India's Inflation Crisis: Squeezing the Middle Class and Crushing Daily Wage Earners

Inflation in India has been a persistent economic challenge, eroding the purchasing power of millions, especially the middle class and daily wage laborers. While the government celebrates macroeconomic growth, the reality for ordinary citizens is stark: rising prices, stagnant wages, and shrinking savings. This blog examines India’s inflation trends from 2014 to 2025, its devastating impact on households, and the government’s inadequate response. 

Inflation in India: A Decade of Volatility (2014-2025).

India’s inflation rate has fluctuated significantly over the past decade, with food and fuel prices being major drivers. Here’s a snapshot of key inflation trends:  

- 2014: 6.67% (high due to global commodity shocks)   

- 2016: 4.95% (moderate decline)   

- 2020: 6.62% (pandemic-induced supply disruptions)   

- 2022: 6.70% (post-pandemic demand surge, Ukraine war impact)   

- 2023: 5.49% (slight easing but food inflation remained high)   

- 2024 (Oct): 6.2% (14-month high, food inflation at 10.9%)   

- Feb 2025: 3.61% (temporary dip, but food inflation still hurting households)   

Despite occasional dips, food inflation has consistently outpaced overall inflation**, making essentials like vegetables, pulses, and cereals unaffordable for many.

The Middle Class: From Stability to Struggle-

India’s middle class, once seen as the backbone of economic growth, is now tightening its belt due to relentless price rises:  

- Shrinking Purchasing Power: Real wages (adjusted for inflation) grew below 2% in 2024, far lower than the 10-year average of 4.4% .  

- Cutting Back on Essentials: Households are switching from branded goods to cheaper alternatives, reducing spending on fast food, and delaying discretionary purchases .  

- Savings Drying Up: Many middle-class families report depleted savings, forcing them to rely on loans or cut back on healthcare and education .  

- Political Fallout: Middle-class frustration was a key factor in the ruling party’s weaker electoral performance in 2024 .  

A Middle-Class Family’s Struggle-

A Mumbai marketing executive with a family of four says:  

“We prefer budget-friendly stores that give good deals and discounts to manage our monthly expenditure.”  

Daily Wage Laborers: The Worst Hit-

For India’s daily wage earners, inflation is a catastrophe:  

- No Buffer Against Price Rises: Unlike salaried workers, laborers have no fixed income. A bad day means no food on the table.  

- Food Inflation Devastates Them: When vegetable prices jump 26% (as in late 2024), a meal becomes a luxury .  

- No Social Security: Most lack savings, insurance, or access to subsidized rations, making them vulnerable to even minor price shocks.  

A Laborer’s Desperation-

Rajwanti Dahiya, a 60-year-old dependent on her husband’s ₹30,000 pension, says:  

“During this festival season, we have not spent at all. Savings are low, barely there.”

Government Inaction: A Betrayal of the People?

Despite repeated warnings, the government’s response has been slow and ineffective:  

1.Weak Policy Measures: The RBI has kept interest rates high for too long, hurting borrowers without adequately curbing inflation .  

2. No Structural Reforms: While food inflation remains high, there’s little investment in supply chains or farmer support to stabilize prices .  

3. Misleading Growth Narratives: The government boasts of 7%+ GDP growth, but this hasn’t translated into better living standards for the poor and middle class .  

4. Delayed Relief: Even when inflation crossed 6% in 2024, the government waited months before announcing minor fuel duty cuts .  

Economist Arvind Virmani notes:  

"Employment is rising, but employees’ salaries are not keeping pace with inflation."

Conclusion: A Crisis Ignored

India’s inflation problem is not just an economic statistic—it’s a human crisis. The middle class is slipping into financial insecurity, while daily wage earners are fighting for survival. The government’s lack of urgency in addressing this issue suggests a disconnect between policymakers and the people they serve.  

Unless real wage growth improves, food supply chains stabilize, and social security expands, millions will continue to suffer silently while politicians celebrate GDP numbers. The question remains: When will India’s leaders start listening? 

What Can Be Done?

- Targeted Subsidies: Expand food and fuel subsidies for low-income groups.  

- Boost Rural Wages: Ensure MGNREGA payments keep pace with inflation.  

- Price Controls on Essentials: Temporarily cap prices of critical food items.  

- Tax Relief for Middle Class: Reduce GST on daily essentials.  

The time for action is now—before more families are pushed into poverty.  

Sources: Reuters, Forbes, The Hindu, Business Standard, RBI reports.