An Analysis into the Behavioral Nature of Capital Formation Through Investments in India

Savings and investments are vital not only for families but also for the advancement of the country. In many economies investment decisions are not based upon borrowing rather the character of Investments changed in the labor consumerist society where investments became the norm and every person in some or the other form try to invest through his savings or even through his current income. This paper mainly aims the study is to analyse what neural behaviour is required in case of trade-offs between consumption investments and savings decision and whether individuals take into account like a rational agent. Correlation study is used to determine the relationship between two or more continuous variables among a single group of people. The low correlation coefficient between per capita net national product and savings-investment shows that the conversion ratio of growth to investment has been quite low with only the richer segment of the society. Another factor which affects the proper relationship between savings and investments is the functioning of the Black Economy, because it acts as a lure for people to diversify their holdings