Savings, Investment and Growth: A Study on the Economic Development of Indian Economy

Abstract

Saving, a sacrifice of current consumption, provides for accumulation of capital, which in turn produces additional output that can be potentially used for consumption in future. Saving not only allows for growth in income and increases in consumption, but also for the smoothing of consumption in the presence of various uncertainties. Saving is crucial for economic development, particularly for developing economies like India. It is also well-recognised that mobilisation of saving is one of the major factors contributing to increasing the pace of economic development. India's 5-year plans have laid greater emphasis for mobilisation of saving from domestic resources. It has been rightly observed that there has been a record of mobilisation of resources; about 94% of the cost of investment programs has been met from domestic savings, which is a measure of increasing self-reliance in the economy.