NEW DELHI: Financial liabilities/indebtedness of the households, which nearly doubled to 5.6 per cent of GDP in FY23, have grown at a compounded annual growth rate of 26 per cent between FY20 and FY23 as against 17 per cent in the pre-pandemic decade, while their savings grew at a much lower 9 per cent, down from 11 per cent, shows an analysis.
Households’ share of savings in physical assets rose to 54 per cent in FY23 from 50 per cent pre-pandemic, while the share of savings in the form of precious metals remained relatively stable and minimal at 0.2 per cent of GDP.
Major rise in financial liabilities was primarily driven by personal loans, particularly housing and unsecured loans. Personal loans from scheduled commercial banks grew at an annualised rise of 18.2 per cent since FY20, up 15.1 per cent in the pre-pandemic decade, as per a Care Ratings’ weekend analysis.
While gross financial savings peaked at 15.4 per cent in FY21 due to the pandemic, net household financial savings have been on a southward-ho mainly due to a rise in financial liabilities.