Savings and sentiments in the recovery process

The March 2021 RBI Bulletin states that household financial savings in India shot up to 21% of GDP in the first quarter of 2020-21

A recent McKinsey Global Institute report expects a strong consumer demand rebound once the pandemic ends. The optimism is based on the fact that savings shot up during the pandemic and there was no increase in consumer debt. These findings are based on a study of US, UK, Germany, France and China. India was not included in this study. 

Nevertheless, there is evidence that household savings in India also increased similarly. The March 2021 RBI Bulletin states that household financial savings in India shot up to 21 per cent of GDP in the first quarter of 2020-21 after having averaged