Credit without Consciousness in EMI Nation: Needonomics Call for Financial Wisdom in Bharat

Prof Madan Mohan Goel, Proponent Needonomics & Former Vice-chancellor (Thrice)

Needonomics School of Thought (NST) offers a timely lens to understand the growing crisis of debt in contemporary Bharat. As a nation once celebrated for its culture of savings and simplicity, Bharat today faces an alarming transformation-its middle class, once prudent and patient, is now increasingly trapped in the cycle of easy credit, equated monthly installments (EMIs), and compulsive consumption. NST reveals that, on average, people in Bharat are spending nearly 33% of their income on loan EMIs, creating what may be called the “Cobra Effect of Debt.”

This “Cobra Effect,” named after the colonial-era policy failure where a bounty on cobras led people to breed more of them, refers to a situation where the solution to a problem worsens the problem itself. Similarly, the convenience of credit—originally designed to improve purchasing power and lifestyle—has instead trapped millions in a web of unending repayments and anxiety. Bharat’s transformation into an “EMI Nation” represents a moral, social, and economic challenge that NST urges us to address through needo-consumption and needo-savings.

1 EMI Lifestyle and the Mirage of Prosperity

The rapid expansion of credit-based consumption-fueled by Buy Now, Pay Later (BNPL) schemes, credit cards, and instant loans—has created a dangerous illusion of prosperity. Young professionals in urban Bharat, armed with digital wallets and multiple credit cards, often mistake access to credit for an increase in income. Flashy advertisements, social media influencers, and online marketplaces amplify the illusion that happiness and success can be purchased on installment.

However, the NST cautions that such a lifestyle—where wants are mistaken for needs—creates an economy of borrowed satisfaction and emotional bankruptcy. The middle-class youth, desperate for material pleasures, have become prisoners of Greedonomics, where consumption exceeds capacity and debt replaces discipline. The short-term thrill of owning the latest smartphone, car, or vacation experience comes at the long-term cost of financial instability, mental stress, and family disharmony.

NST argues that true economic empowerment lies not in expanding one’s liabilities but in mastering one’s desires through needo-consumption-a conscious approach to spending based on real needs rather than impulsive wants.

2 Cobra Effect of Debt: When Solutions Backfire

The Cobra Effect manifests in the modern credit system when attempts to make life easier through loans and flexible financing backfire disastrously. Easy access to credit has encouraged overconsumption, while rising interest rates and inflation have made repayment increasingly burdensome. In many cases, the interest paid on loans now exceeds the principal amount, turning even diligent earners into chronic debtors.

Banks and Fintech companies, in their race for market share, have normalized debt restructuring, top-up loans, and rollover credit—essentially kicking the debt can further down the road. The system, instead of correcting itself, deepens the crisis. NST views this as a moral hazard created by both lenders and borrowers—where the ease of borrowing encourages irresponsible spending, and loan waivers by governments reinforce the expectation that debts need not be repaid.

The result is a double-edged trap: individuals lose their financial freedom, and the banking sector accumulates bad loans, necessitating the creation of so-called “bad banks.” What was once a safety net has become a snake pit, ensnaring both individuals and institutions.

3 Healthcare and Credit Crisis

One of the most worrying dimensions of this debt epidemic is the growing reliance on credit for healthcare expenses. Rising medical costs, combined with inadequate insurance coverage, have made healthcare one of the largest areas of credit-fueled spending in Bharat. Even preventive and lifestyle therapies—such as wellness programs, cosmetic procedures, or fertility treatments—are now being financed through EMIs.

NST identifies this trend as a reflection of misplaced priorities. While health is indeed a necessity, the approach to managing it has shifted from preventive prudence to reactive financing. Instead of building health capital through discipline and moderation, people are borrowing to pay for the consequences of unhealthy lifestyles. The needo-approach urges a shift from reactive to proactive healthcare spending—investing in good habits rather than expensive treatments.

4 Debt as the New Pandemic

Debt, like an infectious disease, spreads silently and swiftly. It thrives on the twin viruses of ignorance and indulgence. The lack of financial literacy among youth today has made them especially vulnerable. Many lack a basic understanding of compound interest, investment returns, and the difference between asset creation and liability accumulation. They celebrate spending but ignore saving. They measure success by possessions rather than peace of mind.

NST emphasizes that financial education must become a core component of value-based education. Teaching young citizens how to manage money is not just an economic necessity but a moral responsibility. Understanding the difference between “income-generating” and “expense-generating” assets can transform not only personal finances but also the moral fabric of society.

As NST often reminds, “Money is like oxygen—essential for life, but fatal in excess.” The pandemic of debt reflects the suffocation of moderation. It is not the availability of credit that is dangerous, but the absence of discipline in using it.

5 The Way Out: Needonomics for Financial Freedom

To escape the Cobra Effect of debt, NST prescribes a path of Needonomics—balancing needs with available resources, promoting mindful consumption (needo-consumption), and nurturing sustainable savings. The first step is recognition-acknowledging that debt is not a sign of progress but a signal of imbalance.

NST recommends the following strategies for financial recovery and resilience:

1. Cutback on unnecessary expenses:

Distinguish between needs and greedy wants. Prioritize essentials and defer luxuries. Simplicity is not a sacrifice; it is wisdom in action.

2. Negotiate settlements and restructure wisely:

For those already trapped in debt, negotiating lower interest rates or settlement plans can help. However, this must be accompanied by behavioral change; otherwise, relief becomes relapse.

3. Adopt needo-savings:

Savings are not just economic buffers—they are moral anchors. Needo-savings emphasize purpose-driven accumulation, ensuring that money serves as a means, not a master.

4. Promote financial literacy:

Awareness campaigns, curriculum integration, and digital literacy programs must teach youth the art of financial prudence. They must understand that wealth creation begins with wealth preservation.

5. Revive frugality as a virtue:

NST calls upon today’s youth to live like their parents—modest in desire, prudent in planning, and farsighted in expenditure. Frugality is not outdated; it is the foundation of sustainable prosperity.

6. Encourage asset creation:

Instead of borrowing for consumption, borrow-if at all-for investment in assets that yield long-term returns, such as education, entrepreneurship, or home ownership.

Conclusion:

The transformation of Bharat into an EMI Nation reflects not economic progress but emotional regression-a society where instant gratification overshadows patient growth. The Cobra Effect of Debt warns us that without self-restraint, even well-intentioned financial tools can become instruments of destruction. NST envisions a Needo-Nation—where citizens spend wisely, save purposefully, and live gratefully. The solution lies not in abandoning credit but in reforming consciousness. The shift from Greedonomics to Needonomics requires courage, discipline, and wisdom. As Bharat aspires toward Viksit Bharat @2047, economic development must be rooted in ethical economics. True progress will not be measured by the number of credit cards or consumer durables owned, but by the serenity of households free from the burden of debt. In this journey,  Needonomics School of Thought lights the path—from excessive consumption to mindful living, from debt-driven despair to debt-free dignity.