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Indian Economy / Macro Economic Aggregates

Health of the Economy

    Gross Domestic Savings ( GDS ) and Gross Domestic Investment ( GDI ) are the parameters to study the health of the economy.

    • Gross Domestic Savings = Gross Domestic Product - The Final Consumption
      Gross Domestic Investment = Gross Domestic Savings + Net capital flow from abroad ( FDI + FII + Remittance – Outflow ) + Borrowings.
    • Gross Domestic Investment is also called the Gross Capital Formation. In a developing economy, investment is generally more than savings.
    • Gross Domestic Savings is estimated by dividing the economy into the private corporate sector, the public sector and the household sector. Household sector accounts for about 75 % of GDS followed by private corporate sector which contributes about 20% and public sector accounts for 5%.
    • The Gross Domestic Savings and the Gross Capital Formation are worked out as a percentage of GDP at market price and current prices.