Sebi Updates Savings Calculation, Boosting FY25 Ratio

India's gross savings rate for fiscal year 2025 is projected to rise by nearly 47 basis points, thanks to a revised calculation methodology by the Securities and Exchange Board of India (Sebi). This new approach offers a more accurate reflection of household savings channeled through the securities market.

Revised Savings Figures

According to a research paper by Sebi officials, the gross savings rate as a percentage of GDP for FY25 has been revised to 34.94%, up from 34.47% under the previous method. This update includes a broader range of financial instruments. The household savings-to-GDP ratio for FY25 now stands at 21.7%, an increase from 21.23%. Net household financial savings have also improved, reaching 7.10% of GDP, compared to the earlier estimate of 6.63%.

Expanded Instrument Coverage

The Reserve Bank of India (RBI) previously focused mainly on mutual fund assets for individual investors. Sebi's revised methodology significantly broadens this scope to include assets in equities, debt, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and Alternative Investment Funds (AIFs).

Under the new framework, household savings through the securities market reached ₹6.9 trillion in FY25, a notable increase from ₹5.42 trillion calculated previously. This expanded coverage better captures the shift from traditional assets like gold and real estate towards financial instruments.

Granular Data and Investor Behavior Insights

The research paper emphasizes that using actual granular data from primary sources provides a more realistic and accurate view of household savings. The revised methodology incorporates secondary market data across various segments, including emerging asset classes and non-profit institutions serving households.

Interestingly, the study found that households were net sellers of direct equity in FY25, offloading ₹54,786 crore, and ₹69,329 crore the prior year. This occurred even as investors actively bought mutual funds. This trend suggests a maturing Indian retail investor base, increasingly booking profits on direct stock holdings and directing new capital into professionally managed funds.