Consider the following statements about domestic capital formation:
- Domestic capital formation depends on domestic saving and capital inflow.
- The rate of domestic capital formation in India is estimated as a percentage of GDP.
Which of the above statement(s) is/are correct?
Correct answer: C
Explanation
Gross domestic capital formation is funded by domestic saving plus net capital inflow from abroad, so statement 1 is correct. India measures its rate of capital formation as a ratio of investment to GDP, so statement 2 is also correct.