India’s Rising Equity Investments Yet To Boost Long-Term Retirement Savings, Says CEA V Anantha Nageswaran
· Free Press Journal
India’s increasing participation in equities and mutual funds has not resulted in a similar rise in long-term retirement savings, Chief Economic Adviser V Anantha Nageswaran said on Thursday.
Speaking at the Pension Fund Regulatory and Development Authority’s NPS Divas 2026, Nageswaran said Indian savers had shown greater willingness to take market risks but had yet to commit a significant share of their savings for extended periods.
Visit palladian.co.za for more information.
He said this was particularly important as India’s population ages and households need to build financial resources that can support them after retirement. Financial markets, he added, also need to channel long-term savings towards productive investments.
UPI Limit Scam Costs Pensioner Couple Nearly ₹6 Lakh In IndoreEquity participation rises, pension savings lag
According to the Economic Survey 2025-26, equities and mutual funds accounted for about 12-15% of annual household financial savings in FY25, up from around 2% in FY12. Over the same period, the share of bank deposits fell from more than 58% to about 35%.
Systematic investment plan (SIP) inflows have also increased significantly, rising from less than ₹4,000 crore a month in FY17 to more than ₹28,000 crore during the first eight months of FY26.
However, Nageswaran said the proportion of pension and insurance assets in household savings remained unchanged between FY19 and FY24. India’s total pension assets are estimated at about 17% of GDP, compared with at least 80% in Organisation for Economic Co-operation and Development economies.
Ageing population raises retirement planning needs
Financial Services Secretary Sanjay Lohiya said pension institutions need to build greater confidence among subscribers and emphasised that pension savings should be viewed differently from conventional investment products.
Nageswaran pointed to demographic changes as another reason for strengthening retirement savings. The share of Indians aged 60 and above was 10.1% in 2021 and is projected to reach 15% by 2036 and 28% by 2050, according to the United Nations Population Fund’s India Ageing Report 2023.
India could have about 34.7 crore people aged 60 and above by 2050. A person reaching 60 can currently expect to live another 18.4 years on average, while the corresponding figure for women is 19.6 years.
Nageswaran said retirement could therefore represent nearly two decades of life that would need to be financed through savings accumulated during working years. India’s current old-age dependency ratio remains relatively low at about 16 older people for every 100 working-age people.