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High Inflation Forces People To Cut Down Expenses On Basic Commodities: Reports

Urban Indian households have cut down on their fuel, clothing and accessories, eating out, and gadgets due to rising inflation and the increased cost of living, a survey showed

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RBI

In the last six months, urban Indian households have cut down on their fuel, clothing and accessories, eating out, and gadgets due to rising inflation and the increased cost of living, according to a recent survey by YouGov.

35 per cent have cut down  their costs on clothing tops and accessories while 31 per cent have reduced expenditure on hobbies or pass time activities.  The study also revealed that 29 per cent of the respondents are saving on petrol and diesel due to the price hike, and 28 per cent have claimed that they have limited the amount of food and beverage intake.

There is a greater likelihood of residents in tier-1 cities feeling the impact of higher costs, with half of them saying that the cost of living has increased a lot in comparison to the 44 per cent and 43 per cent of residents in tier-2 and tier-3 cities, as per the survey.

The survey collected a sample of 1013 urban respondents who expressed that inflation has hit a majority of urban Indians, causing their cost of living to rise over the past year. Half of them responded that the cost of living has levelled up a lot, while 31 per cent said that it went up a bit.

According to the survey, almost a quarter have cut back on streaming services, which are more prevalent in tier-1 cities, and over a fifth have cut back on grooming and wellness services.

Food and crude oil prices drove wholesale price-based inflation to a record high of 15.88 per cent. According to the Consumer Price Index, the retail inflation rate reached an eight-year high in April at 7.99 per cent and in May it was 7.04 per cent.

The report also claims that most urban households see no change in their financial situation. Talking about expectations, only 40 per cent believe that the situation will improve while 32 per cent do not expect it. While 17 per cent feel that the situation will worsen. 

Michael Patra, the deputy governor of the Reserve Bank of India, said that it may be premature to predict a peak in inflation but there are definitely indicators of one. 


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