1
Question
Q. Consider the following statements with regard to Foreign Direct Investment:
Which of the statements given above is/are incorrect?
Q. Consider the following statements with regard to Foreign Direct Investment:
Which of the statements given above is/are incorrect?
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Solution
The correct option is C Both 1 and 2
Explanation:
- Statement 1 is incorrect. Under the approval route of the FDI, all the investment proposals up to Rs 5000 crores are approved by the respective ministries whereas all the investment proposals of more than Rs 5000 crores are approved by the Cabinet Committee on the Economic Affairs which is chaired by the Prime Minister.
- Statement 2 is incorrect. As per the Arvind Mayaram committee, in an unlisted company, even a dollar worth of foreign investment is to be considered as FDI. Whereas for a listed company, an investment of more than 10% will be considered as FDI and an investment of less than 10% will be considered as FPI.
Explanation:
- Statement 1 is incorrect. Under the approval route of the FDI, all the investment proposals up to Rs 5000 crores are approved by the respective ministries whereas all the investment proposals of more than Rs 5000 crores are approved by the Cabinet Committee on the Economic Affairs which is chaired by the Prime Minister.
- Statement 2 is incorrect. As per the Arvind Mayaram committee, in an unlisted company, even a dollar worth of foreign investment is to be considered as FDI. Whereas for a listed company, an investment of more than 10% will be considered as FDI and an investment of less than 10% will be considered as FPI.
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