Three days before Diwali, business is slow at 86-year-old Virender Anand’s wholesale toy shop in Sadar Bazar. People have come in to look at some baby walkers or prams, but no one has bought anything.
For Anand and his son, the cuts in GST rates announced by the government have not translated to a boost in sales. At both Sadar Bazar and Connaught Place, market hubs visited by The Indian Express, traders complained that the cuts may have come a little too late.
The Goods and Services Tax Council last month cleared next-generation reforms in the eight-year-old indirect tax regime, paving the way for a broad two-slab structure of 5 per cent and 18 per cent with a demerit rate of 40 per cent only for super luxury, sin and demerit goods.
“Numbers of customers have declined over the past few years, and this year, it’s very low. People don’t have money in their pockets,” Anand said. Part of the reason lay in ecommerce and quick-commerce sales, he said, and also pointed to the difficulty many people face in going to markets.
“There is just too much garbage on the streets, and traffic has become very bad in this area,” he said. Indeed, the streets of Sadar Bazar were teeming with people on Friday evening. Vendors lined the roads, selling puja accessories, diyas, and flowers.
Pawan Swaraj, owner of another wholesale toy shop, too mentioned the traffic, which has been particularly bad across the city this week. “There are 2-km-long traffic jams near the market,” he said.
According to Swaraj, the GST rate cut on toys has not had an impact because the GST on plastic is still 18%, which makes it difficult for manufacturers to lower prices.
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The owner of a home decor products store said the timing of the GST rate cut did not allow him to make gains. “We are a wholesale shop, so our products are sold more than a month and a half in advance. We made our major sales before the rate cuts took place,” said the store owner, who did not wish to be named.
However, Rakesh Kumar Yadav, president of the Federation of Sadar Bazar Trade Associations, painted a less gloomy picture.
“In my discussions with shopkeepers, there is a huge positive impact on their sales. There are two impacts: products have become cheaper and also, cheaper Indian products have led to more domestically manufactured products being bought, which is also being pushed by the Prime Minister,” Yadav said.
Praveen Khandelwal, secretary general of trade body Confederation of All India Traders and MP from Chandni Chowk, predicted a boom in gold and silver trade on Dhanteras (Saturday). “This Diwali, markets across India — including Delhi — are witnessing tremendous enthusiasm, and both traders and consumers are visibly joyful and optimistic,” Khandelwal said.
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But the owner of a gift shop in Connaught Place said corporate bulk purchases were down this year. “Our sales were already down; the GST reduction has not had a major impact. Corporates are not making the bulk purchases they made last year, they also have limited budgets this time,” he said.
Amit Sundra, owner of Ram Chander Toys and Sons, said: “There has been no immediate impact of the GST rate cut in this festive season. There will surely be an effect in the long term, but it is not visible in the sales numbers right now.”
