MUFG Deal Signals Global Institutions' Growing Interest in India's Progress

सही उत्तर: B

Statement 1 is incorrect. A significant investment like $2.2 billion by a global financial group in a company, typically involving a substantial stake and long-term commitment, is classified as Foreign Direct Investment (FDI), not FPI. FPI is generally for short-term gains and involves less control. Statement 2 is incorrect. NBFCs in India are primarily regulated by the Reserve Bank of India (RBI), not SEBI. SEBI regulates the securities market. Statement 3 is correct. FDI is indeed prohibited in certain sectors in India, including atomic energy, lottery business, gambling and betting, Nidhi company, and manufacturing of cigars, cheroots, cigarillos and cigarettes.

सही उत्तर: A

Statement 1 is correct. A stable macroeconomic environment, characterized by controlled inflation, sustainable fiscal policies, and predictable regulatory frameworks, is crucial for attracting long-term foreign investment, as highlighted in the news summary. Statement 2 is correct. The growth potential in segments like SMEs and retail, which often lack adequate formal credit, presents significant opportunities for financial institutions, making India attractive. Statement 3 is incorrect. While India has improved its Ease of Doing Business ranking significantly in the past, it is not consistently 'high' globally (e.g., it was 63rd in 2020, and the index has since been discontinued by the World Bank due to data irregularities). So, 'consistently high ranking' is an overstatement. Statement 4 is incorrect. India does have certain capital controls, though they have been progressively liberalized over the years. For instance, there are limits on external commercial borrowings and certain restrictions on capital account convertibility. Complete absence of capital controls is not true.

सही उत्तर: C

Assertion (A) is true. As stated in the news summary and widely accepted in economic theory, foreign capital inflows are crucial for financial market development (by increasing liquidity, competition, and product offerings) and economic expansion (by supplementing domestic savings, funding investment, and boosting employment). Reason (R) is false. While foreign portfolio investors do invest in government securities, foreign capital, especially FDI, primarily targets equity in companies (like the MUFG-Shriram deal), greenfield projects, and brownfield expansions in various sectors (manufacturing, services, financial, retail). It does not primarily target government securities to directly fund public infrastructure projects or reduce fiscal deficit, though indirect effects might exist. The primary funding for public infrastructure and fiscal deficit management comes from domestic savings, taxes, and government borrowings.