Reddy Group Puts GDS At 26.3% Of GDP Under 10th Plan

Mumbai, July 10: | Updated: Jul 11 2002, 05:30am hrs
The working group on domestic and foreign savings for the Tenth five-year plan has projected gross domestic savings (GDS) at 26.3 per cent of gross domestic product (GDP) during the period 2002-07, under the baseline scenario, with a GDP growth rate at constant prices of 6.5 per cent.

According to the alternative scenario of GDP growth at eight per cent, the GDS was projected at 29.6 per cent for the 10th Plan, the working group appointed by the Planning Commission said in its report, published in the RBI Bulletin released on Wednesday.

The group, headed by RBI deputy governor YV Reddy, has projected gross domestic capital formation at 27.2 per cent of GDP under the baseline scenario, while under the accelerated growth scenario, it is projected at 32.4 per cent.

The rates for household savings under these two scenarios have been projected at 19.7 per cent and 19.9 per cent respectively.

In terms of GDP at current market prices, gross savings of private corporate sector is projected to account for about 5.49 per cent and 5.51 per cent under the two scenarios respectively, while the rate of gross capital formation is estimated at around 8.23 to 8.97 per cent.

On the other hand, public saving is estimated to be 1.18 per cent and 4.21 per cent of GDP under the two scenarios. As for public sectors draft on private saving, it is estimated at 9.98 per cent of the GDP.

Of this, fiscal deficit alone constitutes 6.68 per cent of GDP. But under the accelerated growth scenario, the figures will be 5.36 per cent and 3.76 per cent.

Under the head of foreign savings, the group has projected a current account deficit to GDP ratio to average at 0.9 per cent over the 10th Plan under baseline scenario. This figure is 2.8 per cent in the other scenario.

The net capital flows will witness a decline in the average annual flow as a percentage of GDP from 1.96 per cent during the 9th Plan to 1.70 per cent in the 10th Plan.

But under the alternate scenario this is likely to up to 2,18 per cent from 1.93 per cent.