India Savings Rate FY24: Decline to 18.1% GDP | CareEdge
india’s household savings rate witnessed a decline for the third consecutive year, dropping to 18.1% of GDP in FY24. This significant shift, highlighted by CareEdge Ratings, also reveals a concerning rise in household financial liabilities, nearly doubling over the past decade. Discover how the India savings rate is being impacted by consumption trends. Rural India, however, showcases resilience with rising wages and positive consumer outlook, offering a contrast to urban pessimism. With CPI inflation easing to 3.2% and the upcoming rabi harvest promising price stabilization, the economic landscape presents a mixed picture. News Directory 3 brings you the latest details on these developing economic factors. Explore the impact of these elements on the Indian economy. Discover what’s next for India.
India Household Savings see Third Year of Decline, Liabilities Rise
Updated June 15, 2025
Household savings in India continue their downward trend, reaching 18.1% of GDP in fiscal year 2024, according to CareEdge Ratings. Gross domestic savings also fell, from 32.2% of GDP in FY15 to 30.7% in FY24.
Conversely, household financial liabilities have surged, nearly doubling to 6.2% of GDP over the past decade. This increase reflects a growing reliance on credit to meet consumption needs.
Despite the overall savings trend, rural india presents a positive outlook.Wage growth for rural male workers increased by 6.1% year-on-year in February, exceeding rural inflation for the fourth consecutive month. Easing food inflation and favorable agricultural prospects are also bolstering rural demand recovery.
Rural consumer confidence remains cautiously optimistic, hovering around the neutral mark of 100. Urban consumer confidence, however, remains pessimistic, although expectations for the coming year are positive in both urban and rural areas.
In the broader economy, labor cost growth for major IT firms has slowed significantly, from a peak of 26% in Q3 FY23 to just 4% in Q3 FY25. This slowdown indicates a broader trend of cost rationalization within the corporate sector.
On the inflation front, the Consumer Price Index (CPI) eased to 3.2% in April 2025, the lowest level as August 2019.
however, high prices for edible oils (17.4%) and fruits (13.8%) continue to moderate overall food inflation. The upcoming Rabi harvest, healthy reservoir levels, and forecasts of above-normal monsoon rains are expected to further stabilize food prices.
What’s next
CareEdge Ratings anticipates that policy rate cuts by the Reserve Bank of India (RBI), lower tax burdens, and continued easing of price pressures will support broad-based demand recovery. Goverment data indicates that the Indian economy grew by 6.5% in real terms in fiscal year 2024-25.