Amid all the noise about record-breaking foreign direct investments inflow into the country, no one seems to be asking if this amount is anywhere near enough.

In Sub-Saharan Africa, FDI flowed primarily into five countries — South Africa, Nigeria, Sudan, Angola and Equatorial Guinea. These countries with a combined population of only about 23 crore attracted more FDI than India between 2000 and 2006.

According to the Global Finance Development Report, recently released by the World Bank, FDI flow into India in 2005 was $6.6 billion. This is a mere 0.8 per cent of India’s GDP of $805 billion. South Africa, at $6.3 billion that makes 2.6 per cent of its $240-billion GDP, fared better.

To do as well as South Africa, India should have attracted FDI of $21 billion. To compete with China’s 3.5 per cent, India should have got $29 billion.

Foreign investors were more enthusiastic about Indian stocks, and net portfolio flows stood at $12.2 billion in 2005, almost double the FDI figure. According to the latest World Investment Report by UNCTAD, FDI in India amounted to only 3.5 per cent of gross fixed capital formation in the economy in that year. The figure for China was 9.2 per cent, while the average for all developing countries was 12.8 per cent.

The UNCTAD report categorises India as an “underperformer” in attracting FDI. According to the report, inward FDI performance index — calculated as a ratio of a country’s share in the global FDI receipts to its share of global GDP — India’s performance in attracting FDI has been poor.

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