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Indians Prioritising Debt Over Savings, But Rural Confidence Holds Strong
- Indian households are saving at their lowest rate in nearly seven years, while their debt has doubled in the last decade, with financial liabilities rising to 6.2% in FY24 compared to 3.2% in FY14.
- According to a CareEdge Ratings report, net household savings were 18.1% of GDP in fiscal 2024, the lowest since FY17, marking the third consecutive year of decreasing savings.
- Rural household confidence remains high, with income growth outpacing inflation, leading to optimistic future expectations. Rural wage rates have been increasing, contributing to positive consumer sentiment in rural areas.
- Consumer confidence in urban areas remains pessimistic, while rural consumers are more optimistic. The report indicates a positive investment climate, with the central government's capital expenditure exceeding previous estimates.
- The CareEdge report suggests that RBI policy rate cuts, reduced tax burdens, and easing price pressures will support a broad-based demand recovery. The Adani Group announced a significant $100-billion capital expenditure plan, emphasizing energy, infrastructure, and other sectors.
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