AP Board 10th Class Social Economics Notes 4th Lesson Globalisation and the Indian Economy
→ Globalisation refers to integration of economies through trade, investment and technology flows.
→ Rapid growth of multinational corporations (MNCs) seeking global presence is a major driver.
→ Improvements in transportation, communication and information technology have enabled globalisation.
→ Liberalisation of trade and investment policies has promoted cross-border flows, v Global institutions like the WTO formulate rule? and agreements to govern trade and investment flows.
→ MNCs control production globally through subsidiaries, partnerships, outsourcing to take advantage of resources and markets.
→ Foreign trade connects producers to consumers across countries expanding market access.
→ Competition forces upgrade of quality, efficiency, technology to compete in global markets.
→ Inadia undertook major reforms in 1991 under WTO and IMF-World Bank pressure to open up the economy.
→ Import restrictions were lifted, tariffs reduced, foreign investment norms liberalised significantly.
→ Globalisation has benefited consumers in urban India through wider choice of brands, higher incomes.
→ Skilled producers have gained from access to technologies, collaboration with MNCs and exports. However, small manufacturers have struggled to compete with imports, many shutting down.
→ Job security, working conditions worsened for labour in many industries like apparels, electronics.
→ New opportunities created in IT, pharma, automobile and other sectors attracting foreign capital.
→ MNCs invest in India to access cheap labour, open economy policies and a fast growing local market.
→ Special Economic Zones provide excellent infrastructure, incentives and single window clearance to attract MNCs.
→ Outsourcing of IT, back office services to India has boomed creating employment opportunities.
→ But,concerns remain about overdependence on foreign capital flows that are volatile.
→ Government.must invest in health, education and skill development to make growth inclusive.
→ Upgrading infrastructure and technologies for small enterprises is vital for their survival.
→ Implementing labour laws and ensuring decent work conditions across sectors is necessary.
→ India should use trade remedial measures to protect producers from unfair competition where required.
→ Government must negotiate proactively at the WTO for favourable rules for developing countries.
→ Coordinating with other developing countries can increase bargaining power at multilateral forums.
→ Rapid advances in IT, internet, mobile telephony catalyse globalisation enabling flow of information, capital etc.
→ Outsourcing of services like software development, call centres etc. to overseas locations made possible by IT revolution.
→ Concerns however exist about loss of jobs in developed countries due to outsourcing to cheaper locations.
→ Developed countries have pushed trade and financial liberalisation to access developing country markets, resources.
→ But accuse developing countries! of protectionism while providing massive subsidies to their own agriculture sector.
→ Globalisation has enabled Indian companies like Tata, Infosys to emerge as Multinationals through overseas investments.
→ However, smaller firms struggle to withstand global competition unlike larger firms.
→ Cluster development, infrastructure upgrades, skill training must help smaller firms tap export opportunities.
→ Trade barriers like tariffs, quotas protect domestic industry but reduce consumer welfare. Balance is required.
→ Special incentives to attract MNCs often lead to enclave development with limited spillovers to the rest of the economy.
→ Rapid globalisation also heightens volatility and reduces policy autonomy to take independent decisions.
→ Rising income inequality between skilled and unskilled is a concern. Social security nets are inadequate in India.
→ Fair global rules, upgrading competitiveness, spreading gains widely are essential for development.
→ Globalisation : The process of increasing interconnectednes and interdependence among countries through the exchange of goods, services, capital, and information.
→ Foreign trade : The exchange of goods and services between countries.
→ Foreign investments : Investments made by fnifltinational corporations (MNCs) in other countries, typically involving the establishment of factories, offices, or partnerships.
→ Multinational corporations (MNCs) : Large corporations that operate in multiple countries, conducting business and production on a global scale.
→ Integration of production : The establishment of production facilities in different countries to take advantage of factors such as cheap labour and resources.
→ Integration of markets : The expansion of markets across countries, allowing the buying and selling of goods and services on a global scale.
→ Technology improvements : Rapid advancements in technology that have facilitated globalisation, such as the internet, communication devices, and satellite communication.
→ Trade liberalisation : The removal or reduction of barriers, such as taxes or quotas, on imports and exports to promote free trade.
→ World Trade Organization (WTO) : An international organisation that deals with the global rules of trade and settles disputes between member countries.
→ Development process : The economic and social progress of a country, including improvements in living conditions, infrastructure, and human capabilities.