india's globalization

8/4/2019 India's Globalization

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India's

GlobalizationBy:

Lara Mejia Alejandro

Luis Raul Lopez Rubio


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India's Globalization

India contains about a fifth of the

population of the developing world;

indeed, some of its constituent states

have larger populations than most

developing countries. The study brings to

bear abundant quantitative and

qualitative data on the analysis.


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The study delineates three broad periods in

Indias recent economic history:

(1) the period prior to liberalization (195657through 197475), characterized as one of

autarky and command and control

economy;

(2) the period of intermittent incrementalliberalization(197576 through 199091); and

3) the period after the paradigm shift to an

outward-oriented economic policy in 1991.


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The study finds that, whatever the

consequences of globalization elsewhere

in the developing world, the case of the

critics has little merit when examined in

relation to the Indian experience. The

Indian case does not bear out the

predictions of the critics.


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1. Instead of economic stagnation, India

has seen acceleration in its average

annual rate of economic growth, from 3.4

percent in the pre-globalization period to

about 6 percent. That figure may soon

reach 7 percent.


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2. Instead of deindustrialization, there hasbeen industrial growth and, indeed,

acceleration in the industrial growth rate.The average annual rate of industrial growthhas jumped from 5.2 percent during theperiod of autarky to 7.0 percent after 1991.

At the last rate, the value of manufacturingdoubles about every ten yearsnot exactlydeindustrialization.


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3. Instead of denationalization, business in

India is now more competitive and is

venturing forth into the global market.

Increased imports and the entry of foreign

multinationals have not swamped it.

Essentially, India is master of its own

economy.


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4. Instead of economic destabilization,the globalization of Indias economy has

led to fewer economic crises. The periodof economic autarky before globalizationwas essentially one long, enduring crisis.Since the paradigm shift to economic

liberalization in 1991, there has been amarked absence of economic crisis inIndia.


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5. Instead of impoverishment, India hasseen a long and unprecedented period

of welfare enhancement. The periodbefore globalization featured high levelsof poverty. There has been a seculardecline in poverty since 1975and

inequality has not increased much. Ofmore concern is the matter of growingregional disparities in India.


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India has been a significant beneficiary of

the globalization process. Rather than

support the case of the critics, Indias

experience strongly repudiates those

critics.


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The policy conclusion that flows from the

experience is that India should, in general,

be more open to globalization in the

interest of sustaining the acceleration in

growth and, therefore, the welfare of its

people.


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The agenda for reform to this end is well-

established in the reform community.

What is required is more energetic action

to implement it, but there are, of course,

constraints in doing so that are built into

the larger political system.

india's globalization

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