Indian Households’ savings dipped to 5 years low, liabilities surged to 5 years high as % of GDP
Total bank credit has improved steadily, reflecting adequate liquidity and sustained lending activity in the economy
Indian households’ saving, as a percentage of gross domestic product (GDP) has dipped to a five-year low at the end of fiscal year 2023-24 (FY24), while liabilities has surged to five year high, Finance Ministry data has shown.
In a written response on Tuesday in Rajya Sabha, Minister of State in the Finance Ministry, Pankaj Chaudhary presented data related to gross domestic savings, household saving and household financial liabilities as percentage of GDP at current prices.
These data are based on National Accounts Statistics prepared by Statistics and Programme Implementation Ministry (MoSPI).
Savings dipped
Data showed household savings as a percentage of savings was 19.1 per cent in FY20, which dipped to 18.1 at the end of FY24. However, there was increase in absolute number.
“The household savings have increased from ₹38.5 lakh crore in 2019-20 to ₹54.6 lakh crore in 2023-24. During the same period, the gross domestic savings have increased from ₹59.4 lakh crore to ₹92.6 lakh crore,” Chaudhary said,
There are two components of household savings: financial and physical. Financial savings (or net financial savings) is the difference between financial assets and liabilities.
Financial assets include bank deposits and investments in financial institutions, life insurance, provident fund, equity, mutual funds and small savings schemes. Financial liabilities include loans from banks and non-banking financial companies. Physical savings include investments in land, buildings and gold.
Chaudhary further said that the gross domestic savings as a percentage of GDP has remained broadly stable at around 30 per cent, indicating continued domestic resource mobilisation to support investment needs.
Credit improved
Total bank credit has improved steadily, rising from ₹103.7 lakh crore in 2019-20 to ₹159.01 lakh crore in 2023-24, reflecting adequate liquidity and sustained lending activity in the economy.
Despite global uncertainties, the gross fixed capital formation in the economy as a per cent of GDP has remained robust at around 30 per cent. “Private investment activity has been supported by strong macroeconomic fundamentals, including robust GDP growth and fiscal and external stability,” he said.
Earlier, a SBI report, using data from RBI’s annual report said that the net financial saving of the household sector – the most important source of funds for the two deficit sectors, namely, the general government sector and the nonfinancial corporations – improved to 5.1 per cent of gross national disposable income (GNDI) in 2023-24 from 4.9 per cent in the previous year.
Further, as against the increase in household liabilities to 6.1 per cent of GNDI, the gross financial saving of households increased to 11.2 per cent of GNDI in 2023-24 from 10.7 per cent in the previous year.
“Based on current trends we estimate that the net financial savings may reach Rs 22 lakh crore (or 6.5 per cent of GNDI) in FY25,” the report said.
Published on August 5, 2025
