India saves a lot – the savings rate at its lowest in recent years was about 30% of GDP but India’s savings fall short of its investment needs, Finance Minister P Chidambaram said recently while delivering a speech at the Harvard University.
“Moreover, India needs intelligent risk capital that will ensure that investments are monitored and brought to fruition. And India needs long term patient capital that is willing to collect a return over many years. Industrial countries, with their ageing populations, would seem to have a matching need – a need, as they increase their savings, to see them invested in attractive long term instruments producing adequate returns. There is a perfect match here provided both sides work at reducing barriers. We constantly hear of moves in industrial countries to engage in financial protectionism, to keep savings at home in order to finance overextended industrial country governments. Any move in this direction would be terribly misguided.” Read More