A broad scale survey reveals, “Indians prefer to save money in ‘in-house savings’ rather than ‘in banks or ‘investment’”. ‘They save money for emergency and any mishappening’, study says. The deputy chairman of planning commission Montek Singh Ahluwalia has released the result of this economic and social status survey ‘'How India Earns, Spends and Saves' on Wednesday in the capital.
National Commission for Applied Economic Research (NCAER) along with Max New York Life, a life insurance company had conducted this survey in major chosen urban and rural areas of the country that represents a rough sketch of 205.9 millions of Indian family’s strategy of earning, spending and saving money.
NCAER and Max New York Life insurance conducted the study over 60,000 families and reveals various facts about Indian’s earning and saving strategy, ‘what and where (from which profession) they earn?’ and ‘What they spent and where they spent?’ The study also shows the broad difference of urban and rural people’s earnings. This survey was conducted in 2005, which result was unveiled here on February 06.
According to research, ‘more than 81% of Indian households to keep their earnings at home’ no matter, whether they are from labour class or land owners or salaried individuals.’ ‘They save this money for any emergency period or any mishappening’, study also revels it. The reason behind is ‘there is no social security in the country for the citizens of the nation’, study stated on the response of the people.
The western and developed countries have the system of social security which prevents the poor families from starvation and ill-social society by giving social protection and economic support.
According to the study, a major portion of Indians saves a thick portion of their earnings but do not invest in the banks or post office or any investment scheme, which give them some return, especially countryside people.
For getting secure return or perfect security of their earning, 51% of Indians put their savings in the banks while 36% of households still prefer to stash cash at home. The investment in post offices and other guaranteed return schemes and plans gets minor part of total savings. Only 5% of family put their money in post offices, while 2% buy insurance policies and 0.5% invests in equities.
‘The habit of savings is good, but the way of savings are not good enough as only a meagre part of total savings come under the government account that is not enough to conduct various plans properly’, said planning commission official over this survey results.
The difference of earning between the urban class family and rural class family is also very wide. The urban class earn an average of 85% higher than their rural counterparts and also spends 71% more and saves nearly double Rs 26,762 compared with Rs11,613 every year as against per household income Rs. 65,041.
The reason behind saving is also varies from people to people. As per survey data, nearby 83% people save money for emergency, while children’s education is the second priority and 81% people prefers it for saving money over other issues. Only 69% households save for old-age financial security, while 63% families keep money ‘save’ to meet future expenses like marriage, births and other social ceremonies.
The survey also revealed that ‘nearly 47% households save to buy or build a house or to improve their business, while 22% households saved to buy consumer durables.
Another panic thing, which unveiled from this survey is that “96% of households feel that they cannot survive for more than a year on their current savings in case they lose their major source of household income,” because in India the tendency of ‘one earning and several surviving’ is a crucial factor behind it, financial expert believes. ‘There is another big reason is not utilizing properly of their savings’, added experts.
|
Comments: