‘Our house rent has gone up 25%’
They are young, energetic and in healthy working ages, but that does not insulate them from the effect of rising inflation. Sandeep Singh reports.business Updated: Jul 30, 2008 22:02 IST
They are young, energetic and in healthy working ages, but that does not insulate them from the effect of rising inflation. <b1>
Surging cost of living in urban India has not made brothers Malik and Abir, who are 28 and 27 years old respectively, fight for sustenance, but has caused a significant rise in their monthly expenses and a corresponding fall in savings. And they are still bachelors, with no family to support.
“Over the past couple of months our monthly expenditure on rent and food alone has gone up by 30 per cent,” said Malik, the elder of the two, working as a senior official with a private sector insurance company. Abir is employed with a reputed housing finance company.
The brothers stay in a two-bed room flat in Delhi’s Vasant Kunj for which they pay Rs 15,000 as monthly rent. “Our house rent has seen an upward revision of 25 per cent this year and it has hit our expenses in a big way,” said Malik. They have also seen their monthly contribution towards food and other basic household requirements going up by more than 20 per cent.
“I realised it because my monthly contribution towards food and other miscellaneous expenses that I give to my domestic help has gone up,” says Abir. “I have been told that edible oil prices have shot up along with a rise in the price of fruits and vegetables.”
The recent fuel price hike has seen their monthly budget on petrol rise by 10 per cent. Having stopped using public transport for a long time now, they are looking for options to reduce their car usage. “The day metro train facility becomes available from my residence to somewhere close to my work-place, I will stop using my car to commute to office,” said Malik.
While the brothers’ total income stands at approximately Rs 1 lakh, their combined household expenditure stands at Rs 30,000. After adding their equated monthly instalments (EMI) on a car loan, fuel and personal expenses, the total expenditure runs up to Rs 70,000.
Abir invests Rs 5,000 in ULIPs (unit linked insurance plans) per month while Malik invests Rs 40,000 each year in mutual funds.
The brothers now want to buy a house of their own. “As rents are rising, it is high time we got a house of our own so that the rental can go towards paying the EMI. That way we will also be investing in something permanent,” said Abir. With
interest rates on home loans expected to go up and inflation remaining firm, their savings are likely to go further south.
“We want our savings to go up so that we can meet our expected EMI on the home loan but over the past three months we have seen our savings go down,” said Malik. Their savings have gone down from Rs 35,000 to only Rs 30,000 now.
To make things worse, they have seen an appreciation of only about 10 per cent in their salaries, which is less than what they had expected. They have been generous enough to revise the salary of their domestic help, Bhandev, by almost 25 per cent over the past six months.