When financial stress becomes a workplace hazard

Furkan is a diligent worker at an automotive component manufacturing unit in Noida. After years as a machine operator, he is extremely well versed in using the equipment. Yet, on a recent routine Monday morning shift, Furkan made a simple but catastrophic error that left him injured and halted production on his area of the machine line for several hours.

Naturally, the resulting investigation into the circumstances and cause of the incident will focus on traditional safety problems, such as a possible mechanical failure or a lack of training, but it is likely to miss what was arguably the root cause. Furkan wasn’t thinking about the machine – he was thinking about how he had missed the rent payment on his house that month. On the morning of the accident, his landlord had sent him a notice, warning him to immediately pay or he and his family would be evicted. Clearly, while companies often invest significant amounts in operational safety measures, they often ignore an unseen hazard that often takes over their employees’ minds: financial stress.

 

Mental health experts say that when people have serious financial worries, the impact on the brain can be similar to that caused by feelings of chronic anxiety – slowing physical reaction times in critical moments.

Furkan said: “I am stressed all the time about money. Now I am also worried about the affordability of everyday living costs. I feel financially stuck; I can’t separate my personal and work life in such circumstances.”

Poor mental health 
A Delhi-based psychiatrist says many of her patients are experiencing poor mental health due to fears the current economic climate indicates an impending financial crisis, including a possible recession due to rising crude oil prices, stock market volatility and employment insecurity.

She says financial worries are the leading cause of sleep loss, which leads to fatigue, a contributing factor in nearly 13% of workplace injuries.

“It [financial problems] can lead to burnout, poor health and even unsafe or unproductive behaviours at work,” she explains. “And because stress builds over time, these challenges can remain for years, even long after the crisis ends.”

Studies have shown that financial difficulties are one of the triggers that can exacerbate mental illness, and research also consistently shows money worries are a common contributor to anxiety, insomnia and depression. 

The energy price rise shock prompted by the US–Iran war and the ongoing closure of the Strait of Hormuz, a vital artery for much of the Middle East’s oil and gas exports, is seeping ever deeper into the Indian economy, presenting policy-makers with a dilemma as it simultaneously weighs on growth and pushes the price of oil, gas, foodstuffs and other commodities higher.

A prolonged closure of the Strait of Hormuz poses the single greatest threat to global energy markets in decades, according to a new ‘Horizons’ report from the global research and consultancy group Wood Mackenzie, Strait talking: Iran war scenarios and the future of energy.

For India, the Strait of Hormuz is far more than just an oil route. It is the gateway through which the country receives crude oil, natural gas, fertilisers and several other essential imports. Any disruption, even a partial one, can quickly increase prices, slash agricultural output, slow down industry and squeeze the budgets of ordinary Indian families. 

Lay off workers
India’s steel plants, cement factories, chemical facilities and textile mills are energy-intensive, and a sharp hike in the price of oil and gas raises production costs in these and other industrial sectors. Smaller enterprises with limited financial resources may be forced to reduce production or lay off employees. 

With fuel prices rising steadily and Prime Minister Narendra Modi asking citizens to voluntarily adopt austerity measures in a bid to reduce India’s fuel use, financial worries and job security are definitely weighing on the minds of workers like Furkaan. 

Just days before beginning a five-nation tour, the PM asked citizens to increase their use of public transport rather than private vehicles, reduce the use of cooking oil, avoid non-essential foreign travel for a year, put gold purchases on hold, buy Indian-made products rather than imported goods, and revisit Covid-era measures such as working from home and virtual meetings, all in a bid to reduce India’s fuel use and reduce outflows of foreign exchange being spent on fuel imports.

To make matters worse, the rupee has been weakening since the West Asia conflict between the US and Iran began, raising the cost of imports and increasing the chance of inflationary price hikes for Indian households.

So far in 2026, the Indian currency has fallen by over 6% against the dollar, further pushing up the cost of most imports, including fuel and fertiliser. On 14 May, the rupee dropped to a historic low of 95.86 to the dollar, weighed down by high crude oil prices and the ongoing stalemate around the conflict between the US, Israel and Iran.

India’s defence minister Rajnath Singh said on 11 May that India had only 60 days of crude oil and natural gas reserves and 45 days of petroleum gas reserves.

Meanwhile, the country’s foreign exchange reserves stand at US$703 billion. Experts say that gold purchases and foreign travel lead to substantial dollar outflows, adding pressure on India’s current account deficit and foreign exchange reserves. 

“The PM’s appeal to the nation is a crisis management response to the current account deficit problem due to high crude price and has slightly negative implications for economic growth in fiscal year 2027,” VK Vijayakumar, chief investment strategist at Geojit Investments, told Reuters.

Financial stress
With salaries barely increasing, inflation rising, asset prices stalling and the rupee weakening, financial stress among middle- and lower-income Indian households has inevitably intensified.

A frustrated Delhi resident, speaking at a petrol pump, said: “The inflation is too high. They have raised the prices of petrol and diesel three times in 10 days. How will the common man make ends meet? With an increase in petrol and diesel prices, milk, bread, eggs and vegetables are costlier. Even CNG (compressed natural gas) prices have gone up. What will happen to us if the government increases fuel prices every three or four days?”

Rising household debt
The Reserve Bank of India’s Financial Stability Report 2025, released in December 2025, showed household debt had climbed to 41.3% of GDP by the end of March 2025, marking a sustained increase over its five-year average of 38.3%. The report points to increased borrowing by households (specifically for consumption), higher debt write-offs by banks and defaults recorded by non-banking financial companies.

Analysis suggests these metrics are rising because salaries (and the availability of jobs) aren’t increasing fast enough to match the cost of living, forcing households to resort to debt. Illusions of widespread prosperity in the country, driven in part by social media, has also convinced many people to take out loans to fund a lifestyle they cannot afford.

According to the Reserve Bank of India’s report, retail credit – excluding mortgages – has tripled since March 2019. An increasing share of these loans, data shows, was used to fund consumption, instead of financing productive assets.

Non-housing retail loans also accounted for more than half of all loans taken out by households in the last fiscal year, states the report.

Ajit Ranade, a noted economist, states the problem is not household borrowing per se, but the purpose of these loans. “Loans for education, housing or small businesses build future assets,” he says, “but loans for consumption create no productive capacity. As households divert more income towards servicing personal loans and credit card bills, they are left with lower savings or investable surpluses.”

However, experts say that when employees are juggling bills, debt and short-term borrowing, long-term financial planning simply isn’t the priority. Stability comes first.

Financial worries affect productivity
A study entitled The Impact of Workers’ Financial Stability on their Workplace Productivity in India found financial stress and worries associated with poverty could directly affect people’s ability to work effectively and increase their income. 

Researchers at The Abdul Latif Jameel Poverty Action Lab conducted a randomised trial to gauge whether enhanced financial stability impacted worker productivity in India. They found that giving small-scale manufacturing workers financial relief in the form of early wage payments increased their productivity and attention to detail on the job. This effect was concentrated among workers with higher pre-existing financial strain. 

The study was conducted in Odisha, where labourers rely on farming for most of the year but typically seek other forms of employment during the lean season, mainly from March to June. During this period, workers typically found only 1.9 days of paid work in the construction or manufacturing sector per week on average.

One such seasonal manufacturing job involved producing disposable leaf plates for restaurants. This is a technical task that requires significant focus, as plates must be stitched together out of irregularly sized leaves to form a clean circle. 

The study focused on men aged 18 to 55 who worked regularly as wage labourers and were not migrants. These workers reported experiencing high levels of financial anxiety – 68% said they would face difficulty arranging even Rs 1,000 in an emergency. In addition, 70% said they were “very worried” about their future finances, and 83% reported they thought about finances while working.

Sustained pressure
PwC’s 2026 Employee Financial Wellness Survey reveals a workforce under sustained pressure, where day-to-day financial strain is undermining productivity, engagement and long-term workforce stability.

For many employees, the challenge isn’t optimising retirement planning; it’s making it through the month. The result is distracted talent, delayed retirements and widening capability gaps. The report further states that for CHROs (chief human resources officers) and workforce leaders, this is a moment to act – reframing financial wellness as a strategic lever to strengthen performance, resilience and organisational health.

Dr Renu Chibber, a wellness expert, says: “If organisations want healthy, thriving workers, they need to take economic stress seriously, and they need to tackle it from every angle, not just inside the workplace.”