"Over 72 per cent respondents from middle and lower middle income families would be forced to slash their Diwali expenditure by 40 per cent and on an average spend nearly 25 per cent of their monthly salary on Diwali," according to a survey conducted by industry body Assocham.
Revision in interest rates by banks have also sent most Indians' EMIs (equated monthly instalments) soaring, thereby eroding their monetary power, it added.
"Even gold, the much sought after item during the festive season, is in the range of Rs 30,000 per 10 gm compared to Rs 22,000 last Diwali," Assocham Secretary General D S Rawat said.
However, the high income group remains unaffected from the rupee fall and double digit food inflation, the survey said.
Out of the 72 per cent respondents, 57 per cent said they will buy only on sale or discounts, whereas 12 per cent will buy fewer gifts and the rest 2 per cent will buy a group gift.
However, only a small portion of them feel that festivals are the time to splurge, even as discounts remain the biggest attraction for most buyers.
Besides, 76 per cent of the respondents said their monthly grocery bills had jumped to about Rs 7,000 as against Rs 4,000 in the last 12 months. Prices of vegetables and bakery products have also risen in the last few months.
Obviously, this will affect the Diwali celebrations, the survey said.
The survey, which was conducted over the last two months in major cities like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun, saw Delhi-NCR topping the chart in curtailment of festive budget.
It was followed by Mumbai, Ahmedabad, Kolkata and Chennai, respectively.