The Indian rupee might have seen the worst and might be on a path of recovery, but it has depreciated enough to hit corporate budgets according to a survey by industry body Assocham.
DS Rawat, the secretary general of Assocham said, "The budget for Diwali and other festivals like Dhanteras and Christmas may see a cut of 40 per cent this year because of the steep fall in rupee."
Tough business environment marked by high inflation, drop in corporate earnings and decline in new business orders are taking a toll on this festive season, he added.
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Severe slowdown in the Indian economy has put pressure on earnings, while inflation is set to rise amid a sharp depreciation in the rupee, the survey noted.
Slashing of corporate budgets means employees are either unlikely to get their customary bonuses this Diwali or may have to settle for a lesser amount, the survey found.
The cut in corporate budgets and curtailing of bonuses would have wider ramifications, dampening the already subdued business environment further.
Companies worst affected by the slowdown are in sectors like consumer durables, gems & jewellery, FMCG, electronics, automobile and real estate, the survey found.
Consequently, the sale of electronics goods, TVs, laptops, washing machines, kitchen appliances, handsets, mobile accessories, personal computer games are likely to be lukewarm this festive season.
The survey covered 2,500 small, medium and large companies located in Ahmedabad, Bangalore, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai and Pune.
It covered sectors like pharmaceutical, consumer durables, electronics, gems & jewellery, automobiles, FMCG, manufacturing and infrastructure etc.
(with inputs from PTI)
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