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Hello Capital formation steps totally related to the saving . if the best saving , then best capital formation. there is positive + relationship between Savings and Capital Formation. So in my opinion capital formation is depend upon the saving . saving means income - consumption . So There are three steps of capital formation . [1] Increase in Savings : - Increase in saving also means creation of savings. the saving should be real saving. so that it is better of capital formation. [2] Mobilization of savings.-capital formation also depends how to mobilize of saving through financial and capital institution. [3] investment of savings : - the best steps of capital formation is how to invest your saving . so better investment , good result. As Per Above conclusion , Capital formation has two aspects. [1] how to save more and more [2] how to use and invest the saving that it is better for any capital formation.