By buld_online 
India’s savings culture is eroding — and it’s not by accident, says IIM Mumbai alumnus Lokesh Ahuja. In a pointed LinkedIn post, he argues the economic system now subtly encourages spending over saving.
Starting 2025, the new tax regime offers a full rebate on incomes up to ₹12 lakh — but only if individuals forgo traditional deductions like Section 80C (investments), 80D (insurance), home loan interest, and HRA.
“The signal? Save less, spend more,” Ahuja wrote.
The tilt against savings continues in capital markets. Long-term capital gains above ₹1.25 lakh will now be taxed at 12.5%, while short-term gains face a steeper 20% rate.
Ahuja contends this undercuts incentives to build wealth through equities.
Meanwhile, credit is more accessible than ever. Personal loans have surged 56% over the past three years, with fintech apps offering pre-approved borrowing in minutes. “Borrowing has never been easier — or more normalized,” Ahuja warned.
Rising prices compound the issue. Since 2021, inflation has climbed roughly 23%, far outpacing income growth. Many households are not borrowing for luxuries, but for essentials. “People aren’t borrowing to splurge, but they’re borrowing to survive,” he noted.
Social pressure, fueled by aspirational lifestyles on platforms like Instagram, adds another layer. “Even ₹70LPA feels tight for many urban professionals,” Ahuja wrote, pointing to the lure of EMIs on everything from iPhones to weddings.
Behind it all, he argues, lies a deliberate playbook: “De-incentivize savings → fuel consumption → boost GDP.” But that model has consequences — reduced financial resilience, rising debt loads, and a generation that looks wealthy but lacks real buffers.
Ahuja ends his post with a question that’s gaining urgency: “Is this sustainable? Should policy reward long-term security again?”