Indians are worried about being able to afford less over the next five years

Indians are worried about being able to afford less over the next five years
Image: Vivek Prakash (Reuters)
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The rupee’s steep decline over the past 15 years has got Indians worried about affordability in the medium term.

About 75% of them believe households will be compelled to cut down consumption over the next five years, a survey by social community platform LocalCircles has shown.

Supply disruptions caused by the Russia-Ukraine war have pushed up commodity prices to multi-year highs, reflecting on fuel, consumer goods, food, and healthcare services, among others.

Around 50% of the survey participants were most concerned about rising fuel costs.

“Higher imported input costs, together with rising transportation costs, are expected to be reflected in product and services costs (as) feared by 30% of the respondents,” LocalCircles said.

The survey results have come amid the currency’s record lows in recent months. On July 21, the rupee hit 80.27 a dollar and has lost nearly 7% in 2022. It has fallen by over 100% from 38 a dollar in July 2007.

The survey involved responses from over 11,000 citizens across 311 districts.

Fuel and healthcare could be the most expensive

This year, consumer prices have shot up across the world. Retail inflation for June stood at 7.01% in India.

A decline in the rupee’s value means India, largely dependent on imports, pays more for purchases abroad. This inflates the value of goods and services and wrecks importers’ margins.

India imports a considerable amount of pharmaceutical products and medical devices, even though, in recent years, it has scaled up production of medical devices considerably.

The cost of international travel for leisure and studies, too, is expected to rise.

“This concern would resonate among a large number of families which have started sending their wards overseas for education right after passing out of school given the tough competition to get admission or choice of subjects in premier colleges,” LocalCircles said.