Economic Survey 2024: Households not in Distress
New Delhi: Keeping in view the investing trend of people in the country, chief economic advisor (CEA) V Anantha Nageswaran on Monday said that households are not in distress as they are investing more in financial assets and their market values are not captured in the national income data.
As per the Economic Survey 2023-24, the 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.
“The 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. The default statistics of small-ticket loans also do not flag any signs of distress in the household sector,” Nageswaran said while addressing the media here.
“Especially in the last 4 years the foray of retail investors into the 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.
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.
Meanwhile, the CEA also called for a pan-India dialogue on the agriculture sector. Advocating for a reassessment of existing policies, he said that despite current government subsidies and support measures for farmers. “Indian agriculture is not in a crisis now but requires a serious structural transformation because climate change and water criticality loom large in the times to come,” he noted in the Survey.
As per the survey, India’s micro, small and medium enterprises (MSMEs) continue to face “extensive regulation” and compliance requirements, apart from major bottlenecks in access to affordable and timely funding being one of the “core concerns.
On the rising formalisation of the workforce, the CEA also noted a significant increase in the EPFO enrolments. “It is heartening to see that some of the staffing companies have recorded an average growth rate of 13.2 per cent in the last 10 years because these workers come with full benefit,” he said.