Study likely to focus on bank deposits, cash, insurance, PF, shares, gold & realty
What do you do with your savings? Do you let your funds grow in fixed deposits, invest in the stock market, accumulate gold, or salt some money away for your retirement? The government wants to know. And it is set to launch a national survey to find out.
“We need to have a direct estimation of household savings and there is no data on this at present,“ a government official privy to the development said, requesting not to be identified.“We do get data from the Reserve Bank of India and financial instruments, but there has been a thinking in the government for quite some time to have its own savings-investment data,“ he said.
The move comes at a time when the government plans to strengthen its financial inclusion drive through the Pradhan Mantri Jan-Dhan Yojana.
The proposed survey marks a departure from the current practice of estimating household savings indirectly by deducting the numbers from other segments of the economy such as government and companies from financial totals.
The official said this method of extracting household savings as a residual doesn't allow cross-validation through estimates emerging from different databases. This leads to data deficiency which doesn't allow household savings to be used as policy inputs, he said.Besides, directly sourced data is expected to provide a clearer picture of the gaps and policy interventions needed.
While the plan is still being worked out, the survey is expected to focus on financial savings in bank deposits, cash in hand, insurance schemes, provident and pension funds, small savings, shares, debentures, mutual funds and commercial bonds, besides savings in physical assets such as gold and property.
In 2014-15, the latest year for which data is available, household savings were estimated to be 7.5% of India's national income, up from 7.3% in the previous fiscal. Savings in physical assets declined from 14.8% in 2011-12 to 10.4% in 2013-14.
Physical savings are considered less efficient and are not easily available to banking system. The survey comes at an opportune time as savings in financial assets are rising, marking a shift from physical assets. The survey will help capture the progression coming from the reversal in household financial saving trends. The government plans to run pilot surveys to collect this data in Uttar Pradesh, West Bengal and Kerala next year.
The estimates for the household sector are worked out on the basis of the available data from various censuses, sample surveys, research studies and assumed relationships, and therefore, subject to greater number of errors. Savings are estimated for three sectors personal savings, corporate and government savings.
In the absence of comprehensive income-expenditure surveys, instrument-wise savings estimates are prepared in an indirect manner through the residual treatment accorded to the household sector.
The Economic Times New Delhi, 31st May 2016
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