GLOBALIZATION AND THE INDIAN ECONOMY

GLOBALIZATION

is the outcome of policies of liberalization and privatization.

It means opening up of the economy for the world market by attaching international competitiveness.

It means integrating national economy with world economy through removal of barriers of international and capital movements.

Improving technologies, better transport and communication have enabled companies to expand into global world wide markets

CHANGES MADE BY GLOBALIZATION ON INDIAN ECONOMY

-          The New Economic Policy prepared a specified list of high technology and high investment priority industries in which automatic permission will be available for foreign direct investment upto 51% of foreign equity

-          In respect of foreign technology agreements, automatic permission is provided in high priority industry upto a sum of one crore. No permission is now required for hiring foreign technicians or for testing indigenously developed technology abroad.

-          In order to make interactive adjustment of Indian currency rupee was devalued in July 1991 by nearly 20%. It stimulated exports, discouraged imports.

-          In order to bring the Indian economy within the ambit of global competition, the government has modified the customs duty to a considerable extent. Accordingly, the peak rate of customs duty has been reduced from 250% to 10% in 2007 -08 budget.

Globalization resulted in greater access to global markets, advanced technology and increased the 

possibility for larger industries of developing countries to become important players in the international arena.

According to some scholars, benefits of Globalization accrue more to developed countries as they are able to expand their markets in other countries. Market driven globalization increases the economic disparities among nations and people.