Print Edition - 2014-10-01 | Main News
Dashain keeps cash registers ringing
Sep 30, 2014-
Dashain is not just a cultural occasion but also huge business opportunity. The country’s economy becomes vibrant as people from all classes go on a shopping spree. Economists say Dashain spending accounts for 40 percent of country’s Rs 1.8 trillion gross domestic products (GDP).
With the Nepalis quite literally taking to shop-till-you-drop, the corporate Nepal finds this the perfect occasion to achieve their hefty sales targets. And marketers are smart enough to feel the pulse of consumers.
The companies, especially those dealing with fast moving consumer goods (FMCG), electronics items and automobiles, roll out festive schemes to lure customers during this time. Brisk sales of food and non-food items during the biggest festival sees massive financial transactions.
Economist Keshav Acharya estimates Dashain spending accounts for 40 percent of country’s Rs 1.8 trillion gross domestic products (GDP). “As well as massive travel expenses, people spend heavily on food, clothing and electronic gadgets,” noted Acharya.
“The growing purchasing power of the rural population fueled by remittance, and lavish spending among higher class have contributed to Dashain spending spree in the recent years.”
One of the major features of Dashain in Nepal is mass movement of people from the Capital to their home towns, resulting in a huge financial transaction in the transport sector.
According to the Federation of Nepalese National Transport Entrepreneurs, around 3.5 million people were travelling--both in and out of Kathmandu during Dashain. Not surprisingly, that figure constitutes around 2.8 million moving out of the Capital.
“With so many people travelling for the festival, the spending on transportation is quite naturally huge,” said Economist Acharya.
This is also the time when the country’s banking system witnesses huge cash withdrawals from banks and financial institutions. Mega Bank CEO Mega Bank Anil Shah said that cash withdrawal during Dashain increases by 20 percent than normal time.
According to Diwakar Poudel, head of Corporate Affairs at Standard Chartered Bank Nepal, average daily withdrawal from his bank during the festival has been Rs 100 million as compared to Rs 30-40 million at other times.
The Nepal Rastra Bank (NRB) estimates Rs 40 billion was withdrawn from banks and financial institutions over the last two weeks. “Money in circulation was around Rs 260 billion two weeks ago which has since reached close to Rs 300 billion,” said NRB spokesperson Mamohan Kumar Shrestha.
Dashain bonus for employees in both public and private sector companies also fuels cash withdrawals.
“Cash reserve in the government’s treasury has come down to around Rs 62 billion from Rs 80 billion in the last few weeks, thanks largely to payment of salary and bonuses to the government employees,” said Shrestha.
Published: 01-10-2014 07:55