The downturn may have receded but this has failed to bring smiles on the

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faces of traders in the national capital who are ruing the lack of enthusiasm among Diwali revellers.

Traders in major markets here say their business is down by nearly 50 per cent from what it was last year and blamed it on people rationing their shopping budgets due to the meltdown and the resultant fall in their income.

"People actually don't want to spend much this year and this has affected our business badly," says Sanjeev Mehra, president of Khan Market Traders Association.

Gift items are among the worst hit, he says. Diwali, the festival of prosperity, is an occasion when people exchange gifts -- mostly household goods, jewellery, dry fruits and sweets.

"Novelty shops, which were doing estimated business of Rs four lakh every year, are now assessing their business could be around Rs two lakh this year," Mehra says.

"People are coming out, but, unlike earlier Diwalis, they are not buying anything and everything. This time, they are being very selective while buying," he says.

Echoing similar views, R G Gambhir, general secretary of Green Park Market Association says, "there has certainly been a drop in business this season. It is not because people are not coming out to shop, but they are spending less this time."

Besides the top-end Khan Market and Green Park markets, a similar trend is being noticed at many other places, traders say as the economic downturn has had an across-the-board impact.

While various economic indicators, including industrial production and vehicle sales, have been showing an upward trend and recovery from the levels seen till early this year, the revival in consumer spending has been slower so far.

Gambhir says a clear picture of the decline was difficult to be ascertained but business could be about 40 per cent below than what it was last year.

Some shopkeepers, however, downplayed the impact of economic downturn on consumers' shopping spree and say there was business as usual ahead of Diwali.

"There has been no impact due to the economic recession. People are thronging the market till late in the night and buying things they want to," says a shopkeeper dealing in artificial jewellery at the Lajpat Nagar Central Market.

"At times, customers want to be entertained after 10 in the night. In such cases, we have to close the doors to stop them from entering," he says.

A recent survey by online transaction service provider PayPal also found a bullish mood among shoppers. About 45 per cent Indians were found to be planning to spend more during this Diwali season as compared to the previous year.