FDI REALISATION RATE HIGHEST SINCE 1991
INDIA TO ADOPT INTERNATIONAL NORMS
OF FDI REPORTING
NEW INDUSTRIAL POLICIES FOR SPECIAL
CATEGORY STATES
ANNUAL REPORT OF DEPARTMENT OF INDUSTRIAL
POLICY & PROMOTION: 2002 - 2003
The realisation
rate of Foreign Direct Investment (FDI inflows to approval ratio)
into India in 2002 has been the highest at 191.08% in rupee terms.
This is the highest realisation rate since 1991. Total FDI inflows
during 2002 were US $ 4.43 billion (Rs. 21,285.97 crore) including
ADRs/GDRs and advance pending issue of shares. FDI inflows
net of ADRs/GDRs during 2002 were Rs. 18,195.57 crore, which is
8.45% higher in rupee terms compared to the previous year. The
above growth has been achieved at a time when global FDI flows
have registered a steep decline. This is indicated in the annual
report of the Department of Industrial Policy & Promotion
(DIPP), Ministry of Commerce & Industry, which was released
here today.
The Government
has set up a Committee comprising of representatives from DIPP
and Reserve Bank of India (RBI) to examine the system of reporting
of data on FDI and for adoption of the international reporting.
The FDI figures hitherto reported do not include reinvested earnings
and other direct capital flows, which actually forms part of FDI
as per international reporting practices. With the adoption of
international standards of compilation, figures of FDI inflow
into India would conform to international definition.
In order to promote
industrialisation, government has announced New Industrial Policies
and other concessions for the States of Jammu & Kashmir, Sikkim,
Uttaranchal and Himachal Pradesh. The main incentives include
100% excise duty exemption for a period of 10 years; Capital Investment
Subsidy @ 15% for investment in plant & machinery subject
to a maximum of Rs. 30 lakhs; Interest Subsidy @ 3% on working
capital loan and Insurance Premium to the extent of 100% on capital
investments. Since these States lag behind in industrial development,
the need was felt for structured interventionist strategies to
accelerate industrial development and boost investors’ confidence.
The Parliament
has passed an amendment to the Patents Act, 1970, namely the Patents
(Amendment) Act 2002. This Act makes the Indian Patent Law
not only TRIPS compliant but also incorporates safeguards for
protection of public interest, national security, bio-diversity,
traditional knowledge etc. As part of the ambitious project of
modernization of IP offices, all Patent Offices have been modernised
and operationalised.
The Report says
that six Core industries (i.e. electricity, crude petroleum, petroleum
refinery products, coal, steel and cement) having a weight of
26.68 % in overall Index of Industrial Production (IIP), grew
by 5.4% during April-December, 2002-03 as compared to 2.5%
during the corresponding period of last year. Finished steel and
cement have been the driver of the growth among six industries
with 8.1% and 9.7% growth respectively. The growth rates for crude
petroleum, petroleum refinery products, coal and electricity during
April-December 2002-03 were 3.7%, 3.6%, 5.1% and 3.7% respectively.
The overall growth of industrial production as measured by IIP
(base year 1993-94=100) registered growth of 5.3% during April-December
2002 as compared to 2.5% during the corresponding period of the
last year.
The Department has
revised the Industrial Park Scheme, under which, 100% tax exemption
is available to any undertaking engaged in developing, developing
and operating or operating and maintaining an Industrial Park
for 10 consecutive years out of the next 15 years after the Industrial
Park is developed. The Report indicates that the benefits have
been extended to industrial parks with effect from 1st
April 2002, which will be developed till 31st March,
2006.
