SEBI Calls for Overhaul in Calculating Household Savings in India: New Report Highlights Gaps in Current Methodology

A recent working paper titled Household Savings Through Indian Securities Market, released by the Securities and Exchange Board of India (SEBI), highlights the need to review and update the current methodology used to calculate household savings in India. The paper points out that certain segments and products in the Indian securities market are not considered under the Reserve Bank of India’s (RBI) existing methodology, despite changes in saving patterns among Indian households over time.

The paper emphasizes that savings through the securities market are not fully captured in the present system. SEBI noted that the Indian securities market has seen several structural changes, and updating the methodology would enhance the accuracy and quality of data.

Three key revisions have been proposed: redefining investor categories, expanding the types of instruments considered, and including new components previously overlooked. The report suggests the inclusion of all domestic individual investors and Hindu Undivided Families (HUFs), regardless of income or investment size, as well as non-profit institutions such as NGOs, trusts, and charities.

Additionally, the paper calls for incorporating real estate investment trusts (REITs), infrastructure investment trusts (InvITs), and alternative investment funds (AIFs), which are currently excluded from the calculations. This revision follows the recognition that the saving patterns of Indian households and the structure of the securities market have evolved significantly over the past decade.