Household savings hit 13 year low, dip to 9.7% of GDP

India’s household savings, which have fuelled growth over the last few years, have dropped to below 10% of gross domestic product, or national income, for the first time in 13 years, as soaring inflation ate into disposable incomes. Net financial savings by Indians, which include deposits with banks and non-banking finance companies, cash, investment in stocks, debentures and small savings instruments besides life insurance, provident fund and pension funds, dipped to 9.7% of GDP in FY11 compared with 12.1% a year ago, as per data released by the Reserve Bank of India on Thursday. “This is because household financial liabilities have risen,” according to Deepak Mohanty, executive director, RBI

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