India - Total Household Savings as a Percentage of the Household’s Annual Income..! - MYREALITY.In, Real Estate, Share Market, Mutual Fund, Insurance
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Sunday, June 04, 2017

India - Total Household Savings as a Percentage of the Household’s Annual Income..!

India - Total Household Savings as a Percentage of the Household’s Annual Income..!

Form
SEBI Investor Survey 2015


Figure 4.3: Total Household Savings as a Percentage of the Household’s Annual Income

Savings
Monthly Income
Below Rs. 20,000
Rs. 20,000 - Rs. 50,000
Rs. 50000 - Rs. 1 Lakh
Above Rs.1 Lakh

< 40% of annual income
10569
8833
2920
5513
40%–60% of annual income
1506
3660
624
843
> 60% of annual income
341
771
143
569
Total
12416
13264
3687
6925

N = 36,756 (all urban respondents, SIS 2015)

To probe further into household indebtedness, the other side of the savings coin, we perform a similar analysis. In this case, the income-debt inverse linear relationship holds true – the higher the household income, the lower the debt levels drop.

Figure 4.4 confirms that 31% of low-income households (with monthly incomes less than Rs. 20,000) have debts larger than 60% of their annual income, whereas just 6% of Rs. 1 lakh+ households have matching debt levels.

However, contrasting the survey findings on savings, the higher income households have lower debts than the mid- income groups. Analogous to the low-income group, nearly a third of the mid-income group households are indebted at the 40% to 60% of income level.

With the rise of indebtedness in the middle class owing to the upsurge of credit instruments like credit cards, easier car loans, student loans and housing loans, this is a foreseeable outcome.

While high-income groups also show a comparable increase in the use of credit instruments, their elevated income levels possibly balance and thus, do not significantly affect their indebtedness ratios.

India - Total Household Savings as a Percentage of the Household’s Annual Income..! Reviewed by S. Chitra on June 04, 2017 Rating: 5 India - Total Household Savings as a Percentage of the Household’s Annual Income..! Form SEBI Investor Survey 2015 Figure 4.3: ...

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