'Diwali Gift': Vijay Sales Sees Upcoming GST Cut As Big Positive For Consumer Durables

A surge in positive consumer sentiment, backed by the Centre's planned overhaul of the goods and services tax regime, is setting the stage for a promising festive season for consumer durables retailers.

Nilesh Gupta, director of Vijay Sales, views this shift as a welcome "Diwali gift from the government," particularly for the air conditioner market which had faced a slowdown due to the early onset of monsoon.

"This is great, especially for ACs as the sales were impacted by monsoon. So this will be a real breather for us and a boost for sales," he said.

The GST bonanza aimed to boost consumption is the latest relief that's coming for consumers, falling along the same lines of the tax rebates that were announced during the Union Budget.

Gupta highlighted a direct link between the government's move and the increase in consumer spending.

"We're already seeing a growth of around 10% to 12% that would not have been possible without the tax cuts," he stated. He emphasised that in the consumer durables segment, consumer confidence is often more crucial than having money in their pockets.

"In consumer durables, what matters is not always if the consumer has money or not but the sentiment," he explained. With sentiment now high and more money in consumers' pockets, the industry is optimistic about the festive demand that is incoming.

The positive sentiment, combined with the recent tax cuts, is expected to boost discretionary spending on big-ticket items like ACs and TVs.