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NEW DELHI: On the whole, even though the total household debt in India from the formal sector amounts to just over Rs 5.58 lakh crore (about 10% of GDP) compared to over 100% of the US GDP for American households, these national averages somewhat underplay the financial vulnerability of the metros' middle-class households during the current economic slowdown. Middle-class households across Delhi, Mumbai, Kolkata, Chennai and Bangalore spend around a fourth of their monthly take-home income on loan EMIs — housing, auto, durables and personal loans. And around two-thirds of these households have taken a personal loan only in the last two years. Take exposure to stock markets, for instance. Although at a national level it is a low 3% of all households, around a third of all socio-economic class (SEC) A & B metro households invest in stocks. Salaried households in Kolkata are the most leveraged across metros, with EMI as percentage of monthly income at a high 27%, though it's non-salaried Mumbai households who carry the maximum personal loan burden at Rs 1.45 lakh, according to a recent consumer survey by New Delhi-based market analysis firm, Indicus Analytics. While there's a strong stock market cult among non-salaried middle class in Mumbai and Delhi, 46% and 45% investing in it, respectively, it is the weakest, at 23%, among salaried households in Chennai. A closer look at the preferred investments confirms the conservative nature of the middle class metro households. Gold, provident fund (PF) and fixed deposit (FD) remain the top pick, not necessarily in the same order. While amongst the salaried class, PF is the most preferred choice — 49% of the households put their money in it — followed by gold (40%) and FDs (39%). Non-salaried individuals on an all India basis show a clear penchant for FDs (43%), followed by gold (42%) and PF (31%). Gold remains an all-time favourite for South Indian households, with about one in every two households investing in the yellow metal. Despite the franchise generated by new age investment cult during the last ten years, small savings instruments — post office schemes and chit funds — haven't yet lost their lustre with metro middle class, with a quarter and a tenth of households here invest in the two, respectively. The penchant for such instruments is striking as one moves down South — Bangalore and Chennai have a significant — in high double digits — proportion of households (SEC A&B ) putting their monies in chit funds. http://forums.investorline.co.in/ --~--~---------~--~----~------------~-------~--~----~ Get latest market updates & search internet right from your browser-download our toolbar here- http://investorline.ourtoolbar.com/ Visit our site at – http://investorline.co.in/ Newsroom: http://newsroom.investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Journal - http://research.investorline.co.in/ Newscatcher- http://catcher.investorline.co.in/ Interested in Financial Planning-Let us Contact you- http://spreadsheets.google.com/viewform?key=pb_z4f1_zGMg4iBBFT3-SWQ&email=true If you like the site then promote it here- https://www.freetellafriend.com/tell/?url=http://investorline.co.in/blogs/news Create your own free blog on- http://investorline.co.in/blogger Visit this group at http://groups.google.com/group/india-investor -~----------~----~----~----~------~----~------~--~---
