Globalisation | Meaning, Causes, Dimensions | Negative & Positive Impact | Globalisation in India

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Meaning:
By the term globalisation we mean opening up of the economy for world market by attaining international competitiveness. Thus the globalisation of the economy simply indicates interaction of the country relating to production, trading and financial transactions with the developed industrialized countries of the world.
Accordingly, the term globalisation has four parameters:
a) Permitting free flow of goods by removing or reducing trade barriers between the countries,
(b) Creating environment for flow of capital between the countries,
(c) Allowing free flow in technology transfer and
(d) Creating environment for free movement of labour between the countries of the world. Thus taking the entire world as global village, all the four components are equally important for attaining a smooth path for globalisation.
Advantages of Globalisation :-
i) Globalisation helps to boost the long run average growth rate of the economy of the country through Improvement in the allocative efficiency of resources;
ii) Globalisation paves the way for removing inefficiency in production system. Prolonged protective scenario in the absence of globalisation makes the production system careless about cost effectiveness which can be attained by following the policy of globalisation.
(iii) Globalisation attracts entry of foreign capital along with foreign updated technology which improves the quality of production.
(iv) Globalisation usually restructure production and trade pattern favouring labour-intensive goods and labour-intensive techniques as well as expansion of trade in services.
Disadvantages of Globalisation:-
(I)Globalisation paves the way for redistribution of economic power at the world level leading to domination by economically powerful nations over the poor nations.
(ii) Globalisation usually results greater increase in imports than increase in exports leading to growing trade deficit and balance of payments problem.
(iii) Although globalisation promote the idea that technological change and increase in productivity would lead to more jobs and higher wages but during the last few years, such technological changes occurring in some developing countries have resulted more loss of jobs than they have created leading to fall in employment growth rates.
(iv) Globalisation has alerted the village and small scale industries and sounded death-knell to it as they cannot withstand the competition arising from well organized MNCs.
(v) Globalisation has been showing down the process to poverty reduction in some developing and underdeveloped countries of the world and thereby enhances the problem of inequality.
Globalization and India:
Developed countries have been trying to pursue developing countries to liberalize the trade and allow more flexibility in business policies to provide equal opportunities to multinational firms in their domestic market. International Monetary Fund (IMF) and World Bank helped them in this endeavour. Liberalization began to hold its foot on barren lands of developing countries like India by means of reduction in excise duties on electronic goods in a fixed time frame.
Indian government did the same and liberalized the trade and investment due to the pressure from World Trade Organization. Import duties were cut down phase-wise to allow MNC’s operate in India on equality basis. As a result globalization has brought to India new technologies, new products and also the economic opportunities.
The 1991 reforms in India have led to greater economic liberalisation which has in turn increased India’s interaction with the rest of the world.
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