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ACCELERATION IN FDI INFLOWS
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Economic Survey 2007-08 says, FDI inflows into India accelerated in 2006-07 due to reforms in policies, better infrastructure and a more vibrant financial sector. On a gross basis, FDI inflows into India after rising to a level of US $ 6.2 billion in 2001-02 has risen to US $ 23.0 billion in 2006-07. The trend continued in the current Financial Year with gross FDI inflows at US $ 11.2 billion in the first six months. FDI inflows continued to be preponderantly of the equity variety, broad- based and spread across a range of economic activities like financial services, manufacturing, banking services, information technology services and construction.
FDI grew by 179.5 per cent on a net basis during 2006-07 while the growth was 150.2 per cent on gross basis. Even as FDI into India grew substantially, a simultaneous pick up in outward investment moderated the over all net inflows. Outward investment by India shot up from levels less than US $ 2.4 billion in the period 2003-04 to 2004-05 to reach US $ 14.4 billion in 2006-07. Thus, over all net FDI in 2006-07 was at US $ 8.5 billion.
The trend continued in the current year also with FDI inflows in the period April-September 2007 being moderated by outward investment of US $ 7.3 billion to yield net flows of US $ 3.9 billion. The proportion of payments to receipts under FDI into India was 0.7 per cent and 0.4 per cent in 2005-06 and 2006-07 respectively. This indicates the lasting and stable nature of FDI flows in India.
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