Grim store sales cast shadow ahead of India's festival of lights

New Delhi

THIS close to India's glittering festive season, the cash register at Neha Tandon's clothes store should be working overtime as revellers snap up elegant sarees for Diwali celebrations and lavish wedding parties.

But the traditional spending sprees have not transpired this festival season, the first since a sudden recall of India's high-value banknotes sent shock waves through Asia's third-largest economy.

"Demonetisation" caused months of crippling cash shortages that hit businesses hard and economists concede it contributed to dragging on India's growth, which hit a three-year low of 5.7 per cent in the first quarter of the financial year.

Retailers say consumers remain scared of parting with their cash and blame that upheaval, and subsequent economic reforms from Prime Minister …