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An Analysis of the Behavior and Composition of Savings
in India
-- Shradha H Budhedeo
The Indian savings experience has been marked by varied oscillations since the inception
of planning in India. In the period following the independence, India has witnessed a rising trend
in the gross domestic saving rate, accompanied by many fluctuations over time though. Also,
there have been many major shifts and substitutions within the composition of savings over the
six decades. The objective of the present study is to examine the trend behavior and
changing composition of savings in India over the planned economic era from 1950 to 2007. The
study uses three indicators, namely, the trend growth of saving, the trend growth of saving rate and
the average saving rate for an analysis of the trend behavior of savings in the country. On the
basis of which, the entire six-decade period is decomposed into six distinct time periods or phases
of saving—low-saving phase, increasing-saving phase, high-saving phase, stagnation phase,
recovery phase and new-high-saving phase. For studying the changing composition of savings,
the average share of saving components has been computed for different saving phases. After
an extensive review of Indian savings, the study arrives at certain enlightening findings.
There have been very important and major changes in the behavior and composition of savings in
India over the analysis period. Household sector is the largest saver with the lion's share in
GDS. Private corporate sector saves very low, while the public sector even dissaves. There have
been some dramatic and drastic substitutions within the saving composition, with household
preferences shifting from the conventionally most sought after saving instruments such as
currency, life funds, provident and pension funds to bank deposits, shares and debentures, and other
small-saving assets.
© 2010 IUP. All Rights Reserved.
Minimum Quality
Standards with More Than Two Firms Under Cournot Competition
-- Mario Pezzino
This paper presents a study of the effects of the introduction of a Minimum Quality
Standard (MQS) in a vertically differentiated market in which three identical firms compete in
quantities in the short run and face quality-dependent fixed costs. In contrast to what has been
shown under the assumption of Bertrand triopolistic competition (Scarpa, 1998), the introduction of
an MQS has a positive effect on the average provision of quality.
© 2010 IUP. All Rights Reserved.
Green Accounting:
Issues and Challenges
-- Himanshu Sekhar Rout
National income measures like Gross Domestic Product (GDP) and
Net Domestic Product (NDP) have been used as measures of the economic progress and
standard of living in almost all countries for a long time. Decision makers and researchers use
these measures for new policy initiatives and to analyze policy alternatives respectively. The
traditional Systems of National Accounting (SNA) are now recognized as inadequate, as they
cannot accurately measure the contribution of environment and the impact of economic activities on
it due to the exclusion of the non-marketed services provided by natural assets, inconsistent
treatment of depreciation on man-made and natural assets, and inadequate representation of
the degradation of environment. This gives a false impression of increase in income to the
decision makers and researchers, while natural wealth is actually reducing. Hence, green accounting
can be useful for sustainable national income accounting and in removing the current biases.
© 2010 IUP. All Rights Reserved.
Group Lending Scheme Operating Through Primary Agricultural
Credit Society:
A Critical Assessment
-- Amit Kundu and Suranjana Mitra
The basic objective of the paper is to identify the effectiveness of group lending-based
microfinance program operating through Primary Agricultural Credit Societies (PACS) in improving the
economic condition among the rural participants in two blocks of Hooghly district in West Bengal.
For the impact study, both Difference-in-Difference and First Difference methods have been
considered. With the help of longitudinal data, the methods have been applied to minimize the
possibility of selection bias during the time of drawing samples. It was found from the field survey that
very few marginal farmers had taken credit from their respective groups for agricultural
purposes. Results reveal that there has been no significant impact of microfinance program in terms of
improvement of the outcome variables among the member households, in spite of the low
interest rate charged on loans, high repayment rate within the groups and small size of Self-Help
Groups (SHGs). The reasons for the same are lack of skill-based training programs for the members
of groups and lack of marketing facilities to promote and sell the products produced by the
members of SHGs. The only positive aspect is that the members can now protect themselves from
the clutches of professional moneylenders who charge exorbitant interest rates.
© 2010 IUP. All Rights Reserved.
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