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PIB 20th October


  1. Foreign Direct Investment Inflow.
  2. All-India Consumer Price Index Numbers for Agricultural and Rural Labourers – September, 2020.
  3. Dr Harsh Vardhan launches CSIR partnered clinical trials website “CUReD” on Repurposed Drugs for Covid- 19.

Foreign Direct Investment Inflow

Focus:  GS 3 ;Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Why in News?

Measures taken by the Government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. 

About Foreign Direct Investment;-

  • Foreign Direct Investment (FDI) is a major driver of economic growth and an important source of non-debt finance for the economic development of India.
  • It has been the endeavor of the Government to put in place an enabling and investor friendly FDI policy. The intent all this while has been to make the FDI policy more investor friendly and remove the policy bottlenecks that have been hindering the investment inflows into the country.
  • The steps taken in this direction during the last six years have borne fruit as is evident from the ever increasing volumes of FDI inflows being received into the country. Continuing on the path of FDI liberalization and simplification, Government has carried out FDI reforms across various sectors.

What is FDI?;-

  • An FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
  • It is thus distinguished from a foreign portfolio investment by a notion of direct control.
  • FDI may be made either “inorganically” by buying a company in the target country or “organically” by expanding the operations of an existing business in that country.
  • Broadly, FDI includes “mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans”.
  • In a narrow sense, it refers just to building a new facility, and lasting management interest.
India's FDI Status 
NO.I in 
India receives 
highest ever 
Foreign Direct 
FDI in 2015-16 
Rank 9 in 
FDI increased 
by approx. 42% 
(from June 2014 
Report 2015 
to March 2016) 
Opening key 
FDI reforms 
sectors for FDI - 
and liberalisation 
major sectors of 
Insurance and 
the economy 
Medical Devices

For the period of last 6 years (2014-15 to 2019-20);-

  • Total FDI inflow grew by 55%, i.e. from US$ 231.37 billion in 2008-14 to US$ 358.29 billion in 2014-20.
  • FDI equity inflow also increased by 57% from US$ 160.46 billion during 2008-14 to US$ 252.42 billion (2014-20).

Financial Year 2020-21 (April to August, 2020);-

  • During April to August, 2020, total FDI inflow of US$ 35.73 billion is received. It is the highest ever for first 5 months of a financial year and 13% higher as compared to first five months of 2019-20 (US$ 31.60 billion).
  • FDI equity inflow received during F.Y. 2020-21 (April to August, 2020) is US$ 27.10 billion. It is also the highest ever for first 5 months of a financial year and 16% more compared to first five months of 2019-20 (US$ 23.35 billion).

FDI Routes in India;-

Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then FM Manmohan Singh.

There are three routes through which FDI flows into India. They are described in the following table:

Category 1Category 2Category 3
100% FDI permitted through Automatic RouteUp to 100% FDI permitted through Government RouteUp to 100% FDI permitted through Automatic + Government Route

Automatic route: By this route, FDI is allowed without prior approval by Government or RBI.

Government route: Prior approval by the government is needed via this route. The application needs to be made through Foreign Investment Facilitation Portal, which will facilitate the single-window clearance of FDI application under Approval Route.

Types of Foreign Direct Investment explained in below image through flow chart;-

W holly 
hint Venture 
I twestment 
Investment in 
GDRs, FDRs, 
FCCBS, etc.

Full forms of above mentioned terms in FDI types flow chart;-

  • Global Depository Receipts (GDR)
  • Foreign Depository Receipts (FDR)
  • Foreign Currency Convertible Bonds (FCCB)
  • Foreign institutional investors (FII)

Trade vs FDI;-

  • Trade just helps the country fulfil its requirements of those goods and services (G&S) that may not available in the country.
  • Investments provide the capital to build infrastructure that can plug the G&S deficit, even, sell it to other markets.
  • Trade just provides entry of G&S.
  • FDI inflow is a route for transferring capabilities, technology, building linkages, business capabilities etc.
  • FDI helps generate employment, public assets, tax revenues and develop markets, none of this is contributed by the trade of merchandise.
  • Foreign investment does have an adverse impact on domestic markets in the short-run by crowding out domestic competition or investment.
  • In fact, attracting FDI in employment-intensive sectors can create positive economic and social spillovers.
  • Possibilities to increase exports often arise from companies with significant levels of FDI.
  • Foreign investor exposes itself to regulatory, economic and geo-political risks of the country.

Difference between FDI Vs FII in below image;-


Above some terms meaning in FDI vs FII Difference ;-

Primary Market;-

primary market is a market where buyers and sellers negotiate and transact directly without any intermediaries or resellers. Regarding financial markets, the primary market is also often referred to as the new issue market as it is the place where the issuing of new securities transpires.

Secondary Market;-

This is the market wherein the trading of securities is done. Secondary market consists of both equity as well as debt markets. Securities issued by a company for the first time are offered to the public in the primary market, are some of the key products available in a secondary market.


Equity is the amount of capital invested or owned by the owner of a company. The equity is evaluated by the difference between liabilities and assets recorded on the balance sheet of a company. This account is also known as owners or stockholders or shareholders equity

The advantages and disadvantages of FDI in India;-

Advantages of Foreign Direct Investment;-

Economic Development Stimulation. 

Foreign direct investment can stimulate the target country’s economic development, creating a more conducive environment for you as the investor and benefits for the local industry.

Easy International Trade.

Commonly, a country has its own import tariff, and this is one of the reasons why trading with it is quite difficult. Also, there are industries that usually require their presence in the international markets to ensure their sales and goals will be completely met. With FDI, all these will be made easier.

Employment and Economic Boost. 

Foreign direct investment creates new jobs, as investors build new companies in the target country, create new opportunities. This leads to an increase in income and more buying power to the people, which in turn leads to an economic boost.

Development of Human Capital Resources. 

One big advantage brought about by FDI is the development of human capital resources, which is also often understated as it is not immediately apparent.

Human capital is the competence and knowledge of those able to perform labor, more known to us as the workforce. The attributes gained by training and sharing experience would increase the education and overall human capital of a country.

Its resource is not a tangible asset that is owned by companies, but instead something that is on loan. With this in mind, a country with FDI can benefit greatly by developing its human resources while maintaining ownership.

Tax Incentives. 

Parent enterprises would also provide foreign direct investment to get additional expertise, technology and products. As the foreign investor, you can receive tax incentives that will be highly useful in your selected field of business.

Resource Transfer. 

Foreign direct investment will allow resource transfer and other exchanges of knowledge, where various countries are given access to new technologies and skills.

Disadvantages of Foreign Direct Investment;-

Hindrance to Domestic Investment. 

As it focuses its resources elsewhere other than the investor’s home country, foreign direct investment can sometimes hinder domestic investment.

Risk from Political Changes. 

Because political issues in other countries can instantly change, foreign direct investment is very risky. Plus, most of the risk factors that you are going to experience are extremely high.

Negative Influence on Exchange Rates. 

Foreign direct investments can occasionally affect exchange rates to the advantage of one country and the detriment of another.

Higher Costs. 

If you invest in some foreign countries, you might notice that it is more expensive than when you export goods. So, it is very imperative to prepare sufficient money to set up your operations.

Economic Non-Viability. 

Considering that foreign direct investments may be capital-intensive from the point of view of the investor, it can sometimes be very risky or economically non-viable.


Remember that political changes can also lead to expropriation, which is a scenario where the government will have control over your property and assets.


  • The Department of Promotion of Industry and Internal trade (DPIIT)  should work out a clear process and precise regulations to decide what is an acceptable investment.
  • India should welcome investment in enhancing the country’s productive capacity regardless of where it comes from, except, of course, in sectors where control of that production capacity has a bearing on national security.
  • There is a need for India to develop new legal and institutional tools. As the ones employed by US and EU member states such as data protection laws or revised mergers and acquisitions rules, and institutional bodies.
  • Without the appropriate legal and regulatory sanction, India might experience reciprocal measures.
  • India should take advantage of trade wars of major economies and attract investments by providing better facilities and improve the  ease of doing business.
  • In order to protect India’s unicorn, there is need to devise a scheme of preferential or special shares which a unicorn can issue to foreign investor.
  • These shares will preserve the decision making by Indian innovators, while also providing them access to foreign capital.
  • At this crucial juncture of economics, where the world is witnessing another economic crisis, India needs to expand its overseas economic engagements, even while remaining sensitive to its overall economic sustainability needs.

Extra Info;-

About Foreign Exchange Management Act (FEMA) in below image;-

Foreign Exchange Management Act, 1999 (FEMA) came into force by an act of Parliament.

 It was enacted on 29 December 1999. This new Act is in consonance with the frameworks of the World Trade Organisation (WTO). It also paved the way for the Prevention of Money Laundering Act, 2002 which came into effect from July 1, 2005.

FEMA (1999) 
The Foreign Exchange Management Act (1999) or 
in short FEMA has been introduced as a 
replacement for earlier Foreign Exchange 
Regulation Act (FERA). FEMA came into force on 
the 1st day of June, 2000. 
consolidate and amend the law relating to foreign 
facilitating external trade and payments 
promoting the orderly development and maintenance 
of foreign exchange market in India 
49 sections in the Act

Difference between FERA and FEMA in below image;-

Fera and fema

About FII’s;-

Foreign institutional investors (FIIs) are those institutional investors which invest in the assets belonging to a different country other than that where these organizations are based.

All-India Consumer Price Index Numbers for Agricultural and Rural Labourers – September, 2020

Focus:  GS 3 ;Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Why in News?

  • The All-India Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) increased by 11 points and 10 points to stand at 1037 (One thousand and thirty seven) and 1043 (One thousand and forty three) points respectively.
  • The major contribution towards the rise in general index of Agricultural Labourers and Rural Labourers came from food, with (+) 9.20 points and (+) 8.95 points respectively mainly due to rise in prices of arhar dal, masur dal, ground nut oil, mustard oil,  vegetables and fruits etc.

About Inflation;-

  • Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc.
  • Inflation measures the average price change in a basket of commodities and services over time.
  • Inflation is indicative of the decrease in the purchasing power of a unit of a country’s currency. This could ultimately lead to a deceleration in economic growth.
  • However, a moderate level of inflation is required in the economy to ensure that production is promoted.
  • In India, inflation is primarily measured by two main indices — WPI (Wholesale Price Index) and CPI (Consumer Price Index) which measure wholesale and retail-level price changes, respectively.

About Consumer Price Index;-

  • It measures price changes from the perspective of a retail buyer. It is released by the National Statistical Office (NSO).
  • The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use.
  • The CPI has several sub-groups including food and beverages, fuel and light, housing and clothing, bedding and footwear.
WPI vs CPI: Definition, Differences, Items, Base Year - Paper Tyari

Four types of CPI are as follows:

  • CPI for Industrial Workers (IW) (Base Year 2001).
  • CPI for Agricultural Labourer (AL) (Base Year 1986-87).
  • CPI for Rural Labourer (RL) (Base Year 1986-87).
  • CPI (Rural/Urban/Combined).

Of these, the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation.

Base Year for CPI is 2011-2012.

The Monetary Policy Committee(MPC) uses CPI data to control inflation.

Consumer Price Index Items Weightage representation in below image;-

India Consumer Price Index Components 
Food and beverages have the maximum 
weightage in CPI, followed by 
miscellaneous items that includes health, 
transport, education , etc. 
• F OCKI and 
• Pan, tobacco and irtoxicants 
• Ck"ling and 
• Hwsing 
• Fuel Mid 
• Misce•anems 
Source On
Group Description 
Food and beverages 
Pan, tobacco and intoxicants 
Clothing and Footwear 
Fuel and Light 
Mi laneous 
Combd: Combined. 
Existing Series Of CPI 
(Weights computed on 
the basis CES 2004-05) 
Revised Series Of CPI 
(Weights computed on the 
basis CES 2011-12) 
Urban Combd. 
Urban Combd. 

Difference between WPI Vs CPI in below image;-

Basis For ComparisonWholesale Price Index (WPI)Consumer Price Index (CPI)
 Meaning WPI, amounts to the average change in prices of commodities at the wholesale level CPI, indicates the average change in the prices of commodities, at the retail level.
 Published by Office of Economic Advisor (Ministry of Commerce & Industry) Central Statistics Office (Ministry of Statistics and Programme Implementation)
 Measures prices  of Goods only Goods and Services both
 Measurement of  Inflation The first stage of the transaction The final stage of the transaction
 Prices paid by Manufacturers and wholesalers Consumers
 How many items covered697 (Primary, fuel & power and manufactured products) 448(Rural Basket)  460 (Urban Basket)
 What type of items covered Manufacturing inputs and intermediate goods like minerals, machinery basic metals etc. Education, communication,  transportation, recreation, apparel, foods and beverages, housing and medical care
 Base year 2011-12 2012
 Used by Only a few countries including India 157 countries
 Data released on  Primary articles, fuel, and power (Weekly basis) & overall (monthly basis since 2012) Monthly basis

Extra Info;-

About Headline Inflation;-

  • Headline Inflation is the measure of total inflation within an economy. It includes price rise in food, fuel and all other commodities.
  • The consumer price index (CPI) represents the cost of a basket of goods and services consumed by a typical household, most countries, therefore, use CPI as a measure of headline inflation.

About Monetary Policy Committee;-

  • The Monetary Policy Committee (MPC) is a committee of the RBI, which is entrusted with the task of fixing the benchmark policy interest rate (repo rate) to contain inflation within the specified target level.
  • The RBI Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC to bring more transparency and accountability in fixing India’s Monetary Policy.
  • The policy is published after every meeting with each member explaining his opinions.
  • The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.
  • Suggestions for setting up a Monetary policy committee is not new and goes back to 2002 when YV Reddy committee proposed to establish an MPC, then Tarapore committee in 2006, Percy Mistry committee in 2007, Raghuram Rajan committee in 2009 and then Urjit Patel Committee in 2013.

Composition and Working;-

  • The committee comprises six members – three officials of the RBI and three external members nominated by the Government of India.
  • The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
  • The Governor of RBI is the chairperson ex officio of the committee.
  • The Reserve Bank’s MPC was given the target of keeping inflation at 4% with a tolerance limit of 2%. This meant that inflation should be between 2% and 6%.
  • Decisions are taken by a majority with the Governor having the casting vote in case of a tie.
  • They need to observe a “silent period” seven days before and after the rate decision for “utmost confidentiality”.

About National Statistical Office (NSO);-

  • The Government has cleared formation of an overarching body —National Statistical Office (NSO) — through the merger of the National Sample Survey Organisation (NSSO) and Central Statistics Office (CSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
  • The new NSO as an agency was envisaged firstly by Rangarajan Commission to implement and maintain statistical standards and coordinate statistical activities of Central and State agencies as laid down by the National Statistical Commission (NSC).
  • This commission had also recommended setting up of the NSC, headed by a person with a Minister of State-level designation, to serve as a nodal and empowered body for all core statistical activities of the country.
  • According to recent order, NSO will be formed with the merger of NSSO and CSO under MoSPI.
  • This recent restructuring seems to be a reaction to the resignations tendered by the member and acting Chairman of the NSC earlier this year.

Dr Harsh Vardhan launches CSIR partnered clinical trials website “CUReD” on Repurposed Drugs for Covid- 19.

Focus:  GS 3 ;Science and Technology- developments and their applications and effects in everyday life.

Why in News?

Dr Harsh Vardhan, Minister of Science & Technology, Health and Family Welfare and Earth Sciences, launched a website that gives comprehensive information about the numerous COVID-19 clinical trials that CSIR is engaged in partnership with Industry, other government departments and ministries.

About CuReD;-

  • The website Called CuReD or CSIR Ushered Repurposed Drugs, the website provides information about the drugs, diagnostics and devices including the current stage of the trials, partnering institutions and their role in the trials and other details.
  • Website link is
  • CSIR is exploring multiple combination clinical trials of anti-virals with host-directed therapies for the potential treatment of COVID-19.
  • CSIR is also working with the Ministry of AYUSH for clinical trials of AYUSH drugs and has undertaken safety & efficacy trials of AYUSH prophylactics and therapeutics based on individual plant-based compounds and in combination.
  • Five clinical trials involving With aniasomniferaTinosporacordifolia + Piper longum ,GlycyrrhizaglabraTinosporacordifolia & Adhatodavasica (individually and in combination) and AYUSH-64 formulation are undergoing safety and efficacy trials.

Extra Info;-

About National AYUSH Mission (NAM);-

  • Department of AYUSH, Ministry of Health and Family Welfare, Government of India has launched National AYUSH Mission (NAM) during 12th Plan for im­plementing through States/UTs.
  • The basic objective of NAM is to promote AYUSH medical systems through cost effective AYUSH services, strengthening of educational systems, facilitate the enforcement of quality control of ASU &H drugs and sustainable availability of ASU & H raw-materials.
  • It envisages flexibility of implementation of the programmes which will lead to substantial participation of the State Governments/UT.
  • The NAM contemplates establishment of a National Mission as well as corresponding Missions in the State level.                                                        
November 2023