01642pab a2200169 454500 180718b2005 xxu||||| |||| 00| 0 eng d Rakshit, Mihir On liberalising foreign institutional investment 2005 p.991-1000. 18 Mar This paper critiques the approach and recommendations of the 2004 government of India expert group on foreign institutional investment flows. The group's approach raise several important analytical and policy issues. The most crucial of these relate to effects of FII flows on (a) aggregate and sectoral investment; (b) behaviour of financial, including foreign currency, markets with special reference to their volatility; and (c) efficacy of fiscal and monetary instruments in attaining the objectives of macrostabilisation and growth. The article examines the macroeconomic impact of FII flows in the light of the Indian experience, and draws some policy conclusions regarding the role of such flows. It also addresses the issue of volatility in the Indian context. It finds there is no coherent macroeconomic model behind the expert groups' analysis and recommendations; no appraisal either of the optimal scale of capital inflows or the relative merit of FII vis-a-vis other categories of capital receipts at the current juncture of the economy; and no examination of monetary/fiscal problems associated with FII or of the quantitative impact of such flows on investment and other macro variables. - Reproduced. Liberalisation Foreign investment Economic and Political Weekly 69412 69412 69412 0 0 0 0 IIPA IIPA 2018-07-19 Volume no: 41, Issue no: 11 AR69868 2018-07-19 2018-07-19 AR