Causal Relationship between Saving, Investment and Economic Growth for India – What does the Relation Imply?

This study investigates the relationship between saving, investment and economic growth for India over the period 1950-51 to 2007-08. The literature on the role of saving in promoting economic growth generally points to saving led growth. However, few studies show evidence for growth driven saving and some suggest no relationship. In theory, saving may stimulate economic growth, economic growth may also induce saving. This paper adds to the literature by analysing the existence and nature of these causal relationships. The present analysis focuses on India, where saving rate has been the most pronounced.[RBI Occasional Paper]. URL:[http://rbidocs.rbi.org.in/rdocs/Content/PDFs/A2_V32070212.pdf].