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Costs of services like education and healthcare will rise exponentially in the next 10 years. Here is what you know to plan your finances accordingly.
I guess after a long battle with rising inflation, we seemed to have belled the cat and the fall in interest rate is a testament to controlled inflation – or I could say reduced inflation over the last 2 years. Now a very interesting question, with controlled inflation, what all becomes cheaper? Confused? Everything should be cheaper now right?
Well not really…
As I have said earlier, inflation under its umbrella has both goods and services. Today in this blog let me talk about services. To broadly classify these: Education, Housing and Healthcare are the three most important services we use in our lifetime. Let’s see how inflation has been on healthcare and education in the past and what should be expected in the future.
The students of IIM Ahmedabad today will pay Rs. 20lac for its 2 years post-graduation program, which is 400% of what was charged back in the year 2007. How much is the inflation rate year on year from 2007 to 2017? Let’s talk about the future. If the education inflation rises 20% year on year from now on, what will it cost 10 years down the line in the year 2027? It would cost you Rs. 1.23Cr for a 2 year post graduation if your kid aspires to study in a B-school in the year 2027. Remember the higher education cost would always have higher inflation rates.
Another equally important sector with a high inflation rate is the healthcare sector. The rise in prices in healthcare is huge in India. For a country as big as ours, having a huge population and a high dependence on the private sector only adds on to the rising cost of healthcare. This is one sector high on demand today and will be in coming years as well. And as it works with everything, anything high on demand will always cost more.
With around 35-40% of our population between the age group of 25-40 years, who still have to get their kids educated and take care of their healthcare needs, is the reduced inflation in last 2 year any way soothing?
Well, to be honest, I don’t think so. I don’t think we have understood the seriousness of the numbers which this data throws at us. With a population growing almost at the rate of 25% per ten years, and more no. of people fighting it out for a seat in college and to have a doctor to treat them, the costs of services like these are going to be much, much steeper, compared to the inflation numbers we will see every quarter been rolled out by the government.
The WPI or CPI inflations are relevant for middle class people, to understand the price movement of potatoes and tomatoes, the items we consume on a daily basis. To understand the effect on specific sectors like healthcare, education and housing; services which we will need to use in our coming 30-40 years, it says a different story.
It is also important that you plan for all the major events in your life simultaneously and make realistic future projection on the amount of money you would need to fulfill any of them. Make provisions, as it would never be an easy choice if you had to choose one over another.
Published here earlier.
Image source: pixabay