Hindus Festivals. They are the favourite keywords for IVY league educated intellectuals and their hired guns in India. Until a few years ago, they had been villainised to such an extent that people had started to forget their spiritual significance. In higher echelons of our society, these remained only an economic opportunity. In hindsight, this phenomenon should not be looked at with resentment. Even with their impact on the Indian economy, Indic festivals managed to stay relevant during ultra-Marxists era of Indian polity. Now, we have one more reason to respect our festivals.
Indian economy needs a final festive push
According to a report by Business Standard, Indian Economy requires a final push to accelerate at its full capacity. The newspaper cited Bloomberg’s tracking of 8 high-frequencies indicators to substantiate its point. Needles on 4 out of 8 indicators were tilted towards recovery. Currently, due to fall in demand in the external market, positive sentiments in businesses have gone down, which is reflected in the World Bank cutting down India’s growth forecasts as well.
Despite that Indian businesses have held on to their stocks. The main reason behind it is that the festive season has not picked up its momentum yet. India’s annual festive season kicks off during Raksha Bandhan (around mid-August) and continues till the end of Diwali (October-November). Between both these festivals, different parts of the country are engaged in festivities like Onam, Pongal, Durga Pooja, Dhanteras among others.
Diwali’s contribution to Indian economy
There is a reason why businesses have pinned their hopes on Diwali. Diwali is possibly the most demand generating festival in India. During Diwali, sales of textiles, automobiles, consumer durables, electronic goods, jewellery, real estate and food register a sudden spike. The advent of tourists to watch Indic festivals adds fuel to the fire (not literally).
According to a 2017 analysis of ASSOCHAM, during Diwali, consumption capacity of the average Indian consumer increases by 20 per cent during Diwali. No wonder, 52 per cent of annual sale of apparel products takes place during this time of the year.
Even FMCG and white good companies are not much behind. Both these sectors chunk up 35 per cent of annual sales during Diwali itself. These numbers are the reason why e-commerce companies like Amazon, Flipkart, Meesho among others push their products through attractive offerings like Big Billion Days, Great Indian Festivals among others.
During the first 4 days of their grand offerings this year, big e-commerce companies sold products worth Rs 24,500 crore. The total sale is expected to be around Rs 80,000 crores.
Diwali benefits everyone
The astronomical increase is also an opportunity for villages and small town-based artisans to showcase their talent and add extra lights to their Diwali celebrations. The Artisan industry is the second largest employer in developing nations. In the last few years, people getting vigilant about not buying made in China products have opened the gates for local artisans to participate with enthusiasm in Diwali.
In 2021, Diwali became the reason why 40 lakh families witnessed a significant increase in their annual earnings. By conservative estimates, these families earned at least Rs 50,000 crores (CAIT analysis), which Chinese companies lost due to boycott by Indian customers.
In its report, the Confederation of All India Traders also found out that Indians bought more than 1.25 lakh crore worth of goods from the festival market. People were so enthusiastic about contributing to Indian economies that recorded sales were the highest in the last 10 years. Predictions for this year are also encouraging to say the least. CAIT is expecting that there will be 60 per cent growth in Diwali sales this year.
Navratri boost to Indian economy
The analysis is based on the sales number registered during Navratri from 26 September to 5 October. During Navratri, FMCG products’ sales were 12 per cent higher. Similarly, 15 per more consumer durables were sold this year. Around 20 per cent growth was registered in electronics and toys, while about 10 per cent was seen in mobiles and groceries.
Apparently, the spike during Durga Puja owes to the popularity of the festival all across India. The 2017 analysis by ASSOCHAM roughly estimated that Durga Pooja contributed more than Rs 40,000 crore to the Indian economy.
However, it quickly noted that spending during the festival was increasing at a rate of 35 per cent Compound Annual growth rate (CAGR), which can be said to be a subtle acceptance of estimates being not 100 per cent accurate. The festivities inspire even event management companies from all across the world as it is not an easy task to handle so much crowd for 9 days.
Bengal is at the centre of Durga Puja economy
As it turns out, the ASSOCHAM report was a gross underestimation of the festival’s potential. The all-India number cited in ASSOCHAM’s report was clocked a few years later by Bengal itself. Bengal government’s incentives in the form of Rs 50,000 cash transfer and 20 per cent discount in power tariffs also played a key role in it. No wonder, the economy of Durga Puja in Bengal crossed Rs 45,000 crore mark this year.
The massive revenue generation helped generate more than 3 lakh jobs only in Bengal itself. The increased consumption capacity resulted in retails amounting to 80-85 per cent of Durga Puja economy.
Even the vehicle sales, which generally spikes around Dhanteras, witnessed 57 per cent increase during Navratri this year. Remarkably, commercial vehicle sales increased by 48.25 per cent, indicating the preparedness of businesses towards the upcoming festive season of Diwali.
Onam boost to Kerala economy
Around the same time festive season kicks off in North India, down South Keralites are also busy celebrating Onam. The Sanatan festival is an occasion for people to break free of mental strain. It is reflected in the government’s increasing revenue from the sales of liquor. In 2021, Vijayan government earned Rs 750 crore more only through taxes on liquor.
Talking about core festival stuff, Keralites bought nearly 80 lakh kilogram of milk in only 4 days. Interestingly, only the sale on Thiruvonam day accounted for 40 per cent of total demand generation. Both total demand and demand on Thiruvonam day saw YoY increase of 6.64 per cent and 11.85 per cent compared to previous year. Apart from that, curd and other dairy products also witnessed phenomenal increase in their annual sales.
The demand for the 2022 season did not wane. On Uthradam — the first day of Onam, the state exchequer managed to get Rs 550 crores only on account of liquor sales. Lottery, the second major source of revenue for Kerala helped the government put more than Rs 300 crore in its coffers. It was a significant change since compared to last year, the government earned nearly 200 per cent more than Rs 124.5 core last year. The lottery sold during Onam indicated the increase in risk taking ability of citizens, a key marker of the healthy state of the economy.
Ganesh Chaturthi kicks off massive spendings
Like Onam there is another 10-day festival called Ganesh Chaturthi celebrated all across India, but mainly in Maharashtra and neighbouring states. An old ASSOCHAM estimate suggested that the festival generates businesses worth Rs 20,000 crores. Contrary to popular belief, Hyderabad, the city of Owaisi, was found to be generating 25 per cent of this humongous sum.
More importantly, the number grows at 20 per cent CAGR each year. China’s Galwan valley misadventure also turned out only fruitful for locals engaged in festivals. This year CAIT stated that only more than 20 crore Ganesh idols were sold. But it is not only idols. Demands in every minute segment of the festival witnessed significant increase. Demand for Pandit ji increased by 50 per cent, while Pandal decorators witnessed 38 per cent push in demand.
Apart from idols, Pandit Ji’s, home decorators, flowers and ornaments also register tremendous growth in their incomes during Ganesh Chaturthi. Bhakts like to cover Bhagwan Ganesh Murti with Gold, silver and other valuable stuff. It has led to inviting insurance companies as well.
In the Matunga area of Mumbai, a Ganpati Mandal had taken insurance cover of Rs 316.4 crore. Estimates suggest that the 10 days festival employ more than 20,000 families every year. The increased employment leads to a virtuous cycle in the economy creating more demand side pressure.
It was evident this year as well when Maharashtra alone witnessed 53 per cent jump in demand for festival-related services. Extra political ASSOCHAM’s estimate of Ganesh Chaturthi, it would be safe to conclude that the 10-day festival provides at least Rs 50,000 crore push to the Indian economy.
Raksha Bandhan contributes around Rs 20,000 crore
Around the same time, another festival called Raksha Bandhan is celebrated. The festival is the grand celebration of India’s unity and diversity since there is no state which can claim that it is majorly celebrated in its own geography.
From Kashmir to Kanyakumari, more than 50 crore Rakhis are sold in India. Before 2020, the market was dominated by China, since it not only pushed readymade Rakhis, but was also pushing foam, pearls, drops, thread, decorative thali, essential elements of Rakhi and Rakhi making.
Out of Rs 6,000 crore of Rakhi markets, China alone used to occupy more than 66 per cent of the market share. But then Indian sisters decided that they wouldn’t be using Rakhis made in the same country which was hell bent on killing their brothers. After that, the market has been flooded with made-in-India Rakhis, increasing the business prospects. In Gujarat alone, the festival generates more than 500 crore of business, giving employment to thousands of families.
Apart from Rakhi, sales of sweets during the Raksha Bandhan is also a big booster to dopamine fuelled shopping. Even Sweet industry alone generated businesses worth more than Rs 10,000 crore every year. Though it did take a hit during Covid, with the revival in consumption, the sales are back on track.
Makar Sankranti and Pongal provides momentum
While Raksha Bandhan does start a more than 3 month long festive season at the back end of the year, festivals like Pongal and Makar Sankranti also contribute their bit to the Indian economy. Both festivals are celebrated at the end of cropping season and farmers are at their peak of spending capacity. 58 per cent of India is still dependent on agriculture. The momentum both these festivals provide makes way for Indians spending over Rs 4 lakh crore till the end of Holi.
Holi helped break the shackles of Omicron
But, the first few weeks of this year had turned out disappointing due to Omicron dampening demand. However, as soon as the air around the Omicron got cleared, people of the country went on a spending spree.
The 2022 Holi sales in India jumped up by 30 per cent, a huge sum considering the fact that economic revival had not caught its momentum during the time. Remarkably, Indians became much more proactive in ditching made-in-China colours, toys and balloons among others.
Earlier China used to push its products worth more than Rs 10,000 crore in India during Holi. 75 per cent of colours, plastic products, water guns in India used to come from China. The economic incursion led to 8-10 lakh Indians losing their jobs.
But with proactive support from the public, traders’ bodies preferred Indian pushing Indian products in the market over that of Chinese ones. No wonder, this year, Holi contributed more than Rs 20,000 crore to the Indian economy. In fact, it won’t be wrong to say that this year’s Holi provided a major push to the Indian economy. The spending instilled confidence in the banking sector to finally break free of their shackles imposed due to NPAs.
Hindu festivals are celebrated all across the year. It is actually sad that only a few of them can be counted in a column. The country is so diverse that every community follows its own deity. Clearly, the potential is there. All it needs is the revival of Sanatan. At the risk of sounding too much boastful, it is possible that India may not have to depend on exports altogether.
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