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Urban Indian consumers reduced spending on apparel, fuel, and eating out over the last six months as inflation ate into household budgets, a YouGov survey showed.

A majority of urban Indians said their cost of living has gone up to some extent as compared to 12 months ago, as prices of daily essentials rose. Among the 1,013 urban respondents polled online during 7-10 June, 46% said their cost of living has gone up “a lot" compared to 12 months ago, while 33% said it has gone up “a little".

“With inflation at its highest level in the past eight years, petrol prices spiralling and wholesale price inflation at a 30-year high, cost of living in India has gone up in the recent past," YouGov said.

Retail inflation measured by the Consumer Price Index (CPI) grew sharply to an eight-year high of 7.79% in April, before cooling to 7.04% in May. As a result, households are trimming expenditure they deem unnecessary.

Consumers in tier I cities are feeling the impact more, with half of them claiming that their cost of living has gone up a lot compared to the 44% and 43% of residents in tier II and III cities.

Clothing tops the list of cutbacks, with more than a third saying they have reduced spends on apparel and accessories. Almost as many (31%) have reduced their spending on hobbies or leisure activities such as going to the cinema.

With the recent rise in fuel prices, 29% claim to have cut expenses on petrol or diesel, while 28% have decreased spending on eating out.

This behaviour is more pronounced in tier I cities than other cities, the survey showed.

Around a quarter have cut down expenses on streaming services, but this is notably higher in tier I cities where 32% have claimed to do so in the last six months.

However, consumers continued to spend on various categories such as essential food items, food deliveries, home broadband subscriptions, insurance, alcohol and tobacco and monthly mobile phone bills.

Fewer cutbacks have been reported on essential food items (12%), broadband subscriptions (15%) and household essentials (18%), perhaps because these are more of a necessity, according to the survey findings.

However, two in five urban Indians expect their household situation to improve in the next 12 months.A third (32%) expect no change and only 17% think it will become worse.

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