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.

Growing fiscal deficit Deficit in BOP Excessive borrowing Insufficient foreign exchange

reserve Negative industrial rate of growth Increased inflation

WHAT IS GLOBALIZATION ?

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

Disinvestment

Allowing foreign direct investment (FDI)

NRI scheme

GROWTH OF INDIAN ECONOMY Formation of new economic reform known as LPG

model

Increase in investments by foreign investors and companies.

India on 4th rank for market capitalization.

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

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

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-981997-98(April-Dec)

1998-99(April-Dec)

Direct Investment

129 315 586 1314 2133 2696 3197 2511 1562

Portfolio Investment

4 224 3567 3824 2748 3312 1828 1742 -682

Total foreign investment

133 559 4153 5138 4881 6008 5025 4253 880

Source: Reserve Bank of India

Direct Investment vs Portfolio Investment (U.S. $ million)

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

India has become progressively vibrant & internationally competitive

Better technological development for common man

NEGATIVE IMPACT OF GLOBALIZATION ON INDIAN ECONOMY

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.

Internationalization of finance capital

Concentration & Centralization of industrial capital

Country is in a debt trap

Unemployment due to privatization

Effect on our natural source & our precious environment

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