1273500 AKSHAY MEHTA , F1 , Q-2-Should funds received under FDI investments be better utilized?

1273500 AKSHAY MEHTA , F1 , Q-2-Should funds received under FDI investments be better utilized?

Introduction 

Foreign Direct Investment  is fund flow between the countries in the form of inflow or outflow by which one can able to gain some benefit from their investment whereas another can exploit the opportunity to enhance the productivity and find out better position through performance. The effectiveness and efficiency depends upon the investors perception, if investment with the purpose of long term then it is contributes positively
towards economy on the other hand if it is for short term for the purpose of making profit then it may be less significant. Depending on the industry sector and type of business, a foreign direct investment may be an attractive and viable option. Any decision on investing is thus a combination of an assessment of internal resources, competitiveness, and market analysis and market expectations.

DISCUSSION

Foreign Direct Investment  as a strategic component of investment is needed by India for its sustained economic growth and development through creation of jobs, expansion of existing manufacturing industries, short and long term project in the field of healthcare, education, research and development (R & D) etc.

Government should design the FDI  policy such a way where FDI inflow can be utilized as means of enhancing domestic production, savings and exports through the equitable distribution among states by providing much freedom to states, so that they can attract FDI inflows at their own level. FDI can
help to raise the output, productivity and export at the sectoral level of the Indian economy. However, it can observed the result of sectoral level output, productivity and export is minimal due to the low flow of FDI into India both at the macro level as well as at the sectoral level,therefore for further opening up of the Indian economy, it is advisable to open up the export oriented sectors and higher growth of the economy could be achieved through the growth of these sectors

CONCLUSION

On the basis of above discussion we conclude that though FDI has a significant role in the development of Indian Economy if the same are utilized in a planned way. The govenment should ensure that the funds are used in those sectors which generate employment, production and export of the country. The Govt should also ensure the overall growth of all the states of the country.