Post-pandemic spends dragged household savings in FY23, rate climbing up now: RBI

The household savings rate in India has hit a five-decade low in 2022-23, according to the Reserve Bank of India. Deputy Governor Michael Patra explained that the decline is due to increased spending after pandemic-related restrictions were lifted, as well as an increase in liabilities, particularly in the form of home loans. Patra noted that historically, the average household savings rate was about 7.5%, but during the pandemic, it had increased due to factors such as inability to spend and precautionary savings.