How has globalisation affected rthe indian economy?
Answers
Globalization has been a historical process with ebbs and flows. Growth of globalization was mainly led by the technological forces in the fields of transport and communication. There were fewer barriers to flow of trade and people across the geographical boundaries. Indeed there were no passports and visa requirements and very few non-tariff barriers and restrictions on fund flows.
India too is no exception to globalization. The Indian Economy witnessed major changes in the 90’s.The main aim was the rapid growth of Indian economy & to make it globally competitive. The Indian economy was in major crisis in 1991 when foreign currency reserves went down to $1 billion & inflation was as high as 17%.
Due to globalization, in Indian economy it affect not only to agricultural production but also employment opportunities in the rural parts, inequality between urban & rural areas. Globalisation is conceived as a powerful transformative force responsible for a massive shake-out of nations, economies, international institutions & the whole world order. Thus, we can say that the higher the level of international corporations/transactions, the higher will be economic growth, income level & living standards the globalization process would bring. Globalisation has brought many jobs & large sums of investment to India. India’s economy has been growing at exceptional rates for the past several years & many new opportunities have opened up for India. Yet, India does remain quite poor. Most of those who profit from globalization in India are the upper classes, with many in the lower classes being displaced & suffering from miserable labor conditions. Globalization has created a large economic boom for India with largely positive effects. At the present, we can also say about the tale of two Indians. We have the best of times; we have the worst of times. Globalization of financial markets has far outpaced the integration of product markets. There is sparkling prosperity, there is stinking poverty. We have dazzling five star hotels side by side with darkened ill-starred hovels. We have everything by globalization, we have noting by globalization.
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When the Indian economy was opened up in 1991, the mantra was "perform or perish". Indian industry immediately reacted by asking for protectionist measures, mostly in relation to import tariffs. But, under GATT and other multilateral or bilateral international agreements, customs tariffs had to be generally brought down all around.
However, Indian Companies soon realised that they had to constantly upgrade their technology, launch production expansion drives in order to attain economies of scale and set up overseas production bases if need be. Mergers and acquisitions followed, greenfield projects set up and to aid this frenetic activity foreign capital and expertise was welcomed.
Today, we as a country are a global economic power, second only to China, producing quality goods and services that stand up to the best in the world. Whether it be air conditioners or motor cars or washing machines or even mobile phones, the Europeans, Americans and progressive Asians have woken up to India's manufacturing capability and wealth of expert manpower to either make in India or buy from India or even both.
India's knowledge base is huge, it has a young population and it is among the top three English speaking countries in the world. All this and more have made this country the cynosure of everyone's eyes as India marches ahead in today's world economy. Globalisation has, therefore, been a boon for this wonderful country of 1.2 billion!
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