WAS THE INTRODUCTION OF FDI IN INDIA A WISE MOVE??????

Foreign direct investment is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country.

Foreign investment was introduced in 1991 under foreign exchange management, driven by then finance minister manmohan singh. As Singh subsequently became the prime minister, this has been one of his top political problems, even in the current times. India disallowed overseas corporate bodies (OCB) to invest in India.India imposes cap on equity holding by foreign investors in various sectors, current FDI limit in aviation sector is maximum 49%.

Starting from a baseline of less than $1 billion in 1990, a 2012  survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010–2012. As per the data, the sectors that attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. Based on UNCTAD data FDI flows were $10.4 billion, a drop of 43% from the first half of the last year.

NEGATIVE IMPACTS OF FDI IN INDIA......

 Nobody in urban India is suffering for lack of ‘access’ to food or grocery items. If at all it is the public distribution system that is diseased with corruption and needs to be replaced or removed. TAccess to food is an issue in the remote and rural impoverished areas of the country, where as the fine print tells you, FDI in retail will not be implemented.

 The myth about ‘farm-to-store’ supply chain should end with the simple fact that middlemen will not be removed from the operation but that existing middle men will be replaced by bigger, more organized, more prosperous middlemen. Anyone who knows the business of distribution knows that there is nothing called a direct sale from farmer to retail, unless it is self-owned farm by the retailer.

The idea that the farmer will get a better price for his produce if FDI in Retail is allowed is a baseless suggestion. The open market does not work on altruism and social service. It negotiates the best for itself so it can corner the most for itself. Farmer suicides are not because they cannot sell, as is being written about by irresponsible columnists and business leaders but because they are unable to get remunerative prices for their produce qwing to poor quality produce due to lack of proper crop management or crop failure, an inability to pay back their loans or make ends meet and lose their land.

Consumers will get lower prices is another figment of the lobbyist’s fertile imagination. Prices never come down. Big bazaar or Walmart, prices never come down. The argument is a facetious assault on the principle of growth and inflation. Big retail can at best sell you cheaper potatoes or five such items carefully selected on seasonal variations or bulk deals with producers cheap for only a week and no more.

THE POSITIVE POINTS........

Sufficient flow of capital towards development in various sectors as well as revenue generation.

 Improvement in technology and skill which reduce the cost and increase the efficiency of working process.

Increase in job opportunities in many sectors, resulted as uplifting in their life style and acceptability.

 Social and economic growth due to awareness from various sources like schools, colleges, constitutional body and information technology etc. which is possible due to FDI.

so , is fdi a good or a bad move by india??  ..only time will tell.........