Save one-third to one-fourth of your monthly income. This has been the wise advice that small town parents have long given to their kids going to big cities for taking up a job. As Union finance minister, Pranab Mukherjee, the former President, offered a similar advice.

Addressing a corporate event in 2010, Pranab Mukherjee said, "There is a need to create awareness among the people to bring their savings in the national banking system in order to get better returns and for social security in their old days." His advice came at a time when the government needed money in banks to deal with post-2008 global slowdown situation.

As another economic slowdown continues to extend, savings have taken a big hit. India's savings rate has hit a 15-year low in the middle of economic slowdown.

India's gross savings has fallen to 30.1 per cent of the gross domestic product, as on March 1, 2019. At 29 per cent, the previous low as witnessed in 2003-004. There has been a general trend of decline in the savings rate in the past few years. It was at over 37 per cent in 2007-08 which fell to 32.12 per cent in 2013-14. It has shown upward growth only twice since - in 2014-15 and 2017-18.

2013-14 - 32.12 2014-15 - 32.24 2015-16 - 31.09 2016-17 - 31.35 2017-18 - 32.39 2018-19 - 30.11

At present, the share of household savings in India's savings is 60 per cent. But seen against the scale of GDP, household savings as percentage of GDP has declined from 23 per cent to 18 per cent in 2019. There are two common explanations - or both could be at play -- for this decline. That people are shopping than they previously did. Secondly, the cost of essentials such as housing, health, education, commutation etc has substantially increased. While inflation supports the second explanation, the figures of consumption show a decline. This connects lower savings to rising unemployment or better say, disguised unemployment. The cumulative outcome is that people have less money in pockets to support the daily requirements of their families - on account of unemployment, less remunerative jobs and consequently more dependent members. This explains decline in savings. Now, why should it bother you and the government?

Money saved today is wealth created tomorrow. Indians are world famous for saving for their retirement or some rainy day. The first generation of salaried class in Independent India had the memories of poverty and economic miseries fresh. They took to savings and trained the next generation in the same economic life skill.

This helped India's national economy even though the individual saving money never knew that she was building the nation. Savings create a pool through monies put in the banks. This is the low cost fund ready for investment. A growing economy like India needs more investments to sustain high growth rates or come out of periodical slowdowns.

If domestic savings are not enough, money for investment comes through borrowing from outside. Foreign borrowings come at a higher rate of interests. This also weakens India's national position by pushing external debt higher. Evidence is on the plate. The external borrowing of India increased from $475 billion in 2014-15 to $543 billion last year. To put it simply, India's budget is allocating more revenue (or our taxes) on repaying debts and interests than previous years. This makes less money available for funding education, health, defence, infrastructure, and also to see that economic slowdown is reversed sooner.