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Indian Economic Policy

Notes • It may be noted that the response of the foreign capital has not been ungrudging and the
performance has been far below expectations. At present, there are less than 40 of the top 100
MNCs operating in India.
23.6 Key-Words

1. FDI : Foreign direct investment (FDI) is direct investment into production
or business in a country by a company in another country, either
by buying a company in the target country or by expanding
operations of an existing business in that country. Foreign direct
investment is in contrast to portfolio investment which is a passive
investment in the securities of another country such as stocks and
bonds.
2. Multinational corporations : A corporation that has its facilities and other assets in at least one
country other than its home country. Such companies have offices
and/or factories in different countries and usually have a
centralized head office where they co-ordinate global management.
Very large multinationals have budgets that exceed those of many
small countries. Sometimes referred to as a "transnational
corporation".

23.7 Review Questions

1. What is the role of FDI? Discuss.
2. Discuss the type of foreign capital.
3. Explain the characteristics of Multinational corporation.
Answers: Self-Assessment

1. (i)(c) (ii)(b) (iii)(a) (iv)(a) (v)(a)
(vi)(c)

23.8 Further Readings

1. The Indian Economy; S.K. Ray; Prentic, Hall of India Private Limited
New Delhi - 110001.
2. Indian Economy; Gaurav Datt and Aswani Mahajan; S. Chand and Company
LTD. Ram Nagar, New Delhi-110055.

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