5 Marks Each

Question

What is Globalization? Explain the process of Globalization in India.

Vidyadip · Accepted Answer

* Introduction : * The Growth rate of merchandise export of India is double than the rest of the world during 1995-2010 because of the process of the globalization in India. * The Service sector has played an important role. * The exports of software through outsourcing played a major role in this process. * During this period the import growth rate is higher than the export growth rate. * To compete with the foreign industries, local industries has to improve the use of technology. * This has increased the quality of the product and use of technology. * In India, due to process of globalization economic growth rate is increased but employment growth rate is not that much increased. * Because of latest technology employment opportunity is not that much created. * Because of free trade policy, small and cottage industries are shut-down step by step. * Globalization has increased the inequalities between income and wealth. * There is critical situation of poverty due to inflation. * Globalization provides job to skilled employees but employment of unskilled employees are striped. * Experience of Globalization in India * Import—Export licensing policy was made simpler and easy. * There has been absolute reduction in import duties but still in comparison to other countries. * The rates are high e.g. in 1991-92, there was average 72.5 % import duty which was gone down to 24.8 % in 1996-97. * But trends of world depression were increased and the policy of increasing import duty was implemented. * India became member of World Trade Organization in 1995 which means perpetual by its rules of free world trade. * Introducing convertibility of Indian rupee into other currencies at market rate by gradually reducing conversion at the official rate. * Thus, value of our currency is determined by trade we have done. * There was sector wise ad systematic increase in foreign direct investment in India. * Investors and producers in India were allowed to increase financial collaborations with their foreign counterparts, and remove the discriminating policy. * State became more indifferent in policy matters between domestic and foreign investor and producer. * In that matter, undue protection for Indian investors against foreign competition was lifted. * Social and cultural ties with other countries were also encouraged including relaxation by many nations in granting visas. * As a part of new economic reforms, flexible exchange rate has been adopted. * The exchange rate is determining according to the factors of demand of foreign currency and supply of foreign currency. * Instead of keeping foreign exchange rate high in an artificial manner, their real value is taken into account. * This has helped promotion of exports. * Total transformation of rupee has been made for all current- account transaction and balance of trade. * The Social and economic distance among the nations has been reduced because of globalization. * Globalization is a process of linking the economy of a country with the global economy. * Before economic reforms, there were many restrictions on international trade. * There were restrictions on imports and import duty was charged at a high rate. * Because of artificially high exchange rate, global trade was restricted. * In 1991, International Monetary Fund (IMF) declared several nations are under the higher debt. * IMF imposed upon them to globalize and upgrade the technologies and growth of their nations. * This was a precondition before sanctioning further loans to these nations. * India was one of those and accordingly India had to relax its policies of granting protection to domestic industries from foreign competition. * Thus, India began globalizing by allowing more trade with other countries. * The following systematic steps are taken for globalization process. * Process of Globalization in India : * Free Trade : * Remove the restrictions on import and export and promote free trade among the nations. * Capital Mobility : * To increase the international mobility of the capital among the nations. * Mobility of Technology : * Remove the restrictions on mobility of technology and promote free movement of technology. * Mobility of labours: * To facilitate the mobility of labours among the nations. * The process of integrating nation with the world is known as the globalization. * In other word, globalization is the process of increasing a • VIVI * country's economic integration with rest of world. * The aspects of globalization includes trade, commerce, technology, science, goods, capital, human resources, natural resources, financial instruments etc. * Globalization process consist of : * Meaning and Different Aspects of Globalization : * Foreign capital can be increased without raising debt. * Country can get the benefit of the new technology. * Increases the exports. * New goods will become available in the market. * Increases the production of the Country and increases the competition in the market. * Share of foreign trade increases in GDP. * Why globalization is needed for India? : Because of globalization : * Globalization is one of the important components of new economic reforms. * Globalization means the integration of country's economy with the rest of the world by increasing trade of goods and services. * The changes made in transportation and communication sectors give boost to the process.

Answer

Need a full question paper?

Explore more

Similar questions

Economic Reforms — Economics STD 11 Commerce — Question

Answer

Need a full question paper?

Explore more

Similar questions