• Will affect 50 million merchants in India
• Profit distribution, investment ratios are not fixed
• An economically backward class person suffers from price raise
• Retailer faces loss in business
• Market places are situated too far which increases traveling expenses
• Workers safety and policies are not mentioned clearly
• Inflation may be increased
• Again India become slaves because of FDI in retail sector

Sector-Wise FDI Inflows from April 2000 to January 2012

The FDI in Automobile Industry has experienced huge growth in the past few years. The increase in the demand for cars and other vehicles is powered by the increase in the levels of disposable income in India. The options have increased with quality products from foreign car manufacturers. The introduction of tailor made finance schemes, easy repayment schemes has also helped the growth of the automobile sector. For the past few years the Indian Pharmaceutical Industry is performing very well. The varied functions such as contract research and manufacturing, clinical research, research and development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational pharmaceutical corporations outsource these activities and help the growth of the sector. The Indian Pharmaceutical Industry has been experiencing a vast inflow of FDI.

The FDI inflow in the Cement Industry in India has increased with some of the Indian cement giants merging with major cement manufacturers in the world such Holcim, Heidelberg, Italcementi, Lafarge, etc. The FDI in Semiconductor sector in India were crucial for the development of the IT and the ITES sector in India. Electronic hardware is the major component of several industries such as information technology, telecommunication, automobiles, electronic appliances and special medical equipments.

Conclusions:

Indian economy has reached in the orbit of high rate of economic growth. She is being widely acclaimed and recognized as an emerging global economic power. The rate of growth recorded during the period 1950-51 to 2011-12 clearly showed a tendency of steady upward trend. However, the decade of eighties emerged as a beginning of the high rate of economic growth or at least a dramatic departure from the past growth performance. This tendency had continued in the 1990s and further growth stimulus has occurred in the early 21st century. The structural change based on sect oral income shares 15showed a rapid economic transformation of the Indian economy from predominantly agrarian to the service oriented. However, the labor force structure show resilience of the primary sector which employ yet largest work force. Transformation of rural work force to non-agricultural economic activities require huge investment both in the activities where such labour force can be deployed along with imparting necessary skills for enabling such work force capable. Policy endeavour of the government of India is to attract foreign investment for the removal of such constraints along with making domestic agents of production to become more competitive and efficient so that scarce resources can be used to achieve high growth rate. FDI inflows have been increased in the post-reform period and India now seems to be quite attractive place for such kind of investments. In quantitative terms, India’s global share of FDI is still very low. However, the FDI still is shying away from the most important sectors and regions where it is direly needed. Since the employment elasticity in the agriculture and industrial sector has gone down in the post-reform period, creation of employment opportunities will be a gigantic task for the policy makers. FDI has come in the most capital intensive sectors, therefore, the desired employment opportunities could not be created especially for the manual and the semi skilled labour. High skilled labour gained substantially. That is why high growth is called urban centric and thus has created a wedge between the rural and urban economy. There is urgent need to fill this void. Policy making process has matured in the democratic Indian polity since the independence. It is thus expected that the growing problems will receive mature response and policy will be articulated in such a manner to use FDI the way China has used to enhance economic growth while taking more and more investment to industrialize the rural sector of the Indian economy.

References: ::

1. Ahluwalia, M. S., 2002. “Economic Reforms in India since 1991: Has Gradualism Worked?” Journal of Economic Perspective, Vol. 16, No.7, 67-88.
2. Banga, R., 2004. “Impact of Japanese and US FDI on Productivity Growth: A Firm- Level Analysis”, Economic and Political Weekly-Review of Industry and Management, Vol.34, No. 5, 441-447.
3. Das, D. K., 2004. “Manufacturing Productivity Under Varying Trade Regimes, 1980-2000”, Economic and Political Weekly-Review of Industry and Management, Vol. 34, No. 5, 423-33.
4. Dasgupta, S. and A. Singh, 2005. “Manufacturing, Services, Jobless Growth and the Informal Economy: Will Services be the New Engine of Indian Economic Growth?” paper presented in the conference on WIDER Thinking Ahead: The Future of Development Economics, June 17-18, 2005, WIDER, Helsinki, Finland.
5. Nagraj, R., 2006. Aspects of India’s Economic Growth and Reforms, New Delhi: Academic Foundation.
6. Nayyar, D. 2006. “Economic Growth in Independent India: Lumbering Elephant or Running Tiger?” Economic and Political Weekly, Vol. XLI, No. 15, April 15, 1451-5

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Prin. Dr. Nilesh M. Patel
nilesh_patel115128@yahoo.com
Shri J. H. Bhalodia Women’s College,
Rajot (Gujarat)