The Hindu : New Delhi News : Middle class goes easy on shopping, eating out

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Monday, Aug 04, 2008
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Middle class goes easy on shopping, eating out

Staff Reporter

Figures have fallen by nearly 55%, finds survey

It shows that inflation has not affected the high income group
Recommends effective planning for spending precious earnings

NEW DELHI: High inflation and interest rates and increasing fuel costs have hit the middle income group which has curtailed its spending on shopping, amusement and eating out by nearly 55 per cent in the past 12 months, states a survey by the Associated Chambers of Commerce and Industry of India.

The survey reveals that double digit inflation and higher cost of money did not affect those in the higher income group during the period as it did not imbalance their earnings and thereby their spending.

The survey on “Inflation Vs High Income Group, Middle Income Group and Other Classes” found that during single digit inflation rate of less than seven per cent, the middle income group was spending roughly a sum of Rs.5,000-6,000 per month on shopping, entertainment and eating out.

“This has fallen by nearly 55 per cent in the past 10-12 months and come down to less than Rs. 2,800,” adds the survey in which nearly 2,000 people, belonging to this group responded on their latest spending habits after inflation exceeded beyond manageable limits.

Releasing the survey, ASSOCHAM president Sajjan Jindal said on an average, the high income group spending on shopping, amusements including eating out are estimated to be over Rs.20,000 per month which was almost the same when the inflation was within the limit of around seven per cent. Nearly 1,000 people belonging to the high income group gave this impression to ASSOCHAM when its research team approached them to know the differential between their spending habits between moderated inflation regimes and after it touched the double digit levels.

The survey, said Mr. Jindal, was completed within a period of 25 days in the month of July. It was also revealed that the high income group, particularly the younger lot and working couples with twin salary benefits and during weekend, spend more than 30 per cent of their income on clothes, shoes and movies. This group’s commuting patterns mostly by cars did not witness any shift despite fuel costs going up abnormally.

The ASSOCHAM, has, therefore recommended that urban higher income group should regulate their wasteful expenditure and adopt means so that they can save their precious earnings and not waste it on weekend and month ends.

It has recommended that people should make effective planning for spending precious earnings.

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