Why are households borrowing more
These pages have discussed the trend of rising household credit and the headwinds it has generated for household savings in the Indian economy. While there has been a lot of alarmist commentary on the rise in household debt and the associated fall in savings, the analysis here stopped short of painting the trend as necessarily bad. What it did point out was that consumption and GDP had become more growth-dependent, and it noted that there was no sign (yet) of households not being able to pay back the loans they have taken. This disclaimer notwithstanding, there is at least one data source – the urban Consumer Confidence Survey (CCS) conducted by RBI – which can be used to argue that urban households have seen a skew in the income-spending balance towards the latter in the past few years.
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- Hindustan Times
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