50% of okayed FDI proposals flow in

NEW DELHI: India approved foreign direct investment (FDI) proposals amounting to Rs 2,85,443 crore or $76,651 million since 1991-92 upto 2002-03. The actual inflows stood at Rs 1,32,533 crore or $32,974 million. FDI from the US accounted for Rs.57,419 crore of the total approvals.
Top 50 FDI approvals to the US amounted to Rs 31,114 crore or $8,762 million. Among the US MNCs that assumed the top slots on India’s FDI chart were CocaCola, Enron, Mission Energy Company, Flour Damiel Inc., CMS Generation, General Motors, Ford Motor Company, Folio Holdings, Hughes Electronics Corporation, Public Power International, Soros Fund Management, Panda Energy Corporation, Pepsico Inc and CIBC.
Coke had received approval to invest Rs 2,387 crore ($694 million) to establish a 100% arm in September 1995, which was the single largest ever FDI approval in the last 11 years of economic liberalisation. Through two of its arms, discredited power giant Enron had got nod to invest a total of Rs 4,612 crore ($1,295 million) in India.
The first FDI approval (Rs 1,464 crore) to Enron Power Development Corporation came in February 1993, followed by three more approvals to Enron Power Development Corporation and Enron International in March ’03, July ’97 and April ’97.
Among the major investments from US-based corporations, Mission Energy Company had got the nod in august 1992 to invest Rs.1,541 crore in Hinduja National Power, Chennai to pick up 99.4% equity shares stake in the company. Fluor Damiel had got the approval to pick up 40% equity stake in PRA Petrochemicals, Delhi with an investment of Rs 1,139 crore.
CMS Generation was allowed in December ’94 to pick up 75% equity stake in Development Consultants, Kolkata with an FDI infusion of Rs 947 crore and General Motors was given the nod to set up 100% arm in the country in February ’92 by making an investment of Rs 887 crore. The average FDI realisation rate — ratio of approvals to actual inflows — in the last 11 years stood at around 46% in rupee terms and over 42% in dollar terms. In fact, the largest realisation rate of 191% was recorded in 2002 (Jan-December). During the year, the inflows stood at Rs 21,286 crore as against approvals of Rs 11,140 crore. This was a quantum jump, considering that the rate of realisation of FDI in the previous years were 71.68% (2001), 52.22% (2000) and 59.46% (1999).
Although the US-based corporations were among the biggest investors in India during the years of economic liberalisation, it is believed that they had also been among the most hesitant to re-invest their earnings in the country.