Festive season is witnessing a remarkable surge in consumer spending, driving the country's economy and bolstering growth. Online sales at major platforms like Amazon and Flipkart have soared by nearly 20% in the first week of festive sales compared to the previous year. This uptick is mirrored in digital transactions, with Unified Payments Interface recording a 40% increase in October transactions.
Experts attribute this surge to a combination of factors, including easing inflation, rising wages, and high consumer confidence. The government's initiatives, such as higher guaranteed prices for crops and reduced cooking gas costs for farmers, have also contributed to the positive sentiment.
Consumer spending, which constitutes 60% of India's GDP, has provided a significant boost to manufacturing activity, propelling the economy to grow at a rate exceeding 6%. The International Monetary Fund predicts India's economy will continue to flourish, with growth rates of 6.3% in 2023 and 2024, outpacing other major economies.
The festive season's momentum is expected to continue, supported by major events like the ongoing Cricket World Cup and the upcoming wedding season. The cricket tournament alone is anticipated to inject $2.6 billion into the economy, as fans spend on travel and dining. Additionally, the Confederation of All India Traders predicts a staggering $50 billion spending during the wedding season, further stimulating economic growth.
Online sales have played a pivotal role in this surge, with mobile phones, electronic goods, and large appliances driving around 67% of the sales. Real-time digital payments through UPI reached 16.46 trillion rupees in October, showcasing the widespread adoption of digital transactions among Indians.
Other economic indicators, such as goods and services tax collection and peak electricity demand, also reflect this robust consumption trend. Manufacturers are operating at full capacity to meet the strong demand, indicating a healthy and vibrant economy.
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