Concept of Savings and Investment – Indian Economy Notes for UPSC
Savings and investment are pivotal to an economy's health, influencing growth, stability, and development. The portion of income not consumed and set
Concept of Savings and Investment Savings and investment are pivotal to an economy's health, influencing growth, stability, and development.Here's an updated overview of their relationship, incorporating recent data and trends: 1. Savings Definition : The portion of income not consumed and set aside for future use. Components : Household Savings : Savings by individuals or families in bank deposits, cash, or financial instruments. Corporate Savings : Retained earnings by businesses for reinvestment. Public Savings : Government savings, often through budget surpluses. Recent Trends in India : Gross Savings Rate : As of March 2023, India's gross savings rate stood at 30.2% of GDP, consistent with the previous year. Household Savings : There has been a decline in household savings, decreasing from 23.6% of GDP in 2011-12 to 18.42% in 2022-23. Financial Savings : Household financial savings have also contracted, dropping to 5.3% of GDP in the financial year 2023, down from 7.3% in 2022. 2. Invest…