But there are other causes for concern in the composition of savings and investment in the recent past. It is evident from Chart 3 that private household savings of both financial and physical forms, has come to dominate savings. This includes all physical savings by non-corporate bodies, including the increase in physical assets of small-scale industries and agricultural units, and so to some extent represents a dynamism of the these sectors which must be welcomed. But to the extent that it also incorporates increase physical assets of households which are not designed to be part of productive assets (such as residential houses and passenger cars), it may in fact reflect an increase in consumption rather than saving per se. Also, the complete collapse of public sector saving, to the point where it has become a net dissaver, deserves serious attention.
Chart 3 >>
 
These trends have their counterparts in the composition of gross domestic capital investment as described in Chart 4.  Even over the 1990s, while the share of the private corporate sector has remained the same, that of the public sector as fallen quite substantially in a relatively short time. The household sector has emerged by the end of the decade as the dominant sector in gross domestic investment.
Chart 4 >>
 
As was evident already from Chart 1, the primary sector has experienced the sharpest deceleration in growth terms in recent years. This is part of a longer term tendency which has meant that there has been a very significant deceleration in the average annual growth rate of the all-crop index of agricultural production from 5.2 per cent in the 1980s to only 2.3 per cent in the 1990s.
 
Further, the RBI notes that during the second half of the 1990s the volatility of agricultural production has increased. The high volatility is clear from Chart 5, and is quite sharp for both foodgrain and non-foodgrain crops. The poor performance of agriculture is attributed by the RBI to "low and variable growth of output, poor and declining yields, inadequacy of capital formation and infrastructure and degradation of natural resources due to inefficient cropping patterns (which) have emerged as the major obstacles to rapid and sustained growth." (Summary, page 2)
Chart 5 >>
 
However, the factors which are in turn behind these agricultural trends are not adequately captured by the RBI report. These factors are very much part of the overall policy environment which characterised the 1990s. Thus, one important factor behind the drop in foodgrain output growth is the drastic decline in real public investment that has occurred in agriculture over a long period. The deceleration had started during the 1980s, but the 1990s have furthered that trend. In addition, the 1990s have witnessed a decline in other infrastructure development in the rural areas, which had increased somewhat in the earlier period. Further, the strategies of reducing subsidies on fertiliser and attempting to increase user charges on water, electricity and other farming inputs which a number of state governments have tried to implement, have also raised costs for farmers and in some cases led to reduced use of commercial inputs.
 
Of course, the most glaring problem in the food economy of India at the moment is the presence of huge excess stocks of foodgrain with the Food Corporation of India, which are now as high as 62 million tonnes, up by more than three times in just six years. These are not being effectively utilised either to reduce hunger in areas and among populations which are food deficit, or to promote public works which in turn would develop infrastructure. Chart 6 makes it clear that this is a reflection of the peculiar combination of increased procurement despite lower harvests and lower off-take by consumers from the Public Distribution System. And this too, is very much a creation of economic policies of the past few years, rather than an arbitrary process.
Chart 6 >>