Lehar Ajwani (2)

Harkesh Bansal (5)

Jaimin Patwa (19)
Shweta Singh (22)
Puneet Vyas (27)
 Difference between the government's total
expenditure and its total receipts (excluding
borrowing) – Fiscal Deficit
 Difference between the revenue expenditure
and the revenue receipts (the recurring
income for the government) - Revenue
deficit
 Fiscal Deficit – Interest payments = Primary
Deficit
 Foreign Direct Investment relates to direct investment in an Indian
company either through a joint venture agreement or as a wholly owned
subsidiary with management interest. Foreign direct investment is also
permitted through the route of Global Depository Receipt/Euro
issue/FCCB.
 Types of FDI
There are two types of FDI:
 Greenfield investment : It is the direct investment in new facilities or
the expansion of existing facilities.
 Mergers and Acquisition : It occurs when a transfer of existing assets
from local firms takes place.
 Forbidden Territories:
FDI inn India is not permitted in the following industrial sectors:
 Arms and ammunition.
 Atomic Energy.
 Railway Transport.
 Coal and lignite.
 Mining of iron, manganese, sulphur, gold, diamonds, gypsum, copper,
 Services (US$ 9,443
million)
 Electrical Equipment (US$
8,964 million)
 Telecommunication (US$
4,880 million)
 Transportation (US$ 3,856
million)
 Fuels (US$ 2,892 million)
 Chemicals (US$ 2,465
million)
 Construction (US$ 1,912
million).
Components (Sectors)
 Mauritius (US$ 20,808
million) – 41.89%
 US (US$ 6,215 million) –
12.03%
 UK (US$ 3,979 million) –
7.98%
 Netherlands (US$ 2,789
million) - 5.59%
 Japan (US$ 2,585 million) –
5.07%
 Singapore (US$ 2,033
million) – 4.05%
 Germany (US$ 1,917
million) – 3.69%
Sources (Countries)
 Steel tycoon Lakshmi Niwas Mittal has pledged an investment of
about US$ 20 billion for building two 12-million-tonne steel
plants in the states of Jharkhand and Orissa.
 Vodafone, the world's second-biggest mobile firm, plans to spend
US$ 2 billion a year on capital expenditure in India.
 Eyeing the projected 15 per cent growth in the luxury car market
segment, DailmerChrysler India Pvt Ltd, makers of Mercedes-Benz
cars, has decided to set up a new plant in Pune.
 Israeli mall developer Plaza Center NV will invest US$ 1.22 billion
over the next five-seven years to set up 50 malls in India.
 Nokia plans to invest US$ 100 million in India in the next three
years to ramp up its capacity in Chennai.
 US-based aircraft engine manufacturer, Pratt and Whitney, plans
to invest about US$ 30 million in the Infotech and spare parts
manufacturing sector.
 Foreign Portfolio investment represents passive holdings
of securities such as foreign stocks, bonds, or other
financial assets, none of which entails active management
or control of the securities' issuer by the investor.
 Some examples of Portfolio investment are:
 purchase of shares in an Indian company.
 purchase of bonds issued by the Indian government.
 acquisition of assets in India.
 The Government of India in 1991 embarked on
liberalisation and economic reforms with a view to
bringing about rapid and substantial economic growth and
move towards globalisation of the economy. As a part of
the reforms process, the Government under its New
Industrial Policy, for the first time, permitted portfolio
investments from abroad by foreign institutional investors
in the Indian Capital Market.
 FIIs include
 Asset Management Companies
 Pension Funds
 Mutual Funds
 Investment Trusts as Nominee Companies
 Incorporated / Institutional Portfolio Managers or their Power of
Attorney holders
 University Funds
 Endowment Foundations
 Charitable Trusts
 Charitable Societies
 Government Securities/Treasury Bills
 Stocks of an Indian Company