The financial saving of the household sector amounted to only 13.7 per cent of GDP in 2004-05, down from 14 per cent of GDP in the previous year, according to the Reserve Bank of India's Annual Report.
Investment in shares and debentures amounted to a minuscule 0.2 per cent of GDP, but this is higher than the zero per cent level notched up during the previous year.
Households' investments in shares and debentures went up from 0.1 per cent of gross financial saving in 2003-04 to 1.1 per cent last fiscal. But that was largely on account of lower redemption from the Unit Trust of India.
Households' investment in mutual funds (other than UTI) went down from 1.2 per cent of gross financial saving in 2003-04 to 0.4 per cent in 2004-05.
However, their share of investments in private corporate businesses' shares and debentures rose from 1.1 per cent to 1.4 per cent. Investing public apparently prefers to invest directly rather than through mutual funds.
Deposits with banks continued to be the favourite, accounting for 37.1 per cent of gross financial saving compared with 36.7 per cent in the previous year.
The scams in co-operative banks have taken their toll, and deposits with co-operative banks and societies went down from 4 per cent of financial saving in 2003-04 to 2 per cent.
Investment in small savings was another favourite, accounting for 19 per cent of financial savings in FY05 compared with 15.5 per cent in FY04. Clearly, most households have missed out on the boom in the stock markets in the last two years.
Lending to industry and housing accelerates
Lending to medium and large industry increased by Rs 42,976 crore (Rs 429.76 billion) in 2004-05, compared with Rs 12,042 crore (Rs 120.42 billion) in the previous year, according to the RBI Annual Report.
Also, the UPA government's emphasis on agriculture seems to have paid off, with loans to agriculture rising by Rs 31,829 crore (Rs 318.29 billion) against Rs 17,023 crore (Rs 170.23 billion) in the previous year.
Of course, with overall non-food gross bank credit rising by Rs 2,03,044 crore (Rs 2,030.44 billion) in FY05, compared to Rs 1,08,367 crore (Rs 1,083.67 billion) in FY04, bank lending rose across almost all sectors.
But incremental lending to medium and large industry not only went up in absolute terms, but also as a percentage of the rise in non-food gross bank credit, the share of medium and large industry moved up from 11.1 to 21.2 per cent.
Incremental housing loans as a percentage of incremental non-food gross credit rose from 7.4 to 11.4 per cent. Real estate loans accounted for another 2.5 per cent of the rise in total loans, a reflection of the boom in the housing sector. Credit to wholesale trade as a percentage of total lending rose from 2.1 per cent in FY04 to 4.4 per cent last fiscal.
Which were the industries which had the highest incremental lending in FY05? Surprisingly, in spite of all the talk, incremental credit to petroleum companies, at Rs 2,352 crore (Rs 23.52 billion), was way down in the list.
Roads and ports, with Rs 7,619 crore (Rs 76.19 billion), topped the list, closely followed by power with Rs 7,319 crore (Rs 73.19 billion) and telecom with Rs 4,548 crore (Rs 45.48 billion).
Among non-infrastructure sectors, gems and jewellery topped with Rs 2,945 crore (Rs 29.45 billion) of new lending, followed by cotton textiles with Rs 2,845 crore (Rs 28.45 billion) and iron and steel with Rs 2,730 crore (Rs 27.30 billion).
With contributions from Mobis Philipose and Amriteshwar Mathur.