INTRODUCTION TO FOREIGN DIRECT INVESTMENT
Foreign direct investment is one of the major monetary sources for economic development. Foreign companies invest in India to take various advantages such as cheaper wages and the changing economic environment of India. With the liberalization of Indian economy in 1991 under foreign exchange management act (FEME), FDI has steadily increased in India.
According to the financial times (2015) china and US were overtaken by India in the marathon of the top destinations of FDI. Increased FDI may be linked with improved economic growth due to the influx of capital and increased tax revenue of the host country and this FDI is channelized into infrastructural and other economic development projects.
Globalization …show more content…
It was in 2000 when the sector was liberalized after a long debatable period, the private players were allowed to participate with foreign investment up to 26% in the equity share capital .many new companies came up after that and the major issues of Indian insurance such as insurance density and insurance penetration had been dealt upto some extend some thought it was an impact of the togetherness others called it the effect of privatization, whatever the reason is performance of the sector is improved but the researchers are still unable to say actually whose impact it is as both the privatization and inclusion of foreign capital were allowed in 2000. The expected still did not happened but the impact of the decision taken in 1999 was producing a positive impact and that was the reason why the debate for increasing the FDI limit to 49% again broke up in …show more content…
The study finds out the policy of government regarding the issue of increased FDI. IT was totally based on secondary data and concluded that the change in policy related to increased FDI limit was not in favor of the Indian insurance sector.
Hasan (2015) in his research paper has tried to analyze the Indian insurance market by sectoral division and deeply analyzed the major problems of the Indian Insurance market such as penetration and density over the years and then the FDI in the insurance sector as well as new increment too. Where he had concluded that the Indian market had a lot of potentials, but these could be excavated through the change in the regulatory fundamentals
Paride (2014) had studied the proposal made in the union budget 2014-15 where the finance minister has proposed to increase the FDI limit to 49% from 26% with full management and control through the FIPB route. He had studies what were the expected two scenarios – first the disinvestment of the Indian promoters stake up to 51% from 74% or keeping the Indian promoters stake at present level (in amount ),but in hands the foreign investment so that the new ratio of domestic and foreign insurer would be 51:49 And concluded that the first scenario may not be an ideal and government may favor the second i.e. to issue the fresh shares for extra foreign investment rather than sale
Foreign direct investment is one of the major monetary sources for economic development. Foreign companies invest in India to take various advantages such as cheaper wages and the changing economic environment of India. With the liberalization of Indian economy in 1991 under foreign exchange management act (FEME), FDI has steadily increased in India.
According to the financial times (2015) china and US were overtaken by India in the marathon of the top destinations of FDI. Increased FDI may be linked with improved economic growth due to the influx of capital and increased tax revenue of the host country and this FDI is channelized into infrastructural and other economic development projects.
Globalization …show more content…
It was in 2000 when the sector was liberalized after a long debatable period, the private players were allowed to participate with foreign investment up to 26% in the equity share capital .many new companies came up after that and the major issues of Indian insurance such as insurance density and insurance penetration had been dealt upto some extend some thought it was an impact of the togetherness others called it the effect of privatization, whatever the reason is performance of the sector is improved but the researchers are still unable to say actually whose impact it is as both the privatization and inclusion of foreign capital were allowed in 2000. The expected still did not happened but the impact of the decision taken in 1999 was producing a positive impact and that was the reason why the debate for increasing the FDI limit to 49% again broke up in …show more content…
The study finds out the policy of government regarding the issue of increased FDI. IT was totally based on secondary data and concluded that the change in policy related to increased FDI limit was not in favor of the Indian insurance sector.
Hasan (2015) in his research paper has tried to analyze the Indian insurance market by sectoral division and deeply analyzed the major problems of the Indian Insurance market such as penetration and density over the years and then the FDI in the insurance sector as well as new increment too. Where he had concluded that the Indian market had a lot of potentials, but these could be excavated through the change in the regulatory fundamentals
Paride (2014) had studied the proposal made in the union budget 2014-15 where the finance minister has proposed to increase the FDI limit to 49% from 26% with full management and control through the FIPB route. He had studies what were the expected two scenarios – first the disinvestment of the Indian promoters stake up to 51% from 74% or keeping the Indian promoters stake at present level (in amount ),but in hands the foreign investment so that the new ratio of domestic and foreign insurer would be 51:49 And concluded that the first scenario may not be an ideal and government may favor the second i.e. to issue the fresh shares for extra foreign investment rather than sale