Investment as a Drive of Economic Growth

The growth of the economy is reflected through the rise in incomes of the people, but development is a wider term, which includes both growth and qualitative improvement in the standard of living of the people and a better distribution of incomes. Development thus involves a rise in the level of income and the level of investments leads to better standard of living in general through growth plus socio-economic changes and development. The inflation is creeping up, to almost 8 percent at times, and this means that the value of money saved goes down instead of going up. In today’s less income growth and highly increasing cost of living economy, one has to know how to use his/her savings or idle funds to generate higher returns. A bewildering range of investment alternatives is available. Savings form an important part of the economy of any nation. With the savings invested in various options available to the people, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to invest his savings. At present an individual has a variety of investment opportunities. As there are different types of investment channels, public get confused when and where they plan to make investment, by selecting the best sort of investment and rejecting the rest is very difficult to the investors. Hence one must pay much attention as regards to investment decision. An investment decision must be made with definite objectives. Before proceeding, the investor should be very clear as to specific requirements and aspirations. It could be a return or capital appreciation or safety or tax relief or any other peculiar factor that a particular investor desires. Depending upon that and on the basis of the objectives, investors make the investment decision by selection. Such a process offers the silver lining of golden return to investors. People invest to multiply their savings in order to fulfill their aspirations for a bigger house, a higher education for their children or a secured retirement for them. To achieve these objectives, the investor has a wide variety of products and services to choose from. One can deposit savings in a bank account, buy shares or bonds on the stock exchange, or buy a life insurance policy or invest in a retirement plan among other investment alternatives. This book highlights the different investment avenues available to the investors, investigates the reasons behind the investment decisions, and identifies the factors influencing the preference of the investors. It also analyzes the investors’ attitudes towards a specific investment pattern and puts forth the problems faced by the professionals in the process of building their investment pattern. Saving entails a tradeoff because it requires consuming less now in exchange for later consuming more. While those who sacrifice to save now can themselves enjoy higher consumption in the future, some of the resulting increase in the nation’s stock and the related income will also benefit future generations. Thus current saving and investment decision have profound implication for the level of wellbeing in the future and current generations are in a sense stewards of the economy on behalf of future generations.