Debts, the economic slowdown and post-demonetisation troubles have made corporates cut down on their budgets for Diwali gifts by 35% to 40% this year, a survey by the Associated Chambers of Commerce and Industry of India, or Assocham, showed on Wednesday.

The lower spending has largely been for gifts companies give their external networks, but the bonus payments employees get on Diwali have also seen a “downward impact”, Assocham said. It attributed this to companies’ need to cut costs, and the “jerks arising out of demonetisation and the rollout issues of the Goods and Services Tax”, which have affected the overall sentiment.

The poor buying as a result of this has further affected sectors that bank upon sales in the festive season, such as fast-moving consumer goods, consumer durable goods and smartphones, said Assocham Secretary General DS Rawat.

“The survey endorses the general low-key mood of the industry and trade with the considerable trimming of the festive budget,” he said.

Assocham’s survey was based on telephonic responses from 758 companies across cities.