As soaring inflation in India led to increased prices of essential items, urban consumers over the last six months reduced their spending on apparel, fuel and eating out, a new survey showed.
A majority of urban Indians said their cost of living went up to some extent compared to a year ago, stated the survey conducted by YouGov, a global market research company.
According to the survey, “With inflation at its highest level in the past eight years, petrol prices spiralling and wholesale price inflation at a 30-year high, cost of living in India has gone up in the recent past.”
Retail inflation in April touched an eight-year high of 7.79 per cent, while it came down to 7.04 per cent in May. As the cost of living increased, households cut down on their expenses.
According to the survey, which polled 1,013 urban consumers online from June 7-10, 46 per cent of respondents said their cost of living increased by “a lot” compared to 12 months ago, while 33 per cent said that it went up “a little.”
Tier I cities residents are feeling the inflation impact more than those living in tier II and III cities. Half of the consumers in tier I cities said their cost of living increased, while in tier II and III cities, 44 per cent and 43 per cent of the residents felt that.
Clothing tops the list of expense cuts, followed by trimmed expenditure on hobbies and leisure activities. More than a third of the respondents said they reduced spending on clothing and accessories, while nearly 31 per cent of people reduced spending on their hobbies.
After the recent hike in fuel prices, 29 per cent of the people said they cut down expenses on petrol or diesel, while 28 per cent cut down their spending on eating out.
The survey said this behaviour was more pronounced in tier I cities than in the rest.
Nearly 25 per cent of people trimmed their expenses on streaming services, as in tier I cities, 32 per cent of the respondents claimed to do so in the last six months.
Meanwhile, the survey said that essential food items, broadband subscriptions and household essentials saw fewer cutbacks, as these are more of a necessity. Almost 12 per cent of consumers cut down their expenditure on essential food items, 15 per cent on broadband, while 18 per cent trimmed their spending on household essentials.
The survey showed that two in five urban consumers expect their household situation to improve in the next 12 months, while 32 per cent expect no change and 17 per cent think it will worsen.