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The bone of contention in the recent debate has been the drastic fall in household net financial savings to GDP ratio during 2022-23 on account of a higher borrowing to GDP ratio. In response to our previous article ‘On the Fall in Household Savings’ (The Hindu, April 21, 2024), the Chief Economic Advisor (CEA) to the…
The fall in household savings has been at the heart of recent debates in India. The decline in household savings is brought about by a drastic reduction in net financial savings as the household net financial savings to GDP ratio attained a four-decade low. Figure 1 shows the broad trend in household savings, physical savings…
For representative purposes. | Photo Credit: Getty Images The release of the Reserve Bank of India’s (RBI) Monthly Bulletin in September revealed that households’ net financial savings had fallen to 5.1% from 11.5% in 2020-21. Financial liabilities of households rose faster than their assets, with many writers highlighting this trend as an indication of rising…