MUMBAI: Driven by rising indebtedness, which hit an all-time high of 5.7 per cent in FY23, the net financial savings of the households, which has been the mainstay of savings in the economy, has been on a southward-ho from FY14, when it stood at 7.2 per cent of GDP has hit a record low of 5.2 percent in FY23, shows the RBI annual report for FY24.
On the other hand financial liabilities have been on a northward-ho during the past one decade, rising from a low 3.1 per cent of GDP in FY14 to a record high of 5.7 percent in FY23, the highest ever in The net savings peaked in the pandemic hit FY21, at 11.6 per cent of GDP.
Similarly, gross financial savings of the households also remained stagnant or declining in the past decade, from 10.4 per cent in FY14 to 10.9 per cent in FY13 after hitting a rock bottom of 9.9 per cent in FY15 and peaking at 15.2 percent in FY21.
The liabilities of the households hit a low of 2.7 percent in FY16, from 3 percent in the previous fiscal and since then has been moving upwards peaking at 5.7 percent in FY23. The numbers remained stagnant at 3 percent in FY15 and FY17 and but moved up to 4.3 percent in FY18, declined marginally to 3.8 percent in the next fiscal but rose again to 3.7 percent in FY20 then resumed its northward jaunt again to hit 3.8 percent in FY22.
Financial savings include savings in the currency which have more or less remained stagnant at 0.9 percent of the GDP in almost throughout the decade, except in FY17—the year of the note-bank when it sunk to –(minus) 2.1 percent but jumped back to a record 2.8 per cent in FY18 and then stabilized at 1 or around 1 per cent of GDP. In FY23 it reverted to 0.9 percent.
The other element of savings is deposits which ahs also been losing sheen—5.8 percent in FY14 to 4 percent in FY23 after peaking it at 6.3 percent in FY17 and hitting a low of 3 percent in FY18.
On the other hand shares and debentures have been moving up from 0.2 percent in FY14 to 0.8 percent in FY23 and peaking at 1.1 percent in FY17.
Other liabilities include claims on the government which has been more or less stable at under 1 percent, investment in mutual funds and provident funds which have also been marginally moving up.