Foregin capital inflow

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Foregin capital inflow

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  • i was hoping you could share the explanation of the slides, becasue i am trying to understand this topic. if you can please email it to me on varia.chandni@gmail.com
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  • hello! if possible, could you please share the explanation of each slide? especially the graphs? please.
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Foregin capital inflow

  1. 1. FOREIGN CAPITAL INFLOW AND GROWTH OF INDIAN ECONOMY CA. Bineet Sundriyal MBF -5 (New Delhi)
  2. 2. Contents:  Introduction  Components of Foreign Capital  Capital Account: Inflows Analysis  Analysis of Foreign Investments  Impact on Indian Economy  Recommendation
  3. 3. Introduction:  Capital inflow means inflows from any country outside India for capital transactions in India. It tracks capital movement of investments and loans into and out of the country. It helps in financing the gap between domestic savings and capital investment need of the Country. When there is capital account surplus it means a country is receiving more capital inflows. This results in increase in overall increase in BoP, thereby resulting increase in country’s foreign exchange reserves. Capital Inflows have direct impact at macro level. It facilitates stability at macro level by impacting the exchange rates, interest rates, forex reserves etc.
  4. 4. Introduction:  It helps in financing Current Account deficit.
  5. 5. Components of Capital A/c: Capital A/c Foreign Investments Loans Banking Capital Other Capital Movement in balances of foreign central banks Foreign Direct Investment (FDI) External Commercial Borrowing (ECB) Foreign Institutional Investor (FII) External Assistance NRI Deposits Short Term Loans Foreign currency holdings
  6. 6. Capital Account: Inflows Analysis 120 100 Capital Account (A+B+C+D+E) 80 Foreign Investment (A) 60 Loans (B) Banking Capital (C) 40 Rupee Debt Service (D) 20 Other Capital (E) 0 2007 -20 2008 2009 2010 2011 2012 2013* * FY13 till December 2012
  7. 7. Analysis of Foreign Investments 60 50 40 30 Foreign Investment (A) 20 FDI Portfolio Investment 10 0 2007 -10 -20 2008 2009 2010 2011 2012 2013*
  8. 8. FDI Equity Inflows
  9. 9. FII Flow in Equity & Debt
  10. 10. Impact on the Economy  Volatility in the Capital Market  Growth Rate  Balance of Payment  Employment Generation  Infrastructure Development  Global Competitiveness
  11. 11. Recommendations:  Measure to attract more capital inflows  Measures against corruption  Measures to strengthen Rupee  FDI in new Sectors  Procedural ease  Tax & Commercial Laws 1/25/2014
  12. 12. Thank You
  13. 13. What is Capital A/c Transactions? Capital A/c Transactions Assets and Liabilities outside India of a person resident in India Including Contingent liabilities Assets and Liabilities in India of a person resident outside India

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