Impact of Globalization on Indian Economy
In Indian’s context, globalization implies conducting substantial programs for import liberalization by changing from quantifiable restraints to import duties and trade tariffs, allowing Indian firms to enter into foreign collaborations as well as inspiring them to establish joint ventures internationally, removing obstacles and constraints to the entry of multinational corporations in India, and exposing the economy to overseas investment by offering services to international firms to put their funds in diverse areas of Indian economic activities ("Impact of Globalization on Indian Economy, 2"). Focusing on this definition, the idea of globalization has been described with the major reforms of the Indian policy of 1991. The process of Indian globalization has yielded both negative and positive results on diverse sectors of the economy.
Steps Towards Liberalization, Privatization, and Globalization (LPG model) In July 1991, Indian economy was in an awful crisis, when the annual rate of inflation had climbed to 17%; reserves on foreign currency had dropped to around 1 billion bucks; NRIs together with foreign investors began doubting the economy; the country was losing much of its funds through foreign investment and chances of not repaying back the loans were high; and monetary shortfall was at its extreme and had become unbearable ("Impact of Globalization on Indian Economy, 1"). In conjunction with this local bottlenecks, a number of unanticipated changes cleared the economies of countries in Southeast Asia, Eastern Europe, Latin America, and Western almost at the same period. As said by Malik (2), through Non-Resident Indian Scheme (NRIs), an international service and policy for overseas investors, NRIs have equal previliges.
Besides, the government has broadened some franchises particularly for foreign corporate firms and NRIs with over 60 percent stake by NRIs. Other measures included the ban of the MRTP Act which required an approval before expanding capacity of firms, the abolition of quantitative restrictions on imports, industries set aside for the public sector were thrown open to private involvement in which only 3 industries are now reserved for the public sector, major restructurings in the insurance industry, capital markets, and in the banking such as introduction of foreign-private sector completion and deregulation of interest rates, and a decrease of the high customs tariff from almost 300 to 30% rate that is currently used (Malik, 2). Effects of Globalization on Indian Economy In his book, “Tale of Two Cities” Charles Human Dickens starts with a vivid description of the oppositions of the seasons: it was the age of foolishness, it was the age of wisdom; we had all we wanted, we had nothing before us; it was the epoch of incredulity, it was the epoch of belief; and it was the worst of times, it was the best of times (Dickens, 1859).
Currently, we can too echo the tale of two Indian citizens: they have worst of the periods, they have the best of periods. Globalization has aided farmers to fetch new market in the promotion and marketing of farm's produce thus boosting the agricultural exports. The encouragement of large retailers from foreign nations to India has too favored the farmers who toil so much to feed the country. These farmers are offered good procurement price and a regular market for their agricultural produce. Again, electronic commerce has played a crucial role in the post-production practices including sales and marketing. Another by-product of globalization is industrial development due to the discovery of complex fertilizer and farm machinery among other things. Also, due to its demographic factor as a young nation, India attracts major companies to invest in the region.
More so, there's a seeming trend towards many government-aided schemes and rapid urbanization to assist the general public obtain necessary skills so as to be employed more. Relaxation of many norms for performing jobs by the government has seen the establishment of schemes such as Digital India, Skill India, and Make in India. Tons of Indian companies have invested internationally and have signed different agreements including mergers and acquisitions as well as joint ventures among others thus increasing their competitiveness across the world ("Globalization: Meaning and Impacts on Indian Economy - General Knowledge Today, 2"). Reduction of investment licenses and norms has drawn large amounts of investment from international countries particularly in electrical equipment, services, and telecommunications. The financial industry has been changed to a highly dynamic from a conservative outlook one by way of the development of many new financial institutions and regulatory bodies.
Due to the competition, technological developments, and large-scale market shifts, the entire industry is undergoing apparent transition. Products and structures of banking have become more efficient and streamlined. So as to live up to the sophistication of procedures imposed by the international banks, local banks have embraced a new work culture ethic ("Globalization: Meaning and Impacts on Indian Economy - General Knowledge Today, 2"). d) Other Impact i) Positive Impact There has been an increase in the growth of Gross Domestic Product of Indian from 5. 6% to 2. 7 in 1999 to 2000 through 3. 0% during 2004-2005 (Dollar, 145). The number of unemployed in real figures over those periods stood at 9. 5 and 13. The finance minister, Chidambaram, in his 2007-2008 Budget speech, proposed to make financial service the next growth avenue in the area and that Mumbai is promoted as a global financial centre.
Mumbai city has 54% slums out of its 13 million population. It is approximated that around 200 new families enter Mumbai daily and settle in a slum colony. 45% of the 14 million population live in slums, undeveloped rural parts, unauthorized colonies, and JJ clusters (Dollar, 167). Besides being the capital of slums in India, it was now to be made the capital of slums across the world. Even with rigorous growth in service and manufacturing industries as well as a profound overflow and inflow of foreign reserves, agriculture remains to be the largest sector offering up to 60% job opportunities of the country's workforce. A country's welfare ought to be founded on advancement from the bottom, it does not percolate from the top. Enablers of Globalization The globalization process has been stimulated through rapid development of technology.
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