1. The role of FDI and migrant remittances
oneconomic development of India.
FDI has played an important role in the
economic development of the country.The fast
and steadily growing economy of the country
has made it one of the most attractive
destination for FDI .India is also one of the
largest supplier of migrant population of both
semi skilled and skilled workers .The remittance
received from them also plays an important role
in the economic development of the country.
FDI is permitted through financial
collaboration ,through private equity and
preferential allotment, by capital markets
,through joint ventures.FDI is not allowed in
arms,nuclear,railways and coal or mining
industries.FDI is considered to be win win
situation for both the host country and the home
country. The home country gets opportunity to
enter new markets and the host country gets to

2. gain by introduction of new technology and
managerial skills ,it also supplements savings and
foreign exchange.
TREND OF FDI IN INDIA
The liberalisation policy that india followed from
1991 onwards increased the FDI inflow manifold.
The annual FDI inflow indicates that it increased from
a negligible amount in 1991 to around US $9 billion in
2006-2007 to around US $ 22 billion in 2007-2008 to
around US$ 37 billion in 2009-2010.
Mauritius and US are the major countries
contributing to FDI in India, with the surprising fact
that FDI from Mauritius is double to that from US.
The main sectors which received the highest
FDI is service sector both financial and non financial
received around 21% of total FDI followed by
computer hardware and software 8% and
telecommunication 8%,housing and real estate and
construction activities around 7%, automobile and
power 5 % and rest to mettalurgical and petroleum
sector.

3. Delhi, Mumbai ,Chennai and Bangalore ,Ahmedabad
are the main centres in india where FDI is mostly
taking place.
IMPACT OF FDI
Since Independence the balance of payment in
current account is negative but from 1996-97 it is
positive as a result of FDI and foreign remittance .It
has played a great role in reducing the fiscal deficit
and revenue defict .
Some of the benefits of FDI can be seen in telecom
sector like increased subscriber base,decreased call
rates, in automobile sector many companies have
opened there shops here ,there is increased
production ,increased domestic sales and exports.In
IT/ITES sector it has helped in increasing the
employment opportunity manifold and also increased
export of softwares.Manufacturing sector has also
been benefitted.Now the government is allowing FDI
in power sector and aviation sectors this will infuse
huge amount of money in this sectors .It will help in
improving the power scenario of the country and will
also improve connectivity by bringing in new players
in aviation sector.Nowadays a political consensus is

4. being evolved for FDI in retail sector that will help
farmers. REMITTANCE FROM MIGRANTS
AND ITS IMPACT
India is one of the largest suppliers of workers
worldwide with a huge population working in the
Middle East. Large number of IT professionals are
working in the US software industries. Huge amount
of money are sent back home from these countries.
India has now the distinction of being the largest
receiver in absolute terms.There has been a
tremendous increase from around USD 2 billion in
1989-90 to USD 52 billion in 2009-2010.Remittances
account for 5.63% of GDP now.
It not only helps in reducing the current
account deficit and improve the BOP situation.It also
helps by increasing the saving in financial institutions
which in turn helps in the growth of small scale
industries . Which in turn helps in increasing the
indirect tax revenue of the government and in turn
the GDP .
At the microlevel( household) it has tremendous
effect it increases expenditure of the households both
in education, housing, health,consumer goods. If the

5. money is spend in productive purposes like
agriculture or entrepreneurial activities for setting up
business it helps in contributing to the GDP.
The recent studies done in kerala has shown how
foreign remittances which accounted for 21% of
states income has increased the percapita income
which in turn has increased the consumption
expenditure.
Thus it can be concluded that both FDI and
remittances by migrants has helped India in building
infrastructure ,improving the per capita income
,increased production as a result has contributed to
the development of the country.