216 RAJ RANI S

THE EFFECT OF GLOBALIZATION ON INDIAN ECONOMY:

THE EFFECT OF GLOBALIZATION ON INDIAN ECONOMY By Raj Rani ROLL no.-216 MBA 1 st sem. K.U.P.G.R.C. JIND. At K.U.P.G.R.C. JIND On 2 nd dec.2009.

What is Globalization:

What is Globalization Process by which the people of the world are unified into a single society Integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and spread of technology

Meaning :

Meaning Globalization – the removal of barriers to free trade and the closer integration of national economies – can be a force for good that has the potential to enrich everyone in the world The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms . - Joseph Stiglitz

Criteria For Measuring Globalization:

Criteria For Measuring Globalization Political Engagement Personal Contact Technological Connectivity Economic Integration

Political Engagement:

Political Engagement Foreign aid, treaties, organizations and peacekeeping HELP

Personal Contact:

Personal Contact Including telephone calls, travel, and remittances.

Technological Connectivity:

Technological Connectivity Number of internet users, hosts, and secure servers

International trade and foreign direct investment:

International trade and foreign direct investment Economic Integration

Single Window (one of the models: single authority):

Single Window (one of the models: single authority)

Effect of Globalization on Indian economy:

Effect of Globalization on Indian economy 1. GDP Growth Rate. 2 . Export & Import. 3. Social Services. 4 . Growth of slum capitals. 5. FDI & FIIs inflows. 6. Agricultural.

Growth Rate :

Growth Rate

GDP Growth 2000 to 2050:

GDP Growth 2000 to 2050 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 [2003 bn US Dollars] Germany Brazil Japan Russia

BOOMING INDIAN ECONOMY: WHAT IS IN IT FOR GLOBAL SHIPPING ?:

BOOMING INDIAN ECONOMY: WHAT IS IN IT FOR GLOBAL SHIPPING ? In Jan.2008 Stock Exchange crossed 20,000 points: More than 85% growth in one year This is the effect of Globalisation on Indian Economy or Industrial Revolution

Slide 15:

YEAR Agriculture Industry Services Total GDP Per Capital GDP 1951-52/1980-81 2.52 5.20 4.41 3.62 1.44 1980-81/1990-91 3.52 6.19 6.61 5.40 3.19 1991-92/1999-00 3.16 5.48 7.52 5.73 3.68 2000-01/2007-08 2.93 7.89 8.82 7.28 5.58

Growth rate in different sectors in sep.2005 to sep.2006:

Growth rate in different sectors in sep.2005 to sep.2006

Value of Merchandise Exports & Imports:

Value of Merchandise Exports & Imports [mn US-Dollars] 2003 Exports: 55.9 bn USD Imports: 70.7 bn USD Imports Exports

STRENGTHS OF INDIAN ECONOMY :

STRENGTHS OF INDIAN ECONOMY Self-sustaining & not implanted by foreign investments to utilise cheap labour Industrial Growth improved from 6-7% to 11.7% Largest middle-class purchasing power Largest number of Professionals Largest percentage of computer literate people Self-sufficient in food production in fact net exporter

Trade Benefits.:

Trade Benefits . Benefits of Trade: Increased choice Greater potential for growth Increase international economies of scale Greater employment opportunities Trade has led to massive increases in wealth for many countries.

Integration of Indian Economy:

Integration of Indian Economy The opportunities to be able to buy and sell in any country in the world. The opportunities for Indian labour and capital to locate anywhere in the world. The growth of Indian global market in finance. Stock Markets are now accessible from anywhere in the world!

Corporate Expansion:

Corporate Expansion Characteristics: Expanding revenue Lowering costs Sourcing raw materials Controlling key supplies Control of processing Global economies of scale Controlling supplies may be one reason for global expansion.

Corporate Domination:

Corporate Domination Key Issues: Damage to the environment? Exploitation of labour? Monopoly power Non-renewable resources Damage to cultures Shell and Nike’s activities have come under severe criticism in some quarters.

Trade versus Aid?:

Trade versus Aid? Disadvantages of trade: Increase in gap between the rich and the poor Dominance of global trade by the rich, northern hemisphere countries Lack of opportunities for the poor to be able to have access to markets Exploitation of workers and growers How far does trade help children like these?

Who benefits from free trade, and who does not?:

Who benefits from free trade, and who does not? Corporations Real smart people who invent things Real aggressive people who start large companies Communist Governments like China Poor People of India. Non-technical people of India Manual Labor in the India The Environment Small Farms and Businesses

Globalization of the Economy:

Globalization of the Economy A disaster for India and other Developing Countries by acharya Krtashivananda Avadhuta

Integration in International originations:

Integration in International originations Reduction of subsidies. Reduction of support for domestic agricultural Removal of PDS. Removal of barriers on imports. Lifting restrictions on entry of foreign investors. Reduction of budgetary subsidies. Removal of subsidies for agricultural inputs. Removal of food subsidies. Promotion of foreign investment. Import liberalization. Privatization of banking sector. WTO:- IMF and WORLD BANK :-

WEAKNESSES OF INDIAN ECONOMY :

WEAKNESSES OF INDIAN ECONOMY Still dependent on agriculture – 25% of GDP and 40% of labour employment Labour Laws archaic – contributes to keeping people below poverty line Political system controlled by clan mentality Day-to-day economic activity shackled in bureaucracy Legal system slow & time consuming Acute shortage of infrastructure development in the country

Globalisation:

Globalisation Globalisation could involve all these things!c

CONCLUSION :

CONCLUSION Two faces of coin:- India will reach 9% Growth Rate in next 5 years Economy will grow to between 10 – 12% between 2010 – 2015 QUOTE: “We can be a developed Nation by 2020 if we make this our Mission Statement” – Dr A P J Abdul Kalam, Indian President It may be A disaster for India. India’s shares of world merchandise exports increased from .05% to .07% over the past 20 years. India’s shares of global trade is similar to the Philippines, an economy 6 times smaller according to IMF. FdI flows into India have averaged around 0.5% of GDP against 5% for china & 5.5% of Brazil. In fact we are one of the least globalised among the major countries- however we look at it. So India should re-manage the globalization policy.

THANK YOU:

THANK YOU