Globalisation means assimilation of economics and societies through the flow of information, ideas, technologies, goods, services, capital, finance, and people. The real meaning of globalisation in a broad sense is connectivity in all aspects of human life. It is the process where the businesses or other organizations expand international authority or start operating on an international scale.
Globalisation has started from many thousands of years ago when people and corporations were buying and selling across the lands at great distances. In the middle age, Central Asia connected with China and Europe through the famed Silk Road. After the Second World War II and during the last two decades, the government of many countries has adopted free-market economic systems. They increased their own productive potential immensely and created innumerable new opportunities for international trade and investment.
The governments have reduced all barriers to commerce and established new international agreements to promote trade in goods, services and investments. These beneficial measures gave rise to opportunities for global trade. With these new opportunities in the foreign markets, corporations established new factories and started production and marketing alliances with foreign partners. Hence, Globalisation is defined as an international industrial and financial business structure.
The frontiers of the state with increased confidence on the market economy and renewed policies in the private capital and resources, a process of structural adjustment spurred by the studies and with the support of the World Bank and other international organizations have started in many of the developing countries. Globalisation has also brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer has promised to improve their productivity and higher standards.
At the same time, globalisation has also created challenges like growing inequality across and within nations, instability in the financial market and environmental deterioration. Globalisation is a fascinating exhibition that can be understood as global systems of competition and connectivity. It has created tough competition among countries and global corporations.
The British Colonial rule had destroyed the self-sufficient economy of India and left India to be the poorest Independent country. Our first Prime Minister gave preference to a mixed economy to boost the economic condition of the country. Public sectors were set up along with the private enterprises but because of the socialistic model of the economy, the new strategy did not produce profitable results. Due to this a number of public sectors became sick and the growth rates of production began to fall.
During that time, the poverty of the people in India was increasing at an alarming rate and because of low domestic savings and acute balance of payment crisis, there was no adequate capital for investment. During that time of crisis, the Prime Minister PV Narsimha Rao introduced the policy of liberalization, privatization to overcome the financial situation.
India opened up to globalisation after the economic policy of 1991 came into force. Mounting debts and pressure from the International Monetary Fund drove the nation to go global. The process of globalisation has been an integral part of the recent economic growth of India. Globalisation has played a very significant role in the growth of export leading to the expansion of the job market in India. One of the major sectors of globalisation in India has been in the growth of outsourced IT and Business Process Outsourcing services. There has been an incredible increase in the number of skilled professionals in India employed by domestic and foreign companies to cater service to the customers globally especially in the USA and Europe.
There was not a doubt that globalisation in India brought a monumental change in the living standards of the people. People in India realized many benefits from globalisation. Establishment of multinational companies generating billions of jobs and access to umpteen numbers of brands and increase in the forex reserves of the country took India at a higher platform globally. Despite this monumental change in the economy of the country, India also faced the challenges of severe competition from the foreign market and the domestic producers started fearing marginalization and pulverization because of the better quality products produced by the foreign producers.
Globalisation had both desirable and undesirable consequences for India and the world. Even though it has accelerated progress in some countries, it has also widened the gap between the rich and the poor.
The impact of globalisation has been both positive and negative on the entire world but we can surely hope for more advancement in the global economy due to this process.
Q1. What Do You Understand By Globalisation?
Ans. Globalisation means assimilation of economics and societies through the flow of information, ideas, technologies, goods, services, capital, finance and the people. The real meaning of globalisation in a broad sense is connectivity in all aspects of human life. It is the process where the businesses or other organizations expand international authority or start operating on an international scale.
Q2. How Did Globalisation Help India to Improve the Economic Conditions?
Ans. Globalisation generated umpteen employment opportunities to people of India by establishing multinational companies. The policy of liberalization and privatization invited foreign traders to do business with India. This has increased the inflow of men, money, material, labour, technology, etc. from foreign countries to India. People have access to foreign brands and the living standards have improved drastically.
Q3. How is Globalisation a Threat to Domestic Producers?
Ans. The domestic producers fear marginalization and pulverization because of the entry of foreign and better quality products.
Q4. Which is the Major Sector that Has Grown Incredibly Due to Globalisation?
Ans. Business Process Outsourcing has grown incredibly due to globalisation.