The influx of technology has changed the way of human life. In modern times, everything is accessible within the range of a single click. However, this was not the case 2-3 decades ago. The world was not open, and cross border trading and investments were not plenty.
However, the introduction of globalisation changed this concept. It promoted foreign investments and helped countries to prosper rapidly. Developing countries like India stimulated its economic growth via the benefits of globalisation. Thus, globalisation and the Indian economy has tightly knitted connection.
The word 'globalisation' represents the integration of a national economy with the global economy. It portrays the interdependence of economies, and cultures, various countries. Resultantly, it increases cross-border trade and investments and exchange of ideas, technologies and increases the flow of information.
Globalisation as a term may be new, but countries have built economic relationships with each other for centuries. This particular term gained popularity in recent years, primarily due to the advent of technologies.
The introduction of globalisation changed Indian society drastically. Globalisation and the Indian economy became interrelated, and next economic policies displayed a direct influence of this change.
Government shaped administrative policies according to it as well. The aim was to promote business opportunities in this country, generate employment, and attract global investments.
Globalisation of Indian economy also witnessed an impact on its culture. Introduction to other societies and their norms brought various changes to the culture of this country as well.
Furthermore, India is one of those countries that attain economic success after the implementation of this concept. The introduction and growth of foreign investment in major sectors of this country fuelled the rise of the Indian economy even further.
During this discussion of globalisation and Indian economy, a name that deserves special mention is former Finance Minister of India Dr Manmohan Singh. He was at the forefront of this movement and ensured a successful implementation of it. He also drafted the economic liberalisation proposal. Here are some quick statistics that will reflect the immediate effect of globalisation on Indian economy –
After 1992, the average annual growth rate of GDP was 6.1%.
In 1993-94, the export of India recorded an exponential growth of 20%. Also, in the following financial year, it was at a healthy 18.4%.
In 1995, the total export value of computer services was about ＄11 billion, and in 2015 it recorded around ＄110 billion.
These statistics prove globalisation and the Indian economy brought positive changes and fast-tracked India's economic growth.
The concept of globalisation in India resulted in the following benefits that helped to transform the Indian economy and the country as a whole –
The introduction of globalisation brought an influx of foreign investments and the favourable policies of the Indian government also helped companies to set up units in this country. This has resulted in new employment opportunities. Also, access to low-cost labour prompted foreign businesses to outsource work to companies operating here.
In a nutshell, the employment opportunities in this country rapidly progressed after globalisation and Indian business merged.
As a direct effect of more employment opportunities, the per-capita income of Indian households also increased after globalisation.
Resultantly, it altered their standard of living and improved the purchasing power of an average Indian. This gave birth to a new middle-class and recorded an increase in demand for consumer products in this country.
Globalisation and the Indian economy provided Indian consumers with a plethora of choices. Indian, as well as foreign manufacturers, brought various products of the same kind, and consumers got a chance to select their preferred one.
This increase in competition prompted manufacturers to create better products at a much lower price point.
A noticeable benefit of globalisation is that it provides access to many untapped markets with huge potential. The globalisation of Indian economy means it allowed foreign companies to operate in the Indian market. Also, Indian businesses got an opportunity to operate on a global scale. As a result, the import-export sector in Indian saw an astonishing rise after 1991.
Globalisation and the Indian economy are a vital chapter of economics. It offers an insight into how this concept transformed India as a country and paints a clear picture of globalisation and the future of the Indian economy. On the website of Vedantu, one of the leading e-learning platforms of this country, individuals can find relevant study materials. Also, they can sign up for live online classes and doubt clearing sessions to improve their preparations.
1. What are the Elements of Globalisation?
Ans. There are five elements of globalisation, these are foreign direct investments, distribution of technology, international trade, capital market flow, and migration. All of these elements play a crucial role in this concept. International trade allows companies to move their products freely across the globe. Foreign direct investments allow organisations to invest in the developing market, which helps with the distribution of technology and migration of labour. When this investment becomes successful, it increases capital market flow and strengthens an economy further.
2. Who Coined the Term Globalisation?
Ans. Theodore Levitt coined this term globalisation. He was a professor at Harvard Business School. His marketing insights during the 1960s gained attention. In his write-up in Harvard Business Review titled 'Marketing Myopia', he criticised business executives for thinking too narrowly of what their organisation does. His idea was that due to the advancement of technology and social behaviour, businesses were becoming global. This is the reason why companies like Coca-Cola can send the same product worldwide.
3. What is the Effect of Globalisation on Education?
Ans. The effects of globalisation are not restricted to economic activities; it has transformed the education sector as well. People living in remote areas, who did not have any access to education can now study and complete their degrees easily. As a result, companies now have access to a well-trained and skilled workforce.