Private Foreign Capital in India :: essays research papers

"Private conflicting Capital in India"-Macro EconomicsProblem     Has unusual Direct Investment (FDI) contributed to the evolution of Gross Domestic Product (GDP) of India?      zippo Hypothesis (Ho) thither is no significant increase in growth of GDP due to FDI inflow in India.Alternative Hypothesis (H1) There is significant increase in growth of GDP due to FDI inflow in India.Project Prcis     Definition     FDI     The acquisition abroad of strong-arm assets such as plant and equipment, with operating control residing in the cite corporation. GDP     The sum total of all final goods and services produced deep down a country in a specified period of time.      Foreign direct enthronement is an important source of capital, complements domestic private investment, and is unremarkably associated with new job opportunities, enhance ment of technology and boosts economic growth in legions countries. Therefore foreign direct investment flows are increasingly looked as a panacea for all the development needs of development countries. So, there is an increasingly intense competition among countries to attract FDI inflows so a great deal so that governments see the magnitudes of FDI received as indicators of their success.Preliminary Literature gaze     Recent literature has shown that some may bring valuable benefits to their host economies, others may crowd-out domestic enterprises and actually reduce host country welfare. Studies discombobulate also shown that host government policies such as screening mechanisms, cognitive process requirements, incentives and pro-active promotion play an important role in determining the smell of FDI inflows. Although FDI inflows into India have increased considerably since1991, its share would appear too small, particularly if it is compared with th at of other countries in the region such as China. India has been receiving FDI inflows of about $3 to 4 billion a year that represent a fringy under 2 per cent of total inflows attracted by developing countries. In contrast, China has been receiving over $45 billion of inflows representing nearly a get out of total developing country FDI inflows.      Particulars     China     IndiaFDI Confidence Index bill*(January 2000)     1.45     1.14FDI Inflow (US $ billions, 1998)     45.5     2.3FDI Stock (US $ billions, 1998)     261.1     13.2GDP (nominal US $ billions, 1999 estimate)     993     468.4* The FDI confidence index tracks the bear upon of likely political, economic and regulatory changes on the foreign direct investment intentions and preferences of the le aders of some of the worlds leading companies.Two parameters i.e. drawing card and Current are considered for probable FDI inflow. From the diagram it is evident that India is average on Attractiveness and average on Current too. India scores well in a higher place countries like Indonesia, Thailand etc in terms of the parameters.