LAHORE: Policymakers tend to focus more on food inflation due to its immediate impact on the poor, which can lead to social unrest and instability. However, the middle class continues to face significant financial stress due to rising rents, increasing tuition fees and escalating medical costs.
For the poor -- who constitute over 40 per cent of the population -- food is their primary expense. Many slum dwellers either face little to no housing costs or live in informal settlements. They send their children to substandard public schools or keep them out of education entirely. For healthcare, they often spend days seeking treatment at government clinics or turn to unqualified practitioners. However, those slightly higher up the economic ladder must purchase these essential services at market rates.
These expenses account for a substantial portion of middle-class spending. Yet, unlike food inflation, they do not receive the same level of policy attention. This has led to a steady erosion of middle-class purchasing power, with long-term consequences such as reduced savings, lower consumer spending and even brain drain, as professionals seek better opportunities abroad.
The pressure on the middle class due to rising housing, education and healthcare costs stems from a combination of weak regulatory oversight, economic mismanagement and structural inefficiencies. Rents are rising due to urbanisation, a lack of affordable housing projects and speculative real estate investments, where property is held for value appreciation rather than being made available for rental. The conversion of industrial and commercial land into housing societies has reduced available space for sustainable housing development.
Education costs are becoming increasingly unaffordable due to inadequate government investment in quality public education, forcing middle-class families to rely on private schools. Many private schools operate without strict fee regulations, arbitrarily increasing tuition costs. Similarly, limited competition in higher education leaves students with no choice but to enrol in expensive private universities.
The public healthcare system remains underfunded and inefficient, pushing people towards costly private hospitals. This has significantly contributed to rising healthcare expenses. The increasing cost of medicines, driven by currency depreciation and supply chain disruptions, has further escalated treatment costs. Private hospitals, operating without proper oversight, continue to charge excessive fees.
Addressing these three critical issues requires stronger administrative measures to ease the financial burden on the middle class. For housing, rent control mechanisms should be implemented to prevent excessive increases. A rent indexation system -- capping annual rent hikes at 5-7 per cent -- has been successful in Maharashtra (Mumbai) and Malaysia, where increases are linked to inflation. While the Punjab Rent Restriction Act exists, its enforcement must be strengthened to prevent tenant exploitation. Developers should be incentivised to build affordable rental housing, and urban planning must focus on expanding housing supply rather than speculative developments.
In education, the government must enforce fee regulations for private schools and invest in strengthening public education to provide an affordable alternative. A cap on tuition fee increases -- linked to inflation, with a maximum of 8-10 per cent per year -- should be introduced. Provincial governments must strictly implement the Private Schools Regulation Act in Punjab and Sindh, making it mandatory for private schools to disclose financial records to justify fee hikes. The state should also introduce scholarships or tax breaks for middle-income families to ease financial pressure.
Regarding healthcare, it is crucial to expand public health insurance schemes to cover middle-class families. The Sehat Sahulat Programme (SSP) should be extended to lower-middle-income earners, not just the poor. The government should facilitate private-sector participation in health insurance schemes, following models such as Indonesia’s micro-insurance programmes. There should be strict price regulations on essential medicines and healthcare services, with measures to encourage competition in private healthcare to drive down costs. The state must set fixed charges for basic medical services -- such as consultations, tests and hospitalisation -- to prevent overcharging.
By implementing these reforms, the government can help stabilise middle-class living standards, ensuring long-term economic stability and preventing further social disparities.