Indian aspiration levels are back to pre-Covid levels and more and more Indians are happily turning to credit to achieve their ambitions. East India tops the list as the most emerging region in India (88.2), followed by West (88.0) on the Aspiration Index, according to BankBazaar’s latest Aspiration Index 2022 study.
According to the study, this year’s index rose 2.9 points, led by intangible pursuits like health (89.5) and relationships (87.9). However, individual goals varied widely, suggesting a clear division between what India wants and what it feels it needs.
Mental well-being and happiness remained the top priority, the study said, highlighting how India is slowly recovering from the impact of the pandemic.
The study involved 1,675 employees aged 22-45 in six major cities and more than 18 Tier II cities across India. Women made up 43 percent of those surveyed.
The top 5 goals, chosen by respondents based on sample size, were: being mentally healthy and happy (49.2 percent); travel and see the world (44.1 percent); save for children’s education (37.9 percent); become an entrepreneur (34.1 percent); and spend on premium products (31.3 percent).
The top five goals chosen by respondents by index were: being mentally healthy and happy (89.5); live close to family (89.2); eat nutritious food (89.2); own house (89.1); and save for the children’s education (88.8).
The results showed that metro cities (87.8) still topped the chart versus non-metro (85.2) in terms of expectations, with the gap at 2.6 being the highest ever .
women more ambitious
Women had higher ambitions (88.7) than men (85.7) and led by three whole points, the results showed.
Women across all age groups were more ambitious than men, with the bargain hunter category (28-34 years) leading the field. The early jobber men (22-27 years) were the least ambitious. Wealth remained the most important pursuit for the savers, but the least important for the wealth warriors (35-45 years). These women valued fame and personal growth more than wealth.
obstacles to aspirations
Limited savings and the high cost of living were the top obstacles to aspirations in the post-pandemic scenario across all age groups, the study found.
“The pain points of each age cohort stand out clearly. Early jobbers face serious job losses and savings depletion in the Covid years; almost half regret the lack of savings. Moneymooners are torn between family commitments and work pressures in a rapidly changing world. And wealth fighters are derailed by the high cost of living and depleted savings,” the report stressed.
inflation and borrowing
Inflation and borrowing have also impacted the overall scenario. More than three-quarters (77 percent) of respondents agreed that spending has increased significantly recently.
“Wealth warriors with greater liabilities and responsibilities feel the heat the most. Metros (79 percent) feel the pinch more than non-metro (72 percent). Accordingly, reliance on loans to meet monthly expenses has increased for 62 percent of respondents, and savings have frozen or fallen for nearly 80 percent,” the study said.
About 80 percent of respondents agreed to have borrowed anything between Rs. 5,000 and Rs. 50,000 per month to cover monthly expenses. Incidentally, this was despite the fact that 64 percent of respondents confirmed they had received a promotion in the past year, and 44 percent agreed that they had received a promotion.
The North led in borrowing (85 percent), followed by the East, South, and West with 84, 80, and 70 percent, respectively.
About 57 percent of respondents also said they took out a new loan in the last year to meet their wants or needs.
“Metro (56.9 percent) borrowed more than non-Metro (52.1 percent). While only 4 percent of these new borrowers are struggling to repay their loans, 82 percent are considering restructuring their loans. Non-Metros (8.1 percent) have twice as much difficulty meeting their loan obligations as Metros (3.1 percent). West (7.1 percent) and East (6.5 percent) find it harder to repay the debt than South (3.6 percent) or North (0.9 percent),” the study said.
Adhil Shetty, CEO of BankBazaar.com, says: “After more than two and a half years of emotional and financial hardship, people are looking to reclaim their former lives and fulfill their desires that have been pushed back due to Covid. However, the realities of the post-Covid world, and rising inflation and global instability in its wake, are forcing people to take a more pragmatic and measured look at how they are going about it. As a result, we are finding that people are prioritizing their goals more than ever.”
One notable aspect, according to the study, was that people are now more focused on their priorities.
“Despite inflation, people are still focused on their priorities. The study shows that 57 percent of people took out a loan in the last year. Of these, almost half took out a loan to invest in a house (49 percent) or a vehicle (43 percent). Around 35 percent for financing higher studies and 26 percent for modernization at home. When you read this along with the overall high Aspiration Index, it shows India’s determination to overcome challenges to achieve its goals,” adds Shetty.
Big savings, alternative investments are on the rise
The pandemic also impacted people’s savings, primarily due to job losses, medical expenses and rising costs of living, the report said.
“Approximately 47 percent of respondents reported a decrease in their monthly savings, while 32 percent said they were unable to increase their savings. While respondents of all ages saw a decrease in savings, the decrease was not the same for everyone. Among women, early jobbers and wealth warriors saw a greater decline in their savings compared to money mooners,” the study said.
An interesting finding of the study was the growing interest in non-traditional forms of investment, particularly cryptocurrencies, as a result of the shrinking of savings and rising aspirations on the other end of the spectrum.
“Approximately 32 percent of the survey participants invested in cryptocurrency, of which a whopping 38 percent were made up of early workers,” the study continues.