Are Indians saving enough? There is no clear answer | Prof. Vidya Mahambare writes for Live Mint

The article highlights that Indian household borrowings rose sharply last year, as per recently released Reserve Bank of India (RBI) data. This led to a decline in household net financial savings—defined as household financial savings during the year minus financial borrowings—to just about 5% of nominal gross domestic product (GDP) in 2022-23, a 2.5% annual drop. The justification, in line with the traditional economic theory, is that the Indian government and corporate sector need money to fund their investment plans, which would drive economic growth. In 2022-23, outstanding vehicle loans from banks grew 25%.

Inflation must be controlled to help corporations and households lower their spending. Apart from raising the cost of essentials, high inflation raised borrowing costs in fiscal year 2022-23 as RBI repo rate went from 4% to 6.5%. Controlling inflation would reduce interest burdens and improve savings.