Chennai : Companies across sectors plan to tighten their purse strings and slash their corporate gifting budgets by up to 20 per cent as the onset of festival season has not been very encouraging for India Inc. amid uncertain recovery in economic growth and a deficient monsoon leading to growth in prices of essential commodities, according to a quick survey conducted by Assocham.
“Depreciating rupee, weak consumer demand showing up in sluggish sales, impact of turbulence in global markets, etc. are certain key factors forcing corporates to slash their Diwali gift budgets,” highlighted the survey by Assocham.
Assocham had interacted with about 1,000 working people and 500 company representatives from diverse sectors like automobile, biotechnology, BFSI, energy, FMCG, IT, pharmaceutical, real estate and others during the course of the past three weeks across 10 prominent cities, including Ahmedabad, Bengaluru, Chennai, NCR, Kolkata and Mumbai to ascertain individuals’ and companies’ festive plans.
Though in recent times festivals have become an occasion to exhibit luxurious living and with heavy pay packets, the spending capacity of people have only grown. But the cost of living and prices of food items have grown faster than earnings, which is compelling people to refrain from overspending during the festive season, highlighted the survey conducted under the aegis of the Assocham Social Development Foundation. “A new government had been elected last year which boosted optimism and led to a rise in consumer confidence, together with improved job security and a perceptive improvement in business sentiment. This encouraged companies to increase their festive budgets by 10-15 per cent last year during Diwali,” said D S Rawat, secretary- general of Assocham while releasing the findings of the chamber’s survey.
“But this time around there is a bleak business outlook for trade and industry as government struggles to rev up economic growth and the labour market,” said Rawat. During the survey, a majority (60 per cent) said they have shelved plans for big-ticket expenses.
From diverse sectors like automobile, biotechnology, BFSI (banking, financial services and insurance), energy, fast moving consumer goods (FMCG), information technology (IT), pharmaceuticals, real estate and others during the course of the past three weeks across 10 prominent cities of Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Indore, Kolkata, Lucknow, Mumbai and Pune to ascertain the individuals’ and companies’ festive plans.
During the survey, a majority (about 60 per cent) of people said they have shelved plans for expenditure on big ticket items be it automobiles, consumer durables and other non-essentials fearing their companies might cut bonus as they have witnessed a lull in most of this year.
Companies reduce corporate gifting, this Diwali
Weak economic factors have resulted in this trend
People’s big-ticket buys have also considerably dipped