Number Theory: Household debt's role in India's growth story
This is the last of a 2-part data journalism series on household finances and Indian economy. The first discussed the latest fall in household savings in India
The first part of this story discussed the net fall in household asset flow in 2022-23 and argued that the data which is available does not provide any objective basis to argue that the number suggests a growing distress in the financial sector or household balance sheets. If the 2022-23 number is just a reflection of ‘revenge spending’ on account of two lost years in the pandemic, then there is nothing of macro-economic importance in this data. But what if these numbers are the beginning of a new trend in household financial behaviour? To be sure, one will have to wait for at least a few years to accept or reject this proposition. However, it is worth engaging with this question given the crucial role of debt in India’s post-reform growth story.