DI is a form of long term international capital movement, made for the purpose of productive activity and accompanied by the intention of managerial control or participation in the management of foreign firm. The role of FDI in the up-gradation of technology, skills and managerial capabilities is well accepted additional investment over and above investment possible with the available domestic resources helps in providing much needed employment opportunities.

At the time of independence the attitude towards foreign capital was one of fear and suspicion. This was natural on account of the previous exploitative role played by it in draining away resources from this country. FDI was introduced in 1991 under Foreign Exchange Management Act (FEMA) RBI has issued Notification No. FEMA 20/2000-RB dated 3 rd May 2000, driven by Finance Minister Mr. Manmohan Singh.

Our Union Ministers are now worried about the devaluation of the Indian Rupee for a relief from this sickening worry the central government has permitted Foreign Direct Investment (FDI) in 12 areas of operation on 18 th June 2013.

In the telecommunication sector what was 74% FDI has now become 100%. In the insurance sector it is now 49% against the previous 26%. In the construction (infrastructure) sector it is now 100% and in the defense sector it is 26%. In all FDI has been raised in 12 different sectors but we should have taken enough caution before permitting FDIs in to India.

India's greatest advantage is its 123crores population of which 65% (80crores) are below age group of 35years. The market scenario in India is therefore more promising with more middle class people with the capacity to buy. That is why Multi-National Companies (MNCs) have emerged in India. Source: fact sheets on fdi, fipb

FDI has an important impact on country's trade balance increasing labour standards and skills, transfer of technology and innovative ideas, skills and the general business climate. FDI also provides opportunity for technological transfer and up-gradation, access to global managerial skills and practices, optimal utilization F of human capabilities and natural resources, making industry internationally competitive, opening up export markets, access to international quality goods and services and augmenting employment opportunities.

V.

According to report from Global Competitive Index (2007-08) published by World Economic Forum (WEF), India has been ranked at 48 out of 131 countries. India is attracting a low level of FDI largely due to poor business environment prevailing in the country. It might be of interest to note that more than 50% of the total FDI inflows received by India during the period from 1991 -2010 came from Mauritius and USA. Investors based in many countries have taken advantage of India. Investors are showing their growing confidence in the immediate and medium term prospects of Indian economy. However, one should not forget that FDI alone is not a solution for eradication of poverty and unemployment which is a big headache to our nation.