Household Savings Behaviour In India An Empirical Analysis

Abstract

India has a great potential for savings and its mobilisation for investment, but newlineunfortunately there is a shortage of investible funds and borrowing for the purpose newlineof investment is not economical. In an emerging economy like India, the newlinehousehold sector is a savings surplus sector, which can contribute to more newlineinvestments through mobilisation of savings. However, the problem here is to find newlinehow this surplus savings can be effectively channelized for the investment newlinepurpose, which can stimulate economic growth. In order to mobilize the household newlinesavings, the savings policy should be drastically reformed. The formulation of newlinesuch a policy should be based on the empirical evidence of savings parameters newlinewith respect to change in factors which impacts the savings behaviour of the newlinehousehold sector in the economy. These inferences can be drawn through an newlineempirical analysis of the household savings behaviour in India. Hence, the major newlineconcern of this study is to estimate the different household savings functions, newlinewhich will further explain the short-term and long-term savings behaviour, and the newlineinvestment potential of the household sector. newline