As the nation marks Independence Day, new data shows rising EMIs are trapping citizens in a cycle of debt, limiting personal and financial freedom.
As India celebrates its 79th Independence Day, a growing number of its citizens feel financially constrained. New data reveals the average debt for individual borrowers has climbed to a historic ₹4.8 lakh as of March 2025. This surge in loans, from personal expenses to consumer goods, is raising serious questions about the nature of modern economic freedom for millions across the country.
The Rise of a Debt-Driven Lifestyle
According to the RBI’s latest Financial Stability Report, this sharp increase from ₹3.9 lakh in March 2023 marks the highest per-capita debt in the nation's history. The growth is primarily driven by non-housing retail loans, including personal, car, and consumer durable loans, which now account for 55% of total household debt. The personal loan segment alone grew by 24% in the last fiscal year, largely fueled by the easy availability of credit from FinTech companies.
Many people today feel trapped by debt, with large chunks of their salary swallowed up by EMIs before they can even think about everyday expenses. A 28-year-old software engineer from Pune, who spends nearly 70% of his income on repayments, described the feeling as being “financially colonised.” For him and countless others, debt isn’t just about numbers on a balance sheet—it shapes their choices. Whether it’s switching jobs, starting a business, or planning for the future, repayment schedules often take the driver’s seat, leaving little room for freedom.
A Shift from Saving to Swiping
This trend marks a significant cultural shift from a generation that prioritized saving before purchasing. Today, "Buy Now, Pay Later" schemes and instant loan approvals have normalized debt as a lifestyle choice. Marketing campaigns often tie financial products to concepts of freedom and independence, such as "own your dream home," creating a cycle where aspiration is funded by long-term liabilities.
The Path to Financial Freedom
Financial experts warn that while credit can fuel growth, unchecked consumer debt limits personal agency and choice. They advise individuals to start with budgeting, build an emergency fund, and prioritize clearing high-interest debt. The new freedom struggle, they suggest, is not political but financial: winning the right to use one's own income without being tied to past expenses.
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