What A Stroll Through Mumbai's 'Kandil Gully' Tells You About The State Of The Economy

It's hard to not vibe with the festive season when taking a walk through Mumbai's largest kandil gully. The street springs to life 10 days before Diwali every year, providing hundreds of small-time vendors and shopkeepers a source of income. Swati Shailesh Shinde has a job but relies heavily on the money she makes from hand-crafted kandils which she sells in the street ahead of Diwali.

Numerous vendors like Shinde sell the decorative lanterns ranging from Rs 50 apiece to a few thousands. Sizes range from small ones that fit in the palms of your hands to those a few feet tall. Others who don't sell home-made kandils are seen selling wax candles, traditional earthen lamps, rangoli kits, and lights, among other decorative items.

So far, the business "has been alright", says Jitendra Kodhe, who is selling an array of candles, including some whimsical ones shaped like modaks and ladoos.

Its not just Kodhe. Analysts to auto dealers and economists to policy makers — all are keeping a close tab on what the king of festivals heralds for the coming year. The all-important festive season carries high hopes with expectations of bumper spending aided by GST rate cuts, easing inflation and rising incomes, albeit only in rural areas.

Several other high frequency indicators too show signs of heightened economic activity. Around 43% of employers say they’re hiring more this festive season than last year, according to a survey by job search portal Indeed. Sectors like e-commerce, logistics, retail, and hospitality are leading the way. Employers are offering referral bonuses and higher hourly wages, according to the survey's findings.

India’s automobile retail sector posted a 5.22% year-on-year growth in September 2025, with total vehicle registration reaching 18,27,337 units, according to data released by the Federation of Automobile Dealers Associations.

As per the estimates shared by the Confederation of All India Traders and its jewellery wing, the All India Jewellers and Goldsmith Federation, total gold and silver trade on Dhanteras is expected to exceed Rs 50,000 crore nationwide. Rising gold and silver prices have failed to dampen the festive spirit, with the steep price hikes likely to attract investors to bullion markets. According to CAIT Secretary General Praveen Khandelwal, bullion and coin purchases are expected to dominate festive buying between Dhanteras and Diwali.

Yet, high frequency indicators continue to show mixed trends.

In a research note published earlier this month, Ambit Capital said that it expects the festive season to exert a lower-than-expected boost this time. "We expect a stagnant formal labour market – visible in moderation in corporate wage growth at about 7% on an annual basis in FY25 and weak hiring – to limit discretionary spending."

Incremental consumption growth will be led by Tier-2 and 3 cities, with relatively robust labour markets supported by strong agriculture and GCCs, the note said. This is reflected in about 4x higher e-commerce volume growth in recent sales events. But risks arise from tightening credit, impeding post-pandemic leveraged spending, as banks and NBFCs turn cautious given repayment stress.

Hopes persist. While business has been decent so far for kandil vendors at the gully, they continue to anticipate high footfall on the weekend before Diwali.