The Reserve Bank of India (RBI) recently released figures for net household financial savings (flow) during 2023-24. These savings stood at 5.3% of gross domestic product (GDP), up slightly from 5% in 2022-23. In 2019-20, they stood at 8.1%. The pandemic broke out in March 2020 and in 2020-21 these savings jumped to 11.5%. So, what do these figures tell us?
First, net household financial savings have come down significantly over the years. In 2018-19, before the pandemic, they stood at 7.9% of GDP.
Second, in the post-pandemic world, income growth for an average Indian has been slow, and given that they have had to spend a greater proportion of their income to meet expenses, household financial savings have fallen. One possible explanation could lie in the fact that more people are working in agriculture now than before the pandemic.
Third, high food inflation from 2022-23 seems to have led to a greater proportion of income being spent. From April to November this year, food inflation, which forms nearly two-fifths of the consumer price index, has averaged 8.4%. It averaged 7.3% and 6.9% during the same period in 2022 and 2023, respectively. With quite a few state governments launching cash distribution schemes, food inflation is likely to remain high.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Nominee Laws at Crossroads: From Trustee to Ownership, A Case for Reforms
The notion of a nominee being a mere trustee complicates the case for asset succession
Zee Ent Q3 profit soars nearly 3-fold
Zee Entertainment Enterprises Ltd clocked a net profit of ₹164 crore for the third quarter ended December, a 180% increase from the ₹58.5 crore a year earlier.
Akasa Air is well-capitalized, path to profitability intact
CEO Dube said the country's two newest airports should help improve its profitability
Declaring pre-existing diseases and timelines: Know the rules
What is the time limit for pre-existing diseases when buying health insurance? Do I need to declare a decade-old hospitalization or illness? I declared an illness from 10 years ago, and the insurer excluded it from the pre-existing conditions list. Is this correct? -Name withheld on request
HDFC Bank walks loan tightrope
DFC Bank Ltd performed well in Q3FY25 but reported a high loan-deposit ratio (LDR) of 98%, indicating less-than-ideal liquidity to cover urgent fund requirements.
CCI Ban on WhatsApp Data-Sharing on Hold
No relief on ₹213 crore fine; experts say order undermines CCI's authority
Inclusive growth key pillar of India's economic blueprint
India will comfortably maintain a 6-8% economic growth rate while keeping inflation under check in the years to come, senior Union railways minister Ashwini Vaishnaw said on Thursday in a statement.
India will clock fastest growth rate: Andhra CM Naidu at Davos
Andhra Pradesh chief minister N. Chandrababu Naidu has said that India's golden era has started and the country will clock the fastest growth rate.
Donald Trump to take virtual centre stage in Davos
Chief executives will be given the chance to lob questions at the new US President Donald Trump
RBI Likely to Transfer Another Bumper Payout
The central bank will likely make another windfall payout to the government on account of its intervention in currency markets to stem the decline in the rupee, according to economists.
