India's average household debt rises 23% in 2 years, says financial expert
In a recent LinkedIn post, Kamra highlighted a concerning shift in household borrowing: non-housing retail loans—including credit card dues, personal loans, and auto loans—now make up 55% of total household debt, while home loans account for just 29%.
A comparison of retail loan growth before and after the pandemic reveals the depth of the change:
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Retail Loan Growth (CAGR):
Pre-pandemic (FY09–19) vs Post-pandemic (FY19–24):
Credit Cards: 12.1% → 21.0%
Personal Loans: 15.1% → 18.2%
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Vehicle Loans: 16.5% → 14.8%
Housing Loans: 19.0% → 15.5%
Credit card spending has seen the most dramatic growth, increasing 13 times over the past 13 years—from ₹1.2 lakh crore to ₹15.6 lakh crore. During the same period, the number of credit cards in use has grown more than fivefold—from 2 crore to 10.8 crore.
Kamra summed it up pointedly: 'Our parents borrowed to build assets. Today, most people borrow to fuel instant gratification.'
Experts warn that the surge in unsecured lending could increase default risks and reduce financial stability in the long run. While this trend may temporarily boost economic activity, it also points to a shift in how young Indians approach money, credit, and consumption.
The Reserve Bank of India has also raised red flags in recent months, cautioning against the sharp rise in personal loan and credit card debt, which could strain household finances if not properly managed.
As this trend deepens, it poses a critical question for borrowers, banks, and policymakers alike: Is this a sign of a shifting consumer culture—or a warning signal for future financial stress?
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