growing issue. “₹70 Lakh p.a. is the New Middle Class,” investment banker Sarthak Ahuja wrote in a viral LinkedIn post, exposing the disturbing yet real truth about urban financial life in India. According to Ahuja, even families earning ₹70 lakh annually are struggling to make ends meet in cities like Mumbai, Bengaluru, and Gurgaon.
He breaks down the numbers: from ₹70 lakh gross income, about ₹20 lakh goes to taxes, leaving ₹50 lakh, roughly ₹4.1 lakh a month. But expenses eat into that almost immediately. A ₹2 crore home loan demands ₹1.7 lakh in EMIs. Add a ₹20 lakh car loan with an EMI of ₹65,000, ₹50,000 for international school fees, and ₹15,000 for domestic help. “This leaves you with just ₹1 Lakh for all other expenses,” Ahuja warns.
That final ₹1 lakh must stretch across food, utilities, healthcare, transport, entertainment, and even savings. “By the end of the month, there’s nothing left!!!” he adds.
According to Ahuja, the three key issues causing this urban squeeze are “runaway inflation in metro cities, real estate priced at 10–30 times annual incomes, and aspirational lifestyles driven by social media.” His advice is blunt but wise, “Think twice before you sign up for a housing loan!”
Financial expert Saurabh Mukherjea, founder of Marcellus Investment Managers, talks about the same concern. Citing Reserve Bank of India data, he notes that 5–10% of middle-class households are now trapped in debt. “The rise of digital finance tools has made borrowing frictionless,” Mukherjea explains. With social media fueling unrealistic lifestyles, more families are spending beyond their means.
He points out that India’s financial savings rate is at a 50-year low, while non-mortgage debt, which is used for cars, gadgets, holidays, and more, is among the highest in the world. “Home and car loans could be next,” Mukherjea warns, highlighting the growing signs of stress in personal loans, credit card bills, and even two-wheeler EMIs.
This situation is a wake-up call for urban earners. The cost of comfort is now dangerously close to unsustainable, and the definition of “middle class” may need a serious rethink — and recalibration.