Unit-5 Monetary and Financial Resources

This unit discusses these aspects which have a crucial bearing on the flow of monetary and financial resources needed for the development of the economy.

Define ‘net capital inflow’? What has been its trend in India in the recent years as percentage of NDP?

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Learning Pundits Content Team

Written on Jun 26, 2019 3:44:52 PM

Net capital inflow is the difference between ‘net domestic capital formation’ and the ‘net domestic saving’. It can be measured as a proportion of national income, or alternatively expressed as the difference between the domestic saving and investment rates.

As percentage of NDP, the net inflow of foreign capital to India has been very modest at around 1 to 2 percent. In future, as the investment rate is pushed up to achieve the postulated higher rates of growth, increasing resort to foreign resources may become inevitable. 

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