NEW DELHI: Seventeen-year-old Indian student Appu Sharma was going to apply to a US university to study economics but with the rupee on the ropes, he’s set his sights closer to home.
“I’ll do my BA here and maybe my postgrad abroad if the rupee improves — my family can’t afford to pay foreign fees now,” the New Delhi Class 12 student said.
With the currency hovering at record lows of nearly Rs69 to the dollar and seen heading south, the estimated 300-million-strong middle-class are being forced to rethink many of their plans.
Holidays abroad are being jettisoned as India grapples with its “new normal” — a weak currency, growth at a decade-low of five percent, stubbornly high consumer price inflation and elevated interest rates that are stifling investment.
“Dollar on an escalator, rupee on a ventilator, nation in the ICU,” reads one Twitter joke that went viral in India, lamenting the nation’s economic trials.
Subhash Goyal, head of the Indian Association of Tour Operators, forecasts up to a 20 percent drop in Indian tourists going abroad this year and calls the situation “grim”.
“It’s the middle class which is worst impacted (by the rupee’s drop),” Goyal said, adding: “People are already postponing plans.”
Sales of cars have also gone into reverse as Indians steer clear of showrooms due to high financing and fuel costs and the economic slowdown. India’s car sales slid by over seven percent in July, marking a record ninth straight month of decline.
Amid a deepening slowdown, dozens of malls across the country have shut with real estate experts saying retailers can’t afford store rents with consumer purchases slowing.
As the sombre mood mounted this month, the government curbed outflows of currency for individuals and companies in a bid to put a floor under the rupee’s slide.
Under the new policy, individuals can send just $75,000 out of India, down from $200,000 — making it tougher to pay overseas university fees, for example — while firms can only ship out funds equivalent to 100 percent of their net worth, down from 400 percent.
Since the start of the year, the rupee has lost around a fifth of its value against the dollar and the prices of life’s little luxuries — from imported appliances to smart phones, cheeses, wine, hair products and olive oil — are set to climb.