Net financial savings of Indian households decreased to a nearly five-decade low in the financial year 2022-’23, data from the Reserve Bank of India said, according to the Financial Express.

Household savings fell to 5.1% of the country’s gross domestic product in 2022-’23, as against 7.2% in the preceding fiscal year.

On the other hand, annual financial liabilities of households increased by 5.8% of the gross domestic product, as against 3.8% in 2021-’22.

The Reserve Bank of India’s data showed that the rate of increase in financial liabilities in the past fiscal year was the second highest since Independence, The Tribune reported. The only time that the figure was higher was in 2006-’07, when it was 6.7%.

The data also showed that net household assets decreased from Rs 22.8 trillion in 2020-’21 – the financial year when the Covid-19 pandemic was at its peak – to Rs 16.96 trillion in 2021-’22 and further to Rs 13.76 trillion in 2022-’23.

Household savings are calculated by subtracting aggregate financial liabilities from total financial assets. Household liabilities comprise loans from banks or non-banking financial companies, while assets can refer to bank deposits, provident funds, currency and other investments.

Nikhil Gupta, an economist at Mumbai-based financial company Motilal Oswal, said that the combination of weak income growth and decreasing savings was unsustainable. “We believe that consumption growth is unsustainable,” he said, according to the Financial Express. “Whether it will be substituted by investments is not our base case, though the jury is still out.”