OneInsure Blog


How India Transforming from a Spending Economy back to a Savings-based Economy Affects You

For many years, our country has been moving in the direction of other developed economies of the world. With the globalization of the economy and liberalization of policies in the early 1990s, entrepreneurs have been given a free rein, foreign funding has flowed, and privately held businesses have ample freedom to operate, market, and thrive successfully in India.

Macro steps like these and many other tweaks and revisions of government policies have ensured that our economy—just like those of other developed nations—has become one that focuses on spending rather than saving.

While 30-40 years ago our previous generation believed in toiling at work, saving money, and hoarding wealth in the form of gold, land, and Fixed Deposits, the current generation is more interested in going out on the weekends, having a good time, and investing what is left over in funds like mutual funds or ULIPs or PPFs.

This is a paradigm shift that has occurred over several decades due to increasing salaries; a freer job market where good jobs are only a few interviews away for worthy candidates; and the prevalence of high-performing financial tools like bank loans, EMIs, insurance, and market-linked funds that have by and large done great over the last 30-odd years. And this perfect scenario was never supposed to backtrack...

…and then COVID-19 happened…

The coronavirus outbreak has impacted not only healthcare, but many other spheres of life around the world. India has NOT been an exception. In fact, India currently sits at the third worst impacted country in the world in terms of positive infections (close to 75 lakhs as of this writing).

It’s not surprising, therefore, that India’s citizenry has suddenly gone from a spending economy to a savings-based one.

This reluctance to spend and tendency to hoard wealth is not restricted only to India, according to experts, who share that this behaviour is a direct result of the fear for health and safety – what they term as “survival mode behaviour”. People all around the world have started curbing their expenditures for fear that they might be out of a job tomorrow or due to the fear that their investments and nest eggs will not be sufficient if the pandemic doesn’t end soon. This tendency to hold on to money and not spend it has resulted in the global economic downturn that is in the news daily.

Finance gurus have something interesting to add, though. They insist that this fear psychosis is merely a temporary downtick. As soon as a vaccine is found and starts being distributed across the world effectively, people will return to the streets, the economy will rebound stronger than ever, and the markets will soar!

Did You Know? The SENSEX touched 41,000 on Oct 15, 2020. This is close to the all-time high of 42,000 that it had touched in Jan 2020 (before COVID-19 entered India). You might wonder why the market is doing so well when the economy is doing badly…

Experts in the know suggest a likely reason. They suggest that investors have flocked back to the market because they surmise that the gains they will get when the market rebounds over the next few years as the world defeats COVID-19 will be well worth the investments they put in now.

Let’s see how you can get the benefits of a market upswing too – Understanding ULIPs

Unit-linked insurance plans (ULIPs) are wholesome insurance products that benefit from the share market as well as help in meeting financial goals. Moreover, being insurance products, ULIPs provide significant life coverage to secure your family in the event of your untimely demise.

Advantages of ULIPs over mutual funds:

  • Same returns as mutual funds
  • Lower maintenance charges
  • No tax burden
  • Gains made in ULIPs are completely tax-free!
  • Hassle-free movement between debt and equity instruments
  • Added life cover

Read more here: 5 Reasons Why ULIPs Are Superior to Mutual Funds

To speak to a OneInsure executive to seek more details on ULIPs, contact 86559-86559 or


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