Inflation, rupee slump have crippled middle-class India: survey

India's middle and low-income population has been brought to its knees by the crippling inflation, with a sinking rupee adding to the price rise through its effect on items like petroleum products and edible oil, according to a survey by top commerce and industry chamber Assocham.

The survey says the rupee depreciation has impacted consumers in the metros and large cities harder than those living in so-called tier-III towns and semi-urban areas.

Over 92 per cent of the respondents said that their monthly household bills have jumped by 15-20 per cent in just the last one month!

Among other things, the country's middle class has been forced to cut back on eating out, buying branded products or vehicles, vacations, studying abroad, and so on.

The survey further says crude palm oil prices set the pace for prices of other edible oils. These are imported in large quantities and any rise in edible oil prices will add to the inflationary pressures.

The rupee is trading at all-time lows against the dollar, having slumped to 60 a dollar on 20 June before recovering slightly.

Restaurants have been hit the hardest, with around 78 per cent of respondents avoiding eating out, according to the Assocham (Associated Chambers of Commerce and Industry of India) survey.

In addition, 65 per cent have stopped buying foreign branded goods, 49 per cent are spending less on home appliances, and 32 per cent have put off plans to buy a new vehicle.

And finance minister P Chidambaram's pleas to stop buying gold in order to shore up the government's unprecedented trade deficit have had little impact, as the middle class continues to bank on bullion as a bulwark against unbridled inflation.

"Despite the effort by the government to reduce, the Indian middle income group is bound by societal traditions and continues to buy gold even at higher prices which have increased the prices of gold due to rupee weakening," said D S Rawat, secretary general of Assocham.

The survey further said that Indian students aspiring to study abroad will also be affected as expenditure on food, living expenses and stay in rupee terms has risen sharply.

The numbers of course hardly matter to the shockingly large proportion of India's abjectly poor citizens. They continue to wallow in squalid misery as they have done since Independence.

The survey was conducted in major cities like Delhi and the National Capital Region (NCR), Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun and others.

Around 55 per cent of the survey respondents were in the age bracket of 20-29 years, followed by 30-39 years (26 per cent), 40-49 years (16 per cent), 50-59 years (2 per cent) and 60-65 years.