No stress in households savings, says finance ministry

There is no distress in household savings as is being discussed in some circles, the finance ministry said, asserting that data indicates that changing consumer preferences for different financial products is the real reason for the overall picture of household savings.

Citing data, the ministry said between June 2020 and March 2023, the stock of household gross financial assets went up by 37.6%, and the stock of household gross financial liabilities went up by 42.6% – a minimal difference between the two.

“Households added net financial assets of 22.8 lakh crore in FY21, nearly 17 lakh crore in FY22 and 13.8 lakh crore in FY23. So, they added less financial assets to their portfolio than in the previous year and the year before, but it is important to note that their overall net financial assets are still growing,” the ministry said on microblogging site X, rejecting criticism that household savings had dipped.

It said households added financial assets by a lesser magnitude than in the previous years because they have now started taking loans to buy real assets. “RBI data on personal loans provides us with evidence. Personal loans given by banks have several components. Key among them are real estate loans and vehicle loans,” said the ministry.