New Delhi: A survey conducted by the apex economic research body National Council for Applied Economic Research (NCAER), and Max New York Life Insurance has thrown up surprising facts about credit behavior among Indian consumers.

The survey revealed that a big chunk of Indians may be living well beyond their means. The loans and other borrowings by households are not based on sound principles as they are not done to create assets like buying a house or a car, instead they are being used to finance daily consumption needs and more shockingly, even to repay existing loans.

The trend in urban India is towards consumerism and the society is slowly accepting living with debt as a part of life. The major chunk of credit card spending is used for purchase of fuel at petrol pumps, buying items for home renovation and furnishings, or that expensive piece of jewelry on festivals or important occasions.

There are different patterns of borrowings in rural and urban areas. According to this survey, 21% of the households borrow from the good old moneylenders, while they are popular only among 7.2 percent of urban households. This is also a big surprise for banks, which nag down the public with calls for loans but are still finding tough competition from the moneylenders.

Coming to the household budget, more than 50 percent of the expenditure goes towards food and related stuff. This figure is 45 percent in case of rural areas and 55 percent in urban areas. Transport comes next with 10 percent of the budget being allocated to it and 7 percent of the expenditure goes towards education. The spending pattern in rural and urban areas is more or less similar except for education.

While, 7 percent of the total budget is spent on education, only 1.5 percent of the families have borrowed to fund education related expenses. Borrowing from friends and relatives has been the most popular way to meet education related activities in rural areas with 36 percent of rural households adopting the practice. Banks, with a share of 19 percent seem to be the most important source of spending on education in urban areas.