How Covid taking huge financial toll on Indians

Hyderabad: The deadly Covid-19 pandemic triggered by the novel coronavirus has taken a big financial toll on Indians, with many people resorting to borrowing to meet the health-related and other expenses, a survey has revealed.

Hyderabad-based short news portal, Way2News, carried a survey among three lakh households about the financial impact of the Covid-19 pandemic whose second wave is ravaging the country now.

According to the survey, the pandemic is leaving a devastating impact on millions of families as hospital and other expenses have gone up multifold. Job losses are compounding the problem. The survey revealed that many families are borrowing at high interest rates from different sources including private lenders and loan sharks as their savings already exhausted.

As many as 28 per cent of the households said their hospital expenses surged while 24 per cent cited that job loss worsened their financial situation.

About 49 per cent admitted that they spent more money on hospital bills and also on efforts to stay healthy, while 31.6 per cent said they already utilised their savings.

On the brighter side, 21 per cent of the consumers spent money on nutrition and hygiene. But, spending more on nutrition and hygiene is a burden on the poor. Nearly 32 per cent of households are spending judiciously during these trying times. They cut down on non-essentials and discretionary spending. "With household financial savings contracted, financial distress is rising in every region. Bold measures and stronger crisis management from the governments is need of hour. Further, India has to work out a way to vaccinate its population at the earliest possible," Raju Vanapala, CEO, Way2News.

Interestingly, a meagre 4.9 per cent of the respondents said they resorted to credit card spending. That means majority of people are borrowing from other sources including private lenders and loan sharks to meet the expenses. There is a spurt in gold loans as middle-class households have not many options to pay their hospital bills.

"Indians are using instant loan/lending money services, where they get higher limits to borrow, at higher interest. Meaning, they are ending up in a debt trap as they are taking loans from unauthorised lenders at exorbitant interest rates. As many as 23 per cent have said they have taken loan this way, already," Raju Vanapala explained.