KARACHI: It’s hard to believe that till the early 80s a lower-middle class family of five in Karachi managed to make ends meet on incomes ranging between Rs1,000 and Rs1,500. Nowadays an income of Rs8,000-Rs10,000 is not enough to meet basic needs. Rising inflation has hit the lower-middle class hardest - the largest segment of the urban population. The middle class though less affected also feels the heat.

People belonging to the lower-middle class are sliding on a slippery slope. They are at the mercy of avaricious traders who miss no chance to fleece and resort to hoarding. During the last four years, prices of kitchen items have increased manifold in the absence of any government subsidy or measure to check prices.

According to the Federal Bureau of Statistics, the consumer price index rose 11.1 per cent in April over the previous year, to a near eight-year high, due to increased food prices, rising house rents and transport costs. The figure was the highest since July 1997, when the CPI was up 11.6 per cent.

The prices of food and beverages rose 15.71 per cent over the previous year, while house rents were up 12.07 per cent and transport and communications prices rose 10.82 per cent.

Prime Minister Shaukat Aziz claims the country has achieved 8.35 per cent growth during the current financial year against the targeted 6.6 per cent. “Pakistan could be among the top five countries in Asia this year in terms of economic growth,” the prime minister said, and added the 8.35 per cent growth would lead to expansion of the middle class and increased per capita income and purchasing power. What about the majority? It seems that the government cares little about it.

How does man on the street interpret the situation? Is this acceleration in growth rate going to benefit him? The answer is a simple No. Ninety per cent of the people (heads of 20 lower-middle class families) interviewed by this reporter said that they coped with rising prices by curtailing expenditure on their medical and kitchen needs. The remaining 10 per cent said they had cut down on shopping and other miscellaneous expenses. Sometimes they had to curtail the education budget of their children by shifting them to schools where the fee structure was more affordable and, where the situation was tighter, they had opted for government schools.

The salary of the lower-middle class ranges between Rs4,000 to Rs7,000 and the amount is so meagre that they find life tough. Their working hours vary from eight to 12 hours. Almost all the people interviewed said they borrowed money from various sources towards the end of every month to meet the shortfall. They also tried hard to find some extra jobs in addition to their tough working schedule to support their families. Only a few said they had succeeded.

“I have been trying for the last six months but have not been able to find a job so far. I am ready to do any job, even drive a taxi,” responds a desperate man heading a family of five when asked if he has found some source to increase his income. “Whenever I apply for a job in a firm, I find it packed with applications and scores of people queuing up for their turn.”

“Our monthly grocery budget, which was Rs500-600 some two years ago, has risen by 25-30 per cent to Rs800-850,” says another.

Growing unemployment and population growth add fuel to the fire. Inflation has also given birth to corruption, crimes and domestic violence in society. During the last two years, the rate of suicide and crime has increased manifold. Many working in private or public sector organizations turn to corruption to satisfy their family’s expectations.

“Rising inflation affects everyone in the economy. But for a country like Pakistan where income inequality is severe, an increase in prices of basic commodities adversely affects the poor and lower-middle class. Although the nominal GDP has grown by 17-18 per cent this year, per capita income of the poor has not increased accordingly,” says Mohammad Sohail, research director at Jahangir Siddiqui Capital Markets.

There is an urgent need to provide basic essentials, especially food items, at an affordable price through duty and tax reduction, he adds.