Since the COVID-19 pandemic began, the household incomes, savings and debt have been drastically impacted. For many households, the pandemic has led to a depletion of financial assets such as bank deposits, mutual funds investments among others.
The Reserve Bank of India estimates show that the household financial savings were at 8.2 per cent of Gross Domestic Product or GDP in the third quarter – that is between July to September 2020. This is a major dip compared to the first quarter when the household savings stood at 21% of the GDP and the second quarter when the household savings stood at 10.4 percent of GDP.
To understand more about the impact of the COVID-19 Pandemic on household savings and debt, Kunika Balhotra, Suno India’s Research and Communications Officer spoke with Professor Biswajit Nag.
Prof Nag is the Head of Economics Division at the Indian Institute of Foreign Trade. He also served in the Poverty and Development Division of the United Nations Economic and Social Commission for Asia and the Pacific.