Why is Diwali so important to India’s economy?

Think about this: you are walking down a street in a market. All you see are big banners with “SALE” written and on both sides a huge pool of people rushing towards those banners. That’s pretty much the scene before Diwali in India. You see, Diwali is a big deal for us. It not only has a huge impact on the social and cultural environment of the country but it impacts the economy as well.

This was clicked last year. 🙂

1. Traveling

On the days before Diwali, most Indians scramble for a ticket to go home to their family. During this time, you might have noticed that the price of an airliner or a railway ticket goes very high. It doesn’t matter if you are travelling domestic or international routes, you will be paying more than the usual during this time. This is because most of these companies have to pay bonuses to their workers. These bonuses only come from the excess profit generated by the company during this time.

Diwali sort of becomes a scapegoat for these companies to increase the price of the tickets and they have been successful in doing so. But, most smart travelers book their tickets in advance to avoid the price surge.

2. Shopping

Diwali’s preceding weeks are traditionally a period of consumption and investment in India. Demand and sales during this period are often seen as a barometer of the vitality of business, and the Indian economy. Most of the businesses in India report higher margins of profit during this time of the year. And why wouldn’t it do so?

You see, people want more by paying less. This would mean that companies would need to focus on the quantity of sales. One of the best ways to do it is by dropping the price of the items to a reasonable rate under “SALE.” This has also led to a common behavioral pattern seen among the Indians to save money throughout the year, and spend it on Diwali sales. This has essentially become an indicator for any company (with operations in India) for a success in gaining market share here.

This video will give a clear view about Diwali in today’s time.

Soon after Diwali, the season of weddings, a growing market which is currently valued at $54 billion kicks off. However, much of the wedding related shopping is done during the Diwali season. This is mostly because of the reduced price and partly due to FOMO (Fear of Missing Out). Most of the shopping are driven by impulse. But, even if they are not planning to buy, they cannot resist the temptation of making a purchase because of the irresistible limited-period offers and mega discounts that are offered by brands during Diwali.

3. Fireworks

Although the burning of firecrackers is banned for this year, it still has a huge share in the Indian market. India’s firecracker industry is estimated to be around Rs 50 billion. Before COVID-19, most of the Indian families always had some of its budget to spend on fireworks. This is one market which will see a major decline in its production in future. As the world pledges to fight against climate change, India’s ban on firecrackers could be described as a step towards this policy.

In conclusion, Diwali is the time for businesses to enjoy higher profits. It’s the time for families to reunite and spend time with their loved ones. But, during this pandemic, one thing that will be certain is that there will be less of burning firecrackers. This will definitely help the people who have recovered from the virus to not suffer again. India’s ban on fireworks could prove to be a decisive measure in the 4th Quarter of 2020.

On this auspicious day, I wish all my readers a Happy Diwali. I hope this year brings everyone closer to one another and removes the darkness in one’s mind and soul. I thank you all so much for reading this post. I also apologize for not being regular with my posting schedule. If you enjoyed reading this post, a like would be awesome. If you are new here, do subscribe to the page. Comment below your thoughts on Diwali. You can now follow me on Twitter and Pinterest as well. Check out my previous post here. Stay tuned for more posts by The Antique Economist.

Economics Behind: The Korean Wave.

Remember back in the day, everyone was hooked on to Gangnam style! Yeah that was 2012. But, Korean pop culture was famous even before Gangnam Style. Since 1999, South Korea had a seen huge growth potential through their cultural economy. Throughout the 2000’s South Korea experienced something known as the “Korean Wave.” The Korean Wave or the “Hallyu” was one of the major reasons behind South Korea’s cultural and economic growth. So, how did “Hallyu” help in helping South Korea’s economy?

Economics behind: Up sale!

To all the readers here, I have only one question for you. Have you ever wondered, why you buy more than you intend to? The truth is, you are a victim of something called as up-sale. Simply put, up-sale is where the sellers encourage the consumers to buy more. What happens here is that the consumers are indirectly pressured to buy the better product. This in-turn will lead them to spend more and the producers to earn more.

Can India grab this opportunity while it lasts?

Let’s be honest, we have seen enough of the pandemic. It would actually be better if we now think about the future and look out for challenges, which the humans have to face. Due to the unprecedented rising of Covid-19 cases worldwide, the global economy is expected to shrink sharply by 3 per cent in 2020, much worse than the 2008-09 financial crisis.

This is no longer just a virus but the survival of the fittest. There are sparking debates as to what the future will be like and how the consumers will react? It is obvious that the demand will fall due to lack of purchasing power and supply of services will be hit as enterprises remain shut. But most importantly, what decisions should businesses and government take to reduce the impact? 

Is this the time for playing mind games?

Since the beginning of the pandemic most of our lives have been confined to the walls of our houses. Through out the ongoing pandemic we have seen a lot of news and videos. Consumer behavior has changed as well. This has resulted in people buying goods which they might even not need but “just to be sure,” they buy it. In simple terms people are hoarding goods which they might even not need in upcoming days. Its simply their minds playing against them.     

Seriously though, Don’t panic!

Why do nations focus so much on Agriculture?

Since the beginning of human civilization, development of any country has taken place because of agriculture. It provides for the necessary goods required by any person for their survival. There are evidences of agricultural activities even before the Egyptian Civilization! But, still in today’s time there are disparities among countries with regards to their growth and the amounts of their trade and what not! Countries have been classified based on their level development. So, where does agriculture stand in today’s world?

Looks amazing right! Well thanks to pexels for this picture..

How are we going to travel after the pandemic?

Let’s be honest, most of us reading this had travel plans during this summer, be it domestic or international. With the ongoing pandemic, all of our travel plans have now, been cancelled! People have been under lockdown for the past 4-5 months. I am a frequent traveler and for me to be locked into my home and not flying is dreadful. For months, we have been witnessing news about it in various forums like TV news and radios. Social Media has been flooded with statistics regarding the number of death tolls. Somewhere in our brains, this does cause some psychological problems.

The tourism industry is huge. Every year, international trips cost around $1.6 trillion. To put that into perspective, the amount is larger than the whole of Spain’s GDP, or at least this was the case before the pandemic. There are a lot of countries which solely depend on the tourism industry as the major source for their income. But, due to the pandemic many have lost their means of income. In April 2020, only 31 million passengers traveled all across the globe. This sort of numbers were last seen in the early 1970’s. So, will this pandemic take us back in time?

Another Trade War or is it just a historical dispute?

For a long time now, the world has been fixated on the ongoing Trade-War between US and China. But you will be surprised to know about another Trade War, which has been ongoing since the Second World War. What started as a historical dispute over forced labor during the invasion has turned into a major economic and political crisis.

The brewing Trade War between these countries could become the cause for slowing down of future global growth! Potentially, this might be the reason for newer smartphones to be more expensive too. But, this one is not among the ones you are thinking right now! It’s between Japan and South Korea.

So, why are Japan and South Korea in a trade war?

How could Africa be China’s China?

The People’s republic of China or as their people call it, “The Red Dragon” has become the manufacturing hub for many international companies in recent times. This is mainly due to availability of a huge workforce at a cheap rate. This in turn reduces the cost of production and helps the companies to earn higher profits.

Now, you might be thinking that if China is the manufacturing hub for foreign companies then why would China be interested in African nations? You see, the country is running out of its potentiality to grow by double digits. This is because China is moving from Industrializing to Industrialized. Africa on the other hand is one of the least developed areas of the world and this lack of development makes the faster growth quite easy.

Can Rwanda be the Singapore of Africa?

Africa, till this date, is often seen as one of the poorest continent around the world. It holds the majority of the world’s least developed countries. Many countries suffer economically due to a corrupted government! But, Africa is BIG! There are 54 countries. And not, all of it fall under the generalization. Rwanda is the perfect example of this!

One of the easiest way to compare countries is through their indicators, and Rwanda’s are impressive. It is seen that out of every 100,000 people, Rwanda has an average of 2.5 murders per year only. As a point of comparison, that’s lower than India’s 3.2 and USA’s 5.4. It’s even more impressive when we look at the kind of the neighborhood Rwanda lives in. Uganda has 11.5, Tanzania has 7, Burundi has 6 and the DRC (Democratic Republic of Congo) has 13.6 murders per 100,000. In addition, Rwanda is ranked as 48^th least corrupt country. This might not be that perfect but it is 2^nd in Africa after Botswana.

Rwanda has a life expectancy of 67. This is 4^th best in Africa and is slightly below world average. What’s truly unbelievable is that 25 years ago, an average Rwandan life expectancy was just 28 years.

Is the Arctic heading towards its end?

Earth’s Northern hemisphere, as we all know is famous for having most of the landmass on Earth. Surprisingly, it has the only ocean whose boundary solely lies in it: The Arctic.

The Arctic Ocean.

Many of us don’t know much about the secrets of the Arctic, the treacherous water routes and the unbearable climate. The famous Norwegian explorer, Roald Amundsen was the first to fly over it. Yes, this is the same guy who was the first to reach the South pole. But, Wally Herbert was the first guy to step on North Pole. 

The Arctic is significantly important to us. Or is it? 

Diversity in population! A gift or a curse for business?

We all know that India is a nation with a huge diversity in population. People in India have various kinds of culture. Diversity has played a major role in shaping the business in India. On one side, it has made huge sums of profit for a company and on other side it has made a company incur losses too. So now the question arises that- does diversity in population affect a business a lot?

Who am I?

Hello fellow reader, I am Arpan from the city of joy, Kolkata. This is my first blog and today I will be introducing myself. I am an economics enthusiast who loves mixing various theorems with ongoing economic activities around the world. I am an avid reader and I love travelling!