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Question 29 of 30

Q."The problem of unemployment is because of low saving and investment in India." Explain in brief.

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2026Subjective· 2mImportance★★★★★
97% · 29/30 Questions
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Low saving → low investment → slow capital formation → few new jobs → high unemployment.

The statement highlights the link between saving, investment and employment:

  • Most people in India have low incomes, so their capacity to save is low.
  • Low savings mean low investment, since investment largely depends on the available pool of savings.
  • With low investment, the pace of capital formation (building factories, machinery, infrastructure) is slow, and few new productive units are set up.
  • As a result, not enough new jobs are created to absorb the growing labour force, and unemployment remains high. …

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