Investment
To invest is to allocate money with the expectation of a positive benefit/return in the future.
In other words, to invest means owning an asset or an item with the goal of generating income from the investment or the appreciation of your investment which is an increase in the value of the asset over a period of time.
Investment is a flow concept. It is also known as capital formation. Investment is a part of the national product which has not been consumed.
The national income may be either consumed or saved.
Normally, a part of the national product is consumed during the year and the remaining part is saved.
For illustration, suppose capital stock at the beginning of the year i.e. 1.4.96 is Rs.1000 crores. Suppose at the end of the year i.e. on 31.3.1997 capital stock is Rs.1100 crores. This addition of Rs.100 crores of capital assets during the year is investment.
Investment
For illustration, suppose capital stock at the beginning of the year i.e. 1.4.96 is Rs.1000 crores. Suppose at the end of the year i.e. on 31.3.1997 capital stock is Rs.1100 crores. This addition of Rs.100 crores of capital assets during the year is investment.