A comparison between India and the world in the pre and post-pandemic era helps us to analyze the implications on its economic sectors, government revenues, and expenditure and highlight some small and big prospects for the future.
Official reports and data point out that festival sales in India are likely to double from the pre-pandemic period and push consumers into markets, despite hints of global depression and slowdown elsewhere in the world.
The upward trend in sales
The online and offline demand for goods and services began last month and is expected to last until November, thanks to the season of Dussehra and Diwali. These winter celebrations are also considered sacred for periods of family marriages and businesses.
These sales are expected to cross $27 billion, almost double the amount in the same pre-COVID period in 2019, and nearly 25% higher in comparison to the last year. According to major industry leaders, online sales rose by nearly one-fifth in the first week of the season compared to last year.
Such amounts will not only help the on-ground shopkeepers but also benefit online platforms such as Amazon, Flipkart, and Walmart. The surge in demand for various items can also be seen in the context of the opening up of the economy after Covid-19, the rise in urban wages, and an increase in the overall job sector.
It is also possible that the resumption of schools, hospitals, colleges, cinemas, and offices was contributing to a surge in auto demand. Demand for consumer goods like mobile handsets, televisions, vehicles, clothing garments, jewelry, gold and fashion, decorative items, etc. has gone up since 2018 and is spreading to small towns which for the next three months can help in boosting the economic indicators of growth.
Food prices nonetheless registered high inflation, especially fruits and vegetables. With more and more people deciding to spend time on family vacations, trips, and recreational activities, auto sales were nearly one-fifth higher than in the pre-pandemic period in 2019, according to the Federation of Automobile Dealers Associations.
Major Indian cities also see a spike in home sales, as builders offered festival discounts. India’s rise in sales comes at a time of growing inflation rates triggered by the Russia and Ukraine war, high-interest rates and fiscal disruptions, changing policies, geopolitical tensions, and rapid climate change.
Global slowdown and depression
However, the country is advised not to digress from its set targets, as in India too, the central bank faces the challenge to deal with its growing pressures and rising inflation.
Moreover, it is the small sectors and rural areas that are on the verge of suffering due to lower wage growth compared to the cities, and probably because of unseasonal rain in October that affected crops.
According to the IMF report, one-third of the global economy is expected to see a contraction in the coming days. India’s situation on the inflation front is still seemingly better than most of the advanced countries like France, the U.K, etc., and other developing economies.
The spending is also being furthered by credit expansion, which hit a 10-year high of 16.2% in August while firms and consumers took out various loans to support investments and purchases, according to the central bank.
From the available reports and data, it can also be interpreted that the Indian government can take advantage and lessons from the retail boom and amplify its resources of governance.
The significant rise in sales and growing demand supports growth prospects as exports fall. Data also showed that the GST (goods and services tax) collections, rose 26% year-on-year in September. The IMF projects a growth of 6.8 percent for India in 2024.
India’s experiment and navigation in these turbulent times will depend on its fiscal and monetary strengthening policies and a spirit of implementing goal-oriented solutions.
While some feel confident about India’s future growth, there are also some speculations about the sustainability of its economic growth. Aditi Nayar, the chief economist at ICRA, Indian Credit Rating Company said that the festival sales surge partly reflects pent-up demand but could be moderated by early next year.
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