People Are Spending Less In India This Festive Season, Compared To 5 Years Ago

Indian economy took an ugly turn when the dollar price suddenly shot up 2 months ago. While most people were scared that the economy might just go down and hit an irrecoverable rock bottom, some hoped that the new RBI governor and maybe the government might be able to do something to prevent it. Thankfully, the Rupee has recovered quite a bit and reached a much better point. It’s not as strong as before, but still good enough.

However, this has left many consumers and ‘Desh ki Janta’ a bit worried about the economy as a whole. Many have started to curtail extra spending and cancelled plans to vacation abroad this season. Consumer goods sales have also seen a slump this festival season. Compared to 2007, people today are not spending as much as they used to do 5 years ago. Ajay Row, Executive Director of Aimia India loyalty program, explains that shopkeepers and businesses are giving better discounts to consumers this season than what they gave half-a-decade ago. Users today are not spending, hence, the need to lure them with gifts and discounts is greater than before and that is what the businesses are doing now.

The uncertainty over the economy is something that is troubling Indian consumers. And that’s why they are trying to find more bang for the buck. They are also looking for opportunities that will get them some additional items or at least a chance to win a prize if they purchase something. A sales person at a home goods store in Khan Market, Delhi, says (on condition of anonymity) that this year, fewer people are flocking to the market and the store than last year. As much as 15% dip in sales has been seen.

Is this is a sign of worry? Probably yes, but many do believe things might change for the better after the state assembly elections and the Lok Sabha polls. Till then, it just might continue to be a roller-coaster ride for the economy.