Scribd Logo
Upload

Welcome to Scribd!

  • 351 views

    Capital Flow Into India

    Uploaded by

    Vaibhav Banjan
    This document provides an analysis of trends in foreign capital flows into India from 2007-2008 to 2011-2012. It summarizes the sources of foreign capital such as debt and equity. It analyzes trends showing increasing FDI inflows and declining portfolio investment and debt flows. Policy initiatives like liberalizing FDI rules contributed to improved inflows. Suggestions are made to further improve inflows such as increasing FII limits and developing fixed income markets.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Capital Flow Into India

    Uploaded by

    Vaibhav Banjan
    351 views19 pages
    This document provides an analysis of trends in foreign capital flows into India from 2007-2008 to 2011-2012. It summarizes the sources of foreign capital such as debt and equity. It analyzes trends showing increasing FDI inflows and declining portfolio investment and debt flows. Policy initiatives like liberalizing FDI rules contributed to improved inflows. Suggestions are made to further improve inflows such as increasing FII limits and developing fixed income markets.

    Original Title

    Capital Flow into India.ppt

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides an analysis of trends in foreign capital flows into India from 2007-2008 to 2011-2012. It summarizes the sources of foreign capital such as debt and equity. It analyzes trends showing increasing FDI inflows and declining portfolio investment and debt flows. Policy initiatives like liberalizing FDI rules contributed to improved inflows. Suggestions are made to further improve inflows such as increasing FII limits and developing fixed income markets.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    351 views19 pages

    Capital Flow Into India

    Uploaded by

    Vaibhav Banjan
    This document provides an analysis of trends in foreign capital flows into India from 2007-2008 to 2011-2012. It summarizes the sources of foreign capital such as debt and equity. It analyzes trends showing increasing FDI inflows and declining portfolio investment and debt flows. Policy initiatives like liberalizing FDI rules contributed to improved inflows. Suggestions are made to further improve inflows such as increasing FII limits and developing fixed income markets.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 19

    Capital Flow into India:

    Analysis of Trends
    Presented by
    CA. Vaibhav N. Banjan
    Membership No : 047584
    MBF/Mumbai/ Batch 3
    MBF Reg No : MBF12MU/010

    Presentation Outline
    Objective

    of the Study
    Sources of Foreign Capital
    Importance of Foreign Capital
    Trends in Foreign Capital
    Analysis of Trends in Foreign Capital
    Importance of FDI as source of Capital Inflow
    Measures to Control Foreign Inflow
    Suggestions to Improve Foreign Inflow

    Objective of the Study


    To

    observe and analyze the trend and


    composition of foreign Capital flows into India
    in the last 5 years.
    To analyze the policy initiatives and reasons
    which contributed to change in Trends of
    Foreign Capital flows.
    To suggest measures to improve the
    composition of capital flows into India.

    Sources of Foreign Capital:

    A) Debt
    External Assistance
    External Commercial Borrowings (ECB)
    Banking Capital (including NRI Deposits)
    Short Term Trade Credits
    B) Equity
    Foreign Direct Investment (FDI)
    Foreign Portfolio Investment (FPI)

    Importance of Foreign Capital


    Increase

    Accumulation & Rate of Investment


    Create condition for Intensive Economic
    Growth.
    Contribute in Filling the Resource Gap.
    Facilities
    Attainment
    of
    Millennium
    Development Goals.
    Necessary for Micro Economic Stability
    Capturing Benefits of Globalisation

    Trends in Foreign Capital


    Particulars

    2007-08

    2008-09

    2009-10

    2010-11

    2011-12

    (in Mn USD)
    I) Foreign Direct
    Investment
    Inflows

    34843

    41873

    37745

    34847

    46553

    Outflows

    18952

    19530

    19780

    23542

    24548

    Net

    15891

    22343

    17965

    11305

    22005

    27271

    -13855

    32376

    31471

    17410

    -163

    177

    -20

    1179

    239

    27434

    -14032

    32396

    30292

    17171

    II) Foreign Portfolio


    Investment
    Inflows
    Outflows
    Net

    Trends in Foreign Capital


    Particulars

    2007-08

    2008-09

    2009-10

    2010-11

    2011-12

    (in Mn USD)
    External Assistance (Net)

    2114

    2439

    2890

    4941

    2296

    External Commercial
    Borrowings (Net)

    22609

    7861

    2000

    12160

    10344

    Short Term Debt (Net)

    15930

    -1985

    7558

    12034

    6668

    Banking Capital (Net)

    11759

    -3245

    2083

    4962

    16226

    of which NRI Deposit

    179

    4289

    2922

    3239

    11920

    Other Flows (Net)

    10847

    -6016

    -13259

    -12484

    -7008

    Total Flow

    106584

    7365

    51633

    63210

    67702

    Trends in Sources of Foreign Capital

    Trends in Sources of Foreign Capital

    Analysis of the Trend in


    Foreign Capital into India

    High contribution of FDI in Foreign Flow


    FDI Inflows has increased in the latest year.
    FPI Flow initially improved in the year 2009-10 and
    year 2010 -11 on account of favourable situation in
    the basic economic variables.
    FPI Flow then declined in the year 2011-2012 due to
    risk aversion on account of global economic
    uncertainty
    Total of FDI & FPI (Equity) is similar in most of the
    years

    Analysis of the Trend in


    Foreign Capital into India.2

    Low Contribution of External Assistance


    ECB Flow was highest in the first year
    then declined considerably on account of outflow
    in the next 2 years and then increased due to
    liberalization in raising Debt capital
    Short Term Debt has shown mixed trend
    Banking Capital of which NRI Deposits has
    contributed significantly in last year to Inflows
    Net Foreign Capital has declined drastically

    Major Inflow : FDI and its


    Impact to India
    Country's

    trade balance
    Increasing labour standards and skills
    Transfer of new technology and innovative
    ideas
    Generation of employment opportunities
    Improving infrastructure, skills and the
    general business climate.

    Initiatives
    that
    contributed
    Improved Capital Inflows
    Automatic

    to

    Route for FDI


    Advance against Equity permitted
    Portfolio Investment schemes liberalized
    Liberalisation in issue of ADR/ GDR by Indian
    Companies
    FII/ NRI permitted to invest in Mutual Funds
    and Government securities

    Initiatives
    that
    contributed
    to
    Improved Capital Inflows
    contd..
    Foreign

    Venture Capital Investment


    ECB Limits liberalised for Many sectors
    Buyers Credit and Supplier Credit liberalised
    Bank allowed to borrow in International
    Market
    Interest Rate on NRI Deposit de-regulated

    Impact of Foreign Capital Flow in


    India
    Improve

    Foreign Exchange Reserve

    Avoid

    Balance of Payment Problem

    Avoid

    Depreciation of the Local currency

    Improve

    Investor Sentiments

    Measures to Control Foreign Flow


    Sterilized Intervention
    Exchange rate Protectionism to be eliminated
    Trade Liberalization
    Check the Flow of FII funds as it may cause
    equity bubbles
    Incentives for Investment in Infrastructure and
    Manufacturing
    Cautious Capital Account Convertibility approach

    Suggestions to Improve
    Foreign Capital Flow
    Removal of restriction on FDI in many sectors
    and in particular in Insurance & Retail
    Increase the Limit of FII in Equity of Companies
    GAAR provisions could be in the way of grandfathering of existing models
    Certainty in Taxation and avoid retrospective
    amendments
    Concessional of Withholding taxes for ECB
    Borrowing of Infrastructure to be continued

    Suggestions to Improve
    Foreign Capital Flow
    Fixed Income securities Market to be developed
    Liberalisation in Venture Capital Financing
    Improve Co-ordination between the Central and
    State Government of FDI Investment
    SEZ policies to be streamlined to encourage
    Investment in SEZ
    Land Acquisition for
    Direct Investment to be
    made easier
    Maintain Stable Exchange Rate

    THANK YOU

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy