Equity and MF share in household savings jumps from 2% to 15%, SIP contribution soar 7x: Economic Survey

Economic Survey 2025-26 Highlights Sharp Rise in Equity and Mutual Fund Allocation

The Economic Survey 2025-26 has revealed a significant shift in household savings towards disciplined, long-term investing, driven by a sevenfold increase in Systematic Investment Plan (SIP) contributions.

Key Findings:

• The share of equity and mutual funds in annual household financial savings increased from 2% in FY12 to over 15.2% in FY25.
• The average monthly SIP flows increased seven times from under Rs 4,000 crore in FY17 to over Rs 28,000 crore in FY26 (April to November).

The growing prevalence of systematic investments reflects a shift towards long-term and sustained household engagement, with savings being channelled in a disciplined manner across market cycles.

Portfolio Diversification:

In contrast, the share of deposits declined from over 58% in FY12 to around 35% in FY25, after having fallen to as low as 31.9% in FY22. This pattern suggests portfolio diversification rather than displacement, with households adding equity exposure to their existing savings rather than substituting entirely away from traditional instruments.

RBI Data:

The RBI data showed that the share of equity and investment funds in total household financial assets increased from 15.7% in March 2019 to 23% by March 2025. Assets managed through mutual funds rose steadily relative to the size of the economy, increasing from 10% of GDP in the early 2010s to nearly 23% by FY26 (as of November 2025), amounting to over Rs 80 lakh crore.

Unique Investor Base:

The unique investor base expanded sharply in the initial years following the pandemic, rising from around 3.1 crore in FY20 to over 11 crore by FY25. Although net additions to the investor base have moderated in the current fiscal, net inflows of domestic investors into equity markets have remained resilient.

Domestic Institutional Investors:

Retail engagement with corporate bonds and debt-oriented investment products remains limited, resulting in debt securities comprising a small portion of household financial assets. Domestic institutional investors (DIIs), particularly mutual funds and insurance companies, have counterbalanced the impact of foreign investment outflows and provided much-needed support to markets.

Regulatory Update:

From January 1, 2026, investments by mutual funds and specialised investment funds in Real Estate Investment Trusts (REITs) will be treated as equity-related instruments, easing participation constraints and potentially improving secondary market liquidity.

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