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<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

Over the past few months, there’s been a lot of brouhaha about the lagging pace of bank deposits in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialization of household savings in the country, or the rising preference of Indians towards mutual funds and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian equity markets through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by <keyword id="20250971" type="General" weightage="20" keywordseo="franklin-templeton" source="keywords">Franklin Templeton</keyword>, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are <keyword id="4000333" type="General" weightage="100" keywordseo="household-deposits" source="Orion">household deposits</keyword> really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. Also, we can’t forego the fact that the share of Indian <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">households</keyword> in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and savings account deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (<keyword id="19942037" type="General" weightage="20" keywordseo="central-board-of-direct-taxes" source="keywords">Central Board of Direct Taxes</keyword>) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of <keyword id="20930760" type="General" weightage="20" keywordseo="securities-transaction-tax" source="keywords">Securities Transaction Tax</keyword> (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell equity mutual funds, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by equities can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in deposit growth we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next <keyword id="19918491" type="General" weightage="20" keywordseo="mpc" source="keywords">MPC</keyword> (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day.

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> hailed the seven-year journey of <keyword id="19922145" type="General" weightage="20" keywordseo="Goods-and-Services-Tax" source="keywords">Goods and Services Tax</keyword> (<keyword id="19951327" type="General" weightage="100" keywordseo="GST" source="keywords">GST</keyword>). Quoting a newspaper report, PM tweeted on the social media platform "X" that GST has improved the lives of 140 crore <keyword id="19916609" type="General" weightage="20" keywordseo="Indians" source="keywords">Indians</keyword>. "For us, reforms are a means to improve the lives of 140 crore Indians. After the introduction of GST, goods for household use have become much cheaper." The PM also highlighted that after the implementation of GST, the <keyword id="20044873" type="General" weightage="20" keywordseo="savings" source="keywords">savings</keyword> of the poor and the common man have increased as the GST has reduced <keyword id="20018720" type="General" weightage="20" keywordseo="taxes" source="keywords">taxes</keyword> on various <keyword id="20447338" type="General" weightage="20" keywordseo="household-items" source="keywords">household items</keyword> like flour, curd, detergent, etc. He said, "This has resulted in significant savings for the poor and common man. We are committed to continuing this journey of reforms to transform people's lives". The Goods and Services Tax will complete its seven years on July 1, it was implemented in 2017. After its implementation, the tax has reduced on several products and services used by the common man. As per the Central Board of Indirect Tax and Customs, post GST various daily household items have become cheaper. It includes items like flour, television, detergent, hair oil, soap etc. The GST has amalgamated a large number of central and state taxes into a single tax. It also mitigated the ill effects of cascading or double taxation in a major way and paved the way for a common national market. From the consumers' point of view, the biggest advantage is in terms of reduction in the overall tax burden on goods. The Introduction of GST has also made Indian products more competitive in the domestic and international markets owing to the full neutralisation of input taxes across the value chain of production. On June 22, <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> announced that the next meeting of the Goods and Services Tax (GST) Council is tentatively scheduled for mid-to-late August. The GST Council proposed exemptions for specific services offered by <keyword id="19909154" type="General" weightage="20" keywordseo="Indian-Railways" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian Railways" meta.hostid="261" meta.entityid="Indian Railways">Indian Railways</keyword> to the general public, as well as for intra-railway transactions. The GST Council recommended waiving interest penalties on demand notices issued under Section 73 of the GST Act for fiscal years 2017-18, 2018-19, and 2019-20. This section pertains to cases not involving fraud, suppression, or misstatement. Taxpayers who pay the full tax amount demanded in the notice by March 31, 2025, will benefit from this waiver.The Council approved an extension for availing input tax credit (ITC) on any invoice or debit note.

Seven years of GST has lowered taxes and improved lives of 140 crore Indians: PM

India is poised to remain the fastest-growing major economy in 2024-25, Chief Economic Adviser V Anantha Nageswaran said in a press conference after the tabling of the <keyword id="20613906" type="General" weightage="20" keywordseo="economic-survey" source="keywords">Economic Survey</keyword> in the Parliament on Monday. The Economic Survey tabled today projected India to grow at 6.5-7.0 per cent in 2024-25. Global institutions, including <keyword id="19896779" type="General" weightage="20" keywordseo="IMF" source="keywords" meta.keywordsubtype="org" meta.entityname="IMF" meta.hostid="261" meta.entityid="IMF">IMF</keyword>, OECD, World Bank, S&amp;P, ADB, and Fitch, have projected India to grow in a range of 6.6-7.2 per cent. The International Monetary Fund (IMF), in its latest outlook, has raised India's growth projections for 2024 from 6.8 per cent earlier to 7 per cent, with the country maintaining the fastest-growing status in emerging markets and developing economies. According to official data of the Indian government, the country's GDP grew at an impressive 8.2 per cent during the financial year 2023-24. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22 respectively. Further, the CEA in his press conference projected that India's <keyword id="20089672" type="General" weightage="20" keywordseo="per-capita-income" source="keywords">per capita income</keyword> is expected to increase from around Rs 2 lakh in 2022-23 to Rs 14.9 lakh in 2046-47. Further, CEA said <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> of Indians in physical assets have been increasing over the past three financial years through 2023-24. The CEA, addressing the press conference, said household savings in physical assets rose from 8 per cent in 2020-21 to 12.9 per cent in 2022-23. "Households are not in distress, they are investing in <keyword id="20792385" type="General" weightage="20" keywordseo="financial-assets" source="keywords">financial assets</keyword> that have done very well. Financial assets of households are not marked to market so households are doing quite well in the aggregate," he said. India needs both banks and capital markets to provide the required finances sourced from a sustained high level of household savings, according to the Survey. <keyword id="20385790" type="General" weightage="20" keywordseo="Union-Finance-Minister" source="keywords">Union Finance Minister</keyword> Nirmala Sitharaman on Monday tabled the economic survey in Parliament, a day ahead of the full Budget presentation for 2024-25. The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and formulated under the supervision of the chief economic adviser, gives insights into the state of the economy and various indicators of 2023-24 (April-March) and some outlook for the current year. The Economy Survey document also gave some idea about the tone and texture of the actual Budget for 2024-25, to be presented on Tuesday. (ANI)

India to remain fastest growing major economy in 2024-25, says CEA Nageswaran

<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword>, Global brokerage <keyword id="19906485" type="General" weightage="20" keywordseo="goldman-sachs" source="keywords">Goldman Sachs</keyword> has flagged multiple headwinds to deposit growth in Indian banks as it loses its attractiveness. It has cited head winds like strained financial savings, the rise of alternatives such as stock market investments and strong growth in alternate government savings schemes (<keyword id="20699846" type="General" weightage="20" keywordseo="ppf-and-small-savings" source="keywords">PPF and Small Savings</keyword>), size of which has grown to 21 per cent of the total deposits. Interestingly, increase in alternative government savings schemes is equivalent to 34 per cent of the increase in deposits over FY21-23, Goldman Sachs said. It said: "We believe the system would need to offer attractive rates to make bank-deposits attractive. "We believe consumer lending is nearing the consolidation phase driven by large volumes of unsecured lending with an estimated 120mn unsecured personal loans which increased 4X over the last three years; rising financial leverage at <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">Households</keyword> with gross-financial-liabilities to gross-financial-assets increasing to all time peak of 40 per cent, a sharp reduction in net financial assets (financial savings minus financial assets) from 11 per cent+ of GDP to less than 5 per cent of GDP and deteriorating performance of portfolio on boarded over the last 12 months." Bank deposits also see competition from government small savings investments which have now grown to 20 per cent of the total deposit pool in the system, and offer higher interest rates compared to bank TD. The share of deposits in the household financial asset mix has decreased to only 45 per cent in FY23 (compared to 48 per cent in FY21), with incremental flow of only 35 per cent going towards deposits. This has led to flows of net financial assets as a proportion of GDP to more than halve from FY21 to FY23, Goldman Sachs said. --IANS biz/san/svn

Bank deposits losing attractiveness as govt savings schemes see strong growth

July is abuzz with news of the upcoming union budget, which Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> will present on July 23, 2024. But you couldn't care less, because you’ve already decided that you’ll tune it all out, as soon as our beloved Nirmala Tai starts her budget presentations in the parliament. We get it, having spent less than three decades on this planet, we GenZers have already had a tough time understanding the complexities of the modern world affecting our daily life. When it comes to our national finances, we just can’t seem to make any sense of the words spoken, and the general vibe of complicated terms like <keyword id="19942084" type="General" weightage="20" keywordseo="Fiscal-Deficit" source="keywords">fiscal deficit</keyword> and <keyword id="20018917" type="General" weightage="20" keywordseo="Capital-Expenditure" source="keywords">capital expenditure</keyword> is extremely off-putting! So, why bother? Don’t worry, we have got you covered. As we step into an unforgiving adult world, it's time to tune in, as the Union Budget often has direct implications on your personal finances. To help you start, here’s your very own budget glossary, which will let you decode all budget-related mumbo-jumbo, the <keyword id="20246469" type="General" weightage="20" keywordseo="GenZ" source="keywords">GenZ</keyword> way. A: Annual Financial Statement Think of this as a simple breakdown of how much money the government has received and spent over three time periods — the current year, the previous year, and the budget (upcoming) year. This is required under Article 112 of the Indian Constitution. It has three parts: <ul><li>The consolidated fund of India, consisting of revenue received by the government as direct and indirect taxes, and loans</li><li>Contingency fund of India for emergencies, or disaster management</li><li>Public Account of India — our money that the government receives under various schemes like PPF, small savings and more </li></ul>B: <keyword id="20313429" type="General" weightage="20" keywordseo="Budget-Estimates" source="keywords">Budget Estimates</keyword> Say you set aside Rs 25,000 this month from your salary, to buy an uber-cool smartwatch. But you find a sweet steal deal on Amazon and manage to grab it for just Rs 20,000. The Rs 25,000 you set aside from your monthly budget was an estimate. In the same way, the government sets aside a specific sum for every project or scheme based on its estimates, but in the end, the actual expenses may vary. C: Capital Expenditure See the government allocating funds left, right and centre for building highways, improving rail connectivity, or developing other infrastructures? That's capital expenditure, or capex. The idea of undertaking capex is to build something for the long term, something which keeps contributing to the economy’s growth, long after its creation. D: Divestments Divesting means to sell off and let go of one’s stakeholding or ownership in a company or enterprise. The government generally divests its shares in various public undertakings to raise funds. Remember the much-touted IPO of Life Insurance Corporation of India (LIC) LIC’s IPO in May 2022? That was the government divesting 3.5% of its share in the insurance behemoth. E: Economic Survey This is a snapshot (and a pretty long one) of all the major economic developments that have taken place in the country during a particular financial year. It is usually released a day before the full budget, highlighting the performance of various government schemes, trends seen in various sectors of the economy, the policy initiatives taken by the government, and where the economy is going in the near future. F: Fiscal Deficit As daunting as it sounds, what if I tell you that most of us are perennially in a state of fiscal deficit? Surprised? It's simply when your spending exceeds your earnings. So, it gives you an estimate of how much you need to borrow, to tide over. Turns out, the government isn't faring great either, given that its fiscal deficit, or the difference between its revenue and expenditure currently stands at a staggering Rs 16,85,494 crores, or about 5.1% of India’s <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword>. G: GDP Gross Domestic Product is the collective monetary value of all the goods produced and services rendered in the country, during a particular period. In other words, it is the combined total of the economic output that is generated by 141.72 crore Indians like us, expressed monetarily. As of 2024, India’s GDP stood at $3.9 trillion. GDP is a measure of how healthy and strong an economy is. Some of the world’s biggest economies, like China and the US, have a GDP of $18.5 trillion and $28.7 trillion, respectively. G: <keyword id="20411624" type="General" weightage="20" keywordseo="Gender-Budgeting" source="keywords">Gender budgeting</keyword> When achieving gender equality, and addressing challenges women face by way of allocating resources and formulating policies accordingly becomes key to preparing a budget, it's known as gender-based budgeting. Such a budget ensures that distribution of public resources between men and women is not heavily skewed towards the former. In 2023-24, India’s gender budget swelled 4.3% to Rs 2.23 trillion, which is about 4.9% of the overall budget. H: <keyword id="21458145" type="General" weightage="20" keywordseo="Household-Income" source="keywords">Household Income</keyword> The total money earned by everyone in your home makes for your household income. So, if you are a family of 4, where your younger sister is studying, and you, along with your parents earn a total of say Rs 25,00,000 per annum, that is your household income. As of 2022-23, India’s average household income stood at Rs 3.6 lakh/annum. O: Outcome of Budget This is a statement of the outcomes achieved by various government departments with the budget allocated to them last year. It answers questions like was the money spent on purposes it was sanctioned for? What was the output achieved? Think of this as a report card, detailing your progress, or money spent during the year, and is indicative of what more needs to be done to achieve the desired results. R: Revised estimates Say are saving up Rs 70,000 for your buying the latest iPhone. But a few months down, you realize that the price point has changed as the release date approaches, and it is likely to cost about Rs 85,000 now. You see, your initial estimate was Rs 70,000, but then, you revised your estimated requirement to Rs 85,000. The government works no differently. 6-months after the budget presentation, the government assesses if the money granted to scheme A is sufficient, or does it need more funds. Are there any other schemes that need more fund allocation? The new, revised estimates then become the benchmark of functioning, against which actual expenditures are compared. S: Subsidy This is a sum that the government gives to an industry or business, with the objective to keep its prices for the general public low. The government pitches in to pay a part of production costs, so that the public does not end up bearing the entire burden of the cost. Remember the recently discontinued FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy on electric vehicles (EV) schemes, which boosted EV adoption amongst Indians. Imagine your elder brother or sister funds 40% of your much awaited Goa trip, without wanting anything in return, for the simple purpose of you having fun! That's them subsidizing your travel! V: Vote on Account Remember Nirmala Tai presented an interim budget this year in February, given that elections were due in May? In an election year, the incumbent government does not present a full fledged budget, because who knows if they’ll be voted back to power or not? So, to tide over the next few months before a new government is brought back to power, the government seeks vote on account, which is basically permission or grant needed to fund expenditures for the next few months. Z: Zero-based budgeting The term refers to a budgeting method in which all expenses must be justified for each new period, starting from a "zero base." Think of it like starting with a blank piece of paper every time you make a plan for how to spend your money. Instead of just changing what you spent last year, you think carefully about every rupee you need and why you need it. In 1986, the Indian government implemented ZBB as a system for determining the Expenditure Budget, making it compulsory for all ministries. However, implementation and application of this approach have remained inconsistent in the later years. So, it's time to listen to Tai with rapt attention, and flaunt your newfound budget dictionary to those still afraid of endless budget jargons!

Budget A-Z, for the GenZ: A fun and handy guide for major terms around upcoming Union Budget

The retention lists of all ten franchises for the <keyword id="6354831" type="General" weightage="20" keywordseo="Indian-Premier-League" source="Orion">Indian Premier League</keyword> (<keyword id="6354312" type="General" weightage="100" keywordseo="IPL" source="Orion">IPL</keyword>) season next year were finally unveiled on Thursday, with several big names like Jos Buttler, Aiden Markram, Glenn Maxwell, Faf Du Plessis, KL Rahul, Rishabh <keyword id="19900230" type="General" weightage="20" keywordseo="pant" source="keywords">Pant</keyword>, <keyword id="19904097" type="General" weightage="20" keywordseo="shreyas-iyer" source="keywords">Shreyas Iyer</keyword> etc being let go by their respective franchises. The surprising retentions and releases by all ten franchises have laid down the foundation for what could be an exciting, fun and record-breaking auction later this year. Let us look at several takeways from the auction: <h2>Several captaincy options available</h2> With the release of IPL winning skipper Shreyas Iyer from Kolkata Knight Riders (<keyword id="19924483" type="General" weightage="20" keywordseo="kkr" source="keywords">KKR</keyword>), Rishabh Pant from Delhi Capitals (DC) and KL Rahul from Lucknow Super Giants, three top-class Indian captaincy options are available. <h2>Auction could be defined by wicketkeepers pulling double/triple duties</h2>The announcement of retention lists have seen many wicketkeeping options being released by their respective franchises, including Pant (from DC), KL (from LSG), Ishan Kishan (from Mumbai Indians) and Jos Buttler (from Rajasthan Royals). With all of them having captaincy experience at various levels, including international <keyword id="1521" type="General" weightage="20" keywordseo="Cricket" source="Orion">cricket</keyword> in case of Pant, KL and Buttler, several teams could go after them. Their experience and strong records as wicketkeepers and top-order batters, particularly opening except for Pant, will help teams find a captain, wicketkeeper and an opener in just one player and save them plenty of money. <h2>No English players retained? Could withdrawing/not playing full season be a cause?</h2> No England players have been retained by franchises this team around. Various stars players like Jos Buttler, Liam Livingstone, Jonny Bairstow, Moeen Ali, Sam Curran, Harry Brook, Phil Salt, Will Jacks etc have been let go. These players missed out some part of their season due to international commitments, while Harry Brook pulled out due to personal reasons. England batter Jason Roy pulled out of IPL ahead of this season due to personal reasons. These all developments damaged the team balance at times, with several teams dependent on their overseas talent. Has the habit of not honouring contracts and missing matches caused this move? The hammer strikes at auction could answer this question. <h2>Caribbean power trusted ahead of mega auction</h2>Four of current top West Indies stars, Nicholas Pooran, Shimron Hetmyer, Andre <keyword id="20287010" type="General" weightage="20" keywordseo="russell" source="keywords">Russell</keyword> and Sunil Narine have been retained by their respective franchises. Pooran has dominated the T20 run charts this year, scoring a record-setting 2,251 runs in 68 matches with a century and 15 fifties at a strike rate of 160.90. Hetmyer is one of the best finishers in T20 circuit and Rajasthan Royals trusts in his abilities. Russell (222 runs in nine matches and 19 wickets) and Narine (488 runs and 17 wickets) have also been reaped rewards for their title winning performances last season and their loyalty to KKR brand. While seven West Indies talents have been released, namely, Shai Hope, Sherfane Rutherford, Kyle Mayers, Shamar Joseph, Romario Shepherd, Alzarri Joseph and Rovman Powell, the four modern-day T20 greats keeping their spots safe with the franchise shows how much trust franchise has in Caribbean power. And who knows, the released names could get brought using right-to-match card or find a new home at a higher price. <h2>Another setback for Ishan Kishan?</h2> Five-time champions Mumbai Indians (MI) placed their trust in Indian core, consisting of skipper Hardik Pandya, former captain Rohit Sharma, pacer Jasprit Bumrah, 360-degree hitter Suryakumar Yadav and young left-hander Tilak Varma. It was expected that Ishan could retain his place, given his youth and experience with the franchise. Aged just 26, he had spent seven seasons with the franchise and did reasonably well. However, after being brought for Rs 15.25 crores ahead of 2022 season, the price tag seemed to have caught up with Kishan. In next 44 matches for the franchise till the 2024-season-end, Kishan scored 1,192 runs in 43 innings at an average of 28.98, with just seven fifties. While these numbers are not bad, it could be debatable that he did not deliver as per expectations, with 19 scores being below 20. In the 2024 season, he could score just 320 runs at an average of just over 22, with just a fifty to his name. After being excluded from the Board of Control for Cricket in India (BCCI) central contract this year after not participating for red-ball cricket, this is another big setback for Kishan, who has not been considered for international cricket despite participating and doing well in red-ball tournaments like Buchi Babu Trophy, Duleep Trophy and Ranji Trophy recently. <h2>DC era 2.0 on cards?</h2> With wicketkeeper-batter and biggest superstar of the franchise, Pant released from the franchise and looking for a new franchise as per several media reports, Delhi Capitals could be moving to their 2.0 era, placing trust in young, under-the radar names like Axar Patel (235 runs with two fifties and 11 wickets in 2024), Tristan Stubbs (378 runs with three fifties and three wickets), Abhishek Porel (327 runs with two fifties) and Kuldeep Yadav (16 wickets at an average of 23.25) after good performances last year. Franchise has also released big time stars like David Warner, Mitchell Marsh, Anrich Nortje, Prithvi Shaw. Could this be the start of a new era for DC? Only time will tell. <h2>Shreyas Iyer joins unfortunate list of captains</h2>The IPL winning captain Shreyas Iyer has been let go after winning the title for his franchise KKR this year, their first in a decade and overall third. While many argue his batting stats of 351 runs in 14 innings with two fifties at a strike rate of 146.86 could be a reason behind his release, the other half of the story is that the in-form KKR top-order did not leave the middle-order with much to do. His recurring fitness issues, which caused him to miss 2023 season, also could be a reason. Irrespective of what the reason could be, one thing is for sure, Iyer is up there with likes of Adam Gilchrist (released by Deccan Chargers in 2011 after title win in 2009, semifinal finish in 2010), David Warner (released by Sunrisers Hyderabad ahead of 2022 season despite 2016 title win and multiple playoff finishes) as one of the most unluckiest captains in IPL. <h2>Strong faith in Indian uncapped/inexperienced stars</h2>The franchises have been extremely bold this time around, opting to release experienced, household Indian/overseas names and placing their trust in several Indian uncapped/inexperienced players. Out of a total of 46 players retained across all franchises, 36 players are Indian. Out of these, 10 players are uncapped Indians stars. These players are Abhishek Porel, Rahul Tewatia, Shahrukh Khan, Ramandeep Singh, Harshit Rana, Mohsin Khan, Ayush Badoni, Shashank Singh, Prabhsimran Singh, Yash Dayal. Also, out of other 24 capped Indians, 13 players have played less than 30 international matches and eight have played 10 or less international games for India. Of these 24 uncapped players, no one has all format experience for India and only two have Test cricket experience, Dhruv Jurel and <keyword id="20022019" type="General" weightage="20" keywordseo="rajat-patidar" source="keywords">Rajat Patidar</keyword>. Notably, it is Jurel, who has just played international matches for India, who has received the biggest pay hike, going from Rs 20 lakh this season to Rs 14 crores next season. <h2>End of 'KGF' era for Royal Challengers Bengaluru?</h2> With stars like Faf and Maxwell released, it could spell the end of 'Kohli, Glenn, Faf' (KGF) era for <keyword id="20282652" type="General" weightage="20" keywordseo="rcb" source="keywords">RCB</keyword>, which lasted from 2022-24. During this phase, they all scored heavily for RCB. Despite a lull in 2022 season, Virat scored 1,721 runs in 45 matches and innings at an average of 44.12, with three centuries and 13 fifties. Skipper Faf also scored 1,636 runs in 45 innings at an average of 38.05, with a strike rate of 146.99 and 15 fifties to his name. Maxwell sits at the third spot with 1,266 runs at an average of 28.77 and a strike rate of over 159, with 12 half-centuries in 50 innings. The only player that came closer to the trio was Indian wicketkeeper-batter Dinesh Karthik, who made 796 runs in 44 matches and 42 innings at an average of 29.48, with three fifties. If RCB had Virat-AB de Villiers-Chris Gayle in 2010s, KGF dominated the RCB batting numbers in 2020s. When RCB starts rebuilding their side from scratch in the auction, they would have a huge task in hand of finding one or two highly popular, capable and consistent foreign stars to help Virat unleash the carnage in a "Play Bold" avatar. Also, with the Rajat Patidar being retained for 11 crores, RCB might have made it clear that he could be the next big Indian batter the franchise invests in. His exceptional spin abilities have made a lot of difference for the side. Ever since he was brought by the franchise in 2021 for Rs 20 lakh, Patidar has played 27 matches, scoring 799 runs at an average of 34.73 with a strike rate of 158.84 and having registered a century and seven fifties. A complete list of retained players is as follows: <ul><li>Chennai Super Kings: Ruturaj Gaikwad, Matheesha Pathirana, Shivam Dube, Ravindra Jadeja, MS Dhoni</li><li>Delhi Capitals: Axar Patel, Kuldeep Yadav, Tristan Stubbs, Abhishek Porel</li><li>Gujarat Titans: Rashid Khan, Shubman Gill, Sai Sudharsan, Rahul Tewatia, Shahrukh Khan</li><li>Kolkata Knight Riders: Rinku Singh, Varun Chakaravarthy, Sunil Narine, Andre Russell, Harshit Rana, Ramandeep Singh</li><li>Lucknow Super Giants: Nicholas Pooran, Ravi Bishnoi, Mayank Yadav, Mohsin Khan, Ayush Badoni</li><li>Mumbai Indians: Jasprit Bumrah, Suryakumar Yadav, Hardik Pandya, Rohit Sharma, Tilak Varma</li><li>Punjab Kings: Shashank Singh, Prabhsimran Singh</li><li>Rajasthan Royals: Sanju Samson, Yashaswi Jaiswal, Riyan Parag, Dhruv Jurel, Shimron Hetmyer, Sandeep Sharma</li><li>Royal Challengers Bengaluru: Virat Kohli, Rajat Patidar, Yash Dayal</li><li>Sunrisers Hyderabad: Pat Cummins, Abhishek Sharma, Nitish Kumar Reddy, Heinrich Klaasen, Travis Head.</li></ul>

From spotlight on uncapped stars to big releases, a look at key takeways from latest IPL retention lists

<ul><li>Compared to 15.9 per cent in 2020-21, the gross financial savings of households stood at 10.8 per cent in 2021-22. In the three previous fiscal years, it was 12 per cent.</li><li>According to a consultancy firm, high <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> has been the major reason behind fall in savings and in order to increase investments, savings need to be encouraged.</li><li>Indian households account for about 60 per cent of the country's savings, but this is falling gradually. </li></ul> Indian households' savings fell to a five-year low in 2021-22 as rising inflation gnawed into the <keyword id="15631502" type="General" weightage="20" keywordseo="purchasing-power-of-the-middle-class" source="Orion">purchasing power of the middle class</keyword>. Also, due to the Coronavirus-induced lockdowns, people were forced to dig into their savings, as the pandemic also led to severe job losses and in the absence of steady incomes, savings were the last resort for people to run their households. Compared to 15.9 per cent in 2020-21, the gross financial savings of households stood at 10.8 per cent in 2021-22. In the three previous fiscal years, it was 12 per cent. Though initially during the lockdowns, people saved their funds, keeping in mind the possibilities of having to spend on healthcare, once the restrictions eased, they went on a spending spree, what economists termed as "revenge spending". This led to depletion of their savings and a situation arose when spendings exceeded income and there were cases when despite having no jobs, expenditures rose, and savings bore the brunt of this excess or revenge spending, economists explained. According to official data, <keyword id="382273" type="General" weightage="20" keywordseo="Household-savings" source="Orion">household savings</keyword> figures were down to 2.5 per cent of the GDP in 2021-22, while share of other savings avenues like insurance, provident fund and pension funds went up to 40 per cent of gross financial savings. In 2021-22, shares and debentures' portion were also at a five-year high of 8.9 per cent, while the share of small savings hit a 16-year high of 13.3 per cent, according to reports. According to a consultancy firm, high inflation has been the major reason behind fall in savings and in order to increase investments, savings need to be encouraged. Indian households account for about 60 per cent of the country's savings, but this is falling gradually. Lower domestic savings exposes borrowers to overseas markets, weakening India's external position and raising external debt. India's savings rate had touched a 15-year-low as gross domestic savings stood at 30.9 per cent of GDP in FY20, down from a peak of 34.6 per cent in FY12. Household savings fell from 23 per cent of GDP in 2012 to 18 per cent in 2019. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/a-year-after-market-debut-paytm-is-the-worst-performer-among-recent-large-ipos-cartrade-policybazaar-and-lic-join-the-party/articleshow/95762071.cms">A year after market debut, Paytm is the worst performer among recent large IPOs – Cartrade, Policybazaar and LIC join the party</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/bikaji-stocks-why-investors-continue-to-snack-on-this-stock/articleshow/95757704.cms">Bikaji Foods: Investors continue to snack on the stock that’s up 35% since listing</a>

Revenge spending effect: Household savings dip to 5 -year low

Amid questions on the depleting <keyword id="20776807" type="General" weightage="100" keywordseo="loan-to-deposit-ratio" source="keywords">loan-to-deposit ratio</keyword> in <keyword id="19895091" type="General" weightage="20" keywordseo="Indian-banks" source="keywords">Indian banks</keyword>, a recent report by <keyword id="19896146" type="General" weightage="20" keywordseo="Motilal-Oswal" source="keywords" meta.keywordsubtype="org" meta.entityname="Motilal Oswal" meta.hostid="269" meta.entityid="Motilal Oswal">Motilal Oswal</keyword> suggests that the loan-to-deposit (LD) ratio is likely to subside on its own in the coming months. The debate on loan-to-deposit ratio (LD), particularly concerning sluggish <keyword id="19998084" type="General" weightage="20" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> and potential risks to <keyword id="20089808" type="General" weightage="20" keywordseo="financial-stability" source="keywords">financial stability</keyword> is raised by even the finance minister and the <keyword id="20151998" type="General" weightage="20" keywordseo="RBI-governor" source="keywords">RBI governor</keyword>. However, the report notes that on closer examination, the situation may not be as alarming as it seems. As of 9th August, 2024 the Indian <keyword id="19964544" type="General" weightage="20" keywordseo="banking-sector" source="keywords">banking sector</keyword>'s loan-to-deposit (LD) ratio stood at 77.2 %, which is slightly below its recent peak of 78.2 % on 22nd March 2024, and its all-time high of 78.8 % in September 2013. The report stated that typically a rising LD ratio is indicative of a tightness in the banking sector, potentially indicating overheating. A lower LD indicates that the bank is aggressive in its credit disbursement practises, which could be risky. It highlighted that an analysis of the sector's transactions with the Reserve Bank of India (RBI) through the liquidity adjustment facility (LAF), along with recent trends in the weighted average call rate (WACR), suggests that the current rise in the LD ratio does not indicate tightness, which is why there is no immediate cause of concern. In fact, the report added that the concern over weak deposit growth may be overstated. Historical data show that bank deposits grew at an average rate of 9.5 % during the pre-COVID period (January 2015 to February 2020) and 10.4 % in the post-COVID period (March 2020 to August 2024). Earlier, Finance Minister Nirmala Sitharaman also urged state-run banks to enhance deposit mobilization through attractive offers and focusing on Tier-2 and Tier-3 cities. Loan-to-deposit ratio pegs the total deposits received by the bank against the loans it has offered. It helps in understanding how liquid the bank is. The loan-to-deposit ratio (LDR) is a financial metric that compares a bank's total loans to its total deposits. It's used to assess a bank's liquidity and credit risk, and to inform lending and deposit-taking decisions The report said while the exact measures are unclear, the deposit growth could potentially be increased by making other asset classes less attractive through taxation or interest rates, or by boosting fiscal spending to increase net credit to the government. In its forecast, the report noted that private banks will witness a moderation in their <keyword id="19998083" type="General" weightage="20" keywordseo="credit-growth" source="keywords">credit growth</keyword>, while public sector banks will maintain a healthy credit growth rate. "Our analysis suggests that deposit growth could be raised by either making other asset classes unattractive (through taxation and/or interest rate) or increasing the growth in net credit to the government by pushing fiscal spending higher" the report added. Alternatively, policymakers might consider curtailing loan growth to lower the LD ratio. However, this could slow deposit growth, particularly if corporate credit growth remains weak. Encouraging savers to shift investments from other assets to bank deposits could also be an option, but this carries risks of overreach and potential damage to economic confidence. Das had also flagged the excessive growth, or froth developing in the personal loan space. Notably, while credit growth in unsecured personal loans like credit cards continues to decline, it remains elevated at 23.3% as of June 2024. However, this is a significant reduction from 34.2% witnessed in November 2023. As fiscal spending increases, bank credit to the government is likely to grow, which should elevate deposits and broad money supply. The report said "However, the extent of foreign capital inflows and the RBI's policy for managing these inflows remain uncertain". Last month, RBI governor Shaktikanta Das had also addressed this issue in the 50th meeting of MPC (Monetary Policy Committee). Per him, deposit mobilisation has been lagging credit growth for some time now. This may potentially expose the system to structural liquidity issues. "While there could be a debate regarding ‘deposits funding loans’ vis-à-vis ‘loans funding deposits’, the current regulatory concern stems from the fact that there could be structural changes happening which banks need to recognise and, accordingly, devise their strategies. Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to capital markets and other financial intermediaries", Das said. Per him, while bank deposits continue to remain dominant as a percentage of financial assets owned by households, their share has been declining consistently, since households are now increasingly allocating their savings to mutual funds, insurance funds, pension funds and other avenues.

Loan-to-deposit ratio will subside on its own in coming months, notes Motilal Oswal report

<keyword id="25452" type="General" weightage="20" keywordseo="retirement" source="Orion">Retirement</keyword> is a non-negotiable phase in one’s life – one where the absence of <keyword id="25456" type="General" weightage="20" keywordseo="financial-planning" source="Orion">financial planning</keyword> can lead to distress. To understand the seriousness of <keyword id="159074" type="General" weightage="100" keywordseo="retirement-planning" source="Orion">retirement planning</keyword>, let us delve into these five pivotal aspects. 1. You might even live till 90: The trajectory of life expectancy has shifted dramatically. Did you know that just 100 years back, the average age of Indians was just over 20. At the time of independence, the average age was 32. Fast forward to 2020, it stands at72. In fact, an urban Indian lives 4-5 years more than a rural Indian. The ability to live longer is not because we have started living healthily, but due to the advancement in the medical field. Healthcare has advanced exponentially and become an integral part of our life. Forecasts indicate that the average Indian age could soon touch 80, underlining the need for comprehensive retirement planning. 2. Is 50 the new 60? In this tech-driven era, work paradigms are evolving. Whether you go to any bank, IT company, start-up, pharmacy, or any other business which belongs to the private sector, how many people do you see above the age of 50? Not many. As technology advances, the way we work is changing at a fast pace. “Experience” which was once a prized asset, no longer guarantees stability. Economic life cycles are shortening, compelling individuals and businesses to adapt or eventually exit. The adage “50 is the new 60” is increasingly relevant, which shines the spotlight on the need to prepare for alternate livelihoods or income sources during retirement. 3. Rise of the Nuclear Family: In the 1980s, we saw a culture of joint family. 15-20 people used to live under one roof. Work used to get divided among the family members. In recent times, family structures have evolved from joint households to compact nuclear units. The traditional support network has diluted, placing more pressure and responsibilities on fewer shoulders. . Women, traditionally have been financially dependent, and now see the rising need to redefine their roles and financial independence. And with the concept of a nuclear family poised to endure, securing financial stability has become even more important. 4. Returns are heading south: Financial landscapes are shifting, with interest rates on the decline while expenses surge. With every passing decade, interest rates on bank Fixed Deposit are getting lower by 2% on an average. By 2040, we may see low single digit returns and by 2050, the interest rate could be nearing 0%. On the other hand, a doubling of household expenses is projected for every passing decade, thanks to the effect of inflation. A little introspection of one’s own expenses a decade back will lay bare the reality. Similarly, consider the returns on bank interest rates and the picture is bound to be grim – giving rise to the importance of investment and savings strategies. 5. Taxation trends and environmental impact: Global warming is bound to have a major impact on our finances. Governments all over the world are struggling to deal with this aspect, and over time the impact is going to be adverse. As a means to deal with the potential fallout (calamities), governments are likely to add additional taxation like the Swachh Bharat Cess. The incremental money various governments will need to spend will come out of the pocket of its citizens. Connecting these dots, it becomes evident that retirement planning is crucial. With rising healthcare costs and waning interest rates, the strain on financial planning is increasing. In the United States, individuals are extending their work lives due to insufficient savings – a scenario that we must aim to avoid in India. Thus far, the government owing to the increased population has been forced to change their pension policy from guaranteed benefits to market linked benefits. However, it is time we take note of the increased life span and the real danger of running out of money during retirement. If you wish to lead a comfortable retired life, it is imperative to start saving early on in one’s working years and spend less on the current wants such that there is enough saved to address the future needs. In summary, the changing tides of life expectancy, work dynamics, family structures, financial landscape and evolving tax trends collectively emphasise the need for early and thoughtful retirement planning. And by taking charge we can pave the way to a secure retirement with early savings and prudent spending. Disclaimer: The article is authored by CA Ashish Modani,CFP,Founder-SLA Finserv Private Limited. The opinions expressed are those of the author and do not necessarily reflect the views of Business Insider India. Do your own research (DYOR) before deciding to invest in any financial asset class:

Secure your future today: Here’s five reasons why retirement planning can’t wait

<ul><li>Former <keyword id="64190" type="POSITION" weightage="20" keywordseo="RBI-Governor">RBI governor</keyword> <keyword id="6358908" type="DEFINITION" weightage="20" keywordseo="raghuram-rajan">Raghuram Rajan</keyword> believes that the government’s top priority should be allocating financial resources towards medical supplies required to fight the <keyword id="8829783" type="UNKNOWN" weightage="20" keywordseo="coronavirus-pandemic">Coronavirus pandemic</keyword>.</li><li>He told India Today in an interview that the second priority should be providing assistance to <keyword id="6903191" type="UNKNOWN" weightage="20" keywordseo="poor-households">poor households</keyword>.</li><li>Only when those two things are taken care of should the government think about introducing a monetary or fiscal stimulus to help the economy, Rajan said.</li></ul>Former RBI governor Raghuram Rajan believes that the government’s top priority should be procuring medical supplies to fight the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">Coronavirus</keyword> pandemic. He said that no expense should be spared in its battle to control the spread of Covid-19. “We need to spend money on medical supplies, ventilators, and masks — on getting protective equipment for medical workers. This means getting resources from private, public, defence, retirement — every resource — and quickly,” Rajan said speaking to India Today. . Rajan explained that even though temporary income support would make sense, the government’s resources are already very limited. “This is not the time to discuss that,” he said about a possible economic and monetary stimulus that the economy might need. However, the finance minister Nirmala Sitharaman on March 24 said that an economic stimulus package would be announced “sooner than later”. She also announced a list of compliances that have been relaxed including delaying IT return filing et cetera. As per Rajan’s list of priorities, the second step should be to address the marginalised sections of the community. Making sure that the livelihoods of poor households — both rural and urban — have enough to sustain themselves. Only when these two critical issues have been addressed, should the government allocate finances towards fixing the economy, according to Rajan. How should the government handle the Coronavirus’ impact on the <keyword id="6356076" type="DEFINITION" weightage="20" keywordseo="indian-economy">Indian economy</keyword>? According to Rajan, everyone is looking at China right now to see if their preventive measures against the spread of Coronavirus will hold. It has already reported a dip of 10% in its GDP during the first quarter. The estimates for Europe and the US also indicate a double-digit fall during the second quarter. When it comes to India, it’s important to make sure that the temporary pandemic shock on the economy doesn’t become a permanent feature, according to Rajan. The downturn of the economy leads to a slowdown in cash flow and takes away the income of workers. He points out that if this carries on for long enough, it could lead to substantial layoffs and firms closing down. “When the Coronavirus is under control, there won’t be a lot of economic activity because those businesses won’t start up again,” said Rajan. He said that even though the government can’t necessarily offer financial support — it can offer partial guarantees and incentivise banks to continue extending credit. See also: <a href="https://www.businessinsider.in/finance/news/no-minimum-balance-use-any-atm-all-the-changes-for-bank-customers-in-india-amidst-coronavirus-related-lockdown/articleshow/74791418.cms">No minimum balance, use any ATM⁠— all the changes for bank customers in India amidst Coronavirus-related lockdown</a> <a href="https://www.businessinsider.in/policy/economy/finance-minister-nirmala-sitharaman-speech-highlights-and-updates/articleshow/74789836.cms">The big announcements from India's Finance Minister Nirmala Sitharaman</a> <a href="https://www.businessinsider.in/india/news/coranavirus-cases-in-delhi-news-and-updates/articleshow/74773842.cms">The third stage of coronavirus spread in India can be delayed but not stopped, says ICMR</a>

Raghuram Rajan says save people before saving the economy

The <keyword id="11499283" type="General" weightage="20" keywordseo="household-appliance-makers" source="Orion">household appliance makers</keyword> now make <keyword id="393597" type="PERSON" weightage="20" keywordseo="refrigerators" source="Orion">refrigerators</keyword> for all budgets. A budget-friendly refrigerator can both be efficient and compact. A compact refrigerator in the kitchen provides a hassle-free cooking experience as you can access the ingredients and food items with ease. To help you buy the best budget refrigerator, here are the best options available on <keyword id="18635" type="COMPANY" weightage="20" keywordseo="Amazon" source="Orion">Amazon</keyword>. <bulletContentEmbed name="B0CFVLVD63" columns="1"><bulletContentHeading name="B0CFVLVD63_head"><div type="image" title="B0CFVLVD63" height="900" width="1200" msid="104731661" hostid="261" sizebytes="2542"></div></columnHeadThumb>B0CFVLVD63</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B0CFVLVD63_body"><bulletContentRow name="B0CFVLVD63_3805176035965087"><bulletContentRowHeading><bulletContentRowHead col="1">Haier 42 L 5 Star Mini Bar Single Door Refrigerator</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">Haier 42L mini fridge, a 5-star energy-rated wonder. With a slide chiller tray, 2L bottle holder, and temperature control, it's efficient and convenient. The stylish recess handle adds a touch of elegance. Backed by a 1-year product warranty and 5-year compressor warranty, this direct-cool refrigerator is perfect for bachelors seeking an economical and stylish cooling solution. </bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B08Z7CTKQG" columns="1"><bulletContentHeading name="B08Z7CTKQG_head"> <div type="image" title="Turbo Icing Technology" msid="83774496" hostid="261"></div></columnHeadThumb>B08Z7CTKQG</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B08Z7CTKQG_body"><bulletContentRow name="B08Z7CTKQG_1645791698294812"><bulletContentRowHeading><bulletContentRowHead col="1">Candy 170 L Single Door Refrigerator</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Candy refrigerator provides ample storage space and comes at a highly affordable price. It features Turbo Icing Technology that can deliver ice cubes in an hour. It comes with a reciprocatory compressor that provides optimum cooling. The refrigerator doesn’t need a stabilizer as it can adjust to the voltage fluctuations well. It has heavy-duty PUF insulation that helps keep your food fresh for a longer period.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B08Z7CTKQG_9457812443318944"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Candy refrigerator can be installed in the kitchen and is a suitable option for a small family.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B08Z878LCJ" columns="1"><bulletContentHeading name="B08Z878LCJ_head"> <div type="image" title="Toughened Glass Shelves" msid="83774522" hostid="261"></div></columnHeadThumb>B08Z878LCJ</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B08Z878LCJ_body"><bulletContentRow name="B08Z878LCJ_4106949500944006"><bulletContentRowHeading><bulletContentRowHead col="1">Candy 190 L Single Door Refrigerator</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Candy single-door refrigerator comes with a reciprocatory compressor that provides optimum cooling while saving energy. It has toughened glass shelves that can take heavy load of storage. It boasts the Turbo Icing technology that can deliver ice cubes in an hour. It has easy controls for cooling that can be adjusted manually according to the seasons. The fridge is equipped with bright LED lights.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B08Z878LCJ_5759397729221115"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Candy refrigerator has an aesthetic design that can enhance the look of your kitchen while providing 190L of storage.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B07R59V5SD" columns="1"><bulletContentHeading name="B07R59V5SD_head"> <div type="image" title="Freezer Compartment" msid="83774562" hostid="261"></div></columnHeadThumb>B07R59V5SD</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B07R59V5SD_body"><bulletContentRow name="B07R59V5SD_9296682186642914"><bulletContentRowHeading><bulletContentRowHead col="1">AmazonBasics 43 L Single Door Mini Refrigerator</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">AmazonBasics Fridge is packed with features to take care of your storing and cooling needs. It comes with a freezer compartment, dairy rack and drip tray. It has a sturdy build quality and it functions well in temperatures up to 43-degree celsius. It is easy to clean and features an efficient coolant that keeps your food and beverages fresh.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B07R59V5SD_8621668768115099"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The AmazonBasics mini fridge is another alternative for storing food items in the kitchen.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B088X2FSPV" columns="1"><bulletContentHeading name="B088X2FSPV_head"> <div type="image" title="Modern Design" msid="83774574" hostid="261"></div></columnHeadThumb>B088X2FSPV</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B088X2FSPV_body"><bulletContentRow name="B088X2FSPV_7915631115454164"><bulletContentRowHeading><bulletContentRowHead col="1">Hisense 44 L Single Door Mini Refrigerator (RR60D4ASB1, Silver)</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Hisense Fridge comes with a reversible door that makes it very convenient to use. It has a chiller zone to cool your beverages faster. It features a bottle bin and wire shelf to organise your food and beverages. It is a compact refrigerator that has plenty of storage. It features a recessed handle and a modern design that can complement the aesthetics of your kitchen</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B088X2FSPV_1121361136133341"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Hisense Fridge has a sleek design and can give easy access to food items in the kitchen.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B083KW4D6D" columns="1"><bulletContentHeading name="B083KW4D6D_head"> <div type="image" title="Efficient Cooling" msid="83774644" hostid="261"></div></columnHeadThumb>B083KW4D6D</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B083KW4D6D_body"><bulletContentRow name="B083KW4D6D_3879890361586989"><bulletContentRowHeading><bulletContentRowHead col="1">Whirlpool 190 L Single Door Refrigerator</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Whirlpool 190L refrigerator is suitable for a small family as it provides ample space for storage. It has up to 9 hours of cooling retention using the Insulated Capillary technology. You can defrost the refrigerator manually by pressing the defrost button. It comes with jumbo bottle storage that can accommodate three 2L bottles. The fridge can have a stabilizer free operation as it adjusts well to fluctuating voltages.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B083KW4D6D_5073594424414123"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">The Whirlpool refrigerator features a chiller for optimally cooling cans and milk packets.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed>

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