The present study is a unique attempt in the estimate of factor shares and savings by income classes. These estimates are used to explain a deceleration in the growth rate in industrial production and consequently a lower growth rate in the Net National Product in India during the later half of the sixties. The author starts with the existing hypotheses and their validity. He advances his own hypothesis of scarcity of investible resources as the main cause of slow down in the investment and consequently deceleration in the growth. Scarcity of resources is explained in terms of a decline in the institutional savings and a decline in the growth rate in savings by the Household Sector. For explaining a decline in the growth rate in household savings during the later half of the sixties, an indepth study has been made of relative shares of various classes and their propensity to save. It has been shown in the study that in the Private Corporate Sector the demand for investible resources rose : One, because at the margin the ratio of capital cost to labour cost was lower which further declined because of "Payment of Bonus Act 1965". Along with this, savings also declined and consequently demand for resources from the Household Sector rose. In the Public Sector also, on the one hand, because of employment programme and / various development programmes, the demand for investible resources rose, on the other hand, its savings declined leading to an increase in the demand for resources from the Household Sector. In the case of Household Sector, due to changes in the distribution of income amongst the various saving classes, the growth rate in savings declined. This led to scarcity of investible resources and consequently lower growth rate in the national product.
