Business Standard

Are financial savings under-reported?

If the real repo rate, the term premium and credit spread were to normalise, borrowing rates could fall by more than 2 percentage points

Illustration: Binay Sinha

Illustration: Binay Sinha

Neelkanth Mishra
Are we saving enough? Like it is for households, the question is an important one for the economy too. A paucity of savings would mean inadequate funds for investment, which in turn has two adverse consequences: It makes capital more expensive and also increases the economy’s dependence on foreign capital. The latter in particular makes the economy vulnerable to volatility in global capital flows.

Of greater analytical interest are financial savings by households, as they move relatively freely through the economy and are an important driver of the cost of funds; savings by private corporations and by the public sector on
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Apr 30 2019 | 9:34 PM IST

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