A STUDY ON ROLE OF FII & FDI IN INDIAN ECONOMIC GROWTH

In 1991 industrial policy, has brought new dimensions to the indian economy through globalization. The basic motto like self-sustainability, domestic savings and infrastructure development were replaced by robust economic growth since a decade. Global trade vanished the cross borders and paved the way for international business. Being most populous country, india is facing many challenges that hampering the growth of economy like societal and financial factors. Deficit in trade, interest rates, inflation are a part of them. Indian economy was influencing by western countries through their investments in to the financial system. Thus, the sources of foreign capital like fdi, fii were become dominant players in capital formation as well as risky too. These investments were welcomed through direct participation in production areas or investing in stock exchanges. Recently, it is evident from the rbi statistics that majority of the capital sources are from foreign countries. This would definitely effect the financial system and economy as a whole. Current research paper focusing on the effect of these factors on indian economy. For this purpose, researcher had taken gdp as growth indicator and the factors like fdi and fii were chosen as independent variables.