India’s Middle Class Is Borrowing More Than Saving as EMI Burden Grows, Financial Experts Warn
India’s middle class is shifting from saving to borrowing, with EMIs now consuming a major part of income and raising concerns over long-term financial stability, debt traps, and reduced savings.
Pune | November15 ,2025: India’s once noted tradition of middle-class saving is being quietly replaced by an increasing reliance on borrowing, a worrying shift that financial experts say could undermine long-term financial stability. According to recent analyses, Equated Monthly Instalments (EMIs) are taking up a growing share of household income, leaving little room for savings and emergency funds.
A rising tide of unsecured debt—especially from personal loans, credit cards, and “Buy Now, Pay Later” schemes—is fueling this trend. As of March 2024, non-housing retail loans accounted for more than half of household liabilities, according to industry data. Experts argue that this borrowing is not for investments, but rather to support a consumption-driven lifestyle. Tapas Chakraborty, a financial expert, described the cycle as “earn, borrow, repay, repeat,” warning that EMIs have effectively become a way of life.
The fallout is already visible: debt-service ratios are crossing 40 percent for a significant portion of middle-class families, a red flag for financial vulnerability. Lifestyle inflation seems to be a key driver—people are using easy monthly credit to buy not just essentials but aspirational goods, from electronics to vacations.
This mounting debt burden comes as savings rates among households hit historic lows. As incomes remain stagnant and inflation erodes purchasing power, the pressure to borrow has intensified. The resulting financial stress isn’t just a household issue; it’s raising broader concerns over economic fragility.
Experts are calling for stronger financial literacy, tighter lending norms, and more sustainable borrowing practices, warning that unchecked indebtedness could threaten the long-term economic well-being of India’s middle class.
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