The current slowdown in consumption is seen as a positive development by Prashant Jain, founder and chief investment officer at 3P Investment Managers. He believes that this slowdown is sustainable and not driven by debt.

Jain points out that when consumption is fueled by increasing leverage, it can lead to a situation where spending outpaces income growth, resulting in moderated demand. He also mentions the proactive measures taken by the Reserve Bank of India (RBI) to address concerns about the rapid growth of unsecured retail loans.

In November of the previous year, the RBI expressed concerns about the excessive expansion of these loans and the heavy reliance of non-banking financial companies (NBFCs) on bank funding, indicating a cautious approach to consumer credit growth.