Double trouble: As India’s household debt peaks, savings shrink

For one 30-year-old event manager in Bengaluru, the start of each new month brings excitement and relief in equal measure. As her salary drops, her bank account swells momentarily before reality kicks in—she has bills to pay.

A significant portion of her salary is reserved to pay rent. Then come the equated monthly instalments (EMI) and credit card payments. What’s left in her account goes towards running her household for the next month. This ranges from buying groceries and personal care products, eating out occasionally, and, every once in a while, indulging in a new experience.

By the last week of the month, frugality is the name of the game. However, each month ends with the same refrain—she’s unable to save. 

This isn’t a problem specific to this particular millennial. A growing number of Indians aren’t saving enough, even as they increasingly lean on credit to sustain their lifestyles. Data from the Ministry of Finance shows that the share of household liabilities as a percentage of gross domestic product, or GDP, was at a six-year-high at the end of the fiscal year that ended in March 2024 (FY24), standing at 41%.