Sir in T.R. Jain 1 reforms and 2 reforms are different and not as you have stated(not up to the mark,not understandable)in your answer?Sir can you please tell me difference between FII and Foreign capital investment by giving example and also difference between FDI and FCI please state me the example?

Yes, first generation reforms and second generation reforms are different. Second generation reforms focus on various measures on economic development such as infrastructure, labour laws, gender equality etc. But they are an extension to the first generation reforms which are already covered extensively in our study material in the given link.

https://www.meritnation.com/cbse/class11-commerce/studymaterial/economics/indian-economic-development/unit-iiliberalisation-privatisation-and-globalisation-an-appraisal/442_2485_6373#slide1_economic-reforms-and-their-need


FDI refers to the investment made by a foreign country in the domestic country to acquire control and ownership of their business in the domestic country. It involves direct participation of a foreign investor in the operations and day-to-day activities of a domestic company. It is a long term investment and hence, cannot be with drawn easily.

FII ( Foreign institutional investment) implies the investment made by a foreign investor in the domestic company by investing only funds in the operations of the business, but not participating in its day-to-day operations. The foreign investors can invest in the domestic company by buying mutual funds, equity shares etc. FII can easily be withdrawn from the domestic company if the foreign investor intends to withdraw it.

For example, Mr. X, a foreign investor thinks that retail industry has a bright future in India. Now, if he opens his own retail stores in India, then it would be referred as FDI. And, if he buys the shares of a retail store like reliance fresh to capture the profit share, then it would be referred as FII.


 

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