The Lokapal Bill has created a rage in the nation. The Jan Lokpal Bill aims to effectively deter corruption, compensate citizen grievances, and protect whistle-blowers. Delhi Chief Minister Arvind Kejriwal, who refused to stay in most luxurious colonial-era bungalows, and top security is striving hard to make the nation corruption free.
If the anti-graft rules are strictly imposed, there will certainly be an impact on the sales of branded luxury items in India. It is believed that gifting of luxury products is a popular means of bribing. Another factor that has kindled the fear of luxury sales being impacted is that a lot of luxury purchases are cash transactions and much of it is ‘black money’ or undeclared in tax filings. The general consensus is that if the drive against graft and black money strengthens, then India may mirror what has happened in the Chinese luxury market. According to a recent study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at USD 6.5 billion in 2012 and is estimated to cross USD 14 billion mark during the course of the next three years. Sectors such as five star hotels and fine-dining, electronic gadgets, luxury personal care, and jewellery performed well in the year of 2013 and are expected to grow by 30-35 per cent over the next three years, the study revealed.
However, in an ode to deplete corruption in the country, there are fewer cash transactions in luxury outlets than before. While anti-corruption drive may have some impact of luxury goods sales in the short term, the Indian luxury market is set to boom in the long term, driven by rising disposable incomes and aspirations of young consumers.
[Via – The-Economic-Times]
