Current Status of Fdi

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RNI. MAHMUL 02935/2011

GLOBAL ECONOMIC RESEARCH

Half Yearly
Research Journal

ISSN 2249- 4081
Vol. I, Issue : III, April 2012 to Sept. 2012

77

CURRENT STATUS OF INDIA’S FOREIGN DIRECT
INVESTMENT
D. V. Gore
Head, Dept. of Economics,
Shri. Vyankatesh College,
Deulgaon Raja, Dist. Buldana.

13

Dr. Jalindar G. Sable
Dept. of Economics,
Dr. B.A.M. University,
Aurangabad, Dist. Aurangabad

RESEARCH PAPER - ECONOMICS

ABSTRACT:
Foreign Direct Investment (FDI) as an important driver of growth. It is an important source of non debt financial resources for country for economic development. Besides it is a means of achieving technical knowhow and employment generation of employment. However, many are of the view that FDI is a big threat to sovereignty of host and domestic business houses. Faster exploitation of natural resources for profit may deprive host from such resources in long run. Midst of debate on pros and cons of FDI, world economy has observed a phenomenal change in volume and pattern of FDI. There is clearly an intense global competition of FDI .

INTRODUCTION
Foreign Direct Investment (FDI) is now regarded as an important driver of growth. Emerging Market Economies (EMEs) look upon FDI as one the easiest means to fulfill their financial, technical, employment generation and competitive efficiency requirements. Gradually they also realized that substantial economic growth is inevitable without global integration of business process. This created opportunities for vocational advantages and

RNI. MAHMUL 02935/2011

GLOBAL ECONOMIC RESEARCH

Half Yearly
Research Journal

ISSN 2249- 4081
Vol. I, Issue : III, April 2012 to Sept. 2012

78

thus facilitated strategic alliances, joint ventures and collaborations over R & D. LITERATURE REVIEW
It is universally acknowledged that FDI inflow offers many benefits to an economy. UNCTAD (1999) reported that Transnational Corporations (TNCs) can complement local development efforts by (i) increasing financial resources for development; (ii) boost export competiveness; (iii) generate employment and strengthening the skill base; (iv) protecting the environment to fulfill commitment towards social responsibility; and (v) enhancing technological capabilities through transfer, diffusion and generation. However, Te Velde, (1999) has rightly reported that in the absence of pro-active government policies there are risk that TNCs may actually inhibit technological development in a host country. Borensztein, et. al.

OBJECTIVES OF THE STUDY
The present study has been undertaken with a conduct empirical analysis of status of FDI in India and made some policy recommendation to boost flow of FDI to India. Thus the objectives of the study can be enumerated as follows: a)

To analyze the pattern and direction of FDI flow in India.
b)
To identify factors those are responsible for comparatively lesser flow of FDI. c)
To review FDI policy of India
d)
To make policy recommendation to improve the level of FDI.
STATUS OF FDI IN INDIA
Various studies have projected India among the top 5 favoured destination for FDI. Cumulative FDI equity inflows has been Rs.5,54,270 crore (1,27,460 Million US$) for the period 1991-2009. This is attributed to contribution from service sector, computer software, telecommunication, real estate etc.

RNI. MAHMUL 02935/2011

GLOBAL ECONOMIC RESEARCH

Rank

Half Yearly
Research Journal

ISSN 2249- 4081
Vol. I, Issue : III, April 2012 to Sept. 2012

79

Table 1: Share Of Top Investingcountries Fdi Equity Inflows
In Inr
Cumulative %age to total
Country
2006-07 2007-08 2008-09 2009-10
Inflows
Inflows

1

Mauritius

28759

44483

50794

42924

204196

44

2

Singapore

2662

12319

15727

8188

42040

9

3

USA

3861

4377

8220

7577

35536

8

4

UK

8389

4690

3840

1841

37746

5

5

Netherlands

2905

2780

3922

3687...
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