Economic Survey 2026 highlights shift in household savings towards equities

The Economic Survey 2025–26 points to a structural shift in India's household financial savings over the past decade, with equities and market-linked instruments emerging as a growing component of household portfolios. The change reflects evolving risk preferences, deeper financial markets and broader access to investment channels, even as traditional savings instruments continue to retain relevance.

According to the Survey, the composition of household financial savings has undergone a gradual but persistent reallocation towards equities. Once a marginal element of household balance sheets, equity investments have increasingly become a significant source of financial wealth, driven by both direct participation and indirect exposure through mutual funds and other vehicles. The Survey notes that the development of debt-linked instruments would be a natural next step in building more balanced and diversified household portfolios aligned with long-term financial goals.

The share of individuals in aggregate equity market ownership increased from about 11 per cent in FY14 to 14.3 per cent in FY19, and further to 18.8 per cent by September 2025. In value terms, individual equity holdings expanded sharply to around Rs 84 lakh crore by September 2025, from nearly Rs 8 lakh crore in FY14.

While direct equity ownership rose modestly -- from just under 8 per cent in FY14 to about 9.6 per cent by September 2025 -- the indirect share of households in equities almost tripled during the period, reaching 9.2 per cent. Between April 2020 and September 2025, household equity wealth is estimated to have increased by roughly Rs 53 lakh crore, underscoring the role of sustained participation in long-term wealth creation.

The Survey also underlines a marked shift in the flow of household financial savings. Between FY12 and FY25, the share of equity and mutual funds in annual financial savings rose from around 2 per cent to over 15.2 per cent. This trend has coincided with a sharp rise in systematic investment plan (SIP) inflows, with average monthly SIP contributions increasing from under Rs 4,000 crore in FY17 to over Rs 28,000 crore in FY26 (April–November).

In contrast, the share of deposits declined from over 58 per cent in FY12 to about 35 per cent in FY25. RBI data further show that equity and investment funds now account for 23 per cent of household financial assets as of March 2025, up from 15.7 per cent in March 2019.

Despite the growing equity footprint, the Survey flags that India's corporate bond market remains relatively underdeveloped, at around 16–17 per cent of GDP, compared with equity market capitalisation (m-cap) of over 130 per cent of GDP.