The Government has said market indicators do not suggest that foreign investors are “unduly worried” about the economy even as global rating agencies are sounding bearish on India.
Minister of State for Finance Namo Narain Meena said in a written reply to Rajya Sabha on Thursday that foreign investors make investments on the basis of perceptions of the returns and risks associated with the economy.
“With regard to the performance of the Indian economy, market indicators, such as the net inflow of foreign institutional portfolio investment to India, do not suggest that investors are unduly worried,” Meena said.
He was replying to queries related to inflation and actions of rating agencies such as Standard & Poor’s and Fitch.
The two have revised the outlook on India’s long-term rating from stable to negative.
The net FII inflows (debt plus equity) in the first seven months of 2012 have recorded “appreciable growth” and were $14.98 billion as on July 31.
“This is the highest inflow during the corresponding period (first seven months of each calendar year) in the last one decade, save for the year 2010,” Meena said.
Equity inflows during January-July have also been highest as compared to the corresponding period in the last one decade except for 2007 and 2010.
“High inflows in equity segment are a reflection of the confidence of foreign investors in the strong macroeconomic fundamentals of Indian economy,” the Minister said.