INTERNATIONAL JOURNAL OF ADVANCE RESEARCH
IN MULTIDISCIPLINARY

This research investigates the macroeconomic impact of festival-driven consumption in India, particularly during culturally significant events like Diwali and Dussehra, between 2020 and 2024. Anchored in Keynesian economic theory, especially the multiplier effect, the study evaluates how temporary surges in private consumption serve as short-term stimuli that substantially influence aggregate demand and other key macroeconomic indicators such as GDP, employment, inflation, the current account deficit (CAD), and digitalization. Utilizing a robust dataset that includes primary survey responses from over 38,000 households across 396 districts and extensive secondary data from government publications, trade bodies, and commercial entities like Amazon and Flipkart, this paper captures the multidimensional role of festive spending in India’s economic landscape. Findings reveal that a high Marginal Propensity to Consume (MPC) of 0.8 to 0.85 during festive seasons significantly amplifies national income, with the 2024 festive expenditure of ₹4.65 lakh crore contributing nearly ₹30.99 lakh crore to GDP through a multiplier of 6.67. The research further highlights increased employment across formal and informal sectors, shifts in consumer behavior toward digital transactions and e-commerce, and the consequent widening of the CAD due to escalated gold imports. By systematically analyzing the interplay between cultural consumption and economic performance, this paper underscores how festivals serve not only as social and religious milestones but also as potent levers for economic expansion and structural transformation in the Indian economy.