India's Savings Rate Exceeds Global Average: SBI Analysis
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New Delhi, Dec 23 (NationPress) India’s savings rate has exceeded the global average as financial inclusion has significantly increased in the nation, with more than 80 percent of adults now holding formal financial accounts, according to a report published by SBI on Monday.
The savings rate in India stands at 30.2 percent, outpacing the global average of 28.2 percent, the report indicates.
“Thanks to various initiatives, India’s financial inclusion has seen remarkable progress, and currently over 80 percent of adults have access to a formal financial account, up from roughly 50 percent in 2011, which is enhancing the financialization of household savings,” the report explains.
The proportion of net financial savings within total household savings has risen from 36 percent in FY14 to about 52 percent in FY21; however, a slowdown was observed during FY22 and FY23.
Trends for FY24 indicate that the share of physical savings has begun to decline again.
Within financial savings, the portion represented by bank deposits and currency is diminishing as new investment opportunities, such as mutual funds, are arising, the study from the Economic Research Department of the State Bank of India has noted.
Over the past decade, funds acquired by Indian firms from capital markets have increased more than tenfold, rising from Rs 12,068 crore in FY14 to Rs 1.21 lakh crore in FY25 (up to October).
The household savings in ‘shares and debentures’ have surged to around 1 percent of GDP in FY24, up from 0.2 percent in FY14, with the share in household financial savings growing from 1 percent to 5 percent.
This indicates that households are increasingly participating in fulfilling the capital needs of the nation, the report noted.
In FY25 (up to October), a total of Rs 1.21 lakh crore was raised from equity markets through 302 issues. Data by region reveals that the Western region dominates in both the number and value of issues, while the Central region accounts for less than 3 percent.
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