FinMin rules out dip in household savings
Says people investing in different financial products and there is no distress
Net household savings declined to a 47-yr low of 5.1% of GDP in FY23 as compared to 7.2% recorded in the previous year, as per the RBI data. At the same time, annual financial liabilities of households rose sharply by 5.8% of GDP compared with 3.8% in FY22
The Union Finance Ministry on Thursday dismissed the criticism over the impact of declining household savings on the economy, saying people are investing in different financial products and there is no distress.
The statement posted on X by the ministry brushed aside critical voices raised with regard to the decadal fall in household savings and its overall effect on the economy.
“Lately, critical voices have been raised w.r.t. to household savings and its overall effect on the economy. However, data indicates that changing consumer preference for different financial products is the real reason for the household savings and there is no distress as is being circulated in some circles,” it said.
Net household savings declined to a 47-year low of 5.1 per cent of gross domestic product in FY23 as compared to 7.2 per cent recorded in the previous year, as per the data released by the Reserve Bank in its latest monthly bulletin. At the same time, annual financial liabilities of households rose sharply by 5.8 per cent of GDP compared with 3.8 per cent in 2021-22. Defending the position, the finance ministry said.
