Savings is a private virtue but a public vice," said renowned British economist John Maynard Keynes. In India, savings have become less and less of a private virtue, with consumption rates rising and savings rate of households falling, , while getting access to reliable jobs data has become increasingly difficult, economists point out that high unemployment rates are also to be blamed for the drop in financial savings.
According to Ambit Capital Pvt. Ltd, there could be further erosion in the country’s savings to gross domestic product (GDP) ratio if the unemployment problem is not addressed. “The strong correlation between savings ratios and employment growth is not just a phenomenon that holds true with respect to India, but in fact can be seen in the context of other emerging markets as well," it said in a note to clients.