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Is globalization good for the indian economy

McDonalds, Coca-Cola, Reebok, Zara, Toyota, Porsche etc, all these multi-national giants entered India when we linked our market to the global market. These new brands which we had only heard of or seen in television, are now actually in our reach.

On the other hand, the backbone of India- agriculture-which is a living source for over 55% of the population of India, has been severely hit by the invasion of imported crops. It not only provides food & nutrition to the people, but is also the main source of supply of raw materials to industries & to export trade. In my opinion, this is the main cause of constant fluctuating prices of the market due to surplus supply. This is due to the integration of global commodities markets.

What is Globalisation?

The word Globalize means emergence of international network of an economic system. Globalisation can be described as widening, deepening, and speeding up of global interconnection. Unhindered cross –border movement of goods, technology and capital, knowledge, services etc, advanced means of communication and transportation and internationalization of financial markets have given a boost to globalization (Kumar, 2015). This wind of change has transformed the world into a global village.

Globalisation in terms of trade has been going on from centuries in India. Cotton textile, vegetable and oil seeds, tobacco, jute, gold, masalas and tea leaves, silk, precious stones etc have been exported and imported since ancient times. Post the economic reforms of 1991, trade and exchange has gathered pace.

India’s engagement with globalisation in the context of the country’s evolving economic policies took baby steps since 1960s. Pre 1991, the goal was self-sufficiency to protect the small scale manufacturers, producers, farmers, craftsmen etc. The transformation of India to a majorly globalized and liberalized country came into full force in 1991 due to the pressure of both powerful international forces and India’s inability to be self-reliant.

My opinions

I think globalization has affected various sectors of the Indian economy . There is no clear distinction that the net effect of globalisation has been positive or negative.

The agricultural sector of India has shrunk massively since 1990. It now contributes only 15% to the GDP.

I don’t deny the fact that better equipment, better quality seeds and fertilizers that possess qualities like disease resistant, herbicide resistant etc are available in the market due to globalisation.

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But as I see it, a farmer in India cannot afford to invest in such heftily priced imported products. Moreover, the export of Indian crops hasn’t seen an increase due to inferior technology and stringent quality parameters imposed by foreign consumers.

To add to it, our own localized markets are flooded with the same produce, from both domestic and foreign markets. Imports being of better quality, lead to either reduced sale or low priced crops of our own nation’s farmer’s produce.

(Chand, n.d.)Hence, the large scale suicide by Indian farmers under the burden of heavy loans can be directly attributed to this.

Now, considering the employment opportunities being offered to the people of India, globalisation has been a huge advantage to Indians in my perspective. Employment equals economic growth. India provides cheap labour to the foreign companies, therefore they favour hiring Indians to reduce their labour costs and increase their profits. However these jobs are restricted to service sector. Lately, the employment scenarios have degraded due to this very same reason of cheap labour. Due to the surplus availability of labour, employees are being hired for lesser wages. These wages tend to be more than what our traditional industries like cottage, handloom, carving, ceramic, jewellery etc can pay. This causes a shortage of skilled workforce in the traditional companies, therefore they too suffer.

Traditionally, the trend was to pass the skill from one generation to the next, thus subsequent generations were stuck in the loop of earnings equal to their previous generation. I see globalization as an influencer to the youngsters that helps them exit the social order and grab the opportunities being offered by the foreign companies via their advanced technologies. Therefore, I think there has been a substantial reduction of unemployment in India, along with a side effect of shutting down of our domestic industries and at times lower wage structures.

Students have access to books, coaching classes, information on internet, online courses, distant learning etc easily available. Education is a must for every person in the country. Globalisation led to the collaboration of numerous foreign universities and study institutions with Indian universities. Of course, this has a direct impact on the course fees. The exorbitant cost has made institutions inaccessible to the poor or middle class students. But the country has seen a growing urban middle-class lately. The families are able to meet their basic needs and have income for discretionary spending. Many can now afford to spend on better consumer goods and services, send their children to these institutions etc due to their stable revenue.

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In my opinion, the students graduating from such highly advanced institutions have their skills developed according to the current advanced trends and can fit anywhere internationally. Hence, they can further contribute to the economic growth of the nation by applying the skills acquired by them in research areas, new developments and also attaining better employment opportunities. Thus earning higher than what the family invested in them. This improves the quality of life of the subsequent generations as well. Educated work force directly impacts the country’s economic growth.

As I see it, globalisation has exposed our country to advanced health technologies. Whether they are for the treatment of rare diseases or common problems. This, has contributed to the decline in death rate. Sadly, these facilities have been made largely available to the rich and urban population as of now. The rural areas still lack basic proper healthcare centers, hospitals and doctors.

Skilled professionals are required for the use of these technologies. This, in turn creates a demand for higher education. But both technology and education are expensive, thus the poor segment suffers anyway. Also, the multinational pharmaceutical companies have skyrocketing cost of medicines. But India is adapting with the speed of light.

I think globalisation has increased costs but since it also brings in constant exposure, Indians can grab such opportunities by offering low-cost solutions to technologies and inconveniences.

I believe, the industrial sector in India has changed after globalisation in terms of ease of doing business. India is a smart and youth country, it attracts foreign companies to invest here. This creates employment and has a direct impact on the rural people as they transition into urbans. To add to it, government-aided schemes to train for specific skills have helped the people to be employable in these firms. This has contributed a lot to the economic growth of India.

– Joining hands with the small industrial sector, government has started schemes like Make in India, Skill India, and Digital India. Loans, microfinance and other forms of easy credit are being provided by the government to help them sustain themselves.

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– Many Indian industries have invested abroad and have entered into agreements like joint ventures or mergers and acquisitions etc (GKtoday, 2015).

I consider globalisation as a wave of fresh breeze for the industrial sector. It ensures technological competence, innovation, and competition amongst companies thus giving consumers a bag of options. As a result, this also increases the efficiency and productivity in my perspective and consumers can purchase goods and services at cheapest best quality rates.

We have seen a tremendous boost in the communication and connectivity. Probably, every man is connected via cell phones, internet. Every person is able to travel long distances at cheaper rates through transport services such as metros, buses, trains. Increased investment in the air transport by foreign countries as well as government has led to affordable air travel as well. There is a free flow of cinema and food cuisines to all parts of the world. But I think globalisation has also enabled the introduction of cigarettes and tobacco, with major adverse health and financial costs associated with that. Once again proving that it is a mixed bag of success and failures.

To conclude”,

In my opinion, globalisation- integration of national economies and free trade- can be a wave of change with the potential of enriching the country. But I also believe that the way economic reforms and trade barrier policies have been established need to be rethought considering India. Although India has raised concerns and negotiated the policies time and again in order to attain maximum gains from globalisation. It needs to maintain a careful balance between interaction and collaboration. Trade liberalisation and technological improvements change the economy of a country, destroying traditional agricultural communities and allowing cheap imports of manufactured goods. This can lead to unemployment if not carefully managed.

Being a part of the global economy, exposes one to both the benefits and makes it vulnerable to crisis. Nationalism should be considered as an alternative method of more stabilized growth, protection of national economy, supporting regional institutions and improved quality of life. One should strike balance to exploit the positive consequences and, at the same time, limit negative effect of globalisation thus safeguarding it shores from the winds of alien shores.

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