FDI (Foreign Direct Investment) in India – Beneficial for Indian Economy

Have some Quick facts to know why?

Foreign Direct Investment (FDI) in India is the major monetary source for economic development in India. Foreign companies invest directly in fast growing private Indian businesses to take benefits of cheaper wages and changing business environment of India. Economic liberalization started in India in wake of the 1991 economic crisis and since then FDI has steadily increased in India. It was Manmohan Singh and P. V Narasimha Rao who brought FDI in India, which subsequently generated more than one crore jobs. According to the Financial Times, in 2015 India overtook China and the US as the top destination for the Foreign Direct Investment.

In first half of the 2015, India attracted investment of $31 billion compared to $28 billion and $27 billion of China and the US respectively.

Quick Facts why FDI is not a Curse for the Country!

  • We all know that food never reaches us consumers directly from the farmers. There is a complex labyrinth of dalals-stockiest-dealers-wholesalers-retailers and the added costs in each step. What the farmers receive, we pay an exorbitant amount of that price. These companies would directly buy from the farmers, thereby cutting costs. Moreover there have been cases of these middle-men hoarding up goods so that prices will rise (I myself have seen one such case). With FDI this will be eradicated.
  • A huge employment arena will be generated in terms of logistics and storage. The dynasty of ‘family businesses will be a passé.
  • FDI in retail will only be allowed in cities with >1 million population, so the village folk needn’t worry. Moreover the govt. has put stringent monitoring clauses in the agreement that will discourage them from any malpractices.
  • Now whenever there is an acute shortage in essentials, many do not know where the fault lies. The production is Okay, so why the shortage? In this complex system, it’s difficult to pin-point the wrongdoer. With a single corporate entity, the entire process will be transparent. When there is a shortage, we’ll be able to exactly determine where it has originated.
  • INDIA INC. has welcomed this move, so has RBI & the likes. I’m sure they know better business & economics than most of us here.

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