MORE F D I ALLOWING-STABILISING ECONOMY OR INCREASING INFLATION? As a layman citizen of age 82 i feel the result is likely to be following! Assume an entity (individual -company) has assets in india of rs 100 crores. He decides to sell this assets under FDI in permissible fields to a foreign entity. What really happens is - assume the foreign investor buys this asset at rs 200 crores and pays the seller this value. what has happened is without creating any new asset country has increased its money supply by rs 100 crores. If it was sold to an indian entity value whould have increased but no addl money would have come except transfer from buyer to seller both indians. In case FDI incremental flow of money has come in the country without any thing happening. Additional money can only result in adding inflation as no product increase has taken place? I WILL BE GLAD TO BE PROVED WRONG BY ALL WHO SUPPORT F D I? Anil Parikh-82.
Posted on: Wed, 17 Jul 2013 04:10:33 +0000
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