Business Daily from THE HINDU group of publications
Saturday, Feb 07, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Saturday, Feb 07, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Economy ‘Savings, investment rates may drop 3-4% this fiscal’ Jayanta Mallick Kolkata, Feb. 6 The country’s savings and investment rates may drop by 3 to 4 per cent during the financial year ending 2009, investment advisory services of Anglo-Indian investment bank Noble has estimated in a report. This means, the savings and investment rates in the current financial year would be close to 34 per cent and 35 per cent of GDP, respectively. Based on recent data colleted by the World Bank and the IMF, India’s savings and investment rates had shot up to record levels of 37.7 per cent and 39.1 per cent, respectively, of the country’s GDP in the year to March 31, 2008. “During the current financial year, both corporate and public spending are likely to decline, while household spending may also slow down in view of job cuts, drop in income and related uncertainties,” said the author of the report, Mr Dipankar Mitra, an analyst with Noble. He said the return to the trend line may not be dramatic and retracement could be restricted to less than half the positive divergence that still exists between the trend line and the FY08 figure. Mr Mitra said the FY08 data reinforced the remarkable long-term trend shown over the past four decades. “These trends suggest that even if India’s savings and investment rates undergo a cyclical correction in FY09, by FY10 these rates should still be 30 per cent plus, enough, we believe, to drive 6 per cent plus growth (in GDP) in the second half of fiscal 2010,” he added. India’s investment and savings rate in recent years showed one of the fastest acceleration among select major Asian countries and emerging markets. India’s investment rate showed sharp acceleration between FY02 and FY07 to surpass the average of all major regions of the world in FY07. Small savings collections down 22.5% in April-Jan 2008 Indians spend more than they save: Survey ‘Social infrastructure, local investment, key to development’ More Stories on : Economy
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