THE DETERMINANTS OF PRIVATE SAVING IN INDIA

Prema-chandra Athukorala and Kunal Sen

ASARC Working Papers from The Australian National University, Australia South Asia Research Centre

Abstract: This paper examines the determinants of private saving in the process of economic development, in the light of the Indian experience during the period 1954 - 1998. The methodology involves the estimation of a saving rate function derived within the life cycle framework while paying attention to the structural characteristics of a developing economy. It is found that the saving rate rises with both the level and the rate of growth of disposable income and the magnitude of the impact of the former is smaller than that of the latter. The real interest rate on bank deposits has a significant positive impact, but the magnitude of the impact is modest. Public saving seems to crowd out private saving, but less than proportionately, suggesting that public policy can influence the national saving rate. Among the other variables considered, the spread of banking facilities in the economy and the rate of inflation seem to have a positive impact and changes in the external terms of trade and migrant remittances a negative impact on private saving.

Keywords: India; saving rate; financial intermediation; macroeconomic policy (search for similar items in EconPapers)
JEL-codes: D1 O11 O53 (search for similar items in EconPapers)
Pages: 47
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://crawford.anu.edu.au/acde/asarc/pdf/papers/2001/WP2001_13.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: The Determinants of Private Saving in India (2004)
Working Paper: The Determinants of Private Saving in India (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pas:asarcc:2001-13

Access Statistics for this paper

More papers in ASARC Working Papers from The Australian National University, Australia South Asia Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Raghbendra Jha ( this e-mail address is bad, please contact ).