The desi savings story continues....

Check this out - opportune or what?

Indian household savings to be 15x in a decade

NEW DELHI: India may takeover the US in terms of households savings by 2020, touching the USD 5 trillion mark, as the growing economy would boost incomes of people, a study has said. "The household savings rate of 33.4 per cent would translate into incremental savings of USD 5 trillion over the next decade with growing incomes of Indian households," Assocham President Swati A Piramal said in a statement. Currently, the size of Indian household savings is over USD 330 billion, according to a study jointly done by Assocham and PricehWaterhouse Coopers.

 OK, even an avid proponent of breakthrough/non-linear growth curves and all like yours truly has difficulty believing some of those numbers there. The growth rate required for a 15x leap in household savings within a decade are beyond reach. By far. A 3x to 5x leap to ~ 1-1.5 trillion in 2010 USD is certainly do-able though. Sure, in nominal terms, if, say, the USD crashes by 50% or something, the figure quoted above may just about become possible. Who knows.

Which is why I say, be skeptical. It saves so much more time and trouble than otherwise. Wonder what kind of methodology the 'study' has employed here. I for one would certainly like to examine their data, assumptions and choices made.

Here's more meat directly from the Project scope....

 Indian households have traditionally preferred safety of bank deposits and government saving schemes. Less than 10 per cent of their investments are in other financial assets like shares, debenture and mutual funds, which is low as compared to some of the developed economies, Piramal said. "Given the quantum of savings, the need to mobilise savings into productive channels and the opportunity for financial intermediation, the next decade will be an opportunity of a lifetime for Indian capital markets," the study said.

Aha, eh?

Hope that interlude was useful.

Sudhir