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Globalization has opened opportunities for India's development but also challenges. It integrated India's economy internationally in 1991, increasing foreign investment and trade. This boosted economic growth but also widened wealth inequality and trade deficits. While certain industries have grown and technology/culture have spread, globalization has largely not benefitted the poor and increased unemployment. Overall, globalization has been positive for India's economy but also highlights the need for continued reforms to ensure benefits reach all.
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- 1. ON LINE ASSIGNMENT Topic: IMPACT OF GLOBALIZATION FOR THE DEVELOPMENT OF INDIAN ECONOMY Submitted To Submitted By Nimmy Varghese Remys Krishnan.S (Lecturer) Option: Social Science
- 2. 2 INTRODUCTION Globalization in a literal sense is international integration it can be described as a process by which the people of the world are unified into a single society and functioning together. This process is a combination of economic, technological, socio cultural and political forces. Globalization as a term is very often used to refer to economic globalization that is integration of national economics into the international economy through trade, foreign direct investment, capital, migration and spread of technology. The world globalization is also used, in a doctrinal sense to describe the neoliberal from of economic globalization. It is also defined as internationalism. However such usage is typically incorrect as ‘global’ implies ‘one world’ as a single unit while ‘international’ recognizes that different peoples, cultures languages nations, borders, economies and ecosystem exist. Globalization has opened up neul and tremendous opportunities for worldwide developers, under the influence of the process of globalization, India in 1991 introduced economic policy changes and integrated its economy to the international economy. Globalization in India arrived just before the end of the cold war. Concept of Globalization The concept of globalization is not new one but gained prominence after the cold war end. Globalization is deeply contested going to be easy. There is no such globalization accepted definition on globalization. It means different things to different peoples. Many scholars and academicians from the field of social science have in simple terms globalization would mean integration of the world economy and the increased inter dependence among the countries of the world. According to Guy Brainbunt, The process of globalization not only includes opening up of world trade, development of advanced means of communication, internationalization of financial markets, growing importance of MNCS, population, migration and more generally increased mobility of persons, goods, capital data and ideas but also infections, diseases and pollution.
- 3. 3 Antony MC Grew’s has defined “globalization as a process which generates flows and connections not simply across nation- states and national territorial boundaries, but between global regions, contents and civilizations. This invites a definition of globalization as: an historical process which engenders a significant shift in the spatial reach of new works and systems of social relations to trans containentalor interregional patterns human organization, activity and the exercise of power”. INDIA’S ECONOMY AFTER THE DAWN OF GLOBALIZATION The emergency of Globalization has a close linkage with progress in India economy. The cold war end, India took the hold steps of implementing economic reforms that finally brings an end to license raj and opening up of reducing tariff and non- tariff barriers, relaxation of FDI (Foreign Direct Investment) rules. Exchange rate and banking reforms. The decision to open up its economy and integrate it to the international economy would always remain the sound basis for- the success behind Indian economy. With this, trade and investment relations with other countries and foreign investment inflows started improving in a way that had never experienced before. FDI inflow to India in 1990 was just US $ 100 million, but within six years, it jumped to us $ 2.4 billion. The India economic growth rate of 8.5% in 2004 and 9.4% in 2005-06. India’s economic performance would have been much better had there been continuous step- by step reforms. Continuous trade and investment reforms would hold the key India’s economic progress in future. The challenges of globalization lies not in stopping the expansion of global market, but in setting rules and institutions for better governance at local, national, regional and global levels. Further, globalization is not just to preserve the advantages of global market and competition but also to provide enough space for human, community and environmental resources to ensure that globalization works for peoples. IMPACT OF GLOBALIZATION IN INDIAN ECONOMY The novel Tale of Two cities of Charles Dickens beings with a piquant description of the contradictions of the items. It was the best of times, it was the worst of times, It was the age of wisdom , it was the age of foolishness, It was the
- 4. 4 epoch of belief, it was the epoch of incredulity we had everything before us, we had nothing be. Globalization offers opportunities and challenges for our in many ways. It has created significant opportunities for manufacturing, agriculture, services and many others. Besides there has been significant inflow of foreign investment in to India. However, it highlights how globalization has its implications on India trade and investment. 1. Trade flow Except in the last few years after the advent of global financial crisis. India’s total merchandise trade increased over three- fold freedom US $ 252 billion in Fy 2006 to 794 billion US $ in FY 2012. India has moved up nine rung from 28th rank in 2006 to 19th rank in 2011. The major items of India’s exports are petroleum products , Gems and Juwellery Pharma products transport equipments, machinery and instruments and readymade garments. While the major items imports to India are petroleum crude, gold & silver electronic goods pearls, precious stones, Non- electrical machinery and organic, inorganic chemicals.
- 5. 5 It can be observed that from trends in the growth of India’s foreign trade that there has been a modest growth rate of exports and large increase in imports thereby widening trade deficit. 2. Dual investment Flow Foreign investment generally has two forms foreign Direct investment and the other is foreign portfolio investment. The difference between two lies only in the degree of influence. Since the integration of Indian economy to the international economic regime, there witnessed a sudden upsurge in the strategic thinking of India with regard to FDI. FDI is considered to be the engine of growth for the host countries. 3. Growing Indian Economy
- 6. 6 4. Technological and cultural impact of globalization Tele communication and soft ware industries are booming in India Entertainment sector in India has a worldwide market. Global food chainl restaurants has already found a hug market in the urban of India. Famous international brands (Amani, omega, Nike etc..) are investing in the Indian market with the changing of fashion statement of Indians. 5.1 Impact of Globalization in Agriculture in India. Agriculture acquired 17% of India’s GDP in 2008 60% of population Still depends on agriculture for their livelihood. Occupied 43% of India’s geographical areas Agriculture scientists are applying new technological and instruments in growing crops. Different state governments of India are taking initiative to literate the farmers. 6. Impact of Globalization on education in India. Literacy rate in India at present is 74.04%. Foreign universities are collaborating with different Indian universities. Year Literacy Rate Male- Female GapPerson Male Female 1981 43.6 56.4 29.8 26.6 1991 52.2 64.1 39.3 24.8 2001 65.4 75.8 54.2 21.6 2010 74.04 82.4 65.46 16.94 India’s problem with globalization
- 7. 7 Some section of people in India, basically poor and very poor, tribal groups, they did not feel the heat of globalization at all. They remain poor and poorest as they were increased gap between rich and poor fuels potential terrorist reaction. Ethical responsibilities of business has been diminished High growth but the problem of unemployment Price hike of every daily usable commodity. Conclusion Globalization seeks to achieve economic efficiency through competitiveness while seeking the broader objectives of economic and social development. The process of globalization has brought significant success for our country’s economy of exports and import. Flowing with globalization India is shining is nearly every prospects. India is getting a global recognition and slowly moving towards to become a major economic and political strength. Though the development is progressing rapidly still many basic problems like rural poverty corruption and political instability remained unsolved. The strategic objective of Indian policy makers at the outset of independence was the creation of a self sufficient and set- reliant economy and reduction of the high levels of poverty that existed, all within a one democratic political frame work, that is globalization. References 1. Acharya, sanker (199)- Economic consequences. 2. L.I. Abluwalia (199), :India’s Economic Reform and Development: Essay of Manmohan singh. 3. Jagadish Bhagwati (2000), “Review of Sachs- Varshney- Bajpai and La”, 4. http://www.ncert.nic.in