New Delhi: India’s savings rate has surpassed the global average as financial inclusion has shot up in the country with over 80 per cent adults now having formal financial accounts, according to an SBI report released on Monday.
India savings rate is at 30.2 per cent, which is higher than the global average of 28.2 per cent, the report stated.
“Due to various measures, India’s financial inclusion improved significantly and now more than 80 per cent of adults in India have a formal financial account, compared to about 50 per cent in 2011, which is improving the financialisation of the savings rate of Indian households,” the report points out.
The share of net financial savings in total household savings has increased from 36 per cent in FY14 to about 52 per cent in FY21, however, during FY22 and FY23, the share has decelerated.
FY24 trends reveal that the share of physical savings have again started to decline.
Among financial savings, the share of bank deposits/currency is declining as new avenues of investment like mutual funds etc. are emerging, the research report from the State Bank of India’s Economic Research Department stated.
In the last 10 years, funds mobilised by Indian companies from capital markets has increased more than 10-fold, from Rs 12,068 crore in FY14 to Rs 1.21 lakh crore in FY25 (till October).
The savings of households in ‘shares and debentures’ has increased to around 1 per cent of GDP in FY24, from 0.2 per cent in FY14 and the share in household financial savings has increased from 1 per cent to 5 per cent.
This shows that households are now increasingly contributing to the capital needs of the country, the report observed.
In FY25 (till October), a total of Rs 1.21 lakh crore of capital was raised from equity markets from 302 issues. The region-wise data shows that the Western region’s share in both number and value is higher, and the share of central region is below 3 per cent.
(IANS)
