New Delhi: The persistent economic slowdown will force corporates to cut budgets by a staggering 40 percent this year and the austerity is set to hit even customary bonuses, according to a survey by industry body Assocham.
"Due to steep fall in rupee, the budget on Diwali and other ensuing festivals like Dhanteras and Christmas may see a cut of 40 percent this year," said Assocham Secretary General D S Rawat.
The tough business environment marked by high inflation, drop in corporate earnings and decline in new business orders is taking a toll on this festive season, he added.
The sharp cut in budget is on account of a severe slowdown which has put pressure on earnings, coupled with spiralling inflation and confounded by a sharp depreciation of rupee, according to the survey.
The slashing of budgets means employees working for corporates are either unlikely to get the customary bonuses this Diwali or may have to settle for a much lesser amount, the survey found.
The survey exercise covers 2,500 small, medium and large companies located in Ahmedabad, Bangalore, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai and Pune.
It encompasses sectors like pharmaceutical, consumer durables, electronics, gems & jewellery, automobiles, FMCG, manufacturing and infrastructure etc.
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.
First Published: Sunday, September 8, 2013, 12:39