After being hit by the pandemic in the first quarter of 2020-21, showing moderation for the second consecutive quarter, the initial estimate of household financial savings was placed at 8.2 per cent of GDP in the third quarter of 2020-21.
The preliminary estimate, which was released by the Reserve Bank of India (RBI), noted that the moderation was driven by a significant dilution in the inflows of domestic financial assets, which far exceeded the moderation in the inflows of domestic financial liabilities.
The ratio of domestic (bank) deposits to GDP also declined to 3 per cent in the third quarter of 2020-21 from 7.7 per cent in the previous quarter.
Despite higher borrowings from banks and housing finance companies, domestic financial liabilities inflows were marginally lower in the third quarter of 2020-21, following a significant decline in borrowings from non-banking financial companies.
The RBI said the domestic debt-to-GDP ratio, which is based on select financial instruments, has been rising steadily since the end of March 2019.
It rose sharply to 37.9 per cent at the end of December 2020 from 37.1 per cent at the end of September 2020.