Diwali Sees No ‘Vikas’ Effect in Modi Land This Year, Worst Since 2002

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“This is the worst Diwali of my career, since 1973. Even in the aftermath of 2002 riots, the sales were good,” says Mukesh Sheth, a leading trader at Ratan Pol, the traditional textile market of the city.


Abdul Hafiz Lakhani | Caravan Daily    

DIPAWALI — the festival of lights seems to be dark this time as the Goods and Services Tax (GST) is taking a heavy toll on small traders, businessmen and even a common man in Gujarat.

Diwali is one of the most important festivals of Gujarat. While the rest of the country observes Diwali for two to five days, in Gujarat the celebrations can go up to nearly a week. Every other state has holidays either on the main day of Diwali or maybe a day after or before Diwali, but in Gujarat, it is five days of holidays with extensive festivities and celebrations, but this time, the market slowdown has affected the mood of Gujarati people.

This year, Diwali will be celebrated on October 19, and next day will start the new Hindu year. 

“This is the worst Diwali of my career, since 1973. Even in the aftermath of 2002 riots, the sales were good,” says Mukesh Sheth, a leading trader at Ratan Pol, the traditional textile market of the city.

“If we ask a fellow trader about how his business is doing, we are just touching a raw nerve. Earlier, we would not have this time to interact with you. But now, most of the retail traders are sitting idle,” he adds.

Businessmen say that liquidity crisis induced by demonetisation nearly a year ago and the GST that was rolled out on July 1 have robbed the small businesses, manufacturers, wholesalers, retailers, as well as consumers.

Sheth is not an exception. Most traders in the market have the same story to narrate.

Businessmen say that liquidity crisis induced by demonetisation nearly a year ago and the GST that was rolled out on July 1 have robbed the small businesses, manufacturers, wholesalers, retailers, as well as consumers. The shortage of cash has also cut the demands from rural buyers. “There is about 70 per cent drop in consumers from villages in Saurashtra,” Sheth says.

Gaurang Bhagat, president of the Maskati Kapad Mahajan, which represents close to 50,000 textile and garment traders in the city, says: “Before demonetisation, the cash flow was intact. Now, the cycle has been broken. Consumers have become very measured and business is becoming increasingly unviable. Those who have taken loans are finding the payment of instalments very difficult. Businessmen, especially in the textile sector, were not given enough time to adapt to the new system.”

Pathik Shah, secretary of the Shree Choksi Mahajan at Manek Chowk, the traditional bullion, gold, and jewellery market in Ahmedabad, says that the GST has not directly affected gems and jewellery sector but the slowdown it has caused in other sectors is reflected in the demand for gold.

Sales this year have dropped by 30-35 per cent, compared to last year, says Shah. Normally, sales for the marriage season begin in Navratri, soon after the Shraadh period. But this year, the situation is different.

It was only on Pushyanakshatra, on last Friday, that markets came out of the gloom. Even then, sales were lower compared to last year. Now, all hopes were pinned on Dhanteras. There are fears that even the upcoming marriage season may not be up to the mark.

Sunil Motwani, president of the Relief Road Electronics Market, says that in addition to other factors, the sector is also hurt by discounted sales on e-commerce marketplaces and organised retailers, who can buy at discounted price, a bargain not possible for small shopkeepers. Sales at traditional shops have dropped by nearly 70 per cent.

(Abdul Hafiz Lakhani is a senior journalist based at Ahmedabad, also Editor of Gujarat Siyasat) 

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