Financialisation of life turns citizens into spreadsheets

David Graeber's Debt: The First 5,000 Years (2011) opens with a quiet historical correction. Finance, he argues, did not arise from barter; finance predates money, and credit predates markets. Mesopotamian temple-records of agricultural debt are older than coinage. Today, the Indian middle-class student takes an education loan to buy a degree, to qualify for a job, to take a home loan, to buy a flat, to take a personal loan, to fund a wedding, to take a credit card, to buy groceries. Each life-event becomes a financial product. When every relationship — schooling, marriage, healthcare, friendship, retirement, even step-counting — gets priced as an asset class, citizens become spreadsheets. The republic loses the meaning that does not fit in a cell.

The scale of Indian financialisation is now substantial. Household debt stood at 38 per cent of GDP in 2024, according to the Reserve Bank of India's Financial Stability Report of June 2024 — roughly doubled in a decade. Unsecured personal loans grew at 25 per cent year-on-year in FY 2024-25, prompting an RBI risk-weight increase in November 2023. The Buy Now Pay Later sector, largely unregulated until 2024, exposed lakhs of young consumers to short-tenor high-interest debt. Gold loans crossed 8 lakh crore rupees in outstanding portfolio. The EdTech sector's defaults, beginning with BYJU's troubles in 2023, demonstrated how easily an education-loan ecosystem can collapse into financial distress. The Hindenburg-Adani sequence of January 2023 — and SEBI's ongoing investigations — illustrated how financialisation of corporate India intersects with retail investor outcomes. The total Demat accounts in India crossed 17 crore in 2024, more than tripling in five years, with much of the growth coming from young first-time investors.

The cultural shift is more subtle and more pervasive. Health insurance premiums are now tied, by several large insurers, to step-counts read from wearables (Apollo Munich's Vitality programme, launched in 2017, is the pioneer). The IRDAI directive of 2025 on dynamic premiums codifies the practice. Credit scoring of CIBIL determines not only loan eligibility but increasingly matrimonial prospects, with some matrimonial sites listing salary and credit score alongside age and education. School rankings are evaluated as return on investment by parents whose children have not yet learnt to read. Even friendship is monetised through influencer economies that convert relationships into engagement metrics that convert into advertising rates. The boundary between life and ledger is dissolving. The 2024 NASSCOM report estimated that the Indian influencer economy is worth over 3,000 crore rupees and growing at 25 per cent annually, with relationships explicitly priced as 'audience engagement assets'.

Institutional pushback has begun but remains uneven. The Reserve Bank of India's Financial Stability Reports have repeatedly flagged unsecured-loan stress; the November 2023 risk-weight increase on personal loans and credit cards was a corrective. SEBI's study of futures and options trading, released on 24 September 2024, found that 76 per cent of retail traders in F&O lost money in CY 2024, with average annual losses of 2 lakh rupees per retail trader. The aggregate loss was nearly 1.8 lakh crore rupees — wealth that moved from households to algorithmic counterparties. The study triggered margin reforms and option-strike-price restrictions. The Insolvency and Bankruptcy Code 2016, India's most ambitious creditor-debtor reform, codified corporate insolvency as moral closure — a structured way to bury what could not be revived. The Pradhan Mantri Jan Dhan Yojana and the Direct Benefit Transfer architecture, through the JAM trinity, have democratised access to formal finance — a counter-balance to predatory exclusion that should not be lost in the critique. The RBI's December 2024 norms on digital lending apps, requiring registered NBFC backing for every lending app, brought the wild-west of fin-tech micro-credit into a regulatory perimeter.

A serious counter-view must be heard. Without financialisation, India would not have UPI, which has banked the previously unbanked. It would not have micro-finance, which has lent to women's groups across rural India. It would not have the bond and equity markets that finance MSME working capital and mega-infrastructure simultaneously. The Pradhan Mantri Mudra Yojana has disbursed over 47 lakh crore rupees in micro-loans since 2015. The Atal Pension Yojana and the National Pension System bring retirement security to crores who never had it. The challenge is the form, not the fact, of financial inclusion. The discipline is to draw the line between empowering credit and enslaving debt. The Self-Help Group movement, which has lifted millions of rural women into financial autonomy through groups linked to banks under NABARD's SHG-Bank linkage programme since 1992, demonstrates that financial access need not be financialisation in the Polanyian sense.

Karl Polanyi, in The Great Transformation (1944), distinguished embedded markets from disembedded ones. In embedded markets, economic exchange is one institution among many, governed by social and ethical norms. In disembedded markets, economic exchange becomes the master institution to which family, faith, education and politics are subordinated. Polanyi's prediction — that disembedded markets eventually generate a counter-movement of regulation and social protection — has played out repeatedly: in the New Deal of 1933, in the European post-war welfare state, in India's banking nationalisation of 1969, in the IBC of 2016. The pattern is structural. Markets that escape ethical embedding are eventually re-embedded, either through reasoned reform or through populist convulsion.

The behavioural dimension matters. Kahneman and Thaler showed that humans systematically err in financial decisions — over-confidence, loss aversion, present bias. Indian retail investors who entered F&O in 2021-23 exhibited textbook patterns of these biases.

The Indian task is to choose reasoned reform. Regulate predatory lending. Strengthen financial literacy at school level. Cap unsecured-loan exposure as a share of household income. Provide age-stratified guard-rails on retail derivatives. Require transparent pricing of dynamic insurance premiums. Above all, recognise that not every life-event needs to become a financial product — some relationships must remain unpriced. The classical balance among dharma, artha, kama and moksha contains the argument: artha is one of four legitimate pursuits, never their master.

The poet Faiz Ahmed Faiz wrote, aur bhi gham hain zamane mein mohabbat ke siva — there are griefs in the world beyond the grief of love. So too there are values beyond price, dignities beyond debit, lives beyond ledger. A republic that lets every life-event become a financial product disembeds itself from its own values, and a disembedded republic is a republic that has forgotten what it is for. Financialisation is a powerful servant and a tyrannical master. The discipline is to keep it in service. The line between servant and master is drawn, daily, in regulation, in classroom curricula, in family conversations, in policy choices. Drawn well, it lets finance fund the development the country needs. Drawn badly, it lets finance own the country it should have funded.