What are the economic implications of globalisation? How has globalisation impacted on India with regard to this particular dimension?
The process of globalisation has had its economic impact more so in terms of a wider market for consumer goods that it has created and in terms of the benefits it offers to the people.
a. Globalisation has expanded the role of international institutions like the World Bank and the IMF in determining and influencing the economic policies of the countries.
b. It led to a greater flow of goods, services and capital resulting in increased trading activities among the nation states.
c. It has resulted in the relaxation of trade barriers leading to greater and free flow of commodities.
d. It has encouraged foreign investments. For example, it has resulted in the MNCs setting up factories and production units and purchasing lands and assets. This has resulted in the greater integration of markets and countries.
e. Globalisation has led to a greater exchange of ideas and beliefs, increased migration of people and growth of electronic media. Internet also has contributed in the making of more informed citizenry.
f. It has increased the choice for consumers in terms of a wide range of goods and services being offered to them.
g. It is argued that globalisation has led to an economic growth with the MNCs providing greater employment opportunities.
h. It has resulted in the inflow of foreign capital and investment.
But, on the other hand, it is widely contested as to what is so global about globalisation as it has not had similar impact everywhere. Rather, it has created disparities among the people of the world.
a. Globalisation has increased inequalities and has drastically reduced the welfare activities of the states.
b. There have been reductions in states’ expenditures in education, health and state-led subsidies.
c. Globalisation had its worst impact on the poorer countries that argued for fairer globalisation so that its benefits reach them all. Critics have associated globalisation to re-colonisation as the poorer countries have to adhere to the norms laid down by the IMF and the World Bank, which are, in turn, controlled by the capitalist countries like the US.
d. Globalisation has impacted the agrarian economy where the government, in an attempt to create SEZs, has acquired the lands of poor farmers without reasonably compensating them.
The economic impacts of globalisation are as follows:
a. Globalisation has brought about an increased inflow of foreign capital; it has widened the choice for consumers.
b. MNCs have provided employment opportunities to the masses, and the local companies supplying raw materials to these industries have also prospered.
c. Globalisation has also created opportunities for the new companies providing services, particularly those involved in offering IT services. The Indian companies today provide a host of services like data entry, accounting, administrative and engineering, which are exported to the developed countries.
However, on the other hand
a. Many small manufacturers and small scale industries had to shut down because of their inability to cope with the foreign brands, thereby creating unemployment.
b. Globalisation has impacted the agrarian economy where adequate protection is not given to the farmers.
c. Growth of MNCs has increased the inflow of foreign goods that have posed fierce competition to the local industries.
d. Globalisation has instead created a class of people who indulge in lavish consumerism.
e. It has resulted in regional disparities as the backward areas suffer and get raw deal. They are generally not considered for investments and continue to remain neglected.