July 31, 2019

Opinion | The slump that threatens to hold the economy to ransom

In Mint, Niranjan Rajadhyaksha analyses the fall in the Indian savings rate and its implications. Excerpts:

 

"The Indian savings rate has declined by nearly seven percentage points since the North Atlantic financial crisis of 2008. The decline has been particularly sharp in recent years. The financial savings of households has also fallen as a percentage of gross domestic product, and the combined borrowing of the Union government, state governments and public sector entities such as the Food Corporation of India is already absorbing almost the entire flow of household financial savings. Given the domestic savings constraint, the proposed sovereign bond is a risky gambit to fund the fiscal deficit from foreign savings."

 

Read the whole article here.

Topic : Transitions / In : OP-EDS
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