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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.

Eroding Edge

Updated: Oct 22, 2024

The Bharatiya Janata Party (BJP), once a seemingly unassailable political force in Mumbai, is facing troubling signs of waning influence in the city. Recently, the BJP found itself bested by its former allies, the Uddhav Thackeray-led Shiv Sena (UBT) faction, not only in high-profile legislative contests but now also in the domain of university politics. The recent clean sweep by the Aaditya Thackeray-led Yuva Sena in the University of Mumbai Senate elections - winning all ten seats - suggests that the BJP’s grip on Mumbai’s electoral landscape is loosening. It also raises questions about the party’s readiness for the upcoming Maharashtra Assembly election.

When it was in alliance with the undivided Shiv Sena, the BJP had expanded its urban appeal across Mumbai while leveraging the Sena’s grassroots muscle. But since the dramatic split within the Shiv Sena in 2022 and the emergence of two rival factions — one led by Uddhav Thackeray and the other by Chief Minister Eknath Shinde (who aligned with the BJP) — the political calculus has altered. The BJP, which had previously counted on the Shiv Sena’s backing in Mumbai, now faces a formidable opponent in Uddhav’s faction.

The Yuva Sena’s success in the Senate polls, much more than just a victory in the field of student politics, is an ominous sign for the BJP’s urban strategy. The win comes on the heels of the Shiv Sena (UBT)’s triumph in the Maharashtra Legislative Council elections earlier this year, where the party secured both the Mumbai Graduates and Mumbai Teachers constituencies, reflecting the diminishing appeal of the BJP even among its traditionally strong urban voter base. The BJP’s rout in 2024 Lok Sabha elections in Mumbai, where it managed to win only one of the three seats it contested in the city, has only underscored its vulnerability. This was in stark contrast to the 2019 general election in Mumbai city, when the BJP had won all three seats it fought on.

It seemed at the time that the party’s blend of Hindu nationalism and development promises resonated with the city’s middle class. However, by 2024, this support seems to have frayed. Internal divisions, the Sena split, and discontent with the BJP’s governance in Maharashtra appear to have undermined its urban appeal.

The Mumbai Senate election result is testimony to the Shiv Sena (UBT)’s capacity for resilience with the party’s youth wing emerging proving that it is able to rally support from a demographic crucial to the 2024 Assembly elections.

The question facing the BJP led by Devendra Fadnavis is whether it can arrest this decline before the state elections. Compounding problems for the BJP, its ally, CM Shinde’s Shiv Sena, has struggled to compete with the Thackeray brand’s enduring appeal in Mumbai.

If the BJP fails to reverse its trend of losing in Mumbai, the upcoming Assembly elections could see a further erosion of its influence in the city.

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