FDI, apart from being a driver of economic growth, can also be seen as a non-debt-creating financial resource. In this context, what is the relevance of FDI in the economic growth of India? What are the issues associated with FDI as a source of growth?
Introduction
Recently India reported highest ever FDI inflow of 85 billion in FY 21-22 indicating the crucial role it plays in economic growth of the country
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Main Body
by Technology: Never & improved technologies & operational practices adopted. 3) Development of human capital: via better exposure to skills & best practice of world. 4) Export growth: Production of goods that are export comparable & [illegible] export oriented with [illegible]. 5) Facilitate stability of exchange rate & adds upto foreign exchange reserve. Issues associated with FDI: Not suitable for strategically important industry. Hindrances of domestic investment. FDI policy uncertainty linked to global issues. Poor performance of certain MNCs & unequal growth. Way forward: - Removal of the need for government approval for FDI - Strengthening single window clearance system - Revised FDI rules & e-commerce rules. Therefore, government aim to achieve USD 100 billion worth FDI is crucial in realising $5 trillion economy in India
Conclusion
Therefore, government aim to achieve USD 100 billion worth FDI is crucial in realising $5 trillion economy in India
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Diagram
Flow diagram showing FDI as driver of economic growth and non-debt creating financial inflow, with sub-branches detailing capital formation and technology adoption
- Clearly defined FDI with recent statistical example (85 billion FY 21-22)
- Structured approach with dual benefits (driver of growth + non-debt creating)
- Good use of flow diagram to illustrate concepts
- Mentioned employment generation as outcome
Dr. Sachin B L
Economic Issues
FDI (Foreign Direct Investment)
FDI in economic growth
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