India's Household Debt Surges Past Assets, Driven by Retail Loans: RBI Report

Summary: The Reserve Bank of India reports a significant trend: household liabilities in India are growing much faster than assets. Between 2019-20 and 2024-25, liabilities more than doubled (102% increase) while assets grew by 48%. This has pushed the household debt-to-GDP ratio from 26% in 2015 to 42% by late 2024.

Key Findings & Impact: The surge is largely driven by non-housing retail credit (credit cards, auto, personal loans), constituting 55% of debt, compared to 29% for home loans. This is linked to easier credit access and aspirational consumption. The impact includes potential erosion of household assets for future needs and risks to long-term macroeconomic stability if consumption isn't productive. Unlike some developed economies with higher debt, India has a weaker social safety net. The report suggests strengthening this net and making personal loans relatively costlier than housing loans as an early warning signal.

Impact Rating: 7/10

Definitions: * Household sector: Individuals and families. * Net indebtedness: Total debt minus financial assets. * GDP: Total value of goods/services produced in a country. * Non-housing retail credit: Personal loans not secured by property. * Aspirational consumption: Spending to achieve a desired lifestyle. * Macroeconomic growth: Overall economic development. * Social safety net: Government support for citizens' economic well-being.