Medical, tuition expenses to hurt even as core inflation eases

NEW DELHI: Medical and tuition expenses are likely to stay high even as core inflation has declined, experts said, citing data which showed health and education inflation remained high in the first half of 2023-24 despite core inflation dipping to a three-and-a-half-year low of 4.6% in September. Strong wage growth contributed to high service inflation, and prices are unlikely to come down in the coming months, said experts.

“In H1FY24, both health and education inflation have averaged higher than levels seen in H2FY23, likely reflecting strong urban demand, supported by strong formal sector wage growth,” said Gaura Sengupta, economist, IDFC First Bank.

Average employee cost of listed companies, a proxy for urban wage growth, remained strong in April-June, increasing 14% over the first quarter of the previous fiscal, he said.


In the June quarter of 2022-23, average employee cost of listed companies had increased 17.4% year-on-year. Average education inflation in the first half of this fiscal was 6.2%, whereas health inflation averaged 5.6%.

“Inflation rates have not varied much recently and remained stickier, attaining a structural level of 5-6%,” said Paras Jasrai, senior analyst, India Ratings and Research.