If household savings continue to decline, it may pose a serious challenge to the GDP growth and macroeconomic stability, says a report.
India’s overall savings rate has declined to 30% from 34.6% over five years, ending FY2016-17. The worst dip was seen in the household sector, the largest contributor to savings in the economy, dropping to 16.3% from 23.6% over the period, said a report titled Arth Samvaad by India Ratings and Research. The household savings rate is the difference between a household’s disposable income and expenditure. The overall savings rate is the amount an organisation or a person places in the savings account or a similar tool as a percentage of total disposable income.