Our problem is a drop in gross savings rather than net
- High household debt need not necessarily be a worry as it could reflect the rise of an emerging market where such spending plays a major role in keeping the economy humming along.
The Reserve Bank of India’s (RBI) latest data on household financial savings has generated a lot of interest. India’s gross financial savings rate declined from 15.4% of GDP in 2020-21 to 10.9% in 2022-23 and net financial savings rate has declined from 11.5% to 5.1%. Is there a problem here?