India that 'saved first, spent later' is gone, says CoinSwitch cofounder

Traditional habit of households putting aside quarter of their incomes in savings is eroding, says Ashish Singhal

Middle-class Indian households are “borrowing to consume and not build”, fintech entrepreneur Ashish Singhal has said amid a debate that a culture of financial restraint is changing.

 

“Our parents’ generation didn’t like loans. If you couldn’t afford it, you didn’t buy it. That India is gone,” Singhal said in a Linked post, noting that household debt per person has climbed to Rs 4.8 lakh, up from Rs 3.9 lakh two years ago. The worrying part, he said, is that this debt is rising faster than income. Singhal is the founder of wealth technology platform PeepalCo and cofounder of CoinSwitch, a crypto exchange.

 

 

Singhal said that half of household borrowings are not going into building assets like homes or businesses. Instead, they’re being used for personal loans, credit card dues and auto loans.

 

“We’re borrowing to consume, not to build,” he said. From Rs 3-lakh loans for vacations abroad to iPhones purchased on monthly instalments, discretionary spending is increasingly being financed by debt. Singhal warned that a “generation-wide” reliance on credit for lifestyle expenses could weaken long-term financial stability.

 

Easy credit meets lifestyle inflation

 

India’s traditional savings habit — households putting aside about 23–25 per cent of their income — is eroding, said Singhal, attributing the trend to the rise of easy loans. “NBFCs figured out how to lend in five minutes through apps. Credit cards are everywhere. ‘Buy now, pay later’ has been normalised,” he said, referring to non-banking financial companies.

 

At the same time, salaries have not kept pace with lifestyle inflation. The pressure to keep up socially, travelling, upgrading, and “living your best life” — is pushing many to take on small, repeated loans. “So you take [out] a loan. Just this once. Then again. Then it’s normal.”

 

‘Loans compound. Lifestyles don’t reverse easily’

 

The long-term impact of this shift may not be immediately visible. “Loans compound. Lifestyles don’t reverse easily,” he said, warning that today’s borrowers could reach their forties or fifties only to realise that their prime earning years went towards servicing EMIs rather than creating wealth.

 

“India is moving from ‘save first, spend later’ to ‘spend now, pay later’ in less than a decade,” he said, adding that the real cost of this transition will be known only when this generation faces its financial future.