Ahead of the Union Budget 2024-25, a survey by community social media platform LocalCircles revealed that 48% of consumers believe their annual household earnings will reduce in 2024-25 in comparison to 2023-24. An equal fraction of households feel their average savings will drop in the current fiscal year.
While 15% households see an over 25% dip in savings in the current year, 7% of them see a 25% or higher drop in household earnings. The decline is largely due to “higher cost of living and other expenses,” often resulting in asset mortgage or liquidation, borrowing for personal use apart from loans taken for buying a flat/ house/ vehicle or even education.
As per the National Account Statistics 2024 data released by the Ministry of Statistics and Programme Implementation earlier, net household savings in India declined sharply by Rs 9 trillion to Rs 14.16 trillion in the three years to 2022-23. Overall, India’s household savings rate has fallen from 22.7% of GDP in FY21 to 18.4% in FY23. Household savings had touched a peak of RS 23.29 trillion in 2020-21, the year which saw the second wave of the Covid pandemic.