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NEW DELHI: The burgeoning middle class in India is feeling the heat of the global financial turmoil. Already battered by rising inflation, many find themselves facing a personal debt crisis.
Aftershocks of the US financial crisis are being felt a long way from Wall Street.
While the Chawlas living in New Delhi have not suffered any losses in the market crash, they do worry about their income.
Like any upper middle class family in India, they dine out in fancy restaurants at least once a week and watch their favourite shows on an LCD TV.
But with inflation running high, saving money is their top agenda, especially during Diwali.
Festive season is on in India. This is a time of celebrations when people usually buy jewellery and exchange gifts. But the global financial crisis has certainly put a damper on the festive spirit.
The festive season is considered an auspicious time to buy gold.
Insurance agent Preeti Chawla was planning to buy a necklace, but has since changed her mind.
She said: "The festival time is coming and there are lots of things to buy. Personally in my case, I had planned to spend on gold. In the last few days, one has been seeing the prices of gold on a daily basis - they have been fluctuating a lot.
"They have moved to Rs14,000 ($288) which is a lot. So definitely, I am thinking of postponing my expenditure on gold," she said.
Thousands of Indians like the Chawlas have similar doubts. As people in India do not trade much in the stock market, their main investments are assets such as car, house and jewellery.
But with interest rates on housing loans soaring, they have postponed their plans to buy property. Adjustable-rate home loan in India has jumped from 9 percent to 12 percent in a month.
Ms Indra Chawla, a housewife, said: "We were planning for our future, to buy a bigger house and expand our property. Right now, we can't even think about that.
"The property rates are running very high and we definitely cannot keep up with our savings. We invest mainly in household expenditure, education of children and even transportation. How can we manage to save more money?"
India's inflation rate is running close to 11 percent.
A typical middle class family like the Chawlas now spends much of its household income on paying off car loans and house rent.
They are being targeted by credit card companies to take up loans and instalment plans to buy automobiles, washing machines and even vacations.
But with soaring living costs, they are now squeezing budgets to pay for all these luxuries. - CNA/de
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