JOIN USAbout 45% Indians uncertain about economic recovery post Covid-19: Survey
A survey has shown that nearly 45 percent of Indians polled are uncertain about economic recovery in the aftermath of Covid-19 and are bracing for at least a year of slow growth, which is reflected in their changed outlook to personal financial matters.
The survey by Scripbox, a digital wealth management service provider, was conducted in July among more than 1,400 adult Indians to assess their financial preparedness to achieve freedom from financial worries.
Of the respondents, 83 percent were men and 17 percent women.
According to Scripbox's Financial Freedom Survey 2020, 50 percent of respondents plan to remove discretionary spending and save more for an emergency.
It, further, said 28 percent will cut back on non-essentials, 22 percent will save to have a financial corpus to dip into during an emergency and 10 percent said that they will reduce their EMI burden.
"It's a time of financial unease. Nearly one in every two Indian (45 percent) is uncertain of the state of the economy and is bracing for at least a year of slow growth," the survey said.
Among all respondents, nearly 44 percent are servicing an EMI that is 15 to 30 percent of their monthly income, while 11 percent have an EMI debt burden of over 50 percent of their monthly income.
The Covid-19 pandemic has spurred Indians to take financial action to save more and to channel these savings into growing their wealth, the survey revealed.
The survey found that 28 percent intend to start with having a financial plan in place to grow their wealth, 23 percent will build a financial corpus for an emergency and 18 percent intend to save for retirement.
Children's education and buying a house were prioritised by just 10 percent respondents, it added.
Moreover, 50 percent respondents intend to get external help with financial planning.
"While the pandemic has had an impact on the economy, the survey points to Indians becoming more aware of the need for financial planning. The desire to take action on growing their wealth also bodes well for the India growth story," said Atul Shinghal, founder and CEO of Scripbox.
While one in every two Indians understands the concept of financial freedom, a majority (70 percent) of respondents are unsure of how to achieve it.
Moreover, women (75 percent) are less confident than men (67 percent) in being able to achieve financial freedom.
With the pandemic having brought personal financial matters under the lens, more respondents realise the limitations of their current investment strategies.
The respondents also acknowledged their most common financial mistake.
The top five mistakes are investing without having a defined long-term goal (39 percent), poor savings (18 percent), not enough investments that offer liquidity (15 percent), mixing life insurance and investments (15 percent) and investing in exotic financial products with poor returns (10 percent).