Your savings:

Why it matters:

Bottomline:

NEW DELHI: The slowdown in the economy has taken a toll on our savings and that has resulted in the country's savings rate falling to a 15-year low. India's gross savings fell to 30.1% of the gross domestic product (GDP) in 2018-19 from 34.6% in 2011-12, and 36% in 2007-08. The previous low was 29% in 2003-2004.Indian households contribute to about 60% of the country's savings but household savings, as a per cent of GDP, have fallen from 23% in 2012, to 18% last year. That could be either because we are buying more things (but slowdown in consumption is one of the reasons for the economic slowdown) or paying more for services like health and education, which have become costlier.While saving for a rainy day or retirement is important for individuals, savings are important for the economy too as the pool of domestic savings equals low cost funds available for investment. For the economy to grow at a higher rate, it needs more investments and investment needs funding.Domestic savings reduce the cost of borrowing for public and private investments. A falling savings rate could lead to Indian companies borrowing more from overseas markets, raising India's external debt (which rose to $543 billion in 2018-19 from $475 billion in 2014-15).Indian economy's growth critically depends on your savings. Now, will your savings help India get out of the slowdown mode (economists also attribute the current slowdown partly to the fall in the savings rate) or will a growing economy get you to save more?