Foreign Direct Investment (FDI) is not the solution

Foreign Direct Investment (FDI) is the investment made by any individual or a group of companies of a country in another country. Investment can be made in any sector such as automobile, food production, retail market, and banking etc., to check the growth of inflation recently Central Government was planning to allow foreign direct investment. Foreign Direct Investment poses a great challenge for our local companies with a price war. If a foreign company invests $ 10000 in Indian market, in Indian currency it will be around Rs 450000 (roughly) which is comparatively higher price in India making an investment cost much lesser for the company than their own country. With a view to capture Indian market the foreign countries can provide goods at lesser price and sustain for a long period of time with lose but Indian companies can’t afford to do so. Everyday you come across in market, the vegetable price in market is quite higher compared to Marts and Bazars of various private sector companies. These bazars and markets can survive with small margin of profit but small individual vendors cannot survive. Within the country only such cold price wars exist, in this scenario if foreign companies are also allowed to invest there will be havoc. Once a foreign company enters another country’s market, it will first look at attracting customers than anything else using any strategy and it is not so easy to compete with such companies.

Not only it affects Indian economy but also the foreign companies will not be bounded by the rules and regulation of Indian Government. In case any accidents or damage occurs by these companies Indian Government cannot take strict action against the company. The memory of Methyl Carbide Company which took lives of thousands of people at Bhopal haunts us till today.

Instead of Foreign Direct Investment, Government can look into alternative methods. The price hike or inflation is mainly due to the decrease in production of necessary commodities used in day to day life. Such commodities production should increase and the import of unnecessary goods should be strictly stopped. Import may look profitable for short duration but in the long run it’s not fruitful, attaining self – sufficiency is the major need. Everyone speaking of progress should think of progress in attaining self – sufficiency rather than speaking progress in terms of constructing tall buildings or acquiring fertile agricultural lands for building townships.

India is the intellectually rich country, having the evidences of Economics in its history itself. Chanakya, minister of Chandragupta Maurya is the very first name strikes to our mind when anyone speaks of Economics and Statesmanship. We have treatise on Economics which dates back to centuries before any modern economist born. India has also efficient economists, even one bagging the prestigious Noble prize. If all together including the common man of country gets together and works in the direction of actual progress in terms of health, providing basic facilities to people, increasing agricultural practice, reducing imports certainly checks the inflation, Foreign Direct Investment (FDI) is not the solution.


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