It is a matter of great concern that Indian Household savings in Financial Products hit a 22 Year Low due to sustained High Inflation and Poor Governance of the Dr. Manmohan Singh Government embroiled in the Greatest Corruption scandals in the World.
This shift in composition is not surprising. In a continuously 3 year high inflation environment, low real returns deter financial savings (as consumption is front-loaded); instead, savings in physical assets rise as an inflation hedge.
Break-up of domestic savings data is not available. However, using close proxies, we estimate that household physical savings [Gold, Real Estate, etc] have hit an all-time high, leaving aggregate household savings rate
Lower financial savings are a negative for an investment-starved economy like India as they reduce the amount of investible funds available to finance domestic investment, thereby increasing the dependence on foreign capital.