Household savings, saw a decline, to 18 percent of the GDP in FY19 from 23 percent in FY12.
Gross savings in India, which includes household savings, fell to a 15-year low in FY19, according to a report by The Economic Times.
Gross savings fell to 30.1 percent of the gross domestic product (GDP) 2018-19 from 34.6 percent in FY12, the report said citing data from the Central Statistics Office (CSO). The previous low was 29 percent in 2003-04.
Household savings, too, saw a decline to 18 percent of the GDP in FY19 from 23 percent in FY12.
Moneycontrol could not independently verify the story.
Households contribute to roughly 60 percent of the country’s total savings, ET reported.
Consumer spending on durables and travelling has increased, the report said.
The slide in savings could mean that Indian companies would need to borrow more from foreign markets. India had borrowed $543 billion from external sources in FY19, the report said.
“If domestic savings are falling, the government is right to tap into foreign savings,” Pranjul Bhandari, chief India economist at HSBC told the publication.“In order to raise investments at a time when savings are falling, the current account balance will have to fall or the current account deficit will have to widen, needing more foreign inflows for funding,” Bhandari added.