Indian households' financial assets rise 6.6 pc to 9.9 lakh crore

NEW DELHI — The net financial assets of households went up to INR 9.9 lakh crore or 6 per cent of GDP in FY25, compared to 5.3 per cent in previous fiscal (FY24), Finance Minister Nirmala Sitharaman said on Tuesday.

Meanwhile, financial liabilities of households dropped sharply to INR 15.7 lakh crore in FY25 or 4.7 per cent of GDP compared to the previous year, FM Sitharaman said in an X post.

"Net financial assets rose to INR 9.9 lakh crore, or 6 per cent of GDP, in FY25, recovering smartly from 5.3 per cent of GDP in FY24," according to the latest RBI data.

This is a sharp turnaround from just two years ago, when household savings slumped to 4.9 per cent of GDP in FY23 -- lowest since early 1970s. The recovery suggests households are rebuilding financial buffers more quickly than expected as the post-pandemic income revival broadens.

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This adjustment is also reflected in the management of household liabilities. Financial debt contracted sharply to INR 15.7 lakh crore (4.7 per cent of GDP) in FY25, from INR 18.8 lakh crore (6.2 per cent of GDP), a quarter earlier.

This moderation aligns with the overall credit growth slipping to 12 per cent in FY25 from 16 per cent in FY24, partly due to tighter regulations around unsecured and retail loans.

Even as gold-backed loans continued to rise sign of preference for quick, collateralised borrowing, the pace may now be easing amid closer regulatory scrutiny of the segment.

What stands out most in the data is the growing appetite for equities. Market-linked instruments accounted for an all-time high of 15.1 per cent of household financial assets in FY25, up sharply from 8.7 per cent in FY24 and 7.3 per cent in FY23.

This sharp climb underlines the confidence of households in capital markets, buoyed by strong equity performance and the promise of superior returns. Simultaneously, the bank deposits' share declined to 35.2 per cent in FY25 as people continued to gradually move their money away from low-yielding traditional savings instruments.