Household savings in India strengthened significantly during the 2024-25 financial year, rising to 21.7 per cent of the country's Gross Domestic Product (GDP) from 20 per cent in 2022-23, reflecting improving household finances and higher savings across the economy, the government informed Parliament on Tuesday.
In a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said the increase is based on the new GDP series with 2022-23 as the base year, released by the Ministry of Statistics and Programme Implementation (MoSPI). The revised data indicate a steady improvement in household savings over the past two financial years.
According to the minister, total household savings, including physical savings such as investments in residential property, valuables and other tangible assets, increased from Rs 52.25 lakh crore in 2022-23 to Rs 69.01 lakh crore in 2024-25. The substantial rise underscores the resilience of Indian households despite global economic uncertainties and inflationary pressures witnessed in recent years.
"As a share of GDP, household savings have increased from 20 per cent in 2022-23 to 21.7 per cent in 2024-25," Chaudhary said in his written response.
The government attributed the improvement in household savings to a combination of stronger economic growth, rising incomes and policy measures aimed at improving financial stability. It also highlighted that both the Centre and the Reserve Bank of India (RBI) have implemented various initiatives to support income growth, enhance financial inclusion and strengthen household balance sheets.
Officials noted that household savings remain one of the most important sources of domestic capital formation in India, providing resources that can be channelled into investments across infrastructure, manufacturing, housing and other productive sectors. Higher domestic savings also reduce dependence on external financing and contribute to long-term macroeconomic stability.
The increase in savings comes amid continued expansion in India's economy, supported by strong domestic demand, improved employment conditions and sustained government spending on infrastructure and social welfare. Economists often view rising household savings as an indicator of improving financial resilience, enabling families to better manage emergencies, education expenses, healthcare needs and long-term investments.
The revised GDP series released by the Ministry of Statistics and Programme Implementation has also provided a more updated picture of the economy by adopting 2022-23 as the new base year, replacing the earlier base year. The updated methodology is intended to better capture structural changes in the economy and provide more accurate estimates of national income and sectoral performance.
The government has undertaken several measures in recent years to encourage savings and strengthen household finances. These include expanding access to formal banking services through financial inclusion initiatives, promoting digital payments, supporting small savings schemes and implementing welfare programmes that seek to improve disposable incomes among different sections of society.
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The Reserve Bank of India has also played a role through policies aimed at maintaining financial stability, ensuring adequate liquidity in the banking system and supporting sustainable economic growth. Stable inflation and a well-regulated financial system are considered key factors that encourage households to save and invest through formal financial channels.
Analysts believe that a sustained increase in household savings can provide an important cushion for the economy, particularly during periods of global uncertainty. Higher savings not only improve the financial security of families but also create a larger pool of domestic resources available for investment, thereby supporting long-term economic growth.
With household savings showing a marked improvement in both absolute terms and as a share of GDP, the government said the trend reflects the strengthening of India's economic fundamentals and the effectiveness of ongoing policy measures aimed at boosting incomes, encouraging financial discipline and fostering sustainable growth.
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