Dealing With Debt

The first wave of the Covid-19 pandemic was devastating for many households, and the second wave in 2021 has only worsened the situation. Millions of people lost their jobs, while many households saw their incomes dwindle drastically. In June 2021, Mahesh Vyas, chief executive officer of Centre for Monitoring Indian Economy, said that over 10 million people became jobless after the second wave of Covid-19, while almost 97 per cent households saw their incomes reduce. In a recent write-up, Vyas said that unemployment rose in August 2021 to over 8 per cent from around 7 per cent in July 2021. In this scenario, a record number of people have had to resort to personal and credit card loans. According to data from the Reserve Bank of India, personal loans grew by 11.2 per cent in July 2021, up from 9 per cent last year. The high penalties in personal loans and credit card loans have a way of...