At the moment, economies worldwide are still struggling with the adverse effects of the financial crisis. The average loss of potential output resulting from the financial crisis has been estimated at 8.4%. And these output effects can be very persistent. Crises reduce an economy’s capital stock – and the catch-up process via investment takes time.
A very limited number of activities fall under this category viz., retail trading, atomic energy, lottery business, gambling and betting. Again, the list for FDI cap below 100 per cent is also quite short including broadcasting, print media, defence, insurance, asset reconstruction, investment companies, petroleum and air transport.