This study examines the income, consumption and savings pattern of rural farm households in select three coastal districts of Andhra Pradesh. The findings of the study were that the average gross income and household expenditure are consistently higher in the developed West Godavari district, followed by the developing Prakasam district, and lowest in the moderately developed Srikakulam district. Although Srikakulam district is well-off in terms of possession of agricultural resources compared to Prakasam district, socially and culturally it is a backward district in Andhra Pradesh. Perhaps this has prompted the farm incomes of Srikakulam district to operate at a lower level of equilibrium with regard to either production or consumption.

The importance of savings in economic growth needs no specific emphasis. Since the emergence of classical economics, savings has been considered as an important determinant of c. Specifically since World War II, the economists dealing with the developmental problems of the developing countries have stressed the need for increased
savings to accelerate the rate of economic development. Rugnar Nurkse aptly pointed out that it is the high rate of capital formation that enables the developing countries to break the vicious circle of poverty.

Savings are crucial in both developed, and developing countries. The very process of economic development depends upon the communities’ ability to save and invest. In the literature of development economics the contributions of Rostow (1960), W A Lewis, etc., clearly indicated the necessary rates of investment and they related these rates with rates of growth of population. The government resources through taxation and external sources are not sufficient to sustain its economic growth. The ability to sustain economic growth lies on its capacity to mobilize its domestic resources.