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In the context of foreign investments in India, consider the following Assertion and Reason statements :
Assertion (A) : Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI.
Reason (R) : Arvind Mayaram committee set a benchmark limit of 25% to differentiate Foreign Direct Investments (FDI) and Foreign Portfolio Investment (FPI).
Choose the correct answer using the codes given below :
Assertion (A) : Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI.
Reason (R) : Arvind Mayaram committee set a benchmark limit of 25% to differentiate Foreign Direct Investments (FDI) and Foreign Portfolio Investment (FPI).
Choose the correct answer using the codes given below :
- a)Both 'A' and 'R' are individually true and 'R'is the correct explanation of A'
- b)Both ‘A' and 'R' are individually true but ‘R'is not the correct explanation of A'
- c)'A' is true but 'R' is false
- d)'A' is false but 'R' is true
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
In the context of foreign investments in India,consider the following ...
Explanation:
Assertion (A) and Reason (R) Analysis:
- Assertion (A): Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI. This statement is true as FDI generally refers to a significant long-term investment made by a foreign entity in a local company.
- Reason (R): Arvind Mayaram committee set a benchmark limit of 25% to differentiate Foreign Direct Investments (FDI) and Foreign Portfolio Investment (FPI). This statement is also true as the committee indeed recommended a 25% threshold to differentiate between FDI and FPI.
Correct Answer Justification:
- Both Assertion (A) and Reason (R) are individually true. However, Reason (R) is not the correct explanation of Assertion (A). The distinction between FDI and FPI is based on various factors, not just the percentage of investment.
- Therefore, the correct answer is option 'C': A is true but R is false.
Assertion (A) and Reason (R) Analysis:
- Assertion (A): Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI. This statement is true as FDI generally refers to a significant long-term investment made by a foreign entity in a local company.
- Reason (R): Arvind Mayaram committee set a benchmark limit of 25% to differentiate Foreign Direct Investments (FDI) and Foreign Portfolio Investment (FPI). This statement is also true as the committee indeed recommended a 25% threshold to differentiate between FDI and FPI.
Correct Answer Justification:
- Both Assertion (A) and Reason (R) are individually true. However, Reason (R) is not the correct explanation of Assertion (A). The distinction between FDI and FPI is based on various factors, not just the percentage of investment.
- Therefore, the correct answer is option 'C': A is true but R is false.
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Community Answer
In the context of foreign investments in India,consider the following ...
- According to RBI, Foreign Investment means any investment made by a person resident outside India on a repatriable basis in capital instruments of an Indian company or to the capital of an Limited Liability Partnership (LLP). Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside of India:
- in an unlisted Indian company or
- in 10 percent or more of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company. Foreign Portfolio Investment is any investment made by a person resident outside India in capital instruments where such investment is
- less than 10 percent of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company or
- less than 10 percent of the paid-up value of each series of capital instruments of a listed Indian company. Based on these definitions, Foreign investments on a small scale of less than 10 percent in a listed company cannot be treated as FDI. So, Assertion (A) is correct.
- As per the Aravind Mayaram committee, any foreign investment of 10 or more than ten percent in a listed company will be classified as FDI. Further, in the case of an unlisted company, irrespective of a threshold limit will be classified as FDI. Hence the benchmark limit set by the committee to differentiate between FDI and FPI is 10% and not 25%. So, Reason (R) is not correct.
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In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer?
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In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer?.
In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the context of foreign investments in India,consider the following Assertion and Reasonstatements :Assertion (A) : Foreign investments on a smallscale of less than 10 percent in a listedcompany cannot be treated as FDI.Reason (R) : Arvind Mayaram committee set abenchmark limit of 25% to differentiate ForeignDirect Investments (FDI) and Foreign PortfolioInvestment (FPI).Choose the correct answer using the codesgiven below :a)Both A and R are individually true and Ris the correct explanation of Ab)Both ‘A and R are individually true but ‘Ris not the correct explanation of Ac)A is true but R is falsed)A is false but R is trueCorrect answer is option 'C'. Can you explain this answer?.
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