What is Investment?
Historical Background
Key Points
10 points- 1.
Investment can be classified as fixed investment (e.g., machinery, buildings) and inventory investment (changes in stock levels).
- 2.
Gross investment includes replacement investment (to maintain existing capital stock) and net investment (addition to capital stock).
- 3.
Foreign Direct Investment (FDI) involves ownership and control of foreign assets.
- 4.
Foreign Portfolio Investment (FPI) involves investment in foreign securities without control.
- 5.
Investment decisions are influenced by interest rates, expected returns, and risk.
- 6.
Government investment in infrastructure can crowd in private investment.
- 7.
Investment in human capital (education, training) enhances productivity and economic growth.
- 8.
Investment in research and development drives technological innovation.
- 9.
Investment is a key component of aggregate demand (C + I + G + NX).
- 10.
Investment is crucial for long-term economic growth and development.
Visual Insights
Types and Significance of Investment
Different types of investment and their significance for economic development.
Investment
- ●Types of Investment
- ●Significance
- ●Factors Influencing Investment
Recent Developments
10 developmentsIncreased focus on attracting FDI to boost manufacturing and infrastructure.
Government initiatives to improve the ease of doing business.
Rise in venture capital and private equity investments in startups.
Emphasis on sustainable and green investments.
Impact of global economic uncertainty on investment flows.
Government policies to promote domestic manufacturing (e.g., Make in India).
Infrastructure development projects to stimulate investment.
Investment in renewable energy and clean technologies.
Digital infrastructure development to support digital economy.
Efforts to streamline regulatory approvals for investment projects.