Rising living costs and borrowing have tempered India’s aspiration index for 2023, to the extent that for the first time since 2020, the All-India Aspiration Index has actually fallen. The latest All-India Aspiration Index released on September 5, 2023 stands at 85.3, down two points from the previous year’s 87.3.
High costs of living and the burden of borrowing have led many to postpone their dreams, BankBazaar said in its Aspiration Index 2023 report. The index tracks the aspirations of salaried individuals aged 22-45 years across India.
For the study, the surveyors spoke to 1,732 respondents across six metros and 18-plus Tier 2 cities, exploring 17 goals under five major aspirations: health, wealth, fame, relationship, and personal growth. A higher index signifies higher aspirations, while a lower one implies hesitation.
Advertisement
Mental health emerged as the top aspiration, closely followed by living near family and venturing into entrepreneurship, according to the study.
Incidentally, the aspiration index not only measures the importance that people place on their aspirations but also on their confidence in achieving them. The greater the lack in confidence, the greater is the gap score, also designated as the readiness gap, assigned. The readiness gap for mental health was notably highest, indicating a strong desire, but limited preparedness.
According to the study, an early retirement is still one of the top-five goals for 28 per cent of people. However, it fell from the sixth position among list of priorities last year to ninth this year. Crucially, it fell from the second most important reason to invest to the sixth place. The percentage of people with a retirement corpus saw a 4 per cent dip.
Advertisement
India’s Aspirations And Road Blocks
India unequivocally declared health as its top priority, with an Index of 87.5. The aspiration for mental happiness and health took the lead with an index of 89.1.
Desire to own a house and children’s education return to the top three. Nutritional diet and living near immediate family were ranked fourth and fifth.
Despite a shrinking workforce participation, Indian women continue to drive aspirations, surpassing men with an Aspiration Index of 86.1, though both fell compared to the previous year.
Women aged 28-34 years had the highest aspirations followed by women aged 35-45 years. Retirement planning, hobbies, and lavish weddings were the least important aspirations for them. Men on the other hand, especially early jobbers (22-27 years) had the lowest aspiration.
“The Indian male is struggling, even more so the Early Jobber male with most of the lowest index scores across all goals...His aspirations for world travel are muted,” the report said.
High living costs took the lead as the most significant roadblock to aspirations for 48 per cent respondents. Limited savings (44 per cent) and a tax regime not adjusted for inflation (30 per cent) were other significant road blocks.
High borrowing costs have significantly impacted aspirations, affecting 82 per cent of respondents. Loans have become more expensive for around 74 per cent, with 42 per cent witnessing an increase in equated monthly instalments (EMIs).
Advertisement
Women on the whole were more bogged down by family responsibilities, compounding the challenges for them along with high living costs and work pressures, the report added.
There has been a noticeable decline in people taking loans for various purposes, including housing, vehicles, education, and home improvement. More people (19 per cent) had credit liability as compared to last year (14 per cent), the report further said.
