Voices Devdutt Pattanaik Dinesh Singh Ravi Shankar Anand Neelakantan Dr Deepali Bhardwaj Swami Sukhabodhananda THE new sunday express MAGAZINE Buffet People Wellness Books Food Art & Culture Entertainment september 6 2026 SUNDAY PAGES 12 PRICES THAT NEVER SEEM TO COME DOWN DEBT IS GROWING FASTER THAN INCOME EDUCATION COSTS ARE OUT OF REACH SAVINGS are NOT AS MUCH AS BEFORE MEDICAL BILLS ARE EATING INTO salaries Retail inflation eased to 3.16% in July 2025, the lowest in six years but essential items remain expensive. Food inflation was 1.76% in July, but prices of many items middle-class households consume daily such as vegetables, pulses, edible oils and dairy remain volatile. Over the past five years, the cost of a vegetarian thali has risen nearly 50%. Household debt rose to 42.1% of GDP in March 2025, up from 37.2% in March 2022. Much of this borrowing is increasingly tied to personal loans, credit-card dues and other unsecured credit, rather than asset creation. Personalloan credit alone grew 14% year-on-year in March 2025, while credit-card outstanding continued to rise. School education inflation was 12.3% in 2024-25, the highest among all major categories in the Consumer Price Index. Annual fees in private schools in metros range from `1 lakh to over `3 lakh, excluding transport, books and activities. For middle-class families with more than one child, education can consume a significant share of disposable income. The household savings rate fell to 18.1% of GDP in 2024-25, down from 23.3% in 2019-20. Rising EMIs, rent, education and healthcare costs are leaving little room to save. A growing share of income is now being absorbed by fixed monthly expenses and debt repayments. This leaves families with a thinner financial cushion to cope with emergencies. A hospitalisation now costs Indian households an average `50,508 in a private hospital. Urban families pay an average `38,688 per hospitalisation, while medical costs are rising at an estimated 12–14% a year. With health insurance covering only about 44% of urban households, one serious illness can still take a sizeable bite out of years of savings. Source: Ministry of Statistics & Programme Implementation (MoSPI) Source: RBI, Sectoral Deployment of Bank Credit – March 2025 Source: MoSPI CPI; Various school portals and fee schedules Source: RBI – Handbook of Statistics on Indian Economy, 2024-25 Source: MoSPI Household Social Consumption: Health, 2025 Squeezed in the Middle T AI generated Household expenses are rising faster than incomes in most metros By Tanisha Saxena hey pay the most taxes. They work the longest hours. They run the economy But . today India’s middle class feels it is sinking. From skyrocketing living costs and , crippling debt to soaring education expenses and a slowing job market, the middle class is under pressure on every possible front. A series of recent reports and official data reveal incomes aren’t keeping pace with expenses that refuse to slow down. For a household earning `2 lakh a month, the monthly budget typically looks something like this: India’s middle class is earning, spending, and paying more—yet somehow finding less left at the end of the month  `50,000 goes toward housing: rental or housing loan EMIs  `30,000 is spent on education  `20,000 for transport and utilities  `15,000 is paid for insurance  `20,000 is the cost of household consumption  `20,000 consists of retirement savings  `15,000 goes to repay debt Left in hand is `30,000 that amounts to 15 per cent of gross income before taxation. The baseline for measuring a middle-class lifestyle is simple: income minus committed expenditure. Ideally , the two should rise in tandem. They don’t—and that is why the definition of India’s middle class keeps shifting. These are not households struggling with food security or living on the margins of poverty but formally , educated, salaried Indians whose financial cushion has steadily narrowed. An unexpected medical crisis, job loss or family emergency can now destabilise a household. The squeeze is most visible not in headline GDP numbers or welfare programmes, but in what remains after the bills are paid. For a class that pays virtually every tax, the question is increasingly stark: what happens when taxation, housing, education, healthcare, debt, retirement and everyday consumption all demand a larger share of income? India’s next middle-class story may well be written not in aggregate statistics, but in the amount left in the bank account at the end of the month. The Behavioural Ratchet The ancient Charvaka aphorism captures the impulse perfectly: Rinam kritva ghritam pibet—“even if you have to borrow, drink ghee.” It embodies a ‘live-well-now’ instinct articulated in Indian philosophy more than two millennia ago. The psychology remains unchanged; only the machinery has been modernised. Instead of informal lending networks, there are now EMIs, BNPL, credit cards, and digital wallets—frictionless tools designed to bridge the gap between what people earn and what they believe they deserve. Dr Anindo Bhattacharjee, a Hyderabad-based behavioural scientist, calls this the “hamster wheel illusion”: the sense of constantly moving forward while making no real progress, with consequences that spill into wellbeing, careers, and family life. The deeper cost is psychological. Prolonged financial pressure produces what he calls “aspirational fatigue”—a paradox in which people continue wanting marriage, children, a home, holidays, and better healthcare even as each feels increasingly unaffordable. The result is a widening gap between aspiration and possibility until the , desire for a better life becomes a source of anxiety exhaustion, and despair. , The Statistical Illusion of the Middle Class Government statistics are eager to establish that India’s economy is growing. Household consumption and financial participation have increased, personal income tax has become a major source of revenue, and household borrowing has risen. Urban households spend heavily on non-food essentials such as education, healthcare, transport and housing. Meanwhile, the government runs vast welfare programmes for poor and vulnerable households. Yet one crucial question remains unanswered: how much has the amount left with a household after taxes and essential expenditure changed relative to the cost of the standard of living the middle class considers necessary? There is no single official statistic that captures this. Taken together, the available data describe a household economy in transition. India’s expanding middle class earns more in nominal terms than earlier generations, but also consumes more, pays more directly into the formal tax system, borrows more, purchases more private services and must save for contingencies that previous generations may not have considered. At the same time, the Indian state continues to operate one of the world’s largest systems of food, employment, housing, agricultural and income support. The result is an economic landscape too complex for a single political narrative. Some households receive government support while paying substantial taxes; others fall outside the income-tax system but pay indirect taxes. Even higher-income households can face enormous housing and education costs. The middle class is therefore increasingly defined not by a particular income level, but by a combination of formal earnings, substantial private expenditure, limited access to targeted welfare, and the need to build its own financial protection against future risks. That is the economic story worth examining. The Paradox of Earning and Empty Wallets Sugar doesn’t lie. But this time, it did—it tasted bitter. In a single month, its price jumped from `49 to `63 a kilo, a 28 per cent surge that captures India’s middle-class woes more vividly than any quarterly inflation report. Milk followed sugar’s vertical trajectory , followed by cooking gas and then gold. By the time school fees, medical bills, EMIs and everyday expenses are paid, a 30-year-old professional earning what once felt like a comfortable salary can suddenly feel poor. Not poor by the government’s BPL standards, certainly . But poor in the more immediate sense. Subranil Sengupta, 31, who works in Bengaluru and earns comfortably by Indian standards, can afford things he once thought beyond reach. Yet month after month, he finds his pocket is empty on the 30th or 31st. The geometry of his life has shifted not because he is blowing up money but because , everything around him has become expensive simultaneously In spite of a . reasonable raise, his salary can’t keep pace with the rising costs. Having moved from Kolkata, he has watched the cost-of-living gap between the two cities narrow not because Kolkata got pricier, but because “the cost of maintaining a reasonably comfortable life has gone up everywhere”. This invisible crisis is reshaping India’s cities not as an economic collapse into hardship, but a narrowing of home budgets. People who live in air-conditioned apartments and drive good cars are now forced to count the cost of a weekend getaway in the same breath with job security The numbers . confirm what their wallets already know. The Ministry of Statistics and Programme Implementation (MoSPI) says India’s headline inflation in June stood at 4.38 per cent that looks minor on paper. But food inflation was 5.32 per cent, while yearly cost of healthcare climbed at 14 per cent and school fees rose close to 12 per cent, making a bigger hole in household budgets by the day For an ordinary middle-class . family these percentages translate into , real arithmetic: the doctor’s visit that costs more, the cancelled holiday and a , home renovation postponed. The formal distinction, as Dr S Priya, Director, School of Management, Hindustan Institute of Technology and Science, puts it, is between nominal income—the salary on paper—and real Turn to page 2