Household net savings drop to multi-decade low

Indian households experienced a significant drop in net savings during the fiscal year 2022-2023, with savings falling by 19 percent compared to the previous fiscal year, according to data released by the Reserve Bank of India (RBI) on September 18. 

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The absolute amount of savings decreased to Rs 13.77 lakh crore, equivalent to just 5.1 percent of the country's GDP. This marks the lowest level of net financial savings in 34 years, raising concerns about the sustainability of consumption and investments in the Indian economy.

In the fiscal year 2021-2022, net financial savings of households stood at 7.2 percent of GDP, while during the peak pandemic year of 2020-2021, savings had surged to 11.5 percent of GDP as spending options were limited.