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Nikhil Gupta
Nikhil Gupta is an Economist who is currently working with Nirmal Bang Equities in Mumbai. He secured first rank in his post-graduation in Economics from Gokhale Institute of Politics and Economics, Pune. He has undertaken macroeconomic research on major world economies including the US, Eurozone, UK and China.
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Household savings and India's current account deficit
India’s current account deficit widened consistently in the post-crisis period between 2008-09 and 2012-13. This column finds that while the public sector was the key driver of this trend in the first two years, the increased consumption/investment by households was responsible for the high deficit in the later period. It recommends that policymakers should now incentivise household savings rather than consumption/investments, which implies limited scope for further interest rate cuts.
How interest rates affect financial decisions of Indian households
RBI has cut interest rates three times this year so far. While rate cuts are welcomed by the Indian corporate sector, their impact on households is less discussed. This column analyses the relationship between deposit rates and financial decisions of households. It finds that lower rates reduce net financial savings of households, which in turn reduces the resource pool available to the corporate sector.