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Foreign Direct Investment (FDI)


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1 Research Assistant, Directorate of Economics and Statistics, Gandhinagar, Gujarat State, India
     

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The Economic reforms in India refers to the Neo-Liberal polices introduced by the government in 1991 and in the later years. The central point of the reforms was liberalization of the economy, simplifying regulations, giving more role to the private sector and opening up of the economy to foreign competition started a new era in India’s economic policy with permission to FDI up to 51 percent in selected sectors. The Foreign Direct Investment is constantly decreasing in our country shown during this study. Gujarat has attracted more FDI than what its GDP size alone would suggest but relative to its peer states (especially Tamilnadu, Delhi etc.) it has fallen short significantly. During April 2000 to March 2019, Maharashtra is the highest contributor to achieve the FDI followed by Delhi at second position, Karnataka at 3rd position, Tamilnadu at 4th position, Gujarat at 5th and Andhra Pradesh at 6th position. It is observed that, during the year 2016-17 to 2018-19, there has been a massive decline in FDI of 45% in Gujarat State. There may be many factors responsible for the decline in FDI in the State such as Industrial vulnerabilities in the state, Complexity and uncertainty in FDI policy etc. It is necessary to attract more and more FDI in order to establish the Gujarat state as a “Model State”.

Keywords

FDI, Gujarat, Economic Reform.
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  • Foreign Direct Investment (FDI)

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Authors

Satyam S. Ratnam
Research Assistant, Directorate of Economics and Statistics, Gandhinagar, Gujarat State, India

Abstract


The Economic reforms in India refers to the Neo-Liberal polices introduced by the government in 1991 and in the later years. The central point of the reforms was liberalization of the economy, simplifying regulations, giving more role to the private sector and opening up of the economy to foreign competition started a new era in India’s economic policy with permission to FDI up to 51 percent in selected sectors. The Foreign Direct Investment is constantly decreasing in our country shown during this study. Gujarat has attracted more FDI than what its GDP size alone would suggest but relative to its peer states (especially Tamilnadu, Delhi etc.) it has fallen short significantly. During April 2000 to March 2019, Maharashtra is the highest contributor to achieve the FDI followed by Delhi at second position, Karnataka at 3rd position, Tamilnadu at 4th position, Gujarat at 5th and Andhra Pradesh at 6th position. It is observed that, during the year 2016-17 to 2018-19, there has been a massive decline in FDI of 45% in Gujarat State. There may be many factors responsible for the decline in FDI in the State such as Industrial vulnerabilities in the state, Complexity and uncertainty in FDI policy etc. It is necessary to attract more and more FDI in order to establish the Gujarat state as a “Model State”.

Keywords


FDI, Gujarat, Economic Reform.