Indians swipe cards, and consumer debt ticks up

By Alistair Scrutton and Surojit Gupta

NOIDA, India, July 19 (Reuters Life!) - Great India Place, one of India's biggest shopping malls, gives eager consumers the chance to browse in air-conditioned comfort, scout for global brands and sip cappuccinos after a hard day's shopping.

It also offers the opportunity to enjoy another capitalist craze -- debt.

"It's party time here," said Nagendra Singh, a manager at Hometown, a 300-staff store that he describes as a mix of Home Depot and IKEA, and where free Hindu religious blessings come with the furniture package.

"Customers find something interesting and they swipe their card. People don't mind swiping a card for one lakh rupees ($2,500)," Singh added.

India's economy has grown at an annual average 8.6 percent in the last four years, sparking a consumer boom as credit cards and mortgages become increasingly popular for an expanding middle class. The majority of the population still, however, lives in poverty.

Store manager Singh said that free spenders were often young couples with nuclear families unfettered by the attitudes of an older generation that emphasized savings.

Total loans, including mortgages and unsecured loans such as credit cards, grew around 30 percent annually in the last three years, an expansion the Reserve Bank has called "unprecedented".

But this year there are signs consumers and banks are starting to feel the strain of rising debts as the central bank cools inflation with higher interest rates.