Briefly comment on the following :There is a wide scope for foreign technical collaboration in developing countries subject to proper regulation and promotion.~ Vivek Economics

 

There is a wide scope for foreign technical collaboration in developing countries subject to proper regulation and promotion.

Answer

Foreign investment policy in India

 Investment policy of India can be broadly classified into two periods – 1948-1990 and 1991 onward. Till 1990, there were only restricted policies and regulated inflows. But from 1991 onward, India witnessed liberalization of foreign investment laws.

What are the merits of foreign capital?

1.  No doubt, a developing country like India has many reasons to welcome fund inflows that can play an important role in the economic development of our nation.
2.  Some natural resources may go unnoticed or unexploited in the absence of technology. So, welcoming new ideas can help in the effective use of resources and prevent them from going to the waste.
3.  Also, new technologies can help in upgrading present techniques giving more result thus saving man power, money and time.
4.  When new technologies are welcomed, employment opportunities also are created. So, it gives many employment opportunities, particularly to new professionals with new ideas. So, skilled labor force can be used in a better way.
5.  They can supply domestic savings and capital formation thereby accelerating the investment rate for the economic development of the country.
6.  New technologies can bring new markets and marketing experts too, thus helping to sell Indian goods in international markets for good prices.

Need for Foreign Collaboration:

1.  Lack of capital is a serious handicap in the way of economic development of underdeveloped countries. The internal resources are not sufficient, so they have to rely on foreign capital in the initial stages of their development. The pace of economic development primarily depends upon the rate of capital formation. But in the underdeveloped countries the per capita real income being very low, the rate of saving investment is very low.
2.  Therefore, these countries are obliged to depend upon external sources of capital for initiating them process of economic development.
3.  External capital cards in the form of (i) direct business investment commonly called, private foreign capital and (ii) international loans and grants more commonly known as foreign aid or external assistance.

Briefly comment on the following :

There is a wide scope for foreign technical collaboration in developing countries subject to proper regulation and promotion.~ Vivek Economics