Monetary belongings added by Indian households every year reached 12% of India’s GDP in 2019-20, however declined to 10.8% in 2024-25. This quantity has remained roughly steady at this degree even within the post-pandemic interval. |Photograph courtesy: Getty Pictures
An evaluation of Reserve Financial institution of India (RBI) knowledge has discovered that since pre-pandemic 2019-20, annual monetary liabilities accrued by Indian households have grown sooner than annual monetary belongings.
The quantity of economic belongings added every year elevated by 48% between 2019 and 2025, whereas annual debt elevated by 102% over this era. As a share of gross home product (GDP), the annual enhance in monetary belongings is decrease this 12 months than earlier than the pandemic, whereas the annual enhance in debt is increased.
The information additionally reveals that there was a serious shift in the way in which Indians save, with mutual funds changing into a well-liked automobile for households to speculate their cash.
Indian households noticed their monetary belongings enhance to Rs 24.1 million in 2019-20, and to Rs 35.6 million in 2024-25, the most recent interval for which the RBI has printed knowledge to date. It is a 48% progress over this era.
In the meantime, households added monetary liabilities price Rs 15.7 billion to their portfolios in 2024-2025, 102% greater than the Rs 7.5 billion added in 2019-20.
% of GDP
Monetary belongings added by Indian households every year reached 12% of India’s GDP in 2019-20, however declined to 10.8% in 2024-25. This quantity has remained roughly steady at this degree even within the post-pandemic interval.
In the meantime, family monetary debt in India accounted for 3.9% of GDP in 2019, rising to 4.7% in 2024-25. However the state of affairs has just lately improved right here, with the proportion reaching a post-pandemic peak of 6.2% in 2023-24, earlier than declining in 2024-25.
The information additionally reveals that the way in which Indian households save and make investments is altering. For instance, though financial institution deposits stay the principle vacation spot for family financial savings, the share of mutual funds has elevated quickly lately.
Industrial financial institution deposits accounted for 32% of family monetary belongings added in 2019-20, rising barely to 33.3% in 2024-25. In absolute phrases, family deposits added had been Rs 7.7 billion in 2019-20, which grew by 54% to Rs 11.8 billion in 2024-25.
The rise of funding trusts
Nonetheless, the share of funding in mutual funds in complete family monetary belongings rose from 2.6% in 2019-20 to 13.1% in 2024-25.
Investments in new mutual funds jumped 655% from Rs 61,686 crore in 2019-20 to Rs 4,700 crore in 2024-25.
The rising share of mutual funds in new wealth creation got here on the expense of foreign money investments, which declined from 11.7% to five.9% from 2019-20 to 2024-25.
The shares of different financial savings and investments resembling life insurance coverage funds, provident funds and pension funds, shares and small financial savings all remained roughly flat between 2019-20 and 2024-25.
