INDIANAPOLIS, April 9 (Reuters) – As the global economy falters and the world braces for the first U.S. presidential election since 2008, Indians have become accustomed to paying more for their products, and many are already feeling the pinch.
A survey of 500 Indians by the BBC India newspaper found that a majority of respondents said they have increased the amount of cash they keep in their bank accounts and are making savings to spend on essentials such as food and clothes.
In a country where one-fifth of the population lives below the poverty line, Indians are increasingly worried about how their money is being spent, and want to know how to save and invest.
The BBC India survey of 1,000 people in Delhi, Uttar Pradesh, Maharashtra and Karnataka also found that the number of households spending less on food, clothing and other essentials has risen in the past three years, with the median family income falling.
In India, people are living longer, and in some cases longer than before, according to the World Bank.
Many believe the trend will only get worse in the years ahead, as India is among the world’s most indebted countries.
In its most recent poverty report, the U.N. body said India is on track to have one of the world in the next three decades to reach its Millennium Development Goal (MDG), which aims to end extreme poverty.
While many have seen the economy grow at a rapid pace in recent years, the majority of Indians do not have the financial resources to purchase essentials like food and clothing, the BBC reported.
“There is an imbalance between those who can afford it and those who are struggling,” said a 52-year-old Indian woman who asked not to be named.
“The food prices have been going up and that is making people think twice about buying food, even though there are people who are buying the stuff.”
I feel insecure and I have been spending more and more money on my kids.
“A majority of the survey respondents said the biggest cause of their financial distress was inflation, with many blaming high fuel prices for the country’s rising prices and rising food prices.
India’s inflation rate is nearly 25 percent, and is among some of the highest in the world.
Inflation in the country is so high that it has forced the government to intervene.
The government has cut the minimum wage to $1.60 ($0.74) an hour and the minimum pension to $25 ($32) a month.
But the survey found that people have also been forced to take on debt to pay for essentials like petrol, fuel, and electricity.”
People who do not earn enough to pay the bills are forced to make long-term debt repayments in the form of a mortgage,” the BBC said.
In addition, many have had to put off saving because they are struggling to pay their rent or mortgage and they do not know how much their savings will be able to buy.
In the latest poll, respondents were asked if they expected inflation to rise further this year and if they would take on a loan to buy essentials such in food, fuel and electricity to buy for themselves.
In many cases, they did not have to pay back the loan, the poll found.”
What you are seeing is the real impact of the crisis in the economy and the lack of access to finance for ordinary people,” said Abhishek Gupta, the director of the Asia Pacific Center at the Brookings Institution, a Washington think tank.”
These are the kinds of things that we have seen happen before.”(Reporting by Arshad Mohammed; Editing by Stephen Powell)