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Correspondent

23 August 2024 at 4:29:04 pm

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local....

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local. This reversal owes much to policy. The recent rationalisation of the Goods and Services Tax (GST) which trimmed rates across categories from garments to home furnishings, has given consumption a timely push. Finance Minister Nirmala Sitharaman’s September rate cuts, combined with income tax relief and easing interest rates, have strengthened household budgets just as inflation softened. The middle class, long squeezed between rising costs and stagnant wages, has found reason to spend again. Retailers report that shoppers filled their bags with everything from lab-grown diamonds and casual wear to consumer durables and décor, blurring the line between necessity and indulgence. The effect has been broad-based. According to Crisil Ratings, 40 organised apparel retailers, who together generate roughly a third of the sector’s revenue, could see growth of 13–14 percent this financial year, aided by a 200-basis-point bump from GST cuts alone. Small traders too have flourished. The Confederation of All India Traders (CAIT) estimates that 85 percent of total festive trade came from non-corporate and traditional markets, a robust comeback for brick-and-mortar retail that had been under siege from online rivals. This surge signals a subtle but significant cultural shift. The “Vocal for Local” and “Swadeshi Diwali” campaigns struck a patriotic chord, with consumers reportedly preferring Indian-made products to imported ones. Demand for Chinese goods fell sharply, while sales of Indian-manufactured products rose by a quarter over last year. For the first time in years, “buying Indian” has become both an act of economic participation and of national pride. The sectoral spread of this boom underlines its breadth. Groceries and fast-moving consumer goods accounted for 12 percent of the total, gold and jewellery 10 percent, and electronics 8 percent. Even traditionally modest categories like home furnishings, décor and confectionery recorded double-digit growth. In the smaller towns that anchor India’s consumption story, traders say stable prices and improved affordability kept registers ringing late into the festive weekend. Yet, much of this buoyancy rests on a fragile equilibrium. Inflation remains contained, and interest rates have been eased, but both could tighten again. Sustaining this spurt will require continued fiscal prudence and regulatory clarity, especially as digital commerce continues to expand its reach. Yet for now, the signs are auspicious. After years of subdued demand and inflationary unease, India’s shoppers appear to have rediscovered their appetite for consumption and their faith in domestic enterprise. The result is not only a record-breaking Diwali, but a reaffirmation of the local marketplace as the heartbeat of India’s economy.

Can Pakistan Protect Its People and Foreign Workers?

Updated: Oct 22, 2024

The Duki massacre shocked the country with its brutality. The miners from the Pakhtun ethnic community and Afghan nationals were reportedly killed when terrorists launched rockets and grenades into the mine. This kind of ethnic dimension further complicates the security situation in Balochistan, a province already grappling with separatist insurgency and religious militancy. While no group has claimed responsibility for the attack yet, the tragedy highlights the vulnerability of labourers working in one of Pakistan’s most dangerous regions.


Earlier in the week, the killing of Chinese nationals who were working on infrastructure projects under the China-Pakistan Economic Corridor (CPEC) frustrated Beijing, which is growing increasingly concerned over the safety of its citizens. Initial investigations suggest that this attack might have involved the assistance of a foreign intelligence agency, potentially to destabilise Pakistan’s relationship with China. For Pakistan, China is not just a key economic partner but also a critical player in its strategic and diplomatic landscape. These attacks have raised questions about whether the country can protect its citizens and foreign nationals.


Balochistan has long been a battleground for Baloch separatists and religious extremists. The province’s porous borders with Afghanistan and Iran make it difficult for security forces to control the movement of militants. Separatist insurgents in the region have historically targeted migrant labourers from Punjab, but the attack on the miners in Duki indicates that the province’s security situation is deteriorating.


The timing of these attacks is particularly concerning. Pakistan is on the verge of hosting the Shanghai Cooperation Organisation (SCO) summit, a major diplomatic event that will bring together regional dignitaries in Islamabad. The attacks seem deliberately timed to project an image of instability and insecurity, potentially discouraging foreign dignitaries and investors from attending the summit or making investments in Pakistan. Given that Pakistan is facing a significant economic crisis with soaring inflation and a growing balance-of-payments issue, attracting foreign investment is critical to stabilising the economy.


Hostile foreign actors may be involved in these attacks. Pakistan has often accused India of supporting Baloch separatists to destabilise the country, particularly in Balochistan. Though unproven, covert operations between the two nations have a long history, and the timing of the Duki massacre and the attack on Chinese engineers hints at external involvement. Whether these attacks are coordinated by foreign forces or driven by local militancy, the impact on Pakistan’s international standing is significant.


While it is important to bring the perpetrators of these attacks to justice, this alone will not be enough to address the broader security crisis facing the country. Pakistan needs a comprehensive counterterrorism strategy that addresses the root causes of violence and dismantles the networks that enable terrorists to operate. The state’s Azm-i-Istehkam campaign aims to restore stability by targeting terrorists, though its steps remain unclear. The government must provide more transparency and regular updates on progress being made if it hopes to build public confidence in its counterterrorism efforts.


In recent years, the country has seen a resurgence of terrorism, with both religious extremists and separatist insurgents carrying out attacks. While the state has made significant strides in reducing terrorism since the height of the insurgency in the mid-2010s, the recent wave of attacks suggests that the problem is far from solved. There are deep-rooted issues that need to be addressed, including poverty, ethnic tensions, and political disenfranchisement, all of which contribute to the conditions that allow terrorism to thrive.


The country’s strategic relationship with China is crucial for its economic future, but that relationship is under threat from both internal and external forces. For Beijing, the safety of its nationals is a top priority, and if Pakistan cannot guarantee that safety, it risks losing not only Chinese investment but also the broader strategic partnership that has been the cornerstone of its foreign policy.


At the same time, Pakistan is grappling with record-level inflation and faces a balance-of-payments crisis, and attracting foreign investment is crucial for stabilising the economy. The perception that Pakistan is a dangerous place for foreign nationals will only make it harder to secure the kind of investments the country needs to pull itself out of this economic quagmire.


The country stands at a critical juncture. If it can restore order and security, it has the potential to attract foreign investment and improve its standing on the global stage. However, if the state fails to act decisively, the consequences will be dire—not only for the victims of terrorism but also for the country’s economic future and international reputation.


Without urgent action, Pakistan risks slipping further into chaos, and the recent attacks could become the beginning of a new and even more dangerous phase of terrorism in the country. The government must act now to protect its citizens, secure its foreign partnerships, and restore confidence in its ability to maintain law and order.


(The writer is a senior journalist based in Islamabad. Views personal.)

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