FDI inflow-approval ratio spurts in Jan.-March

NEW DELHI, MAY 12. The actual inflow of foreign direct investment (FDI) as a percentage of approvals has shown a remarkable turnaround in the current calendar year so far, with inflows touching 93.12 per cent of the total investment approved.

During January-March, the actual inflow of FDI has been $992.4 million compared to $1.07 billion approved, according to latest figures available.

Industry Ministry officials attribute the delay in inflow compared to approvals to predominance of infrastructure projects, which take a much longer period for fruition.

Projects in the infrastructure sector such as power have taken a much longer time for financial closure due to poor financial health of State electricity boards. In fact, three of the eight "fast track" power projects cleared by the Government as early as 1994 are yet to achieve financial closure.

Total FDI flow into the country between January 1991 and March 2000 was $20.19 billion against total approvals of $60.76 billion, working out to a poor 33.23 per cent.

The inflow-approval rate has been languishing in the range of 20- 30 per cent for most of early and mid-Nineties but started improving in the last couple of years.

From a paltry 29.92 per cent in 1997, the inflow to approval rate increased to 43.29 per cent in 1998 and 59.46 per cent in 1999.

During 1999, the FDI inflow increased to $4.02 billion from $3.38 billion in the previous year. However, the total approvals last year fell to $6.57 billion from $7.8 billion a year ago.

Last year's FDI inflow was the second highest achieved in a single year after $4.58 billion in 1997.

In 1991, the year in which the government set in motion the economic liberalisation, the inflow-approval ratio was a healthy 65.78 per cent though the total inflow was only $143.6 million. In rupee terms, the cumulative approval of FDI since 1991 stood at Rs. 214,340 crores compared to total inflow of Rs. 74,212 crores.

The total number of foreign collaborations, including technical, approved since 1991 stood at 17,320.

- PTI

* Fresh inflows touching 93 per cent of fresh total approvals

* Delay in inflow attributed to infrastructure projects

* In early and mid-Nineties, inflow-approval rate was around 20- 30 p.c.

* 17,320 foreign collaborations approved since 1991

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