Diwali to see 40% cut in festive budget, Delhi-NCR top in expense curtailment!

Breaking Tourism News (BTN India)
An overwhelming majority of middle and lower families will slash their festive budget by over 40% this Diwali season as they struggle to cope up with their monthly expenses due to rising inflation, less job opportunities and shrinking real wages reveals an ASSOCHAM quick survey.
A recent ASSOCHAM Survey on “High prices dampening the festive spirit” conducted under aegis of ASSOCHAM clearly showed over 72% respondents from middle and lower middle income families would be forced to slash their Diwali expenditure by 40% and on average spend nearly 25% of their monthly salary on Diwali for shopping, sweets, gifting, apparel etc. Delhi-NCR is on top of the chart projecting curtailment of festive Budget thanks to eroding purchasing power, reveals the ASSOCHAM.
The survey was conducted in a period of two months beginning August to September 2013 in major cities like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun etc. A little over 200 persons were selected from each city on an average. Delhi ranks first in curtailing their expenses during the festive seasons followed by Mumbai (2nd), Ahmedabad (3rd), Kolkata (4th) and Chennai (5th).
The skyrocketing prices of essential commodities have left the “aam admi” hard pressed. Be it sweets, dry fruits, crackers, pulses, dairy products, fruits or vegetables, the prices have registered large increase this year compared to the Diwali last year. Even gold, the much sought after item during this festive season, stays in the range of Rs.30,000/- per 10 gm compared to Rs.22,000 last Diwali, said D S Rawat Secretary General ASSOCHAM.
The survey reveals the high income group remains unaffected from rupee fall, double digit food inflation. However, a large number of lower and middle income groups indicate that they are finding ways to cut back spending now or indicating they will do so in the future, noted the survey.
Majority of respondents said that they plan to spend fewer amounts on this festive season as the prices on average of most of the gifts and traditional Indian sweets have gone up by 55%, while the value of saving has gone gown by almost 15%. Revisions in interest rates by banks have also sent their EMIs soaring further eroding their monetary power.
Most of the respondents plan to cut down on personal expenses or go bargain hunting to keep their festive budgets in control. Over 57% of the respondents will buy only on sale or discounts, 12% will buy fewer gifts and the rest 2% will buy a group gift. Only a small percentage feels that festivals are the time to splurge, even as discounts remain the biggest attraction for most buyers.
Over 76% of the respondent said that monthly grocery bills have jumped to about Rs 7,000/-, compared to Rs 4,000 in the last 12 months. The prices of vegetables and bakery products have also risen in the last few months. Obviously, this will affect the Diwali celebrations.
Milk, butter, sugar, dry- fruits, flour and labour charges – all go into making an irresistible sweet have turned dearer. On the other side, dry fruit & sweets are the most expensive item of Diwali, adds the ASSOCHAM survey.
Similarly, the rates of ghee, sugar, edible oils, atta and spices have also registered increases of around 25 per cent to 35 per cent during the past one year.
The Survey copy
ASSOCHAM Questionnaire – Will you spend in festive seasons?
ASSOCHAM conducted a survey to gauge the consumer sentiments. Majority of the respondents tighten their purse strings to splurge this seasons.
Q) Will you spend more, or less, than last year this festive season?
A majority of the respondents is unlikely to go on a spending spree this festive season: As much as last year 14%), More (17%) and Less (69%).
Q) If you plan to spend less, what is the reason?
High inflation, less job opportunities and shrinking real wages are the main reasons for buyers cutting down on their spending: Saving for big purchase (17%), EMI have increased (12%), prices have gone up (50%) and Value of saving has gone down (21%).
Q) How do you plan to cut down your expenses?
Most respondents plan to cut down on personal expenses or go bargain hunting to keep their festive budgets in control: Buy fever gifts (17%), Buy only on sale or discount (45%), recycle gifts (7%), Buy a group gift (4%) and spend less on sweets, cloths (27%).
Q) If you plan to spend more, what will be the incentives?
Only a small percentage feels that festivals are the time to splurge, even as discounts remain the biggest attraction for most buyers: Higher Discounts (68%), I am earning more (8%), I have received a bonus (10%) and It’s the time to splurge (14%).
Q) On which items will you spend the most?
Gifts, food & drinks (25%), renovating the house (10%), Vehicles (6%), Cloths (27%), Electronics (28%) and Gold & Jewellery (4%).
Q) How will you pay for your purchases?
Only a small percentage of respondents plan to take on more debt or dip into their savings when they go for shopping: Use a debit card (39%), Use a credit card (47%), Dip into my savings (3%) and Opt for EMIs at 0% (11%).
Q) How much of your monthly take-home salary will you spend?
Only a small 21-40% (26%), 41-60% (17%), 61-50% (6%), 81-100% (5%) and 0-20% (46%).
Q) Which is the best deal?
Most of the respondents opted for instant cash discounts as the best deal, rather than choose one where they would have to spend more for stuff they may not need: Up to 50% discount (51%), Buy one, get one free (29%), Buy two for the price of one (15%) and Spend Rs. 5,000 get a gift worth Rs. 500 (5%).
Q) Do you believe most festive offers by retailers are genuine?
Most consumers feel that discounts and freebies should be taken with a pinch of salt as they may not be genuine: Yes (9%), only some of them (53%) and No (38%).

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