{"id":565,"date":"2024-01-26T07:37:00","date_gmt":"2024-01-26T07:37:00","guid":{"rendered":"https:\/\/www.saldanha.in\/blog\/?p=565"},"modified":"2024-02-23T07:38:33","modified_gmt":"2024-02-23T07:38:33","slug":"real-estate-dominates-indian-household-savings-with-highest-allocation","status":"publish","type":"post","link":"https:\/\/www.saldanha.in\/blog\/real-estate-dominates-indian-household-savings-with-highest-allocation\/","title":{"rendered":"Real estate dominates Indian household savings with highest allocation"},"content":{"rendered":"\n<p>Source: Live Mint (<a href=\"https:\/\/bit.ly\/49njiH1\">https:\/\/bit.ly\/49njiH1<\/a>)<\/p>\n\n\n\n<p>The household sector plays a major role in the Indian economy by serving as a primary source of financial resources through savings, contributing a substantial 70% to the total gross domestic savings.<\/p>\n\n\n\n<p>Household savings are broadly classified into two primary forms: financial and physical assets, with financial assets representing 56% and physical assets comprising 44% of the overall household savings, says global brokerage firm BofA Securities said in its recent report.<br><br><strong>Physical savings: shining bright<\/strong><\/p>\n\n\n\n<p>As of FY22, household savings in financial assets stand at \u20b928 trillion, twice the \u20b914 trillion seen in FY12. On average, an Indian household holds 77% of its total assets in real estate, 7% in other durable goods, and 11% in gold.<\/p>\n\n\n\n<p><strong>Financial savings are still weak<\/strong><\/p>\n\n\n\n<p>Financial savings are computed on a net basis, where gross financial assets are adjusted for financial liabilities, primarily comprising loans obtained by households from banks and non-bank financial institutions.<\/p>\n\n\n\n<p>In the last decade, the report indicates that the growth rate of financial liabilities, at 16.1% year-on-year, has exceeded that of gross financial assets, which averaged 10.8% year-on-year.<\/p>\n\n\n\n<p><strong>Per capita income and real interest: two main drivers of financial savings<\/strong><\/p>\n\n\n\n<p>Per capita income and the real interest rate are typically the two main drivers of financial savings.<\/p>\n\n\n\n<p>&#8220;Empirical research suggests that rising per capita income was found to have a weak positive effect on savings rate, even though it correlates with private consumption growth remarkably well. This is understandable for a middle-income economy where the propensity to consume is relatively high. As for the real rate, studies indicate that a rise in the real interest rate increases the household saving rate in the short run.,&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The household sector plays a major role in the Indian economy by serving as a primary source of financial resources through savings, contributing a substantial 70% to the total gross domestic savings.<\/p>\n","protected":false},"author":1,"featured_media":556,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":""},"categories":[13,4,14,11,3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/posts\/565"}],"collection":[{"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/comments?post=565"}],"version-history":[{"count":1,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/posts\/565\/revisions"}],"predecessor-version":[{"id":566,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/posts\/565\/revisions\/566"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/media\/556"}],"wp:attachment":[{"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/media?parent=565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/categories?post=565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saldanha.in\/blog\/wp-json\/wp\/v2\/tags?post=565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}