Notwithstanding the striking improvement over the past few years, it may be noted that the public sector savings rate at 3.2 per cent during 2006-07 was still less than the peak of over five per cent touched in 1976-77.
Nonetheless, the turnaround of 5.2 percentage points of GDP in public sector savings – from a negative 2.0 per cent of GDP in 2001-02 to a positive 3.2 per cent of GDP in 2006-07 – has been a key factor that has enhanced domestic savings from 23.5 per cent to 34.8 per cent over the same period.