Structural shift in India

"India's savings patterns are shifting, with far-reaching implications for the economy and financial systemThe downward plunge of the Indian stockmarket has hurt the fortunes of thousands of investors, big and small. It will also have broader implications for India's financial system and the future of savings and investment patterns. Over the past few years, cautious investors had started to diversify away from bank deposits and cash, moving into equities, mutual funds and insurance products. But the market turmoil is driving them back to the safety of bank deposits, reducing the amount of capital available to other instruments and possibly retarding the growth of the financial-services industry as a whole.India's high savings rate has been a crucial driver of its economic boom, providing productive capital and helping to fuel a virtuous cycle of higher growth, higher income and higher savings. Since the 1990s, the gross domestic savings rate has risen steadily from an average of 23% to an estimated high of 35% in the 2006/07 fiscal year (April-March). The latter rate compares very favourably not only with developed economies (the US and the UK have savings rates of around 14%), but also with other emerging economies—with a few exceptions such as Malaysia (38%) and Chile (35%). ..." (2009-3-31)
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