Domestic savings were 17.2 lakh crores, which decreased to 5.2 lakh crores in the first half. Domestic savings was 17.2 lakh crore, which decreased to 5.2 lakh crore in the first half | NewsBust Domestic savings were 17.2 lakh crores, which decreased to 5.2 lakh crores in the first half. Domestic savings was 17.2 lakh crore, which decreased to 5.2 lakh crore in the first half | NewsBust

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Domestic savings were 17.2 lakh crores, which decreased to 5.2 lakh crores in the first half. Domestic savings was 17.2 lakh crore, which decreased to 5.2 lakh crore in the first half

By Amit - March 7, 2023

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  • Domestic Savings Was 17.2 Lakh Crore, Which Decreased To 5.2 Lakh Crore In The First Half

New Delhi7 minutes ago

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Inflation is eating away our savings. The country’s net financial savings (NFS) stood at just 4% of GDP in the first half of the financial year 2022-23, compared to 7.3% in the first half of 2021-22. Financial savings stood at 12% of GDP in the financial year 2020-21. If it is converted into amount, the financial savings in the first half of 2022-23 was Rs 5.2 lakh crore, which was about Rs 17.2 lakh crore in the previous financial year 2021-22.

Not only this, there has been a decrease in gross savings along with financial savings. Gross savings stood at 15.7% of the country’s GDP. This is also the lowest in 30 years. It has averaged 20% of GDP in the last five years.

Investment firm Motilal Oswal has released this report after analyzing RBI data. Prices have increased in all major consumer sectors like petrol-diesel, FMCG, automobile. It has dented the pocket of the common man. According to the report, even though financial savings have been affected by inflation, physical savings in property and gold have remained the same.

Reason: Inflation highest in 2 years and domestic liabilities increased

  • The major reasons for declining net financial savings are declining gross savings and high financial liabilities. Household liabilities to remain at 5% of GDP in the first half of 2022-23. In the last year this figure was 3.9% of GDP.
  • The average inflation rate in the first half of 2022-23 was 7.2%, which was 5.8% in the last 2 years. Due to the increasing cost, companies of all sectors have increased the prices.
  • RBI increased interest rates several times due to slow growth rate and inflation. Due to this the demand in the manufacturing sector is decreasing.
  • There has been a 5.3% increase in spending in rural areas in the third quarter of 2022-23. The growth in consumption was only 4.6%, the lowest in the last 3 quarters.

This decline is temporary, financial savings will increase further
The report expressed confidence that the decline in household financial savings is temporary. It may reach the level of 7-8% of GDP in the coming quarter. If savings do not increase, investment will decrease. External pressure on the economy may increase. This can slow down the economic growth of the country.

There is more news…

Amit

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