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.

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

199192

199293

199394

199495

199596

199697

199798

199798
(AprilDec)

Direct
Investm
ent

129

315

586

1314

2133

2696

3197

2511

1562

Portfolio
Investm
ent

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

199899
(AprilDec)

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

u
o
y
k
Thank
n
a
h
T

you