GS PrelimsEconomyInvestment2001

The largest share of Foreign Direct Investment (1997-2000) went to

A

Food and food product sector

B

Engineering sector

C

Electronics and electric equipment sector

D

Service sector

Correct Answer: Option D

Explanation

1. The question asks about the sector receiving the largest share of Foreign Direct Investment (FDI) into India during the period 1997-2000. 2. This period followed the initial phase of economic liberalization in India (1991). FDI inflows were gradually picking up. 3. Data from that period (late 1990s) indicates that the Engineering sector (which includes machinery, transport equipment, etc.) and the Electronics and electric equipment sector were significant recipients of FDI. 4. The Service sector, while growing, received substantial FDI later, particularly post-2000 with the IT boom. The Food sector was also not the primary recipient during 1997-2000. 5. Among the given options, the Engineering sector generally attracted a substantial share of FDI inflows during the late 1990s, often competing with or slightly exceeding the electronics/electrical equipment sector in specific years within that timeframe. Official data often grouped these, making precise distinction hard without specific year-wise breakdown, but engineering was consistently a top recipient.

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