Household Balance Sheets: Signals from the Latest Survey

The photograph we are still using is eight years old

Ask anyone in Indian policy circles what the average household owns and owes, and the honest answer is uncomfortable: we are still working off a picture taken on 30 June 2018.

That picture is the All India Debt & Investment Survey, NSS 77th round — fieldwork in 2019, published in 2021. It remains the last full-frame portrait of Indian household assets and liabilities. What it showed was striking then and looks almost quaint now. The average rural household held assets worth ₹15.92 lakh, of which financial assets accounted for just ₹72,608 — roughly 4.6 per cent. Urban households averaged ₹27.17 lakh, with ₹2.52 lakh in financial form. Land and buildings together made up 91 per cent of rural household wealth. About 35 per cent of rural households and 22.4 per cent of urban households carried debt at all.

That is not so much a balance sheet as a plot of land with a bank account attached.

Two replacements are being built as you read this. AIDIS returns to the field for a July 2026–June 2027 round. And for the first time in seventy-five years of national sampling, the NSO is running a National Household Income Survey — roughly 4.5 lakh households, April 2026 to March 2027, with results expected around the middle of 2027. India will finally be able to put income, assets and liabilities inside the same frame.

Which leaves an awkward eighteen months. In the meantime, the freshest reading available comes from a much smaller instrument: the Reserve Bank’s bi-monthly consumer confidence surveys, whose July 2026 round landed on 5 August.

What the July round actually said

The RBI canvassed 5,987 urban households across 19 cities and 8,581 rural and semi-urban households across 31 states and union territories, between 11 and 20 July 2026.

The headline was a slide. The urban Current Situation Index fell to 88.3 from 90.7 in May, while the Future Expectations Index eased to 115.3 from 118.7. Rural readings moved the same way — CSI down to 91.7 from 95.2, FEI to 113.6 from 119.3. Both expectations indices stayed above the neutral 100 mark, so this is caution rather than gloom. But a year earlier, in July 2025, the urban CSI stood at 96.5 and the FEI at 124.7. That is a meaningful twelve-month erosion.

Underneath the index, the detail is more interesting than the headline. Urban households’ net assessment of the current economy dropped to –23.4 from –16.5, and of employment to –21.9 from –14.4. Rural households, close to neutral in May, swung to –11.9 on the economy and –8.0 on jobs. Rural current income turned more negative still, at –8.7 from –5.8.

And yet spending intentions went up. The urban net response on current spending rose to 77.3 from 74.0. Non-essential spending flipped positive — +3.3, against –0.8 in May. Rural spending held firm at 77.4.

This is the part worth pausing on. Households reported feeling worse about the economy, their jobs and their income, and simultaneously reported spending more. A sentiment survey cannot tell you how that circle gets squared. A balance sheet can.

The flow data: deleveraging dressed up as thrift

Start with the flow. The RBI’s Annual Report for 2025-26 put net household financial savings at 7.0 per cent of gross national disposable income in 2024-25, up from 5.8 per cent the year before. Gross domestic savings climbed to 34.2 per cent of GNDI. Cue applause.

The composition deserves a closer look. Gross household financial savings did not rise — they slipped, from 12.1 per cent of GNDI to 11.8. The entire improvement came from the other side of the ledger: household financial liabilities dropped sharply, from 6.4 per cent to 4.8. Households did not save more. They borrowed less.

“Indian households did not get thriftier last year. They got less indebted. Those are two different stories, and they have two very different endings.”

Deleveraging is no bad thing. But it is a fragile foundation for a savings recovery, because it can reverse inside a single festive quarter — and because it tells you nothing about whether income is doing any of the work.

The stock data: 45.5 per cent, and a composition problem

The Financial Stability Report of June 2026 put household debt at 45.5 per cent of GDP as of September 2025, up from roughly a third in 2018-19. By international standards that is unremarkable; China, Thailand and Malaysia all sit higher. The RBI has been careful to describe the level as moderate.

The composition is where the eyebrow goes up. Non-housing retail loans now account for 58.4 per cent of household debt, against about 50 per cent in 2019-20. Housing accounts for 26.3 per cent, and agriculture and business loans make up the remaining 15.3 per cent. The distinction matters more than the ratio. A home loan buys an asset and is secured against it. A consumer durable loan, a credit-card balance or a small-ticket personal loan is a claim on next month’s income and very little else.

The early warning light is small but blinking. Delinquencies on small-ticket loans rose to 6.4 per cent in March 2026, from 4.5 per cent two years earlier. Headline bank asset quality, meanwhile, is at a multi-decade best — which is exactly why the household-level detail is where supervisors are looking.

Gold: the revaluation nobody earned

Then there is gold, which does something no other line on the Indian household balance sheet does. It appreciates without anybody doing anything, and it can be borrowed against in an afternoon.

Bank loans against gold jewellery stood at ₹4.61 lakh crore in March 2026. Seven years earlier, in March 2019, the figure was ₹24,671 crore. NBFC gold lending grew about 69 per cent year-on-year to ₹3.41 lakh crore by June 2026 — several times the pace of retail credit overall, which itself grew a brisk 20.3 per cent.

Read that alongside the confidence numbers and a mechanism appears. When collateral revalues, the same bangle in the same locker unlocks a bigger loan. Households that feel poorer can, for a while, behave as though they are richer. It is a genuine buffer, and arguably the most democratic one India has. It is also a one-way conversion of a family’s most liquid store of value into a monthly obligation.

The inflation wedge

One more signal, and it is a stubborn one. Official CPI inflation in July 2026 came in at 4.45 per cent — a nineteen-month high, with food at 5.52 per cent, but comfortably inside the tolerance band. In the very same month, households’ net response on current prices was –92.7 in urban India and –90.5 in rural India. Expectations for the year ahead were barely better.

Perception is running far hotter than the index. That gap is not irrational — households weight food, fuel, rent and school fees far more heavily than a statistical basket does — but it carries balance-sheet consequences. Perceived inflation drives precautionary gold buying, shortens saving horizons, and makes an EMI feel more expensive than the interest rate on it suggests.

It also sits oddly against the consumption picture. The last Household Consumption Expenditure Survey, for 2023-24, put average monthly per capita expenditure at ₹4,122 in rural India and ₹6,996 in urban India, with the urban-rural gap narrowing to 70 per cent from 84 per cent in 2011-12. Rural India has been catching up on spending. The July survey suggests it is doing so while feeling distinctly less secure.

What the aggregates cannot tell you

The financialisation story, meanwhile, runs on its own track. Mutual fund industry assets stood at ₹85.76 lakh crore at the end of July 2026, with monthly SIP contributions of ₹31,961 crore across 28.09 crore folios. The RBI notes a gradual rise in shares and debentures within household financial savings, even as deposits, provident and pension funds and insurance continue to dominate the mix.

Here is the caution that ought to travel with every number in this article. These are aggregates and sentiment indices. Neither can tell you how debt is distributed. A national ratio of 45.5 per cent of GDP is perfectly consistent with a country in which most households owe nothing and a minority owe a great deal — which is roughly what AIDIS 2019 implied, with average debt per indebted rural household at ₹1.70 lakh against ₹59,748 averaged across all rural households.

That distribution is precisely what the 2026-27 AIDIS and the new income survey are built to measure. Three questions they should settle. First, whether the 91-per-cent dominance of land and buildings in rural wealth has finally cracked. Second, whether the incidence of indebtedness has climbed above its 2018 levels, and for whom. Third, whether the long shift from non-institutional to institutional credit has continued, or quietly reversed at the bottom of the distribution.

Until then, treat the monthly and quarterly signals as what they are — weather reports, not a diagnosis. The July confidence survey says households are uneasy and spending anyway. The savings data says the improvement came from borrowing less rather than earning more. The credit data says the borrowing that remains is increasingly unsecured, and increasingly collateralised by the family’s gold.

None of that is a crisis. All of it is worth watching carefully. And from the middle of 2027, for the first time in a very long while, we will be able to watch it properly.

Sources

All figures cited above are drawn from the following, in order of primacy:

●        Reserve Bank of India — Annual Report 2025-26, household savings data as reported — https://www.business-standard.com/economy/news/net-household-financial-savings-rise-to-7-of-gndi-in-fy25-rbi-report-126052901658_1.html  (Business Standard, 29 May 2026)

●        Reserve Bank of India — Consumer Confidence Surveys, July 2026 round — https://www.business-standard.com/economy/news/urban-rural-consumer-confidence-dips-as-price-concerns-persist-rbi-survey-126080601374_1.html  (Business Standard, 6 August 2026)

●        Reserve Bank of India — Financial Stability Report, June 2026: household debt and retail credit — https://www.business-standard.com/finance/news/rbi-flags-nascent-stress-in-micro-enterprises-retail-loans-need-monitoring-126063001396_1.html  (Business Standard, 30 June 2026)

●        Financial Stability Report, June 2026 — debt composition, gold loans and delinquency detail — https://www.businesstoday.in/latest/economy/story/indias-household-debt-rises-to-45-5-of-gdp-non-housing-retail-loans-account-for-58-4-show-data-544604-2026-07-22  (Business Today, 22 July 2026)

●        MoSPI / PIB — All India Debt & Investment Survey, NSS 77th Round (2019) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=1753935

●        MoSPI — AIDIS Concept Note, confirming the July 2026–June 2027 round — https://www.mospi.gov.in/sites/default/files/announcements/AIDIS_Concept_NoteN.pdf

●        PIB — AIDIS and Situation Assessment Survey, 2026-27 announcement — https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2165638&reg=3&lang=2

●        PIB — National Household Income Survey (NHIS), 2026 — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2178574&reg=48&lang=2

●        MoSPI — Household Consumption Expenditure Survey 2023-24, press note — https://www.mospi.gov.in/sites/default/files/press_release/HCES_Press_Note_2023-24_27122024_rev.pdf

●        MoSPI — Consumer Price Index press release, July 2026 — https://www.mospi.gov.in/uploads/latestReleases/latest_release_1786529680747_3113661d-1a2b-4b9a-af06-b340193ef9a0_Press_Release_CPI_July_2026.pdf

●        AMFI — Indian mutual fund industry AUM, July 2026 — https://www.amfiindia.com/articles/indian-mutual

●        RBI sectoral deployment of bank credit — NBFC gold loan and retail credit growth, June 2026 — https://www.newkerala.com/news/a/nbfc-gold-loans-continue-near-70-growth-reach-122.htm  (reporting on RBI data)

●        The India Forum — “The Great Borrowing Boom”, analysis of FSR June 2026 household debt data — https://www.theindiaforum.in/economy/great-borrowing-boom

RBI — Urban Consumer Confidence Survey, July 2025 round (comparative base) — https://www.business-standard.com/markets/capital-market-news/urban-consumers-expect-decline-in-both-price-and-inflationary-pressures-over-coming-year-125080700313_1.html