Net financial savings of households, the most important source of funds for investments, surged to 11.5% of gross national disposable income (GNDI) in FY21 from 7.9% in FY20, as individuals slashed discretionary spending because of the pandemic.
This is the highest such surge in close to two decades. Most of the precautionary savings were parked in bank deposits which rose to 6.3% of GNDI from 4.2% in the same period, data from Reserve Bank of India show.
However, the rate of gross domestic savings dropped to 27.8% of GNDI from 29.4% because of a fall in savings of non-financial companies and the government.