Saving and economic growth in India

This monograph presents a case study of accumulation in a developing economy. The study is based upon empirical evidence of the Indian economy since the 50's up to the 1985. The CSO's white papers on national accounts statistics, NSS reports, RBI studies on flow of funds, corporate finance, household credit, debt and investment, NCAER household surveys. constitute the study. primary sources for this The principal attention is paid to household savings and their redistribution in favour of modern capitalist sectors. The author has made an attempt to correlate the macroeconomic characteristics of saving and its microeconomic features.

The principal conclusion of the study is that accelerating of growth of domestic savings since the mid-60's was caused mainly by faster development of small scale capitalist enterprise both in agricultural and non-agricultural sectors. The socio-economic results of the latter process were contradictory. On the one hand, it facilitated broadening of the social base of bourgeois state. The combination of government policies and spontaneous market regulators led to a path of capitalist development based upon greater integration of public sector and the small-scale capitalist entrepreneurs along with a certain restriction of large scale private capital.

On the other hand, the socio-economic polarization was aggravated. This phenomenon leads to ever growing Socio-political tension in the country. Despite greater saving and production potential of the capitalist sector the latter cannot absorb a great bulk of labour force in the economy even in the long run. The growth of disproportions between the modern capitalist sector and the economic periphery not only hinders capital accumulation in the former, but also results in shifting the government policies from growth promotion to upkeeping socio-political stability. These policies become less growth oriented and more law and order oriented by way of increasing income redistribution in favour of the poorer sections of population on the one hand and their suppression on the other one.

It is one of the most useful books for Economists, Sociologists. Public Administrators and Planners interested in the various aspects of Indian economy.