Question

Impact of globalisation in india advantages and disadvantages

Answer 1

By the term globalisation we mean opening up of the economy for world market by attaining international competitiveness. Thus the globalisation of the economy simply indicates interaction of the country relating to production, trading and financial transactions with the developed industrialized countries of the world.

Accordingly, the term globalisation has four parameters:

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(a) Permitting free flow of goods by removing or reducing trade barriers between the countries,

(b) Creating environment for flow of capital between the countries,

(c) Allowing free flow in technology transfer and

(d) Creating environment for free movement of labour between the countries of the world. Thus taking the entire world as global village, all the four components are equally important for attaining a smooth path for globalisation.

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The concept of Globalisation by integrating nation states within the frame work of World Trade Organisation (WTO) is an alternative version of the ‘Theory of Comparative Cost Advantage’ propagated by the classical economists for assuming unrestricted flow of goods between the countries for mutual benefit, especially from Great Britain to other less developed countries or to their colonies.

In this way, the imperialist nations gained much at the cost of the colonial countries who had to suffer from the scar of stagnation and poverty. But the advocates of the policy of globalisation argue that globalisation would help the underdeveloped and developing countries to improve their competitive strength and attain higher growth rates. Now it is to be seen how far the developing countries would gain by adopting the path of globalisation in future.

In the mean time, various countries of the world have adopted the policy of globalisation. Following the same path India had also adopted the same policy since 1991 and started the process of dismantling trade barriers along with abolishing quantitative restrictions (QRs) phase-wise.

Accordingly, the Government of India has been reducing the peak rate of customs duty in its subsequent budgets and removed QRs on the remaining 715 items in the EXIM Policy 2001-2002. All these have resulted open access to new markets and new technology for the country.

Advantages of Globalisation:

The following are some of the important advantages of globalisation for a developing country like India:

(i) Globalisation helps to boost the long run average growth rate of the economy of the country through:

(a) Improvement in the allocative efficiency of resources;

(b) Increase in labour productivity; and

(c) Reduction in capital-output ratio.

Answer 2

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$\boxed{\underline{Advantages:-}}$

→ Due to Globalisation, customers have a wide - choice of products and there are many varieties of any particular product.

→ Due to Globalisation, products are cheaper and are available in large amount.

→ Due to Globalisation, many of the local companies get newer tech when the MNC's do investment in them, and allow the economy to grow for a country.

$\boxed{\underline{Dis-advantages:-}}$

→ Globalisation is unfair, as it doesnt implement same laws for the developed countries like: USA.

→ Due to Globalisation, local companies have to face a tough competition and even result in the companies shutting down.

→ Due to Globalisation, when people have wide - choice of products, people buy cheap products which Are Imported from other countries, this results in improving the economy of other countries and not the country where the products are mainly developed.

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