Could India's Household Savings Hit Rs 22 Lakh Crore in FY25?

Mumbai, May 30 (NationPress) - The net financial savings of India's household sector is projected to soar to Rs 22 lakh crore, equivalent to 6.5 percent of the gross national disposable income (GNDI) in FY25, as reported by SBI on Friday.

The latest report from the RBI shows that the household sector displayed remarkable financial resilience, with net savings climbing to 5.1 percent of GNDI in FY24. The SBI report emphasizes that this growing capital pool is essential for financing government and corporate deficits while bolstering macroeconomic stability.

In addition, even though household liabilities rose to 6.1 percent of GNDI, gross financial savings of households increased to 11.2 percent of GNDI in 2023-24, up from 10.7 percent the previous year.

The RBI's annual report indicates an 8.19 percent expansion of its balance sheet in FY25, slightly below the 9.9 percent nominal GDP growth. Despite declines in traditional income sources such as domestic interest and LAF earnings, effective management of foreign exchange and measures to curb rupee volatility have significantly boosted surplus generation. A provision of Rs 44,861.7 crore for the Contingency Fund has kept realized equity robust at 7.5 percent of the balance sheet, facilitating record surplus transfers of Rs 2.69 lakh crore to the government and improving fiscal space.

Moreover, total gold holdings reached 879.58 metric tonnes, with an increase of 57.48 metric tonnes during FY25. The share of gold in NFA grew to 12.0 percent by the end of March 2025, up from 8.3 percent the previous year due to rising gold prices.

Currency in circulation consistently expanded in FY25, with banknotes increasing by 6 percent in value and 5.6 percent in volume.

The Rs 500 note continued to dominate, while the withdrawal of Rs 2,000 notes progressed efficiently, reclaiming 98.2 percent of those in circulation.

The introduction of more durable Rs 10 coins, alongside a reduction in Rs 10 notes, represents a strategic shift towards cost-effective currency.

Counterfeit note detections decreased overall by 2.4 percent to 2.17 lakh pieces, although detections for Rs 200 and Rs 500 notes increased, highlighting the need for enhanced anti-counterfeiting technologies and enforcement.

In the digital sphere, the RBI's retail digital currency pilot, involving 17 banks and 60 million users, saw the value of digital currency in circulation surge by an impressive 334 percent in FY25. The addition of offline capabilities and programmable features, as well as the inclusion of non-bank wallet providers, enhances financial inclusion and marks a significant evolution in India's payments landscape.