Diwali: An Economic Perspective –  Anzar Malik and Vaishnavi Musunuri

Reflectionist Anzar Malik and Vaishnavi Musunuri (ITBM 2022-24)

Why do we celebrate Diwali? 

Mainly in Hindu mythology, Diwali is a day when Lord Rama and his family return home after 14 years in exile. The villagers decorated a path with lights for Rama, who had conquered the maleficent king Ravana. Enacting skits of this story is a famous way of celebration in many places across India. 

Another story about Diwali in Hindu mythology is that it is the day when Lord Krishna emerged victorious over the demon Narakasura and freed his people. After slaying the demon, Lord Krishna announced that this day would be a day of festivities. In India, people burn the effigies of these villainous kings as part and parcel of the festivities. 

People also worship the Hindu Goddess Lakshmi during Diwali. As the goddess of harmony, abundance and fertility, the romantic Diwali story culminates in her choosing Lord Vishnu, one of Hinduism’s most important gods, to be her spouse on the night of Diwali. Other cultures also see this day coinciding with harvest and new year celebrations. No matter which Diwali story you celebrate, it’s always a day of new beginnings and the victory of light over darkness. 

Since most of us are very familiar with the festivities and celebrations of Diwali, we thought it best to present to our audience something that is not very well known about the ripple effect of Diwali on our ECONOMY.

Economic Point Of View 

Diwali has many religious connotations for many people, but the one thing that unites all of us irrespective of our religion is the sales. The autumn months of October and November witness major shopping sprees across the country with the festival of Diwali culminating the shopping season. Diwali is marked with bonuses, discounts, and hikes in dearness allowances, it is the start of the new year and the wedding season for many people, which leads to a massive increase in consumption. 

Due to all mentioned reasons, despite the global economic slowdown and reports of upcoming recession around the world, in India, businesses are looking forward to the uptick in the spending of the consumers that will surely take place during the five-day festivities. In fact, according to the Confederation of All India Traders (CAIT), it predicts that with the upliftment of Covid-19 restrictions, sales during this Diwali will be Rs 2.5 trillion, last year the sales were Rs 1.5 trillion. 

As per a report by consulting firm Redseer, two prominent online sales led by Amazon and Flipkart are projected to register revenue worth Rs 41,000 crore, a 28% increase over last year during the first festive week. Diwali has also raised the hopes and aspirations of the tourism industry. According to a search engine, KAYAK — October 21st 2022, would be the busiest day at Indian airports as citizens look to travel back home or to destinations of their preference. It also has to be noted that international destinations are emerging as go-to places for Diwali, despite higher fares than pre-Covid levels. 

On the whole Diwali 2022 will be an inclusive Diwali. From rural farmers to city dwellers, all will participate with the same enthusiasm as the MSMEs and informal businesses are witnessing a spark in sales after a lag of two years. The Manufacturing industry is again moving in the right direction, and the young generation will get an opportunity to apply for new jobs. Diwali is inducing India’s Economic Recovery and Growth Momentum.