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No Impact of Global Recession on FDI
Monday, March 9, 2009

The Minister for Overseas Indians Affairs, Vayalar Ravi, recently informed the Lok Sabha (the lower house of the Indian parliament), that the global recession had no impact on Foreign Direct Investments (FDI) from Indians abroad as it has registered a rise in the current fiscal.

Informing the lawmakers about investment figures from the states, Ravi said there had been no decline in investment due to global recession during 2008 as compared to 2007. Non-resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Corporate Bodies (OCB) accounted for FDIs and Foreign Technology Cases (FTC) worth Rs 700 m during January to September 2008 in comparison to Rs 658 m for the period January to December 2007. Interestingly, Goa figured as the highest investment attracting state receiving Rs300m from the above mentioned categories of investors during 2008. West Bengal came in second among all Indian states, recording Rs203m in Foreign Direct Investments (FDIs). Goa was liberated from Portuguese rule in 1961 and went on to become the 25th state in the Indian Union in 1987.

People worldwide know Goa as a tourists' paradise blessed by silvery and pristine beaches, historical temples and churches and a place of peace-loving people who cherish communal harmony. Very few would, however, fancy that Goa is today turning into a fast developing economy. The state has been ranked among the leading states on the developmental scale by national magazines. Goa's economy is growing at a faster rate than that of the country as a whole. The Goan economy traditionally hinged on mining, Gulf remunerations and now on service sector mainly tourism.

It was ranked the best placed state by the Eleventh Finance Commission for its infrastructure, ranked on top for the best quality of life by National Commission on Population based on the 12 Indicators, placed in top three states in India for high rate of literacy and low rate of infant mortality and declared the second fastest growing state by CRISIL. Goa has been on the lookout to attract investments armed with a pro-active industrial policy, which identified biotech, food processing, agro-based industries, IT and IT-enabled services and entertainment sector as core areas of focus. After the State was declared a permanent venue for prestigious International Film Festival of India (IFFI), the entertainment industry led by state-owned Entertainment Society of Goa (ESG) is bringing entertainment to the forefront as a significant revenue generating sector.

At present, real estate seems to be the state's top draw when in comes to investment by NRIs and PIOs. The new phase of real estate development in Goa has encouraged a multitude of investors to put sums of money. According to real estate experts, the prospects of real estate investment in Goa are bright. The strategic location of Goa and the availability land at good locations has attracted real estate developers. In recent years, Goa has also attracted huge investment for holiday homes by non-resident Goans (NRGs), NRIs and domestic buyers. According to The Times of India, real estate prices had boomeranged by 30 percent in 2004, and had been steadily increasing. Land value in Panaji doubled in the last one year while other places across the state have seen a steady 20 percent increase.

Nearly one in every four buyers in Goa were second home seekers looking for a good investment option. Real estate experts say that most property buyers in Goa are high-end clients looking for a villa ranging between Rs8m to Rs10m. NRIs and persons of Indian origin have particularly evinced interest in buying property here and constitute 15 per cent of the demand.



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