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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.

Fugitive Justice

After years on the run, Mehul Choksi, the diamond dealer-turned-fugitive at the heart of one of India’s most egregious banking scandals, has been arrested in Belgium. The 65-year-old is a key accused in the Rs. 13,500 crore Punjab National Bank (PNB) fraud case that rocked India’s financial system in 2018. His arrest is a rare diplomatic success for Indian authorities in a saga marked by financial chicanery, sluggish extradition battles and gaping regulatory failures.


Choksi had been conveniently living in Antigua and Barbuda as a citizen since 2018 after fleeing India. His arrival in Belgium last year, reportedly for cancer treatment, had attracted little public attention until now. That his wife holds Belgian citizenship may have eased his travel, but not his fate. India has wasted no time with both the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) pressing for his extradition.


The task is not impossible. India has a functioning extradition treaty with Belgium, dating back to 1901. The treaty operates on the principle of ‘dual criminality,’ which is that a person can be extradited if the alleged offence is punishable in both countries. Financial fraud, of course, qualifies. But success is far from guaranteed.


India’s recent track record in pursuing high-profile economic offenders has been dismal. Nirav Modi, Choksi’s nephew and a co-accused in the PNB scam, has fought a protracted legal battle against extradition from the United Kingdom, where he has remained since 2018. Vijay Mallya, the former Kingfisher Airlines boss accused of defaulting on loans and money laundering, continues to stall his return despite an extradition order. In both cases, India has been ensnared by the procedural thickets of British courts, and by arguments about prison conditions, political persecution and judicial independence.


Belgium’s treaty has similar escape valves. It bars extradition in cases deemed political or if the accused can argue persecution. Choksi has previously claimed that he is the target of a politically motivated witch-hunt, a narrative he used when he mysteriously vanished from Antigua in 2021 and ended up in Dominica, alleging he had been abducted.


This time, Indian authorities must build an airtight case and ensure his prosecution stands up to judicial scrutiny abroad. But even if Choksi returns to face trial, justice must go further. The alleged fraud was colossal: Choksi is accused of siphoning over Rs. 6,000 crore and Nirav Modi another Rs. 7,000 crore. Today, the realisable value of Choksi’s assets stands closer to Rs. 2,500 crore.


Beyond extradition, what is needed is restitution. The defrauded sums must be returned to their rightful owners, public sector banks and, by extension, Indian taxpayers. That means faster trials, sharper asset recovery mechanisms and more transparency about where the money goes. It also means plugging the regulatory holes that allowed such frauds to flourish in the first place. Justice will only be served when not just the fugitives, but the system that enabled them, is held to account.

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