Diwali: Igniting economic opportunities in India
While consumer spending during this year’s festival season is slightly better than 2022 and economic growth is expected to be higher than 6.3%, India is making a positive splash in almost all sectors, adding to extra sparkle in Diwali across the country in 2023
Diwali, often called the Festival of Lights, is India's most widely celebrated festival. Embraced by billions of individuals of diverse faiths and backgrounds, this five-day extravaganza not only illuminates the Indian calendar but also remarkably unites hearts and homes. Diwali symbolizes the victory of good over evil, the triumph of knowledge over ignorance, and the celebration of humility over pride. However, it encompasses much more than symbolism alone.
This grand celebration sees people of all ages eagerly awaiting its arrival. Families and friends exchange gifts, prepare delectable feasts, and offer 'Bhog' to the gods while the air shimmers with the soft glow of lamps, diyas, and the exhilarating burst of firecrackers. Diwali's universal appeal is evident in the joy it brings to people from all walks of life.
Unsurprisingly, this festival's reach extends far beyond India's borders. Diwali has quietly but powerfully gained international recognition. In recent years, international leaders, including US President Joe Biden have respectfully lit lamps during Diwali. This unspoken gesture speaks volumes, fostering a silent yet profound exchange of India's rich cultural heritage with the world.
Adding to Diwali's international recognition, New York has taken a historic step by announcing Diwali as a school holiday from 2023. This decision not only acknowledges the festival's cultural and spiritual importance, but also paves the way for a more inclusive and diverse society where the vibrant tapestry of traditions is celebrated and cherished.
Leveraging Diwali as an economic catalyst
While Diwali's splendour is deeply rooted in Indian culture and tradition, it has become more than a national celebration. In recent years, India has harnessed the power of Diwali not only to showcase its rich heritage to the world but also to fuel its economic growth.
Let's delve into how India bolstered its economy with the Diwali in 2022 and what we can expect from the country as we look forward to Diwali 2023. As we explore further into this article, we will uncover how India has recognized Diwali as a means to ignite remarkable economic opportunities.
Online sales from Amazon, Flipkart, and others reached 47 billion rupees ($565 million) in the week through October 15. Mobile phones, electronic goods, and large appliances accounted for approximately 67% of these sales.
UPI processed transactions worth 16.46 trillion rupees from October 1-30, marking an increase of more than 40% from the previous year.
Credit card payments jumped 16% to 1.42 trillion rupees in September, according to data from the Reserve Bank of India.
Other indicators, such as goods and services tax collection and peak electricity demand, also indicate strong consumption and economic activity in India.
In nutshell, Diwali, the Festival of Lights, not only adds weight to India’s cultural legacy, but also works as a dynamic force driving India's economic growth. With a robust performance in almost all sectors, including online sales, manufacturing, and consumer spending, Diwali has become a catalyst for prosperity.
International recognition and projections
According to the International Monetary Fund's World Economic Outlook database, India is poised to become the world's third-largest economy in the coming five years, following the United States and China.
The IMF on October 31 raised India’s GDP projection marginally by 0.2% to 6.3% even though it slashed the global growth forecast to 3%. Moody’s Investor Services on November 9 retained the country’s economic growth at 6.7% for 2023.
In fact, the Indian economy expanded 7.8% in the first quarter of the current fiscal, up from 6.1% in the previous quarter on higher government spending, coupled with increased private capital and strong services growth. A robust domestic demand, and manufacturing and services activities spurred growth during the quarter.
On the other hand, despite challenges such as rise in dollar index, India's forex reserves are comfortably positioned at $590.78 billion, the latest data by the Reserve Bank of India showed. Gold reserves have surged by $200 million to $46.12 billion, while SDRs are up by $64 million to $17.98 billion.
While performance of public sector banks continues to be outstanding. The combined profit of 12 Indian public sector banks in Q2FY24 jumped 31% to Rs 33,643 crore in comparison to Rs 25,684 crore recorded during the same period last year.
Diwali 2023 is offering something to cherish for all. Micro, Small, and Medium Enterprises (MSMEs) and informal businesses have witnessed a spark in sales after a two-year lag. The manufacturing industry has got back on track, and the young generation was presented with new job opportunities.
Therefore, Diwali is not just a festival; it's catalyzing India's economic recovery and igniting the nation's growth momentum.
As we embrace the festivities and aspirations this year during Diwali, let us revel in the promise of a brighter tomorrow, propelled by the spirit of unity, resilience, and prosperity that this festival brings.
***The author usually writes on developmental, financial and market issues; views expressed here are her own