As per the survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the falling rupee, inflation and its cascading effects on rise in prices of petroleum products, edible oil, studying abroad, foreign trips are going to impact the middle income group the most. The Indian rupee slumped to record low of 60 against US dollar after US Federal Reserve signaled an end to its monetary stimulus that would help in further strengthening of the greenback.
The inflation has badly impacted the middle and lower class consumers in metros and other major cities. People in metros have been considerably affected by rupee depreciation compared to tier-lll and semi-urban areas. 92% of the respondents of a survey reported an increase of 15-20% in monthly bills during the last month.
The bulk import of crude oil, fertilisers and iron ore became costlier due to the weakening of the rupee. As crude oil import is in large quantities, any rise in its price pressurizes the inflation. This indirectly impacts the finances even if these items are not for daily consumption, ultimately affecting the overall spending habit of the middle income group.
According to D S Rawat, Secretary General of ASSOCHAM, the rupee weakening results in the steady purchase of gold even in the higher price by Indian middle income group in part of societal traditions. That’s why the governmental effort to control the gold price through import restrictions is not at all an effective one.
