Lok Sabha Question No. 1099 (UNSTARRED), answered on 2017-07-21
Subject: Domestic Savings
Ministry: FINANCE
Asked by: HARI MANJHI

- (a) whether the Government has any target for domestic saving;
- (b) if so, the details thereof;
- (c) the proportion of growth in domestic savings in comparison to Gross Domestic Product (GDP) during each of the last three years; and
- (d) the steps taken/being taken by the Government to encourage the domestic savings and to promote the economy?

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

(a) and (b): No specific annual targets for domestic savings are set by the Government.

(c):  Saving rate, defined as the ratio of Gross Domestic Savings to GDP at current market price was 32.1 per cent, 33.1 per cent and 32.3 per cent respectively in 2013-14, 2014-15 and 2015-16.  The information on Gross Domestic Saving is not available for the year 2016-17. The growth rate in Gross Domestic Saving at current prices was 7.1 per cent, 14.2 per cent and 7.3 per cent respectively in 2013-14, 2014-15 and 2015-16.

(d):  Savings  are  realized  from  three  broad  categories  of savers,  viz.  households,  private  corporate  sector  and  public sector. Various measures have been taken by the Government to improve household financial savings, which, inter alia , include:  re-launch  of  the  certificate  savings  scheme  called  Kisan  Vikas  Patra;  Sukanya  Samriddhi  Yojana  that  can contribute significantly to the financial security to the girl child; and, Pradhan Mantri Jan-Dhan Yojana (PMJDY) which has been a landmark initiative of financial inclusion. Under PMJDY, about 29.09 crore bank accounts have been created -- of which around 60 per cent are in the rural and semi urban areas - and deposits amounting to about Rs.64,922 crore have  been  mobilized  as  on  12 th July  2017.  The  budget  2017-18  reduced  the  tax  rate  of  assesses  earning  income between Rs. 2.5 lakh and Rs. 5 lakh from 10 per cent to 5 per cent that could encourage household savings. Other initiatives like: increase in the personal income tax exemption limit, increase in the limit of deduction under the Income Tax  Act  for  health  insurance  premium,  contribution  to  specific  pension  funds  and  contribution  by  the  employees  to National Pension Scheme, also have the potential to boost household savings. The Government has also taken steps to popularise the Small Savings Schemes by carrying out publicity on an all-India basis. Greater public saving is sought to be achieved through efforts at fiscal consolidation, including rationalization of subsidies and promotion of direct benefit transfer.  The  initiative  to  reduce  corporate  tax  in  a  phased  manner  and  various  initiatives  to  encourage  industry  and enterprise are expected to improve corporate savings.

The  Government  of  India  has  taken  various  initiatives  to  boost  the  GDP  growth  which, inter  alia, include;  fillip  to manufacturing and infrastructure and concrete measures for transport and power sectors as well as other urban and rural  infrastructure  and  comprehensive  reforms  in  the  policy  for  foreign  direct  investment.  Government  has  also announced various measures in the Budget 2017-18 to promote growth in the economy which, among others, include push to infrastructure  development  by  giving  infrastructure  status  to  affordable  housing,  higher  allocation  to  highway construction, focus on coastal connectivity and taking up the second phase of Solar Park. The other growth promotion measures include: lower income tax for companies with annual turnover up to Rs 50 crore; further measures to improve the  ease  of  doing  business;  and,  a  major  push  to  digital  economy.  The  Budget  also  targeted  to  provide  higher agricultural credit and to increase employment significantly. The introduction of the Goods and Services Tax (GST) has provided  a  significant  opportunity  to  improve  growth  momentum  by  removing  barriers  to  trade,  business  and  related economic activities.

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