MUMBAI: At a low under 10 per cent of GDP, the household debt in the country is not increasing and there is no cause for any concerns over it, says a report.
“There has been of late a lot of brouhaha over the increasing household leverage in the country. However, such fears are largely unsubstantiated by hard facts which is only 9-10 per cent,” SBI Research said Thursday.
Though it is true that the household savings rate has declined to 30 per cent in FY17 from a peak of 36.8 per cent in FY08, it is wrong to conclude that this has led to a surge in household debt,” it added.
The household debt is low and stagnant during the past few years hovering around in the range of 9-10 per cent of GDP, it said.
The report explained that the problem in the household debt composition is of debt structure, pointing out that non- institutional sources like landlords, money lenders and friends and relatives still play an important role in financing household debt. (AGENCIES)