Expense Account, Mint
What we know anecdotally is now there as data in the Reserve Bank of India annual report 20011-12, that Indian household savings are moving from financial assets to real assets. The household savings rate has remained almost constant at about 23% of gross domestic product (GDP) (at current market prices) but there has been a portfolio reallocation within this broad number. Net financial savings of households (remove home loans and other personal loans from gross financial savings to get the net figure) have dropped from just over 12% in 2009-10 to just below 8% in 2011-12. Valuables, like gold, have more than doubled their share from 1.3% in 2008-09 to 2.8% of GDP in the last financial year. The slowdown has been most severe in small savings, bank deposits and life funds. Go deeper into the numbers and you see that households pulled money out of mutual funds in 2011-12 and invested less in insurance funds. We invested Rs.33,000 crore in mutual funds (MFs) in 2009-10, but pulled out Rs.10,600 crore last year. We bought Rs.2,59,800 crore of life insurance in 2008-09 but bought Rs.36,400 crore less (Rs.2,23,400 crore) last year.