Globalization And its Impact on Economy

GLOBALISATION & THE INDIAN ECONOMY

Economics Presentation.

WHAT IS GLOBALISATION?• It is the process of rapid integration or

interconnection between countries.

• MNCs play a major role in the globalization

process. • More and more good,

services, technologies, investments etc. are

moving around countries.

Web of GLOBALIZATION :

Factors that have enabled globalization

There are

2 factors…

1. Technology Rapid improvement in technology has been a major factor that has stimulated the globalization process.

This has made much faster delivery of goods across long distance possible at lower costs.

2.Liberalization of foreign trade and investment policy

Liberalization - the act of making less strict.

Tax on imports Is an example of trade barrier.

It is called a barrier because some restriction has been set up.

Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

The Indian government, after Independence, had put barriers to foreign investment.

This way considered necessary to protect the producers from within the country from foreign competition.

In 1991, the government decided that time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

Impact of globalization in

India Advant

ages

Globalization and greater competition among as- has been of advantage to consumers.

There is greater choice who now enjoy improved quality and lower prices for several products.

As a result these people today enjoy much higher standards of living than was possible earlier.

Increased Competition:

With globalization, companies have forayed into the developing countries and hence generated employment for them. It has given an opportunity to invest in the emerging markets and tap the talent which is available there.

Due to global nature of the businesses, people of developing countries too can obtain gainful employment opportunities.

Employment:

While discussing the effects of globalization, how can we forget about the impact of foreign trade on an economy.

Comparative advantage has always been a factor, even in during old times.

While trade originated in the times of early kingdoms, it has been institutionalized due to globalization.

Foreign Trade:

The world that we live in today is a result of several cultures coming together. Societies have become larger as they have welcomed people of other civilizations and backgrounds and created a whole new culture of their own. 

One of the most powerful effects of globalization is the spread of education. Today, you can move in the search of the best educational facilities in the world, without any hindrance. A person living in India can go to another continent for a new experience which he may not find in his home country. 

Spread of Culture & Education:

MNCs have increased their investments in India over the past 15 years, which means investing in India has been interested in industries such as cell phones , auto mobiles, electronics , soft drinks , fat foods or services such as banking in urban areas.

These products have a large number of well-off buyers. In the industries and services new jobs are created.

Impacts of Globalization:

Globalization is associated with all these spheres of daily life

Impact of globalization in

India Disadvant

ages

Uneven Wealth Distribution:

It is said that the rich are getting richer while the poor are getting poorer. In the real sense, globalization has not been able to reduce poverty. Instead it has led to the accumulation of wealth and power in the hands of a few developed economies. Therefore the gap between the elite and the underprivileged seems to be a never ending road, eventually leading to inequality.

Environment Degradation:The industrial revolution has

changed the outlook of the economy. Industries are using natural resources by means of mining, drilling, etc. which puts a burden on the environment. Natural resources are depleting and are on the verge of becoming extinct. Deforestation is practiced owing to the non-availability of land, thereby drastically reducing the forest cover. This in turn creates an imbalance in the environment leading to climate change and occurrence of natural calamities.

Loss of Culture:Conventionally, people of

a particular country follow its culture and traditions from time immemorial. With large number of people moving into and out of a country, the culture takes a backseat. People may adapt to the culture of the resident country. They tend to follow the foreign culture more, forgetting their own roots. This can give rise to cultural conflicts. 

Monopoly:Monopoly is a situation

wherein only one seller has a say in a particular product or products. It is possible that when a product is the leader in its field, the company may begin to exploit the consumers. As there exists no close competitors, the leader takes full advantage of the sale of its product, which may later lead to illegal and unethical practices being followed. Monopoly is disastrous as it widens the gap between the developed and developing countries.

Thank Ya!!

Jishan Ali.