India's household savings shift to mutual funds as SEBI revises data

A revised methodology jointly developed by the Securities and Exchange Board of India (SEBI), the Reserve Bank of India and the Ministry of Statistics has substantially increased estimates of Indian household savings through the securities market. The new framework shows household investments rising to ₹6.91 lakh crore in FY 2024‑25, up from ₹3.58 lakh crore the previous year, and pushes the gross savings‑to‑GDP ratio up by 47 basis points to 34.94%.

Nearly four‑fifths of the FY 25 investment flowed through mutual funds, with primary mutual‑fund inflows surging from ₹1.66 lakh crore in FY 23 to ₹5.13 lakh crore in FY 25. At the same time, households were net sellers of direct equity, offloading ₹54,786 crore in FY 25. Industry commentator Jimeet Modi said the trend reflects “maturation” rather than a retreat from equities, noting that investors are booking gains on stocks and reallocating fresh savings to professional vehicles such as systematic investment plans (SIPs), which he described as “the operating system of India’s household financial savings.”

The updated approach also incorporates secondary‑market activity and newer asset classes like REITs, InvITs and AIFs, providing a more granular picture of savings behaviour and informing public‑policy planning.