Effect of Major Determinants on Gross Domestic Saving in India: An Application of ARDL Approach

This study investigated the determinants of gross domestic saving in India. Secondary data were extracted from the World Development Indicator (WDI) and the Economic Survey of India from 1972 to 2020. The Augmented Dickey-Fuller (ADF) and Autoregressive Distributed Lag (ARDL) bounds tests were used for stationary and cointegration analysis, respectively. The Cumulative Sum of Residuals (CUSUM) test was also applied to confirm stability. The results indicated that HSV and PBSV positively and significantly impact GDS, while DPR had a significant negative impact in the short and long run. Further, GDP and inflation were insignificant in the long run. The ECT coefficient was found to be -0.53 per year, which suggested that the short-term disequilibrium transforms into long-term equilibrium at a remarkable rate of 53 per cent per year.