Rupee fall hits middle income group hard: Assocham

The middle income group has been impacted by inflation particularly in context of falling rupee and its cascading effects on price rise of items like petroleum products and edible oil, according to a survey by apex chamber Assocham.

The survey says the rupee depreciation has impacted consumers in metros and other major cities in a big way compared to tier-III and semi-urban areas.

Over 92 per cent of respondents said their monthly bills have jumped by 15-20 per cent in last one month. The middle class and the lower class are the worst hit, adds the survey.

The Associated Chambers of Commerce and Industry of India said it conducted a survey in major cities like Delhi-NCR, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun and other cities.

"Despite government effort to control gold imports, the Indian middle income group is bound by societal traditions and continues to buy gold even at higher prices which have increased the prices of gold due to rupee weakening," Assocham  Secretary General D S Rawat said.

Around 55 per cent of the survey respondents fall under the age bracket of 20-29 years, followed by 30-39 years (26 per cent), 40-49 years (16 per cent), 50-59 years (2 per cent) and 60-65 years, the survey said.

The weakening rupee has made crude oil, fertilisers and iron ore, which India imports in large quantities, costlier. Though these items are not for daily consumption, but impact the finances indirectly, Rawat said.

The survey further says crude palm oil prices set the pace for prices of other edible oils. It is imported in large quantities and any rise in its price will add to the inflationary pressures.

It also said that Middle Income Group, uncomfortable with weak rupee are changing their overall spending habits, including dining out, vacations, electronics and others.