TEWD OF NRI PORTPOLIOS-1

Introduction

The previous chapter dealt with the NRI interest

in direct investment schemes.

It highlighted the N R I

participation in the setting up of projects in India, direct

subscription to several schemes, their contribution to key
industrial sectors, etc.

The analyses are also made in

respect of industry-wise and state-wise status of N R I

projects approval, investment, region-wise trend of N R I
investment in industries, etc.

In this chapter an attempt

has been made to study the trend of N R I portfolio

investments adopting appropriate tools.

This chapter is also divided into two parts: 'Part

A ' and 'Part

B'. While the former deals with N R I investment

in shares and debentures, the latter discusses the N R I

investment in company deposits, units of U T I , etc.

PART

-A

Investment in Shares and Debentures

The Indian capital market provides a significant
opportunity to NRIs to invest their funds in corporate
securities.

Portfolio investment, i.e., investment in

shares/debentures of companies through recognised stock

exchange, by NRIs is permitted only through designated
branches of authorised dealers. The rate at which portfolio
investment has also grown has resulted in the fact that the
quota of most new public issues reserved for NRIs has been
oversubscribed.
Portfolio analysis begins when a portfolio
investor has the expected Holding Period Return (HRP) and
risk statistics for the various bonds, stocks, and other
assets under consideration for inclusion in the portfolio.
A simple way to select assets worthy of investment is to use

the dominance principle.

It states that among all

investments wit11 a givcn expect;ed 1IP11, the onc wit11 the

least risk is the most desirable, and conversely, among all

investments in a given risk class, the one with the highest
HPR is the most desirable.

Bepatriable Portfolio Investment

Table V.l is constructed mainly for the purpose of
analysing the portfolio investment made by NRIs.

It is

Portfolio Investment by N l l l s
(Actual Purchase of Shares and Debentures)
[ I ~ H11
,1 < : l ' ~ l l ' ! ~ U )

Year ending
31st March

Repatriable

2
22 .!)I

19R2-83

Non-repatriable

Total

0.01

(2+3)

2 % .9%

l00.1t~1)

lO.Il1~

1983-84

40.43
(99.39)

0.25
(0.61)

40.68

1984-R5

46.57
[il!I.:ltl)

0.30
(1l.Il-I)

4f3.87

1985-86

55.40
(98.70)

0.73
(1.30)

56.13

19R(i-87

5R.OR
(!It{,
:I!))

0.95

59.03

(1 .Ill)

64.97
(97.73)

1.51
(2.27)

66.48

1.75

77.71

1987-88

7n.o~

1rWu-Rn

(!I / 39)

(2.41)

Source (i) Jay Narayan Vyas, NRI Investment Policy and

procedures, A Ready Reckoner, Saket
Cnmmllni rntlon Crntrr, Ahrmnrlnhnrl, p. 2, nnrl
(ii) Compiled from the Annual Reports of the

Indian Investment Centre, New Delhi.

Note: (i) Figures are cumulative
(ii)
-

t'lgures in parenltlescs are perccoLages Lo

total.

clear from the table that though there are facilities for
both repatriation and non-repatriation, NRIs prefer to
invest only in repatriable rather than non-repatriable
schemes. The portfolio investment on-repatriation basis was
nearly the centum at a percentage mark of 99.96 in the year
1983.

It can be witnessed from the table that a sum of

Rs.22.91 crores is invested in the scheme during the year

1982-83 which accounts for 99.96 per cent of the total
portfolio investments.

The

corresponding figures for the

year 1988-89 is Rs. 70.99 crores recording 97.59 per cent.

Though there is a three-fold increase in terms of investment
for the period of seven years, the proportion between
repatriation and non-repatriation has been maintained at the
same level.

It is further seen from the table that the NRI

interest in the scheme has grown at a rate of 24.7 per cent
at the end of March, 1986, whereas, the same has grown at
6.39 per cent from 1986-89. Though the NRI interest has not
declined in the scheme, the overall growth rate shows a poor
growth of 17.53 per cent for the study period recording an
average flow of investment of Rs.51.33 crores per annum.
It can be seen from the table V.2 that the trend
equation fitted for the purpose shows that.the growth rate

for the scheme is encouraging ('b' value 7.3153).

The

increasing trend of the scheme ( ' R ~ ' value 0.9460) shows

that the growth rate is found statistically significant as
the

computed

significance.

't' value

is 9.36 at

5 per cent level of

The reasons for th8 higher value of the

computed trend may be due to the liberalization policies of

the Central and State Governments on the rules, procedures
and other formalities in addition to the facilities of easy
transfer and taxation relief.

Non-Repatriation Portfolio Investment

It is seen from the analysis (vide table V.l) that
the share of portfolio investment on non-repatriation basis
is very meagre.

In the initial period, this scheme accounts

for only 0.04 per cent of the total portfolio investments

and its share increased to 2.41 per cent during the year
1988-89.

The NRI interest in the scheme in the initial

period shows a higher growth rate of 92.3 per cent, whereas,

for the later period, it has only 24.43 per cent growth.
However, the overall growth rate of the scheme for the
period shows that there is a sizeable growth (109.14 per
cent) recording an average investment flow of Rs. 0.7857
crores per annum.
The trend equation analysis (vide table V.2) shows
that the growth rate for the scheme is found statistically
significant as proved by the computed 't' value of 11.49

when the growth rate ('b' value) and consistency ('R2'

value) are worked out to 0.2996 and 0.9635 respectively.
The higher value of the computed trend may be due to the
liberalization policy of the GO1 towards the NRI investment
in the past half a decade.
Further, it is observed from the analysis (vide
table V.l) that the total portfolio investment (clubbing
both repatriable and non-repatriable schemes) is increasing
at a higher rate.

The growth rate of the scheme shows that

there is a sizeable growth at 25.1 per cent for the period

upto 1986.

But the growth rate for the schemes for the

remaining period, upto 1989, is only 6.7 per cent.

However,

it is clear from the analysis that the growth rate of the

schemes for the overall period is 17.94 per cent recording
an average flow of investment of Rs.52.14 crores.
The trend equation fitted for the purpose also
shows (vide table V.2) that the growth of NRI investment in
these schemes is welcome as referred by the computed ' b '
value of 7.615.

It is clear that the investment in these

schemes has positively increased, and the consistency ('R2

value 0.9516) and the growth rate ('t' value 9.91) is found
statistically significant at 5 per cent level.

The capital issues to NRIs by the Indian Joint

Stock Companies include the 'initial issues', 'further

issues', 'bonus issues', 'debenture issues', 'loans', etc.

The progress of capital issue of the Indian Joint Stock
companies to NRIs is shown in table V.3.

It is evident from

the table that the capital issues to W I s by way of 'initial

issues' account for higher growth rate at 48.24 per cent.
The lower amount of growth is due to the 'debenture issue'
recording 3.42 per cent growth rate for the study period.
The average capital issues account for Rs.23.91
crores and Rs.12.9 crores for the 'initial issues' and
'further issues' respectively for the period.

It accounts

for Rs. 30.21 crores and Rs.9.94 crores for the 'bonus
issues' and 'debenture issues' respectively.

The average

'loan' contribution accounts for 68.24 per cent for the

period of the study.
'Further issues' have grown at a rate of 41.8 per
cent over the period, whereas
per cent.

the 'bonus issues'

at 18.3

The 'loans etc' have grown at 10.94 per cent

while the total capital issues to NRIs by the Indian Joint

Stock Companies have grown at a rate of 20.67 per cent over
the period of the study.

The analysis further reveals that

the major share of capital issues is that of the 'bonus

issues', though there are different types of issues to NRIs.
To'understand better the trend and progress of the
capital issues of the Indian Joint Stock companies to NRIs,
a linear trend equation is fitted for each case and the

results are presented in table V.4.

It is understood from

the table that the increasing trend of the total capital

issues by the Indian Joint Stock companies ('b' value
731.10) shows that the consistency t1R2' value 0.8174) and

the growth rate are found to be statistically significant

(computed 't' value 5.60).
A

trend equation is fitted for the purpose of

knowing the level of significance of the NHI contribution to

Indian Joint Stock Companies by way of capital issues.
Though the

NRI

share

in the capital issues of the Indian

Joint Stock Companies has registered an enormous growth the

growth rate is found to be low (insignificant) as proved by
the computed 't' value of 1.74.

The analysis further

reveals that the capital issues to NRIs in the form of

'initial issues' alone account for Rs.23.91 crores as an
average per annum.

The overall growth rate shows that the

'initial issues' have been growing at a rate of 48.24 per

cent. However, the trend equation analysis reveals that the
growth rate is proved statistically insignificant as the
computed 't' value is only 1.57 at 5 per cent level of
significance.
It is understood from the analysis that the
capital issues to NRIs by way of 'further issues' have grown
at 41.8 per cent recording an average capital issue of about
Rs.12.95 crores annually.

Though the consistency ('R2

value 0.5168) is found reasonable, the growth rate for the

capital issue to NRIs as 'further issues' is found

statistically significant (computed 't' value 2.74).

The

capital issue to NRIs by the Indian Joint Stock Companies in

the form of 'bonus issues' has succeded in its objective to
the level of 18.3 per cent growth rate over the period,
recording an average inflow of investment of Rs.30.21 crores
per annum.

Though, according to the trend equation

analysis, the progress of the 'bonus issues' to NRIs is

found statistically significant (computed 't' value 2.34),
the consistency with time is found low as proved by the
calculated 'R"

value of 0.4397.

The growth rate for the capital issues to NRIs in

the form of 'debenture issues' is found statistically
insignificant having least relationship with time as one of
the bivariate; it has grown at a rate of 2.9 per cent only
for the period.

Though the Indian Joint Stock Companies

consider NRIs as the potential investors, they have

miserably

failed 4 n tapping the resour.ces from the

debenture issue.

It is quite evident that the NRIs evince

keen interest in contributing towards the equity base of the

companies, but their response towards the debenture capital
is not that much encouraging.
And

in fine, the growth

rate of

the NRI

contribution in the Indian Joint Stock Companies in the form

of 'loan' is aleo found statistically insignificant as
proved by the computed 't' value having an average flow of

investment potential of Rs.68.24 crores annually over the

period.

It can be concluded that the growth of the share of

NRIs in the capital issues of Indian Joint Stock Companies

is high, though the share is statistically low. It is also
hoped from the analysis that the share of NRIs' in the
Indian captial market will be even higher in the years to
come.

-B

PART

Other Investment by NHIs

Besides investing in shares and debentures of
Joint Stock companies, NRIs show a considerable interest in
investing their funds in units of UTI, Government Bonds, and
other investment schemes like NSS, NSC, etc.

Of late, a

considerable number of them invest in company deposits also.

An attempt has been made in this part of the chapter to
discuss the NRI response towards these investment schemes.

Investment in Company Deposits

Year-wise progress of NRI investment in company
deposits is presented in table V.5.

It is understood from

the table that though the scheme of company deposit

investment was introduced only in 1983, it has achieved
growth at an enormous rate.

The NRI investment in company

deposits on repatriation basis has grown at a rate of 40.13

per cent over the period, whereas the NRI investment in

TABLE V.5

NRI Investment in Company Deposits

(Rs.in Crores)
Year ending
31st March

Repatriable

Non-repatriable

Total
(2+3)

Source:

Compiled from the Reports of the Indian

Investment Centre, New Delhi.

Note:

Figures in parentheses are percentages to

total.

company deposits on non-repatriation basis has grown at a

rate of 10.27 per cent only for the same period. However,
the overall growth rate for the total (clubbing together
both the repatriable and the non-repatriable) company
deposit shows that there is an encouraging trend in the
scheme; as it has grown to the extent of 26.02 per cent over
the period.

It can also be observed from the table that the

NRI share in the scheme on non-repatriation basis is high in

the initial years of the scheme.

In 1984-85, an amount of

58.98 per cent of the company deposits were made on nonrepatriation basis; though the deposits on non-repatriation
basis have increased from Rs. 5.09 crores in 1984-85 to
Rs.8.3 crores in 1988-89, the proportion of deposits has

declined to 30.26 per cent.

However, the deposits made on

repatriation basis have registered a higher rate: it was

only Rs. 3.54 crores in 1984-85, which accounts for 41.02
per cent of the total company deposits, and it increased to
Rs. 19.13 crores in 1988-89. It is seen that the deposits on
repatriation basis have grown almost five fold during half a
decade and the record is 69.74 per cent of the total company
deposits during the year 1988-89. So, it can be concluded
that the NRI interest has turned towards depositson
repatriation basis, as against the overwhelming response to
non-repatriation-basis-company-deposits in the initial years

of the scheme.
To understand better the trend of NRI investment
in company deposits, a linear trend equation is fitted for
each case, worked out, and is presented in table V.6.

It is

inferred from the table that the NRI investment in company

deposits has grown at 40.13 per cent for the period,
recording an'average investment inflow of Rs. 12.9 crores on
repatriation basis.

The trend equation analysis reveals

that the growth rate of the NRI interest in the scheme on

repatriation basis is found statistically si~nificnntas the

computed 't' value is 3.32 at 5 per cent level, when the
'R2' value works out to 0.7857.
The table further reveals that the NRI investment
in company deposit on non-repatriation basis has grown at a
rate of 10.27 per cent over the period recording an average
flow of investment of Rs. 6.83 crores.

As it is witnessed

by the computed 't' value of 4.26, the growth rate for the
scheme is found statistically significant at 5 per cent
level of significance, when the consistency is considerable
('R2' value 0.8580).
Though the NRI investment in company deposits on
repatriation basis has grown at 40.13 per cent over the
period, the overall growth rate (clubbing together both the
repatriable and the non-repatriable) of the scheme shows
that the investment has grown to the extent of 26.02 per
cent only.

However, the trend equation analysis shows that

there is a sizeable rate of growth ('b' value 5.47), and

consistency ( ' R ~ 'value0.7859), and, thereby, it is found
that the success of

the growth in the scheme

is

statistically significant as evidenced by the computed 't'

value of 3.32 at 5 per cent level of probability.
The main reasons for the enormous growth of the

NRI investment in company deposits may be the enhanced

interest rate offered to this type of deposits and the

liberalized policy adopted by the GOI. Another attraction

may be that the company deposits are secured against the
fixed assets of the company in order to compensate the loss
that might arise in case of any company failure.

In the

event of any company failure or dissolution, the NRIs

wouldn't have to lose a single rupee since the entire
deposit is secured. Further, the share of NRI investment in
company deposits is more on repatriable rather on than nonrepatriable basis since they feel that the repatriation
facility is more beneficial to them than the nonrepatriation one; an additional attraction is that an
exchange gain might arise in the event of the the
depreciated of the Indian rupee.
Like the bank deposits, the company deposits
may depend on the exchange rates of the dominant currencies
which have been permitted for investment in company
deposits.

In order to understand the relationship between

the NRI investment in company deposits and AER for

f,

simple correlation analysis has been attempted, and the

results are presented in table V.7. It is observed from the
table that there is a hiehly positive correlation between
the company deposits made by NRIs and the AER for f as shown
by the computed ' r ' value of 0.9844. The table also reveals
that there- is a positive correlation between the NRI
investment in company deposits and the AER for $ for the
period as evidenced by the computed 'r' value of 0.8987.

TABLE V.7

Correlation Co-efficient for

NRI Investment in Company Deposits and Interest
Rates on NRI Banh Deposits and E x c w g e Rates on $ and P

Correlation Co-efficent Between

Company Deposit and AIR on FCNR Account

II

0.1345

Company Deposit and AIR on NRER Account

0.1844

Company Deposit and AER for $

0.9844

Company Deposit and AER for

0.8987

!1

Correlation
Co-efficient
( ' r' Value)

Source : Computed Results from the Compiled data

Further, a simple correlation analysis has been
attempted to understand the dependency relationship between
the company deposits made by NRIs, and the AIR on NRER and
FCNR deposits.

The analysis reveals that there is a

positive correlation between the company deposits and the

AIR on NRER deposit as shown by the 'r' value of 0.1844.
However, there is a negative correlation (-0.1345) between
the company deposit and the AIR on FCNR deposit.
It can

therefore be concluded that there is a

positive correlation between the exchange rates and company

deposits. While there is a positive correlation between the

company deposit and the interest rate on NRER deposit, a
negative correlation is found between the company deposit
and the interest rate on FCNR deposit.

So, it can be said

that the NRI investment in company deposit is dependent on

the exchange rate of $ and

and the NRER interest rate, but

not on the interest rate of FCNR deposit.

NRI Investment in units of UTI

Scheme-wise Analysis
Though

there are several schemes for NRI

investment in units of UTI, the dominant schemes such as

'Unit scheme 1 9 6 4 ' ,

'Re-investment Plan', and 'Children's

Gift Plan' have been taken into account for the analysis.
The analyses are made on the basis of applications and the
investment by NRIs (sales and outstanding).

The scheme-wise

progress of NRI investment in units of UTI is presented in

table V.8.
It is understood from the table that out of ttre
applications sold to NRIs for the investment in units of UTI
in different schemes, those in the 'Re-investment Plan'are
greater in numbers.

It alone accounts for 863 (59.15 per

cent) in 1978-79 as against 2170 applications (53.73 per

cent) in 1987-88.

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It can be seen from the table that out of the

different schemes available under UTI. NRI share is higher
in 'Unit Scheme 1964'. It has been maintained the NRI
investment in this scheme alone amounts to more than 80 per
cent level for all the years under study, except the year
1987-88 during which the share of NRI investment accounts
for 78.23 per cent only.
It is also observed that the NRI investment in
'Re-investment Plan' accounts for a meagre share of Rs.8.38
lakhs in 1978-79 to Rs.436 lakhs in 1987:88.

However, the

interest of the NRIs in the plan is picking as evidenced at

17.67 per cent in 1987-88 as against a very low share of
1.46 per cent in 1978-79.
NRI investment in the 'Children's Gift Plan'
accounts for a very low share.

However,, the investment

under the scheme is found to be growing.

From the analysis, as a whole, it can be concluded
that while the share of NRI investment is growing to a high
rate in the 'Unit Scheme 1964', the growth found in the 'Reinvestment Plan' and 'Children's Gift Plan' have been
progressing at a low rate.
Trend equation analyses are also attempted to
understand statistically the growth of NRI investment in
various schemes of units of UTI, and the results of the

analyses are given in table V.9.

It is inferred from the

table that the NRI interest in 'Unit Scheme 1964' has been
increasing at a rate of 19.9 per cent recording an annual
average investment inflow of Rs.189-5 lakhs.

However the

total progress of outstanding NRI investment in the scheme

is found to be growing at a rate of 13.4 per cent only. The
results of the trend equation, fitted for the purpose, show
that there is a sizeable consistency with time in the
interest of the NRIs in the scheme as shown by the ' R ~ '
value of 0.8238.

It is also found statistically

significant, as the computed 't' value is 6.12 at 5 per cent

level.

The table reveals that the share of NRI in the

'Re-investment Plan' has also been increasing at an enormous
rate of 48.5 per cent recording an average outstanding
investment inflow of Rs.114.8 lakhs for the period.
However, the net annual inflow of NRI investment in the
scheme accounts for 22.5 per cent growth only, recording an
average inflow of Rs.35.4 lakhs per annum.

The trend

equation fitted also supports the results of the growth rate

I'RI(

value 0.7400), and it is found that the NRI interest

in the scheme is growing interestingly, and the growth rate

is proved statistically significant ('t' value 4.77) at 5
per cent level.

1w Y.9
Trmd of t h a d ~ R
e l l n m t m t ' in h i t s d I l l 1

Sthew

:unit Sche@e194
Ikppllcatlan Sil!sl(

IA~eraqe I 8routh 1 Trend Value

: I n v e s t ~ e n t I Rrte l lY I t b x l
1IRs.ln
I
1 Lakhsl :

-,

'

1 851.0
(110,bI

I 13.3
I

85lt190.7811

~ ~ ~ ~ l i c a t i o n 0 u t s t m d i n p ~ ~ i 8 1 5 0 5.6
.2
111531.91
Iksount of Baler
ik#ount outstandin!
~ ~ 5 t l r t V l a n
i
t

Lldrcn's i t P
lRpPiitatiDn Sales

ilotal R o a ~ l I
:Sales

1.81

0.1442

1.54

0.81bl;

51,10

18.bl

3.15

O.bbll

85.18

0.8238

13.52

0.9312;

29.15

19.64

9SI.b

13.1

152.61t131.0llrj21.125

6.11

9.6

131b.5+131.S01 111.b19

10.bh

9.3

1315,8~131.8?1ijll.5h9

11.19

0,1120j

22.5

35.3bt8.81~xI1.1600

1.98

0.1561

81.81

18.5

111.83+11.511xi 7.8b31

1.11

0.1400

109.10

0.11

0.0015

35.90

: (1I4,bl :

j 1316.5
I I400.bI

I 35.1
I 128.1l

111.8
11125.31

:
:

h5.5
ISb.31

9.1
16.31

51.0
I 130.11

1 1169.0

: 1812.3I

:
:
j

;
j

1 12.5
I

10.6

1 11.0

i
i

11.2

10.7

6.3

jl0018.b
:ao92.8l

I101aI l n v t r t f i m t
13ales

231.b
11188.11

j; 10.0 /

jQl9.5

I I$bl.bl j

15.7

81.88t17.11x

b.9105

512.b~65.1P(x

b.lb93

9.11+1.14lx

1 5.8281E
1-01

10.31

0.1301

31.05

2.17

0,1122

b1.51

i.

0.9641;

51.71

0.8755

1b.11

0.9116~

10.76

80.16

51t10.281xj b.91551~i 14.80

I-01
j
2lb~t2bl.8~lx~35.lll

j10018.b+b95.141xilb.563

lOulstandlng

I0utstandinp

189.S2t15.8~~ / 1 1 . ~ 8

1
ibrount~utstindlng

111.138

ikppllcation ~ u t s t m d i n p l l j 511.6
: Il81.9l
Ikanunt of Srles

8119.1t500.bl1xjbb.391

I (390.ll

ihlount Outstanding

Value I 'R1'ValueI t o - e l l i c i c n t l
I 01 variation:

j 189.5
19.1
1 1lhl.PI I

jlippil~ation~utstandinqf~1
1315.8
Arounl of Sales

I Standard:'!'
I Error I

1.50

j
i lll~.5tll0.8llx~29.~llj
231.bt5b.O)lx

'-I(

F ~ g u r ni n p l r m t l n w dmote slrndlrd devirlions.

) S l p n ~ l i r m tr t 5 per r n ! level
I ~ p p l i r a t l mI n n u e b r s
8 w r t e 1 C m p u t d m u 1 1 1 I r a * LLe c w ~ l l t dd l t a

160

ill.9b0

9.09

4.61
6.05

0.1331

0.8101;

50.65

j
j

The next major share of investment by NRIs in

units of UTI is the 'Children's Gift Plan'. The interest of
the NRIs in this plan alone has grown at 14 per cent,
whereas, the outstanding share of NRIs has grown at 21.2 per
cent accounting an average investment inflow of Rs.52 lakhs
annually.

The growth rate,of the scheme is found to be

'
0.9647) and statistically significant
consistent ( ' R ~ value
as the computed 't' value is 14.80 at 5 per cent level.
The growth rate of the overall NRI investment in
these schemes is only 15.7 per cent for the period.
However, the rates of growth these schemes show an upward
trend and the consistency is reasonable ('Fi2' value 0.8205).
As a whole, the growth rate is found statistically
significant as proved by the computed 't' value of 6.05 at 5
per cent level.
In fine, it may be concluded that the NRI
investment in all those schemes under UTI is found to be
growing at a higher rate excepting the 'Children's Gift
Plan' and the 'Unit Scheme 1964'. However, the growth rate
for all these schemes under UTI is found statistically
significant. The reasons for the higher values of the trend
may be the greater attraction of the former schemes.

Later

the N R I interest might have turned to the recently

introduced schemes.

Source-wise Analysis of NRI Investment in Units of UTI

The main sources of investment are 'direct

remittances from abroad', 'transfer from NRER and FCNR
accounts', 'transfer from NRO account', and 're-investment
of dividend', etc.

NRIs are allowed to invest in the units

of UTI under all the available schemes mobilising the

deposit from any one of the sources.

The source-wise

figures of NRI investment in different schemes under UTI are

presented in table V.lO.
It is inferred from the table that most of the NRI
investment in units of UTI has been made from the source of
'NRO account' followed by the 'NRERIFCNR accounts'.

The

share of 'remittance from abroad' and 're-investment of

dividend', etc.,

account for the least investment in

different schemes of units of UTI.

It can be understood that the source of 'NRO
account' accounts 54.73 per cent in the year 1987-88, as
against 33.27 per cent in 1978-79; the source of 'NRER/FCNR
accounts' records 36.97 per cent (Rs.40.08 lakhs) in 1978-79
as against 27.49 per cent (Rs.430 lakhs) in 1987-88,
registering more than a ten-fold increase over a decade.

It

is clear that the NRIs' share in the investments of units of

UTI (from the source of 'NRER/FCNRt and 'NRO accounts') has
positively increased; but the investment in units of UTI

from the source of 'NRER/FCNR accounts' shows a declining

h c r r l u 1111 I n v f ~ t n a t sI n L l t n of U l l h r l+n?q I
[lhrwnt .RI I n L l l h s l

'

hnr
1 tndlnq
1 Sill
{march
!
1

hourcr of Funds

1Rnltt1ncr i r o n 1 1 1 ~ n ~ i e1108
r
1 l r a n t f ~ ri r o n
Rbro~d
IMRIRIFCYR Account; MO Rrraunt

'

'

'

:Rf-lnvrst~rnt
;of V i l d f n d

'

'

I Uncl~ssf~ld

lotnl

'

1
I
IAppllu-1kountI
Ilppllca-/ h u n t /Applica-/~8cunt ihppl1c~-/ h u n t jlppl1c1-/ Anount 1Appllc1-I Anwnt 1 t i a l l t 1 l l I + 5 + l + I
1 tlon I
tlon I
I tion I
I tlon 1
I tlon I
1tbt8+101/ 9t111 j

/
I
I-(-(-I-I-I-I-I-I-I-I-(-I

I'

>I

1 6

1 9

l l O j l 1 j l 2 j 1 S j

<

~
'I
,
I
~
<
I
<
<
P
<
<
~
+

,
,

1
/

,
I

,
I

I
I

I
I

I
I

I
I

91 1 13,31 1 261 110.08 1 113 1 36,01 1 8b3 1 9.18 1 91

9,15
11 6.511 I 112.30lj 118.0Slj13b.911 j 17.80 Ij 133.211j 159.151; 18.111 j l6,15 1) 18.721

1918-79

1
/

,,

j
j

I159 108,12 j
1 1 0 0 1: 1100 l j

<

Il119-80 1 111 1 11.29 1 294 115.37 1 150 1 11.10: 916 I 11.12 I 11 i 1.91 I IS18 1 93.21 j
1
11 1.311 : 118,5111 Il1.3lIjl18.68I I 19.88 I1 I18,15l/ 162.3211 112.2511 11.12 I / 12.081 j I 1 0 0 Ij I 1 0 0 1;

<

I 1980-81 i 51 I 8.23 :
11 3,811 j 110.151j
1
,,
8
,
<
<
11981-82 1 115 1 11.80 :
II 9.571 I113.9511
1

<

'l

,,

<

211 111.11 1 lb6 I 20.00 I

116.241111b.111 19.11 l j 120.bllj
,
<
,
,
112 : 97.00 i 113 : e i . o o l
121.0811111.991 j 17.03 1: 135.0blj

, ,

<

I 11.91 I I010 i 13.81 I 11 1 2.08 I 1173 I 81.051

I: I 2 2 , l l l ~ 168.511: lll.lllj 11.15 lj 11.511 I 1 0 0 l j I I00 1;

,,

bb 1 1,bO I
l l 3.64I 1 11.15 11
,
,
I
,
,
,
,
,
1 1181-81 : 106 1 19.00 :
:I 1.961 I 18.23 11
I

,#

250 I38.95 I I39

11b~971,1l48,06l l9,11

:<

131 1 69.06 1 118 1 21.08

1056
18.11 I 9 1 1.52 1 1829 1 127.60I
123.5b11151.121 1 1B.09 11 116.5111 151.1111 111.1211 11.01 1: 11.191 1 1 100 11 I 104 Ij

: 1782-83 :

8
1

1121 1 23.08 I I 1 1 1.19 I 1811 I 96,91 I

Ibl.121j 123.8llj 13.53 Ij 11.631 1100 11 I 1 0 0 I:

:,

'l

1.00 I rlsa I 2si.00:

1322 j so.oo 1s
ibl.83lj 112.99lj 11.10 Ij 11.131 j I 1M) I / 1100 Ij

<

<

1 1981-85 I 138 1 19.00 1 511 : 109.00 1 101 1 1b8.00 1 1152 1 15,00 1 bB I 6.00 I 1583 I 631.00 1
1
11 5,341 (1 (2,98 lj l ? 0 , l l l ~ l l l , l l l 1, 115.611: 113,111j 156,221,1 15,501: l2,b3 I,; 10,911 j I 100 1,: I 100 I/
1

8
f

: 1981-86 I

219 I 11.00 1 839 I 112.00

I 1 1.161 j 15.08 1; 126.121j118.181

11 18.81 ,1 (l0.951j 131.91)j(23.211

4
,

: 1981-88 1 111 1
1

I 1000 I 161.00 I I851 1312.00

'
I

: l98b.81

<

(0.36 Ij I0.6BI

1100 Ij I 1W l j

: 110 1 195.001 1596 1 80.00 I 118 1 13.00 1 3212 1 906.00 1

j 1 1 l . l b l j lbS.b8Ij 119.691j 18.831 j 13.61 I / 11.131 j 1100 l j 1100 I\
,
,
: 603 : 853.00/ 1839 1 101.00~ 19 / 10.00 / 5320 ~1110.00 j
,

111.331j 118.031,I 131.511j 11.011

856.00'1 2110
98.00
I ~ B . O ~ 1882
1s0,on 1 896
11
I
11.5llj IlO.11lj 132,3bI/l21,171 j 115.211j 151.151~ 111.32lj lb.211

i
/

10
12.00
10,51 1 j 10.171

~
-I-I-I-<
f-I(<
-<
I-4
'-I-

Sourcrl Colpilfd fro8 thf u l l t t l n s 01 the Unit T r u d 01 Indla, Robbay for servfrnl years.
Mot! Fi(ures i n P t r r n t h f i , dfnotr grcfntapcs to t o t a l

511s i1sac.w
I 1 0 0 Ij I 1 0 0 I/

trend, and in the case of 'NRO account' the share of the

source has been increasing at a higher rate.

It may be due

to the interest of the NRIs returning in the following years

to utilise fully the funds invested on non-repatriation
basis.
The investment from the sources 'remittances from
abroad' and

're-investment of dividend' has slightly

declined. However, these sources have been picking up in

terms of 'remittances from abroad' accounting for Rs.168
lakhs in 1987-88, as against Rs.13.34 lakhs in 1978-79,
registering about a thirteen-fold increase over a decade.
The investment from the source of 're-investment of
dividend, etc'., has increased to Rs. 98 lakhs in 1987-88
from Rs.9.48 lakhs in 1978-79 recording more than a ten-fold
increase over the period.

This, according to the source-

wise analysis, shows that the share of investment is

declining.

But the NRI investment has registered a more

than ten-fold growth over the period.

The progress of source-wise NRI investment in
units of UTI is also tested with the help of a statistical
tool of trend equation analysis.

It has been fitted for

each case, worked out, and the results of the analyses are
shown in table V.11.

It is inferred from the table that the

investment from the source of 'remittance from abroad' has

grown at 28.8 per cent as a whole for the period, recording

l r m l 01 W i c ) d ~RI Imvnht i n bits 01 1111

>

Sourc!

1Avrrrpr 1 Growth 1 lrend Value

IlnvrstnrntI Rate 1 IY = r t bxl
I1Rs.in
1
1
;11khrI
;
1
, -G

a t l l t t r n c r i fro1 Abroad
Appl~cIti~n~l~

; Alounl

18.0

<

4
4

~11.12t15.18lx

<

' C r ~ d ~ ir01
l ~ d NRERliCNR Ac[ountr 1lO.b : 21,l
: Appl~crtionrll
: 1b03.11 1

Iredltpd iron MA0 Account

Appllration~tI
Gnount

1 110.8

: 1131.11 :

A~ount

:
(

1.1

Figures I n parrnlherel d r n ~ t rr t a n d ~ r ddevlrtionr.

' S i ~ n i i l c r n t r t 5 prr crnt l r v e l
' l R p p l l r r t r ~ nI n nunbrrs
l ' ~ S l q n i l l r m t at onr $ t r cent l r v r l
Sourrr: Conputrd r t r u l t s trot the r w p i l s d d ~ t a

b.11+0.8All1:

0.~812j

135.10

0.6963

81,8l

1 0.12b9 1

91.1b

11.11

1,18

5.b4

0.1'192

115.01

10.11

0.'1349

29.10

1 12.29lll.lltx

3.33
8

12.3 1 26.3
115.11 1

b.4
11.11

/18.813

~1311,5+131.1$x

19,1+5.011

111.X

1 0.7562

9.1

1.98

/ 29b.S3+lOA,lAIx

1 O.SJO5

,
10.909 j

I 311.2+12.181x

j 29L.S
11.3
11311.11 1

:
:

1.13lb!

3.13

1 138.82+58.921~ 1 8.4350 1 1.61

lb.O

Re-inuert#mt of Divldrnt, eti.; 1317.5

lipplirat~ondl
1 1100.31 1
, Anount

1 1101Ltl15,211x 1

1 20.0

1 121.2

: 1210.11

'(

1 2b.813

I lJ9,Sl 1

Gnount

: 101.1t81.111x

281.1 1 11.5
I 1325.61 1
11.1

:
j

1 S t m d r r d l ' l ' Value I 'RI'Valuel Co-rfllclrnt:

Error :
1
1 of v1rirtlm1

l1.Lll

11,513

1.80351

A.lb

1 0.82581

83.W

1,18901

0,10

1 0,0013

L9.35

3.9b3bE;
-01

2.21

1 0.38b81

b3.77

'

'

an average investment inflow of Fis.47.4 lakhs per annum.

The growth rate is found statistically significant as proved
by the computed ' t ' value of 3.33 at 5 per cent level.
While the average inflow of investment from the
source Of 'transfer from NRER/FCNR accounts' records
Rs.138.8 lakhs, it accounts for Rs.324.2 lakhs from the
source of 'transfer from NRO account'.

The overall growth

rate of the investment from the sources are also found at

26.8 per cent and 37.3 per cent respectively for the said
sources. From the table it is clear that the trend equation
analysis for the NKI investment from the sources of
'NRER/FCNR1and 'NRO accounts' reveals that the growth rates
of the investment from the said sources are found to be
statistically significant. The computed 't' values of 4.61
and 5.64 are for the sources of 'NRER/FCNR1 and 'NRO
accounts' respectively.

In addjtion, the growth rate and

relationship for the investment from these sources are

almost similar/equal as shown by the calculated 'R2' values
of 0.7269 and 0.7992 respectively for the sources.
The N R I investment from the source of 'reinvestment of dividend' i n units of UTI has grown at 26.3
per cent fcr the period, registering an average investment
inflow of Rs.42.3 lakhs per annum. The consistency is also

is Statistically significant, as evidenced by the computed

't' Value of 6.16 at 5 per cent level. The investment from
the source 'unclassified' has grown at 2.4 per cent only
recording an average investment inflow of Rs.6.4
annum.

lakhs per

llowever, the trend equation analysis reveals that

the growth rate for the NRI investment from the source
'unclassified' 1s statistically significant, as proved by
the computed It' value of 2 . 2 5 at one per cent level.
From these analyses it can be concluded that the
overall growth of the NRI investment from all the said
sources is statistically significant. It means that the NRI
interest in units of UTI in general has been growing at an
enormous rate.