SAVING AND INVESTMENT-High Social Cost

High Social Cost A MUCH discussed aspect of the country's economic performance is the high level of saving and investment despite a relatively insipid rate of growth. The discussion on this subject is likely to get a fillip from the disclosure, in the latest annual report of the Reserve Bank of India, of a further rise in saving and investment rates in 1986-87. According to the Reserve Bank, aggregate net domestic saving rose from 16.8 per cent of net national product (NNP) at current market prices in 1985-86 to 18.2 per cent in 1986-87. The entire increase has been the contribution of the household sector and, further, of this sector's saving in the form of financial assets. The Reserve Bank takes the saving of the public sector in 1986-87 as constant at the 1986-87 rate of 0,7 per cent of NNP and that of the private corporate sector at 0.5 per cent. It is unlikely that these assumptions will be proved correct. The economic and functional classification of the Union Budget suggests that the negative saving of the centre and its departmental undertakings shot up from Rs 2,587 crore in is a moot point if the other segments of