THE EMI ILLUSION: HOW DEBT IS FUELING AND THREATENING INDIA'S MIDDLE-CLASS DREAM

The narrative of India’s economic ascent is often painted with the broad brushstrokes of a burgeoning middle class, one that seemingly possesses all the trappings of modern success: spacious homes, shiny cars, quality education, foreign vacations, and the latest technological gadgets. On the surface, it appears that “good days are here,” a testament to rising prosperity and economic liberalization. However,acloser examination revealsa more precarious reality, one underpinned notby sustainable wealth but by the seductive and often dangerous allure of easy credit. The Indian middle class has, believe it or not, metamorphosed into an “EMI class,” where every aspiration, from theessential to the extravagant, is available for the price ofa few monthly installments. This systemic reliance on debt is not just reshaping consumption patterns; it is forging a debt trap that threatens financial stability, mental peace, and the very foundations of the economic progressit purports to symbolize. The facade of prosperity is cracking under the weight of cumulative liabilities, revealing a deep-seated crisis where dreamsare purchased on credit, and peace of mind is the first casualty.

- DR. AMAN KUMAR SHARMA & SHELU SHARMA

THE ANATOMY OF A DEBT-FUELED LIFESTYLE

The transformation of the Indian middle class into a consumption-driven entity is largely a story of financial innovation meeting aspirational demand. The proliferation of Equated Monthly Installments (EMIs) has democratized access to goodsand services that were once considered luxuries or Iong-term goals. Thissystem, while enabling immediate gratification, often conceals a critical component: the interest. This hidden cost allows individuals to fulfill their dreams today but mortgages their financial security tomorrow. The text poignantly highlights the cyclical nature of this trap: “Before one EMI ends, another begins. One loan settled then the need for another one arises.” This cycle is exacerbated by the use of revolving credit instruments like credit cards, where bills from one card are paid with another, creating a perilous house of cards. The statistics are alarming: a 50% surge in credit card usage in three years and credit card defaults skyrocketing from Rs 1,100 crore to over Rs 6,500 crore in five years illustrate the severity of the situation. ‘The average household debt in India has swelled from Rs 3.9 lakh toRs 4.8 lakh in just two years, a clear indicator of the growing reliance on borrowed money to sustain acertain standard of living.

FROM NECESSITY TO VANITY: THE CHANGING NATURE OF BORROWING