The government has also time and again, emphasised that savings and investments should be over 30%, if the 9% economic growth has to be sustained. “Gross domestic saving (GDS) at current prices in 2005-06 is estimated at Rs 11,56,809 crore as against Rs 9,73,028 crore in 2004-05, constituting 32.4% of GDP at market prices as against 31.1% in the previous year,” the release said. All sectors have contributed to the rise in GDS, it added. The rise in domestic savings would mean that a large part of the total requirement of investment, totaling about 32% of the GDP would be easily met by internal resources.

Shankar N Acharya, honorary professor ICRIER said, “The new figures augur well for the coming year, especially the revision in agriculture. However, it brings to mind the question that if agriculture was doing so well, why was there a spurt in inflation in primary articles this year.”

Meanwhile, the gross capital formation at current prices constituted 33.8% of GDP in 2005-06 as against 31.5% in 2004-05, the release said.

The rate of capital formation in 2005-06 was higher than the rate of saving because of net capital inflow from abroad of Rs. 47,665 crore in 2005-06, it added.

The increased savings and investment also augur well for economic growth during the current fiscal.