Economic Survey 2017-18 Suggests Demonetisation Drive Gave a Boost to Share of Financial Instruments in Household Savings
The Survey further states that as India emerges as one of the world’s largest economies, it needs to gradually move from being a net consumer of knowledge to becoming a net producer.
New Delhi, January 29: The Economic Survey 2017-18 was tabled in the Parliament on Monday by Union Finance Minister Arun Jaitley. The survey showcased today how demonetisation had an impact on the Indian economy. According to the survey, Prime Minister Narendra Modi’s demonetisation drive in 2016 has given a boost to share of financial instruments in household savings with a clear shift visible towards market instruments.
The Survey further states that as India emerges as one of the world’s largest economies, it needs to gradually move from being a net consumer of knowledge to becoming a net producer. The Survey suggests coordinated action between government and the judiciary to boost economic activity in the country.
The highlights of the Investment and Savings situation as brought out by Economic Survey 2017-18 tabled in Parliament today are as follows: -
India’s unprecedented climb to historic high levels of investment and saving rates in the mid-2000s has been followed by a pronounced, albeit gradual, decline. This current episode of investment and saving slowdown is still ongoing. “The ratio of domestic saving to GDP reached 29.2 per cent in 2013 to a peak of 38.3 per cent in 2007, before falling back to 29 per cent in 2016. The cumulative fall over 2007 and 2016 has been milder for investment than saving, but investment has fallen to a lower level”, the survey adds.
Based on the break-up of investment and saving, that is available up to 2015-16, private investment accounts for 5 percentage points out of the 6.3 percentage point overall investment decline over 2007-08 and 2015-16. Asian countries faced the largest number of slowdown episodes following 1997. Currently (after 2008), these economies are in the era of saving slowdowns. In India, the investment slowdown started in 2012, subsequently intensified and was apparently continuing as of the latest date, that for 2016.
The Survey states that the investment slowdown started in 2012, but later intensified and was still continuing as of the latest date, that for 2016. “Since investment slowdowns are more detrimental to growth than savings slowdown, so, policy priorities over the short run have focused on reviving investment by mobilizing saving, via attempts to unearth black money and encouraging the conversion of gold into financial saving”, the Survey stated.
(The above story first appeared on LatestLY on Jan 29, 2018 04:11 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).