Wednesday, 9 July 2014

India's Economic Survey and Household Savings-VRK100-09Jul2014







Data: http://indiabudget.nic.in/  Economic Survey 2013-14.


India’s household savings have been declining since the financial year 2009-10. From an all-time of 25.2 percent in 2009-10, the household sector savings rate declined to 21.9 percent in 2012-13 as a percentage of GDP at current market prices.

Household savings consist of financial assets and physical assets. Interestingly, households in recent years have shifted from financial assets to physical assets, such as real estate and gold. Stung by excessive inflation, low real interest rates and moribund stock market, they have no choice but to shift their savings to physical assets.

After reaching an historic high of 12.0 percent in 2009-10, the financial assets’ share in GDP has come down drastically to 7.1 percent in 2012-13. The trend is just opposite for physical assets, whose share in GDP has enhanced from 13.5 percent in 2008-09 to a record 15.8 percent in 2011-12 before falling to 14.8 percent in 2012-13.

It will be interesting to watch what the new finance minister Arun Jaitley will do to stimulate household sector’s financial assets, while presenting the 2014-15 budget tomorrow.


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Some of my Tweets on Economic Survey 2013-14:









































Disclaimer: The author is an investment analyst, equity investor and freelance writer. The author has a vested interest in the Indian stock markets. This write-up is for information purposes only and should not be taken as investment advice. Investors are advised to consult their financial advisor before taking any investment decisions. He blogs at:

http://ramakrishnavadlamudi.blogspot.in/      http://www.scribd.com/vrk100


Connect with him on twitter @vrk100





















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