With reference to Government of Indias I decisions regarding Foreign Direct Investment (FDI) during the year 2001- 02, consider the following statements: 1. Out of the 100% FDI allowed by India in tea sector, the foreign firm would have to disinvest 33% o

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Q: 85 (IAS/2003)
With reference to Government of India’s I decisions regarding Foreign Direct Investment (FDI) during the year 2001- 02, consider the following statements:
1. Out of the 100% FDI allowed by India in tea sector, the foreign firm would have to disinvest 33% of the equity in favour of an Indian partner within four years.
2. Regarding the FDI in print media in India, the single largest Indian shareholder should have a holding higher than 26%
Which of these statements is/are correct?

question_subject: 

Current Affairs

question_exam: 

IAS

stats: 

0,10,47,13,10,23,11

keywords: 

{'single largest indian shareholder': [0, 0, 1, 0], 'foreign direct investment': [0, 0, 2, 7], 'fdi': [0, 0, 3, 7], 'indian partner': [0, 0, 1, 0], 'foreign firm': [0, 0, 1, 0], 'equity': [0, 1, 1, 5], 'tea sector': [0, 0, 1, 0], 'india': [8, 1, 7, 13], 'decisions': [0, 0, 2, 7]}

The question is about the policies implemented by the Indian Government for Foreign Direct Investment (FDI) during 2001-02.

Option 1 states that out of the 100% FDI allowed in the tea sector, the foreign firm is required to disinvest 33% of the equity in favour of an Indian partner within four years. This is incorrect as there were no such mandatory disinvestment conditions imposed by Indian Government on FDI in tea sector during 2001-02.

Option 2 mentions that in the print media sector, the single largest Indian shareholder should have a holding higher than 26%. This is true. The policy mandated that the largest Indian shareholder must have a larger stake than any foreign investor, to ensure control and management of the print media remains in Indian hands.

Option 3 is false as it claims that both statements are correct, whereas only statement 2 is correct.

Option 4 says that neither 1 nor 2 is correct. This too, is incorrect as statement 2 is true.

Therefore, the correct answer is 2 - Only statement 2 is correct.

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