Indian corporates will cut their budget for Diwali gifts by about 50% this year due to high inflation and shrinking profit margins, a survey by industry body Assocham said today.
"This year, business houses are bracing for a muted Diwali affair evidently as majority of respondents have tightened their purse strings and have slashed their budgets for Diwali gifts significantly," it said.
Of the 150 companies interviewed, about 30 of them have decided to entirely do away with gifting concept this year, it added.
"India Inc this Diwali is severely cutting back its corporate gift budgets by a whopping 45-50% as costs balloon and earnings together with profit margins shrink by the day," it said.
Majority of the participants said they are going to spend less on gifts for their corporate connections this year and have drastically scaled down their budgets in this regard.
"Corporates blamed the prevailing economic slowdown both in India and abroad together with decelerating industrial growth, spiralling inflation, dropping operating profits for going slow this festive season," the survey said.
It said that digital cameras, watches, pens, wallets, chocolates and smart phones have replaced the large dry fruit packs, luxury gift items, gold coins, it added.
Further, it said that dry-fruit traders are witnessing dull business this year.
Many company representatives even said they have deferred their plans for holding an annual Diwali party for their employees and are not distributing any festive bonus, it said.
