3 out of 4 Indians concerned on affordability of essential household needs due to Massive depreciation of Rupee

New Delhi: As rupee falls from 38 to 80 against US dollar in last 15 years, 3 in 4 Indians surveyed by Community Social Media platform LocalCircles believe it will impact them adversely.

The Indian rupee last week crossed its all-time low exchange rate of 80 against the US dollar. This means that the dollar to rupee rate has moved from 1:38 in July 2007 to beyond 1:80 in July 2022 in relative economic terms, said a LocalCircles study. 

"Given the massive rupee depreciation, LocalCircles via its latest survey has attempted to understand the pulse of citizens on how they view India’s performance in relative economic terms in the last 15 years and whether they have concerns about weakening rupee’s impact on their lives. The survey received over 34,000 responses from citizens located in over 328 districts of the country of which 65% respondents were men while 35% respondents were women; 43% respondents were from tier 1, 34% from tier 2 and 23% respondents were from tier 3, 4 and rural districts," the study added.

The study found that 1 in 2 Indians surveyed confirming that India in relative economic terms has performed poorly given the massive rupee depreciation from INR 38 per USD in 2007 to INR 80 per USD in 2022. This question in the survey received 11,207 responses.

"Experts point out that it is not only the Indian rupee which has been hit as the Dollar Index has this year gained 13% against six major currencies - euro, pound, yen, Swiss franc, Canadian dollar and Swedish krona. Since the Russia-Ukraine war, the RBI has been closely monitoring the foreign exchange market. It has also been using its reserves as and when required," LocalCircles study said.

On the affordibility of essential household and family needs, as many as 76% of 10,778 respondents expressed concern that they and their family will be able to afford less in the next five years as higher import costs will get reflected in products they buy right from petrol and diesel to consumer goods and services and even overseas education, which would impact increasing number of students seeking to pursue higher education. Just 18% of the respondents to the survey felt further depreciation of rupee will not impact them or their families in the next five years, while 6% were undecided, said LocalCircles.

52% respondents expect impact due to higher transport and cooking fuel costs, cost of essential products and services, 52% expect goods and services to cost more, particularly healthcare and medicines, 44% are concerned about higher overseas travel costs while 24% respondents fear impact on overseas education plans for children/ grandchildren, found the study.

The findings of the LocalCircles survey indicates that the massive rupee depreciation, which last week crossed INR 80.00 for a US Dollar, is causing concerns on many fronts as it is expected to impact prices of several important goods and services in the coming years. For 1 in 2 Indians surveyed, the weakening of rupee against the dollar from 38 to 80 in the last 15 years is a reflection that in relative terms, the Indian economy has performed poorly.