Globalization and Its Impact on the Indian Economy

Topics: Globalization, Agriculture, International trade Pages: 8 (2849 words) Published: December 18, 2012
What is globalisation and its impact on indian economy?

A. First about globalisation, its meaning, dimensions, measurment and content perspectives: Globalization is the increasing interconnection of people and places as a result of advances in transport, communication, and information technologies that causes political, economic, and cultural convergenceThe word "globalization" can be traced back to 1944. The term has been used by economists since 1981; however, its concepts did not permeate popular consciousness until the later half of the 1990s. The earliest concepts and predictions of globalization were penned by an American entrepreneur-turned-minister Charles Taze Russell who first coined the term 'corporate giants' in 1897. Various social scientists have tried to demonstrate continuity between contemporary trends of globalization and earlier periods. The first era of globalization (in the fullest sense) during the 19th century was the rapid growth of international trade between the European imperial powers, the European colonies, and the United States. After World War II, globalization was restarted and was driven by major advances in technology, which led to lower trading costs.Globalization in the era since World War II was first the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences. These were the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund. It has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the World Trade Organization (WTO), to mediate trade disputes and set up a uniform platform of trading. Other bi- and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade. Looking specifically at economic globalization, it can be measured in different ways. These centre around the four main economic flows that characterize globalization: Goods and services, e.g. exports plus imports as a proportion of national income or per capita of population  Labour/people, e.g. net migration rates; inward or outward migration flows, weighted by population  Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population  Technology, e.g. international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband)  To what extent a nation-state or culture is globalised in a particular year has until most recently been measured employing simple proxies like flows of trade, migration, or foreign direct investment, as described above. As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the recent index calculated by the Swiss Think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. Data are available on a yearly basis for 122 countries. According to the index, the world's most globalised...
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