NEW DELHI: Indians seem to be living way beyond their means. An extensive survey has found that more and more households seem to be borrowing not for creating assets like building a house or buying a car, but to meet consumption needs ranging from food, transport and medical bills to even repaying loans.

Consumers using credit facilities, probably credit cards, for purchasing fuel and renovating their houses constitute the biggest chunk of the borrowings, a soon-to-be released survey by National Council for Applied Economic Research and Max New York Life Insurance said.

The findings confirm the trend towards urban India's transformation into a consumerist society with diminished stigma associated with debt. Thus, while housing loan business may be big in terms of value but in terms of number of loans, it is still the odd renovation expenditure or a loan to buy jewellery at the time of a weddings that dominates.

Also, while banks may be pestering you with calls offering a variety of loans, many urban households don't mind tapping the much-maligned moneylender or friends and relatives to borrow for meeting routine expenses.

Though only 7.2% of urban households borrow from moneylenders, compared to nearly 21% in rural areas, the figure is significant because of the widening institutionalised credit bouquet. Then again, one-third of city borrowers who approach moneylenders do so for meeting routine expenses, the Indian Financial Protection Survey which visited 63,000 households said. In villages the number is a little lower at 25%.

For Indian households, food makes up over half the household budget, followed by transport (10%) and education (7%). Urban households spend 45% of their income on food while the figure for rural households is 55%.

Surprisingly, spending patterns in urban and rural India are more or less similar, with education being the only major point of difference.

Even the spend on durables in rural areas, in what marks good news for white goods companies, has caught up with the pattern in cities. Though 7% of the household spending is on education, only 1.5% of the families have borrowed to finance education. For this purpose, banks, with a share of 19%, are the most important source.

In rural areas, 36% of the households borrowed from friends and relatives to meet education-related expenses.

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Dont help others because others have helped you,,,,help others because its the right thing to do!!!

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Lot of Indians are seeing the freedom to spend and availability of materials. With incomes rising and more nuclear families (where in joint families u see lot of control freak oldies), there is lot of independence. Not to forget the rat race, keeping with the Jones and peer pressure. IMO, the % of these type of spenders is pretty small. Indians always think at long term savings.

(little wonder why ICICI is using goons for loan recollection)

DIO

I feel that urban India is dominated by such big spenders. I feel its only the Indians living abroad and the older generation still believe in the "save as much as you can" mentality.

Most of the 'BPO' generation believes only in spending money and having a good time without worrying about long terms savings.

Why the share market is going up? Company are make money now, in fact now most people have jobs now are making money now. Economy is flying. Look like the good old US days. Biggest consumer market for companies

Goons will be after them if unable to pay and who knows more deaths if unable to pay. No protection like US Bankruptcy laws.

Yes it always good to have good debt (Like home /property loans). But bad debt (depreciation assets) like car and other consumer goods, brrowing money for vacation/ marriage will eat you