Essay On Importance Of Saving

The dynamic society needs saving for its socio-economic development. So, in a developing country like India. Saving has achieved a greater importance in the Indian Economy, particularly with the advent of planning the state has become the main instrument of welfare. The socio-economic progress of the country increasingly depends on saving and investment. Saving has generally been held one of the major determinants of economic development. On one hands most of long run, investments are in plant and machinery, roads and bridges, building and equipments preserve and maintain productive capacities. Savings invested in capital projects increases the productivity of labor and thereby provides employment. Therefore, saving is essential for investment and economic progress. It also checks the business cycle and trade cycles. Savings provides for the future wants of individuals to meet the unexpected events. On the other hand savings invested in trade, commerce or industry brings enhanced production and more employment opportunities. And also the savings ensure future Security, better social welfare amenities, such as medical, education, housing and measures of social securities, as old age pensions and unemployment benefits. Saving is thus a major factor to ensure the general well being of society, as well as, the

Saving propensities play an important role though as yet not a precisely quantifiable one. There would probably also be general agreement that an increase in aggregate saving propensities tends to have deflationary consequences and a decrease inflationary consequences without any presumption that the effect on consumption would be offset by a corresponding impact on investment. If the propensity to save is less, than the income flows in the commodity market for consumption which results in