Growth in domestic savings recorded during the year 2020 due to lockdown, GDP was 22.5%

In the year 2020, Lockdown was put together in the whole country for the prevention of Corona Crisis. Due to this, there was a lot of damage in all sectors. But, for most of the time, due to people staying in the house, there was a great jump in household savings.

Household savings stood at 19.8 percent of GDP in 2019, which increased to 22.5 percent in 2020. However, when there was a strict lockdown across the country during April-June, the physical savings of the household reached 5.8 percent of GDP. It was about half of what it was before Corona.

According to a report by brokerage firm Motilal Oswal Financial Services, it maintained a recovery position till December quarter of 2020 and reached 13.7 percent of GDP, the highest in the past several years. In the year 2020, people increased their savings in currency and investment in the December quarter as compared to the September quarter, but there was a decline in deposits, pension, and small savings. In the December quarter, people borrowed more from banks, but non-banking and housing finance companies saw a decline in liabilities.

According to the Reserve Bank of India (RBI) data, the non-financial savings of households were equal to 21.4 percent of GDP in the June quarter of 2020 and 10.4 percent in the September 2020 quarter. Prior to Corona, household non-financial savings were 7-8 percent of GDP in the January-March quarter.

However, it fell to 8.4 percent in the December quarter. According to the RBI, gross financial savings fell to 13.2 percent of GDP in the December quarter. At the same time, financial liabilities remained equal to 4.8 percent of GDP. Household investment or physical savings fell to 5.8 percent of GDP in the second quarter of 2020, but after that, it reached a record multiple of 13.7 percent in the third quarter.

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