A viral Reddit post has sparked a heated debate over whether the EMI culture is destroying the financial discipline of the middle-class Indians.
Taking to Reddit, the user has shared how middle-class people are becoming increasingly dependent on EMIs. He started the post with the title, “Are EMIs silently destroying India’s middle class?” The user pointed out that practically everywhere, people are living on EMIs. The entire middle class is using monthly installments to support their lifestyle. “But is this really financial progress, or are we falling into a trap?” the post read.
Citing a PwC/Perfios survey, the Redditor said around 33–45 percent of people’s salaries are going into EMI repayments. Household savings are at a 47-year low. People no longer have any emergency buffer, the Redditor said.
Nearly 45 percent of middle-class families have a DSR above 40 percent of income which is a red flag for financial distress. Among youth, about 43 percent of smartphones are bought on EMI. Delinquency rates for personal loans have crossed 5 percent, the Reddit post said.
The Redditor said that people are buying wants over needs. “A ₹50,000 phone “feels” like ₹2,500/month, so it doesn’t feel expensive. Banks and corporates profit, but families carry the long-term burden,” the post read.
The user said that in emergencies like job loss or illness, families collapse because there is no savings cushion. “We’re creating a false image of prosperity while silently hollowing out financial stability,” the post read.
The user says that EMIs are more of a trap that keeps India’s middle class in permanent debt. EMIs transfer wealth upward to lenders and big companies. “So my question to you all: Do you think EMI culture is ruining financial discipline in India? Or is it just the “new normal” we have to accept as part of modern living?”
Netizens react
The Reddit post has received mixed responses with some saying that EMI is a trap and others arguing that EMI is good as long as it is in line with one’s salary or savings.
A user commented, “It’s a trap. Many people argue that it’s okay as long as it’s manageable. The problem is that any unforeseen circumstances can make it impossible to manage.”
Another user commented, “Buying things you can live without, with money that you dont have.”
“The thing is India is a status-driven society. So not having that particular phone, car, house, or vacation like others really makes you sort of look left out..and not one wants that..!!”, commented one user.
“They are spending money they don’t have. One shock and it could ruin families,” commented a user.
One user wrote, “No. EMIs are not destroying indian middle class. People are dumb enough to screw up their finances and ignoring risk management.
“EMI is good, but should be according to the salary or savings. Plus medical insurance is a must,” commented one user.
One user wrote, “Debt should be in moderation. It isn’t a way to buy everything you want.”
