By 2020 Indian Household savings will touch $5 Trillion

By siliconindia   |   Monday, 15 November 2010, 22:14 IST
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By 2020 Indian Household savings will touch $5 Trillion
New Delhi: A joint study by the Associated Chambers of Commerce and Industry of India (Assocham) and Pricewaterhouse-Coopers (PwC) shows that Indian Household savings will touch $ 5 trillion (Rs 225 lakh crore) by the year 2020. It also states that the Indian Household savings has surpassed U.S. savings as well. India's current economy rate is growing at a rate of nine percent and is approximately $1 trillion (Rs 45 lakh crore). The savings rate of Indian households is $330 billion, which is expected to grow further at an average rate of eight percent. Swati Piramal, president of Assocham said "This translates into incremental savings of $5 trillion over the next decade as against the current size of the U.S. economy which is around $13.22 trillion. Assuming a savings rate of five percent, savings of Indian households will exceed that of the U.S." The study shows that Indians have always preferred bank deposits and government saving schemes for their savings and less than 10 percent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies. The study has also said that the size of Indian mutual fund industry, comprising both equity and debt funds, is estimated at $162 billion. The study said that the quantum of savings needs to be mobilized and the savings need to be invested into productive channels for financial intermediation. The next decade will be an opportunity of a lifetime for the Indian capital markets," the study said.