Indian household debt is rising

India’s household debt has risen 80% in 2017-18. It could bite if incomes don’t grow

Illustration by Arindam Mukherjee | ThePrint

We have heard these last few years about the twin-debt problem faced by companies and banks. We’ve read reports like Credit Suisse’s ‘House of Debt’, on companies that don’t have the earnings to pay interest on debt, let alone the principal. And of course we have read more than we would wish to about how banks have been writing off record sums of bad loans. So far, though, no one seems to have looked at the extent of money that is being borrowed by individuals, and the rising levels of household debt. Time to look at it when the consumption engine that has kept the economy going through a multi-year investment slowdown has stopped firing as before.

Individual or household financial stress is usually the result of lost jobs or livelihoods, and there is some of that. Look at depressed farm incomes, the fate of Jet Airways, or the effects of demonetisation. But there seems to be a deeper problem building up, one that is not linked to economic downswings or disruptions. Personal debt has been climbing and we must ask whether the burden of repayment is eating into disposable incomes — especially if loans taken for housing have to be repaid even when the housing project is stuck. Take a look at the numbers.

Between 2013-14 and 2017-18, according to the Reserve Bank of India’s (RBI’s) ‘Handbook of Statistics on the Indian Economy’, personal loans given by banks went up in by 89 per cent to Rs 19.1 lakh crore. This, when private consumption increased by only 53 per cent, and overall non-food credit went up by an even more sedate 39 per cent. There was an increase of 82 per cent in borrowing for housing, 54 per cent for consumer durables, and 78 per cent for vehicles. The most striking was a 154 per cent increase in “other personal loans”, even as credit card outstanding went up by an even bigger 176 per cent. The only modest increase was for education loans (up about 16 per cent).

These numbers on borrowings are compelling when placed against the figures for household savings, which, in the three years to 2016-17, went up by just 18 per cent, while physical household savings actually declined, though fractionally. The household figure for savings includes unincorporated enterprises, so the numbers are not strictly comparable. 

Nevertheless, the growing tendency to borrow more to consume is clear: The ratio between borrowings and overall consumption (including of the daily necessities) moved up in four years from 15.6 per cent to 19.3 per cent.

That’s just bank credit. There is then the money that people borrow from non-banking financial companies (NBFCs), usually for housing and cars but also for consumer durables and spending occasions like weddings. RBI numbers suggest that banks account for only about two-thirds of household financing, and the overall financial liabilities of households went up by Rs 6.7 lakh crore in 2017-18. This was an astonishing 80 per cent step up from the increase in (not total) liabilities of a year earlier.

India’s household debt in relation to its GDP is low — barely 11 per cent — compared to the other BRICS countries: 17 per cent in Russia, 26 per cent in Brazil and 48 per cent in China. But loans have to be repaid out of disposable income. This will be lower in India, where most people still live hand-to-mouth, than in the rest of BRICS, which has per capita income about five times India’s. For that reason, straight comparisons with such countries on the levels of personal debt can be misleading. That apart, at their present rates of growth, personal loans in India could well become the largest category of bank credit in just two or three years, replacing large industry and services which lead the tables now. Bank credit to all of industry, for instance, grew just 7.3 per cent in the four years to 2017-18. The financing of households is fine if incomes keep growing. If not, high debt levels could begin to bite, and we will have a double whammy.

Uber drivers are not employees

Uber Drivers Are Contractors, Not Employees, Labor Board Says
For The New York Times
By Noam Scheiber
May 14, 2019
The National Labor Relations Board, handing an important victory to Uber, has concluded that the company’s drivers are contractors, not employees.

The move, outlined by the board’s general counsel in a memorandum released Tuesday, deals a blow to drivers’ efforts to band together to demand higher pay and better working conditions from Uber and its main rival in the ride-hailing business, Lyft. It is the first major policy move the board has made concerning the so-called gig economy under President Trump.

Contractors lack the protection given to employees under federal law — and enforced by the labor board — for unionizing and other collective activity, such as protesting the policies of employers. As a practical matter, the conclusion makes it extremely difficult for Uber drivers to form a union.

The board’s general counsel, Peter B. Robb, who was appointed by Mr. Trump, does not have purview over other laws applying to employees, such as minimum wage and overtime protections.

Still, had Mr. Robb’s office found that drivers were employees rather than contractors, the decision could have put pressure on the regulators who enforce such laws to reach the same conclusion.

The labor costs of companies like Uber and Lyft would probably rise 20 to 30 percent, according to industry estimates, if regulators or courts forced them to treat drivers as employees. Both businesses have seen their stock prices fall after recent public offerings amid questions about their financial prospects.

The companies appear to be walking a delicate line: Investors and analysts have suggested that the businesses might have to slash their labor costs to become profitable. Drivers frequently complain that pay is already unacceptably low.

Uber lost nearly $2 billion last year, and Lyft lost nearly $1 billion.

“We are focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value,” Uber said in a statement on Tuesday.

The memo follows an opinion last month by the Labor Department arguing that workers at an unnamed company with a business model like Uber’s were contractors, not employees.

In both cases, the conclusions reversed the approach adopted by the Obama administration, which had suggested that people who found work through apps were likely to be considered employees. In 2016, the labor board issued a complaint against Postmates, an app-based delivery service, over allegations that the company had interfered with workers’ ability to exercise their labor rights.

The agency could not have issued that complaint without first concluding that Postmates couriers were employees.

The memo released on Tuesday, which was dated April 16, has no long-term value as a precedent and can be reversed by a future general counsel. But it carries considerable weight in how the board enforces federal labor law.

The general counsel is the labor board’s chief prosecutor and has authority over whether or not to issue formal complaints against employers, which are analogous to indictments in criminal law. The memo essentially tells Uber drivers and many other gig-economy workers that they should not bother reporting a labor rights abuse to the board because Mr. Robb has deemed them to be outside its jurisdiction.

Mr. Robb has had a long career in labor law largely spent representing employers. He was involved in the Reagan administration’s legal fight with the air traffic controllers’ union, which went on strike illegally in 1981. Labor experts have said the government’s decision to fire the controllers contributed to organized labor’s decline.

The immediate consequence of the memo is to render moot three formal accusations, filed in different parts of the country, that Uber had violated federal labor law. The memo instructs the board’s regional offices to dismiss the charges if the people who made them do not withdraw them first.

In its analysis, the general counsel’s office listed 10 factors that collectively determine whether a worker is an employee or a contractor, including the extent to which the company can control how the work is performed and whether the company or the worker provides equipment.

But, citing a federal appeals court decision, the memo also said the “animating principle” used to make the determination of contractor status was whether the worker had an opportunity to profit from the activity in the way an entrepreneur would.

“The drivers had significant entrepreneurial opportunity by virtue of their near complete control of their cars and work schedules, together with freedom to choose login locations and to work for competitors of Uber,” the memo stated.

Marshall Babson, a former labor board member appointed by President Ronald Reagan who is now a labor lawyer representing management, said the general counsel’s conclusion had largely been dictated by the limitations of federal law.

While the conclusion may not be satisfying to those who believe the National Labor Relations Act, enacted in 1935, does not reflect the realities of today’s workplace, Mr. Babson said the board did not have the authority to expand the boundaries of the act on its own.

“Congress has to do it, not the N.L.R.B.,” Mr. Babson said.

But Wilma Liebman, a board chairwoman under President Barack Obama, said the memo elevated the importance of factors that indicate a contractor relationship, like whether both the company and worker believe the person is a contractor, and underplayed factors that suggest employment, like the fact that drivers perform a function that is central to Uber’s business.

Ms. Liebman added that the memo took an extremely permissive view of entrepreneurship, given that drivers cannot set prices or market their personal services to potential customers. The driver’s entrepreneurial opportunities are almost “completely circumscribed by the company’s control of the price,” she said.

Some labor groups insisted that drivers would not be deterred from mobilizing for better treatment, even without the protections of federal labor law.

“Drivers across the globe are organizing and demanding rights,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in response to the memo. “The road may be long and difficult, but one way or another Uber will have to answer to its workers.”

Dark matter season 1

This is the series which I hopped onto when I had the inkling for a sci fi series. There is a scarcity of good science fiction nowadays . Nope the superhero series don't count

Looks like I missed it when it aired in 2015 and the only familiar face is Roger cross from continuum.

My opinion

After finishing the thirteen episodes of the first season I can safely conclude that this is a solid  series

There was never a dull moment in the entire 13 episodes kudos to the writers who made it as engaging as possible. The fact that the primary characters still call themselves by a number which they gave themselves when they woke up with their memories erased at the start was interesting. They continued to follow the same even after they learn of their real identities. It gets the question whether sometime in the future humans will have a service to erase their memories to escape a traumatic past or guilt. This would be the real pursuit of happiness. Imagine every day is a new day  wouldn't that be exciting


One has a past of Fortune and tragedy which he is trying to piece together

Two is a criminal with a bio mod which her almost invulnerable to anything

Three is a journeyman criminal who seems to be the only one who behaves the same way before losing his memory I.e he doesn't have any emotional baggage

Four is royalty and is the first one to learn his past and act on it

Five is the free loader to the criminal spaceship

Six is the man with morals which is contrary to his criminal past

Despite it's very thin budget , the special effect in this series is a joke ,the selling point is the manner in which they maintain intrigue in every episode by adding layers to each character

Somehow they make the audience invest in their stories and would like to unfold the story along with them

The acting is good and there was no moment where I had to facepalm which is impressive for a cast which I haven't seen anywhere else