Controlling Consumption

The savings margin can be widened by putting curbs on domestic consumption by means of physical controls and fiscal measures . Russia and Japan were able to raise the level of their investment to 30 percent of their national income to achieve a high level of economic development by adopting austerity measures and cutting consumption to the minimum . But in the under developed countries, the standard of living is already very low and their governments are committed to the raising of living standard of living is already very low and their governments are committed to the raising of living standards and improving economic  welfare. This coupled with democratic form of government rules out the large scale adoption of such restrictive measures However the consumption of luxury or semi luxury goods can be controlled. But there is a way out . Without cutting down the level of consumption, it is possible to raise the rate of savings and investment, it there is a relatively higher rate of savings from the increase in incomes.