The RBI points out that India’s household debt remains moderate compared to other emerging markets, despite the growing financial crisis. It is observed that many of the secured loans are not challenged
Household savings rose to 15.4 per cent of GDP in 2020-21. In 2021-22, it will be 11.1 percent. It will come down to 10.9 percent in 2022-23. Total household savings to grow by 13.9 per cent in 2022-23. However, it is noteworthy that savings have declined to 5.1 percent of GDP in 2022-23 from 11.5 percent in 2020-21.
In 2022-23, fixed assets declined from 11.1 per cent to 10.9 per cent. Fiscal liabilities have risen from 3.8 per cent of GDP in 2021-22 to 5.8 per cent in 2022-23.
The challenge is the increase in loans
The main reason for the increase in household indebtedness is the sharp rise in borrowing from financial institutions. , which also leads to a decline in the overall savings of households. The RBI points out that household debt has been controlled to 37.6 percent of GDP in March 2023 from 39.2 percent in March 2021.