India's savings rate to dip to 30%: India Ratings
National savings rate usually refers to the percentage of GDP savings by households.
According to the government data released over weekend, growth in per capita income fell both on current prices and real terms basis in FY12.
The per capita income rose 4.7 per cent on real terms basis to Rs 38,037 in FY12 as against 7.2 per cent in previous fiscal. Similarly, on current prices basis, it grew by only 13.7 per cent as against 17.1 per cent in FY11.
According to analysts, the slowdown in the savings rate takes resources away from investment, which will result in greater dependence on foreign capital. The lower savings rate is also having an impact on the current account, which is moving deeper into deficits.
"The slowdown is reflective on the poor tax collection. The government has changed its fiscal deficit target to 5.3 per cent this fiscal from the budget estimate of 5.1 per cent.
"Even after factoring in recent disinvestment proceeds, we expect the new fiscal deficit target will be difficult to be met," Pant said.
The CSO estimate is drastically lower than what has been projected thus far by the government and RBI, which pegged growth at 5.7 and 5.5 per cent respectively.
Last week, the government had revised downward the the FY12 growth to 6.2 from 6.5 per cent.
The CSO lowered the growth in agriculture and allied activities to 1.8 per cent compared to 3.6 per cent last fiscal, while manufacturing is also expected to drop to 1.9 per cent, from 2.7
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