Exhibiting moderation for the second consecutive quarter, after having shown a spike in the pandemic-hit April-June period of 2020-21, the preliminary estimate of household financial savings was placed at 8.2 per cent of GDP in the October-December period of 2020-21.
The preliminary estimate, which was released by the Reserve Bank of India (RBI), noted that the moderation was driven by a significant weakening in the flow of household financial assets, which more than offset the moderation in the flow of household financial liabilities.
The ratio of household (bank) deposits to GDP also declined to 3 per cent in the third quarter of 2020-21 from 7.7 per cent in the previous quarter.
Despite higher borrowings from banks and housing finance companies, the flow in household financial liabilities was marginally lower in third quarter of 2020-21, following a marked decline in borrowings from non-banking financial companies.
The household debt to GDP ratio, which is based on select financial instruments, has been increasing steadily since end-March 2019, RBI noted.
It rose sharply to 37.9 per cent at end-December 2020 from 37.1 per cent at end-September 2020.