Holi, the popular festival of colours, usually happens in early March and brings in the first big opportunity for Indians across the globe, to celebrate their hearts out after New Year's Day. Some call it the celebration of love, some the welcoming of spring, while others associate it with the triumph of good over evil. Whatever may be the true purpose behind it, there is no doubt that it is believed to invoke prosperity and good luck for the upcoming year. The huge economic flux in the demand and supply chains of certain commodities in India, around Holi, largely corroborates this claim. However, the overall impacts of Holi on the economy are not completely analogous to what they might be in the case of other big festivals like Diwali or Dusshera in India.
Many economists consider festivals to be a harbinger of growth and thus a great time for the economy. Increased demand for festive commodities like diyas, gulaal and the like, a huge inflow of tourists during festivals, and the temporary employment opportunities created are some of the major reasons to think so. However, while the ripple may be a given as a consequence of festivals, it may not be that strong, effective or even positive in the case of smaller festivals like Lohri or in the case of festivals like Holi that generally fall at an odd time of the year. Holi, though second only to Diwali in terms of magnitude, lies outside the big 'festival season' in India that happens usually from October to November. Thus, the positive economic effects of Holi are largely temporary and restricted.
Moreover, what differentiates it extensively from other major festivals in India is the fact that it is not celebrated with the same colourful zeal and craziness in South India, where people avoid mass playing, as it is in North India. The acute water shortage and water pollution as a consequence of the increased usage of water guns called pichkaris and water balloons around Holi is another major externality of Holi that fails to be captured in the data that focuses only on sales and profits. However, with a shift towards a more eco-friendly Holi, things, though slowly, are changing for the better.
Nonetheless, in absolute terms, Holi offers huge space and opportunity for producers, part-time sellers, and small shopkeepers to maximise their monthly incomes and payrolls. In fact, according to CAIT, it was amongst the first few things to have fueled India's post-pandemic recovery through business sales of up to ₹20,000 crores and a 50% increase in travel bookings around this period. With just a few days left for Holi and the first-hand festivities starting already, a similar positive trend in sales is projected. In fact, travel firms have already witnessed a 30% increase in advance bookings for this year's Holi week, with popular holiday destinations such as Goa, Jaipur, Dubai and Singapore seeing a huge demand. Who knows, if the holy magic of Holi works out yet again, India may even be able to belie the fears of a slowdown, as predicted by IMF, from 6.8% to 6.1% in economic growth.
Gaurika Bhanot
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