June 23rd, 2022, Bhawna Singh, Sonika Choubey
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.
A new YouGov survey reveals a majority of urban Indians say that their cost of living now has gone up to some extent as compared to 12 months ago. Nearly half of these urban Indians said their cost of living has gone up a lot (46%) while for three in ten it has gone up a little (31%).
Residents in tier-1 cities are more likely to feel a greater impact on their cost of living with half of them claiming their cost of living has gone up a lot, as compared to 44% and 43% residents in tier-2 and tier-3 cities who said the same about their situation.
The impact has led people to make cutbacks to their household spending in many areas since December 2021. Clothing tops the list with more than a third (35%) saying they have cut their spending on clothes, apparels and accessories. Almost as many (31%) have reduced their spending on hobbies or leisure activities like going to the cinema.
With the recent increase in fuel prices, 29% claim to have cut their expenses on petrol/ diesel. 28% have decreased their spending on eating out and 15% have done so for F&B deliveries. This behaviour is more noticeable in tier-1 cities than the rest of the cities in India.
More than a fifth have limited their spending on services like grooming & wellness and gyms (23% and 19%, respectively).
Around a quarter have cut down expenses on streaming services, but this is notably higher in tier-1 cities where 32% have claimed to do so in the last 6 months.
Comparatively, lesser cutbacks have been made on staple essential food items (12%), broadband subscriptions (15%) and household essentials (18%), perhaps because this is more of a necessity than a luxury.
Despite experiencing an impact on their cost of living, only 22% urban Indians said their household financial situation has become worse compared to 12 months ago. Three in ten (30%) feel it has become better while 42% experienced no change in their financial situation.
The positive sentiment is likely to carry forward in the future as two in five urban Indians (40%) expect their household situation to become better in the upcoming 12 months. A third (32%) expect no change and only 17% think it will become worse in the coming future.
Data was collected online among 1013 urban respondents in India by YouGov’s Omnibus between June 7th and 10th, 2022 using YouGov’s panel of over 20 million people worldwide