Six years ago, 24-year-old Munna Kumar Singh and his family migrated to Delhi from a small town in Bihar, where he worked in a denim facto...
Six years ago, 24-year-old Munna Kumar Singh and his family migrated to Delhi from a small town in Bihar, where he worked in a denim factory in the city’s Udyog Vihar for a monthly salary of Rs 9,000. He is the sole breadwinner in the family of four. He also tries to send a small remittance to those at home in Bihar. When he lost his job with last year’s lockdown to curtain the spread of Covid-19, Singh struggled to make ends meet. He ended up borrowing extensively from informal channels. He is now over Rs 50,000 in debt with no stable income to repay his loans.
Singh’s experience echoes that of many low-income households across India. Even though household debt in India had been on the rise from 2013, debt has surged since mid-last-year, driven by the catastrophic economic impact of pandemic, the lack of institutional access to credit or income support, and the uncertainties-anxieties making most people to borrow and save for the future.
As per Reserve Bank of India data, household-debt-to-GDP ratio increased to 37.1% in the second quarter of 2020 from 35.4% in the first quarter. Overall debt held by Indian households roughly valued at Rs 43.5 trillion, as of March 2021.
Government and corporate debt...
