Sharjah vs India: Financial advisor questions India’s inflation & GDP numbers through UAE rent model

In Sharjah (UAE), tenants sign a rental contract knowing exactly what to expect: the rent will remain unchanged for the first three years. By law, landlords cannot raise rents during this period. Even after that, increases are capped — in Dubai, for instance, the RERA Index ensures that rents rarely rise more than 5% in a year. 

According to Akshat Shrivastava, this makes sense because the UAE’s official inflation hovers around 3%, and rent hikes are capped at 5%. “Numbers and lived experiences stay consistent,” he wrote in his post on X (formerly Twitter). 

Now compare this to India. Shrivastava highlighted that while official inflation is about 2.3%, tenants in Indian cities regularly face annual rent increases of 8-10%. In metros like Bengaluru, Delhi, and Mumbai, landlords hike rents far beyond inflation. For him, this mismatch exposes a deeper problem in how India reports its economic data. 

GDP vs Ground Reality 

Shrivastava explained that GDP growth calculations depend heavily on the inflation figure — used as a proxy for the GDP deflator. “Nominal GDP = Real GDP + GDP deflator,” he noted. 

In India’s case, the math looks like this: 

• Nominal GDP: 8.8% 
• Real GDP: 6.5% 
• Inflation (deflator): 2.3% 

By keeping inflation artificially low, Shrivastava argued, India’s real GDP appears stronger than it actually is. “When I tell folks that inflation & GDP data is manipulated — they bash me rather than looking at the practical reality,” he added. 

Why UAE rents behave differently 

Part of the difference, Shrivastava said, lies in supply dynamics. In the UAE, cities expand into the desert or create new islands to meet housing demand. Infrastructure, road connectivity, and faster construction cycles keep supply robust, which reduces pressure on rents. 

In India’s metros, however, the opposite holds true. Shrivastava pointed to poor infrastructure, limited Floor Space Index (FSI), and 5-7 year construction cycles that create scarcity. For investors — particularly NRIs — this makes Indian premium real estate attractive, despite the strain it puts on the middle class. 

Beyond numbers: Aspirational inflation 

Beyond official numbers, Shrivastava underlined what he calls “Dream/Aspirational Inflation” — the hidden rise in living costs that the middle class faces. This inflation, he argues, is often twice as high as official figures suggest, affecting everything from housing to education. 

For Shrivastava, the lesson is clear: inflation and GDP aren’t just numbers on an Excel sheet. They shape daily life, rent negotiations, and household budgets. “Economy should be based on practical reality, not made-up stories,” he concluded. 

Shrivastava’s post sparked a wave of responses online. 

One user wrote, “Exactly! In India, rents rise 8–10% yearly while official inflation shows ~2%. That mismatch itself shows the gap between data on paper vs life on ground.” 

Another added, “Sharjah’s model proves inflation controls can be logical. In India, the disconnect between policy inflation and street inflation is exactly why people stop trusting institutions.” 

A third noted that while India’s real estate creates wealth, the UAE offers a more predictable system. “Truth is if rent is not handsome in UAE, why would the price increase? Supply is huge and infra is world-class. In India, scarcity keeps prices high.”