ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Savings A Clarificatory Note

Savings A Clarificatory Note

Savings: A Clarificatory Note Ashima Goyal THERE is an ongoing debate in Economic and Political Weekly on the measurement of savings in India. We claborate on some issues that are relevant to this discussion, and point out a conceptual error in the treatment of foreign inflows in the national accounts statistics, After enumerating the reasons why household physical savings may well be underestimated, we use some simple macro- economic identities to clarify the effect of foreign inflows on savings in Section II. In Section III we see the ways in which these macro-economic concepts and identities can clarify measurement practice. Section IV uses the pattern in acquisition of gold in the 1990s to suggest that contrary to widespread belief, gold is purchased more for investment rather than for consumption, in India.

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