In India, we are witnessing a significant transformation in the consumer market. Previously, the disposable income was concentrated in a few of the cities in the country. Whereas, with the rise in the country’s economic prowess, the trickle-down impact is now showing the exposure to tier-2 and 3 cities where people can now spend on other amenities.
Government policies boost consumer disposable income, and strong financial networks like UPI and the penetration of credit cards are the reasons for this shift in consumption. Even in the recent budget, the Ministry of Finance made income up to ₹12 Lakhs tax-free.
These are the signs that people will have more liquidity in their monthly budget, and that can create some spillover effect where people will buy more products, and that means the ability to finance. The loan DSA partner is the perfect one who can help a customer get the right consumer durable loan.
In this blog, we will understand how the rise in consumer loans has happened and how disposable income is one such long-term tailwind that is creating this dynamic shift in the market.
The Rise in Disposable Income in India
The rise in disposable income can be attributed to various factors, such as the growth in the economy of the country. The rate of rapid urbanization, along with the young demographics, is also one of the reasons for the rise in disposable income. Here, three factors have been listed that will allow a person to do the work on their behalf.
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Economic Growth
The first thing is economic growth, which is one of the main factors that shows how the country has progressed in the last two decades. It has created several public and private companies that help take the young demographic of the country to work. India’s GDP is still the fastest-growing GDP in the world and, therefore, is a major reason for the high growth factors in another sector of the economy.
When we consider the rise in disposable income, it’s quite evident how online commerce and now quick commerce are grabbing the major markets of the country. It shows that a service like this will have customers, and the rate of it will only increase as more people get comfortable with spending some extra money for convenience.
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The Rise in Urbanization
Urbanization is also another reason for which we are witnessing a rise in disposable income. For example, people who are coming alone to the city for work are looking for services like house help and are ordering more things that are necessary for them.
Now this expenditure in their home town was conserved as some other member of the family does the work. However, with the urbanization trend and the location of the jobs in the major cities, it’s now important to measure how it has contributed to the rise in expenditure on consumer goods products. It accounts for even the big ticket purchases like ACs and refrigerators.
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Positive Government Initiative
The next thing that is also helping in this growth story is the lateral push of the government to increase the expenditure of the people. The recent move in the budget is the perfect way to boost the demand side of the economy.
On the supply side, “Make in India” and “Startup India” are the projects that are helping to build jobs and thus covering the supply side of the economy.
How the Boom of Consumer Loans is Related
A consumer loan is directly linked to the rise of the disposable income. With all the financing options a person has in today’s economy, it’s quite evident for them to have the right means that will enable them to make a purchase.
For example, while purchasing a TV or an AC for a new home, one can look for the best app for DSA, and there, the agents can guide a customer to the right lender. The rise in the loan books of the banks and NBFCs shows that people are getting into the habit of consuming more and thus financing their big purchases whenever needed.
These are some of the factors that can be considered for a long-term approach to understanding the growth story of India. It also shows how it has been the right place in the current decade that is increasingly inclining towards debt-led consumption.
