New Delhi: The persistent economic slowdown will force corporates to cut budgets by a staggering 40 percent this year and the austerity is set to hit even customary bonuses, according to a survey by industry body Assocham.

"Due to steep fall in rupee, the budget on Diwali and other ensuing festivals like Dhanteras and Christmas may see a cut of 40 percent this year," said Assocham Secretary General D S Rawat.

The tough business environment marked by high inflation, drop in corporate earnings and decline in new business orders is taking a toll on this festive season, he added.

The sharp cut in budget is on account of a severe slowdown which has put pressure on earnings, coupled with spiraling inflation and confounded by a sharp depreciation of rupee, according to the survey.

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