Households not in distress: CEA Nageswaran

Chief Economic Advisor V Anantha Nageswaran on Monday said that households are investing more in financial assets and their market value are not captured in the national income data.

The Economic Survey 2023-24, tabled in Parliament, said that registered investor base at NSE has nearly tripled from March 2020 to March 2024 to 9.2 crore as of March 31, 2024, potentially translating into 20 per cent of the Indian households now channelling their household savings into financial markets.

Addressing reporters, Nageswaran said, “households are not in distress” and they are investing in financial assets which have done very well. Also, savings in physical assets have improved and gone up from 10.8 per cent in fiscal 2020-21 to 12.9 per cent in 2022-23.

“Especially in last 4 years the foray of retail investors into stock market through SIPs and mutual funds has been quite prolifically documented. Our national income data do not record this at market prices and that is the reason why there is a feeling that financial liabilities have grown faster than financial assets of households,” Nageswaran said.

Asserting that households are doing quite well, Nageswaran said the default statistics of small-ticket loans also do not flag any signs of distress in the household sector.

As per the National Account Statistics 2024 data released by Ministry of Statistics and Programme Implementation (MoSPI) in May, the net household savings declined sharply to Rs 14.16 lakh crore in three years to 2022-23, from Rs 17.12 lakh crore in FY22, and Rs 23.29 lakh crore in FY21.