The pandemic shake-up of savings is settling down but a few finer patterns may have shifted
The Reserve Bank of India (RBI) recently released data on Indian household savings for fiscal year 2021-22. Household savings reflect the health of their balance sheets, signalling the ability of families to cope with emergency requirements in the face of a sudden income shock, the accumulation of funds for significant life events such as marriages and children’s education, a long-term cover for retirement spending and the desire for a bequest. The financial savings of Indian families are held mainly in cash, bank deposits, mutual funds (MFs), insurance and retirement funds, and in physical assets such as real estate and gold. Most of these serve as a source of funds for corporate and government investment, which is the leading determinant of long-term growth. Household financial savings are calculated as the change in the opening and closing balances of stocks of financial assets at the end of each fiscal year, which runs from April to March.