Globalization in India: a Dream to Destroy

According to Legal Services India, globalisation is defined as “A process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation and trade”. As the researcher can infer from the above definition, globalisation can have two distinct perspectives. One, the economic perspective involving FDI, trade, capital flows, technology transfers etc, whilst the second perspective is social and societal, i. e. the happenings in one globally integrated location in the world has an impact on other globally integrated locations (legalservicesindia. om, 2012). One such globally integrated location in the world which has felt these affects of globalisation is India. INDIA: A NEW AGE In 1991, under the guidance of P. V. Narasimha Rao and Manmohan Singh, India introduced its LPG policy i. e. Liberalization, Privatization, and Globalisation (Goyal, S, 1996). They followed the Washington Consensus model whilst doing so (Naim, M, 2000). At that time India’s economy was in shambles and LPG was the only feasible way out. With time we even saw that not only was this an emergency exit of sorts, it was also a stimulus for further growth (managementparadise. om, 2010). Globalisation led to foreign companies setting up shop in India, especially when it came to sectors like pharmaceutical, petroleum, and BPO’s. Furthermore we even saw advanced technology, information and investments flowing into our country (buzzle. com, 2010). Consumers enjoyed a wider range of products to choose from, whilst reaping the benefits of international quality. With economic proliferation and high GDP growth, India was emerging as a world power (indiastudychannel. com, 2010). FAULT LINES However, this growth was largely quantitative.Cracks soon began to emerge. With the growth of South East Asia via the alternate developmental model, the Washington Consensus model began to lose its sheen (Naim, M, 2000). Qualitatively, globalisation’s medicinal effects had worn off and its side effects became increasingly apparent. Foreign companies had begun to show their single mindedness in terms of capturing market share, and profits (buzzle. com, 2011). This led to a whole host of economic and social problems. Economically- where India was supposed to gain- India has seen rising inflation levels (theviewspaper. net, 2010).An increase in imports has impacted the exchange rates (rbi. org. in, 2010). Increased competition in the Indian market has also led to contraction of market share of local (particularly small and medium) enterprises. Such manufacturers, who were supposed to be one of the largest beneficiaries of this globalization wave, have faced difficulties in sustaining their growth. Cottage industries have had to stop manufacturing traditional goods and cater to only those required by MNC’s (indiastudychannel. com, 2010). Increased imports and more automated manufacturing have led to increasing unemployment.In fact, joblessness has increased from 6. 0 % in 1994 to 9. 4% in 2009 (tradingeconomics. com, 2010). Even India’s agricultural sector industry is losing out to imports (napcsyr. org, 2005). Environmental degradation has also played its part. MNC’s come to India to exploit its lax environmental laws, resulting in increased pollution (Najam, A, et al, 2007). Very recently we have also seen how the Indian economy is vulnerable to financial shocks. Although we have tight financial controls, courtesy the Reserve Bank of India (RBI), we have still had to dish out money from our coffers to pay the IMF.This could be considered as an indicator of the power of the Indian government. If the Indian government cannot control its globalised partners from making demands, how could we think that the government will protect its citizens? Therefore we see globalisation destabilising India’s anyway volatile economy (buzzle. com, 2011). Having highlighted the economic issues, let’s focus on the social impact. India for one began to notice a growing disparity among its rich and poor, which according to the Gini Coefficient stands at over 0. 3% (economist. com, 2007).As mentioned earlier, technological change was causing unemployment among unskilled labour (tradingeconomics. com, 2010). Exploitation on the other hand was more subtle. Rural land was being bought by MNC’s in the name of growth. This reflected in the growing landlessness of rural farmers. In 1987, only 35% of farmers did not have land, but in 2005 over 55% were landless (legalservicesindia. com, 2012). As is apparent, disparity in income levels is therefore one of the main impacts of globalisation (un. org, 2010). Although statistics show that poverty has reduced from 51% pre 1991 to 26% in 2007, this is far from the truth.Pre 1991 poverty was calculated at 1$ a day but now it’s calculated at 25 cents a day. This reclassification has been the key to reduced poverty, not globalisation. In fact, globalisation had increased real levels of poverty to 55% in 2007, whilst nominal levels fell (BBC Hard Talk, Youtube. com, 2011). This poverty has compelled rural Indians to migrate to the city, leading to the development of slums. For a class one city like Mumbai to have a population of 13million in slums is disgraceful (managementparadise. com, 2010). It just goes to show how uneven the developmental process has been.Moving on from poverty to other comparatively minor issues, we see a negative cultural impact in terms of lifestyle, food habits etc (international. ucla. edu, 2011). CONCLUSION Overall the researcher concludes that globalisation was handled by the government in a very poor manner. Recognising the fact that governmental flexibility was suppressed at the time of LPG, the researcher does not fault the government entirely. The blame must also lie with those international bodies like the IMF and the US government who formed policies as those stipulated by the Washington Consensus (Naim, M, 2000).However with a new age dawning, the calibration of globalisation as per the needs of the country and all its stakeholders is essential, much like that of what has happened in China. To conclude, the researcher is in concurrence with Thomas Friedman when he says “Globalisation can be incredibly empowering and incredibly coercive. It can democratize opportunity (like S-E Asia) and democratize panic (like India)” (globalenvision. org, 2003).

Leave a Reply

Your email address will not be published. Required fields are marked *


I'm Heidi!

Would you like to get a custom essay? How about receiving a customized one?

Check it out