Submitted By: Deeksha Bordoloi
Globalization in the everyday understanding refers to the growing inter-linkages and dependency found among world’s economies, cultures and people, brought about by cross- border trade in goods and services, technology and flows of investment, people and information in priority basis. It stands for the speedup of economy, movements and exchanges (of human beings, goods and services etc), which ofcourse leads to accelerated interactions between people and regions around the globe.
(Globalisation: Defination, Benefits, Effects, Examples- What is Globaisation?, 6 October,2020)
The entry of Globalization to our Indian Politico Economic scenario has heated up the integration of the Indian Economy into the International/Global Economic System. When the Indian Economy was in a major economic crisis in the year 1991, Globalization helped in uplifting the economy by affecting numerous dimensions such as Agricultural, Health, Industrial and many other factors. The introduction of Liberalization, Privatization and \Globalization (LPG) uplifted our shattered economy. (Ilnu) However, sooner or later Globalization started to drain the identity of our Indian Unique Politico Economic system in numerous ways. Loss of cultural identity, widening the gap between the rich and poor, non-recognition of domestic policies and market conditions, unemployment due to displacement of human labourers by machines etc. (Ilnu)
This article discusses in detail-the emergence of Globalization, its impact (both positive and negative) on the variants of the Indian system and the possible measure to balance the thin line.
Keywords: Globalization, Impacts, Economy, Polity, Identity.
GLOBALIZATION:LOOKING INTO THE CONTEXT OF THE TERM:
According to World Health Organisation , globalization is thoroughly defined as “ the increased interconnections and interdependence of peoples and countries. It is generally understood to include two inter-related elements: the opening of international borders to increasingly fast flow goods, services, finance, people and ideas; and the changes in institutions and policies at national and international levels that facilitate or promote such flows”.
We often relate globalization with either trade developments or financial exchanges, but in the real world globalization is a much wider concept. Some of its sub-branches are highlighted below-
1) Economic Globalization: stands for the upgradation and development in the field of trade and infrastructure of the systems within the framework of transnational players such as NGO’s, corporations etc.
2) Cultural Globalization : it stands for the integration of the cultures of the world with special interest towards the western culture. As reflected in food habits of KFC,MC Donald’s and dressing style of today’s era.
3) Political Globalization: implies the growing power and corresponding response of international organizations such as the UN or WHO, where governmental actions take place at a multilateral level platform and states act accordingly as multiple actors in a global system. (Globalisation)
1) Higher trade opportunities and exports in goods both between nations and within regions. It also leads to increase in transferring of capital which includes expansion of Foreign Direct Investment (FDI) by Trans-National Companies (TNC’s) and the rising influence of Independent Money Funds.
2) The World Trading System enabled to attract numerous New Nations such as- China and India joined the WTO in 1991, Russia joined the WTO in 2012. Globalisation is also characterised by increased levels of labour migration within and between countries.
3) Globalisation has made possible an increased and faster possible changes in the balance of world economic and financial powers transforming them from a developed to a emerging country/market, leading to the change in the epicentre of the gravity of the world economy. (Globalisation)
Major Drivers of Globalisation:
1) Technological Change: Globalisation has highly reduced the distance and time in trading
any item from one end of the earth to the other. This has been the key factor in knowledge
products using web technology.
2) Opening up of Avenues for Global Financial Markets to Flourish: Foreign Direct
Investment is made possible by this, by removing capital controls and opening up numerous
options for customers in various parts of the country.
3) Less Protectionism: Old forms of tariff rules and import licensing and foreign exchange
controls have given its way clear for globalisation to flourish worldwide. Borders have
opened up for smoother economic flow. (Globalisation)
MAJOR FACTORS CONTRIBUTING TO THE GROWTH OF GLOBALISATION IN INDIA:
Foreign Direct Investment (FDI) and increased trading of foreign companies and corporations has resulted in greater integration of production and markets across countries, which is indeed the product of Globalisation spreading its tentacles in numerous areas.
The major factors responsible for the spread of Globalisation in India are as follows:
1)Technology : Rapid improvement in technology has accelerated the globalisation process in India.
2)Trade Barriers: Trade barriers have been uplifted by the government on numerous imports, enabling multiple multinational countries to invest in Indian markets.
3)Liberalisation: With the outset of the New Economic Policy and removal of restrictions on trade avenues, businesses are allowed to make decisions without restrictions on what they wish to import or export. (Globalisation and Factors Responsible for Globalisation)
To ensure smooth functioning of Privatization, Government has taken the following steps:
1) Sudden Reduction in the number of public sectors industries and opening up opportunities for private industries to imprint their mark on the world economy.
2) Monopolies and Restrictive Trade Practices Act (MRTP Act) and Foreign Exchange Regulation Act are lifted.
3) Government has disinvested a part of its share in public sector units (PSUs) and the private sector now handles a few state governed services.
4) Foreign Investors and Multinational Companies were allowed to invest capital and establish industries in India. Government has also lifted up al labour restrictions to ensure the smooth establishment of globalisation in India. (Globalisation and Factors Responsible for Globalisation)
5)The entry of Internet in our Indian Society has increased e-commerce enabling firms of all sizes to compete more easily in global markets . The internet enables anyone to shop online from anywhere around the clock. It gives easier access to the foreign markets. (Maziar Homayounneyad & s School)
India is rising rapidly in the global market, which was once a third world country, has now become the fifth largest economy in terms of GDP and is second to the U.S.A in terms of paved highways. India today accounts for being the world’s largest producer of milk and among the top five producer of cotton, tea, coffee, spice, silk etc , in which Globalisation has played an
HIGHLIGHTING THE PROS AND CONS OF GLOBALISTION ON THE OVERALL NUCLEUS OF OUR INDIAN POLITICAL ECONOMY:
India is amongst the countries which has succeeded enormously after the emergence and implementation of Globalisation. The growth of foreign investment in the field of retail, corporate and scientific sector is really commendable. In recent years, Globalisation has increased its impact due to growth of global trade, doctrines and culture.
It has intensified wisely the economic integration of the politico-economic market as a whole. (India:Factors of Globalisation and Growth)
1) Increase in Employment/Job Avenues: The introduction of Special Economic Zones (SEZ), has enormously increased the job opportunities available in India. Cheap Labour, Export Processing Zones (EPZ) etc attracts big companies of the West to outsource employees from other region and increase the employment opportunities already available.
2) High Standard of Living: Globalisation has increased the standard of living of the citizens of India in numerous ways. This change is observed in the purchasing behaviour of customers or what we call shopping in the modern world and opening up of private firms. (Globalisation)
3)Superior Technology: Another significant contribution of Globalisation is the availability of superior technology. From the cars we use, to the online platforms we have been dependent on specially during Covid-19 , to the use of smart phones etc is the by- product of a globalise
While Globalization has benefited India in numerous ways, there are a few criticisms against it too. Disadvantages of Globalization include-
1)Unequal Economic Development: Globalization has hightened the level of difference in the economic status quo of both countries in the international arena and has widened the gap between the rich and the poor, with only a few handy people being able to enjoy the benefits of a globalised world.
2) Lack Of Local Firms/Corporations: The various policies through which globalisation operate allows only companies which have the capacity to operate their supply chains through their resources or infrastructure in hand to benefit from it. But in the process growing local firm loses all it desires for in this unhealthy competition of the better offs. A local cloth producer in India needs to compete with other multinational companies worldwide.
3) Causes Job Displacement: Globalisation doesn’t provide equal job opportunities for all, nor does it increases it. Instead it causes loss of jobs for many, by distributing job opportunities from a high-cost country to a lower in the ladder. (How Globalisation works: Pros adn Cons of
Globalisation , Nov 8, 2020)
We can’t move forward by going backward. It doesn’t mean we should keep doing the same old things. Although globalisation has accelerated the growth of our Indian Economy, but at the same time it has also brought about seamless job losses. (Gary Pinker)
To summarize, the process of globalization has changed the industrial patterns and social life inter-linkages of global people and it has immense impact upon our global trade system. No doubt, India is gaining international recognition and strengthening in economic and political areas. But at the same time government should also initiate measure to reduce the negative impacts of globalisation, specially upon the poor generation.
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