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Around 69% of households in India suffer from financial insecurity: Survey


A personal finance survey has revealed some eye-opening facts about the dynamics of financial behavior in India. India’s Personal Finance Pulse which mapped income, savings, investment, and spending of Indian households claimed that around 69% of the households in India struggle with financial insecurity and vulnerability.

The survey also unveiled the Money9 Financial Security Index which is India’s first-ever state ranking of citizen financial security and also provided insights on how India earns, spends, and saves.

“The survey finds that the average income of an Indian family of 4.2 persons is 23,000 per month. Over 46 percent of Indian families have an income of less than 15,000 per month i.e.belong to the aspiring or lowest-income cohort,” it said. “Only 3 percent of Indian households have a luxury standard of living and most of them belong to higher income cohorts (High- Middle and Rich),” a statement from the survey conducted by Money9 said.

Around 70% of Indians do some form of financial savings in bank deposits, insurance, post office savings, and gold, with the highest penetration of bank and post office deposits, which is more than 64%.

“The incidence of saving is less prevalent among the aspiring class. Also, two-fifths of the Indian households in the same class are unable to do any financial savings. There is a clear need to address this segment by the policy makers/market players,” it said.

On investments by Indian households, the survey noted that 22% of Indian households invested in stocks, mutual funds, ULIP, and physical assets, with the highest investments in real estate (18%). Only 6% of Indian households invest in mutual funds, 3% invest in the stock market, and 3% in Unit Linked Insurance Plans or ULIPs, according to the survey.

The bank loans of Indian households are also very low with just 11% of the households having an active loan accounts with banks. The percentage of personal loans is the highest and after that comes the home loans, among retail loans.

“India’s Money9 Financial Security Index which ranks states in security across several parameters. This index finds 42 percent… of Indian households are ‘insecure’ (this includes households having monthly earnings of 15,000 or more). The level of financial insecurity further increases to 69 percent after including the lowest income cohort i.e. households having monthly earnings up to 15,000,” the statement said.

The survey had a sample size of 31,510 households across 1,154 urban wards and villages in 100 districts and 20 states and was conducted between May and September 2022.

With inputs from PTI.


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