Globalization

GLOBALIZATION The term globalization means international integration. Globalization is a process through which the diverse world is unified into a single society. Presented By: Sushil Kumar

SITUATION OF INDIAN ECONOMY BEFORE GLOBALIZATION In early 1991, a major economic crisis surfaced in India.    

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Growing fiscal deficit Deficit in BOP Excessive borrowing Insufficient foreign exchange reserve Negative industrial rate of growth Increased inflation

WHAT IS GLOBALIZATION ?

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Opening up of world trade Internationalization of financial markets Development of advanced means of communication Growing importance of MNCs Population & goods migration Exchange of technology & Knowledge

IMPACT ON INDIAN ECONOMY GDP Growth Rate

Year

5.6%

1980-91

7.00%

1993-01

7.5%

2003-04

8.5%

2004-05

9.0%

2005-06

9.2%

2006-07

10%

Expected

IMPACT ON INDIAN ECONOMY Foreign Exchange reserves

Year

$ 39 billion

2000-01

$ 107 billion

2003-04

$ 145 billion

2005-06

$ 180 billion

2007-08

$ 200 billion

Expected

STEPS TAKEN TO GLOBALIZE INDIAN ECONOMY 

Devaluation

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Disinvestment

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Allowing foreign direct investment (FDI)

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NRI scheme

GROWTH OF INDIAN ECONOMY 

Formation of new economic reform known as LPG model

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Increase in investments by foreign investors and companies.

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India on 4th rank for market capitalization.

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New fiscal policies and budgets in favor of foreign investors and companies.

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Worth of textile, retail, banking, IT and finance industries increases rapidly.

Direct Investment vs Portfolio Investment (U.S. $ million) 1991-921992-931993-941994-951995-961996-971997-981997-98 1998-99 (April- (AprilDec) Dec)

Direct Investme nt

129

315

586

1314

2133

2696

3197

2511

1562

Portfolio Investme nt

4

224

3567

3824

2748

3312

1828

1742

-682

Total foreign investm ent

133

559

4153

5138

4881

6008

5025

4253

880

Source: Reserve Bank of India

IMPACTS OF GLOBALIZATION INDIAN AGRICULTURE     

Exposure to global links of markets Use of technology & investments Improvement in yields Getting better prices & secured off take Tie-up with many companies link with food materials

POSITIVE IMPACT OF GLOBALIZATION ON INDIAN ECONOMY  Highly positive in almost all spheres of economic &        

social life GDP increase Exports have boomed Incidence of poverty has been reduced Employment has surged Begging by India for economic aids has stopped Longer term inflation rate has gown down Scarcity of goods have disappeared Quality of products have improved

POSITIVE IMPACT OF GLOBALIZATION ON INDIAN ECONOMY 

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India has become progressively vibrant & internationally competitive Better technological development for common man

NEGATIVE IMPACT OF GLOBALIZATION ON INDIAN ECONOMY    

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Lowering per capital income of farmers Increasing the rural indebtedness Unemployment due to privatization faulty & restrictive policies of Indian politicians made difficulty commercial farming causing many farmers committed suicides Using old British Indian laws of land acquisition the state government forcing farmers to sell there lands for industries at prices they considered justified Adverse effect on our natural sources & precious environment

FUTURE OF INDIAN ECONOMY 

Globalization will economically recolonize the developing third world.

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Internationalization of finance capital

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Concentration & Centralization of industrial capital

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Country is in a debt trap

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Unemployment due to privatization

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Effect on our natural source & our precious environment

u o y k n a h T

Thank you