How has Covid-19 shaped the Personal Finance landscape in India

Key Takeaways

  • The number of new investors and the assets under management will likely continue to soar even in the post-pandemic world.
  • The housing prices remain stagnant despite various salvaging measures such as low home loan rates, whereas uncertainty prevails in the commercial property market.
  • The interest in digital alternatives of gold is here to stay, owing to the benefits in terms of legitimacy and safekeeping.
  • The overall insurance industry is set to boom even after covid-19 stops being the main concern, as the majority of the population is still severely underinsured.
  • Though hit hard during the pandemic, credit cards will not be an ailing sector for too long due to the ease of use, security of transactions and attractive cash-backs.

How has the pandemic affected the lives of millions across the globe? Or, what new hobbies have people picked during the pandemic lockdowns? From addressing the obvious negative impacts to our life, to finding the silver lining to this dark cloud – the word pandemic is so omnipresent that it’s hard to find a literary piece today that doesn’t mention it in one context or the other. And why not, the pandemic after all has impacted every aspect of each of our lives. Today we’ll look at one such aspect – personal finance. We’ll be talking about the trends that are prevailing, and how individuals are reacting to the changes in various sectors of the financial world. Has there been a shift in perspective? If yes, has it been towards progress or has it caused a setback? Read on to find out more.

Retail Investments (stocks, mutual funds, ETFs)

The widespread adoption of the internet, easy access to investments through online brokerages, and the extra time at hand during the pandemic has overall contributed to a phenomenal increase in participation in capital markets (to a large extent, direct stocks). There has been an increase of 10.4 million in active investor accounts with the majority of new accounts opened by millennials aged 24 to 39 (as reported by SEBI). While the steep growth rate of new investors may not sustain, the actual number of investors and the assets under management will likely continue to soar even in the post-pandemic world.

retail investments


The demand for physical gold ornaments dropped during the lockdown owing to social distancing and mask-wearing rules. On the other end, there has been a spike in alternatives such as digital gold and gold ETFs. Though this shift was caused by restrictions of the pandemic, the benefits of these digital assets in terms of legitimacy and safekeeping have won the gold-buying population over. The interest in digital alternatives of this precious yellow metal is here to stay.

Real estate

As the population was badly hit by the pandemic, there has been further reduction in demand for residential properties, once the favorite investment of the Indian population. The transactions have halted due to multiple successive lockdowns and the demand has plunged due to cashflow constraints and lack of job security. The housing prices remain stagnant despite various measures implemented to salvage the market such as low home loan rates.

As far as the investment value of office space is concerned, it’s a mixed basket. The new normal of work-from-home will definitely impact the demand for commercial properties. While there will be a certain portion of white collar jobs that may see a permanent shift to remote work, the commercial space requirement for ecommerce companies, cloud kitchens and other such online businesses that are booming currently, is set to increase.

real estate investments


No prizes for guessing the fastest growing insurance product in India – covid-19 specific health insurance. IRDAI has reported that the health insurance market has grown 10 times in the past year. The fear of covid-19 fatalities as well as the potential of financial strain due to high treatment costs have spurred many into buying health insurance. The presence of numerous web aggregators and the ease of conducting financial transactions online has further accelerated the growth of the insurance sector. Although, covid-19 may not be the specific reason to purchase in the future, the overall insurance industry is set to boom, as the majority of Indian population is still severely underinsured. Few areas to be addressed are closing the knowledge gap amongst the population, simplifying products and increasing accessibility, which are some of the most common pain points or hindrances for the masses in purchasing insurance.

Credit card

When the pandemic struck and left millions jobless, people became more cautious with money. Moreover, the businesses that formed key credit card expenditures such as dining out and travel were severely affected. This resulted in the growth rate of credit card spending declining by 15% in 2021 compared to 2020. However, as we are all learning to live with the pandemic, we are slowly inching towards pre-pandemic levels of consumer spending via credit cards. While the channels of spending are no longer the same, the plethora of services that can be availed online, such as food deliveries, shopping, courses and services, are only set to increase. Based on a 2021 EY report , 25% of the total organised retail market in India is online, and is expected to reach 37% by 2030. This trend coupled with the many benefits of credit cards i.e. ease of use, security of transactions and attractive cash-backs, give the assurance that credit cards will not be an ailing sector for too long.

credit card spending

Bottom Line

We’ll leave you to make your own perceptions on each of the trends we have discussed in this post. What we want to emphasize is that personal finance decisions should be made on the basis of long-standing principles of finance, after careful consideration of the environment and your situation. In the current situation, there is a definite shift towards digitization and automation of personal finance. To keep pace, adaptation to the rapidly changing financial world and adoption of the latest technological solutions in personal finance is the need of the hour. We have elaborated on several topics on personal finance on our blog, so feel free to read those up before you catch on the trends.

Leave a Comment

Your email address will not be published. Required fields are marked *