Weekly Numerics | Suspension spree in the Parliament, Indian students’ spending abroad soars, and the rise in credit demand

Weekly Numerics is a column that features three to five charts based on major events or interesting data points that emerged during the week. Here are some of the key figures of the past seven days.

Record-breaking suspensions

As the winter session of parliament was adjourned sine die a day ahead of schedule, the total number of MPs suspended stood at 206, the highest number of MPs ever suspended in India.

One hundred and forty six MPs were suspended in this winter session alone because of ‘unruly conduct’ following opposition protests demanding a statement from Union Home Minister Amit Shah on the security breach in parliament on December 13.

With almost 20 percent of the MPs suspended, the ruling BJP took the opportunity to pass several important legislations in parliament, such as the three bills replacing the Indian Penal Code, and the Telecom bill.
In fact, the parliament passed a total of 17 bills, 10 of which were introduced this session, along with seven pending from previous sessions, and no bills were referred to parliamentary committees. According to PRS Legislative Research, the proportion of bills referred to committees has decreased from 71 percent during the 15th Lok Sabha, to 16 percent during the current 17th Lok Sabha.

Number of Indian students going abroad and their expenditures

The number of Indian students going abroad for education is estimated to rise from 11.8 lakh in 2022 to around 15 lakh in 2025. Their expenditure is expected to rise from nearly $50 billion to more than $70 billion during this period, according to a recent report published by University Living, a student housing marketplace, and One Step Global, a business strategy firm focused on the education sector.

According to the report, the majority of students from India studying abroad are concentrated in just four countries, USA, UK, Australia, and Canada, and contribute significantly to their economies. “We estimated that almost 8.5 lakh students are pursuing their higher education abroad in just four countries — US, UK, Australia and Canada — spending close to $34 bn in 2023,” said the report.

As much as 60 percent of Indian students studying abroad are pursuing a master’s degree. Meanwhile, state-wise data shows that Andhra Pradesh, Punjab, and Haryana had the highest number of students studying abroad, accounting for 12.5 percent of the total.

Festive cheer lifts credit demand

Demand for bank credit saw increased in the festive season this October. According to data sourced from CMIE (Centre for Monitoring Indian Economy), credit disbursal by scheduled commercial banks went up by Rs 2.8 trillion (lakh crore) during the month. This is significantly higher than the average increase of Rs 1.5 trillion during April-September 2023.

The boost in credit was largely driven by demand from the services sector and personal (including housing) loans, followed by industry and agriculture.

Bank credit to the services sector surged by Rs 1.81 trillion in October, significantly exceeding the average monthly increase of Rs 0.3 trillion from April to September 2023. The demand within the services sector was largely from the wholesale trade and NBFCs (non-banking financial companies).

Personal loans, meanwhile, shot up by a record Rs 1.76 trillion during the month, driven by considerable increase in demand for housing loans, vehicle and other personal loans, and credit card outstandings, surpassing the average monthly increase of Rs 0.3 trillion from April to September, 2023.
According to the RBI’s (Reserve Bank of India) June 2023 Financial Stability Report (FSR), the proportion of unsecured loans in overall retail loans rose from 22.9 percent to 25.2 percent between March 2021 and March 2023. Although unsecured personal loans only account for around 8 percent of total non-food bank credit, it’s a significant number compared to bank NPAs (non-performing assets), which are expected to drop to 3.5 percent by the end of this fiscal.

This prompted the RBI to tighten capital norms in November. The new norms, which especially affect consumer loans, could result in increased borrowing costs. Moreover, reports suggesting rising delinquencies in small personal loans and in loans obtained in partnership with fintech firms, have led the banks to limit such offerings to curb the rise in unsecured personal loans.