Foreign investment in India-the contribution to and impact on the service sector Dey Manik Chand1, Dash Ashok Kumar Dr.2 1Asst. Prof., Department of MBA, Balasore College of Engineering and Technology, Balasore, Orissa 2Dean (Administration), Department of MBA, Balasore College of Engineering and Technology, Balasore, Orissa Online published on 20 March, 2021. Abstract There have been a significant number of debates, discussions on establishing the interrelationship among the two major determinants of economic growth-saving and investment. Some studies have favored that savings is translated into capital accumulation, which in turn promote economic growth. On the other hand, some other studies, as based on life cycle hypothesis, have concluded growth increases aggregate savings for the simple reason that the income of the active group is larger than the income of the retired groups. More or less, a positive correlation among growth, savings and investment were found in most of the studies. So far as gross domestic savings is concerned, which is at present 33.7% as per 11th five year plan, is not sufficient to accelerate the GDP growth. An apparent paradox which is observed in the last decade in India is in spite of high rate of savings, investment level has shown a steady trend, while the growth is widely fluctuating and comparatively lower than high income countries. GDP refers to total value of all products and services produced within a country in a year. It broadly includes contribution made by agriculture, industry and services sector. In the last decade the contribution from services sector has grown exponentially compared to the growth in other two sectors. In this context first, an attempt is made to study the contribution of services sector to GDP growth. Second, a study will be made about the flow of foreign investment into India in various forms during last decade. Finally, the paper will show the impact of FDI on services sector in India. Top Keywords Economic Growth, GDP, Savings, Foreign Investment. Top |