Question : What was the main purpose of allowing foreign direct investment (FDI) in India?
Option 1: Enhancing employment opportunities
Option 2: Increasing government revenue
Option 3: Promoting sustainable development
Option 4: Attracting advanced technology
Correct Answer: Attracting advanced technology
Solution : The correct answer is (d) Attracting advanced technology
One of the primary purposes of allowing foreign direct investment (FDI) in India was to attract advanced technology. By allowing foreign companies to invest in India, the government aimed to bring in new technologies, expertise, and managerial practices that could contribute to the country's economic development.
Foreign companies often bring advanced technologies and know-how that may not be readily available domestically. This transfer of technology can help enhance productivity, improve the quality of goods and services, and promote innovation in various sectors of the Indian economy.
Additionally, attracting FDI can have positive spillover effects on other areas of the economy, such as employment opportunities, government revenue, and sustainable development. While these factors are also important considerations, the primary purpose of allowing FDI was to tap into advanced technologies and knowledge that foreign investors can bring to India, thereby boosting the country's industrial capabilities and competitiveness.
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