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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.

Welfare Sham

The ‘Majhi LadkiBahin Yojana’ which involved a monthly handout of Rs. 1,500 to women between the ages of 21 and 65, had been touted as a game changer in the Mahayuti’s electoral strategy. But going by Deputy Chief Minister Ajit Pawar’s recent revelations, the scheme appears to be a cynical, haphazardly administered bribe disguised as welfare. Launched just weeks before the November 2024 state elections, the scheme was timed with precision but implemented with all the carelessness of a government more interested in votes than veracity. That the coalition swept to power, bagging 235 of 288 seats, is less a triumph of public policy than a testament to how brazen populism can pay political dividends.


Pawar has sheepishly admitted that thousands of ineligible beneficiaries, specifically government employees, were enrolled and paid under the scheme. Over Rs. 3.5 crore is being clawed back from some 2,652 women who never should have received a rupee. The scheme’s architects are blaming the election calendar for the mess, as if democracy and due diligence are incompatible. Pawar claimed that the ruling coalition did not have time to check the implementation, as though the sudden emergence of polling dates took everyone by surprise. It is an astonishing confession of negligence dressed up as inevitability.


Any policy that commits the public exchequer to recurring transfers must begin with rigour, verification and clarity. The errors, as lamely explained away by Pawar, were not unfortunate oversights but predictable outcomes of a politically expedient rollout. The only surprise is how quickly the scheme has begun to unravel.


What makes the situation worse is the government’s refusal to take responsibility. The Mahayuti, which won a thumping majority last year government piggybacking on this very scheme, now appears duplicitous. It is trying to have its cake, refund it and eat it too.


The moral hazard is enormous. Programmes like LadkiBahin are not inherently bad. Conditional cash transfers, if designed and executed with care, can lift women out of poverty, increase household autonomy and improve gender equity. But they cannot be tethered to electoral whims. When the purpose is electoral rather than economic, the state ends up subsidising corruption and inefficiency. Worse, it risks discrediting the very idea of targeted social support.


It appears that the Mahayuti had created a situation wherein authorities were pressured to disburse funds without scrutiny and the system bent under the weight of political urgency. This is electoral patronage on steroids. A flagship scheme that cannot distinguish between a daily wager and a salaried bureaucrat is certainly no triumph of women’s welfare. The Mahayuti may have secured votes in the short term, but its long-term legacy is likely to be one of waste and corruption.


If it is serious about women’s empowerment, the Mahayuti should re-engineer LadkiBahin with integrity. Else, it will remain what it already appears to be: a dressed-up dole wrapped in the language of sisterhood, but hollowed out by the politics of expediency.

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