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India Inc cuts Diwali gifts by 40%
Reeling under disruptions arising out of demonetisation and GST rollout, corporate India is going rather lukewarm in Diwali gifts, slashing the budget under the head by at least 35-40 per cent, Assocham said.
Hyderabad: Reeling under disruptions arising out of demonetisation and GST rollout, corporate India is going rather lukewarm in Diwali gifts, slashing the budget under the head by at least 35-40 per cent, Assocham said.
A survey by industry chamber The Associated Chambers of Commerce and Industry of India (Assocham) showed that the reduction in gifts from corporate houses was in sync with low-key festivities due to slowdown concerns and pressure on their balance sheets. “The survey endorses the general low-key mood of the industry and trade with the considerable trimming of the festive budget,” observed Assocham in the report.
The industry body said the reduction in gifts from corporate houses to their associates, networked partners, employees and other key personalities was more for outside connects than employees who more or less received their annual gesture from their employers.
“However, there has been certainly a downward impact on bonus payments with several corporates reeling under debt and cutting costs in their overall operations. Besides, disruptions arising out of demonetisation and roll out issues of the Goods and Services Tax (GST) have affected the overall sentiment,” it said.
Assocham secretary general D S Rawat said: “Consequent to slowdown in the Diwali gift sale, the FMCG companies which generally bet high on festive sales in the business of chocolates, cookies and sweets are reporting less than normal sales. Even the festive sale of high-end smartphones seems to have taken a hit.”
Assocham had conducted a telephonic survey of about 758 companies across tier I, II and III cities – Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai in the run-up to Diwali.
“Similar is the case with consumer durable firms engaged in washing machines, refrigerators, ovens, electric stoves and other such items. Even the festive sale of high-end smartphones seems to have taken a hit,” Rawat said.
About 60 per cent of the total respondents across cities said they don’t have any gift giving policy as such, but as part of networking they do exchange gifts.
“Most private companies’ representatives informed that they have gradually moved away from a fixed Diwali bonus and instead provide benefits considering employees’ individual performance for past few years and this year too hardly any change is expected on this front,” highlighted the survey.
Online shopping vouchers, cash rewards, gift cards, dry fruits, chocolate/ bakery (cake and biscuits) items, wearable devices like fitness tracker and others are top choices as Diwali gifts for both employees and clients. Most of the company representatives said there was huge drop in this space as well.
