In another glaring example of biting impact of demonetisation and GST on the consumers, a latest survey by Assocham has revealed that two key economic measures by Modi government had caused at least 35-40 % reduction in this year’s Diwali spending.
The survey also 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, reported PTI.
This comes just weeks after it was revealed that the country’s GDP had experienced considerable slowdown, lowest in three years, following the chilling effect of demonetisation. Even Finance Minister Arun Jaitley had expressed concern on the economic slowdown.
The topic has gained momentum in the run-up to assembly elections in Gujarat and Himachal Pradesh with opposition parties busy extracting the electoral mileage of people’s anger against the Cntre’s failed economic policies.
The Assocham survey said that 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 demonetization and roll out issues of the Goods and Services Tax (GST) have affected the overall sentiment,” it 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, Assocham secretary general D S Rawat said.
“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. “The survey endorses the general low key mood of the industry and trade with the considerable trimming of the festive budget,” he said. The Associated Chambers of Commerce and Industry of India (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.