(a) whether a huge difference has been found in the approved capital investment and the actual capital investment in the industries being run in the country by foreign capital investment;
(b) if so, the average difference found during the last three years;
(c) whether the Government have identified the reasons for this difference;
(d) if so, the details thereof; and
(e) the action taken by the Government to solve them?
Minister of State in the Ministry of Finance (V. DHANANJAYA UMAR)
(a): Yes Sir. There has been difference in the total amount of foreign investment approvals vis-...-vis the actual inflow of foreign direct
investment (FDI) from 1991 to till March, 2000.
(b): The percentage of fructification of FDI during last three years is given below:
Year FDI Inflow/FDI approvals (Percentage of fructification)(c) & (d): FDI inflow are based on medium and long term considerations and are attracted by the investors perception about the current and future position of economy. The implementation of any project involving FDI is also determined by various factors including the availability of infrastructure, man power, domestic market and fiscal and other incentives provided by the State Governments. Due to these reasons, the approved foreign investment does not fructify to the maximum extent.
1998 43.29% 1999 59.46% 2000 86.91% (upto May)