Investment Scenario in India

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Emerging strong even during the scariest phase of global financial meltdown, India has become one of the favorite investment destinations for the foreign investors across the globe. The investment scenario in India is getting better and better with each passing day due to high confidence level of the investors. Today, India is considered the 4th biggest economy in the world. Its impressive GDP rate, especially in the field of purchasing power, has catapulted it to second position among all the developing nations.

According to forecasts, Indian economy will grow to become 60% in size of the economy of US. It will also witness macro-level stability in economic conditions. Behind all this, investment can be said to be the key player.

To know investment environment in India in the best possible way, it will be wise to consider the performance of 3 core sectors including education, infrastructure and security.

Private Education Investment

Since Independence, Indian education scene has improved for the better. As against 0.1 Million enrollment in 1947, India experienced over 11 Million enrollments in 2005-06. At present, the educational sector has become more attractive with its growing enrollment rates and the credit for this can be given to the whole fresh team of education providers, consisting of distance learning course providers, private institutes, foreign education providers and public institutions.

Though the Foreign Direct Investment (FDI) in educational sector, comprising higher education, has been allowed by the Indian government, there are still many shortfalls that need to be overcome. An increase in the enrollment figures is being constantly witnessed. But, when it comes to cumulative states expenditure, the scene is quite gloomy. For the period 2007-08, a fall of about 18% has been seen in the total expenditure. Further, a clear gap in the per capita education expenditure among the states can also be seen. Per capita fund inflow to educational sector in Uttar Pradesh stood at ` 483 whereas in Bihar it was ` 487 in 2005-06. Himachal Pradesh has ` 1777 and Maharashtra and Kerala show ` 1034 per capita fund flow.

Despite good financial performance of many of the states, their spending scenario in educational sector has been found in poor condition.

Infrastructure Investment:

Investment scenario in India in infrastructure sector is attractive. Many sectors have been allowed to receive private investment, which is truly a turning point. In past few years, many road projects have been launched under National Highway Development Programme. The project costing neared about US$ 12 billion. In this, the foreign construction companies have also been invited to take part. Telecom sector and power reforms have also experienced massive improvement. Telecom and Oil and Gas sector are seeing disinvestments processes. Government is also thinking of introducing a more integrated transport system with chalking out plans for the investment.

It cannot be denied that India has been successful in launching plenty of infrastructure projects with encouraging private participation in the sector. The booming IT and BPO sectors of India are the absolute testimony to its success story in the infrastructure projects.

The overall outlook of the roads and highways in India has also changed for the better. Many cities and towns have been inter-connected to each other. Both state and central governments have dished out significant amount to the development of highways.

Security Investment:

Security investment scenario in India is also bright. While several industries in India are grappling with the impact of global meltdown and recent Mumbai attacks by terrorists, the one industry which is predicted to register profits in near future is the Indian security industry. The private security business in India is expected to become ` 50,000 crore (` 500 billion) worth industry.

Current Investment Scenario in India

Globalization and Foreign Direct Investment form an integral part of all the developed as well as developing economies. In fact, the growth of the underdeveloped economies is also dependant on these key factors. These components equip any nation with new skills, new items and provide smooth access to markets and technology. Today, every nation across the globe is looking for foreign and overseas investors. Whether it's India or China, everyone wants foreign investments. According to recent trends, India is only second to China in the league of favorite investment destinations.

In the report issued by Department of Industrial Policy and Promotion, the fund inflow to India reached US$ 27.3 billion in the period 2008-09, considered from the month of April 2008 to the month of March 2009. Last quarter of 2008-09 alone witnessed an inflow of approx. US$ 6.2 billion.

In the reports issued by Reserve Bank of India for outward investment from India, a growth of 29.6% to US$17.4 billion has been seen in the period 2007-08. The figures do not include individuals and banks. India is considered the 2nd highest foreign employer in the United Kingdom after the United States.

Global Investment Scenario

Along with India, the others who are participating in the race of investment among the developing economies are China, Singapore, Malaysia, Russia and Brazil. Most of them are vying for contracts from USA and Europe.

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