‘Middle class pain isn’t taxes or inflation’: Wealth advisor warns of a deeper crisis in plain sight

India’s middle class is not being crushed primarily by inflation or taxes, but by something far more insidious—EMIs. That’s the stark warning from Tapas Chakraborty, a wealth advisor, in a detailed post on LinkedIn.

“The biggest trap? Not inflation. Not taxes. It’s EMIs,” Chakraborty wrote. “Earn → Borrow → Repay → Repeat → No savings → Swipe again.” He laid out a troubling cycle that many middle-class families have unknowingly fallen into.

What began as a financial tool to help people make essential purchases has become a default way of life. “Phone? EMI. Fridge? EMI. Sofa, AC, flight tickets? All on EMI. Even groceries,” he wrote. “No paperwork. Just swipe. We’ve made borrowing feel normal.”

But the data reveals how deep the problem has become. Household debt in India has now climbed to 42% of GDP. A striking 32.3% of this is made up of unsecured debt—credit cards, personal loans, and Buy Now, Pay Later services. Among iPhone users in India, 70% bought their devices on EMI. About 11% of small borrowers have already defaulted, and three out of five people are juggling three or more loans simultaneously.

“We’re not just spending,” Chakraborty said. “We’re building quiet debt — layer after layer.” And while each EMI may feel manageable on its own, they pile up quickly. A phone at ₹2,400 per month, a laptop at ₹3,000, a bike at ₹4,000, and credit card dues north of ₹6,500 can quickly drain ₹25,000 before mid-month. “No savings. No cushion. One health emergency — and things break.”

Chakraborty emphasized that the issue extends beyond individual households. “This is no longer just a personal problem,” he wrote. Less savings means reduced investment, more debt leads to more defaults, and increased stress impacts workplace productivity. “Middle class squeezed → country slows. This affects everyone — not just one family.”

To avoid falling into the trap, he advised four immediate steps: Check your total EMI burden—if it exceeds 40% of your monthly income, stop and reassess. Build a basic emergency fund, even ₹500 per month is a start. Don’t borrow just to appear successful. And start investing early, however small the amount.

“Living with stress isn’t normal. Owning things you haven’t paid off isn’t success. The dream of a better life shouldn’t become a debt trap. Freedom isn’t about earning more. It’s about owing less.”