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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.

Urban Surge

India’s federal compact, frequently invoked but rarely invigorated, often stumbles under the weight of political parochialism and bureaucratic entropy. But at the recent NITI Ayog meeting chaired by PM Narendra Modi, a few CMs defied this pattern by enriching the Centre’s vision instead of defying it. The gathering, intended to forge a cooperative agenda for investment, job creation and reform, produced pragmatic interventions from N. Chandrababu Naidu and A. Revanth Reddy.


Naidu’s suggestion of three sub-groups: one to boost GDP growth via investment, manufacturing and exports backed by viability gap funding for public-private partnerships; a second to address population management and the dual challenges of demographic dividend and ageing; and a third to drive technology-based governance using AI, drones, quantum computing and digital platforms for real-time, citizen-centric administration was notable.


Few state leaders have been better aligned or more ready to operationalise these aims than Naidu, a self-styled technocrat. He understands that boosting manufacturing and jobs is not just about tax incentives or land acquisition but about building modern, liveable cities where investors and talent want to stay. A state-specific mission under the umbrella of the Centre’s sub-group framework could act as a laboratory for the integration of tech-based governance tools. With Naidu’s track record of adopting real-time dashboards and biometric systems, Andhra Pradesh could well serve as a proving ground for the Centre’s ambitions around AI and citizen-centric digital governance.


If Naidu spoke the language of structural reform, Telangana’s Revanth Reddy articulated the need for strategic scale. His proposal for a national task force led by the Prime Minister and comprising the chief ministers of India’s six largest metropolitan economies - Mumbai, Delhi, Bengaluru, Kolkata, Chennai and Hyderabad - is as radical as it is rational. These cities account for nearly 40 percent of India’s urban GDP but remain shackled by fragmented jurisdiction and overstretched services.


A central task force could transcend these silos, harmonise regulations, pool infrastructure investment and align metropolitan growth with national priorities. Such a mechanism has international precedent: Germany’s city-regional partnerships, the European Union’s urban agenda, and China’s special economic zones all illustrate what’s possible when major cities are treated not as administrative headaches but as engines of growth.


The success of the Centre’s sub-groups will depend less on press releases and more on political will, particularly the willingness to devolve authority and funds to states. The technology-led governance model will fail if it rests on tokenistic pilot projects or is deployed in silos without state capacity. And urban missions will falter if they repeat the fragmented funding patterns that hobbled previous efforts like the Smart Cities programme. Still, the Centre should not merely record these ideas but should adopt, fund and empower them. India’s transformation will not come from the Centre alone. It will come from states and cities only when they are given the tools, and the trust, to lead.

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