High inflation will force a majority of middle and lower income families to curtail their festive budget , according to a survey by industry chamber ASSOCHAM.
Over 72 per cent of respondents said they would be forced to cut their Diwali expenditure by 40 per cent due to sudden erosion in their purchasing power and the overall bleak economic outlook.
The survey was conducted over a period of two months in major cities such as Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun.
A little over 200 persons were selected from each city on an average, ASSOCHAM said in a statement. Delhi ranked first in curtailing expenses followed by Mumbai, Ahmedabad, Kolkata and Chennai. While the price of essential commodities have risen, , the additional burden due to a steep rise in the prices of sweets, dry fruits, crackers, pulses, dairy products, fruits or vegetables is set to dampen festive shopping.
Even gold is hovering at around Rs. 30,000 per 10 gram compared to Rs. 22,000 last Diwali.
As per the survey, the high income group has remained largely unaffected by the fall in rupee value as well as high food inflation.
“Majority of respondents said they would spend less money as the prices of gifts and traditional Indian sweets have gone up by 55 per cent, while the value of saving has gone down by 15 per cent. Revisions in interest rates by banks have also sent their EMIs soaring, further eroding their monetary power,” the survey, whose findings were released on Wednesday, said.
“Most of the respondents plan to cut down on personal expenses or go bargain hunting. Over 57 per cent of the respondents will buy only on sale, 12 per cent will buy fewer gifts. Only a small percentage feels that festivals are the time to splurge,” the survey added.
“The prices of vegetables and bakery products have also risen. The rates of ghee, sugar, edible oils, flour and spices have registered increases of around 25 per cent to 35 per cent in one year,” the survey said.
