The tumble in India’s savings rate needs to be reversed
1 year, 3 months ago

The tumble in India’s savings rate needs to be reversed

Live Mint  

A farmer has to set aside a portion of the seeds from his harvest to be used for next year’s sowing. The intuition that a high savings rate sustains high growth has been tested and confirmed across the world and has withstood all macroeconomic crises and business cycles. Much of the East Asian long-term miracle growth was predicated on a high savings rate. A combination of high savings, high growth, high tax collections, lower deficits and low interest rates was the virtuous cycle enjoyed by India during the first decade of this century. The fact is that India’s gross savings rate is still six-percentage-points below the golden ratio needed for sustained 8% growth.

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History of this topic

How to address India's falling household savings
1 day, 8 hours ago

How to address India's falling household savings

Live Mint  

Savings have long been the backbone of financial stability in Indian households. Read this | Savings to consumption via debt—warnings from India’s households Key factors behind this trend include shifting consumption patterns and evolving investment behaviours among modern consumers. Urban consumers could benefit from digital micro-saving apps linked to everyday expenses, while rural households might prefer simplified savings accounts with …

India’s GDP growth shocker: Bad news can be good too
2 weeks, 6 days ago

India’s GDP growth shocker: Bad news can be good too

Live Mint  

India’s growth in gross domestic product of 5.4% in the three months ended 30 September, or the second quarter of 2024-25, was a shocker. It’s the lowest level seen since the third quarter of 2022-23 and a sharp drop from 8.1% growth in the same period last year and also from 6.7% in the first quarter of 2024-25. Given the …

Why a current account deficit is good for India
5 months, 2 weeks ago

Why a current account deficit is good for India

Live Mint  

India’s current account recorded a rare net surplus of $5.7 billion in the first quarter of 2024. One metric evaluates the current account through the difference between domestic savings and investments:If a country saves more than it invests, it runs a surplus; the opposite means a deficit. Given that rating company Crisil recently pegged investments at 33.7% of GDP in …

Revival in Household Savings Likely in FY24, Says Crisil
7 months ago

Revival in Household Savings Likely in FY24, Says Crisil

Deccan Chronicle  

Mumbai: High inflows in mutual funds and real estate, strong deposit growth, and slower consumption are pointing towards a rebound in India’s household savings in FY 24 after falling to its lowest level in FY23, rating agency Crisil Ltd said in its report, titled 'Trends in household savings and debt after the pandemic'. Overall, India’s household savings rate has fallen …

Real GDP growth may hit 8% this fiscal year, signals FinMin
9 months ago

Real GDP growth may hit 8% this fiscal year, signals FinMin

The Hindu  

India’s economy may well end up growing by about 8% this fiscal, outstripping the 7.6% real GDP growth projected by the National Statistical Office, the Finance Ministry signalled on Friday, citing the continuing momentum in economic activity in the ongoing final quarter of 2023-24. Despite risks such as “hardening crude oil prices” and “global supply chain bottlenecks to trade”, the …

Indian economy to grow at 6.7% between fiscals 2024 to 2031: CRISIL
10 months, 3 weeks ago

Indian economy to grow at 6.7% between fiscals 2024 to 2031: CRISIL

The Hindu  

“The Indian economy is expected to grow at an average rate of 6.7% per annum until the end of the decade,” CRISIL said in its latest report. “This is a result of the investment-driven strategy of the government when the private sector was shy of making investments.” “The government increased capital expenditure significantly to support building expenditure and providing interest-free …

Are Indians saving enough? There is no clear answer
1 year, 2 months ago

Are Indians saving enough? There is no clear answer

Live Mint  

Indian household borrowings rose sharply last year, as per recently released Reserve Bank of India data. This led to a decline in household net financial savings—defined as household financial savings during the year minus financial borrowings—to just about 5% of nominal gross domestic product in 2022-23, a 2.5% annual drop. In fact, net household financial savings seem to be still …

Decoding the historic decline in financial savings of Indian households | In Focus podcast
1 year, 2 months ago

Decoding the historic decline in financial savings of Indian households | In Focus podcast

The Hindu  

October 05, 2023 04:03 pm | Updated 04:05 pm IST The net financial savings of households in India has fallen to a five-decade low of just 5.1% of the GDP in FY 2023. This is a worrying development, because a high savings rate has traditionally correlated with a healthy growth rate. Data released by the RBI also shows that at …

Have household savings reduced?
1 year, 2 months ago

Have household savings reduced?

The Hindu  

The release of the Reserve Bank of India’s Monthly Bulletin in September revealed that households’ net financial savings had fallen to 5.1% from 11.5% in 2020-21. The Finance Ministry explained that while household financial savings may be reducing, it did not imply total savings were falling, since households took advantage of low interest rates after the pandemic to invest in …

An uneven rebound: The Hindu Editorial on the economy
1 year, 3 months ago

An uneven rebound: The Hindu Editorial on the economy

The Hindu  

India’s economy, as measured by the Gross Domestic Product as well as the Gross Value Added, grew 7.8% in the first quarter of the year. But the months ahead could prove to be more challenging with global headwinds that have hit goods exports and manufacturing already, combining with domestic pressures from the renewed spurt in inflation and the likelihood of …

We must incentivize household savings for fast economic growth
1 year, 6 months ago

We must incentivize household savings for fast economic growth

Live Mint  

Prime Minister Narendra Modi has given a clarion call for India to become a developed country by 2047 when we celebrate 100 years of India’s independence. However, this alone is not a good enough explanation, since India has gone through slower GDP growth phases in the past as well without witnessing such a steep decline in household savings. We argue …

Indranil Banerjie | If Pakistan implodes, India has to deal with the fallout
1 year, 9 months ago

Indranil Banerjie | If Pakistan implodes, India has to deal with the fallout

Deccan Chronicle  

Pakistan could be imploding. Ironically, while Pakistan’s best friends could well walk off without a scratch if things go sideways, the one country that is unlikely to remain unscathed is India. During 2012-21, Pakistan’s population rose by a whopping 23.6 per cent -- even Bangladesh was way behind at just 12.2 percent, and India at 11.2 per cent. If and …

Explained | Is the economy driving with the brakes on?
1 year, 11 months ago

Explained | Is the economy driving with the brakes on?

The Hindu  

The story so far: At this time last December, India’s economy was on the cusp of a fledgling recovery from the COVID-19 pandemic, though the Omicron variant posed fresh speed bumps for the rebound. As JP Morgan managing director and India chief economist Sajjid Chinoy explained at a CII economic policy summit last week, 2022 was expected to see a …

5 charts show why the world is cheering India's economy
2 years ago

5 charts show why the world is cheering India's economy

Live Mint  

NEW DELHI : On more than one occasion in recent months, India has been hailed for holding its head high amid a looming global economic slowdown. India will spend ₹3,500 crore on toys to outplay China Why housing real estate remains a losing proposition This manager's small-cap fund gave 40% CAGR returns in 3 yrs View Full Image Mint The …

The truth about ‘the India story’
2 years, 1 month ago

The truth about ‘the India story’

The Hindu  

As the COVID-19 pandemic fades and hopes rise for nations and societies to return to some kind of normalcy, there is effort all around to take stock of where we stand and what our prospects look like. In fact, from 2003 to 2011, barring one year, the start of the Great Recession in 2008-09, India was on top of most …

Savings fuel India's post-pandemic spending spree
2 years, 2 months ago

Savings fuel India's post-pandemic spending spree

Live Mint  

MUMBAI : Indian households’ savings rate fell to the lowest in five years in the year ended 31 March as people drew on their savings to indulge in a post-pandemic spending spree, even as inflation eroded their purchasing power. Gross financial savings of households stood at 10.8% of India’s gross domestic product in FY22, falling sharply from 15.9% in FY21, …

Monthly economic review | India’s growth to be sustained by consumer spending rebound
2 years, 3 months ago

Monthly economic review | India’s growth to be sustained by consumer spending rebound

The Hindu  

A sharp rebound in consumer spending and rising employment will sustain economic growth in India in the months ahead, the government said in its monthly economic review for August published on Saturday. The report also said high levels of foreign exchange reserves, sustained foreign direct investment and strong export earnings have provided a reasonable buffer against monetary policy normalisation in …

India economy projected to grow 8% in coming fiscal year
2 years, 10 months ago

India economy projected to grow 8% in coming fiscal year

Associated Press  

NEW DELHI — India’s economy is projected to grow 8% to 8.5% in the financial year beginning April 1, signaling a strong recovery after it was slammed by the COVID-19 pandemic. The government’s annual economic survey, released Monday, comes a day before Finance Minister Nirmala Sitharaman is due to present the national budget for the 2022-23 fiscal year. The survey …

Growth needs steps beyond reforms
3 years, 4 months ago

Growth needs steps beyond reforms

The Hindu  

The Indian economy has travelled through an eventful period through the last three decades. The break with the past came in three important ways: in dismantling the vast network of licences, controls and permits that dominated the economic system; in redesigning the role of the state and allowing the private sector a larger space to operate within, and in abandoning …

Deep reforms could see India through a taper tempest
3 years, 5 months ago

Deep reforms could see India through a taper tempest

Live Mint  

As the Indian economy tries to gain a semblance of normalcy after a debilitating second wave of covid, a new storm is gathering on the horizon. Helmut Reisen shows in Sustainable and Excessive Current Account Deficits that current account deficits cannot be run indefinitely and ultimately lead to “reversals” or “hard landings”. The only way to prevent such a hard …

India's economy may grow at world's fastest rate in FY22 despite Covid shock
3 years, 6 months ago

India's economy may grow at world's fastest rate in FY22 despite Covid shock

India Today  

India’s economy has been predicted to grow at the fastest rate among all major economies in the world this year despite the disruption caused by the second wave of Covid-19 pandemic. It may be noted that the estimate has been shared after several ratings agencies downgraded previous growth forecasts for India due to the impact on the economy triggered by …

Economic Survey predicts 11% growth in fiscal 2022
3 years, 10 months ago

Economic Survey predicts 11% growth in fiscal 2022

The Hindu  

India’s economy is firmly in the middle of a V-shaped recovery and will bounce back to record 11% growth in 2021-22 after an estimated 7.7% contraction this year, according to a ‘conservative’ estimate in the Economic Survey for 2020-21. Making a strong pitch for the government to loosen its purse strings to spur the economy with a ‘counter-cyclical fiscal push’ …

Indians look to delay retirement as covid-19 shrinks savings
4 years, 3 months ago

Indians look to delay retirement as covid-19 shrinks savings

Live Mint  

The covid-19 pandemic has depleted the savings of many Indians. An annual report, titled Bankbazaar Savings Quotient, shows that the pandemic has resulted in shrinking of savings, compelling many Indians to reorder their priorities. Shrinking savings “Over the last year, the combined impact of the recession, the pandemic and the lockdown has meant that people have less money in hand. …

Indians turn to saving more, push back retirement in the wake of covid-19
4 years, 3 months ago

Indians turn to saving more, push back retirement in the wake of covid-19

Live Mint  

The covid-19 pandemic has not only claimed jobs and livelihoods for many Indians but has consequently depleted their savings as well. Shrinking savings “Over the last year, the combined impact of the recession, the pandemic and the lockdown has meant that people have less money at hand, whether to spend or save. This year’s survey, conducted among 650 working professionals …

How growth reshaped India’s destiny, and why we need an encore
4 years, 5 months ago

How growth reshaped India’s destiny, and why we need an encore

Live Mint  

The pandemic-induced recession has brought back memories of 1979, when India’s GDP contracted by more than 5 percent for the first time since independence. And if the GDP growth rate were to revert to the pre-1979 trajectory of 3 percent per annum, it would take nearly 30 years for India’s per capita income to double. India’s growth process over the …

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