Main Article Content
Abstract
India is a store house of natural resources. The effective and efficient use of these natural resources may lead to substantial economic growth. The social and economic disparities, regional imbalances, poverty, migration, unemployment, sluggish economic growths etc. can easily be removed through proper exploitation of these resources. Non-availability of funds was one of the biggest bottleneck in exploiting these resources. Internal financial resources crunch led to exploring external resources. To resolve the issue of financial crunch, it was decided by the policy makers to open up the economy for foreign investors. It was believed that foreign investment will bring new capital, technology, managerial expertise and access to foreign markets. In this paper an attempt has been made to assess the foreign direct investment (FDI) policies particularly related to core industries i.e. power, coal, fertilizers, steel, cement, refinery products, crude oil, natural gas and fertilizers. It has also been tried to find out the FDI inflow in these industries and further effort has also been made to analyse the inflow of FDI in the regions looking at the prospects of core industries in those regions. The study is based on secondary data. The study reveals that investments in the core industries were not up to the mark as it was expected by the policy makers. The flow of FDI in the core sector was almost negligible. The flow of FDI in core industries has been showing declining trends except power sector. The regions that have high prospects for developing the core industries have not that much of FDI inflow as it was in other regions. The policy makers have to make see level changes in the FDI policies not only in the taxation and raising the sectoral caps but also in developing infrastructure, single window system for clearance of proposals, corruption free environment, removal of restrictive trade policies, a strong political will power to make the changes, strong and well defined legislation etc.