India’s Middle Class Tightens Its Belt | K-Shaped Diwali 2026 | Cracknomics Ep 116

This Diwali, most Indian middle-class families are feeling the squeeze. Worldpanel’s latest Kharcha report reveals that 84% of households are struggling to manage monthly expenses or finding it harder than last year. Only 16% say they are living comfortably — down sharply from 28%. Urban consumption has fallen 4% year-on-year. Spending habits have clearly shifted: 64% of consumers have changed the way they spend, and nearly half (48%) have cut non-essential purchases like entertainment, travel and shopping. Priority is going to groceries, EMIs, education and medical needs. Festive spending remains cautious. LocalCircles data shows an average Diwali budget of around ₹20,000, with urban India expected to spend 6% less than last year. While 57% still plan some festival shopping, 31% have no plans at all. Clothes and fashion lead the list (72%), followed by appliances and travel. Most families (83%) are funding it from savings, not extra income. The result is a K-shaped festival season — premium and affluent households continue discretionary spending, while the broader middle class stays selective under the weight of stagnant real wages, high EMIs and price pressure. How is India’s middle class faring this Diwali season, we find out in #Cracknomics this week. Join The Wire's Youtube Membership and get exclusive content, member-only emojis, live interaction with The Wire's founders, editors and reporters and much more. Memberships to The Wire Crew start at Rs 89/month.    / @thewirenews