Business Environment, 1st Edition by Pearson

| 90 | Part I: Fundamental Concepts

population coupled with low growth, small size of the market,

economic backwardness, technical backwardness, high taxes,

unchecked practice of defi cit fi nance in budgeting uncontrolled

infl ation and demonstration effect eating away the country’s sav-

ings. There is widespread corruption in administration which also

siphons away a large amount of incomes that would have legiti-

mately swelled savings and capital formation in the country. These

factors are responsible for the low capital formation in India. But it

is expected that with higher economic growth, the saving capacity

of the country would show a defi nite improvement as it has been

demonstrated in India over the past one and a half decades after ...