Optimism Rises for Diwali Sales as GST 2.0 Boosts Consumer Confidence

Business owners in Lucknow are expressing optimism for a strong Diwali sales season, thanks to the recent implementation of major goods and services tax (GST) reforms, effective from September 22. These changes aim to simplify tax rates and lower them on various common products, which has already sparked increased consumer interest in sectors such as automobiles, electronics, and precious metals during the Navratri festival.

The Federation of Automobiles Association (FADA) reports a significant rise in pre-booking numbers, indicating a positive trend ahead of the festival of lights. Vinkesh Gulati, an executive member of FADA, noted that sales during Navratri have surged by nearly 20% compared to last year, with expectations for this Diwali season to see sales of 30,000 two-wheelers and 16,500 four-wheelers in Lucknow. Last year, the city sold 24,232 two-wheelers and 13,816 four-wheelers during this period.

Market Insights and Expectations

Sanjay Gupta, president of the UP Adarsh Vyapar Mandal, highlighted the increased foot traffic in markets, a promising sign for business growth. The utensils market is anticipated to grow from ₹ 80 crore last year to ₹ 100 crore this year, particularly benefiting from the Dhanteras shopping rush. Harishchandra Agrawal, president of the Lucknow Metal Merchants Association, emphasized the potential for booming sales in this sector.

The electronics market is also experiencing a surge, with reports indicating that pre-bookings for electronics and electrical appliances have increased by at least 50% compared to last year. Anirudh Nigam, an electronics businessman associated with UP Adarsh Vyapar Mandal, shared that the market, which was worth over ₹ 14.5 crore last Diwali, is expected to grow by an additional ₹ 4-5 crore this year.

The readymade garment sector is similarly poised for growth, with expectations for sales to rise from ₹ 650 crore last year to ₹ 800 crore. Mohammad Afzal, state treasurer of UP Adarsh Vyapar Mandal, explained that the reduced GST rate on clothing under ₹ 2,500 will benefit many consumers, even as higher rates apply to more expensive items.

Concerns and Market Dynamics

While the GST reforms have generated enthusiasm, Amarnath Mishra, president of Lucknow Vyapar Mandal, pointed out the need for the government to create a level playing field between online and offline markets. This equalization could further enhance business prospects for local vendors.

The Chowk Sarafa Market is also seeing a rise in pre-bookings as demand for precious metals increases steadily. Adesh Jain, an office-bearer of the Chowk Sarafa Association, noted that a diverse range of customers, from investors to wedding shoppers, are invigorating the market, leading to optimistic forecasts for the festive season.

The following figures illustrate the expected sales growth across various segments:

As the Diwali season approaches, the impact of GST 2.0 appears to have instilled a renewed spirit among Lucknow’s business community, with many anticipating a vibrant and profitable festive period ahead.