As the Indian consumer consumption boom continues, a combination of moderating growth rates, high inflation and low real rates on investments is taking a toll on India's Net Financial Savings rate.
""According to preliminary estimates released by the Reserve Bank of India (RBI), net financial savings moderated to 7.8% of GDP in F2012 from 9.3% of GDP in F2011 and 12.2% of GDP in F2010.
Net Financial savings comprises cash investments, deposits with banks and non bank companies, investments in shares, debentures, mutual funds, small savings and also life insurance, provident and pension fund
RBI attributed the decline in net financial savings to persistently high inflation, leading to low real rates on bank deposits and small savings funds, coupled with uncertain global environment adversely impacting equity market returns, leading households to favour investments in valuables such as gold. In addition to these factors, we believe slower urban job creation and income growth would also have affected the rate of household savings."""