Number of the week: 6.5 per cent

Business Standard
13th February

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.

Disclaimer: This information is from a third party—Business Standard—offered through a tie-up to Kotak Securities customers for free for life. The third party content is not created or endorsed by any business offering products or services through it. The provision of this third party content is for general informational purposes only and does not constitute a research call, recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Also, the views and opinions stated in the content belong to Business Standard. Kotak Securities does not uphold nor promote any of the views. These reports do not, in any way, qualify as a Kotak Securities research report.

A few links for further reading

Invest and emigrate

The great Indian dream of settling abroad is achievable if one has a few crores to invest. Rich nations offer a variety of investment options in a quid pro quo arrangement: immigrants get a better quality of life and revenue from them helps these countries’ finances. Wealthy Indians, troubled by polluted cities and the red tape holding up entrepreneurship, may want a quick ticket out of the country. Sanjay Kumar Singh lists a range of options: from a Canadian province’s investor programme to America’s US EB-5 plan.

Small savings schemes

Investors in small savings schemes breathed a sigh of relief when the government announced on October 1 that interest rates on these instruments would not be revised for the fourth quarter of the calendar year. With the economy witnessing a slowdown, and the stock markets also turning volatile, many investors are looking for alternative avenues to park their savings. Small savings schemes, with their sovereign guarantee, have emerged as a viable alternative.

Hard path to growth

The signals for the economy are not positive: overall demand is yet to pick up; the share of total exports in India’s GDP is declining, and industrial output pattern remains worrying.

Want to get this in your email?