Are there stories unfolding across the Indian household sector? Is there any development that could show a rewarding outcome for the economy?
In this first of our short data stories, The True Picture will explore household sector savings and see if anything interesting is going on.
We will look at the data to see what story it tells.
As a matter of fact, the data from the Reserve Bank of India (RBI), as presented in its Annual Report for financial year 2016-17, shows that Indian households have invested more in financial products in 2016-17 compared to earlier years. The graph below charts the data.
The figure shows household financial savings as a percentage of Gross Domestic National Income (GDNI). Taking a look at it, we can see that the household sector has increased its investment in shares and debentures as well as insurance.
The total percentage of savings in Shares & Debentures, Insurance, Pension & Provident Funds and Government Claims has gone up from 4.7 % of GNDI in 2015-16 to 6.5 % of GNDI in 2016-17. If we go back 5 years, this figure was at 3.3%. Clearly, this is good news as it demonstrates not only that household savings have gone up but also that household savings are being judiciously invested.