NEW DELHI– Diwali, one of the biggest festivals enjoyed by almost all the communities across India, was celebrated on Monday with much pomp and show compared to the previous two years when the COVID-19 pandemic spoiled the festive mood.
During the past two years, people generally kept themselves to their homes, away from markets and public places amid joblessness and salary cuts.
Despite the inflationary pressure in the South Asian country with the retail inflation hitting nearly 7.5 percent, people were seen indulging in shopping over the past two weeks with almost all markets in every town and city being over-crowded.
Most of the items bought by people during the festive season included new clothes, jewelry, house decorating materials, bikes and cars. Companies offered huge discounts in a bid to maximize their sales.
The phenomenal rise in purchasing capacity, also known as pent-up demand, is attributed to the improvement of employment over the past couple of months.
Quoting figures of the Confederation of All India Traders (CAIT), the Print online newspaper reported that compared to last year’s Diwali festival sale of 1.25 trillion Indian rupees (around 15 billion U.S. dollars), this year’s estimates are around 2.5 trillion Indian rupees (over 30 billion dollars).
“This year, the surge is much larger due to pent-up demand as COVID-19 recedes after two years of devastating the economy,” said the report.
A prominent political leader and chief minister of the western Rajasthan state, Ashok Gehlot, said people were keen to indulge in Diwali celebrations this year.
“People were deprived of celebrations due to COVID-19 in the last two years, but this time people are enthusiastic about it. I hope this happy atmosphere continues,” he tweeted.
As per the latest available official figures, the rate of retail inflation in India rose to 7.41 percent in September, up from 7 percent a month ago.
Prices of daily use items, including food, are on the rise.
Some of the vegetables like peas, carrots and leafy vegetables like spinach, fenugreek and chenopodium album usually consumed during winter continue to be out of the common man’s reach.
The “comfort level” of retail inflation as per the Reserve Bank of India (RBI), India’s central bank, is 4 percent.
In a report released earlier this month, the RBI said the fight against inflation will be “dogged and prolonged” as the monetary policy operates with long and variable lags.
Reacting to the inflationary trend, Jayanth Verma, a member of the RBI Monetary Policy Committee (MPC), said inflation will not be brought down before mid-2023.
“Whatever we have done or may do in 2022 can only bring inflation down in mid-2023,” the Times of India quoted him as saying in an interview.
“The problem is that we have still to return to the pre-pandemic trend line, and we have still not recovered from the growth slowdown that began four or five years ago. In this context we need to bring inflation down to around 5 percent very quickly,” he added.
He believed that the only way to prevent the 7-percent inflation today would have been by “aggressive tightening” (of interest rates) in the second half of 2021.
“Since we did not normalize the interest rates till early 2022, we had already missed the bus when the Ukraine-Russia conflict started,” he said.
Another member of RBI’s MPC Ashima Goyal pointed out that the efforts being taken by the country’s central bank to contain inflation by repeatedly increasing interest rates will help contain inflation, “which is likely to fall below 6 percent next year”.
The gush in pent-up demand witnessed during the ongoing festive season is perhaps directly related to the rise in employment over the past couple of months.
According to the data released earlier this month by the Center for Monitoring Indian Economy, an independent think-tank, India witnessed the creation of around 10 million new jobs in September, thus bringing down the rate of unemployment from 8.3 percent in August to 6.4 percent.
The data revealed that three-fourths of the new jobs, or nearly 7.86 million, were created in rural areas last month.
It is described as the “lowest rate of unemployment” in India in the past four years.
In a bid to further raise regular employment, Prime Minister Narendra Modi launched the first phase of the Employment Fair, a recruitment drive for 1 million central government jobs through video-conferencing in 50 centers across the country on Oct. 22.On the occasion, appointment letters were handed over to more than 75,000 new recruits.
“This recruitment is done by Central Ministries and Departments themselves, and through recruitment agencies like the Union Public Service Commission, Staff Selection Commission, the Railway Recruitment Board,” said a statement issued by the Indian government. – Xinhua