New Delhi, July 01: India’s statistics on foreign investment, it turns out, have been lies that damned us more than we deserved, and the Chinese dragon no longer soars as far above the Indian tiger as first impressions gave us to believe. India has received and has been exporting far more capital than our official figures have estimated. With the first official attempt to align our FDI estimation procedures with the best international accounting practices, this is about to change. While China has been attracting investment in excess of $40bn every year, India struggled to reach one-tenth that level. It turns out, we have been underestimating our FDI inflows by as much as 81%.
The government has reorganised FDI data for ‘00-01, ‘01-02 and ‘02-03 along the lines recommended by the International Monetary Fund to include some hitherto uncaptured elements of capital. The fresh items number 14 and have been classified under equity capital, reinvested earnings and other capital. Equity investment in unincorporated entities such as branch offices, earnings reinvested in India by the foreign investor, long-term and short-term debt now count as FDI.

Their inclusion has led to a steep increase in FDI figures for these years. As per the revised data, FDI inflow during ‘00-01 will be seen as $4.03bn against $2.34bn published earlier, while it will be $6.13bn ($3.91bn) in ‘01-02 and $4.67bn ($2.57bn) in ‘02-03. Bureau Report