With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?

[UPSC Civil Services Exam – 2020 Prelims]

(a) It is the investment through capital instruments essentially in a listed company.

(b) It is a largely non-debt creating capital flow.

(c) It is the investment which involves debt-servicing.

(d) It is the investment made by foreign institutional investors in the Government securities.


Answer: (b)        

Explanation:

  • Option 3 is incorrect because FDIs (Foreign Direct Investments) are not directly linked to the concept of debt service, which refers to the cash required for interest and principal repayment on a debt.
  • Option 1 is incorrect because FDI investments can be made in either an unlisted Indian company or in a listed Indian company with a stake of 10% or more of the post-issue paid-up equity capital on a fully diluted basis.
  • Option 4 is incorrect because FDI investments can be made in equities or equity-linked instruments, as well as in debt instruments issued by the company. However, FDI investments are not directly associated with government securities.

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:                                               

Read More »

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:                                               

Read More »

Useful Links

Download
Neyyar App

Left Menu Icon