Gross and Net Savings

The gross domestic savings were at around 23% of GDP during 1978-79 to 1980-81. Of these, around 17% of GDP was accounted for by the household sector, 2% in the private corporate sector and 3-4% in the public sector.

In 1994-95, the household sector's net savings worked out to 18.9% of GDP, while the private corporate sector accounted for 3.8% to GDP, and public sector gave a net contribu¬tion of 1.7%. Total net domestic savings stood at 16% in that year and gross domestic savings rate was 24.4% of GDP in 1994-95. The difference was accounted for by the high degree of obsolescence and capital depreciation in *****.

The investment in domestic capital formation is at a slightly higher rate of 27.8% in 1997-98 as against the gross savings rate of 26.1%. The difference between the domestic savings and investment is made good by foreign capital inflows, which constitute the saving in the foreign sector.

LIQUIDITY vs PROFITABILITY | MAXIMISATION OF RETURN | WEALTH MAXIMISATION | Constraints - Policy Decisions - Profitability | IMPLICATIONS OF WEALTH MAXIMISATION | Suppliers of Loan Capital | RELEVANCE OF WEALTH MAXIMISATION | Retaining earning and Undistributed profits | Managerial finance function | Functions of Financial Management | FINANCIAL FORECASTING | MANAGEMENT OF CORPORATION ASSET STRUCTURE | THE MANAGEMENT OF INCOME | MANAGEMENT OF CASH | DECIDING OUT NEW SOURCES OF FINANCE | CONTACT AND CARRY NEGOTIATIONS FOR NEW FINANCING | ANALYSIS AND APPRAISAL OF FINANCIAL PERFORMANCE | INCIDENTAL OR ROUTINE FUNCTIONS | CAPITAL BUDGETING DECISION | CURRENT ASSET MANAGEMENT | Maximisation of Share Value | RESPONSIBILITIES OF FINANCIAL MANAGEMENT IN THE FIRM | Functions of the Treasurer and Controller | TASKS OF FINANCIAL MANAGEMENT | CHALLENGES OF FINANCIAL MANAGEMENT | Gross and Net Savings | Household Savings | How to politely win when credit disputes and problems arise