Households’ net financial liabilities up in FY24, but savings also rose to pre-pandemic level
Record net financial savings of households in peak pandemic was a one-off, data shows
- May 19, 2025,
- Updated May 19, 2025 2:56 PM IST
Net financial liabilities of Indian households rose to a new high of Rs 18.79 lakh crore in FY24, comprising largely of bank advances, even as net financial savings reached pre-Covid levels at Rs 15.51 lakh crore.
The data, which is a part of the National Accounts Statistics 2025, released by the Ministry of Statistics and Programme Implementation recently, sheds important light on the state of finances of households, which are a major source of domestic financing.
Indicating the growing leveraging of households, net financial liabilities grew by 17.7% in FY24 from Rs 15.96 lakh crore in FY23. In FY24, the dependence of households on bank advances was higher compared to FY23. As a result, of the total net financial liabilities of Rs 18.79 lakh crore in FY24, Rs 18.56 lakh crore was bank advances. In contrast, in FY23, bank advances amounted to Rs 11.91 lakh crore.
Meanwhile, household savings also grew in FY24 to Rs 15.51 lakh crore, marking a 16.51% increase from Rs 13.31 lakh crore in FY23. This is higher than the Rs 15.49 lakh crore in FY20 but remains well below the peak of Rs 23.29 lakh crore in FY21 during peak Covid.
Post that household savings had eroded raising concerns over the financial position of households and in recent months, there have been worries about a weakness in consumption demand due to lower savings and slow wage hikes. As a result, this data has been closely monitored by policymakers and experts since the Covid-19 pandemic.
Morgan Stanley in a recent report noted that the current household debt level is manageable: “We expect household debt growth to continue to outpace nominal GDP growth as a reflection of improved credit penetration. The key to assess sustainability of the debt dynamics will be income growth, which, in our view, will sustain around nominal GDP growth,” it said.
The rise in retail loans has been the key driver of credit growth post-pandemic, leading to concerns of over-leverage, it further noted.
Net financial liabilities of Indian households rose to a new high of Rs 18.79 lakh crore in FY24, comprising largely of bank advances, even as net financial savings reached pre-Covid levels at Rs 15.51 lakh crore.
The data, which is a part of the National Accounts Statistics 2025, released by the Ministry of Statistics and Programme Implementation recently, sheds important light on the state of finances of households, which are a major source of domestic financing.
Indicating the growing leveraging of households, net financial liabilities grew by 17.7% in FY24 from Rs 15.96 lakh crore in FY23. In FY24, the dependence of households on bank advances was higher compared to FY23. As a result, of the total net financial liabilities of Rs 18.79 lakh crore in FY24, Rs 18.56 lakh crore was bank advances. In contrast, in FY23, bank advances amounted to Rs 11.91 lakh crore.
Meanwhile, household savings also grew in FY24 to Rs 15.51 lakh crore, marking a 16.51% increase from Rs 13.31 lakh crore in FY23. This is higher than the Rs 15.49 lakh crore in FY20 but remains well below the peak of Rs 23.29 lakh crore in FY21 during peak Covid.
Post that household savings had eroded raising concerns over the financial position of households and in recent months, there have been worries about a weakness in consumption demand due to lower savings and slow wage hikes. As a result, this data has been closely monitored by policymakers and experts since the Covid-19 pandemic.
Morgan Stanley in a recent report noted that the current household debt level is manageable: “We expect household debt growth to continue to outpace nominal GDP growth as a reflection of improved credit penetration. The key to assess sustainability of the debt dynamics will be income growth, which, in our view, will sustain around nominal GDP growth,” it said.
The rise in retail loans has been the key driver of credit growth post-pandemic, leading to concerns of over-leverage, it further noted.