Close to 70% of Indian consumers have increased savings and investments post the onset of covid-19 pandemic, according to the ‘Consumer Spending Sentiment Index Report’ by InterMiles.
"Given the uncertainty and suddenness of the global pandemic, close to 70% Indians have now placed greater emphasis on securing the future by increasing investments and savings," the report said.
The report is based on responses received from more than 11,500 people across India.
Pandemic has brought a change in personal spending behavior of almost every Indian consumer, according to the study. Only a mere 10% of the respondents saw no change in their spending behavior.
Spending priorities have also changed. While 21% of consumers increased spends on essential products, non-essential spending saw a negligible (3%) increase post the advent of the pandemic.
The rise in savings and investments is evident in other reports as well. A study released by UBS in January 2021 revealed that household savings in India rose in 2020 after declining steadily between 2014 and mid-2019.
The foreign brokerage said household savings scooped up a hefty $200 billion in extra savings, which is a 20-year high.
Bank deposits and insurance/pensions form 14% each of the total household savings, while 19% constitute claims on government and a whopping 135% are in hard currency, according to the UBS report.
“The sharp surge in retail deposits of banks, inflows into government's small savings schemes, insurance (new business premium and resilient persistency ratios), retail equity flows and rising cash in circulation are all evidence of higher financial savings by the households,” the report said.
Rising retail investments in equities
Indians are not just saving more but are also adopting new investment modes. According to a report by Jefferies, Indians directly bought stocks to the tune of $12 billion over January-September 2020. The impact of this investment was that the average shareholding of small retailers in listed companies went up by 0.6 percentage points between December 2019 and September 2020.
