CareEdge Report: Household Savings in India Drop for Third Year, Debt Nearly Doubled

According to a recent report by CareEdge Ratings, household savings in India have declined for the third consecutive year in FY 2024, while financial liabilities have nearly doubled over the past decade. This suggests that more people are relying on debt to meet their needs.

The report highlights that India's domestic savings, which were 32.2% of GDP in FY 2015, have dropped to 30.7% in FY 2024. Specifically, household savings have fallen to just 18.1% of GDP in FY 2024, indicating a sharp decline in financial security at the family level.

Meanwhile, household financial liabilities have increased to 6.2% of GDP—almost double over the last ten years. This trend shows that Indian families are increasingly depending on loans for everyday expenses and financial obligations.

Despite these concerns, there is a positive note in the report: rural India shows signs of improvement. Rural male wages grew by 6.1% in February 2024, marking the fourth consecutive month where wage growth has outpaced rural inflation. This indicates that income levels in villages are improving steadily.

As India becomes the fourth-largest economy globally, these household-level financial trends reveal deeper structural changes in how families manage income, savings, and debt.