globalization and its impact on india

8/3/2019 Globalization and Its Impact on India

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NURUKURTHI SATISHB080521EE

GUIDE:RATNA KUMAR


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The term globalization means internationalintegration.

General Agreement on Tariffs andTrade(GATT), led to a series of agreements toremove trade restrictions. GATT's successorwas the World Trade Organization(WTO),

which created an institution to manage thetrading system.

Exports nearly doubled from 8.5% of totalgross world product in 1970 to 16.2% in 2001.


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The term globalization has therefore, fourparameters:

Reduction of trade barriers to permit free flow ofgoods and services among nation states;

Creation of environment in which free flow of capitalcan take place among nation state;

Creation of environment, permitting free flow oftechnology; and

Creation of environment in which free movement oflabour can take place in different countries of theworld.


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Increased choices,

Greater potential for growth,

Increase international economies of scale, Greater employment opportunity,

Developing countries can export goods todeveloped countries and import goods at

cheaper cost,

Developing countries can raise capital.


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Increase in gap between the rich and the poor.

Dominance of global trade by the rich,northern hemisphere countries.

Lack of opportunities for the poor to be able tohave access to markets.

Exploitation of workers and growers.

Small and medium scale industries have threatfrom multinational companies.

Employment problem exist for short runperiod.


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In early 1990s the Indian economy had

witnessed dramatic policy changes.

The idea behind the new economic modelknown as Liberalization, Privatization and

Globalization in India (LPG)

LPG model of development was introduced in

1991 by the then Finance Minister Dr.Manmohan Singh.


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Public sector was opened to private sector.

Permitting private sector to set up industrial

units without taking a licence. Grant approval for direct foreign investment.

Greater autonomy was given to PSUmanagements and the Boards of public

sector companies.

The economy was opened to other countries

to encourage more exports.


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There are many areas to study but main areas

of interest are

Trade Imports and Exports

Foreign investment flow

Employment

Poverty and Inequality


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During period of 11 years (1995-2006) Indias merchandise exports increased at the rate of

13.3 percent per annum,

china increased at the faster rate of 18.6 percent. world average annual exports of 8 percent. India did benefit from globalization in increasing its

export growth rate. But Indias share in world merchandise exports

improved only marginally from 0.59 percent in 1995 to0.99 percent in 2006. Indias performance in service sector exports was

relatively much better, annual average growth of 18.2percent during the period.


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Exports rose from 5.8 percent of GDP in 1990-91 to 9.1 percent of GDP in 1995-96.

Imports increased from 8.8 percent of GDP in1990-91 to 12.3 percent in 1995-96. There is a deficit in Indian economy. Statistics clearly shows that western

countries took the advantage of globalizationthan India. a net positive balance invisibles has helped it

to wipe out the large trade deficit.


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Two forms of Foreign Investment Flow are

Foreign direct investment (FDI)

Foreign PortfolioInvestment (FPI)FDI is continuously increasing from the day of

globalization, its share in globalizationincreased from 24.2 percent to 60.8 percent

in 20 years.FPI is mostly because of software exchange

and it is volatile.


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We can say globalization decreased

employment chances.

Agriculture is neglected hence many becameunemployed.

Employment rate of growth of governmentjobs went negative during the period 1994-

2000.

Private job opportunities increased in a

slower phase.


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There is a big difference between urban and

rural salaries/wages.

Policies of globalization helped the alreadyindustrialized states much more than less

industrialized states and this combined withagriculture has been responsible for

inequality and poverty.


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Good political governance based on ademocratic political system, respect for

human rights, the rule of law and socialequality. Strong representative organizations of

workers and employers are essential for

fruitful social dialogue. Balanced Regional Development. Employment Guarantee Programme. Universal access to education.


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Thank you

globalization and its impact on india

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