How Did India's Household Credit Surge to 42% of GDP in FY24?
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Synopsis
In a remarkable shift, India's household credit skyrocketed to 42.1% of GDP in FY24, up from a stable range of 32-35% during FY13-FY20. This indicates a renewed confidence in the economy as households navigate the post-pandemic landscape. What does this mean for the future?
Key Takeaways
- Household credit reached 42.1% of GDP in FY24.
- Previous credit levels were stable between 32% and 35% from FY13 to FY20.
- Increased confidence post-pandemic has driven this surge.
- Net household financial savings decreased to 5.2% of GDP in FY24.
- Financial liabilities have nearly tripled since FY21.
New Delhi, July 11 (NationPress) Household credit has surged to 42.1% of the gross domestic product (GDP) in FY24, a significant increase from the stable range of 32% to 35% witnessed between FY13 and FY20, as reported on Friday. This growth reflects an optimistic outlook on the resilient economy.
Following a notable rise in household financial obligations in the aftermath of the pandemic, the latest insights from the National Stock Exchange (NSE) market pulse report indicate that financial access and confidence among households are on the rise.
According to the report, household credit has notably increased from the stable 32-35% of GDP during FY13 to FY20, reaching 39.9% in FY21 and further escalating to 42.1% in FY24.
Additionally, the report highlights that net household financial savings, which spiked to 11.7% of GDP in FY21 due to pandemic-driven caution and limited spending or borrowing opportunities, have gradually returned to normal levels. By FY24, savings have declined to 5.2% of GDP.
This decrease can be linked to the rise in household financial liabilities, which have increased from 3.7% of GDP in FY21 to 6.2% in FY24.
"Post COVID, household financial obligations have nearly tripled, soaring from Rs 7.4 lakh crore in FY21 to Rs 18.8 lakh crore in FY24," the report notes.
The escalation in liabilities has led to a reduction in net financial savings, which fell from a peak of Rs 23.3 lakh crore in FY21 to just Rs 15.5 lakh crore in FY24.
This shift in net financial savings and liabilities has played a significant role in driving a robust recovery in private consumption, averaging 6.7% growth during FY23-FY25.
This consumption surge is, in part, fueled by the increase in household credit, the NSE market pulse report asserts.
Point of View
I believe the substantial rise in household credit reflects a critical turning point for India's economy. The increase not only signifies growing consumer confidence but also highlights the evolving financial landscape in a post-pandemic world. It is essential to monitor these trends closely to understand their long-term impact on economic stability.
NationPress
26/07/2025
Frequently Asked Questions
What is the current household credit percentage of GDP in India?
As of FY24, household credit has risen to 42.1% of India's GDP.
How does the current credit percentage compare to previous years?
Previously, household credit ranged between 32% and 35% of GDP from FY13 to FY20.
What factors contributed to the rise in household credit?
The increase can be attributed to improved financial access and growing confidence among households following the pandemic.
What has happened to household financial savings?
Net household financial savings peaked at 11.7% of GDP in FY21, but normalized to 5.2% in FY24.
How have household financial liabilities changed?
Household financial liabilities have nearly tripled, increasing from Rs 7.4 lakh crore in FY21 to Rs 18.8 lakh crore in FY24.
