FDI goes up for India as govt clears nearly 2000 crore investment

    0
    18

     

    In a sign of improving sentiment over the Indian economy, Foreign Direct Investment jumped a full 56% in November 2011. The total flow of FDI reached $22.83 billion in the April-November period, which was way above the $19.43 billion that had flowed into the country in the fiscal 2010-2011.

    The rupee has seen a decline of about 15% since August in the face of declining FDI, cuts in ratings, weakning economy and ballooning deficit. However, with inflation under control, the rupee strengthening, and successive upgrades in India’s debt rating, things are looking up.

    To help the economy along and attract more FDI the govt has allowed 100% foreign direct investment in single brand retail. The govt further said that it had approved 20 FDI proposals worth $373 million, or Rs 1,935.24 crore.

    FDI is considered stable money, while investment from the Foreign Institutional Investors (FII) is considered “hot money”. While FDI stays on in the country, that is to say it comes in the form of subsidiaries, plants, retail chain etc, FIIs invest in stocks and sell when the price is right.

    The movement of FII money can cause serious disruption to the market. The proposals for FDI were cleared following recommendations of the Foreign Investment Promotion Board (FIPB) at its meeting Dec 23, 2011, the finance ministry said in a statement.

    After two months of decline, India saw $2.53 billion of FDI in November last year against $1.62 billion in the same month of 2010. The government cleared Sterlite Grid’s Rs.1,150 crore proposal to act as an investing company. It also allowed Equitas Micro Finance’s Rs.230.70 crore proposal for demerging its microfinance business with its wholly owned subsidiary.

    Mumbai-based TV Vision’s Rs.200 crore proposal to induct foreign investment by way of issuing equity shares through an initial public offering (IPO) for a non-news and current affairs television channel had also been approved, said the ministry in a statement.

    The ministry, however, deferred 23 proposals, including those of Rossell Aviation, Veritas (India) and Aptuit Laurus. It rejected 10 proposls, including those of Pomelo Infra Projects, Flemingo Dutyfree Shop and Springer Editorial Services.

    A proposal of G4S Security Services for induction of foreign equity to carry out the business of providing security services has been withdrawn from the agenda and another of MNP Interconnection Telecom Solutions has been noted.

    In the case of Omnimedia SL’s proposal to undertake the business of publishing and printing of scientific and technical magazines and circulation of their digital versions that did not involve any fresh flow of money, the applicant was advised to approach the information and broadcasting ministry.

    IANS