Globalization – Effects in India- J K Sachdeva
Shivangi Padhi
1) Economic and Trade – Field Globalization helps developing countries to deal with rest of the world increase their economic growth, solving the poverty problems in their country. In the past, developing countries were not able to tap on the world economy due to trade barriers. The developed countries were able to invest in the developing nations, creating job opportunities for the poor people. For example, rapid growth in India and China has caused world poverty to decrease (blogspot.com.2015). It is clear to see that globalization has made the relationships between developed countries and developing nations stronger, it made each country depend on another country. s. However, countries like Africa still have the highest poverty rates, in fact, the rural areas of China which do not tap on global markets also suffer greatly from such high poverty (blogspot.com.2016).
2) Education and Health Systems- Globalization contributed to develop the health and education systems in the developing countries. We can clearly see that education has increased in recent years, because globalization has a catalyst to the jobs that require higher skills set. In addition, globalization helped doctors and scientists to contribute to discover many diseases, which spread by human, animals, and birds, and it helped them to created appropriate medicines to fight these deadly diseases. For example, HIV/ADIS, swine flu and birds’ flu whole world know about these diseases, and they know how to avoid it. According to the World Bank (2004) “The AIDS crisis has reduced life expectancy in some parts of Africa to less than 33 years and delay in addressing the problems caused by economic”. Another drawback of globalization is, globalized competition has forced many minds skilled workers where highly educated and qualified professionals, such as scientists, doctors, engineers, and IT specialists, migrate to developed countries to benefit from the higher wages and greater lifestyle prospects for themselves and their children. This leads to decrease skills labour in the developing countries.
3) Globalisation and Poverty- Globalisation in the form of increased integration though trade and investment is an important reason why much progress has been made in reducing poverty and global inequality over recent decades. But it is not the only reason for this often-unrecognised progress, good national polices, sound institutions and domestic political stability also matter. Despite this progress, poverty remains one of the most serious international challenges we face up to 1.2 billion of the developing world 4.8 billion people still live in extreme poverty. But the proportion of the world population living in poverty has been steadily declining and since 1980 the absolute number of poor people has stopped rising and appears to have fallen in recent years despite strong population growth in poor countries. If the proportion living in poverty had not fallen since 1987 alone a further 215million people would be living in extreme poverty today. India must concentrate on five important areas or things to follow to achieve this goal. The areas like technological entrepreneurship, new business openings for small and medium enterprises, importance of quality management, new prospects in rural areas and privatisation of financial institutions. The manufacturing of technology and management of technology are two different significant areas in the country. For example food processing and packaging are the one of the area where new entrepreneurs can enter into a big way.
4) Export and Import – India’s merchandise export in 2021-22 (April-January) was USD 335.44 billion, an increase of 46.53% over USD 228.9 billion in 2020-21 (April-January) and an increase of 27.0% over USD 264.13 billion in 2019-20 (April-January). Many Indian companies have started becoming respectable players in the international scene. Agriculture exports account for about 13 to 18% of total annual of annual export of the country. According to the provisional data, India’s agricultural products exports in 2022-23 increased by 16% to USD 17.43 billion from USD 15.07 billion over the same period of the last fiscal. The United States also posted its best export year ever in 2022 with international sales of U.S. farm and food products reaching $196 billion, an increase of 11% from the previous record set in 2021. Marine products in recent years have emerged as the single largest contributor to the total agricultural export from the country accounting for over one fifth of the total agricultural exports. Cereals (mostly basmati rice and non-basmati rice), oil seeds, tea and coffee are the other prominent products each of which accounts for nearly 5 to 10% of the country’s total agricultural exports.
5) Culture Effects – Globalization has many benefits and detriment to the culture in the developing countries. Many developing countries cultures has been changed through globalization, and became imitate other cultures such as, America and European countries. Before globalization it would not have been possible to know about other countries and their cultures. Due to important tools of globalization like television, radio, satellite, and internet, it is possible today to know what is happening in any countries such as, America, Japan and Australia. Moreover, people worldwide can know each other better through globalization. For example, it is easy to see more and more Hollywood stars shows the cultures different from America. For example, we can see there is more and a biggest opportunity for people in both developed countries and developing countries to sell as many goods to as many people as right now, so we can say this is the golden age for business, commerce, and trade.
6) Impact on India- India opened the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. The new policy regime radically pushed forward in favour of a more open and market-oriented economy. Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing regime, reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and change over to market determined exchange rates. Over the years there has been a steady liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors.
7) GDP Growth rate- The Indian economy is passing through a difficult phase caused by several unfavourable domestic and external developments; Domestic output and Demand conditions were adversely affected by poor performance in agriculture in the past two years. The global economy experienced an overall deceleration and recorded an output growth of 2.4% during the past year growth in real GDP in 2001-02 was 5.4% as per the Economic Survey in 2022-23. The performance in the financial year 2022 is 8.7%.
8) India Global- The liberalisation of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates, which picked up from 5.6% in 1990-91 to a peak level of 77.8% in 1996-97. Growth rates have slowed down since the country has still been able to achieve 5-6% growth rate in three of the last six years. Though growth rates have slumped to the lowest level 4.3% in 2002-03 mainly because of the worst droughts in two decades the growth rates are expected to go up close to 70% in 2003- 04. A Global comparison shows that India is now the fastest growing just after China. This is major improvement given that India is growth rate in the 1970’s was very low at 3% and GDP growth in countries like Brazil, Indonesia, Korea, and Mexico was more than twice that of India. Though India’s average annual growth rate almost doubled in the eighties to 5.9% it was still lower than the growth rate in China, Korea, and Indonesia. The pickup in GDP growth has helped improve India’s global position. Consequently, India’s position in the global economy has improved from the 8th position in 1991 to 4th place in 2001. When GDP is calculated on a purchasing power parity basis
9) Globalization – Globalization is the new buzzword that has come to dominate the world since the nineties of the last century with the end of the cold war and the break-up of the former Soviet Union and the global trend towards the rolling ball. The frontiers of the state with increased reliance on the market economy and renewed faith in the private capital and resources, a process of structural adjustment spurred by the studies and influences of the World Bank and other international organizations have started in many of the developing countries. Also, Globalisation has brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer hold out promises improved productivity and higher living standard. But globalization has also thrown up new challenges like growing inequality across and within nations, volatility in financial market and environmental deteriorations. Another negative aspect of globalization is that a great majority of developing countries remain removed from the process. Till the nineties the process of globalization of the Indian economy was constrained by the barriers to trade and investment liberalization of trade, investment and financial flows initiated in the nineties has progressively lowered the barriers to competition and hastened the pace of globalization.
10) Where does Indian stand in terms of Global Integration-
India clearly lags in globalisation. Number of countries have a clear lead among them China, large part of east and far east Asia and eastern Europe. Let’s look at a few indicators how much we lag.
References
“Globalisation And Its Impact on Indian Economy: Developments and Challenges”, 1. Globalisation and Poverty: Centre for International Economics, Australia. 2. WIDER ANNUAL LECTURE 6: Winners and Losers over two centuries of Globalisation: Jeffery G. Williamson. 3. Globalisation Trend and Issues – T.K. Velayudham, Page 3, 66. 4. Globalisation and India -Lecture: Prof. Sagar Jain, University of N. Carolina. 5. Repositioning India in the Globalised World – Lecture: V.N.Rai. 6. Globalisation and India’s Business prospectives – Lecture – Ravi Kastia. 7. “Globalisation and Liberalisation” Prospects of New World Order – Dr.A.K. Ojha, Third Concept – An International Journal of Ideas, Aug 2015. 8. The Indian and Global Business – Jan 2014, Page 30. 9. Globalisation: Imperatives, Challenges and the Strategies, Page 39