The Central Government on Tuesday informed Parliament that household savings in India have increased to 21.7% of GDP in FY 2024-25, up from 20% in FY 2022-23, as per the new GDP series with base year 2022-23.
Minister of State for Finance Pankaj Chaudhary shared the data in the Rajya Sabha, highlighting the growing financial strength of Indian households.
Household Savings Key to Investment Financing
The minister emphasized that household savings remain a primary source of financing investments in the economy and play a crucial role in strengthening financial stability.
He noted that various government initiatives aimed at improving economic conditions are contributing to rising incomes and savings.
Policy Reforms Driving Income and Savings Growth
According to the government, several policy measures have supported this upward trend, including:
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Improving ease of doing business
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Expanding skill development initiatives
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Promoting employment generation
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Strengthening infrastructure
These steps are expected to further boost household income and savings in the coming years.
Tax Relief and GST Rationalisation to Boost Disposable Income
The minister stated that recent policy decisions—such as:
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Income tax exemption up to ₹12 lakh annual income
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Rationalisation of GST rates
are expected to increase disposable income.
This, in turn, will likely:
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Boost consumption
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Encourage higher savings
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Promote investments
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Reduce dependence on borrowing
Food Prices Decline, Fuel Inflation Remains Negative
Responding to another query, the minister said there was no inflation in food and fuel during FY 2025-26.
Key highlights:
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Retail food prices saw an average decline of 0.98% (April–January FY26)
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Compared to 7.3% inflation in FY25
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Fuel inflation stood at (-)3.16% as per Wholesale Price Index (WPI)
He added that while global and domestic crude oil prices had been declining over the past year, recent geopolitical tensions in West Asia have pushed prices above $100 per barrel.
Factors Influencing Food and Fuel Inflation
The government noted that food and fuel inflation are influenced by both domestic and global factors.
Food inflation depends on:
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Agricultural output and monsoon performance
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Seasonal supply fluctuations
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Input costs such as fertilizers, energy, and labour
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Supply chain and storage infrastructure
Outlook: Stronger Consumption and Investment Cycle
The rise in household savings, coupled with supportive policy measures, is expected to strengthen India’s consumption and investment cycle, contributing to sustained economic growth.
