Foreign Capital in India

Q.11. What are the sources of Foreign Capital in India? Examine the problems associated with foreign aid. What are the disadvantages of foreign capital? Foreign Capital Investments- FDI, FPI Foreign Aid External Commercial Borrowings  Problems with Foreign Aid- •      Political Pressures: •      Uncertainty of Aid: •      Restrictive Use: •      Low Utilization Rate: •      Complacent domestic initiatives Disadvantages of foreign Capital •      Can Aggravate Monopolistic Tendencies •      Old technology •      Income Inequalities •      Profit goes out of the country •      Luxury consumption pattern •      Reduce foreign exchange •      Volatility in the market •      Regional disparities •      Crowds out local entrepreneur and Growth ***