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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.