Household liabilities hit high of 5.7%; savings at record low of 5.2% in FY23

DRIVEN by rising indebtedness, which hit an all-time high of 5.7% of GNDI in FY23, the net financial savings of the households, which has been the mainstay of savings in the economy, has hit a record low of 5.2% in FY23, shows the RBI annual report for FY24.

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The net financial savings of the households has been on a southward-ho from FY14 when it stood at 7.2% of gross national disposable income (GNDI).

Financial liabilities have been on a northward-ho during the past one decade, rising from a low 3.1% of GNDI in FY14 to a record high of 5.7% in FY23, the highest ever in net savings, peaked in the pandemic hit FY21 at 11.6%.

Gross financial savings of the households remained stagnant or falling in past decade, from 10.4% in FY14 to 10.9% in FY13 after hitting a rock bottom of 9.9% in FY15 and peaking at 15.2% in FY21.