Composition of Foreign Capital Inflows and Growth in India: An Empirical Analysis.

Author(s)

Narender ,

Download Full PDF Pages: 26-32 | Views: 324 | Downloads: 97 | DOI: 10.5281/zenodo.3459065

Volume 4 - April 2015 (04)

Abstract

The role of foreign capital in economic growth has been a burning topic of debate in several countries including India. It is not possible for a developing country like India to grow without sufficient import of capital because of the gaps that exist in domestic savings and capital requirements. The Government of India has taken many initiatives to attract foreign capital to boost the Indian economy since liberalization. As a result, India has received Foreign Direct Investment (FDI) to the tune of US $ 355415 million as at the end of December 2014. This study has assessed the growth of GDP and Exports along with the composition of foreign capital, i.e. Foreign Direct Investment, Foreign Portfolio Investment (FPI), External commercial Borrowings (ECBs), and NRI Deposits in India during the period 1991 to 2014 which is based on secondary data. This study has analyzed the trends of foreign capital inflows in the form of source wise, country wise and reveals that the effect of foreign capital inflows have a positive impact on GDP and Export except the source of ECBs on GDP, ECBs and NRI deposits on Export which both are not significant as per model formulation. 

Keywords

Gross Domestic Product, Foreign Direct Investment, Foreign Portfolio Investment, External Commercial Borrowings, NRI Deposits, Export

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