India’s middle class appears to be thriving, with increasing access to premium goods, international travel, and high-end technology. However, beneath this image of affluence lies a growing financial strain that many households struggle to acknowledge. The illusion of luxury is often maintained through easy credit, leaving families burdened with debt and uncertain economic stability.
Incomes for a vast section of the middle class have remained stagnant for the past decade, failing to keep pace with inflation and rising living costs. This has led to a dependence on loans and credit cards to sustain aspirational lifestyles. While high-end restaurants, electronic stores, and international travel agencies see booming sales, many consumers are silently struggling with EMIs, education loans, and everyday expenses. The gap between spending habits and actual financial well-being continues to widen, creating a situation where luxury comes at a hidden cost.
The economic divide in India is stark, with a small fraction of the population driving luxury markets while a majority struggle with limited discretionary spending. Although the top segment of society fuels growth in premium brands, nearly a billion people still prioritise basic necessities over indulgences. The middle class finds itself caught between these two extremes, striving to maintain a lifestyle that often outstrips its financial reality.
A key trend in recent years has been the shift toward premiumisation, particularly in industries such as automobiles, consumer electronics, and even beverages. Brands have capitalised on middle-class aspirations by offering high-priced versions of everyday products. While this signals evolving consumer preferences, it also raises concerns about the sustainability of such purchases when funded through debt. For many households, the thrill of upgrading to a more luxurious lifestyle comes with the long-term challenge of managing financial commitments.
This growing reliance on credit and loans poses a larger economic risk, not just to individuals but also to the country’s financial health. As a greater portion of household income is allocated toward debt repayment, the ability to spend on essential goods and services weakens. If incomes fail to rise significantly, this pattern could lead to broader economic consequences, limiting long-term growth and financial security for millions of families.
The middle class has long been regarded as the backbone of India’s economy, but its financial struggles raise critical concerns. A lifestyle supported by borrowing rather than steady income growth is unsustainable. Addressing stagnant wages, improving employment opportunities, and promoting financial literacy are essential steps to ensure that middle-class prosperity is not just an illusion but a reality.
