Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

[UPSC Civil Services Exam – 2011 Prelims]

(a) FII helps bring better management skills and technology, while FDI only brings in capital

(b) FII helps in increasing capital availability in general, while FDI only targets specific sectors

(c) FDI flows only into the secondary market, while FII targets primary market.

(d) FII is considered to be more stable than FDI


Answer: (b)        

Explanation:

  FDI FII
Meaning When a company situated in one country makes an investment in a company situated abroad, it is known as FDI. FII is when foreign companies make investments in the stock market of a country
Entry and Exit Difficult Easy
It brings Long term capital Long/Short term capital
Transfer of Funds, resources, technology, strategies, know-how, etc Funds only.
Economic Growth Yes No
Consequences Increase in country’s Gross Domestic Product (GDP). Increase in the capital of the country.
Target Specific Company No such target, investment flows into the financial market.
Control over a company Yes No

 

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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