6.5 per cent: India's net household financial savings growth rate has fallen to an eight-year low of 6.5 per cent, according to data released by the National Statistics Office (NSO).
- Gross savings less total loans taken by households gives you net savings. Gross savings have fallen from Rs 20 trillion in FY18 to Rs 19.9 trillion in FY19, while loans taken by households have gone up.
- With corporate loans not taking off, banks are aggressively pushing loans to their retail customers.
- Another reason for the fall is that 2017-18 was an exceptional year. It was the post-demonetisation year, when gross savings of households went up because all of us transferred our savings into the banking system. So, there was a huge rise in household savings that year.
- That has corrected now. So we should not worry too much about this development, say experts.
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A few links for further reading
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Small savings schemes
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Hard path to growth
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