What is the story about?
India’s mutual fund industry is playing a larger role in household finances, with systematic investment plans (SIPs) emerging as a key driver of long-term retail participation, according to the Economic Survey 2025-26.
Average monthly SIP inflows rose more than seven-fold over the past decade, increasing from under ₹4,000 crore in FY17 to over ₹28,000 crore in FY26 so far (April–November). The Survey links this steady rise to a structural shift in household saving behaviour, with investors increasingly committing money in a disciplined manner across market cycles rather than responding to short-term market movements.
The growing prominence of SIPs has coincided with a sharp increase in the share of equities and mutual funds in household financial savings. This share climbed from around 2% in FY12 to over 15.2% in FY25.
ALSO READ | Economic Survey flags surge in gold and silver as signal of global risk
Over the same period, the share of bank deposits in household financial savings declined from more than 58% to about 35%, indicating a gradual diversification of savings rather than a wholesale move away from traditional instruments.
From a stock perspective, assets managed through mutual funds have expanded rapidly relative to the size of the economy.
Mutual fund assets rose from less than 10% of GDP in the early 2010s to about 23% of GDP by FY26 (as of November 2025), amounting to more than ₹80 lakh crore. The Survey notes that indirect equity ownership through mutual funds has grown faster than direct equity investments, reflecting a preference for professionally managed and diversified products.
Retail participation in mutual funds has also broadened geographically. As of December 2025, the industry counted 5.9 crore unique investors, with nearly 3.5 crore coming from non-Tier I and Tier II cities, underlining the spread of market-linked savings beyond major urban centres.
The Economic Survey highlights the stabilising role played by domestic institutional investors, particularly mutual funds, during periods of volatile foreign capital flows.
While foreign portfolio investors were net sellers during much of FY26, domestic institutions continued to invest in equities, pushing the share of mutual funds in NSE-listed companies to an all-time high of 10.9% in the second quarter of FY26.
Overall, the Survey says that the rise of SIPs and mutual funds reflects a deeper financialisation of household savings, with domestic retail capital increasingly supporting equity markets and reducing dependence on foreign inflows.
Catch LIVE updates on Economic Survey here
Average monthly SIP inflows rose more than seven-fold over the past decade, increasing from under ₹4,000 crore in FY17 to over ₹28,000 crore in FY26 so far (April–November). The Survey links this steady rise to a structural shift in household saving behaviour, with investors increasingly committing money in a disciplined manner across market cycles rather than responding to short-term market movements.
The growing prominence of SIPs has coincided with a sharp increase in the share of equities and mutual funds in household financial savings. This share climbed from around 2% in FY12 to over 15.2% in FY25.
ALSO READ | Economic Survey flags surge in gold and silver as signal of global risk
Over the same period, the share of bank deposits in household financial savings declined from more than 58% to about 35%, indicating a gradual diversification of savings rather than a wholesale move away from traditional instruments.
From a stock perspective, assets managed through mutual funds have expanded rapidly relative to the size of the economy.
Mutual fund assets rose from less than 10% of GDP in the early 2010s to about 23% of GDP by FY26 (as of November 2025), amounting to more than ₹80 lakh crore. The Survey notes that indirect equity ownership through mutual funds has grown faster than direct equity investments, reflecting a preference for professionally managed and diversified products.
Retail participation in mutual funds has also broadened geographically. As of December 2025, the industry counted 5.9 crore unique investors, with nearly 3.5 crore coming from non-Tier I and Tier II cities, underlining the spread of market-linked savings beyond major urban centres.
The Economic Survey highlights the stabilising role played by domestic institutional investors, particularly mutual funds, during periods of volatile foreign capital flows.
While foreign portfolio investors were net sellers during much of FY26, domestic institutions continued to invest in equities, pushing the share of mutual funds in NSE-listed companies to an all-time high of 10.9% in the second quarter of FY26.
Overall, the Survey says that the rise of SIPs and mutual funds reflects a deeper financialisation of household savings, with domestic retail capital increasingly supporting equity markets and reducing dependence on foreign inflows.
Catch LIVE updates on Economic Survey here
