Financial Daily from THE HINDU group of publications
Wednesday, Jun 19, 2002
Financial Daily from THE HINDU group of publications Wednesday, Jun 19, 2002 |
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Industry & Economy
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Foreign Direct Investment FDI inflows cross $4 b in 2001-02 Our Bureau
NEW DELHI, June 18 FOREIGN direct investment inflows amounting to $4.06 billion were received during financial year 2001-02, the highest received so far as against $2.46 billion received in 2000-01, registering a 66 per cent growth. The above figures are based purely on foreign equity investments, including preference shares other than foreign portfolio investment. It also excludes investments by offshore venture capital funds/domestic venture capital funds set up by foreign venture capital investors.Apart from this, it also excludes reinvested earnings and other direct capital flows, which are treated as FDI as per IMF standards. The IMF definition of FDI, which is adopted by most countries for reporting FDI data treats both reinvested earnings and other direct capital flows such as debt securities, trade credits and grants as part of FDI. The FDI inflows into India when recalculated on the basis of international reporting practices will work out to be much higher than what is currently reported, according to a Government release. According to a recent survey conducted by International Finance Corporation (IFC), adoption of international standards for computation of FDI would raise India's net annual FDI inflows from the present $2-3 billion to about $8 billion, which works out to approximately 1.7 per cent of India's GDP. With a view to aligning our FDI reporting system with the international computation standards and updating the FDI inflows into the country accordingly, the Government recently set up a joint committee comprising representatives from the Reserve Bank of India and the Department of Industrial Policy and Promotion. The committee is expected to complete its work shortly.
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