A recent report by Bank of Baroda (BoB) forecasts that consumer spending in India during the 2025 festive season will be in the range of ₹12 lakh crore to ₹14 lakh crore. The Economic Times
- The estimates exclude daily consumer goods (like food and basic FMCG), focusing instead on higher-ticket items and celebrations tied to festivals and marriages.
- A large proportion is expected to come from wedding related expenditures, which may account for ₹4.5-5 lakh crore of the total.
- Other high-spend categories include clothing, electronics, automobiles, and marriage-festival gifts.
What Is Driving the Surge
Several factors are contributing to this projected uptick:
- GST Rate Cuts
Recent changes in the GST regime have reduced tax rates on many consumer durables, electronics, and related goods. This gives consumers more disposable income or at least makes expensive items more affordable. - Marriage Season Overlap
The festive period also aligns with the peak marriage season. With a large number of marriages taking place between October and December, spending around weddings (venue, apparel, decor, gifts) is a big driver. - Strong Consumer Sentiment
Surveys show that consumer confidence is rising. People are willing to spend more, especially on discretionary items. Good monsoons and easing inflation also bolster this sentiment. - Rise in Big-Ticket Purchases
Electronics, autos, white goods etc., are expected to see strong demand because with lower GST and holiday sales, consumers are more likely to purchase high-cost items.
Sectoral Breakdown & Estimates
Here’s how some categories are expected to perform under this projected spending:
| Sector | Expected Spending / Growth |
|---|---|
| Wedding & Marriages | ~₹4.5-5 lakh crore of the total forecasted spend. |
| Clothing & Footwear | Among the largest segments; spending estimated around ₹2.80-3.00 lakh crore. |
| Automobiles | Strong demand expected. GST changes and festive offers give a boost. |
| Electronics & White Goods | More purchasing of air conditioners, refrigerators, TVs, etc., aided by tax relief and festival discounts. |
Implications
- For the Economy: Such a high level of consumer spending can give a boost to GDP, especially as consumption is a major component of India’s economic growth.
- For Retailers/Brands: The period will be crucial. Retailers who leverage GST benefits, offer timely discounts, manage inventory well, and promote promotions aggressively may capture outsized gains.
- For Inflation & Demand Pressure: Even with GST cuts, high demand in autos and electronics might stretch supply chains, possibly pushing up prices in certain goods.
- Policy Effects Visible: The forecast underscores how tax policy (like GST reform) can have direct consumer behaviour and market outcomes.
Risks & Uncertainties
- Exclusion of FMCG and Daily Goods: Because the estimates leave out regular consumption (food, groceries), the total spending across all goods (including essentials) could be much higher—but also more volatile.
- Discrepancy between Intent and Actual Spending: Surveys and reports predict behaviour, but actual spend may lag if consumers are cautious or if macroeconomic pressures increase.
- Supply Chain / Inventory Constraints: For big-ticket items, product availability and delivery delays could drag.
- Regional Variations: While urban areas may see strong spending, rural or lower-income regions could be more constrained.
