India's households hold substantial wealth, primarily in gold and real estate, amounting to approximately Rs 950 lakh crore. According to Sashi Krishnan, Director at the National Institute of Securities Markets (NISM), this wealth landscape poses significant challenges for transitioning savings into more productive financial markets. At the recent Moneycontrol FiDEX 2026, Krishnan pointed out that Indian households collectively possess between 30,000 to 35,000 tonnes of gold, valued at around Rs 450 lakh crore. Additionally, residential real estate assets are estimated to be worth approximately Rs 500 lakh crore. Most of this wealth remains tied up in physical assets that yield minimal financial returns, thus limiting overall economic growth.
Currently, only about 5.3% of household savings are allocated to financial products, which Krishnan identifies as a key concern. The remaining funds—nearly Rs 950 lakh crore—are largely stagnant in gold and real estate, resulting in unproductive capital. Despite India's household savings rate standing at around 18% of GDP, a substantial portion of these savings remains outside the formal financial system. This trend highlights the potential for capital markets to grow significantly if a shift in savings behavior can be achieved.
The current retail investing environment also reveals a notable participation gap. While dematerialized accounts (demat) have surpassed 21 crore, only approximately 4.5 crore accounts are actively trading or investing. Similarly, mutual fund folios have grown to around 26.6 crore, but the number of unique investors remains at about 6 crore, equating to roughly 4% of the Indian population. This disparity suggests that a considerable portion of the population is not yet engaged in financial markets, which could represent an untapped opportunity for growth.
Krishnan emphasizes that if just an additional 10% of the population redirected their savings from gold, real estate, or idle assets into financial markets, the potential for capital market expansion would be substantial. Encouraging households to invest in productive financial assets is crucial for deepening India's capital markets and fostering long-term wealth creation. By addressing the barriers to investment and promoting financial literacy, stakeholders can facilitate a more robust financial ecosystem that benefits both individual investors and the broader economy.