Savings, Capital Formation and National Income

National Income V K R V Rao The Indian economy has reached a high rate of domestic saving and capital formation and yet poverty and unemployment seem to be on the increase. The level of growth is nowhere near that reached even by the middle level industrialised countries even though the rate of saving and capital formation seems to be approaching their level. Why is it that in spite of a high rate of capital formation, the rate of growth is low and why is it that in spite of an increase in the rate of saving there is an increase in poverty?