India is set to have a sparkling Diwali with consumption showing a huge pick up as the daily number of fresh COVID-19 cases decline.
Until last year, Diwali lights, a must-buy during the festive season with an estimated market size of a staggering Rs 10,000 crore went directly into the pockets of Chinese manufacturers.
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This year, the story has changed. Thousands of local manufacturers, all categorized as small and medium, in Maharashtra, Gujarat, Tamil Nadu, Chattisgarh among other places have grabbed up the business.
“Typically, the total demand for lights in the country during the Diwali period has been met by Chinese imports but this year, the production of these has happened indigenously,” Praveen Khandelwal, Secretary-General, Confederation of All India Traders (CAIT) told Indianarrative.com.
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As optimism returns with expectations of an early vaccine to combat the deadly virus and the announcement of a fresh stimulus package by Finance Minister Nirmala Sitharaman, experts opined that the worst is behind and India’s recovery could be much faster than expected.
The Indian cottage industry, which has been facing severe competition from the Chinese, has finally got the much-required boost after Chinese imports especially for items such as lights, household decorations, gifts, garments, and footwear, have been banned.
According to Cait, footfall in shops and marketplaces has increased significantly in the last couple of weeks. “Goods worth about Rs 60,000 crore has been sold, which is much higher than what we anticipated,” Khandelwal said. Typically, total turnover between Rakshabandhan and Diwali has estimated at Rs 70,000-Rs 75,000 crores.
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Finally, there are visible signs of an economic revival after the GDP contracted by 23.9 percent in the April to June quarter.
Rating agency Moody’s in its Global Macro Outlook 2021-22 too increased its forecast for India’s growth to -8.9 percent for the calendar year 2020. Earlier, it has predicted a contraction of -9.6 percent.
In an attempt to provide a further fillip to the economy, Sitharaman Thursday – just ahead of Diwali – announced a fresh stimulus package under the Atmanirbhar 3.0 program to boost demand. A total stimulus package of Rs 29.87 lakh crore – 15 percent of the GDP – has been injected to address both demand and supply.
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“The bouquet of measures is expected to augment demand through incentivization. Employment generation is the key focus of the package in the third round,” a report by the State Bank of India said.
Astringent nationwide lockdown for about two months since March 25 to contain the spread of COVID-19 dealt a severe blow to the economy leading to a slump in consumption. (IANS)
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