Household savings rate has dipped, personal loans are increasing: India Ratings & Research report

Despite the decline, households contribute to more than half of the total savings in the country, according to a recent survey, Arth Samvaad, by India Ratings & Research.

Here are some more findings from the study.

I. Dip in household savings rate
The household sector accounted for 60.93% of the economy’s total savings between 2011-12 and 2016-17, but the growth of household savings at 3.7% was the lowest during this period compared with public sector and private corporations.


2011-12: 23.6%
2016-17: 16.3%

II. Share of households in total investment has declined
The falling share of households in total investment means that private corporations are contributing the most to the total investment pie.

2011-12: 43.3%
2016-17: 31.4%
Figures are share of households in total investment

III. Investing household savings
Nearly three-fourths of household savings are invested in dwelling, other buildings and structures.

2011-12: 81.6%
2016-17: 74.5%

IV. Drop in household contribution to savings
Despite the decline in household savings, these continue to contribute more than half of the savings in the country.

Figures are share in savings

V. Fall in household investment
The decline in household investments has kept pace with the reduction in household savings

2011-12: 15.9%
2016-17: 9.2%

Figures are household investments/GDP

VI. Rise in MSME & personal loan
The share of resident households (personal loan) in non-food credit fell to 18.2% in 2011-12 from 23.7% in 2007-8, but reached 25.9% in the first quarter of 2018-19. Resident households have emerged as a preferred choice for the banks after the deterioration in asset quality of banks.

2011-12: 13.1%
2016-17: 13.7%

Figures are MSME & personal loan/GDP

VI. Dip in retail inflation
In June 2018, retail inflation rose to a five month high of 5%, with core inflation (excluding food, fuel and light, transport and communication) spiking to 6.3%, the highest in 46 months.

July 2012: 9.84%
July 2018: 4.17%

CPI figures

Source: Central statistical office, Ind-Ra