Indian households have seen a sharp rise in wealth thanks to the soaring price of gold, with holdings now valued at an estimated $3.8 trillion, accounting for almost 89% of the country’s GDP, according to a Morgan Stanley report. The report says the surge in household wealth is further supported by lower interest payments after recent monetary policy easing, as well as higher disposable income from tax cuts, ET reported. The recently implemented GST cuts, in addition to the income-tax cuts announced earlier this year, aimed at boosting income of individuals, it added. Gold prices have climbed 61.8% this year, reaching a record Rs 1.27 lakh per 10 grams. The Reserve Bank of India has also increased its gold reserves by around 75 tonnes since 2024, taking total holdings to 880 tonnes, about 14% of the country’s foreign exchange reserves. Household investments are also shifting, with equities now making up a record 15.1% of financial savings in FY25, up from 8.7% in FY24 and just 4% before the pandemic. Meanwhile, the share of deposits has fallen to 35%, down from 40% in FY24 and 46% pre-pandemic, according to ET. Morgan Stanley expects this trend to continue, predicting that equities will play an even bigger role in household savings, supported by a younger population and growing awareness of investment options.
