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Submitted To: Submitted By:

Dr. Manju Dahiya Vishwajyoti
(Q) Do you agree with the view that the process of Globalization has
led to unequal competition?
 Let us first understand about Globalization :-

Globalization is the free movement of people, goods, and services across boundaries, or in other
words, increased in economic integration among the nations. The word globalization means to
connect your National economy with World Economy through trade, Capital Flows, Foreign
Direct Investment, Migration and the spread of Technologies.

 Globalization in India :-

After suffering from a huge financial and economic crisis Dr. Manmohan Singh brought a
new policy which is known as Liberalization, Privatization, Globalization (LPG) also known
as New Economic Policy, 1991 as it was a measure to come out of the crisis that was going
on at that time. Today India has become one of the fastest growing economies in the world
with an average growth rate of around 6-7%. There has also been a significant rise in the per
capita income and standard of living. Poverty has also reduced by around 10%.

The service industries has a share of around 54% of the annual Gross Domestic Product while
the Industrial and Agriculture Sectors share around 29% and 17% respectively. Due to the
process of globalization, the exports has also improved significantly.

The following measure were taken to Liberalized and globalized the economy:-
1:- Devaluation: - To solve the balance of payment problem Indian currency were devaluated by
18% to 19%
2:- Disinvestment: - To make LPG model smooth many of the public sector were sold to the
private sector.
3:- Allowing Foreign Direct Investment: - FDI was allowed in a wide range of sector such as
Insurance (26%), Defense Industry (26%), etc.
4:- NRI Schemes: - The facilities which were available to foreign investor were also given to
5:- Improved standard of living and better Purchasing Power
 Impact of globalization on various sector of economy:-

 Agriculture: It is the main sector of the rural Indian economy. The liberalization of Indian
economy was adopted by India in 1991. Facing a severe economic crisis, India approach IMF
for a loan, and the IMF granted that is called a structural adjustment loan with certain
conditions attached which relate to a structural change in the economy.
Globalization has helped in:-
 Raising living standards
 Alleviating poverty
 Assuring food security
 Generating buoyant market for expansion of industry and services, and
 Making substantial contribution to the national growth.

 Industry:-
Effect of globalization on Indian industry started when the government opened the country
market to foreign investment in the early 1990s. Globalization of the Indian industry took place
in its various sectors such steel, pharmaceuticals, petroleum, chemical, textile, cement, retail, and
BPO. The negative effects of globalization on Indian industry are that with the coming of
technology the number of labor required decreased and this resulted in many people being
removed from their jobs. This happened mainly in the pharmaceuticals, chemical,
manufacturing, and cement industries.

 Advantages of globalization:
 There is an international market for companies and for consumer there is a wider range of
product to choose from.
 Increase in flow of investment from developed countries to developing countries, which
can be used for economic reconstruction.
 Greater and faster flow of information between countries and greater cultural interaction
has helped to overcome cultural barriers.
 Technological development resulted in reverse brain drain in developing countries.
 Demerits of Globalization :-
 The outsourcing of jobs to developing countries has resulted in loss of jobs in
developed countries.
 There is an underlying threat .of multinational corporations with immense power
ruling the globe.
 For smaller developing nations at the receiving end, it could indirectly lead to a subtle
form of colonization.
 The number of rural landless families increased from 35% in 1987 to 45% in 1999,
further to 55 % in 2005. The families are destined to die of starvation or suicide.

Globalization has led to unequal competition

Globalization signifies a process of internationalization plus liberalization. It is the process of

integrating various economies of the world without creating any hindrances in the free flow of
goods and services, technology, capital and even labor or human capital. Globalization has led to
an "unequal competition" –

A competition between giant MNC and dwarf Indian enterprises. The small scale sector is a vital
constituent of overall industrial sector of the country. The small scale sector forms a dominant
part of Indian industry and contributing to a significant proportion of production, exports and
employment. This paper intends to present the impact of globalization on Indian Small Scale
Industries and also focuses on the performance of SSI, before and after globalization.
Small Scale Industries occupy a strategic place in Indian economic structure due to its
considerable contribution in terms of output, pro- motion of exports, creation of employment and
alleviation of poverty. This is a fact that small scale industries have been accepted as the engine
of economic growth and equitable development at global level. SSI contributes almost 40 percent
of the gross industrial value added in the Indian economy. It has been estimated that a million
rupees of investment in fixed assets in the small scale sector produces 4.62 million worth of
goods or services with an appropriate value addition 10 percent points. The small scale sector has
increased vastly over the years. During various five year plans the growth rates in SSI has been
very impressive. The number of SSI has also risen at a reasonable rate. The SSI sector has
emerged during the last five decades as a highly vi- brand and dynamic sector of the Indian
economy. This sector now ac- counts for about 95 percent of industrial units and this is
contributing about 40 percent of value addition in the manufacturing sector nearly 80 percent of
manufacturing employment and around 35 percent of total exports.
The SSI sector is having 32 lakhs units which are spread all over the country producing nearly
7500 items, and providing employment more than 178 lakhs persons. The small enterprises not
only play a crucial role in providing large scale employment opportunities at lower capital costs
than large scale industries but also helps in industrialization of rural and backward areas thereby
reducing not only regional imbalances but assuring more equitable distribution of nation income
and wealth SSI units are complementary to large and medium scale units as ancillary units.
Before the process of reform began in 1991, the government attempted to close the Indian
economy to the outside world. The bureaucracy often led to absurd restriction up to 80 agencies
had to be satisfied before a firm could be granted a license to produce and the state would decide
what was produced, how much, at what price and what source of capital were used. Planning and
the state, rather than markets, would determine how much investment was needed in which