Social Impact of Larger FDI

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The social impact of larger FDI is dependent on India's policies and institutions. The flexibility of the labor market would determine employment opportunities. The extent to which the lower income groups can take advantage of the growth policies determine the growth-poverty relationship.

The production in the fields of physical and social infrastructure determine the regional developments. The Indian industries are predominantly labor based but there are also many capital based companies. Capital intensive set up is an expensive proposition but India can look forward to more professional and sophisticated number of workers and employees at all levels. Human capital in terms of quantity was never a big problem in India due to its huge population added emphasis must be laid on the quality and efficiency in work. This is brought about by MNCs.

Foreign Direct Investments foster relations, co-operation, and harmony between India and foreign countries. The social impact of larger FDI include the product market as well because many new products come into the market as a consequence of FDIs. As a result, the people of India enjoy unprecedented exposure to branded and quality goods. In fact, various training methods, personality grooming, and soft skills are given by multinational corporations which impart value to human resources.

Owing to social impact of larger FDI, India also enhance its educational system. Since 2003, the Indian government has been allowing 100% FDIs in education, which means that foreign schools, colleges, and universities can set up wholly owned subsidiaries in India. Students passing out of these institutes will be awarded foreign degrees and certificates. The social impact of larger FDI in education is such that the number of foreign students pursuing higher education in India has increased by a large margin. Also, the 'brain-drain' issue has also been checked to a significant extent since the number of students going out of India has also reduced.

Even the civil society can work with the government and help in reducing bureaucratic hassles and interferences. The increase in FDI in India is also helping in the liberalization of labor through which the inequality in wage earnings will be reduced.

There is implementation of higher education and training for the laborers. The health facilities also increase with better and sophisticated products and processes. India is definitely developing in a much faster pace now than before but in spite of that, it can be identified that developments have taken place unevenly. This means that while the more urban areas have been tapped, the poorer sections are inadequately reached out to. To get the complete picture of growth, it is essential to make sure that the rural section has equal amount of development as the urbanized ones. FDI helps to focus in this area thus,fostering social equality and at the same time a balanced economic growth.

The social impact of larger FDI brings about a more broadminded outlook in the Indian society, leaving alone a few who would be a bit conservative. However, the condition of the Indian urban sector has improved drastically thereafter, which we still await the developments from other areas of the Indian economy.