Panorama September 2024 edition is out now!

Here are the key insights from the report:

1. Deposits comprise 41% of household financial assets, down from the 51% share recorded in 2012. In contrast, equity and investment funds account for 21% share, up from 11% a decade ago. The share of insurance and pension funds has remained stable at around 28%.
2. Financial assets grew more rapidly than liabilities during the pandemic. However, this trend reversed in the post-pandemic period, and liabilities outpaced asset growth. Consequently, household leverage (debt/assets) fell to a low of 25% in September 2021 but later increased to 28% by March 2023.
3. The banking system’s reliance on borrowings and certificates of deposit has increased, exposing it to structural liquidity issues. The households’ share of bank deposits has also steadily declined since FY21, while that of less stable non-financial private corporations has increased.
4. Private corporate investment intentions surged by 61% YoY to Rs 5.7 trillion in FY24, up from Rs 3.5 trillion in FY23. The strong momentum continued in Q1 FY25 as well. Meanwhile, real fixed investment growth rose to 7.5% YoY in Q1 FY25, up from 6.5% in the previous quarter, with the construction sector achieving a double-digit growth rate of 10.5%, up from 8.7% in the previous quarter.
5. The recovery in credit to large industries also reflects a pickup in private capital expenditure. Cyclical sectors such as metals, roads, and construction are witnessing healthy credit offtake. However, the RBI’s tighter unsecured lending regulations have slowed retail credit growth and bank loans to non-banking financial companies.

Click here to read the full report