Among several factors for India's potential growth, savings rate is the most effective one. Do you agree? What are the other factors available for growth potential?
The savings rate which is expressed as a percentage or ratio denotes the savings by households which causes the capital formation and is responsible for the economic development of a nation.
Contribution: According to the Economic survey gross savings contributed 30.5% of GDP in 2017-18.
Savings & investment: The growth of the economy not only depends on the GDP share but apart from the savings, investment also plays a significant role.
Mode of savings: Saving could be in the form of cash, government securities, bonds, shares, other funds as well as assets like real estate, gold, etc are also considered as savings.
Economic growth: There are some other factors to enhance the potential of growth.
- Adoption of modern technology increase productivity and competitiveness
- Highly skilled, trained as well as efficient manpower could contribute to the advancement of productivity by creative implementations.
- Proper infrastructure like transport, communication, power, electricity
- Introduction of government policies to nullify economical complications
- Creation of a business-friendly environment
- Robust and strong management technique
- Social and political stability
Attracting more young potential and women in the working field by implementing innovative solutions will definitely improve the productivity of the Indian economy.
Topics: GS-III: Indian Economy Issues Relating to Planning