Is Globalisation a Boon or a Bane for India

Before the 1990, India's economic model was dominated by a large public sector, which favoured
partitions for domestic industry. There was distrust for private sector and suspicion of foreign
investment, with extremely high taxation levels on imported goods and a different business environment
for foreign business interests. However, a balance of payment crisis in —rushed India to seek loans from
the International Monetary Fund and liberalise the economy.

India embarked upon the policies of liberalization, privatization and globalization, mainly in the last two
decades of the 20th century.

Liberlisation means :
-Simplifying procedures of business, i.e. investment, trade etc. such as doing away with the license,
permit and quota raj.
-Less interventionist and more co-operative role of the Government in economic affairs, i.e. facilitating
business rather than controlling it.

Privatisation means:
- Dis-investment of state assets
-Transferring industry from public to private ownership
-Permitting private participation in management of public sector undertakings (PSUs)

Globalisation means:
-Expansion of economic activities across the political boundaries of nation states.
-Increasing economic openness and growing economic interdependence between countries.
-Opening up of markets to foreign players and vice versa.

Broadly speaking, the term ‘globalization’ means integration of economies and societies through cross
country flows of information, ideas, technologies, goods, services, capital, finance and people. Cross
border integration can have several dimensions – cultural, social, political and economic.

BOON

In discussing the issue of globalisation in the Indian context, the word is used, i.e. the technological
changes, and associated policy changes, that have brought the world economies closer and made them
more integrated with each other. In this particular sense, the changes that have occurred in the patterns
of trade and capital flows in recent years are to India’s advantage – although, unfortunately, so far we
have not made much use of it. Today, in terms of the potential benefits of globalisation, India is in a very
different position than would have been the case 50 or even 20 years ago.

Globalization has brought to India new technologies, new products and also the economic opportunities.
Despite bureaucracy, lack of infrastructure, and an ambiguous policy framework that adversely impact
MNCs operating in India, MNCs are looking at India in a big way, and are making huge investments to set
up R&D centers in the country. India has made a lead over other growing economies for IT, business
processing, and R&D investments.
Dr. Ahulwalia stressed that this economic liberalization led to a rapid paradigmatic shift that significantly
reduced suspicion of the private sector. Dr. Ahluwalia argued that India has undoubtedly benefited from
the 1990s reforms. His argument was substantiated by two major facts: (1) The reduction of Indian
poverty rates in the 90s and (2) India's ranking second next to China, in comparison with growth rates for
large developing countries.

India and China are amongst the most pro-competition countries. India produces bountiful of software
engineers and software analysts, while China supplies all kinds of equipments. So, as per the current
scenario, the conclusion has been derived, "India as back office supplier, China as front office supplier."

Due to globalisation, the Gross.Domestic Product (GDP) increase with meteoric speed. GDP is the value
of all goods and services produced in a country during a given period. Today, India's rank is 10th in the
top ten economies (GDP). The USA is numero uno in this. India 4th largest economy in the world

 The fastest growing segment of services is the rapid expansion of knowledge-based services,
such as, professional and technical services. India has a tremendous advantage in the supply of
such services because of a developed structure of technological and educational institutions,
such as this one, and lower labour costs.
 Unlike most other prices, world prices of transport and communication services have fallen
dramatically. By 1960, sea transport costs were less than a third of their 1920 level, and they
have continued to fall. The cost of a telephone call fell more than ten-fold between 1970 and
2000. Moreover, the cost of communication is also becoming independent of distance. The most
dramatic example in this area is, of course, provided by the "Internet". India’s geographical
distance from several important industrial markets (for instance, North America) is no longer an
important element in the cost structure of skill-based services.

 It is now feasible to "unbundle" production of different types of goods and services. India does
not necessarily have to be a low-cost producer of certain types of goods (e.g., computers or
discs) before it can become an efficient supplier of services embodied in them (e.g., software or
music).

 Today, the foreign universities and different educational institutions are establishing their
branches in other nations. Due to gloablisation in — a student gets foreign education in his own
country. India has also lunched many sub-centres of different educational institutions in other
countries. The Indian Institutes of Management (IIMs) are its best

Globalization has definitely brought positive changes and been helpful in improving living conditions of
people. Improvement in financial status and livelihood of people can be understood by the following
figures and facts:

Personal Finance:
 Entry of the private sector banks has completely transformed the functioning of public sector
banks
 Opening up of mutual funds; thirty five players; 15 joint ventures
 Commencement of the depository that helped common men to become the retail investors
 Deregulation of insurance industry; Nineteen players; 14 joint ventures in life insurance sector
  Fall in interest rates; smaller monthly installments made life more simple to Indian customer
 ATM's (Automated Teller Machines) made bank transactions more easier to common men than
few years back
 Online trading, online purchanse of various finance products and online banking have helped
common men to participate in investment process.
Job Sector:
 Salaries are now more attractive than in the nineties.Average annual IT salary has increased from
Rs 1.6 lakh in 1998 to Rs 5.5 lakh in 2008
 Students get selected by the companies through campus recruitment an year before the date of
completion of their technical education.
 Large salary hikes than offered few years ago.
 More emphasis on performance and not on number of years in the job
 More flexibilities in timings and work from home arrangements are becoming common
 In the last ten years, annual revenue of software industries has grown by 350%.
 Around 1.16 crore people are employed in BPO sector compared to only few lakh in the year
1998
 Office automation has helped improving effeciency of employees
 More and more recruitment are being made using job portals. Earlier ads were placed in the
newspapers.
Banking sector:
 Number of ATMs has increased from 500 in 1998 to 32300 in 2008; 1st ATM was installed by
HSBC in 1987
 Computerization of banks has helped speed up the bank transactions
 Net banking is used by 32% of saving bank account holders in 2008 compared to 1% in 1998.
Likewise mobile banking was offered by 6% banks in 1998 that is now being offered by 90% banks
in 2008
 1st debit card and 1st credit card were issued by Citibank in 1998 and 1990, respectively.
Tax reforms:
 Tax reforms have given common men more freedom to invest money and more purchasing
power than ever before
 Tax concessions on interest of houising loan, and easy availability of house loans have helped
common men to own a dream house. However, increase in interest rates recently has made life
difficult for salaried people. Housing loan accounts have increased from 4 lakh in 1998 to 45 lakh in
2008.
Some common indicators of change:
 Now most of the households have more than one color TV sets
 Number of people travelling by air or AC class in trains have increased tremendously
 There are 42 million internet users in India in the year 2008 compared to 1.4 m users in 1998.
 The number of mobile phone users has grown to 246 million in 2008 from 1.0 million users in
1998
  There has been a great increase in sales of passenger cars. The sale has increased by 96% in the
last ten years
 Monthly pocket money of 10-17 years old has risen by 500% from Rs 300 in the year 1998
BANE

There has been both positive and negative impact of globalization on social and cultural values in India.
Although globalisation may seek to promote economic efficiency, generate growth and yield profits, it
misses out on the goals of equity, poverty eradication and enhanced human security. It is this concern
that is getting highlighted increasingly in the global community of the concerned, today.

Changes in social and cultural life:

 Access to television grew from 10% of the urban population (1991) to 75% of the urban
population (1999).
 Cable television and foreign movies became widely available for the first time and have acted as
a catalyst in bulldozing the cultural boundaries.
 All these technologies have changed perceptions and dreams of ordinary people.
 Unmarried boys and girls are sharing same apartment and staying away from their parents.
 Indian youths leaving education in mid-way and joining MNC's
 There has been a increase in theviolence, particularly against women.
 Scientific and technological innovations have made life quite comfortable, fast and enjoyable.
 More availability of cheap and filthy material (CD's or DVD's of Hollywood movies, porn movies,
sex toys, foreign channels like MTV) in the name of liberalization.
 Society has become more open compared to its earlier conservative look due to exposure to
other cultures through DTH or cable network.
 This has contributed to dating, celebration of friendship days/valentine day, and resulted to
rising number of call girls and make them more prone tosexually transmitted diseases .
 People are less worried for government jobs as MNC's and private or public sector are offering
more lucrative jobs.
 Extension of internet facilities even to rural areas.
 In place of old cinema halls, multiplex theatres are coming up.
 Old restaurants are now replaced by Mc. Donald. Fast food and Chinese dishes have replaced
juice corners and Parathas.
 More inflow of money has aggravated deep rooted problem of corruption?
 More scandals and scams compared tp pre-globalization era.
 Girls being blackmailed by their ex-boy friends using MMS
 Ban on TV channels for showing sex and violence violating all norms
 Girls being raped in moving vehicles
 There is deterioration in social values as evident from less respect for ladies, older people
The so called process of globalisation has opened up unlimited and unrestricted vistas of business for the
foreign MNC’s. Many of them have infiltrated into the Indian markets and even those industrial units
which have already built up capabilities to produce domestic products and low prices. Most of the Indian
herbal and aromatic plants, medicinal products, etc have been patented by the foreign investors and
through outsourcing process, produced final products at exorbitantly high rates in Indian markets. Food
products like corn flakes, potato chips etc which could be produced in viable manner at cheaper rate
being taken over by the MNC’s to crush the Indian small scale producers. Kellogs Corn Flake, Kentucky
Fried Chicken, Mc Donald Burger and such other food products of the MNC’s have flooded the Indian
food markets.

These products very easily lure our younger generation owing to colourful advertisement, professing
superior quality luxury products. Along with the change of food habit of the local people; luxurious
products of the MNC’s bizarre culture at the cost of our national values, aesthetic ferour have been
embraced by our younger generation. If this model of globalisation is accepted without reservation our
socio-economic and cultural edifice will very soon move towards doom. Hence, globalisation is not a
boon, but a bane in the present context of its style and mode of functioning.

A proper perspective of local socio-economic environment, cultural milieu, age old tradition, lifestyle and
pattern of livelihood etc may be generated to evolve a pragmatic reforms programme which may fit in to
our Indian tradition and culture.