RBI says domestic savings 31% in FY '13

Gross domestic savings as a proportion to GDP fell from a high of 36.8 per cent in FY08 to 30.8 per cent in FY ‘13, according to RBI.

RBI, in its half-yearly FSR, blamed the sharp fall in domestic savings on the steep decline in financial savings of households which dropped from 11.6 per cent of GDP in FY08 to a poor 8 per cent in FY13. The report cited the stark investor shift from financial assets to real estate and gold.

Inflation, which hovered over 8 per cent last fiscal, low penetration of banking services, poor credibility of financial entities due to some cases of mis-selling and frauds, low post-tax return on bank deposits, low real interest rates are some of the issues that need to be addressed to redirect non-financial savings towards financial savings.

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