This is my seminar work which i have done in my 4th semester. An attempt has been made to analyze the changing trends of savings and its dependency on certain factors in India , a comparative graphical representation of China and India has been done to reflect patterns of changing rates in these two emerging economies . Please do give valuable suggestion so as to improve in future .

2.  Definition
 Factors of Savings
 Motives for savings
 Data Sources & Methodology
 Literature Review
 Gross Domestic Savings –Status of India & its Composition
 Household Savings – Overview of Rural & Urban India
 Graphical comparison of Household savings with its factors
 China vs. India – comparative analysis
 Conclusions
 Limitations
 References

3.  Saving means the excess of income over expenditure on consumption.
Saving = Income - Consumption
- J.M Keynes
 From this definition we are clear about two major components on which
savings depend upon – income & consumption.
 Income - The Income of the entrepreneur as being the excess of the value of
his finished output sold during the period over his prime cost.
 Consumption – Act of using up of resources, the entrepreneur consumption is
given by (A-A1)[ A is the total sales made during the period and A1 is the total
purchase made].

4.  Culture
 Differences in saving motives
 Economic Growth
 Demographics
 People in labor force
 Economic policy

6. Data is acquired from secondary sources only.
Analyzing saving behavior has been one of the most worked upon field in
India so data is easily available. Data and statistics are accessed through
various publications like -
 Report of the Working Group on Savings during the Twelfth Five-Year
Plan (2012-13 to 2016-17)’by Reserve Bank of India (RBI).
 Report of ‘ National Council of Applied Economic Research’on How
Households Save and Invest: Evidence from NCAER Household Survey-
2011 (Sponsored by S.E.B.I)

7.  Handbook of Statistics on The Indian Economy by RBI (2012-
2013)
 Report of the High Level Committee on Estimation of Saving
and Investment by Ministry of Statistics and Programme
Implementation Government of India (MOSPI).
 Sites like ‘trading economics’ also provide valuable data and
graphs.

8. We will be analyzing the TRENDS AND SAVINGS
PATTERN IN INDIA, which requires going through
data available on household savings. Also an attempt
has been made to classify the savings into Rural and
Urban and understand the changes over the years. To
show these variations we have tried to link the
change in factors of savings with changing saving
rates in India.

9.  The famous life-cycle model of Nobel laureate FRANCO
MODIGLIANI asserts that people save—accumulate assets—to
finance their retirement, and they dissave—spend their assets—
during retirement. The more young savers there are relative to
old dissavers, the greater will be a nation’s saving rate.
 The precautionary motive—that is, the motive to save in order to
be prepared for various future risks—is one of the key reasons
people save. Besides the risk of living longer than expected,
people save against more mundane risks, such as losing their job
or incurring large uninsured medical expenses.
 The uncertainty of market also encourages savings , as
individuals are not sure about bank rates and fluctuation of stock
market ultimately inducing a fear of loss on expected returns .

10. Sahoo, Nataraj & Kamaiah (2001) asserted that savings serve as the
engine of economic growth which they established through examination
of casual nexus between savings and economic growth. Mühleisen
(1997) also suggested a substantial rise in domestic saving as one of the
prerequisites for putting India on high growth . Desai (1981) worked on
the incentives to save in his research on rural savings in India. Panikar
(1961) analyzed the patterns of savings in rural India. Choudhary (2005)
worked upon determination the savings potential of urban and rural
households in India. Sinha (2008) also tried to determine the savings in
urban India. Krishnamurthy, Krishnaswamy and Sharma (1987) has
contributed towards better understanding of saving behavior.

12. The top 112 cities account for about 200 million Indians which is more
than 60% of urban India. These cities constitute a market of consumers
whose combined annual incomes are Rs 13.26 billion. Their combined
savings are Rs 3.5 billion which is about 26.5% of income.
If we look at four classes of cities(by size), we get the following picture:
Total Income (Rs
billions)
Total Savings (Rs
billions) Savings/ Income
Ratio
Alpha (Top 10) 5,912 1,296 21.9 %
Beta (11th to
30th)
2,887 931 32.2 %
Gamma (31st to
50th)
1,774 519 29.3 %
Delta (The
balance 62) 2,688 771 28.7 %
Top 112 cities 13,261 3,516 26.5 %

13. Total Income (Rs
billions)
Total Savings (Rs
billions)
Savings/ Income
Ratio
EAST 2011 522 25.9 %
WEST 5167 1191 23.0 %
NORTH 2849 797 28.0 %
SOUTH 3233 1007 31.1 %

14. Total Income (Rs
billions)
Total Savings (Rs
billions)
Savings/ Income
Ratio
Mumbai 1608 216 13.4 %
Delhi 1264 289 22.8 %
Bangalore 602 192 31.9 %
Thane (Urban) 569 132 23.2 %
Pune 446 111 24.9 %
Ahmedabad 429 109 25.3 %
Chennai 393 88 22.2 %
Kolkata 350 68 19.3 %
Surat 318 82 25.8 %
Hyderabad 295 87 29.3 %

15. This implies that there is hardly any possibility of increasing rural saving
in the near future unless income registers a much more rapid growth
than in the past and reaches a certain minimum level essential for
savings to increase

16. As a community, Guajarati's are not known to be flashy in their lifestyle
even if they may be loaded with cash. You may call it frugality. The fact is
they are enterprising, earn a lot of money and yet end up saving a heap to
secure their future. That is the reason why banks, insurance companies,
financial institutions and stock-broking firms are so keenly eyeing the
surplus cash that Gujarati households generate every year.
Former IIM-A director and advisor Adani group Bakul Dholakia, says "It
is an established fact that the rich save more than the poor. A rich man
may dine in a five star hotel and a middle income man may dine in a
dhaba, but the percentage of spending as a proportion of his income will
remain lower than that of the latter.“
- 14 Aug 2008,Nimish Shukla & Yagnesh Mehta,TNN
(THE TIMES OF INDIA)

17. PERSONALSAVINGSLABORFORCE

18. PersonalSavingsGDP

19. PersonalSavingsInterestRate

20. DisposablePersonalSavingConsumerSpending

25.  It is clear from information we have gone
through that instead of savings dependence on
multiple macro factors , the saving rate in India
has hardly been affected and is growing at an
increasing rate.
 The condition of savings in Rural India has been
pathetic due to lack of proper incentive and poor
information.

26.  In Urban India the conditions are comparatively
better , even though we will see an heterogeneous
behavior oriented towards culture , lifestyle ,
working population etc.
 Factors of Savings have significantly less impact
on saving (Household) behavior due to lack of
knowledge of the system.

27.  Accuracy of data.
 Errors are made and corrected on yearly basis making it hard
to bring consistency in conclusions.
 Black Money – Individuals hesitate to disclose their actual
savings.
 Dependence of Savings on multiple macro factors is really
challenging to study and conclude upon.

28.  ‘Report of High level committee on estimation of
saving and investment’ by the Ministry of Statistics
and Programme Implementation.
 ‘ Report of the Working Group on savings during the
Twelfth Five-year plan (2012-13 and 2016-2017)’by
the Planning Commission.
 ‘Handbook of Statistics on the Indian Economy’ by
the Reserve Bank of India.
 Income, Consumption And Saving In Urban And Rural India
by Uma Datta Roy Choudhary.
 Income and Savings in Urban India(2008) by Amit
Sinha

29.  ‘Savings and Economic Growth in India : The Long Run
Nexus (2001)’ by Pravakar Sahoo, Sethanjali Nataraj and B.
Kamaiah.
 ‘Research on Rural Savings in India (1981)’ by B.M Desai
(Agricultural Economist , World Bank).
 ‘Improving India’s Saving Performance (1997)’ by
Martin Muhleisen.
 http://www.econlib.org/library/Enc/Saving.html - Econlib.
 Trading Economics
(http://www.tradingeconomics.com)
 ‘The General Theory of Employment , Interest and Money by
J.M Keynes