India's savings rate has emerged above the global average since financial inclusion has surged in the country with more than 80 percent adults now possessing formal financial accounts, a report released by SBI on Monday has said.India savings rate is at 30.2 percent that is higher than the global average of 28.2 percent, the report said.
The report points out that due to various measures, India's financial inclusion improved significantly and now more than 80 percent of adults in India have a formal financial account, compared to about 50 percent in 2011, which is improving the financialisation of the savings rate of Indian households.
The share of net financial savings in total household savings has increased from 36 per cent in FY14 to about 52 per cent in FY21, however, during FY22 and FY23, the share has decelerated.
FY24 trends reveal that the share of physical savings have again started to decline.
Among financial savings, the share of bank deposits/currency is declining as new avenues of investment like mutual funds etc. are emerging, the research report from the State Bank of India's Economic Research Department stated.
In the last 10 years, funds mobilised by Indian companies from capital markets has increased more than 10-fold, from Rs 12,068 crore in FY14 to Rs 1.21 lakh crore in FY25 (till October).
Households' saving in 'shares and debentures' has jumped to around 1 percent of GDP in FY24, from 0.2 percent in FY14, and the share in household financial savings has increased from 1 percent to 5 percent.
It means that households are now increasingly contributing to the capital needs of the country, said the report.
The aggregate capital raised in FY25 till October stands at Rs 1.21 lakh crore from equity markets on account of 302 issues. Region-wise, the number and value of issues from the Western region are much higher, while the central region's share remains below 3%.
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