Middle class pays the price for inflation
Samuel Baig, still stout at 70, has taken a painful decision that could simply mean not being able to walk straight again.
His broken leg fused incorrectly after a fall seven months ago. Hobbled by healthcare expenses, Baig told his doctors last month he had no cash to continue treatment or even a surgery. He’d rather limp.
Baig’s hard times mirror how India’s high inflation is hurtling its middle-class into a silent crisis. Incomes have fallen or failed to meet rising costs. January through June this year, India’s national income grew 5.6%, the slowest in months, while retails prices rose over 10%. A study by the UN’s Food and Agriculture Organisation says a 10% inflation rise hits welfare of both rural and urban households in emerging economies.
Away from policymakers’ gaze, prices are spooking households as the government battles its own cash crunch.
Unlike the US’s Medicaid or the UK’s National Health Service, there’s no universal health coverage in India, which spends just 1.2% of its GDP on healthcare. Of this, the Centre funds only 0.3%.
High food prices — still the largest slab of monthly family expenditure — threaten to leave people financially drained for years.
“A little gold jewellery is a must. But Rs. 25,000 for just a necklace?” asks Ravi Kant, chief mechanic at a garage in Delhi’s Green Park, who’s planning his son’s wedding. At over Rs. 32,000 per 10 grams, gold prices are at their highest decadal level because investors typically buy up bulk gold during a downturn.
Personal inflation rates may not equal the official rate, which is just a broad measure. It is surprising – or probably not – that rice and wheat, which India produces in surplus, have risen higher than protein items. In mid-September, rice was 51% higher at Rs. 41 a kg than a year ago.
In Mayur Vihar’s Samachar market, a daily stop for its mostly professional residents, fruit-seller Ahmed says most people stop to take a look at his shiny apples and red grapes but leave without buying.
“Who will pay Rs. 60 for 12 bananas,” asks Maya Sharma, a teacher. Prices have come home to roost.
In India, inflation typically hits the organised, urban labour force the hardest, economist Abdusaleh Shariff of the Washington-based US-India Policy Institute told HT.