New Delhi, June 9 -- In 1769, French philosopher Denis Diderot received a luxurious scarlet dressing gown. At first, it delighted him. But then he noticed that everything around it-his old chair, desk, and rug-seemed shabby in comparison. One by one, he replaced them until he was mired in debt. This story, known as the"Diderot Effect,"remains a parable for how one act of consumption can trigger a cascade of financial decisions, often with ruinous outcomes.

Fast forward to modern India, where a digital version of this effect is taking shape. This time, it's not scarlet robes but smartphones, kitchen renovations, weekend getaways, and onlineshopping sprees-all made seemingly affordable by Buy Now, Pay Later (BNPL) apps andinstant small loa...