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Last Updated: Thursday, 19 October 2006, 23:00 GMT 00:00 UK
Diwali splurge reflects economic boom
By Karishma Vaswani
Business correspondent, BBC News, Mumbai

Children playing with Diwali sparklers
Some Diwali pleasures are simpler than others

It's festival time all over India this week - and in Mumbai, the nation's financial capital, the festivities have begun in style.

Five-star hotels across the city are booked out for glamorous parties, held by Mumbai's elite.

Televisions are blasting the latest Bollywood songs from films that are being released this weekend. It's Diwali - the Hindu New Year - a time for celebration.

Deep in the heart of Mumbai, though, in one of the city's many slums, eight-year-old Raju and his friends are celebrating Diwali in their own way.

Playing with sparklers, the boys are looking forward to their parents spoiling them this Diwali.

The holiday is traditionally a time for Indian parents to buy their children new clothes and gifts. And with the Indian economy booming, even those at the bottom of the economic ladder are feeling richer.


"My mum and dad are spending more money on me this year, " Raju told me, in between a session of setting up off some colourful sparklers with his mates.

Raju, 8, with sparkler
Raju is looking foward to receiving Diwali gifts

"They are buying me a new coat and new shoes. We'll be buying lots of sweets - and chocolates, which I love. I am hoping to get many more presents."

Indian children are reaping the benefits of economic growth - especially those who are born to the country's fast-growing middle classes.

It is estimated that about 200 million people now make up the middle classes in India.

Indian parents are feeling far more generous and want to spend more of their rising salaries on their kids.

Spending has become fashionable and is driving up sales at kids' stores across the country. The children's market is expected to grow by as much as 35% a year.

Purchasing power

A number of foreign brands are heading to India's shores to capitalise on this growth. Monnalisa, a European girlswear line, launched stores in India this week.

According to reports from the Indian retail industry, global brand Nautica is set to come to India with its children's clothing chain.

And cartoon giant Disney has also launched its apparel stores across the country, with 150 speciality outlets in the pipeline over the next few years.

Children shopping in a Disney store in Mumbai
Disney stores are already making an impact in India

To reach out to Indian children, Disney started broadcasting two of its channels in regional languages in 2004.

Building a brand that kids here can associate with is vital for its success as a business, media experts say.

"In our research, we've found that children are fast becoming the influencers in Indian families' spending habits," CVL Srinivas, chief executive of Maxus in Mumbai, told me in one of the Disney speciality stores in the city.

He heads a media buying firm and is largely responsible for selling Disney's brand in India.

"The numbers are quite revealing: 66% of Indian kids have articulated a brand preference to their folks - an average of 47% of kids are curious about their parents' purchases across different categories.

"And an average of 40% of kids even suggest brands to their parents. The Indian child is fast becoming the decision-maker in terms of purchasing in Indian families."


But just around the corner from the Disney store in Mumbai, there is a stark reminder that not all of India's children have the same opportunities.

Armaan scavenging for bottles in Mumbai's canals
Armaan is missing out on the economic boom

For millions of Indian children, it's a struggle merely to earn money, let alone spend it.

The United Nations estimates that between 12 and 60 million children here work to make a living, despite a recent ban on child labour.

Armaan is a scavenger in Mumbai. He collects used plastic bottles from Mumbai's filthy canals and sells them to shops nearby.

He makes $2 a day doing this work. He says he would like to go to school, but cannot afford to.

India's children may be its future, but as yet, not all of them are included in the country's economic growth.

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