NRI investments considered as domestic: Happy times of economy

Over spending vs underspending

Happy times of Indian economy have begun. Indian Government has decided to treat the non-repatriable investments by NRIs, OCIs and PIOs will be treated as domestic investments. Now, such investments shall not be subject to Foreign Direct Investment caps.    This decision means that investments by NRIs under Schedule 4 of FEMA regulations will be deemed to be domestic investment at par with the investment made by residents.Facility of investment on non-repatriable basis aimed at providing NRIs an incentive to bring funds into India without repatriation rights, at a time when foreign exchange reserves were limited and capital inflows were moderate. This contribution of Modi Government to Indian economy shall result in increased investments across sectors and greater inflow of foreign exchange remittance leading to economic growth of the country. The time when many were busy in criticizing the Prime Minister Narendra Modi, he was busy in reaching out to NRIs to invest in India. Ignoring all criticism, he focused and found that NRIs were demanding that their investment shall be considered as Domestic Investment. Keeping all these in mind, the Union Cabinet, chaired by Prime Minister Narendra Modi, had approved amendments. The approval includes changes in definition of NRIs, to be incorporated in the FDI policy. This will enable investments by NRIs, OCI cardholders and PIO cardholders under Schedule 4 on non-repatriation basis, across sectors without being subjected to any of the conditions associated to foreign investment. We all talk about Foreign Direct Investment but why and how these are important for our economy.

  • Does not create any debt on the part of the government
  • Promotes innovation
  • Benefit of Advanced technology
  • Contributes to international integration by promoting exports
  • Causes a flow of money into the economy which stimulates economic activity
  • Increase employment

The decision by Indian government may lead to flood of foreign investment in India that shall ultimately result in high growth of our country. Step by step Modi government is pushing our economy to a high level. 

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