New Delhi: India’s household savings as a percentage of GDP increased to 21.7 per cent in FY2024-25, up from 20 per cent in FY2022-23, according to the latest GDP estimates based on the new base year 2022-23, the government informed Parliament on Tuesday.

Responding to a question in the Rajya Sabha, Pankaj Chaudhary said household savings play a crucial role in financing investments in the Indian economy and help strengthen the financial resilience of households.

He said the government has implemented several policies in recent years to support income growth, employment generation and higher savings in India. These measures include improving the ease of doing business, expanding skilling initiatives, promoting inclusive human resource development, and investing in infrastructure development.

According to the minister, such reforms are expected to boost household income and savings levels in India over the coming years, supporting sustainable economic growth.

Tax relief and GST changes to boost disposable income

The government has also introduced policy measures aimed at increasing disposable income, which could support higher household consumption, savings and investment in the medium term.

Chaudhary pointed to income tax exemption for annual incomes up to ₹12 lakh and GST rate rationalisation as key steps that could help increase household disposable income. Higher disposable income, he said, may also reduce overdependence on credit while encouraging stronger savings and spending patterns in the economy.

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Food inflation falls in FY2025-26

Replying to another question, the minister said food and fuel inflation trends in India have remained subdued in FY2025-26.

Data showed that retail food inflation declined to –0.98 per cent during April–January of FY2025-26, compared with 7.3 per cent in FY2024-25.

Chaudhary said the new Consumer Price Index (CPI) series does not include a separate fuel category. However, based on the Wholesale Price Index (WPI), average fuel inflation stood at –3.16 per cent during April–January FY2025-26.

Global crude oil prices remain a key factor

The minister noted that global crude oil prices and the Indian crude basket had been on a declining trend over the past year, although geopolitical tensions in West Asia recently pushed prices above $100 per barrel.

He added that food and fuel inflation in India are influenced by a combination of domestic and global factors.

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Food inflation, in particular, depends on agricultural output, monsoon performance, weather conditions, seasonal supply variations and input costs such as fertilisers, energy and labour. In addition, supply chains, transport networks and storage infrastructure also play a significant role in determining food prices.

Overall, stronger household savings, stable inflation trends and supportive government policies are expected to contribute to sustained economic growth in India in the coming years.

IANS