Globalization is an ongoing process that allows different cultures,
societies, traditions, economies to fuse together to work on a large, global
scale with means of imparting the knowledge of the oldest traditional norms to
the most advanced technologies available to each other.
Globalization has been a hot topic for debate since its inception. While
some believe that globalization is indispensable for the growth of Indian
economy and the development of the nation, others believe that globalization is
a threat for Indian artisans, brands, start-ups and also a cause of
depreciation of the Indian culture. On the other hand, some believe that it has
increased the employment rate and helped Indian industries to expand globally
along with the increased inflow of the advanced technologies.
Looking at the economic history of India, the well-built trade relations
were evident during the Indus Valley Civilization. Coins portraying various
civilizations shows good relation of India with the rest of the world. Indian
share of world economy although decreased from 22.3% in 1700AD to 3.8% in 1952
after the invasion of East India Company. They bought raw materials from Indian
market forcefully and sold finished goods at higher prices to the world. After
independence, around in 1950s India grew in the economic sector comparatively.
The manufacturing sector of the nation was strengthened by emphasizing on the
establishment of heavy industries. It made the backbone of the economy.
Simultaneously agricultural and social development was observed which accounted
for around half of GDP and modern industry in the form of factory
establishments.
Before the 1991 Economic Reforms in India and the introduction of the
New Economic Policy under Prime Minister P.VNarsimha Rao and Finance Minister
Dr Manmohan Singh, India was following a ‘mixed economic system’, which means,
our economic system combined the features of both, capitalism and socialism.
This allowed economic freedom in the use of capital but still had room for the
government to interfere in the economic activities to achieve social aims.
Soon, the Indian Government realized that these economic policies were harming
the economic health of the nation and leading to its stagnation. The private
sector wasn’t modernizing due to the lack of competition. There was no growth
in the public sector as well because of corruption. This also gave rise to
inflation and thus increased the cost of living for people. The government was
getting trapped into a humongous debt-trap. This was all a result of
inefficient management.
The country was in huge debt, the international financial institutions,
such as the World Bank and the IMF refused to help India further unless they
change their economic policies. Therefore, the economic reforms were made and
the New Economic Policy was brought in 1991 which essentially has three major
sections: Liberalization, Privatization, and Globalization.
The main aim of globalization was to integrate the Indian Economy with
the World Economy in order to promote unrestricted and smooth International
Trade. And with the passage of time, people are noticing a more integrated
world, giving smaller communities got a chance to run in the big race. It gave
people global knowledge. Equity limit of foreign capital investment was
increased and other favourable changes to International Trading were made in
order to promote the integration of the world trade with the domestic trade of
India. For example, the steady cash flow gradually decreased the dollar
difference This added exponentially to the growth of the economy because this
promoted Indian products all over the world and also generated employment in
India because of the involvement of international companies in the Indian
market. The bridge between the Indian and foreign cultures got stronger and
stronger as people travelled overseas for education, trading, and marketing.
With globalization and improved international trade, our foreign reserves
increased greatly, thus winning the trust of more and more foreign investors
and improving the overall economic health of the nation, also painting our
picture as the ‘new emerging economic power’ in the global market. Investment
options for Indian investors also increased. Globalization makes the economy of
one country dependent on another country. Balancing is important Although, the
biggest advantage of globalization was a shift from a monopoly structure to a
competitive structure in the market, thus increasing the production, quality of
goods, customer satisfaction, and overall improvement in the state of the
economy. The increase of influx of information between India and other nations
increased which led to the better exchange of ideas and advanced technologies
available. This helped India’s progress to match with that of developed
countries. Along with sharing financial interests, governments are also
trying to sort out the ecological issues for each other. Economically and
socially they are building each other. One of the most obvious examples to show
the impact of globalization is food. India has now almost all the international
cuisine available on her restaurant’s menus. Bollywood is praised
internationally. People of India are now exposed to international music,
literature, languages, festivals, and culture. Globalization has helped Indian
students to know and learn about international cultures without any much
problem
Although this benefited us greatly, there was a drawback to
globalization too, and that was the exploitation of the domestic market by the
international companies, the introduction of casual employment and weakened
labour movements. This increased competition for the existing domestic brands
in India and affected their business. People shifting their industries to the
developed nation which are well-off in resources also shifts the quality and
reputation of our country. Due to globalization, cheaper goods were imported
which reduced the demand for domestic goods, since there was inadequate
investment in the infrastructure for producing goods, thus making domestic
goods costlier than the imported goods. This led to a reduction in production,
thus increasing unemployment. Globalization also brought a cultural shift from
traditional to global, thus accepting the so-called ‘western’ culture, which
had its upsides and downsides. Not only this, but it also started practices like
surrogacy and human trafficking and made it easier with the passing time. In
the face of globalization, many malpractices have also been tendered.
Decentralized administration and empowerment of the local administration and
just judiciary is important.
To sum up, the 1991 Economic Reforms and the New Economic Policy (NEP)
were the need of the hour and indispensable for the economic growth of the
nation. Introduction of Globalization in India not only gave her the confidence
to compete with the world but also brought integrity within the nation. If it
wasn’t for these reforms, the Indian economy would have collapsed.
Globalization brought an array of advantages, mainly, decreased fiscal debt,
increased the overall GDP and decreased the rates of inflation. It also
increased our foreign reserves significantly, attracting more and more foreign
investors. Globalization also improved the levels of customer satisfaction
since it brought in variety at lower rates. The downsides of globalization were
that the large inflow of cheap foreign products compromised the sale of quality
but a little costly local hand works. Globalization also increased the
influence of MNCs, thus increasing their control over our economy (resembling
colonization in new-age) and decreasing the reach of domestic producers since
they were weaker in competitive strength. Malpractices for personal benefits in
the face of globalization has to be controlled and eventually stopped.
Globalization, hence, has impacted Indian society in many aspects, its culture,
its people and its economy. I believe that India is more dependent on the world
than the world is in India. The need of the hour is globalization that not only
makes the rich richer but also nourishes poor. India can get further benefits from
globalization if it becomes the leading exporter of cultural and technological
goods and services. Only then India will be said to get the best of
globalization.
References:
https://www.youthkiawaaz.com/2017/10/globalization-and-its-imlication-on-indian-society/
https://www.fibre2fashion.com/industry-article/2993/impact-of-globalization-on-indian-economy-an-overview
-Shreya Jain
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