What is Globalization?

Globalization is a term that includes a wide range of social and economic variations. It can
encompass topics like the cultural changes, economics, finance trends, and global market
expansion. There ought to be positive and negative effects of globalization - it all comes as a
package. Globalization helps in creating new markets and wealth, at the same time it is
responsible for extensive suffering, disorder, and unrest. The great financial crisis that just
happened is the biggest example of how negative globalization can turn. It clearly reveals the
dangers of an unstable, deregulated, global economy. At the same time, this gave rise to
important global initiatives, striving towards betterment. Globalization is a factor responsible for
both repression and the social boom.

What happens when there is a growing integration of economies across the globe? Majorly there
have been positive impacts of this global phenomenon - through liberalization, privatization and
globalization (LPG). Due to globalization, there has been significant flow of inward foreign direct
investment. MNCs are getting a chance to explore various different markets across economies
and explore the untapped potential.

Globalization and India

India's economy opened up during the early nineties. The policy measures on the domestic front
demanded that there was a requirement of multinational organizations to set up their offices here.
The market became more open and the economy started responding to the external (global)
market. Due to globalization, contacts have been developed all across the globe, with the pace of
integration dramatically increasing.

Impact of Globalization

It was in July 1991, when foreign currency reserves had tumbled down to almost $1 billion;
inflation was at a soaring high of 17%, highest level of fiscal deficit, and foreign investors
loosing confidence in Indian Economy. With all these coupling factors, capital was on the verge
of flying out of the country and we were on the brink of become loan defaulters. It was at this
time that with so many bottlenecks at bay, a complete overhauling of the economic system was
required. Policies and programs changed accordingly. This was the best time for us to realize the
importance of globalization.
Measures of Globalization

1. Devaluation: The first initiative towards globalization had been taken the moment there was an
announcement of devaluating the Indian currency by a hoping 18-19% against all the major global
currencies. This was a major initiative in the international foreign exchange arena. The Balance of
payment crisis could also be resolved by this measure.
2. Disinvestment: The core elements of globalization are privatization and liberalization. Under the
privatization scheme, bulk of the public sector undertakings have been/ and are still being sold to
the private sector. Thus the concept of PPP (public private partnership) came up.
3. Allowing Foreign Direct Investment (FDI): Allowing FDI inflows is a major step of
globalization. The foreign investment regime has been quite transparent and thus the economy is
getting boosted up. Various sectors were opened up for liberalizing the FDI regime.

Is globalization delivering all the desired results to the masses? Or only a few can feel the benefits of
globalization? Figures have out rightly proved that the global average per capita income showed a strong
surge throughout the 20th century but the income gap between rich and poor countries have not been
bridged for many decades now. The ultimate inference being that globalization hasn't shown positive
results.

The continuing global tendency towards the free flow of business and monetary infusions across nations
describes globalization which helps in the formation of international financial system. It provides economic
independence and triggers competition stimulating globalization to elevate the living standard of people in
the nations that offer themselves to the world trade.
Benefits of globalization

"We have moved from a world where the big eat the small to a world where the fast eat the slow", as
observed by Klaus Schwab of the Davos World Economic Forum. All economic analysts must agree that
the living standards of people have considerably improved through the market growth. With the
development in technology and their introduction in the global markets, there is not only a steady increase
in the demand for commodities but has also led to greater utilization. Investment sector is witnessing high
infusions by more and more people connected to the world's trade happenings with the help of computers.
As per statistics, everyday more than $1.5 trillion is now swapped in the world's currency markets and
around one-fifth of products and services are generated per year are bought and sold.

Buyers of products and services in all nations comprise one huge group who gain from world trade for
reasons encompassing opportunity charge, comparative benefit, economical to purchase than to produce,
trade's guidelines, stable business and alterations in consumption and production. Compared to others,
consumers are likely to profit less from globalization.

Another factor which is often considered as a positive outcome of globalization is the lower inflation. This
is because the market rivalry stops the businesses from increasing prices unless guaranteed by steady
productivity. Technological advancement and productivity expansion are the other benefits of globalization
because since 1970s growing international rivalry has triggered the industries to improvise increasingly.

Some other benefits of globalization as per statistics:

 Commerce as a percentage of gross world product has increased in 1986 from 15% to nearly 27%
in recent years.
 The stock of foreign direct investment resources has increased rapidly as a percentage of gross
world product in the past twenty years.
 For the purpose of commerce and pleasure, more and more people are crossing national borders.
Globally, on average nations in 1950 witnessed just one overseas visitor for every 100 citizens. By
the mid-1980s it increased to six and ever since the number has doubled to 12.
 Worldwide telephone traffic has tripled since 1991. The number of mobile subscribers has
elevated from almost zero to 1.8 billion indicating around 30% of the world population. Internet
users will quickly touch 1 billion.

Globalization leading to social anxieties:

Listed below are the three sources of anxiety between worldwide markets and social steadiness:
 Across the nations, globalization triggers the services of large sections of working people more
effortlessly substitutable,
 Commerce can set free factors that weaken guidelines in national practices, for example workers
in South Carolina are replaced by child laborers in Honduras,
 Globalization and its cutthroat rivalry makes it hard for administration to perform important tasks
of offering the social programs

Key areas which demand immediate attention:

 Public education, which will demand proper evaluation and outcomes of globalization
incorporating its benefits.
  Amending practices to review the international fiscal institutions to assist in averting crises,
facilitating helpful early warning systems, better synchronization of exchange rates among the
world markets and arranging the private sector in order in performing rescue functions, and
 Reorganizing the bilateral liberalization of the global financial system, which
should tackle the major areas related to food trade, labour pacts and the
environment.

Business Globalization

The last decade of the 20th century witnessed many hindrances in international trade which resulted in its massive dip and thereafter a series of
companies started practicing global policies to achieve competitive benefit.
For achieving 'business globalization' phenomenon, business players have laid strategies keeping the global economies in mind rather than thinking in
context of national markets.

Causes of speedy growth of global business:

 Increasing real living standards

 Liberalization of trade supported by World Trade Organisation, growth and expansion of the European Union

 Switch to market structures in Eastern Europe

 Speedy growth of the Asian Tigers and also in China and India

 Privatization and liberalization of national economies

 Deregulation of worldwide capital economies

 Dip in transport charges

 Enhancement in global communications

The Impact of Globalization on Business:

Expanding the geographic footprint of any business in the era of globalization is not at all a perilous and costly job as it has been in the past. To remain
competitive in today's scenario aggressive measures should be implemented to expand business. Starting business internationally is as defensive as an
offensive play. Going by the global demands and considering the total size of international economies would reveal that in comparison with the size of
national market the potential buyers generally reside in international markets.

In comparison, if a business does not aim international market and the international customers then the company will not only be lagging behind taking
the first mover's benefit of preserving customer dependability, but would also lose on collaborations with key partners and distribution pacts. With increase
in consumers' demands and flattening of global market the international business is expected to assist several markets in a faultless manner. Changing
slowly to economic alterations in today's world could ultimately harm the business.

Examining the alleviating factor that globalization had on the world business would reveal that trade shortage, petroleum costing, dip in equity markets,
housing calamity, restricted influx of funds, and total cost of living is defying us than ever before. With so many negative traits in world economy,
conservative economic theory recommends that the interest rate today hold similarity with that of 1980 than the low interest rates we are witnessing
today. In comparison with the financial scenario of 1980, the contemporary market is the outcome of a worldwide economy which is performing the role of
an alleviating factor.

By considering the following, it is estimated that by 2015, the developing economies will account for 50% of world GDP.

 Growing economies – Over the last few years China and India has witnessed 9% and 7% of annual growth respectively. Demographics –
Economies now characterize younger populations, increasing number of well-qualified population, growing middle class populations, elevating
incomes and urbanization.

 Commercial need – The financial growth, as well as the existence of worldwide firms that accompanies job opportunities focused around
intellectual capital is generating need for marketable real estate infrastructure. Infrastructure development – Communications, utilities, and
well-organized transportation has steadily improved over the past few years as compared to what it was few decades ago.

 Opening up of closed market structures – Most flourishing developing economies have been occupied in methodical reorganization of
basic community norms ignored in the developed economies. The factors which trigger growth and monetary infusions incorporate property
privileges, legal procedure, published guideline, privatization of state owned firms, removal of capital management, and liberalization of
norms related foreign direct investment.

Factors accounting for the growth of multinational companies:

 Exploration of developing markets

 Globalization of economies

 Need to minimize manufacturing expenses

 Need to switch production to nations with cheap labor

  Need to avert transportation charges

 Need to avert tax and non tax hindrances

 Promote vertical incorporation

 Expansion of product life cycles

 Deregulation of capital economies

Against Globalization

Not only the word globalization has amplified over the last few years, but the term anti-globalization has appeared and is still growing. Anti-
globalization or against globalization is the umbrella term for a collection of diverse protest grounds, incorporating: conservationism, third world
obligation, animal rights, child labor, lawlessness, against capitalism and disagreement to MNCs.

World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank are the institutes which has been the focus of anti-globalization
disputes. As the industries are flourishing globally, anti-global operations and disputes are also growing aggressively

The disadvantages of globalization are as under:

1. Big companies with international businesses are charged of social inequality, poor working conditions, turning blind eye towards
environmental issues, unprofessional handling of natural resources, and biological harm. Anti-globalization supporters feel that the World
Trade Organization, the World Bank and the International Monetary Fund are the leaders of economic globalization and blindly follow only
those guidelines which yield them corporate interests.
2. Anti-globalists feel that the economic growth is not the only factor which make people happier but can often make their lives depressing with
organizations like WTO making the rich richer and the poor poorer. These organizations get away with their share of profits by ignoring nature
and human interests.
3. Globalization elevates the inflow of skilled and non-skilled employment opportunities from the developed economies to third world in search of
cheap workforce.
4. Growth in chances of monetary commotions in one country effecting all other countries
5. Corporate control of nation-states is greater than that of civil society associations
6. The privatization of world media and its authority in the hands of a few restricts the artistic and ethnic expression
7. Globalization might lead to greater risks of violent behavior from people at the receiving end in an effort to conserve cultural inheritance
8. Restriction less international travel and influx of foreign visitors generate greater chances of spread of diseases carried accidentally between
countries
9. Anti-globalists predict that the globalization is responsible for altering people's mindset, outlook and lifestyle and promote materialistic way of
living
10. They also hold international organizations like the World Trade Organization responsible for violating national and individual independence
11. Greater probability of civil war within the third world nations and open conflict between them as they compete for resources

Reasons stating anti-globalists stand on opposing the World Trade Organization:

1. The WTO norms only serves the purpose of MNCs – The WTO, as per the anti-global campaigners, is not an autonomous establishment.
The guidelines of WTO are formed by and for institutions with close access to discussions. Moreover, this international organization heavily
depends on its 17 "Industry Sector Advisory Committees" for the supply research data for the purpose of trade consultations. Contributions
by consumer, human rights, labor and environmental organizations are deliberately and repeatedly overlooked.
2. The WTO ignores labor and human rights – Probable solutions to curbing child labor and human rights abuses are wedged by the WTO
clarifying that it is beyond the legal jurisdiction for an administration to prohibit a product on the basis of the way it is manufactured and
secondly the administration can neither consider the code of conduct of the firms that do business with governments nor can take the
behavior of companies into account that perform business with brutal despotism.
3. The WTO is a foe for environment – The WTO terms the environmental policies as "hindrance to trade" and encourages firms to break
them. Practices such as removing tax on wood products by WTO were a deliberate attempt for amplifying the timber demand which would
eventually trigger deforestation.
4. The WTO is responsible for slaying people – The vicious resistance of intellectual property rights-official documents, copyrights and
trademarks by WTO is implemented at the cost of ignoring wellbeing and human lives. The administration of developing nations has been
pressurized by the international organization to trigger the utility of standard drugs and remove the practice of producers providing monetary
help to medicos who recommend their products which permits firms to import medicines from other nations where cheap drugs are available.
5. The WTO is increasing social disparity – The phenomenon of free commerce is not helping the majority of the world. Social disparity
worsened during 1960 to 1998 both internationally and within nations. This period on the contrary witnessed a rapid increase in global
commerce and investments. As per the UN Development Program the 20% of world's richest population devour 86% of world's natural
resources while the 80% of the underprivileged are left with 14% of the resources.

Financial Globalization and Exchange Rates

Financial Globalization and Exchange Rates are the two components which are discussed at length amongst all economic experts and analysts since long
time back. There have been many scholars who dedicated their entire research to explain the inter-relation between the two and how the inter-play
between these phenomena affects any financial structure of the nation.

It has been noticed in the last decades that the global economy has been much influenced by a considerable increase in trans-border asset trade. A
combination of trade liberalization, capital flow, decreasing transaction expenses and a positive development in financial sophistication has worked out well
for the investors, who gradually were encouraged by the trend to enhance the allocation of foreign assets in their kitty. With an increase in the
international financial trade, the nations that adopted expanded economic outlook experienced that their external assets and liability holdings grew more
than Gross Domestic Product (GDP).

These and many such insights prompted analysts to delve deep into the topic and explore a link between Financial Globalization and Exchange Rates.
However, before going directly into that aspect, let us first get acquainted with these two elements separately in brief.
About Financial Globalization

In definite terms, financial globalization signifies relation between domestic economic system of a particular nation and foreign bodies along with financial
markets. A massive improvement in global economy and technology, specifically in the fields of transport and communications, led to the beginning of
financial globalization. IMF and World Bank, in this regard, are the two international finance bodies that support world trade to continue the trend of
financial globalization.

About Exchange Rates

Exchange rates between two currencies depict the value of one currency against the other, for example – what will be the value of international currency
when measured in terms of the currency of one’s own nation.

Relation between Financial Globalization and Exchange Rates

Financial globalization and exchange rates play an important role in improving the economic outlook of any nation, which can be showed in the following
manner:

 If the net foreign assets of any nation are in the positive, the actual exchange rates of that nation will show appreciation. However, under
huge external liabilities, the nation’s exchange rates are likely to depreciate more.

 Financial consolidation helps nations to manage extensive creditor and debtor portfolios. Countries with increasing external assets or liabilities
may manage trade surpluses or deficits and thereby obtain appreciation or depreciation in exchange rates.

 Globalization of finances is useful in solving transfer problems. It removed confinements from current and capital account and brought forth
equity financing that minimized transfer effect imports, generally induced by debt financing.

It cannot be denied that financial globalization and exchange rates have enhanced the economic system in the international arena to a considerable extent
and have made accessibility process easy and smooth.

Financial Globalization and Financial Stability

Globalization is a complex process and it has different facets. Among all of them, financial globalization is the most powerful dimension. It has caused
great impact on the global economy and constituted a remarkable change in the exhaustive cross-border financial and cost flows. In addition, financial
globalization also has great impact in international risk-sharing management. There are myriad of aspects of Financial Globalization, and financial
globalization and financial stability is one of them.

Due to financial globalization, a massive change has been noticed in the market operators and institutions, in expanding the stakes of cross-border
properties as well as the growing international profile in the financial stability of economic markets. These changes have been called as the ‘second wave’
of financial globalization.

When the financial markets cannot perform at its best due to an unrelenting predicament, the situation is called as financial instability. To counteract this
instability, financial globalization takes an important role. First of all, it changes the traditional government-ruled exchange rate to a flexible exchange rate
system. In addition, a precise application of liberalization and formation of institution is the crucial factor in all emerging markets.

Reasons of financial globalization

Technological advancement is considered as the prime cause of financial globalization. Especially, the transport and communications sectors have
experienced an enormous growth which caused a change in the financial system. A combined effort of the technological advancement and the expansion of
financial liberalization ensured active financial globalization in today’s global economy.

History

Due to financial globalization there was a huge crisis in banking sector which affected almost all the countries in the world. The first impact had been
noticed in the Nordic countries and Japan in the 1980s, while in the 1994, there was Mexican crisis, and crisis in banking sector in the Asian countries took
place during the 1997-98. In the Russian countries it was in 1998.

Impact of Financial Globalization and financial stability

Earlier the system was mainly political dominated, but financial globalization and financial stability has reformed the entire system, and gave birth to the
market-directed system. This system performs important role in determining the conditions of flexible accessibility in economy, and exchange rates. In
addition, it also helps to cope up with any sort of financial crisis.

There was massive impact of financial globalization on the countries and regions across the world. A total transmission noticed, and in the place of bank-
centered financial system, a market-driven financial system has taken the charge. As a result, there was a downfall in the banking sector, and they need
to search for other options in domestic and global markets to rejuvenate the sector.

Advantages of Financial Globalization and Financial Stability

It can undoubtedly be said that due to financial globalization and financial stability there is boom in the economic sector. Plenty of options have been
opened and the sources of global financing have become cheaper and easily accessible as well. Due to financial globalization numerous countries are
enjoying financial stability which is widely accepted. The most important thing is that, for the developing countries, financial globalization and financial
stability is really a boon. They have been highly benefited from the security markets of the developed countries. Furthermore, to keep the inflation rate in
control, financial stability has been very much effectual. In a word, financial globalization and financial stability is definitely a perfect step for boosting up
the economy in different countries worldwide.
 Corporate Globalization

The corporate globalization fact sheet reveals that around fifty-one of the world’s top hundred financial systems are corporations. Moreover, there are
63,000 transnational corporations globally, with 6,90,000 overseas associates. Over three quarters of all international companies are situated in North
America, Japan and Western Europe and ninety nine of the hundred biggest international firms are from the industrialized nations.

The growth of corporate globalization is so huge that the annual turnover of Royal Dutch Shell is greater than Venezuela's Gross Domestic Product.
Considering this calculation, Wal-Mart is bigger than Indonesia. General Motors is approximately equivalent to the size of New Zealand, Ireland and
Hungary combined.

WTO and Global Trade

 Since 1995, the year of WTO’s creation, the international organization has ruled that every environmental strategy it has analyzed is an
unlawful business obstacle that must be removed or amended. The WTO also has ignored every fitness or food safety norm it has assessed.
Countries whose norms were pronounced as trade obstacles by the WTO or which were simply intimidated with WTO actions have removed or
amended their guidelines to fulfill WTO prerequisites.

 WTO's 134 member nations have an equal authority but unofficially the decision-making is governed by the "Quad" comprising USA, European
Union, Canada and Japan. Every member of the Quad signifies the company's concerns at the WTO and is precisely indulged in forming WTO
guidelines. In the United States this is accomplished through certified ‘Trade Advisory Committees’ which are governed by the private sector.

 To cite an example, the US International Trade Administration's Energy Advisory Committee has representative from oil, mining, gas and
utility firms (Texaco, Enron, Halliburton and Freeport-McMoran are few such corporations).

 82% of the expanding export business and 68% of overseas monetary infusions is enjoyed by the top five of the global population in the
developed economies while the bottom five of the world population get only 1%.

 Around 70% of the world's population comprises women. The total estimate accounts for 1.3 billion of poor women. Globally, they are at the
receiving end of the economic and monetary alteration and calamity caused by market factors and globalization.

Corporate Globalization and the weaker section of the society

The compelling data published by the Washington, D.C. located Center for Economic and Policy Research (CEPR) compares the growth rates of the
economies from 1980 to 2000. The results reveal that 89 nations witnessed their per capita rate of growth dip by five percentage points from 1960-1980
to the period 1980-2000. Only 14 nations witnessed their per capita rate of growth elevate by five percentage points from 1960-1980 to 1980-2000.

CEPR established that the dip in the growth has been so intense that individuals in 18 nations, including African countries, would have double the income
of what they are earning at present provided they had sustained the growth rate in the last twenty years which they witnessed in that duration.

Further research by CEPR implemented similar approach to evaluate social indicators and established that the development in minimizing the infant
mortality and growing literacy has slowed during the era of corporate globalization especially in developing economies. The CEPR hold the corporate
friendly guidelines enforced by IMF and World Bank responsible for this. Some of the other factors are:

 Liberalization of Business – The removal of tax protections for agriculture and trade in flourishing economies often results in mass
discharge and dislocation of poor residing in rural areas. The corporate globalization has put the poor farmers in a situation where they find it
difficult to compete with agricultural imports by the overseas markets.

 Privatization of industries – The structural modification guidelines by IMF and World Bank permits the taking over of government-owned
firms by private organizations. Pay cuts for workers in private firms is regular in such sector.

 Reductions in government expenditure – Dip in government expenditure often minimize the capability of the government to facilitate
services to the poor leading to rural dislocation and industrial discharge.

 Enforcement of user charges – Costs on the utilization of services provided by the government such as schools, drinking water and health
clinics leads to denial of right to use those services by the poor.

 Export endorsement – Nations which implement the methods to endorse exports perform it at the cost of production for domestic
requirements. In rural areas, the land of poor farmers is forcibly occupied by large plantations for growing their crops for overseas markets.

 Sky-rocketing interest rates – High interest rates, however lucrative for overseas investors, wield a slowdown effect on national market
resulting growth in unemployment. Small industries find it hard to survive in the market.

Corporate world and its profit seeking ideology

Corporate globalization program does not consider elevating the interests of the poor and concentrates more on its profit seeking ideology. Ambitious in
their approach, they are in a quest of altering the entire Latin American continent trade into NAFTA-style business and investment pact and strengthening
the IMF and World Bank's capability to inflict structural modification.

To minimize the avertable human misery, it is essential that the activists continue to strengthen the movement against corporate globalization.

Another world is indeed possible but right now the biggest challenge to be immediately met is to put the actions of corporate globalizers at halt and stop
them from making the present situation worse.

History of Globalization

Globalization is mainly a socio-economic term which is nowadays synonymous with the economic development of a country. In simple terms, it is a
continuous process through which different societies, economies, traditions and culture integrate with each other on a global scale through the means of
communication and interchange of ideas. By having an idea of the history of globalization, one will be able to properly understand the causes which led to
such social and economic change.
Alexander the Great forges eastward link with Chandragupta Maurya for overland routes between the Mediterranean, Persia, India, and Central Asia.
During the 1st century CE the trans-world trade makes its first major appearance in China under the Han dynasty and successfully established trade
relations with Asian and European countries. The period from 650-850 AD records the expansion of Islam and trade relations with the west Mediterranean
region with the Indian sub-continent. The Rise of Genghis Khan during 1100 AD gave rise to the integration of overland routes across Eurasia. The 1650s
marks the expansion of the slave trade and it sustained the expansion of Atlantic Economy, giving birth to integrated economic and industrial systems
across the Ocean. The period from 1776 to 1789 AD marks the US and French Revolutions and the creation of modern state as a fall-out of military and
business interests. These integrated empires expand during the industrial revolution. The eighteenth century marks the merging of the modernity with
globalization and it also marks the foundation for the creation of international trade law.

Early history of globalization

According to most scholars and researchers, it is the modern age which led to the origin of globalization. In this age, wide spread development took place
in the field of infrastructure and connectivity. This led to more interaction between the nations and sharing of ideas, culture and tradition took place. All
these put a direct impact on the process of globalization. In the economic scenario, more trade links started taking place between countries on a global
scale which influenced global as well as domestic economies to a great extent.

However, there are some scholars who point out that the origins of the history of globalization can be traced back to the ancient civilizations. Scholars who
advocate this theory say that the example of the earliest forms of globalization is the trade links between the Sumerian civilization and the Indus Valley
Civilization in third millennium B.C. In fact, after this age, there are numerous instances where trade links were established between various countries like
India, Egypt, Greece, and Roman Empire and so on. There were regular business links between the Parthian Empire, Roman Empire and Han Dynasty. The
popularity of the trade relations led to the development of various trade routes like Silk Road and so on.

Globalization in the medieval age

The Islamic period in the medieval era is an important epoch in the history of globalization. This was when the Jewish and the Muslim traders started going
to various parts of the world to sell various items. This led to a blend of ideas, traditions and customs.

In China, the first postal service was introduced and paper was invented. This led to better knowledge sharing. As more and more people started traveling
to various countries across the world, it led to more communication between people and intermingling of languages. Explorers like Columbus and Vasco Da
Gama sailed through the oceans in search of new countries and establish trade links with them or to make other countries their colonies. All these factors
were a major cause for the development of the pre-globalization era.

The medieval period was the age of discovery. It was in this period that Africa and Eurasia engaged in cultural and economic exchange between them.
Gradually, this led to the growth of colonies in various parts of Africa, Asia and Latin America. As a result, there was constant blend of the ideas,
languages, rituals and customs between the natives and the foreign inhabitants. In fact, this system of colonization put a deep impact on agriculture,
trade, ecology and culture on a global scale.

Globalization between the pre modern periods to modern period

The industrial revolution in the 19th century was one of the major periods in the history of globalization. Due to the industrial revolution, there was a
significant increase in the quantity and quality of the products. This led to higher exports and better trade and business relations. Due to better products
and colonization, lots of countries across the world became the consumers of the European market.

The phase of pre globalization perhaps came to an end after the First World War was fought. The war put a significant adverse effect on the economic
scenario and it led to the Great Depression and gold standard crisis in the later part of the 1920s and early 1930s.

Globalization in the modern era

Globalization, in the modern sense of the term, came into existence after the Second World War. One of the main factors for this was the plan by the world
leaders to break down the borders for fostering trade relations between nations. It was also in this period that major countries like India, Sri Lanka,
Indonesia and some countries in South America gained independence. As a result, these countries too started having their own economic systems and
made established trade relations with the rest of the world. The establishment of the United Nations Organization (UNO) was also a major step in this
regard.

Gradually, the economic scenario of the world strengthened and it led to better trade relations and communication. Some other factors which have put a
positive impact on globalization are:

 Promotion of free commerce and trade

 Abolition of various double taxes, tariffs, and capital controls

 Reduction of transport cost and development of infrastructure

 Creation of global corporations

 Blend of culture and tradition across the countries

Another milestone in the history of globalization is the creation of the World Trade Organization which led to the growth of a uniform platform to settle
trade and commercial disputes. According to economic surveys, the world exports improved significantly from 8.5% to around 16.2% due to globalization.

India and globalization

The wake of globalization was first felt in the 1990s in India when the then finance minister, Dr Manmohan Singh initiated the economic liberalization plan.
Since then, India has gradually become one of the economic giants in the world. Today, it has become one of the fastest growing economies in the world
with an average growth rate of around 6-7 %. There has also been a significant rise in the per capita income and the standard of living. Poverty has also
reduced by around 10 %.

The service industry has a share of around 54% of the annual Gross Domestic Product while the industrial and agricultural sectors share around 29% and
17% respectively. Due to the process of globalization, the exports have also improved significantly.

Globalization has really out a positive impact on today's economy and it is expected to develop in the years to come.
Impact of Globalization
 Positive impacts of Globalization
Globalization is the new catchphrase in the world economy, dominating the globe since the nineties of the
last century. People relied more on the market economy, had more faith in private capital and resources,
international organizations started playing a vital role in the development of developing countries. The
impact of globalization has been fair enough on the developing economies to a certain extent. It brought
along with it varied opportunities for the developing countries. It gave a fillip for better access to the
developed markets. The technology transfer promised better productivity and thus improved standard of
living.
Negative impacts of Globalization

Globalization has also thrown open varied challenges such as inequality across and within different nations,
volatility in financial market spurt open and there were worsening in the environmental situation. Another
negative aspect of globalization was that a majority of third world countries stayed away from the entire
limelight. Till the nineties, the process of globalization in the Indian economy had been guarded by trade,
investment and financial barriers. Due to this, the liberalization process took time to hasten up. The pace of
globalization did not start that smoothly.

Economic integration by 'globalization' enabled the cross country free flow of information, ideas,
technologies, goods, services, capital, finance and people. This cross border integration had different
dimensions - cultural, social, political and economic. More or less the economic integration happened
through four channels -

1. Trade in goods and services

2. Movement of capital
3. Flow of finance
4. Movement of people

Advantages of globalization

The gains from globalization can be cited in the context of economic globalization:

 Trade in Goods and Services - From the theoretical aspect, international trade ensures allocating
different resources and that has to be consistent. This specialization in the processes leads to better
productivity. We all know from the economic perspective that restrictive trade barriers in
emerging economies only impede growth. Emerging economies can reap the benefits of
international trade if only all the resources are utilized in full potential. This is where the
importance of reducing the tariff and non-tariff barriers crop up.

 Movement of Capital - The production base of a developing economy gets enhanced due to
capital flows across countries. It was very much true in the 19th and 20th centuries. The mobility
of capital only enabled savings for the entire globe and exhibited high investment potential. A
country's economic growth doesn't, however, get barred by domestic savings. Foreign capital
inflow does play an important role in the development of an economy. To be specific, capital
flows either can take the form of foreign direct investment or portfolio investment. Developing
countries would definitely prefer foreign direct investment because portfolio investment doesn't
have a direct impact on the productive capacity expansion.
 Financial Flows - The capital market development is one of the major features of the process of
globalization. We all know that the growth in capital and mobility of the foreign exchange markets
enabled better transfer of resources cross borders and by large the global foreign exchange
markets improved. It is mandatory to go in for the expansion of foreign exchange markets and thus
facilitate international transfer of capital. The major example of such international transfer of
funds led to the financial crisis - which has by now become a worrying phenomenon.
Thus, globalization has the fair and rough share of its impacts and thus we can surely hope for more
advancement in the global economy due to this process.

Impact of Globalization on Employment in India

Globalization has played an important role in the generation of employment in India. Since the economic liberalization policies in the 1990s, the
employment scenario in the country has significantly improved. An analysis of the impact of globalization on employment in India will bring out a number
of factors in this regard.

Market liberalization policies and employment

The wake of globalization was felt in India in the early 1990s when the then Finance Minister Manmohan Singh initiated the open market policies. This led
to a significant improvement in the gross domestic product of the country and the exports increased considerably. There was significant rise in the
customer base and it slowly gave rise to the consumer market where the market changes were dependant on the demand supply chains. In fact, the
growth in demand brought a favorable change and the supply too started increasing. As, supply is directly involved with employment, more supply led to
more production which led to more employment over the years.

Growth of new segments in the market

Due to globalization and the growth of the consumer market, a number of segments in various sectors of the industry have grown over the years. This has
led to the significant rise in the rate of demand and supply. In the recent years, a number of industry segments such as information technology, agro
products, personal and beauty care, health care and other sectors have come into the market.

Experts say that the introduction of a wide range of sectors have led to the favorable growth of the economy in the country. With more and more industry
segments coming up, there has been a high demand for quality workforce. As such, lots of young people are taking jobs in all these segments in order to
start a good career.

In the unorganized sector as well, there has been an increase in various sectors which has improved the rate of employment in the country. As per the
recent surveys, there has been a significant increase in the number of people working in the unorganized and allied sectors. The pay package in all these
unorganized sectors have also increased to a great extent.

Improvement in the standard of living

As globalization has put a favorable impact in the economy of the country, there has been an improvement in the standard of living of the people. The
favorable economic growth has led to the development of infrastructure, health care facilities and services, per capita income and other factors which have
really led to the high growth rate. It has been expected that the economy in India will grow by around 6-7% yearly. This growth rate is expected to
improve the overall employment situation more and the per capita income will also increase significantly.

Development of other sectors

Globalization has positively affected the growth of various sectors in India. These have opened up new employment opportunities for the people. The
service industry has a share of around 54% of the yearly Gross Domestic Product (GDP). From this figure itself, it is understood that the service industries
are doing very well in the market and as such, plenty of employment opportunities are taking place. In the other sectors such as industry and agriculture,
the rate of employment has gone up. The industrial sector contributes around 29 % while the agricultural sector contributes around 17 % to the gross
domestic product. Some of the well known exports of the country consist of tea, cotton, jute, wheat, sugarcane and so on. Due to the growth of customer
base in all these sectors, more and more employment opportunities are opening up. In fact even young people and freshers are getting jobs in all these
sectors. In the manufacturing sector, there has been a growth of around 12% while the communication and storage sector has also grown up by around
16.64%.

Government Initiatives

To keep pace with the favorable effects of globalization, the government has taken a number of initiatives. A number of employment opportunities such as
Prime Minister Rojgar Yojna and the CM Rojgar Yojna have been initiated to improve the employment situation in the rural areas. The Minimum Wages
scheme has also been successfully implemented. In order to improve the quality of the workforce, effort is also being given to impact education to various
sectors of the rural areas. Under these schemes, new schools are being opened up and attention is also being given to the welfare of the students.
Likewise in the urban sector too, more and more employment opportunities are being opened up for the youth in a number of government sectors, banks
and so on.

In order to foster communication and migration of workforce to various parts of the country to cater to the needs, the government has also developed
infrastructure to a great extent. New roads and highways are being constructed to increase connectivity.

Globalization Income Inequalities and Regional Disparities in India

There has been a continuous debate over globalization, income inequalities and regional disparities in
India. While some scholars say that globalization has cast a favorable impact on the overall economic
condition of the country, there are also lots of scholars who argue that factors such as poverty, income
inequality and regional disparities have not been affected by globalization. In order to have an idea, one
needs to deeply analyze various factors.
Globalization and income inequality Although globalization has led to the economic development in
the country, it has not really helped to minimize income inequalities across the country. Recent surveys say
that lots of people across the country still live below the poverty line and their standard of living has gone
down considerably. In fact, the poverty level in India is much more than that of China. One of the main
causes of poverty in India is income inequality. While the effects of globalization, economic liberalization
and market growth are being felt in the cities and urban sectors across the country, most of the rural areas
are still not so developed and the condition has also not significantly improved. No doubt, there has been
some improvement but still a lot needs to be done.

A significant portion of the rural mass does not have access to the basic amenities such as electricity,
education, sanitation, drinking water, and infrastructure. The wealth distribution pattern is also uneven in
the country. Recent surveys have shown that the top 10% of the income groups share around 33% of the
total income of the country. Even after globalization and economic progress, around a quarter of the
population of the country has a earning less than the minimum level of $0.40 per day.

Globalization and regional disparities

Globalization has also not done much good to reduce disparities between various regions and states across
the country. While some states have a high earning, there are also some states which have a very low
growth rate. Some of the states which have a high income are Gujarat with 8.8%, Delhi with 7.4% and
Haryana with 8.7%. In comparison to these, Bihar with 5.1%, Uttar Pradesh with 4.4% and Madhya
Pradesh with 3.5% are some of the lowest ranking states with very little socio economic growth.

To minimize the income inequalities and regional disparities across the country, the government has taken
a number of steps. Lots of rural development programs have been initiated to make the rural mass self
sufficient and financially stable. In this regard, the government has set up village cooperative banks,
Regional Rural Banks and so on to help the poor and the villagers. The government also offers land for
farming at cheap rates, tax relief and other incentives to minimize regional disparities and income
inequality.

Growth and Regional Disparities

India saw an annual growth rate of GDP (Gross Domestic Product) of only 3.6% during
the 3 decades, post-independence. It's a growth of only 1.4% in terms of per capita. The
economy of the country only moved towards higher growth trajectory during 1980s,
when it saw a growth rate of 5.4%. The growth rate of GDP soared up to 7.3% by 2007-
08, whereas the per capita GDP saw a growth of 5.7%. Due to sufficient foreign
exchange reserves, moderate inflation, stable exchange rates and adequate food stocks,
the country achieved a sustainable growth rate.

However, the gross state domestic product growth rates largely varied between states in
India. The states like Assam, Uttar Pradesh, Madhya Pradesh and Bihar saw a growth rate
of less than 5% in pre and post reform period. On the other hand, states like Andhra
Pradesh, Tamil Nadu, Gujarat, Karnataka, Haryana saw a growth rate of less than 5%
during 1980-93, which improved considerably during 1993-2006.

GSDP Per Capita GSDP

States
1980-81 / 1992-93 1993-94 / 2005-06 1980-81 / 1992-93 1993-94 / 2005-06

Andhra Pradesh 5.72 6.53 3.50 5.41

Assam 3.98 3.54 1.75 2.14

Bihar 3.41 4.73 1.23 5.26

Gujarat 6.77 7.10 4.74 5.30

 Haryana 5.75 6.98 3.24 4.81

Karnataka 5.57 6.88 3.59 5.50

Kerala 3.82 6.28 2.44 5.51

Madhya Pradesh 4.49 4.91 2.07 6.00

Maharashtra 6.32 6.17 3.97 4.42

Orissa 3.67 5.53 1.80 4.31

Punjab 5.21 4.53 3.23 2.93

Rajasthan 7.37 5.44 4.74 3.29

Tamil Nadu 5.46 6.12 4.03 5.16

Uttar Pradesh 4.47 4.19 2.17 2.59

West Bengal 4.57 6.61 2.35 5.23

Source: CSO

Finally, globalization has had its effect on Indian economy. There also exist income inequalities and
regional disparities. Yet, these shouldn't be treated as the inevitable outcomes of globalization. There
are also some other factors like politics, political institutions, political mobilization, and policy
frameworks etc. which play major role in creating income inequalities and regional disparities in the
country. Political preferences often slow down the process of growing inequalities, which avert the
movement from agriculture to service.

Effects of Globalization on Indian Industry

Effects of Globalization on Indian Industry started when the government opened the country's markets to foreign investments in the early 1990s.
Globalization of the Indian Industry took place in its various sectors such as steel, pharmaceutical, petroleum, chemical, textile, cement, retail, and BPO.
Globalization means the dismantling of trade barriers between nations and the integration of the nations economies through financial flow, trade in goods
and services, and corporate investments between nations. Globalization has increased across the world in recent years due to the fast progress that has
been made in the field of technology especially in communications and transport. The government of India made changes in its economic policy in 1991 by
which it allowed direct foreign investments in the country. As a result of this, globalization of the Indian Industry took place on a major scale.

The various beneficial effects of globalization in Indian Industry are that it brought in huge amounts of foreign investments into the industry especially in
the BPO, pharmaceutical, petroleum, and manufacturing industries. As huge amounts of foreign direct investments were coming to the Indian Industry,
they boosted the Indian economy quite significantly. The benefits of the effects of globalization in the Indian Industry are that many foreign companies set
up industries in India, especially in the pharmaceutical, BPO, petroleum, manufacturing, and chemical sectors and this helped to provide employment to
many people in the country. This helped reduce the level of unemployment and poverty in the country. Also the benefit of the Effects of Globalization on
Indian Industry are that the foreign companies brought in highly advanced technology with them and this helped to make the Indian Industry more
technologically advanced.

The various negative Effects of Globalization on Indian Industry are that it increased competition in the Indian market between the foreign companies and
domestic companies. With the foreign goods being better than the Indian goods, the consumer preferred to buy the foreign goods. This reduced the
amount of profit of the Indian Industry companies. This happened mainly in the pharmaceutical, manufacturing, chemical, and steel industries. The
negative Effects of Globalization on Indian Industry are that with the coming of technology the number of labor required decreased and this resulted in
many people being removed from their jobs. This happened mainly in the pharmaceutical, chemical, manufacturing, and cement industries.

The effects of globalization on Indian Industry have proved to be positive as well as negative. The government of India must try to make such economic
policies with regard to Indian Industry's Globalization that are beneficial and not harmful.

1. Globalization and Structural Changes in the Indian Industrial Sector

Globalization and Structural Changes in the Indian Industrial Sector took place in the early 1990s when the government decided to open the
markets to foreign investments by forming new economic polices. Structural Changes in the Indian Industrial Sector and Globalization were initiated
because the government wanted to encourage growth by doing away with supply bottlenecks that stopped efficiency and competitiveness.

Globalization implies the dismantling of trade barriers between nations and the integration of the economies of the nations through financial flow, trade in
services and goods, and corporate investments between nations. Globalization has increased in the recent years due to the rapid progress that has been
made in the area of technology especially in communications and transport. The Indian policies with regard to the industrial sector before globalization had
imposed many restrictions on the sector with regard to the use and procurement of capital and raw material, type and nature of industry where the entry
of private sector was allowed, the operation scale, and the various markets where they could supply. The Indian industrial policies favored firms of small
size that were labor intensive.

The Structural Changes in the Indian Industrial Sector was brought about by the New Economic Policy of 1991 which did away with many of the
regulations and restrictions. The various advantages of Globalization and Structural Changes in the Indian Industrial Sector are that it brought in huge
amounts of foreign investments and this gave a major boost to this sector. Many foreign companies entered the Indian market and they brought in highly
technologically advanced machines into the country as a result of which the Indian Industrial Sector became technologically advanced. With new
companies being set up in the Indian Industrial Sector it provided employment opportunities for many people in the country which in its turn helped to
reduce the level of poverty in the country. The number of factories in India in 1990-1991 stood at 110,179 and in 2003-2004, the figure increased to
129,074.

The various disadvantages of Globalization and Structural Changes in the Indian Industrial Sector are that with many foreign companies entering the
sector increased the competition for the domestic companies. With foreign goods being better then the Indian products, the consumer in the country
preferred to buy the foreign goods. This reduced the profit levels of the Indian companies and they had to resort to lowering the prices of their products
which in turn further lowered their levels of profit. With highly advanced technology entering the Indian Industrial Sector, the number of labor required in
the sector reduced. The number of labor in the Indian Industrial Sector in 1990-1991 was 81,62,504 and in 2003-2004, the figure has decreased to
78,70,081. Thus, Globalization and Structural Changes in the Indian Industrial Sector poses advantages and disadvantages for the country. So the
government of India must take steps in order to ensure that the changes in the structure of the Indian Industrial Sector are such that it facilitates
globalization in a manner that is gainful and constructive for a country like India.

BPO Services Services in India

Business process outsourcing services in India are involved with the western operations of multinational
corporations, providing solutions to client industries. This is one of the fastest growing sections of the
Information Technology Enabled services industry.
BPO Services in India: overview

From 2004-05, there was an unexpected boom in the outsourcing sector in India, not just
within the domestic market but also in the export market of business process outsourcing
where foreign clients were offshoring their back office and procedural functions to Indian
BPOs due to the cost advantage and work quality they offered.

The main factors of such rapid growth are cost-effective telecommunications and easy
availability of English speaking workforce with impressive technical know-how in India.
The main customers who are mostly benefited from the business process outsourcing
services are the industries related to Healthcare, Insurance, Banking and Finance,
Telecom, Automotive, E-commerce and Retail, Pharmaceuticals, and Airlines. Some of
the leading BPO organizations, well known for their performance and service standards
in India are Wipro, Infosys BPO, HCL, Satyam, IBM Daksh, Accenture, Hewlett
Packard, Cap Gemini, Convergys, and Tata Consultancy Services, to name a few.

Growth of BPO Services Services in India:

Business process outsourcing services in India has witnessed a growth of 70% a year and
involves 100,000 people. Most of the US and European multinational companies are
heavily dependent on the outsourcing or shared services to India in order for supporting
their financial functions. The major Indian cities like Bangalore, Chennai, Hyderabad,
Kolkata, Gurgaon, New Delhi, Noida, Pune, and Mumbai are well known as the business
processing hubs in India, offering valuable outsourcing services in India.

In a nutshell, the main reasons for the growth of business process outsourcing services in
India are:
 Cost Factor Advantage
 Utilization Improvement
 Superior Competency
 Economy of Scale
 Business Risk Mitigation

Nature of BPO Services in India:

In general, the main aim of the services of the business process outsourcing firms in India
is to provide the best solutions to satisfy clients demands. The nature of the business
process outsourcing services as offered by the BPOs are like providing inbound customer
service, outbound collections, telemarketing, invoice processing, transaction processing,
finance and accounting services, and knowledge management of complex technologies.

Globalization of Indian Manufacturing Sector

The initiation and development of globalization of the Indian manufacturing sector took place simultaneously in the 1990s. The widespread
acceptance and development of globalization of the Indian manufacturing sector effected astronomical growth of this industry
The introduction and the subsequent development of globalization of the Indian manufacturing sector respectively helped India to shed its age old tag of
being 'an agriculture based country'. The main growth driver of the Indian manufacturing sector are Information Technology and hardware,
telecommunication hardware, automobile, pharmaceutical, biotechnology, infrastructure, electronic, electrical, textiles, etc. The effect of globalization of
Indian manufacturing industry is reflected in the GDP's share of Indian manufacturing sector which has grown considerably over the years.

The share of Indian manufacturing industry towards India GDP has grown from 25.38% in 1991 to 27% in 2004. Further, the contribution of the Indian
manufacturing sector to the Indian export sector has increased from 52% in 1970 to 59% in 1980 and 71% in 1990 and 77% in 2000-01. Furthermore,
the Indian manufacturing exports accounted for a little over 5% (in 1990) of the value of output of the Indian manufacturing sector but today it is close to
10%.

India exports manufactured products worth about US$ 50 billion and a recent study on Indian manufacturing industry has forecast an annual growth of
17% by the end of the year 2015. In other words at this rate of increase the quantum of India's manufacturing exports will cross the US$ 300 billion mark
by the end of the financial year 2015. Most of this business would be in the domain of auto components, pharmaceutical, apparel, specialty chemicals, and
electrical and electronic equipment sectors. The Indian sectors which grew tremendously as a result of globalization of the Indian manufacturing sector are
as follows -

 Capital goods

 Engineering goods

 Chemicals

 Petroleum

 Chemicals & fertilizers

 Packaging

 Consumer non-durables

 Electronics

 IT Hardware & peripherals

 Gems & jewelry

 Leather & leather products

 Mining

 Steel & non-ferrous metals

 Textiles & apparels

 Water equipment

The positive effect of the globalization of the Indian manufacturing sector can be corroborated from the following facts -

 The Indian industrial growth exceeded 10%

 Manufacturing growth rate exceeded 12 %

 Manufacturing of consumer durables and non-durables have also recorded upswings

 Telecommunication sector with inflows of US$ 405 million has registered the maximum growth of 950%

 Merchandise exports recorded strong growth

 The automotive industry achieved a growth rate of over 20% in 2006-07

 The biotechnology industry witnessed another good year in 2006-07 and registering more than 40% of growth

 The US$ 47 billion Indian textile industry is expected to grow to US$ 115 billion by the year 2012

 The US$6.4 billion Indian retail industry is expected to grow over 20% annually to US$ 23 billion by 2010

 The robust pharmaceutical market in India ranks 4th worldwide and is expected to cross business worth Rs 1,00,000 crore in

 formulations and bulk drug production by 2010

Although, the process of globalization of the Indian manufacturing sector have contributed immensely for the overall development of the Indian economy
but it still suffers from some bottlenecks, like the following -

 Use of primitive technology or under utilization of technology

 Poor infrastructure
  Over staffed operations

 Expensive financing and bureaucracy

India is slowly shedding its image from being an agriculture based country to a manufacturing based country and thus the above-mentioned bottlenecks
should be immediately arrested and eradicated to ensure further growth of this industry. To ensure elimination of the above-mentioned aberrations form
the Indian manufacturing sector the government of India must focus on areas like improving the urban infrastructure, ensuring fair competition and access
to markets, reduction of import duties, quality improvements in vocational and higher education, increased investment in R&D and support of SMEs.

The manufacturing industry is the backbone of any economy since it helps in the overall growth of productivity, employment, and it also strengthens
agriculture and service sectors. The astronomical growth in worldwide distribution systems and Information Technology, coupled with opening of trade
barriers, has led to stupendous growth of global manufacturing networks, designed to take advantage of low-waged yet efficient Indian work force. The
globalization of the Indian manufacturing sector has brought down the percentage of Indians living below poverty line from 40% to 25%. The Indian
manufacturing sector is successfully competing in the global marketplace and registering high growth on year-on-year basis since the 1990s.

Globalization and the Indian Petroleum Industry

Globalization and the Indian Petroleum Industry go hand in hand since Globalization of the Indian Petroleum Industry started soon after the
independence of the country.

The Indian Petroleum Industry was dependent from the very beginning on foreign capital, expert personnel, and technology, which led to the industry's
globalization. Globalization entails the integration of the nations' economies through corporate investments, financial flow, and trade in goods and services
between nations. Globalization also means the dismantling of trade barriers between nations and it has increased in the last few years due to the massive
progress that has been made in the area of technology, especially in transport and communications. The Indian Petroleum Industry's Globalization took
place since foreign involvement in the various important stages such as production, refining, exploration, and transportation increased over the years. In
order to further encourage the Globalization of the Indian Petroleum Industry, the government of India took certain measures in the early 1990s when the
country opened its markets to foreign investments.

The various measures taken by the government to encourage Globalization and the Indian Petroleum Industry are converting the legal status of the Oil
and Natural Gas Commission to a corporation. In order to encourage the involvement of the private sector in production and exploration, the government
set up the Directorate General of Hydrocarbon. The government in an effort to encourage Indian Petroleum Industry's Globalization has offered the
contract of discovered fields to foreign and private companies. The various companies that have helped in the Globalization of the Indian Petroleum
Industry are Enron Oil and Gas Company, Videocon Petroleum Ltd, Reliance Industries Ltd., Ravva Oil Ltd., and Command Petroleum.

The Indian government in an attempt to further boost the Globalization of the Indian Petroleum Industry formed the Exploration Licensing Policy by which
it tried to attract the foreign and Indian companies to production and exploration. The incentives that were declared by the government to encourage
Globalization and the Indian Petroleum Industry are that on imports that were required for petroleum operations custom duty would not have to be paid,
state participation is not compulsory, no tax on the production of crude oil, provisions for liberal depreciation, tax holidays for 7 years from the day that
production starts, and the freedom to sell natural gas and crude oil in the domestic market at prices that are related to the market.

Globalization and the Indian Petroleum Industry has been going together as has been seen for the past many years. The government of India has taken
several measures in order to ensure that the Globalization of the Indian Petroleum Industry is successful for the industry. In the future, the government is
likely to ensure that Indian Petroleum Industry's Globalization is beneficial for the industry and not harmful.

Effects of Globalization on Indian Steel Industry

The effects of Globalization on Indian steel industry have been felt more profoundly in the past few years. The India steel industry is one of the
major industries in India
The effects of Globalization on Indian steel industry are not same throughout the country. The effects depend on the different regions, the type of raw
materials used, the condition of the markets, technological advancements, the policies of the governmental authorities pertaining to the trade and
business activities of the Indian steel industry, etc. In this age of the globalization, as the other industries of the developing countries, the Indian steel
manufacturing sector needs to restructure itself, in order to have a sustainable growth. This will be very helpful for providing the correct strategies for the
steel industry in India. The restructuring should depend on the different requirements of the steel industry.

The government played a very important role in the development of the steel industry in India. The India steel industry is experiencing a slow but steady
growth. The steel industry in India has huge scopes in the future with massive scale of infrastructural development happening all across the country. The
steel industry in India caters to many other industrial sectors such as construction industry, mining industry, transportation industry, automobile industry,
engineering industry, chemical industry, etc. The steel segment includes the manufacturing of three different kinds of steel such as carbon steel, ferro-
chrome steel, and stainless steel.

The steel industry in India has further plans of development. Plans are being chalked out on setting up of three pig iron manufacturing units of the
combined capacity of 6 lakh tons per year and a steel manufacturing unit of the capacity of producing 1 million tons yearly in West Bengal, with the
technical and financial support of China. With all these developments steel industry in India is all set to become one of the most reputed industries not
only in India but also in the international market as suggested by experts.

In order to survive the immense competition under the globalization, the Indian steel industry plans a reversal of the production of steel industry. The
main objectives of the strategy is the derivation of the benefit from the optimum utilization of the plant capacity, the nullification of any form of
drawbacks, to track the opportunities in order to get the maximum from it and to tackle the possible threats.

The strategy suggested for the reversal of the steel industry in India is double layered in nature, effecting the reversal and at the same time sustaining the
reversal. The strategy has to be growth and survival oriented. The survival part would assure the survival of the industry in the fierce competitive
atmosphere and the growth part would boost the sustainable growth of the industry. The two different parts of the strategy has to be integrated into one
to have the expected results.

The reduction of the cost is another major factor in the survival of the Indian steel industry in the age of globalization. The cost reduction would be the
main aspect of the improvement pertaining to the competitiveness of the industry. The manufacturers under the steel industry in India have to focus their
attention in the areas such as:

 The reduction in the cost of operations

 The reduction in the costs pertaining to the working capital

 The reduction in the costs pertaining to the production inventory or stock that is not sold
  The improvement in the economics operating in the technological aspects of production

 The transposition of basic materials of production

 The sources of the procurement should be different

Globalization Countries

For further information on Globalization Countries please refer to the

following links:
India, China and other developing globalization countries, with adopting measures for financial integration not only got rid of their poor economic
conditions, but they have also been able to offer one of the most competitive economic opportunities to the rich nations even during global economic
crisis. These nations presented a very positive outlook of the liberalization and privatization processes.

However, in this context, it will be wise to learn about different views and opinions on globalization.

About Globalization

The meaning of globalization may vary from person to person depending on the context. There are some scholars who believe that globalization is not
only about growth in technology and communication, opening of world trade, rising of multi national companies, population migration or expansion of
financial markets. Globalization, according to them, cannot also be defined in terms of capital, statistics, ideas or goods alone. They hold that
globalization causes pollution, infections and diseases also. Hence, both the positive as well as negative impact of the globalization has been shown
here.

The other views suggest that globalization means financial consolidation of the world channelized through free trade and capital inflows. This is also
inclusive of technology transfer and knowledge. Free labor movement between the countries is another aspect of the globalization. As per India is
concerned, globalization means opening doors for foreign direct investment (FDI) by facilitating the process of investment for international companies
in various areas of economic activity in the nation. It also signifies MNCs entry into India and tie-ups of Indian companies with foreign institutions.
Launching joint ventures in the foreign destinations and liberalization programs are also the part of the globalization process in India. Thus, in the
context of India, globalization is primarily referred to as policy reforms.

Globalization and Developing Countries

Globalized countries like India and China emerged stronger during the worst global recession period and continued to rule the chart with their
impressive performance. The credit for this can be given to their policy reforms that hit the right chord at the right time, making them one of the safest
destinations for the foreign investors. Today, most of the developed nations are looking keenly at these two developing countries to come out of the
troubled waters and to re-establish their economy on firm grounds. Governments of both India and China are also trying their best to attract capital
inflows as much as possible by relaxing their tax and duty rules.

Truly speaking, this is the real effect of globalization and all the globalized or globalization countries whether developed or developing can draw huge
benefit from this system, if aptly used.

Technology Transfer

Technology Transfer is the process where knowledge, technologies, skills, methods and samples of manufacturing, and facilities are shared among the
governments and other institutions. The goal is to take scientific and technological developments to the reach of an extensive array of users so that they
can further develop and use the technology in the development of new products, process, materials, applications and services. Closely related to and often
considered as the subset of Knowledge Transfer, Technology Transfer is often referred to as “Technology Commercialization” or “Technology Valorization”.

Technology Transfer and Globalization

Technology transfer and globalization are interconnected with each other. They are highly interdependent as well. The onset of globalization has brought
up free passage of goods and services across the globe. The role of technology has also changed from time to time. It is currently considered as one of the
important factors in the propagation of globalization. Technology transfer consists not only of various scientific researches and discoveries, but also the
transformation of such researches and discoveries into practical and feasible applications or products. Technology transfer is one of the major aspects of
globalization.

Why Technology Transfer?

This is the age of technology. With the advancement of technology, the sectors like communications have seen an enviable growth. It is also considered as
a vital factor for the propagation of the concept of globalization. One can only use the technology to its fullest for development of new products,
applications, processes and services only if s/he has got an in-depth knowledge on it. Technology transfer helps one to learn new skills, knowledge,
methods, and information.

Technology Transfer Functions

Following are the functions associated with technology transfer:

 Coordination: It is one of the most important elements of technology transfer. In technology transfer, the coordination between the users of
the technology and its developers is of utmost important. Besides, access to necessary internal and external resources to individual projects
needs to be provided.

 Nurture: Before one can successfully transfer technology from the research laboratory to the new business enterprise, it is extremely
important to have the proper environment that would support the entrepreneurship. Proper guidance and counseling are also required.

Technology Transfer Process

Most of the companies in the current days have their own “Office of Technology Transfer”, which handle the technology transfer process for the
organization. There can be varied methods of commercially exploit research, which may involve setting up joint ventures and partnerships, licensing
agreements and introducing new technologies to the market. When the organization is not interested or doesn’t have the necessary skill to develop new
technology, other corporate vehicles like spinouts come into action. These approaches often lead to raising of Venture Capital. For commercialization in
Canada, Spinoffs are used.
It’s often seen that the offices of the technology transfer work on behalf of research institutions, big multinationals and governments. In the recent past,
the number of transfer intermediaries, specialized in their fields has gone up. Following are the activities in technology transfers:

 Processing and evaluation invention disclosures

 Filing for patents

 Technology Marketing

 Licensing

 Protecting Intellectual Property developed from research activities

 Assistance in creating new businesses as well as the promotion of the existing organization’s success

Constituents of Technology Transfer Process

Following are the constituents of technology transfer process:

 Technology Transfer

 Technology Promotion

 Technology Deployment

 Technology Innovation

 Technology Development

 Technology Assessment

 Technology Information and Communication

 Technology Investment

 Technology Collaboration

 Technology Commercialization

Capital Flows and Their Effects

Capital flows, in simple terms, signify growth in the amount of money obtained from foreign or external
sources for the acquisition of local capital assets including machines, estates or buildings. There can be
various factors dominating capital inflows of any particular nation. These factors or reasons can be
efficiently brought under three vast categories. These are as follows:
 An autonomous rise in the domestic money demand
 Growth in the domestic capital output
 External influences, like plummeting international interest rates

About Capital Flows and their Effects

Guided by three main factors, capital flows can cause rise in asset prices. It can also influence the real and
nominal exchange rates in a positive way. On looking at its impact on asset prices, we can discover three
angles. The three dimensions are as mentioned below:
1. International portfolio inflows can influence the assets’ demand in direct fashion. To say it so,
capital flows into the stock exchange boost the demand for stocks and results in an increase of the
stock price. Further, portfolio inflows can bear an impact on other markets. It can be pointed out
that while capital flows into the stock exchange give rise to an increase in stock price, one still
notices a decrease on stock returns. As a consequence, investors may look for other asset markets
that bring higher returns.
 2. Capital flows may pave a way for rise in money supply and liquidity. As a result, asset prices may
increase. As already pointed out that capital inflows usually pushes the real and nominal exchange
rates, it is the responsibility of the monetary bodies to adopt such measures in the foreign
exchange market that can check appreciation in exchange rates. They can tackle the situation of
excessive demand for local currency by purchasing international currencies tracking such flows.
This helps in accumulating foreign exchange reserves and at the same time domestic money
supply. When this results in the rise of liquidity flows into asset markets, asset rates may increase.
In this case, the intervention of the foreign exchange may be checked through selling government
securities in open markets. Nevertheless, if foreign exchange intervention is sterilized only
partially, it may lead to an increase in liquidity and asset prices.
3. Capital flows are a potent cause of economic boom in a nation and result in a rise of asset prices.
Capital flows subsequent to decrease in world interest rate can generate booms in consumption
and investments.

Hence, it can be asserted without any doubt that capital flows and their effects hold great meaning in the
financial condition of any nation.

Globalization and Opening Markets in Developing Countries

Globalization has been noticed by a rush in capital flows between industrial and developing countries. In fact, it has acted as a boon to most of the
countries worldwide. Globalization and opening markets in developing counties have refurbished the global economy. Financial globalization has enhanced
capital flow and labor mobilization between counties which leads to increase in employment opportunities, and level of income. In addition, it also shows
increase in industrial growth which boosts up the gross domestic products. Globalization has also opened up the door of open trade which means that
companies can sell their products regardless of political boundary. Consumers can choose their preferred product from any country. Employing the skilled
workforce, developing countries can boost up their economy and develop the living condition of its citizens and grow the country better.

Fact of Globalization and Opening Markets in Developing Countries

Since globalization makes it easier for the countries to sell goods and provide services without any hassle, it has increased the competition among the
companies. Globalization and opening markets in the developing countries have compelled the industries to offer the best quality product in affordable
prices which is highly beneficial for the global consumers. Not just that, by using the natural resources efficiently and implementing latest technology, all
the countries can easily strengthen their economy, earlier which was almost impossible.

Features of the globalization and opening markets in developing countries

There are various features of globalization and opening markets in developing countries. First and foremost it has scientific and technological aspects
which is comprised of the internet, computer based components as well as bio-engineered food, and the Global Positioning System. The second thing is
governance where the role of the domestic and international legal system and regulating the economy and global corporations is included. Another
important feature is population. Developing countries experience an increase in population, while the developed countries see the
decline of population.

Effect of Globalization and opening markets in developing countries

Globalization and opening markets in developing counties have an array of effects. Open trade allows free moving of goods and skilled labor, while it also
enhances the systems of communication among countries. This is regardless of their physical location for boosting up the flow of information. As the
market becomes wide, it leads the industries to increase their production which causes more jobs for the people. Technology has taken the center stage
and for better communication, satellite, internet and high-end gadgets are being used. As far as negative aspects are concerned, it has increased
environmental and security threat for the countries. Migration of unskilled labor without any legal documents is also a major problem.

Globalization and Opening Markets in Developing Countries and Global Economy

 Globalization and Opening markets in developing countries have a massive impact on global economy. Firstly, Capital controls have been
trimmed down and in most of the cases it has crashed. All the countries can take benefits of free trade zones without spending extra. An exchange of
culture also takes place and the world has become a global village with the concept of multiculturalism. Increase in the global tourism and travel has been
noticed. Globalization and opening markets in developing countries also have initiated the global justice centers and global justice legal system. Another
most important thing is that, the international trade agreement has made it easier for the national as well as transnational companies to gain finance form
the foreign countries.

Apart from business and culture, the field of sports also has been significantly influenced by globalization and opening markets in developing countries.
The number of world wide events such as, the Olympic games, French open tennis tournament, the FIFA world cup soccer tournament, Wimbledon tennis
 tournament, U.S. open tennis tournaments, ICC cricket world cup tournament, Australian open tennis tournaments, Formula 1 racing, and more are being
organized all through the year.

Globalization and the Need of Fiscal Reform in Developing Countries

Without distinctive fiscal policies, a country can never be able to reap the benefits of globalization. Thus, Globalization and the need of Fiscal Reform in
developing countries are considered a must for the countries that have implemented open market economy in the recent times. It facilitates the particular
country to control and regulate the financial market. Opening up of the domestic market could be lethal as it can increase the pressure to the domestic
companies while competing against the more financially powerful foreign companies. They can even fail to compete and eventually may break down which
could lead to unemployment. And in this regard, the government needs to take an extra responsibility to support these companies. So, before taking the
decision to open the domestic market, the government must ensure that public interest is protected. If any kind of financial risks arise, the government
following open market economy can counter the problem if it has very high level of public spending. High level of public spending also increases the Gross
Domestic Product.

Globalization and the need of fiscal reform in developing countries and closed economies

Developing countries that are following closed economies have social protection which is not carefully or expertly made. In these countries hardly any
importance has been given to public spending. Instead, social protection has been given by controlling the price of the daily commodities, by escalating the
job opportunities in the public sector units, by reducing the price utility, by offering of credit subsidy, and more.

But in the perspective of financial globalization, all these are truly vulnerable. Plenty of changes need to be made by the government of a growing country.
And changing the years old orthodox system is definitely a Herculean task. But for better social protection, this fiscal reform is necessary. Globalization
and the need of fiscal reform in developing countries require steps like offering compensation for unemployment, allowances to the families, offering
pension to the retired professionals, and offering free mid day meals to the school children, etc. If these steps are followed, definitely public spending will
be increased and as a result gross domestic product will also be enhanced and the pertaining country could enjoy the benefits of globalization. Statistics
show that the public spending of the developed countries is much higher than the developing or under developed countries.

Globalization and the need of fiscal reform in developing countries and Taxation

In today’s taxation system, the personal tax and the value added tax (VAT) have an important role to play. But due to globalization, decrease in these two
taxation systems has been noticed. Financial globalization and open market economy does not approve these taxes; instead taxes are imposed on
considering the international trade which is a big setback for the developing countries.

Solution

 To counter this problem of taxation, several methods have been applied. Sometimes, the developing countries introduce high tax on luxurious
products that are imported from the foreign countries. Mobilization of the financial capital among the different countries also reduces the tax, while there
are also some countries that have come up with the policy of dual income taxation.

Globalization and Mergers in India

Globalization and Mergers

The extent to which cross border mergers and acquisitions are growing are all due to the globalization process. It has been observed of late that there are
several sectors of the economy that are heating up with a number of cross border mergers and global alliances. This is only to improve the economic state
of the country. Globalization and mergers in India has only helped in improving the economic state. The automobile sector, steel, cement, pharmaceutical,
petrochemical, and many more sectors have only experienced successful mergers with overseas companies in India. These global associations have
brought them an array of success which has created a brand value in the market. The sector which rules the merger scenario in India and is a result of the
globalization process is the automobile sector. The mergers of Maruti Udyog Pvt Ltd and Tata Motors in India have led this sector to a booming path.

Countries that are seeking mergers in India for enhancing the trade scenario are Canada, Holland, Belgium, Italy, Sweden, Norway, Poland, Germany,
Spain and the United Kingdom. Globalization and mergers in India is an important standpoint of any corporate executive on every detail of mergers and
acquisitions implemented around the world. Mergers in India may include mergers, joint ventures, acquisitions, takeovers, and other kinds of cross-border
transactions. The trends and growth of mergers and acquisition dealings has led to a noticeable increase in the globalization and mergers in India.

Globalization and mergers in India have been massively advantageous for all sectors across India and this has increased the global market efficiency.

The relation between globalization and mergers in India are quite noteworthy. The important elements of Indian mergers for globalization can be cited as
follows:
1. M&A is a good growth strategy in context of globalization – Corporates in India have been experiencing a surge in the revenue growth due to
cross border mergers and the figures are only to go up more.
2. Most Indian companies have a clear M&A strategy – the market strategy is clear for most corporates. That is why when finalizing a deal, there
arises no confusion.
3. Top M&A markets – The top M&A markets are US, India and UK.

Future of Globalization and Mergers in India

Companies usually choose the growing through the M&A route, rather than going in for an organic growth strategy due to a lot of added advantages. The
inclination towards globalization and expanding through mergers and acquisitions is a rising phenomenon nowadays.

Finally, the globalization trend has set in. As companies plan to expand their territory, global expansion is what they aim at. And this is where the
marriage of two overseas companies gives rise to the concept of globalization.

There have been instances where cross-border M&As have proved to have reaped unsatisfactory results. Considering a lot of external factors like corporate
governance, political factors, countries involved, and regulatory norms can actually lead the company towards the success path. This is why the mergers in
India have seen a considerable surge.

Tata Motors

One of the leading car makers of India, Tata Motors is recognized for its impressive line of cars and
commercial vehicles. The company features among the leading five medium and heavy commercial vehicle
makers, besides gaining prominence in car making.

About Tata Motors

Instigated in the year 1945, Tata Motors has a wide network of retailers and suppliers across India. It was in
1954 that the company launched its first vehicle. Today more than 3 million Tata cars and heavy vehicles
glide through Indian roads. The company gained the prestige of being the first from engineering industry of
India to be listed under the New York Stock Exchange in September 2004.

Besides being second biggest in the passenger car division, Tata Motors is also ranked as fifth highest in
the category of medium and heavy commercial vehicles at international level.

With the help of its associates, Tata Motors offer high end manufacturing and automotive solutions to its
customers. It's foremost indigenously made car was Tata Indica, followed by a mini-truck Tata Ace in
2005. In the year 2009, the firm marked its name in the pages of automotive history by introducing the
world's fuel efficient and cheapest car - Tata Nano.

Tata Motors - Product Portfolio

Tata Indica: First locally made passenger car, Tata Indica is a compact rear door car that attracted the
attention of the people within the months of its launch. Spacious, comfortable and reasonably priced, Indica
is perfect for Indian roads and families.

Tata Sumo Victa: Introduced in 2004, Tata Sumo Victa is an MUV equipped with spacious interiors,
burly appeal and an exclusively designed cockpit. With 4.9m of rotating radius, coercing Victa through
packed Indian roads is never an issue.

Indica V2 Xeta: designed for urban Indian middle class it boasts of its competitive cost and functionality.
At the hatch back it can comfortable hold three people and two in the front seat.

Tata Indigo: India's first luxury sedan, Tata Indigo is equipped with hi-tech features and stylish design.
Competitively valued, the car is highly admired by Indian customers.

Tata Indigo Marina: Tata Indigo Marina is the station car adaptation of their renowned model Indica and
takes pride of its opulence, roomy interiors that of an MUV and superb performance.

Tata Safari: Perfect for off-road drive, Tata Safari is Tata motors first sports utility vehicle (SUV).
Adorned with powerful engine, sporty appeal and excellent performance, Safari is preferred by Indian car
enthusiasts.

Tata Indigo SX: Introduced in the year 2005, Tata Indigo SX is renowned for its chic and panache. It is
widely admired by the end users and keeping the Indian roads in mind.

Tata Motors - Latest Launches

 
Tata Manza
 Tata Land Rover
 Tata Jaguar
 Indica Vista
 Tata Indica Dicor

Tata Motors - 2010 Market Performance

The FY 2009-10 witnessed the highest sale of Tata Motors vehicles registering at 642,686 units. In March
2010, Tata Motors' total sales were recorded at 75,151 against 54,452 units vended in March 2009.

Collective sales of Tata Motors commercial vehicles in the Indian market for 2010 are 373,615 units. The
company registered a growth of 41% considering its previous year's sales.

Collective sales of Tata Motors passenger vehicles for 2010 are 234,930 units and are estimated the highest
ever for the firm.

The firm's trade from exports for March 2010 was at 4,105 units against 1,799 units in the previous fiscal.

State Policies in the Globalization Era

Globalization along with liberalization of economy has brought several changes across the world. And the changes can be noticed in varied aspects,
starting from the economy of the nation to its people, their lifestyles, and many more. State policies of government have also changed accordingly. In fact,
state policies in the globalization era depend upon a lot of components, which change from time to time and are also subject to continuity. Though even in
the age of globalization, one can still find the state relations in the governing body, however, the most distinguishing features of this is again the fact that,
it has been able to bring changes in the policies of the state.

Globalization

Let's have a look at globalization. Is it good for the economy or a harmful one? The principles of globalization were questioned in terms of the Westphalia
system – a theory of governance. According to some agnostic, globalization is a threat to the state governing body. Being the framework of it, there is
every possibility that globalization would affect Westphalia. In this juncture, the statehood principles and self-government come into limelight. According to
the statehood, world is divided into territorial shares, and for the governance of each shares, it would require a separate government. Sovereignty is also
classified into two categories, viz. Internal Sovereignty and External Sovereignty. Internal sovereignty is the case when the government exercises
complete authority on a particular region. On the other hand, in case of External Sovereignty, there is no practice of absolute authority. While formulating
policies, the state should consider these features of sovereignty.

Globalization and the State Policies

Globalization has had a huge impact on the state at every level of activity and functioning. As a result, state policies in the globalization era are also
formulated accordingly, considering the above said impacts of globalization. If we look more into the term ‘Globalization', the term is popularly defined as
“the integration of economic, social and cultural relations across the borders”. There are three dimensions of globalization that showcase the relationship
between the sovereign state and the globalized world.

Economic Globalization

Economic globalization is associated with finance, trade, production, distribution and management. MNCs have played a major role in accelerating the
integration of the global economy. During the 1960s and 70s, augmentation of foreign direct investment (FDI) by the U.S. MNCs were observed. It's the
Japanese as well as the west European FDI that saw an increasing graph during 1980s. Besides these, financial flows including portfolio-type transactions
have also started increasing. National capital got integrated with the international financial capital, corporate alliances also started coming about.

Political Globalization

Political globalization is defined by “the shifting reach of political power, authority and forms of rule”. Political relations become closely knitted, posing a
challenge to the distinctions between domestic and international politics. In this present era, one can see the emergence of regional and global law in
global politics. It challenges the state sovereignty.

Military / Security Globalization

Globalization extends the scope of security. The military/security globalization leads to re-definition of national security as international security or also
sometimes as new cooperative security community. Here states can no longer be in charge of their non-physical security requirements like protection of
technology assets or information.
State Policies

State policies play a major role in the governing powers – national or international, state or non-state and public or private. State policies in the
globalization era involve transformation of powers to the international agencies and unions such as the EU and the regional and sub-national agencies. The
changes that happened during to the financial globalizations largely depended upon the state support and approval.

The last 10 years saw huge changes in the globalization era state policies. Globalization has been the reason behind the flow of money transfers, capital
flow, computer data flow, satellite communications, electronics upsurge and merchandise trade. The state policies have also changed accordingly.

Globalization and the Role of World Bank

Role of Globalization

Shouldn't we all treat globalization as a challenging opportunity? Globalization means increased interconnectivity and interdependence with the economies
of the entire world. It encompasses international trade, investment, and finance – helping in augmenting the national incomes of economies. Technologies
got transferred in a manner that fostered better communication. It also speaks of the global environment, crime, violence, and terrorism, untapped
potential across economies and employment opportunities that led to better economic integration. Globalization also speaks of the dreaded financial
crunch, fear among workers to loose jobs and issues alike.

Dual side of Globalization

Globalization is all about risks and opportunities, which should be managed at the national level by a strong social, structural, and financial system.
Globally, there is a need to establish a strong international financial architecture and get rid of the challenges thrown open to us. This is where
globalization and role of World Bank cannot be denied.

Role of the World Bank in Globalization

Low-Income Countries – Debt relief would be given to the low income countries and the process should get going vigorously. It is here that the World Bank
has a vital role to play by working with governments and ensure strong governance, effective judicial systems, and a robust financial system. All these
would help fight corruption. If these initiatives are not taken, attracting foreign and domestic investment would be difficult and thus globalization shall fall
back upon us.

Middle-Income Countries – Statistically, 80% of the world's poor live in middle-income countries. These are the countries which require utmost help for a
strong financial stability. For that, the structural and social reforms should be in place for the next stage of development. The mission of tackling global
poverty is the main agenda and the only important tool to achieve overall development.

World Bank is focusing on –

 Secure long-term funding

 Give advisory services

 Create the right policy and institutional framework

 Address weaknesses in the social, structural, and sectoral policies

Future of globalization and World Bank's role

In next 25 years, the population of the entire world would go up by 2 billion to a figure of 8 billion people. The 98% of the surge in population would be in
the developing countries. In 2008, more than 47% of the global population lived in urban areas. By 2020, 4.1 billion, or 55% would be living in urban
areas. The World Bank is now aiming at maintaining parity in education and is also aiming at achieving the gender equality goals.

We all must work towards building up a commitment towards global poverty reduction. After all, the benefits of globalization should be harnessed for
delivering prosperity to the nations.

Globalization and Liberalization

Globalization and liberation are directly linked with each other. The first wake of globalization started in India when the economic liberalization policies
were undertaken in the 1990s by Dr Manmohan Singh, the then Finance Minister of the country. Since then, the economy of India has improved to a great
extent and has significantly led to the rise in the standard of living of the citizens.

Pre liberalization period and globalization

From independence till the later part of the 1980s, India economic approach was mainly based on government control and a centrally operated market.
The country did not have a proper consumer oriented market and foreign investments were also not coming in. This did not do anything good to the
economic condition of the country and as such the standard of living did not go up.

In the 1980s, stress has given on globalization and liberalization of the market by the Congress government under Rajiv Gandhi. In his government
tenure, plenty of restrictions were abolished on a number of sectors and the regulations on pricing were also put off. Effort was also put to increase the
condition of the GDP of the country and to increase exports.

Even if the economic liberalization policies were undertaken, it did not find much support and the country remained in its backward economic state. The
imports started exceeding the exports and the India suffered huge balance of payment problems. The IMF asked the country for the bailout loan. The fall
of the Soviet Union, a main overseas business market of India, also aggravated the problem. The country at this stage was in need of an immediate
economic reform.
Liberalization in the 1990s

It was in the 1990s that the first initiation towards globalization and economic liberalization was undertaken by Dr Manmohan Singh, who was the Finance
Minister of India under the Congress government headed by P.V. Narasimha Rao. This is perhaps the milestone in the economic growth if India and it
aimed towards welcoming globalization. Since, the liberalization plan, the economic condition gradually started improving and today India is one of the
fastest growing economies in the world with an average yearly growth rate of around 6-7%.

Impact of globalization and liberalization

Globalization and liberalization has greatly influenced the Indian economy and made it a huge consumer market. Today, most of the economic changes in
the country are based on the demand supply cycle and other economic factors. Today, India is the world’s 12th largest economy in terms of market
exchange rate and 4th largest in terms of the Purchasing Power Parity. According to a report by the World Bank, the Indian market is expected to grow at
around 8% in the year 2010.

Globalization and liberalization has also made a positive impact on various important economic segments. Today, the service sectors, industrial sectors and
the agriculture sector have really grown to a great extent. Around 54% of the annual Gross Domestic Product (GDP) of India comes from the service
industry while the industrial and agriculture sector contributes around 29% and 17% respectively. With the improvement of the market, more and more
new sectors are coming up and reaping profits such as IT services, chemical, textiles, cement industry and so on. With the increase in the supply level, the
rate of employment is also increasing considerably.

There has been an improvement in the manufacturing sector as well which grew from 8.98% in 2005 to around 12%. The communication segment has
grown up to around 16.64%. The condition is expected to improve further with more demand and increase in customer base. The yearly growth of the
industrial sector has been around 6.8 % which will rise more in the future. India is one of the well known industrial markets in the Asia-Pacific region.

Globalization and foreign investment

One of the main aspects of globalization is foreign investment. India today has emerged as one of the perfect markets for foreign investors due to its vast
market base. More and more foreign companies are investing in the Indian market to get more returns. The foreign institutional investments (FII)
amounts to around US$ 10 billion in FY 2008-09, while the rate of Foreign direct investments (FDI) has grown around 85.1% in 2009 to US$ 46.5 billion
from US$ 25.1 billion (2008).