Indian household savings to touch US $ 5 trillion will beat USA by 2020
With the Indian economy growing at the rate of about nine per cent per annum, Indian household savings are projected to touch $ 5 trillion (Rs 225 lakh crore) by the year 2020, surpassing that of the US, says a joint study by the Associated Chambers of Commerce and Industry of India (Assocham) and Pricewaterhouse-Coopers (PwC).
According to the study, the Indian economy's current size is approximately $1 trillion (Rs 45 lakh crore). The savings rate of Indian households is 33.4 per cent, which is expected to grow further at an average rate of eight per cent.
"This translates into incremental savings of $5 trillion over the next decade as against the current size of the US economy which is around $13.22 trillion," Swati Piramal, president, Assocham said.
"Assuming a savings rate of five per cent, savings of Indian households will exceed that of the United States," Piramal added.
Currently, the size of Indian household savings is over $330 billion, the study pointed out.
According to the study, despite the huge savings Indian households have traditionally preferred the safety of bank deposits and government saving schemes for their savings.
The study says less than 10 per cent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies.
"Given the quantum of savings the need to mobilise savings into productive channels and the opportunity for financial intermediation. The next decade will be an opportunity of a lifetime for the Indian capital markets," the study said.
Concerted efforts by the government and the regulators supported by a longterm vision and clarity in action can significantly help fostering a climate that is conducive to growth and investments, Piramal said.
The study has also said that the size of Indian mutual fund industry, comprising both equity and debt funds, is estimated at $162 billion.
However, the industry continues to be plagued by low margins and stiff competition from other investment products, such as the life insurance industry and portfolio managers.
Indian household savings to beat US Nos. by 2020: Business : India Today
With the Indian economy growing at the rate of about nine per cent per annum, Indian household savings are projected to touch $ 5 trillion (Rs 225 lakh crore) by the year 2020, surpassing that of the US, says a joint study by the Associated Chambers of Commerce and Industry of India (Assocham) and Pricewaterhouse-Coopers (PwC).
According to the study, the Indian economy's current size is approximately $1 trillion (Rs 45 lakh crore). The savings rate of Indian households is 33.4 per cent, which is expected to grow further at an average rate of eight per cent.
"This translates into incremental savings of $5 trillion over the next decade as against the current size of the US economy which is around $13.22 trillion," Swati Piramal, president, Assocham said.
"Assuming a savings rate of five per cent, savings of Indian households will exceed that of the United States," Piramal added.
Currently, the size of Indian household savings is over $330 billion, the study pointed out.
According to the study, despite the huge savings Indian households have traditionally preferred the safety of bank deposits and government saving schemes for their savings.
The study says less than 10 per cent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies.
"Given the quantum of savings the need to mobilise savings into productive channels and the opportunity for financial intermediation. The next decade will be an opportunity of a lifetime for the Indian capital markets," the study said.
Concerted efforts by the government and the regulators supported by a longterm vision and clarity in action can significantly help fostering a climate that is conducive to growth and investments, Piramal said.
The study has also said that the size of Indian mutual fund industry, comprising both equity and debt funds, is estimated at $162 billion.
However, the industry continues to be plagued by low margins and stiff competition from other investment products, such as the life insurance industry and portfolio managers.
Indian household savings to beat US Nos. by 2020: Business : India Today
