In India, a family will hand over house keys to a newly hired domestic worker and, on the same day, refuse to let a census official into the house because they don’t trust their ID.
We check with three relatives before picking a new doctor or repair service, before engaging with a new government process (such as the special intensive revision of the electoral rolls).
India is often called a low-trust society. But look at our lives closely, and the label doesn’t fit.
Indians lend money without paperwork, leave children with neighbours, trust a maid because the neighbour does. Trust is not missing.
It is uneven.
THE WRONG BAROMETER
Part of the confusion comes from how it is measured.
Generalised trust is confidence in a complete stranger. Particularised trust is confidence in family, friends, and known groups. Institutional trust is confidence that organisations and rules will act fairly and competently.
India tends to be unusually high on the second kind and low on the first.
In formal surveys measuring generalised trust, our scores tend to hover between 35% (World Values Survey, 2017-22) and 38% (Pew Research, 2025).
TANGIBLE FAITH
What may be highest of all is particularised trust – the confidence we place on the people in our inner circle.
Money shows the pattern clearly. Family and friends were the most common sources of emergency funds for Indian adults (35%), scoring higher than work (23%), savings (14%) and formal loans (13%), according to the World Bank’s Global Findex Database 2025 survey.
This highlights two things: Bonds with certain formal systems are weak, and personal networks absorb part of the shock.
A bank asks for documents, collateral, credit history. A family relies on memory, obligation, affection, and shame. Call this social collateral. It can rescue a household but it can also trap one. A relative who lends without paperwork may remember the debt for 20 years, and help can arrive with strings attached.
But it isn’t a question of which option one prefers.
The lack of trust in institutions has immense ramifications for an economy this size. Yes, the loan from a friend or relative is interest-free, but one is less likely to access it. It is usually distress that causes one to reach out to a relative or friend — not ambition, a dream or an idea.
PERSON OVER PROCESS
The element of risk this introduces is visible across the board. Most Indians don’t have insurance for their house or business; it is only in recent years that a thin sliver has begun to embrace private health insurance. Elsewhere, the police and courts are considered a resource of last resort.
When trouble strikes, we don’t turn to processes, we turn to people.
If a pension is delayed or paperwork stalls, we call a local councillor. A family seeking admission to a prestigious school, or hospital, reaches out to the most powerful person they know. And it works more steadily than the official channels. Because the system is broken in some parts, and unpredictable in others.
MAN ON THE INSIDE
Indian institutions often become trustworthy one employee at a time.
This leads to a hard puzzle called the broker problem. A helpful councillor or MLA can help a widow get her pension, fix a migrant’s documents, and get a civic complaint registered.
Have they solved the problem? No. They have made it temporarily bearable.
In doing so, a helpful broker — whether efficient government official, helpful MLA, cousin, uncle or neighbour — reduces suffering but also quietly eases the pressure to repair the system itself.
The proper path is citizen, rule, institution, outcome.
The real path is often citizen, broker, official, favour, outcome.
When rights are treated as favours, the loop of mistrust is reinforced.
And a public institution that the public doesn’t trust is two things: it is failing; and it is impeding growth. Countries that evolve into superpowers tend to be defined by greater transparency in public-facing institutions; and by public-facing institutions that serve as the first helpline.
The smoothness of such operation eases business, living, growth, order — often in a loop.
WIDENING THE CIRCLE
So, informal trust should neither be worshipped nor thrown away. Families and communities provide care and quick help that formal systems cannot fully match.
This is our strength in India. We can see how parts of the developed world are worse off for not having it.
But informal trust is also an inequality machine. Its benefits are unevenly distributed. Trustworthy institutions, instead, can aim for uniformity of access, promote confidence and accountability, as well as efficiency and rule of law.
The truth is, as Indians, we know whom to trust. The task is to widen that circle, so that a stranger in an official role becomes as reliable as a second cousin.
We aren’t the only country where communities are still stronger than institutions. But we should aim to work our way off that list.
(Kashyap Kompella is a CFA charterholder, tech industry analyst and author of three books on AI)
