People do maximum shopping in the festive season of Diwali that also includes Navratras and Dhanteras. Be it jewellery or automobiles or gifting expensive articles to friends and relatives, this period is considered auspicious for making new purchases. But this Diwali, the mood of market appears quite dampened. City-based jewellers are bracing for low sales this Diwali. According to jewellers, ever since demonetisation, people have become cautious about how they spend their money. And GST is giving billing headaches to jewellers.
Rajiv Sahdev, president of Chandigarh Jewellers’ Association, said that the festive season had brought no cheer yet.
“After demonetisation, people’s money got blocked in banks. There is a limit on withdrawing the cash. Moreover, people haven’t even understood what GST is. They feel with GST, rates are going to be really high, so everybody is apprehensive about purchasing jewellery,” Sahdev told Chandigarh Newsline.
The jewellers’ association said in previous years there would be sales of about Rs 35 crore in the entire Tricity on the occasion of Dhanteras. The association said that if they get even 35-40 per cent of the sales they had last year, they would be happy. Arun Talwar, another city-based jeweller, said, “We are expecting barely 40 per cent of sales as compared to last year.”
The government’s recent relaxation in buying jewellery worth upto Rs 2 lakh has also failed to spur sales.
Rajiv Sahdev, president, Chandigarh Jewellers Association, said, “The new revised GST statement by the government has surely reduced the burden on the customers as earlier on the sale of jewellery worth above Rs 50,000, the customer had to submit his PAN card but as per new announcement, upto Rs 2 lakh jewellery purchase, the customer does not need to submit his PAN card details.
Yet, till now the market is down if we compare it with previous years. Call it the effect of GST or demonetisation, there are only 10 per cent buyers at present compared to previous years. Since the government has revised the limit of purchase from Rs 50,000 to Rs 2 lakh recently, the market may pick up in the next few days,” said Sahdev
After Diwali, comes the wedding season. The jewellers fear if the market’s sentiment remains the same, the poor sales may carry on even during the wedding season.
Sanjay Kumar, another city-based jeweller, said, “We had comparatively better sales on the occasion of Karva Chauth. There is a total slump in the ongoing festive season. I think that it will take at least a couple of years for the market situation to come back to normal,” said another jeweller who did not wish to be named.
City residents said that post-demonetisation, priorities have been fixed. “In fact, because of limited use of cash, people have set their priorities like buying of things required for use than luxury items. Only families where weddings are coming up may prefer to buy jewellery on Dhanteras,” said Vikram Sharma, a resident of Sector 20 in Chandigarh.
Automobile sector hopes to ride on offers
The automobile sector is also witnessing a slowdown during the ongoing festive season. The sector had initially picked up when the government had slashed GST on high-end sports utility vehicles and other luxury segment cars. However, that peak in sales was shortlived as GST was restored to the original tax levels within a period of two months. Although during the ongoing season, the automobile dealers have introduced many lucrative offers but they say that the response is yet to get better.
Rohit Bhateja, an expert in the automobile sector, said, “This time, the situation of automobile sector is worst. Except from four selective mid-segment brands, you will not find the waiting list of customers for any other automobile brand. There is a competition among the automobile dealers as well. A customer who agreed to purchase a car at a discount of Rs 75,000 in Chandigarh withdrew because he got the same car at a discount of Rs 1 lakh in Gurgaon.” “Despite huge discounts and other offers given by the automobile dealers, the desired response is yet to be seen,” Bhateja added.
“Special discounts are being offerred on Dhanteras and Diwali. Last month’s sale trend was slow because of Shraadhs, a period that people generally consider inauspicious for buying new things, especially vehicles. The sales did pick up during Navratras. We hope that the situation improves in the coming days since Dhanteras is approaching. Many people consider Dhanteras as one of the most auspicious days for buying new vehicles”, said Surinder Singh Grewal, senior relationship manager, Modern Automobiles, Panchkula.
“People are showing lack of interest in luxury cars after increased cess rate in GST. We have seen a large decline in sales from last months. We are trying to attract our customers by offering good discounts and offers. At least, for this festive season we are hoping for good,” said Pradeep Kumar, team leader in sales, EM PEE Motors Limited, an authorised dealer of Toyota Automobiles.