Indian Economic Growth – The Untold Story

We observe that FII and FDI put to-gather is less than 10% of the Gross Domestic Savings.

Our Growth is due to Domestic savings and that too household savings [households include other than pure consuming households-Proprietorship/Partnership firms also]

 

Table 4.2:

Savings and Capital Formation           [Rs. Crore]

  1994 -95  2000-01 2004-05 2008-09 2009-10 2010-11 2011-12* 
Gross domestic savings

251463

496272

1050703

1802620

2182338

2651934

2765290

Of which              
Household sector

199358

 (79%)

446217

(89%)

763685

(73%)

1330873

(74%)

1630799

(75%)

1832901

(69%)

2003720

  (75%)

Foreign Investment inflow

  16133

 (6.4%)

30224

(6%)

68259

(6.5%)

125600

 (7%)

173200

(7.9%)

257500

(9.7%)

240600

    (8.7%)

of Which              
A. Direct Investment

  4126

18404

26947

190600

157800

118100

155000

B. Portfolio Investment

12007

  11820

41312

-65000

15400

139400

85600

 Note:  *=Revised estimates. The percentage in the bracket is to the Gross Domestic savings

Source: Statement 18; NAS 2013 and Table 155 Hand Book of statistics on Indian Economy Sep 2012 RBI.

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One comment

  1. harsh chirania · · Reply

    Sir I understand your point that domestic savings constitute the major chunk of investments and household savings invested in banks are the largest part of that domestic savings. But Sir can you please tell if that household savings and thereby domestic savings will be enough to sustain an economic growth that can lead us out of poverty and to finance the infrastructural requirements. Also sir can you please explain the point that is often raised about FDI being necessary to meet the high trade deficit and avoid a BoP crisis because it seems there are no other short term measures to meet the high import bill due to petroleum and other imports being a necessity.

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