Trends in Saving Investment Ratio

February 28, 2011 November 22, 2013

From the above graph, we note that the overall savings-investment gap that was implicit in these estimates was 2.3 per cent in 2008-09 and 2.8 per cent in 2009-10. We have already seen that on the savings front, the share of household savings held firm at 70%. The more savings are due to an uptrend posted by the Public Sector as well as the corporate sector. The following snippet shows this:

The savings rates are expected to edge marginally higher in the coming year, with trends supported by improved financial intermediation and fiscal consolidation initiatives and efforts towards divestments, which could boost public sector savings. On the investment front, a renewed thrust on infrastructure development as elections approach could aid numbers.
The survey notes that the gap in terms of sectors indicated a widening of the public-sector balance in 2008-09 to – 9.0 per cent, which subsequently moderated to – 7.0 per cent in 2009- 10. This reflected the expansionary polices and was partly made up by the upward shift in the privatesector savings-investment balance on the component side and on the macroeconomic side reflected relatively stronger domestic demand vis-à-vis external demand.