This study examines the impact of household debt on consumer spending and disposable personal income in India from 2007 to 2024. The findings indicate that while disposable income has shown a steady increase, household debt initially declined but has been rising since 2020, suggesting growing financial pressures. Consumer spending has also increased, supported by rising incomes, though the recent rise in debt may indicate a growing reliance on credit. The widening gap between disposable income and household debt highlights improved financial stability but necessitates careful financial management. The regression analysis suggests that household debt negatively impacts disposable income (-0.0342) and has a small negative influence on consumer spending (-0.2770), though these relationships are statistically insignificant. Additionally, past consumer spending has a minor negative impact on household debt (-0.0436), implying that increased spending may reduce the need for borrowing. The Wald test confirms that the relationship between household debt, consumer spending, and disposable income is short run in nature, indicating that household debt does not have a significant long-term effect on these economic variables. Overall, the study highlights the need for sustainable borrowing practices and policy measures to maintain financial stability.
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- P. Y. Radhika (Author), G. Manasa (Author), Pallavi Kencha (Author), Kruthika Manigandla (Author), M. Veera Swamy (Author), M. Arul Jothi (Author), 2024, The Short-Run Impact of Household Debt on Consumer Spending and Disposable Income in India (2007–2024), Munich, GRIN Verlag, https://www.grin.com/document/1577600
