Household financial savings dip to 6.5% of GDP despite new RBI methodology

Financial liabilities, on the other hand, had risen sharply after demonetisation after people heavily stashed cash in bank deposits, insurance schemes, and MFs

Net financial savings by Indian households dropped to 6.5 per cent of gross domestic product (GDP) in 2018-19 (FY19) — the lowest in at least eight years. The drop has been fuelled by both a drop in gross financial savings as well as a rise in liabilities, shows the data recently released by the National Statistics Office (NSO). 

But more importantly, the decline in gross financial savings has surfaced despite the new revised methodology adopted by the NSO scaling up financial savings. The Reserve Bank of India (RBI) uses a methodology which captures savings more accurately. After due deliberation with