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Crowdingout and Crowdingin Impact of FDI on Indian Economy: A Detailed Study,Used
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FDI has become a catchphrase since 1991 in Indias economic development policy. However, FDI comes with the threat of crowdingout of the domestic investment. Owing to MNCs financial and technical muscle, there is a strong possibility of washing out weak domestic industries. Also most MNCs adopt Resourceseeking' and 'Marketseeking approach to seize domestic market and employ cheap physical as well as human resources in the host country, which do not necessarily promote internal growth of the economy. Similarly, it would be naive to make any quick remark on FDIs implication on the host economy based on its shortterm performance. This research has attempted to find out potential threats of crowdingout of domestic industries at national level in general and also at state as well as sector level. FDI's short term and long term effects, spillovers, its capacity to generate employment, growth potentials of the economy, promotion to domestic industries, trade and exports have to be studied. Hence, appropriate policy measures are discussed to ensure balanced growth of all the sectors as well as the states.
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