Stock markets won't help, Indians need better interests on their savings

A change in the investment scenario for people in India has adversely impacted the poor, the middle classes, the farming community and the senior citizens.

Investments in the real estate sector have seen a sharp decline over the recent past. Interest rates on saving schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) have been falling consistently. The rate of interest on bank savings may make you cry if you are a senior citizen in the country. Post demonetisation, hoarding money at home without earning any interest on it does not make sense.

Against this backdrop, the only plausible option to earn some savings on one's earnings seems to be to invest in stock markets.

Every time the Sensex jumps, it makes instant headlines in business news and sets a feel good factor among those who understand the stock market and invest in it. However, this feel good feeling is restricted to a handful of people when compared with the over 130 crore population of the country. This savings option is definitely not easy to access for the country's diverse economic sections.

The manufacturing and agricultural sectors are still recovering from the blows of the Goods and Services Tax and demonetisation. Prices of daily use household items have been out of control for some time now under inflationary pressures. Unemployment is another major problem staring the economy.

Despite a good monsoon, the agricultural sector has fared unexpectedly bad. Farmers' agitations are on a pause mode for now but can erupt any moment as protests may start ahead of the upcoming Vidha Sabha elections.

A rough estimate suggests, no more than 10 per cent of the 70 per cent of India's population living in villages may be aware of the stock markets, the BSE, or the NSE.

If the Sensex bubble was to burst suddenly, it is set to hit the aspirational section of risk taking wealthy people who are looking for ways to get rich quickly.

It's time both the small investors in urban India as well as in the rural heartlands get better and more attractive investment avenues to earn on their savings. If that doesn't happen, maybe we'll have to go back to "gullak" savings.

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