According to a recent report of Goldman Sax, India is changing steadily towards financial property, due to a stable per capita income growth, favorable democratic trends such as decreasing dependence ratio and improved access to financial services. However, it is still far behind other economies.
Experiences in other countries show that tax incentives and government-sponsored savings schemes, especially for non-bank tools, play a vital role in changing savings towards financial property.
India’s stable per capita income and the development of the ongoing financial markets are available in the next few years for the greater opportunity for the economic economy of domestic savings, it said.
In the last ten years, India’s domestic financial savings project is approximately 5 per cent of GDP in the next ten years, compared to the average GDP on average.
“According to our estimates, according to our estimates, according to our estimates, in our estimates, in our estimates, the report, according to our estimates, in the bear-processing situation, the domestic financial savings may be about 11.5% of the GDP in the next ten years. 4 trillion) and 4 of them are expected to be a trillion, which has 4 trillion, which has 4 trillion, which has 4 trillion, which has 4 trillion, which has 4 trillion, which has 4 trillion, which is expected to have 4 trillion and all kinds of trillions, which are expected of 4 trillions, which are expected.
“We expect to continue the stream of equipment and mutual funds (about $ 1.8 trillion), while we project the bank’s deposits to attract the trillion dollars,” he said.
“In this proportion, India’s transition reflects the transition of the physical to financial property of India, mirroring samples appear in other countries as the income increases and the financial system matures.”
Extensively, the Goldman Saxes in India see three main results of high home -based savings savings.
First of all, without physically extending this account deficit, the corporate capital expenditure cycle will provide stable funds.
Secondly, this long-term bond market is likely to support anchor long-end universal bond products, and motivates to issue long-term semi-rains or corporate bonds, which can facilitate infrastructure financing.
Finally, this is likely to increase retail participation in the capital markets and promote the demand for commercial property management services.
According to the report, the distribution of savings between financial and physical assets depends on many factors, including home decisions, income, inflation, interest rate, risk preferences and access to the financial market.
There has been a clear change in financial property in advanced economies, families are investing in capital markets, pension funds and insurance products.
On the contrary, many emerging markets still distribute high levels of savings to material property such as real estate and gold, which shows significant potential for further financialization of savings.
At low income levels, families prefer material property and look at them as a safe store of value. As the income increases and the financial system matures, the financial properties are gradually diverted, which usually gives high liquidity and in some cases, higher returns.
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