Lok Sabha Question No. 218 (UNSTARRED), answered on 2021-11-29
Subject: Net Financial Assets
Ministry: FINANCE
Asked by: Kani K. Navas, Balubhau (Alias Suresh Narayan) Dhanorkar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFIARS

## LOK SABHA

## UNSTARRED QUESTION NO. 218 TO BE ANSWERED ON 29.11.2021

## NET FINANCIAL ASSETS

## 218.  SHRI K. NAVASKANI: SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  people's  Net  Financial  Assets  dropped  from  21  per  cent  of  India's  Gross Domestic Product (GDP) to 8.2 per cent of GDP and if so, the details thereof;
- (b) whether 230 million Indians have been pushed below the poverty line, according to a report and if so, the details thereof;
- (c) whether 159 districts in 25 States saw a decline in fixed deposits in Q4 of 2020-21;
- (d) if  so,  whether  the  Government  is  taking  any  steps  to  alleviate  the  acute  economic distress that ordinary citizens are facing; and
- (e) if so, the details and impact reports of the steps taken in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) : As per the Preliminary Estimates of Household Financial Savings for Q3 of 202021 released by Reserve Bank of India, net financial assets of the household sector stood at 21 per cent of India's Gross Domestic Product (GDP) in Q1 of 2020-21, 10.2 per cent in Q2 of 2020-21 and 8.2 per cent in Q3 of 2020-21. A drop in the ratio from Q1 to Q2 is explained by much lower contraction of GDP at 7.4 per cent in Q2 as compared to 24.4 per cent contraction in Q1 in the pandemic year of FY 2020-21. A further drop from Q2 to Q3 is explained by a fall in bank deposits that followed higher spending in the economy when COVID-19 cases declined and the unlocking of the economy was complete.
- (b) : According  to Niti  Aayog's  National  Multidimensional  Poverty  Index  (MPI) Baseline Report released in November, 2021, India's national MPI identifies 25.01 per cent of the population as multidimensionally poor. This report is based on National Family Health Survey 4 (NFHS-4), which was conducted in 2015-16 by International Institute of Population  Sciences  (IIPS)  under  Ministry  of  Health  and  Family  Welfare  (MHFW), Government of India, in consultation with 12 Line Ministries and in partnership with State governments and the index publishing agencies -Oxford University's Oxford Poverty and Human  Development  Initiative  (OPHI)  and  United  Nations  Development  Programme (UNDP). The household microdata collected at the unit-level for the NFHS serves as the basis of the computation of National MPI. IIPS and MHFW, which conducted NFHS 5 in 2019-20,  released  its  summary  fact  sheets  for  all  States  and  Union  Territories  on  24 November,  2021.  NITI  Aayog's  preliminary  observations  on  the  summary  factsheets suggest  improvement in  access  to  clean  cooking  fuel,  sanitation,  and  electricity  which translates  to  reduction  in  deprivation.  Additionally,  the  State  reports  released  for  22 States  and  UTs  suggest  reduction  in  deprivation  in  school  attendance,  drinking  water, bank  accounts  and  housing.  These  improvements  indicate  significant  and  further

reduction in the incidence of multidimensional poverty since NFHS 4 (2015-16) owing to focussed programmatic interventions and flagship schemes.

(c) :  As  per  the  latest  Quarterly  Statistics  on  Deposits  and  Credit  of  Scheduled Commercial Banks released by the Reserve Bank of India, 159 districts in 25 State/UTs saw a decline in fixed deposits in Q4 of 2020-21 compared to Q4 of 2019-20, as private consumption registered a positive growth after contracting for three consecutive quarters.

(d)&(e):  The  decline  in  multidimensional  poverty  has  been  driven  by  programmatic interventions and flagship schemes of Government that has focused on inclusive growth as reflected in Government's commitment to Sabka Saath, Sabka Vikas. 'Gaon, Gareeb aur Kisan', in particular has been at the centre of government policies.  In this regard, Government has been implementing a number of targeted programmes to improve the per capita income of both rural and urban India for overall balanced development in the country.  These  programmes,  inter-alia,  include  Pradhan  Mantri  Kisan  Samman  Nidhi, Pradhan Mantri Kisan Maan-Dhan Yojana, Mahatma Gandhi National Rural Employment Guarantee  Scheme  (MGNREGS),  Deendayal  Antyodaya  Yojana-National  Rural  and Urban Livelihoods Mission, Skill India, Pradhan Mantri Awaas Yojana (PMAY), Pradhan Mantri  Gram  Sadak  Yojana  (PMGSY),  Swachh  Bharat  Mission,  Sansad  Adarsh  Gram Yojana, Shyama Prasad Mukherjee National RuRBAN  Mission, National Social Assistance Programme (NSAP), Pradhan Mantri Jan-Dhan Yojana (PMJDY), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), Shyama Prasad Mukherji Rurban Mission  (SPMRM),  Pradhan  Mantri  Suraksha  Bima  Yojana  (PMSBY),  Pradhan  Mantri Jeevan Jyoti Bima Yojana, Atal Pension Yojana, Pradhan Mantri Mudra Yojana, Stand Up India Scheme, Pradhan Krishi Sinchai   Yojana, Swachh Bharat Mission (Rural and Urban). Government has also implemented the Aspirational Districts Programme aimed at comprehensive development of backward areas in six areas: (i) health & nutrition, (ii) education, (iii) agriculture & water resources, (iv) financial inclusion, (v) skill development, and (vi) basic infrastructure.

To limit the damage inflicted by the pandemic on the economy and initiate quick recovery of economic growth in FY 2020-21, Government had announced a special economic and comprehensive  package  of  Rs.  29.87  lakh  crore  under  AtmaNirbhar  Bharat  (ANB) including measures announced by Reserve Bank of India and PM Garib Kalyan Yojana (PMGKY). Under the PMGKY package of Rs.1.70 lakh crore, an ex gratia of Rs. 1,000 in two instalments of Rs. 500 each were given to 2.82 crore existing old age, widow and disabled beneficiaries of National Social Assistance Programme (NSAP), amounting to Rs. 2814.50 crore, and an ex gratia of Rs. 1,500 in three instalments of Rs. 500 each were paid to all 20 crore plus women account holders of PMJDY through Direct Benefit Transfer  (DBT),  amounting  to  Rs.  30,944.9  crore.  In  addition,  under  Pradhan  Mantri Garib Kalyan Ann Yojana (PMGKAY) free food grains were distributed to nearly 80 crore beneficiaries.

The Union Budget 2021-22 further announced a number of measures to support broadbased  and  inclusive  economic  development.  These,  inter-alia,  include  a  34.5  percent increase in capital expenditure and 137 percent increase in health expenditure apart from rationalization  of  personal  income  tax  rates  to  support  domestic  demand,  a  16-point action  plan  for  holistic  development  of  the  agriculture  sector  and  critical  measures  to boost  rural  spending.  Subsequently,  a  relief  package  of  Rs  6.29  lakh  crore  was announced in June 2021 to strengthen public health and provide impetus for growth and employment measures.

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