My Struggle Should not Be Passed On: Addressing the Financial Hardships of Hardworking Working Class Indians

 There is a quiet arithmetic that plays out in millions of Indian households on the first of every month. The salary message arrives on the phone. And before the family has bought a single vegetable, paid a single school fee, or celebrated a single small joy, nearly 40 paise of every rupee has already left the account — claimed by EMIs, rent, and insurance premiums committed long ago.,

This is not a metaphor. The Perfios–PwC "How India Spends" study of over 30 lakh consumers found that salaried Indians now spend more than 33% of their monthly income on loan EMIs alone. Add necessities — groceries, utilities, fuel, medicines, school fees — and 71% of the month's income is spoken for. What remains is not savings. It is survival margin. And for at least 29% of Indians, even that margin runs out: their salary does not last beyond the 15th of the month.

## A Decade of Borrowed Living

To understand how we arrived here, look at two lines moving in opposite directions.

The first line is debt, and it is climbing steeply. India's household debt has roughly doubled in a decade — from about 26% of GDP in 2015 to nearly 42% by the end of 2024, per the RBI's Financial Stability Report. The average borrower's debt jumped 23% in just two years, reaching ₹4.8 lakh by March 2025. Credit card outstandings tell an even more dramatic story: from ₹340 crore in August 2015 to ₹2.88 lakh crore by August 2025, with active cards multiplying from 2.1 crore to over 11 crore.

The second line is savings, and it is collapsing. Net household financial savings fell to 5.1% of GDP in FY23 — a 47-year low, confirmed by the RBI itself. Three-quarters of Indians have no emergency fund whatsoever. Over 60% of salaried professionals hold less than one month of expenses in liquid savings. One sudden layoff, one hospitalisation, and the entire structure gives way.

What connects these two lines is the most troubling fact of all: the *purpose* of borrowing has changed. Non-housing loans — personal loans, credit cards, consumer durables — now make up about 55% of household debt. Indians once borrowed to build homes and assets. Increasingly, we borrow simply to make ends meet.

## The Anatomy of Bad Credit

Bad credit does not announce itself. It arrives dressed as convenience — a one-click app loan, a "pay in 4" checkout button, a pre-approved limit. Then the numbers turn.

Credit card NPAs rose 28.42% in a single year to ₹6,742 crore by December 2024 — more than five times the level of December 2020. Small-ticket personal loans under ₹50,000, the favourite product of digital lenders, showed delinquency of 5.4% — and roughly half of these borrowers already juggled four or more credit products. Unsecured lending accounted for over half of all new retail NPAs, and the RBI's December 2025 report found 53.1% of retail loan slippages now originate from unsecured products. At the bottom of the pyramid, microfinance NPAs surged to nearly 16%. Behind every one of these percentage points is a family fielding recovery calls, a father hiding statements, a young professional whose CIBIL score now shadows every future dream.

And it is the young who are walking into this earliest. Gen Z made up 41% of all first-time borrowers and half of new credit card customers. TransUnion CIBIL found that 31% of Gen Z borrowers held two or more credit accounts before their first card, and 28% ran balances above ₹25,000 within three months of getting one. Compare that with the previous generation, where a majority of millennials had no credit exposure at all at the same age.

The cruellest cost of this crisis is not financial. It is psychological.

Deloitte's 2025 global survey found financial insecurity among Indian Gen Z jumped to 48% — from 30% just a year earlier. Globally, more than half of young workers report living paycheck to paycheck. When every month ends at zero, the future stops being something you plan for and becomes something you merely brace for. Marriage gets postponed. Children's education becomes a source of dread rather than pride. Healthcare — inflating at 14% annually, with 62% of costs paid out of pocket and nearly a quarter of hospital bills financed through fresh borrowing — turns illness into financial catastrophe.

The deeper injustice is that this is not the result of reckless living. Real wages for the average Indian worker actually *fell* 4% between 2012 and 2024 after adjusting for inflation, even as corporate profits touched their highest share of GDP since 2008. Hardworking Indians are not failing the economy. In important ways, the economy's rewards are failing to reach them — and cheap, frictionless credit has been papering over the gap.

## Putting It in Check: Three Pillars of Repair

**The Self.** The first act of resistance is an audit. Add up every EMI; if the total crosses 40% of take-home pay, you are over-leveraged — full stop. Freeze all new unsecured and BNPL debt, and attack credit card balances first, because 36–45% interest is a fire that consumes everything around it. Then build the buffer: three to six months of essential expenses in liquid savings, started with even ₹5,000 a month. Adopt the 50-30-20 rule — 50% needs, 30% wants, 20% savings — and automate a SIP on salary day, so investing happens before spending can. Protect it all with term life and health insurance, because one uninsured hospitalisation can erase five years of discipline.

**The Government.** Policy must attack the root, not just the symptom. That means addressing wage stagnation — indexing minimum wages to inflation so incomes keep pace with the cost of living. It means sustaining the calibrated vigilance the RBI showed in November 2023, when higher risk weights on unsecured loans measurably cooled reckless lending, and in October 2024, when it barred four NBFCs for usurious pricing. It means mandating total-cost-of-credit disclosure for every digital loan, embedding financial literacy in schools and workplaces, and strengthening social security so families do not borrow out of desperation.

**Financial Institutions.** Banks, NBFCs, and fintechs must decide what business they are in: building customers' futures or mining their vulnerabilities. That means honest debt-to-income checks before approval, not after default. It means flagging borrowers with five or more live loans instead of extending them a sixth. It means designing products that favour good debt — housing, education, enterprise — over pure-consumption credit, and treating a first-time Gen Z borrower as a relationship to nurture for decades, not a limit to exhaust in a quarter.

## The Road Back

India's story is not yet a crisis — our household debt remains modest by global standards, and financial inclusion is genuinely expanding. But trajectory matters more than position. A nation whose workers save at a 47-year low while borrowing at record highs is spending its future in the present tense.

The correction begins with a simple reversal of the monthly arithmetic: pay the future first. A salary that funds savings before EMIs, protection before consumption, and hope before habit is not just a healthier bank balance. It is the difference between a working population that merely survives each month — and one that finally gets to dream beyond it.