Buoyed by substantial cut in GST rates, this year’s festive sales touched the sky with many goods having registered an increase of more than 50 per cent against last years’ sales.
Buoyed by the substantial cut in GST rates, this year’s festive sales have touched the sky with many goods purchased registered an increase of more than 50 per cent compared to last years’ sales. In all probability, the record sales, starting from clothes to cars, will substantially boost the third quarter’s growth rate of the ongoing fiscal which may have a telling effect on the overall growth rate of the country in this fiscal year, provided other sectors of the economy do well. It may be mentioned here that India’s main festive season begins with Navratri and continues up to Diwali. People from all over the country, irrespective of their economic standings, spend heavily during this period. However, the trend was badly affected for the last couple of years due to COVID-19 pandemic, as the people didn’t have enough money to spend. So, the government has rightly revised GST rates in an effort to make it consumer-friendly along with income tax reduction to ensure that more money is left with the people. This move has done wonders as the sales of various products have recorded the highest growth in recent years. For instance, sales of clothes below INR 2500 have grown over 20 per cent as estimated by the industry insiders. Similarly, smartphone sales have gone up 8-10 per cent by volume, and small car and two-wheeler sales is expected to grow more than the expectations of the automobile sector with biggest beneficiary being Maruti Suzuki as the largest car maker in India has delivered nearly 3, 25, 000 cars between Navratri and Dhanteras.
As a matter of fact, the festive season accounts for 25 to 35 per cent sales of most of the companies. But this year was an exception with people having more money than usual, the sales may go up to 50 per cent, which will provide the market the much-needed respite from the gloom witnessed earlier. If we examine closely, the amount of transactions done through UPI in the month of October itself stands at INR 2070 crore, which is a new record. As the Christmas and New Year celebrations are round the corner, the market is expected to grow further, which may propel India’s annual growth rate to a new height in this hour of global uncertainty. It shows the inherent strength that the Indian economy possesses and explains why it is the fastest growing economy in the world at present. This is not simply a flight of imagination but a reality, as besides reduced GST rates, India has a good monsoon, which is crucial for growth of the country’s agriculture sector. Good monsoon, in all likelihood, will ensure high agricultural yield and the primary sector of our economy is expected to do well in the ongoing fiscal. However, to further strengthen the growth rate, the government may consider increasing the interest rates in savings, which will widen the existing consumer base.