New Delhi, Oct. 6 -- India continues to clock the fastest GDP growth among major economies, drawing headlines that suggest resilience and dynamism. Yet, the financial foundations of Indian households, which are the backbone of both consumption and investment, are showing signs of strain. Declining financial savings, rising dependence on gold loans as well as overall indebtedness and a collapse of net foreign direct investment (FDI) do not portend a strong foundation for growth.

One of India's structural determinants of sustained, high and inclusive growth has been the resilience of household savings. This provides the crucial financial capital to fund growth and acts as a stable domestic base to fund fiscal deficits.

Also, net foreign i...