As a result of the epidemic, the savings of the people of India have decreased while the debt has increased, the Reserve Bank of India had warned earlier. This time, the research report of the State Bank added to that fear. They said many families in India had to borrow heavily in the last financial year to cover their expenses. Not only that, the survey warns that the way the second wave of Kovid has hit India, many more people may be forced into debt in the coming days.
According to the concerned quarters of India, last year the epidemic took away the livelihood of the people and the public had to resort to saving. But even that did not save many, it is clear in these debt growth figures. According to a SBP report, household debt in India jumped to 36.3 per cent of GDP in the last financial year from 32.5 per cent of GDP in the previous fiscal.
However, the epidemic is not the only reason for ordinary families to be in debt, it is also clear in the research paper of the State Bank. It said debt had been rising for four years. The Modi government is responsible for several steps. For example, GST was hastily introduced in July 2017 to heal the wounds of cancellation of large notes in 2016. Concerned quarters are also pointing to the slowdown in the economy in 2019 as another factor in the pre-Corona period. However, the capital crisis in the household has increased so much in the last financial year with the help of Corona. As a result, according to the report, the debt growth in Indian households last year was about 620 basis points.
However, many Indian capital market experts are reluctant to accept that a reduction in bank deposits means that people are reluctant to save. They claim that many people are losing interest in keeping money in banks as interest rates are falling rapidly. Instead, they are attracted to invest in stocks through mutual funds. NS Venkatesh, CEO of the Association of Mutual Funds, said that in the last five years, investment in the fund has increased 2.52 times through the SIP (Monthly Fund Investment) project.