POSITIVE AND NEGATIVE EFFECTS OF GLOBALISATION ON INDIA

Prelude:

As India is entering into the second decade of Globalization, this essay attempts to critically analyze the effects- both positive as well as negative that Globalization has brought into the country, mainly in the spheres of economy, trade and commerce. Globalization is taken here as the sharper and continuous integration of the world economy, while liberalization refers to deregulation and decontrolling of national economies.

The history:

Shedding its protectionist regime and putting and end to the so called ‘License Raj’, India forged into the foray of globalization in the year of 1991, under the able direction of then Finance Minister Mr. Manmohan Singh. India has been traditionally following the socialist pattern of development with heavy intervention and control of the Government in all spheres of economic activities till the beginning of 1990s. These introvert and protectionist policies of the Government effectively put shackles on the entrepreneurial traits of the Indian corporate and the over pampered companies were simply concerned to save their turf from their equally pampered domestic competitors, thus making a typical oligopolistic economic system inside the country. (Bidwayi, Praful, The right Perspective, Front Line, 21 Dec 2009).

Positive effects:

The opening up of the economy resulted in the pouring of technologies, Ideas and opportunities along with immense competition from foreign companies, which rushed in to grab a pie in the lucrative 1000 million plus market of the country. The initial dilemma lasted for hardly 3-4 years and the educated Indians and the Corporate India were especially quick to respond to both the threats and opportunities that the globalization unveiled before them.
India received a great acceleration in the rate of economic growth, from 3.4% of the pre-liberalization period to a whopping 7+ percent year on year since last 6 years. (Nayar Baldev, 2006)
From being a predominantly agrarian economy, India made a paradigm shift. Presently agriculture contributes only 17.2% of the GDP of the country, while Industrial and Service sectors contributing 29.1% and 53.7% respectively. (Dutt and Sundaram, 2010)
The country’s economy got stabilized like never before. In 1991, when the whole process of globalization started, India was in the verge of a severe foreign exchange crisis. India’s present condition as far as foreign exchange reserve is 200 times better than that of 1991.

The Negatives:

The globalization exposed the Indian consumers to the concept of consumerism, which they never experienced before. The amount of resources they can afford to consume has grown up tremendously and if the Indian middle class starts to consume at the rate that the US and UK citizen are consuming at present, the resources available in the earth in no means would be sufficient to meet their demand. The increased consumption increased the degradation of natural resources and pollution as well.
The Great Indian divide, which marked a clear line between the richer India and the poorer Bharat grew bigger than ever before. The failure of central planning to enable the deprived millions to reap the benefits of globalization caused greater resentment among its population and that resulted in the growth of militant extremism inside the country.