High prices, rates make cos slash Diwali gift budget by 30%

Corporate houses have reduced their gifting budget by 30 per cent this Diwali on account of high inflation and rising interest rates, an industry body study has said.

"Companies operating in sectors like pharmaceuticals, real estate, FMCG and civil aviation have cut down their Diwali budget by 25-30 per cent this year compared to the last year," Assocham secretary general D S Rawat said.

Besides prices of edible items, the general inflation has remained stubbornly over 9 per cent since December 2010.

The study said that companies that have not cut down the number of people to give gifts, have opted for cost-effective

Chinese goods.

"Some multinational corporations are importing gifts for their employees from China as buying in bulk saves them a good amount of money," the study said.

It said sluggish economic growth in the western markets are putting pressure on the companies' bottomlines, thus, leading them to tighten their belts.

Orders for electronic goods like iPods, digicams, camcorders, mobiles and portable DVD players have come down, the study said.

However, affordable e-tablets, mobile phones and watches, are more in demand.