Wonder how much of what Dr Swamy claims is true, considering Dr swamy himself is rootless(politically speaking). With the economy showing no signs of making any recovery, are the knives finally coming out in the BJP camp.
Indian Economy : News,Discussions & Updates
- Thread starter Butter Chicken
- Start date
-
- Tags
- indian defence forum
Wonder how much of what Dr Swamy claims is true, considering Dr swamy himself is rootless(politically speaking). With the economy showing no signs of making any recovery, are the knives finally coming out in the BJP camp.
Retail debt data suggests India’s households are becoming austere
Debt is widely considered the lifeblood of commerce. Retail (or consumer) debt has long been a measure of the proclivity of people to spend (sometimes money they do not have). A Hindustan Times analysis of retail debt data suggests that Indian household are becoming austere – perhaps from the fear that their and the country’s long-term prospects have deteriorated, or perhaps for some other reason .
The Reserve Bank of India tracks eight sub-categories of personal loans every month: consumer durables, housing, advances against fixed deposits, advances to individuals against shares, bonds etc., credit card outstanding, education, vehicle loans, and other personal loans. This data is available until July, 2019. Headline growth in personal loans has been fluctuating within the range of 15%-20% in the last one year. More than half of personal loans in India are housing loans, which have actually shown a growing trend in the last two years. Since this head includes priority sector housing, part of it could be the result of government’s push on welfare housing programme.
Chart 1: total personal loan and housing loans
Vehicle loans have been the second biggest component of personal loans since 2007. Annual growth in vehicle loans between August 2018 and July 2019 was 7.7%. This is the lowest under the current government. To be sure, the number was even lower in the three years before the Modi government assumed office. Between August 2008 to July 2009, August 2009 to July 2010, and August 2013 to July 2014. The first two could have been the impact of the global financial crisis. The last could have been a result of economic despondency owing to what is referred to as policy paralysis during the second United Progressive Alliance (UPA) government. The trend in consumer durable loans in the last one year is worse – a decline of 75% between August 2018 to July 2019, on the back of a 1.6% decline in the corresponding period of the previous year.
Chart 2: vehicle loan, consumer durables and credit card loans
These trends suggest that a large number of Indian households are cutting back on what can be described as lifestyle spending. To be sure, credit card spends have been continuing to rise – an indication of at least some of the consumer product loans being routed through credit cards – but their penetration still remains low in India.
Another disturbing trend in the personal loan data is the fact that education loan growth has been falling continuously in the last decade and it has actually declined in the last two years. Understanding the reasons for this will require more research, though.
Chart 3: education loans
These trends point towards a crisis of confidence in the Indian economy. While households are not shying away from buying houses on credit, which brings tax benefits and probably also saves rent, they are unwilling to splurge on cars, durables, even education. These are expenses which are premised on hopes of better earnings in the future.
Retail debt data suggests India’s households are becoming austere
Debt is widely considered the lifeblood of commerce. Retail (or consumer) debt has long been a measure of the proclivity of people to spend (sometimes money they do not have). A Hindustan Times analysis of retail debt data suggests that Indian household are becoming austere – perhaps from the fear that their and the country’s long-term prospects have deteriorated, or perhaps for some other reason .
The Reserve Bank of India tracks eight sub-categories of personal loans every month: consumer durables, housing, advances against fixed deposits, advances to individuals against shares, bonds etc., credit card outstanding, education, vehicle loans, and other personal loans. This data is available until July, 2019. Headline growth in personal loans has been fluctuating within the range of 15%-20% in the last one year. More than half of personal loans in India are housing loans, which have actually shown a growing trend in the last two years. Since this head includes priority sector housing, part of it could be the result of government’s push on welfare housing programme.
Chart 1: total personal loan and housing loans
Vehicle loans have been the second biggest component of personal loans since 2007. Annual growth in vehicle loans between August 2018 and July 2019 was 7.7%. This is the lowest under the current government. To be sure, the number was even lower in the three years before the Modi government assumed office. Between August 2008 to July 2009, August 2009 to July 2010, and August 2013 to July 2014. The first two could have been the impact of the global financial crisis. The last could have been a result of economic despondency owing to what is referred to as policy paralysis during the second United Progressive Alliance (UPA) government. The trend in consumer durable loans in the last one year is worse – a decline of 75% between August 2018 to July 2019, on the back of a 1.6% decline in the corresponding period of the previous year.
Chart 2: vehicle loan, consumer durables and credit card loans
These trends suggest that a large number of Indian households are cutting back on what can be described as lifestyle spending. To be sure, credit card spends have been continuing to rise – an indication of at least some of the consumer product loans being routed through credit cards – but their penetration still remains low in India.
Another disturbing trend in the personal loan data is the fact that education loan growth has been falling continuously in the last decade and it has actually declined in the last two years. Understanding the reasons for this will require more research, though.
Chart 3: education loans
These trends point towards a crisis of confidence in the Indian economy. While households are not shying away from buying houses on credit, which brings tax benefits and probably also saves rent, they are unwilling to splurge on cars, durables, even education. These are expenses which are premised on hopes of better earnings in the future.
Retail debt data suggests India’s households are becoming austere
Criticism or delusions if not blatant lies? Criticism is when you talk sense, when you put things in context. Things made out of thin air is not criticism now don't say I called you anti national. There is a little trend going on in your little universe where if anyone question the veracity of claim other person automatically became Sanghi and Modi supporter who is asking you to leave India.
Yeah corporates are evil.
It's right there why you can't ever objectively look at economics and understand it, forget analysis for economic slowdown.
Criticism or delusions if not blatant lies? Criticism is when you talk sense, when you put things in context. Things made out of thin air is not criticism now don't say I called you anti national. There is a little trend going on in your little universe where if anyone question the veracity of claim other person automatically became Sanghi and Modi supporter who is asking you to leave India.
Yeah corporates are evil.
It's right there why you can't ever objectively look at economics and understand it, forget analysis for economic slowdown.
Thank you for not calling me a anti-national or ask me to leave for Pakistan. If you don't like labels, then it is only fair that you try not to label others .
Corporates are not evil, yes some can be when they commandeer state machinery to oppress people or even mass murder them, but they sure are committing the greatest fraud ever to have visited this land since the end of British colonialism. Its unfortunate that all this is happening with the active connivance of the elected governments.
How is it comparable uncle ? Entire auto industry is in a constant decline for last 10 months.These cars are 10lakh+ segment for which the market share is very low. For all that we know without the slowdown they could have got double of the number of bookings.
Probably people are thinking that better to save money than buy tincans of Maruti Suzuki