Private Foreign Capital in India Essay

This essay has a total of 696 words and 5 pages.

Private Foreign Capital in India

"Private Foreign Capital in India"-Macro Economics

Individual Project
(Term Paper)

Kaushik. P
Great Lakes Institute Of Management,
Srinagar Colony, Off Raj Bhavan Road,
24, South Mada Street,
Chennai - 600015, India

Has Foreign Direct Investment (FDI) contributed to the growth of Gross Domestic Product (GDP) of India?

Null Hypothesis (Ho): There is no significant increase in growth of GDP due to FDI inflow in India.

Alternative Hypothesis (H1): There is significant increase in growth of GDP due to FDI inflow in India.

Project Precis:
FDI: The acquisition abroad of physical assets such as plant and equipment, with
operating control residing in the parent corporation.

GDP: The sum total of all final goods and services produced within a country in a specified period of time.
Foreign direct investment is an important source of capital, complements domestic private
investment, and is usually associated with new job opportunities, enhancement of
technology and boosts economic growth in host countries. Therefore foreign direct
investment flows are increasingly looked as a panacea for all the development needs of
developing countries. So, there is an increasingly intense competition among countries to
attract FDI inflows so much so that governments see the magnitudes of FDI received as
indicators of their success.

Preliminary Literature Survey:
Recent literature has shown that some may bring valuable benefits to their host economies,
others may crowd-out domestic enterprises and actually reduce host country welfare.
Studies have also shown that host government policies such as screening mechanisms,
performance requirements, incentives and pro-active promotion play an important role in
determining the quality of FDI inflows.
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