A middle-class family struggling to keep up with the bills in the inflation
There was a time when the Indian middle class was the symbol of aspiration — the backbone of the country’s consumption-driven economy, steadily rising with growing incomes and opportunities. But today, many in this vast segment are grappling with a harsh reality. Inflation is biting deep, incomes are barely keeping pace, and the safety nets seem thinner than ever. If you are part of this middle-class story, you might recognise the challenges—balancing rising grocery bills, managing EMIs, and worrying about the future of your children’s education. This is the fight to stay afloat.
The truth is, inflation has become more than just an economic term. For millions of families, it translates into a daily struggle. Food prices have soared to their highest in over a year. Vegetables, fruits, and cooking oils—the staples of every kitchen—have seen increases that chip away at monthly budgets. When I spoke with middle-income families in cities like Mumbai and Bengaluru, the frustration was palpable. “Our salary barely covers essentials now,” one software engineer said. “We have stopped eating out, cut down on non-essentials, and yet we are just about managing.”
On the income front, the situation isn’t much better. Data shows that real wage growth has stalled, with many urban workers seeing stagnant or even declining take-home pay. This means that while the cost of living rises, the money coming in doesn’t stretch as far. The consequences? Many are turning to credit cards and loans just to maintain their lifestyles.
It’s no surprise that borrowing has become a way of life for many middle-class households. If you are juggling EMIs for a home loan, car, or personal loan, you are not alone. The rising household debt in India—now hovering around 43% of GDP—is a warning sign. Savings are shrinking, leaving less room for emergencies or investments. One thing becomes clear: the middle class is quietly bleeding.
I remember talking to a young couple in Pune who recently took a personal loan just to cover school fees. “It’s not a good feeling,” she admitted, “but we don’t have much choice.” Stories like this are increasingly common, underscoring the widening gap between earnings and expenses.
So how is the middle class coping? There’s a growing tendency to cut back on discretionary spending—no more weekend getaways, no more dining out, fewer luxuries. Instead, families focus on essentials, even resorting to buying smaller, cheaper packs of everyday items.
This "pouch economy", where products are sold in sachets and tiny portions, may seem like a small change, but it highlights how deeply consumers are feeling the pinch. Major companies across FMCG and automobile sectors have already noted a slowdown in demand as wallets tighten.
Beyond the numbers, the impact is deeply personal. The stress of mounting debts, fears about future financial security, and the frustration of stagnant growth weigh heavily on many. Financial advisors report that emotional distress linked to money troubles is rising. People hesitate to share their struggles, fearing stigma, but the pressure is real.
Surveys reveal that nearly 40% of Indians expect their quality of life to worsen in the coming year. This creeping pessimism is a warning bell not just for families, but for the economy itself.
The government has recognised these challenges. The recent budget’s increase in income tax exemption limits was a welcome relief for many, helping preserve more of the hard-earned money. The Reserve Bank of India’s cautious interest rate cuts aim to ease loan burdens. But these steps, while important, only partially address the problem.
Indirect taxes, fuel price hikes, and rising costs of services continue to squeeze middle-income households. The challenge for policymakers is to balance inflation control with the need to sustain consumer demand and protect vulnerable segments.
If you find yourself in this squeeze, the good news is there are practical steps you can take. Begin by tracking your expenses carefully—sometimes small leakages add up. Prioritise essential payments, and where possible, avoid high-interest debt. Build an emergency fund, however modest, to cushion unforeseen shocks. Take full advantage of tax benefits and government schemes. And perhaps most importantly, talk openly about financial pressures with family or advisors. Financial stress is isolating only if you let it be.
The Indian middle class is not just a statistic. It is millions of individual stories, dreams, and efforts. Its strength has propelled India forward, but it cannot bear unchecked inflation and stagnant incomes indefinitely.
If we want India’s growth story to continue, it’s time to rethink how policies, businesses, and communities support this vital group. For families, it’s about resilience, wise financial choices, and seeking help early. For governments and corporations, it’s about creating an environment where incomes can grow alongside costs, credit is fair and accessible, and social safety nets are robust.
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