New Delhi: Indian household debt has grown more than twice as fast as their financial assets since the pre-pandemic period, a report by The Hindu analysing the Reserve Bank of India (RBI) data has stated.

While the amount of financial assets added each year grew by 48% between 2019 and 2025, annual liabilities, or debt, surged by 102% over the same period.

In absolute terms, households added Rs 24.1 lakh crore to their financial assets in 2019-20, a figure that grew to Rs 35.6 lakh crore by 2024-25. In contrast, financial liabilities jumped from Rs 7.5 lakh crore to Rs 15.7 lakh crore in the same timeframe.

As a share of the economy, annual financial asset creation has fallen from 12% of GDP in 2019-20 to 10.8% by 2024-25. Meanwhile, the pace of adding new debt has risen from 3.9% of GDP to 4.7%. The data does show a recent improvement, with the liabilities-to-GDP figure declining from a post-pandemic peak of 6.2% in 2023-24.

The analysis also reveals a significant shift in how Indians are saving, with a dramatic move towards investing in mutual funds.

While bank deposits remain the main destination for savings, accounting for a third of new assets, investments in mutual funds have seen their share jump from just 2.6% in 2019-20 to 13.1% by 2024-25. New mutual fund investments soared by an astonishing 655% over this period, from Rs 61,686 crore to Rs 4.7 lakh crore.

This surge came largely at the expense of holding physical currency, which saw its share of new assets fall from 11.7% to 5.9%. Other investments such as life insurance, provident funds, and small savings saw their shares remain largely stable.

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