Fdi Approval Shoots Up To $5.7bn In Jan-March

The number of foreign direct investment (FDI) proposals cleared by the government has risen dramatically in the first three months of 1997. FDI approvals in January, February and March stood at $5.74 billion (Rs 20,087 crore) which is more than half of the $10.32 billion (Rs 36,147 crore) approvals granted in the twelve months of 1996.

According to the preliminary estimates prepared by the industry ministry, up to March 1997 the country received FDI flows totalling one-third of the amount received in the whole of last year.

About $0.8 billion (Rs 2,900 crore) worth of foreign equity flowed into the country in the first three months of this year against $2.41 billion (Rs 8,441 crore) in the whole of last calendar year.

 

A closer look at the month-wise FDI inflows that were actually realised in the two years under study reveals that the months of January-February 1997 saw a 90 per cent jump over the corresponding months of 1996.

Against an inflow of Rs 2,070 crore ($0.57 billion) in the first two months of this year, the January-February period last year received inflows of Rs 1,090 crore ($0.30 billion).

All the figures collated by the industry ministry take into account only those projects that have received the final clearances by the government, instead of the total clearances made by the Foreign Investment Promotion Board (FIPB).

Therefore, these figures do not take into account all the mega-investments committed in the infrastructure sectors like power that have been cleared by the Foreign Investment Promotion Board but are currently awaiting the final approval by the Cabinet Committee on Foreign Investment (CCFI).

Currently, FDI proposals worth over $1 billion are pending with the CCFI which is yet to meet after its reconstitution under Prime Minister Inder Kumar Gujral.

The cumulative foreign equity investment approvals from the beginning of the economic reforms in 1991 up to March 1997 aggregate to $35.43 billion (Rs 1,15,773 crore).

Against this, the actual FDI inflows represent only 20 per cent of the total approvals.

The ministry expects the approval figures to improve dramatically once all these mega-projects get the final nod from the cabinet committee.