Question

Discuss the impact of globalisation on Indian economy in about 250 words

Answer 1

Globalization is seen as a process defining the growing interdependence between various economies of the world. The term is also used specifically for economic globalisation which stands for aligning regional economies with the global economies through the vehicle of trade, FDI, flow of capital, technological advancement and also wide-scale migration. It was only after the economic liberalisation in 1991, Indian economy tasted freedom in real sense. The LPG Policy of 1991, had four basic premises:

Devaluation: Indian currency was devalued by 18-19%.

Disinvestment: Many public sectors were sold to the private sector

Allowing FDI: FDI was allowed in both in Insurance and Defence sector.

NRI Scheme: NRIs were given same benefits as FIIs.

Thus, the policy opened Indian economy to new horizons and embraced privatisation in a big way. This served as the first footprint of globalisation on Indian economy. Due to the increased global interdependence, all economic policy formulations on a domestic front is not done in isolation from the outside world. They are heavily dependent on international economic health and norms. Likewise, any decision taken at a global platform has direct or indirect impact on domestic policies. Thus, it can be deduced that government has lost policy autonomy to the global forces.
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Answer 2

What is the impact of globalisation on Indian economy?

Globalisation has multiple components like :

Economic

cultural

Social

Political

Philosophical etc.

Globalisation has affected India under these headings such as :

Economic effect: farmers are suffering due to cheap import, small traders are suffering due to big malls like walmart.

Cultural: due to globalisation people are getting attracted towards western life style. This behavioural change causing change in their expenditure pattern. They are less saving and more consuming.

Social aspect: globalization is causing nuclear family and consequently, fall of value system. MNC's are setup in metro cities. A small town guy gets job in these companies and take a house on rent then after some get married. He also got chance to have a foriegn deputation but during all this he finally loses touch with his parents.

Political : foreign institutes such as World bank, IMF and WTO are interefeering in internal matters of a sovereign country. A global accident can affect internal politics. A rise in right wing leads to formation of govt. Under modi and donald trump. This is a global trend.

Philosophical: globalisation is philosophically defined by liberalism. After 1991, the fall of USSR leads to rise of USA. USA supports open market economy. Thus, Globalisation is making most of the big economies easily penetratable. This is not so good in favour of poor and needy population.

There are many other impacts of globalisation such as rise of middle class, fall of caste system, more consumer centric services, more brands, better buying options, cheap deals on shopping etc.