Savings, investment rates plunge 1000 bps in FY11-FY18: Report
Ahead of the general elections, the government Wednesday lowered economic growth rates during the previous Congress-led UPA regime by shaving off over 1 percentage point.
The near 10 percentage points drop each in savings as well as investment rates between the UPA regime and the present government is a "major economic challenge" faced by the economy, says a report.
Ahead of the general elections, the government Wednesday lowered economic growth rates during the previous Congress-led UPA regime by shaving off over 1 percentage point from the only year when India posted double-digit GDP growth post liberalization and from each of the three years with 9- plus per cent expansion.
This was carried out through a recalibration of the data for the past years using 2011-12 as the base year instead of 2004-05 by the Central Statistics Office (CSO).
"...This data also shows deceleration in investment rate from a high 39.8 percent in FY11 to 30.6 percent in FY18 and the decline in gross savings rate to 29.6 percent in FY17 from 36.2 percent in FY11," India Ratings chief economist DK Pant said in a note.
"These are major economic challenges which the economy is currently facing," he added.
Increase in the size of economy in real terms is a "pure statistical phenomenon", which has resulted in lower GDP growth at the FY12 prices compared to FY05 prices, he said.
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Barring FY08 under the UPA, annual GDP growth trend has not changed, he underlined.
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