India is getting expensive: Rising cost of living spares none

Highlights:  The price of basic daily essentials in India is rising, with the cost of living becoming expensive due to Inflation  Survival in tier-2 and tier-3 cities is becoming unaffordable for the lower and middle classes Inflation in India: Rising food prices, housing and urbanization, education, healthcare, and transportation costs How to survive amid rising inflation 

India is becoming expensive, with people facing a financial crunch due to the rising cost of living. The issue has been raising alarms lately, as an X post has drawn all the attention to it. An IIT Bombay graduate (BSc in Economics), Monali Dambre, who is currently a member of the founding team at Agno in Bengaluru, took to social media, sharing her concern for the middle and lower class, after feeling that the grocery bills were "unusually high". Further worried about their survival, as this has not even spared the smaller cities[1]. 

Monali's post read, "I'm slowly coming to the fact that the cost of living in India is getting really expensive- even in smaller, tier-3 cities. And honestly, I am starting to genuinely feel worried about how the lower and middle class are managing to survive...or how they are going to survive in the next few years." She pointed out the fact that Bengaluru, the tech hub, is a well-paying city. Yet it is becoming expensive, as even the grocery bills are skyrocketing. Adding, "Even in Bangalore, my grocery bills (which include only absolute staples- nothing fancy or luxurious) are starting to feel unusually high. Just basic fruits, veggies, and daily essentials- and it feels like things have got expensive than they should have.[1]" 

 

I’m slowly coming to terms with the fact that the cost of living in India is getting really expensive—even in smaller, tier-3 cities. And honestly, I’m starting to feel genuinely worried about how the lower and middle class are managing to survive… or how they’re going to…

— Monali (@monali_dambre) May 3, 2025

Here is how some X users reacted to Monali's post, landing in a discussion over the cost of living and their lives lately, with suggestions pouring in not to rely on e-commerce apps, while someone said it is more expensive to buy in person than order online: 

One of the comments read, "Rupee is collapsing compared to gold. It's showing this in all hard assets. Anything plastic or digital will remain at the same price, but anything that takes real energy to produce and distribute is increasing in cost. Add to it an ultra-high tax burden and speculative real estate.[1]"

Another user said, "Yes, the inflation on food and groceries is way too high. In general, the cost of living has increased bar above the usual 5-6% annual year-on-year limit.[1]"  

A third one commented, "In Bengaluru, the cost of living with two kids will easily cross 2lpa for a really average life. I think the GST is hiking prices for everything[1]."

What is Inflation? 

According to the International Monetary Fund (IMF), "Inflation is the rate of increase in prices of goods and services over a given period of time. While in the broader sense, it is the overall increase in prices or the increase in the cost of living in a country." 

It measures how much a particular set of goods and services has become expensive over a certain period, which is usually a year. When inflation rises, it reduces the purchasing power of money, which means one buys fewer goods and services with the same amount of money[2]. 

The price of goods and services (commonly purchased items) and their share in the household budget reveal the Consumers' Cost of Living. This cost, when expressed relative to a base year, is the Consumer Price Index (CPI), and a percentage change in the CPI over a certain period reveals the Consumer Price Inflation[2].

The Indian scenario

Inflation has been on a significant rise in India over the past 10 years, especially when it comes to food, housing, education, and healthcare. The Reserve Bank of India has projected FY26 inflation at 4.0%, with core inflation expected to rise, but stay moderate. Owing to the US tariff hike and other global trade uncertainties, the economy faces pressure, and the RBI has revised its repo rate yet again. The GDP growth forecast has also been lowered to 6.5 percent[3]. 

Despite the facts and figures, when it comes to daily needs, it is the 'real-world' inflation that shows the grim reality: 

Food prices

Vegetables, cereals, pulses, dairy, and other commodities have become quite expensive. With onions and tomatoes observing dramatic fluctuations time and again. As of March 2025, the cost of food in India increased by 2.69% over that of the previous year. In February 2025, the cost of food in India increased by 3.75%[4]. Even though food prices were eased, and this was the lowest Consumer Food Price Index since November 2021[5], it is groceries that are causing the biggest hole in the pockets. 

Urbanization and Housing

Seems like a roof over the head will only be a dream for some. Whether one purchases or rents, the increasing demand has also led to a surge in prices. As more and more people are paving their way forward to cities for a brighter future, real estate sees a rise in property value. Specifically in cities like Pune, Mumbai, Delhi, and Bangalore. Not only the metropolitan cities, the potential real-estate hostpots, including Indore, Kochi, Coimbatore, Nagpur, and Kanpur[6], among others, are also facing a similar price surge due to the demand as well as property investment. 

A 2-BHK in Bangalore for rent can cost between Rs 20,000 to Rs 60,000 a month, and this varies depending on various factors: the area, size of the apartment, and whether it is furnished or semi-furnished. 

This is only for the rent; when you opt for buying, it can seem extremely unaffordable for the middle class. To have a home of one's own, individuals often use a considerable sum of their incomes on home loans and rents. This not only affects their savings, but also further investments. The recorded housing inflation for February 2025 was 2.91%[7]. 

Education & Healthcare

Education and Healthcare are the necessities of life, still good Education and Healthcare have become a sort of luxury these days. Both of these have been quite expensive: 

When you think of visiting the doctor, what bothers you first is the consultation fees, followed by the medications, and the equipment that you might need. The healthcare provided by the State is only for the lower class, while the upper and middle classes rely on private healthcare. Medical expenses are borne out of pocket and have often resulted in debts, with private hospitals leaving no chance of extracting their profits, as observed during COVID-19. According to the analysis, in 82.5% of cases, the patients were overcharged compared to the official packages[8]. 

Every parent wants to provide their child with quality education. But it becomes more of a distant dream when they are charged a whopping sum of money for primary and secondary schooling. And when the child strives ahead for higher education and enrolls in professional programs, institutions demand lakhs of money. Education costs in India have escalated in India for a few years now. As per the National Sample Survey Office report published in 2020, the average educational expenses in India have nearly doubled over the previous decade. With a 70% increase in the average tuition fees for courses like Engineering. 

This rise in education and healthcare leads to a burden on families, putting them under immense pressure. Sometimes, they have to borrow and meet the essential needs. 

Not only the ones mentioned above, but there is also a rise in transportation costs with high fuel prices, imposed by currency exchange rates, and domestic taxes levied. Public transportation is affordable, but having a car or bike is not everyone's cup of tea. Ever since the pandemic, there have been significant changes in the lifestyle of the population, with job losses, reduced incomes, as well as a shift in spending. This adds to the worldwide growth in digital consumption. For most of the Indians, it is more about aspirations, i.e., to keep up with their peers around, instead of their own affordability. 

While we do not know whether this rising inflation will come under control anytime soon due to the political turbulence and trade policies, and shifts around the globe, there is something that we can do as individuals for our own selves. This involves restricting to Financial planning[9]: 

Budgeting (have a track of your revenues and expenses),

Save, invest, and grow,

Focus on long-term stability,

Debt management,

A good credit score to avail future loans with ease. 

Well, there is a fear of survival these days due to the high cost of living, still, it is necessary to be prepared on your end with an apt financial planning. The ultimate goal is to thrive, not to merely survive.