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  1. Data Drive: The missing equity

Data Drive: The missing equity

Most households in India prefer to invest in physical assets like land and building.

Updated: December 27, 2014 1:39 AM

Most households in India prefer to invest in physical assets like land and building.

Financial instruments like equity rank much below in the share of total investment. Latest data from NSSO show that the share of total value of assets in shares in rural India is 0.07% and that of urban India is just 0.17%. The share of deposits in the total value of assets in rural India is 1.65% and that in urban India is 4.35%.

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In rural India, land and building (physical assets) account for 93% of the total value of assets and that in urban areas it is close to 92%. In terms of the average value of investment in stocks, Tamil Nadu tops the list in rural areas followed by Kerala, and in urban areas, it is Haryana followed by Himachal Pradesh. The data clearly indicate that in some economically prosperous states like Maharashtra and Gujarat, households are not comfortable in investing in stock markets. The government will have to take corrective steps to attract retail investors to put money in equity.

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Fixed deposits, which accounts for over half of net financial savings in the country, are popular across the country. NSSO data show Lakshadweep tops the list in the average value of assets in deposits in rural India, at R1,92,160, followed by Nagaland. In urban India, Mizoram tops the list with the average value of such assets at R2,60,614, followed by Chandigarh and Himachal Pradesh, indicating that the basket of financial products has not widened across the country.

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