Household credit in India surged to 42.1 percent of the country&rsquo;s gross domestic product (GDP) in FY24, a significant jump from the stable range of 32 to 35 percent recorded between FY13 and FY20, according to a new report by the National Stock Exchange (NSE).
The increase signals growing financial access and confidence among Indian households in the aftermath of the COVID-19 pandemic. The report highlighted a sharp rise in household financial liabilities, suggesting that families are borrowing more, possibly to meet consumption needs or invest in assets.
"Household credit has expanded meaningfully, from remaining stable at 32 to 35 percent of GDP during FY13 to FY20 to a marked increase to 39.9 percent in FY21 and further to 42.1 percent in FY24," the report noted.
Meanwhile, net household financial savings, which spiked to 11.7 percent of GDP in FY21 due to limited spending and increased caution during the pandemic, have now declined to 5.2 percent of GDP in FY24.
This reduction is largely due to rising household liabilities, which jumped from 3.7 percent of GDP in FY21 to 6.2 percent in FY24. In absolute terms, household financial liabilities almost tripled from Rs 7.4 lakh crore in FY21 to Rs 18.8 lakh crore in FY24.
As a result, net financial savings have shrunk from Rs 23.3 lakh crore at their peak in FY21 to Rs 15.5 lakh crore in FY24.
Despite the decline in savings, the report indicates that household borrowing has played a major role in fueling private consumption. From FY23 to FY25, private consumption has grown at an average rate of 6.7 percent, largely driven by the surge in household credit. [Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed]

Post-COVID borrowing surge boosts household credit, compresses savings, fuels private consumption

Household Credit Hits 42% of India’s GDP in FY24

Post-COVID borrowing surge boosts household credit, compresses savings, fuels private consumption

July 11, 2025 | 15:06 IST