Official data on household net financial savings indicates that it fell to 5.1% of GDP in FY23 from 11.5% in 2020-21, well below its long-run annual average of 7.0-7.5%. The fall was driven by a rapid rise in financial liabilities (household borrowings - from 3.8% of GDP in FY22 to 5.8% in FY23.
Indian households net financial savings have decreased, posing a threat to the government s capital investments. This decline in savings limits resources for the rest of the economy and could require the government to rely on volatile foreign capital. Rising debt levels and stagnant income contribute to this trend, potentially indicating rising inequality.
This is the last of a 2-part data journalism series on household finances and Indian economy. The first discussed the latest fall in household savings in India | Latest News India
Net household savings declined to a 47-year low of 5.1 per cent of gross domestic product in FY23 as compared to 7.2 per cent recorded in the previous year, as per the data released by the Reserve Bank in its latest monthly bulletin.
This is the first of a two-part story on household finances. The second part will look at the relationship between household debt and India’s economic growth | Latest News India