Friday, August 31, 2012

India FDI fact of the day

Painting the India growth story with a single stroke of the brush is not advisable. As the FT writes, the picture that emerges from the foreign direct investment (FDI) trends is no different,
More than 3 in every 4 dollars of equity FDI allocated to Indian regions in the last 12 years went to the state of Maharashtra and its capital Mumbai, Delhi and Bangalore (in the state of Karnataka) – territories that account for a mere 18 per cent of the population... The western region received over $100bn of FDI equity inflow in the last twelve years out of the $130bn altogether. The figure contrast with a mere $320m of equity FDI that reached the eastern states of Orissa, Jharkhand and Bihar over the same period. With 15 per cent of the Indian population, they secured just 0.2 per cent of all FDI.


IndiaPowerReforms said...

But, these small investments (relatively) seem to be having a disproportionate impact on the stock market and the economic sentiment.

The sentiment seems to be driven more by issues like these which dont have a real impact on the production of goods and services, the real economy.

IndiaPowerReforms said...

These relatively minor flows seem to be having a disproportionately large impact on the stock and commodity markets. (Which i feel are getting far removed from the real economy of production of goods and services)