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Consider the following statements about the Savings and Investments in India and identify the incorrect one.
The Savings rate in India has been consistently rising since 1991 reforms and stands at more than 40% as a share of GDP.
The Investment rate has always been lower than the savings rate thereby signifying domestic financing of all investments in India.
The household sector accounts for maximum savings and physical savings are more than financial savings.
After household savings, Public sector accounts for maximum savings in the economy.
Third statement is incorrect. The saving of the household sector can be measured by: (i) Total financial saving and (ii) Saving in the form of physical assets. The financial saving includes possession of currency, net deposits, investment in shares, debentures and government securities and small savings whereas, the physical assets include machinery, equipment, construction, inventories etc. held by individuals. Secondly, the saving of the private corporate sector constitutes the net saving of non-government, non-financial companies, private financial institutions and co-operative institutions as revealed from the profit and loss accounts placed in the balance sheet of these companies. According to the recently released first set of revised estimates of the GDP for 2015-16, over a third of all household savings are now in financial rather than physical assets. The share of financial instruments such as equity, mutual funds, bonds and bank deposits in the household sector’s savings rose to 34.4 per cent of gross savings in the economy as a whole for the year from 31.3 per cent in 2014-15. On a nominal basis, the household sector had gross financial savings of 15, 14,207 crore in 2015-16, up from 12, 82,633 crore in 2014-15. Central Statistics Office data show household investment in physical assets was 14, 83,539 crore in 2015-16, at current prices, compared to 15, 78,151 crore in the preceding year.
By: Vishal ProfileResourcesReport error
Gurleen Kaur
according to question's ans - C statement is correct but in explanation it is incorrect ?
corrected thansk
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