Blight Dims Season Of Lights

THIS Diwali, Sanjay Bhutani won't be performing Lakshmi puja at home. He sees no reason to. "I am just not in the festive mood," says he. Bhutani can't be blamed. Every year, a couple of weeks prior to Diwali, Bhutani's Bharat Dry Fruit Mart on Janpath, one of New Delhi's principal arterial roads, is a hubbub of activity, and he scarcely gets a moment to himself. All this translates into a 30 per cent increase in daily sales vis-a-vis the non-Diwali period. This year, though, has been different. "For the last few days, I've hardly had any work to do. Sales are barely 10 per cent of the usual quantum," laments Bhutani.

 Qummar Siddiq of Space Carpets on Calcutta's posh Park Street has a similar tale to tell. "During Diwali, Marwaris spend a lot on interior decoration. And that's just fine by me. But this year, the market is really bad, and there's scarcely any demand for my carpets," says Siddiq. "Space Carpets is packed with customers every festive season, and it becomes nearly impossible to walk in my shop. But this year it's virtually empty."

The business community would do well to dwell on the words of Bhutani and Siddiq. For, they merely echo the sentiments of traders across the country. And if that's anything to go by, those who've been predicting an economic upturn—finance minister Yashwant Sinha included—have to grapple with the fact that even Diwali has failed to up customer spend. In other words, customers are convinced that their tomorrow won't be any better than today, and are avoiding the usual Diwali splurge. "Demand from customers has been disappointing all through this year. Many of us were hoping that with the onset of the festive season, sales would pick up. But our hopes have been dashed," says Ashutosh Gupta of Ivory Mart Jewellers in New Delhi. He usually sees a 50-60 per cent increase in the sales of bangles, pendants, and chains during the festive season. But this year, he estimates, business is down 50 per cent. "There's just no money in the market," he says.

Gupta is no exception. Other jewellers too report roughly the same drop in sales. Says a jeweller who participated in the International Jewellery Exhibition in Delhi in the first fortnight of October. "Most jewellers, including us, reported 40 per cent lower turnover figures, as compared to last year." The scenario is roughly the same in Calcutta. Says Kuldip Nayar, owner of Chandrani Pearls, the only branded pearl showroom in Calcutta: "Sales show an uptrend every year during Durga puja and Diwali. But this year they have stayed stagnant."

Across the country, consumers prefer to keep their money in the bank rather than spend it. There are other reasons too. The depressed Sensex—it's rarely crossed the 3,000 mark this year—and a sluggish real estate market have left Mumbaikars with little to splurge with. Not surprising, therefore, that India's corporate capital reports the same tale of woe. Anmol Jewellers in Bandra, a frequent shopping destination for Sangeeta Bijlani and Tina Ambani, has seen a 40 per cent reduction in its usual pre-Diwali sales. Says Ishu Datwani, partner: "People who indulged in 10-day shopping expeditions prior to Diwali are now making do with five days."

TO a great extent, it's the recession in the corporate world that is accounting for the low customer spend. "Around half of my customers are corporates. But with the economy in a recession, and corporate profits squeezed, they just haven't been placing orders with me," says Bhutani. Ditto with Kapil Advani, of Rhythm Corner, a consumer electronics store in New Delhi. "I usually get a fair number of corporate clients ordering anywhere between 50-200 pieces of walkmans, toasters and emergency lights, to give as gifts during Diwali. This year, my corporate clientele has shrunk by half. In fact, small and medium-sized companies—which usually order 8-10 pieces of an item—just don't seem to be giving any gifts this year. I am only left with a few large corporate accounts," says Advani.

A senior executive at a consumer goods multinational explains why the likes of Advani are having to suffer: "Our company, for instance, has recorded negligible growth this year. While costs have gone up, squeezing profits. That's forced our company to embark on an extensive cost-cutting drive. With the result, this year we have struck a number of people off the list. Besides, we are buying cheaper gifts too."

And it's not merely sales of gift items that have been affected. Automobile sales too are in a slump. Beginning with the harvesting of the kharif crop, moving on to the navratras, followed by Diwali, and right up to the commencement of the wedding season post-Diwali, automobile sales usually scale new heights. And while car sales between January and August this year have shrunk by 2.5 per cent, the festive season doesn't seem to have done much to rev up the figures. "We usually sell between 25-30 cars a day during the Diwali season. But this year, we are hardly selling 10-15 per day," says Jasbir Singh, vice-president at Allied Motors, a New Delhi-based Maruti dealer. Singh believes that it's a combination of two factors that is impacting car sales in his showroom.

"The car customer is being besieged with new car models these days. To an extent, that will impact Maruti. But more than that I feel it's the general recession prevailing in the market that is affecting our sales." Dealers were, in fact, expecting car sales to shoot up during this year. That's because the interest rate has come down from the 21 per cent figure that prevailed nearly two years ago, to the 17 per cent that exists today.

THAT hasn't happened, because like corporate demand, consumption from individual buyers has also been hit. "Though the cost of owning a car has gone down today, the general price rise has eroded family budgets," says Singh. And it's not just in automobiles that the impact of higher by the day inflation, and shrinking annual salary increments is being felt. "Individuals aren't gifting sweetmeats in the same quantity today, as they did earlier. That's because our prices have been going up. People today would much rather give a set of glasses than sweets, because there isn't much of a price difference. And glasses are a lot more substantial," says Girish Aggarwal of Bengali Sweet House, one of the largest sweetmeat sellers in Delhi. He too hasn't seen the usual spurt in sales. But he is still hopeful that last-minute corporate demand will bring a cheer to his face.

Chandu Halwai, at Worli Naka in Mumbai, isn't all that optimistic. "Sales are down by 10 per cent as compared to last year," says a spokesperson. Even earthen diya sellers and paper lantern makers in Mumbai have suffered due to the rains. The story is roughly the same for dealers of fire-crackers. Dealers at Majid Bunder in south Mumbai sold firecrackers of up to Rs 2 crore last year. They estimate that this year's sales won't cross the Rs 70 lakh mark. "A combination of unseasonal rains and recessionary market conditions have affected our sales adversely," says a shopkeeper. Delhi's Sadar Bazaar, the city's largest wholesale market, seems to be witnessing a damp Diwali this year, as well. "We begin seeing a host of stalls selling Diwali firecrackers a good fortnight before Diwali, but  this year they've only started appearing during the last week. And they are fewer in number," remarks a shopkeeper.

Sanjay Bhutani of Bharat Dry Fruit Mart, too, has more or less given up on the idea of individual buyers flocking in. "The corporate sector isn't buying because they are in a recession, individual customers have been hindered by the relatively higher prices of dry fruits this year," says he. For instance, cashew nuts this year are priced approximately 30 per cent higher than last year's figure.

Even for those who haven't been affected by the recession directly, the general buzz about living in recessionary times seems to have put a dampener on their purchases. Says Datwani of Anmol Jewellers: "This talk of recession has made people more discerning. Customers now visit a few shops before deciding on a purchase. They have also reduced the value of their purchases. Why, even women customers, who otherwise don't talk about these things, have been using the word 'recession' to explain their tight buying."

 Little wonder then, that Diwali is low key for individuals like Calcutta-based Prabha Khaitan, an exporter and Hindi novelist. "Diwali this year is pheeka (dull). I have cut out all the unnecessary frills from the celebrations," says Khaitan.

Possibly nothing indicates the national pessimism and the helplessness of the average Indian more poignantly than the festival of lights flickering in the wind.