There's no single right answer to 'what should we spend on Diwali gifting' — but there is a sensible way to arrive at a number instead of guessing, which is to build it bottom-up from headcount and tiers rather than picking a round total and working backward.
A common structure for mid-sized Indian companies: 70–80% of the employee base in an entry tier (₹500–₹1,500 per person), 15–20% in a mid tier for team leads and managers (₹1,500–₹3,500), and the remaining 5–10% — leadership and a short list of top clients — in a premium tier that can run anywhere from ₹5,000 to well above ₹10,000 per recipient.
For a 500-person company on this structure, that works out to roughly ₹5–8 lakh in total gifting spend, though the exact number depends heavily on which categories you choose within each tier — gift vouchers and gadgets sit at very different price points even within the same nominal 'tier'.
Whatever total you land on, build in a 10–15% buffer for headcount changes between planning and dispatch — new joiners, last-minute additions, and the inevitable 'can we add five more for the Mumbai office' request are far easier to absorb if you've planned for them.