FYBCOM Foundation Course Semester 2 | Globalization and Indian Society

FYBCOM Foundation Course Semester 2


Liberalization means the removal of licensing policy, quota, and many other restrictions and controls after economic reform in 1991.

FYBCOM Foundation Course Semester 2

Measures were taken for Liberalization

  1. Removal of licensing policy for all industries except in a few industries like alcohol, cigarette, hazardous chemical, defense equipment, and industrial explosive.
  2. Liberalization allowed entry of new private sector banks and foreign banks in India, also the insurance sector is opened up for the private sector.
  3. SEBI (Security Exchange Board of India) was formed to protect the interest of the investors in the capital market.
  4. Restrictions had been removed for expansion or contraction of business activities.
  5. Freedom in fixing prices after economics reforms in 1991.
  6. Liberalization in import and export results in industrial growth and development and foreign earning.
  7. It encourages the foreign market by simplifying the procedure and makes it easy to do business in Indian. 


  1. Privatization means a reduction in the role of the public sector (Government) and increases the role of the private sector in business and non-business activates. Privatization gained importance in India, after economic reform since 1991.
  2. Disinvestment of the public sector means the transfer of public sector enterprises to the private sector.
  3. BIFR i.e. Board of Industrial and Financial Reconstruction was set up to strengthing sick units of public sector enterprises that suffering a loss.
  4. Navratna Status is given to nine public enterprises based on performance. It has given full financial and managerial rights to make them global giants.
  5. National Renewal Board is set up to take care of retrenched workers the board also provides compensation to employees who take voluntary retirement.


Globalization means integrating national economics with the world economy. It means the free flow of goods and services, capital, technology, and labor across the national borders. The main purpose of globalization is to take advantage of global opportunities for local growth.

The main component of globalization includes the following:

  1. Introduction of Foreign Exchange the Government of India introduce FEMA in 1999 by replacing Foreign Exchange Regulation Act 1973.
  2. Reduce in Custom Duty: The Government of India reduced the peak customs duty from 150% in 1991 to 10%(Current level). The peak custom duty means to general custom duty on most of the items. The reduction in import duty leads to cheaper imports into India.
  3. Liberalization of Foreign Investment: Th government of India has liberalized foreign investment (FDI) since 1991. FDI is allowed in many sectors, which can go up to 100%.
  4. Signing of WTO Agreements: India has signed a number of WTO agreements to increase India’s trade worldwide, like TRIPs, TRIMs, GATS, and agreement on Agriculture.

Corporate farming: 

  1. Corporate farming means farming undertaken by corporate firms. The corporate firms buy prime agricultural land from the farmers who are willing to sell their land.
  2. Corporate Farming increased after the new industrial policy in 1991. Corporate farming is undertaken by large corporate firms either by buying the land or taking land on a rental basis.
  3. The corporate firms may also purchase or take on the lease wasteland from the State government for the purpose of agriculture-related activities.
  4. The agricultural production is meant for their captive food processing a requirement for sale in the open market.
  5. Several states such as Maharashtra, Gujarat, Goa, Madhya Pradesh, Tamil Nadu, Punjab, and others have permitted corporate farming.
  6. IEEFL, Pune (Subsidiary of Ion Exchange India), Jamnagar Farms Pvt. Ltd. (Subsidiary of Reliance Industries), SYP agro, Ahmedabad, etc.

What is globalization? Discuss the positive and negative impacts on employment.

Globalization means integrating national economics with the world economy. It refers to the free flow of goods and services, capital, technology, and labor across the national borders. The main purpose of globalization is to exploit global opportunities for local growth.

The positive impact of Globalisation on employment

  1. Employment in the service sector:  Growth of service sectors due to liberalization privatization and globalization leads to an increase in employment from 30% in 2019.
  2. Impact of FDI on employment: A number of restrictions on foreign investment have been removed due to the WTO, TRIMs agreement, as a resulted increase in foreign direct investment(FDI) and employment opportunity in the country.
  3. Increase in contractual workers: Due to globalization, the share of contractual and casual labor has increased. The increasing trends of contractual and casual workers have reduced to the grip of trade unions over the management of firms. Apart from the contract workers, some firms resort the outsourcing jobs, which has further weakened the role of trade unions in India.

Negative impact

  1. Introduction of labor-saving devices: Competition increased due to Globalisation which helps the organization to improve the quality and to be cost-effective. Business firms started using high-speed Machines, Computerization for computing, processing and analyzing information, etc. Therefore there is an increasing number of job cuts across the various industries in India.
  2. Negative growth on employment in the public sector: Government has disinvested some of the public sector units Due to liberalization.  This has resulted in the reduction of workforce in the public sector, for example, the employment in the public sector was 191 lakh in 1991 but it came down to 176 lakh in 2013.
  3. Employment in small scale sector: The small scale sector is one of the major sector providing employment in India. The micro and small enterprises provide employment to about 7% of the total workforce in the country however the annual growth rate of employment in this sector has remained more or less stagnant during the past several years.

What is the positive and negative impact of globalization on the Agriculture Sector? 

Positive effects: 

  1. Increase in Production: Globalization can increase agriculture production by the exchange in technology and industrial development.
  2. Diversification of cropping: It means farmers switching from traditional food items to non-food items like horticulture and medicinal plantations etc.
  3. Better Price: Globalization helps farmers can get a better price for their producing quality output due to competition.
  4. Increase Export: The volume of export of agriculture output has increased due to Liberalisation.

Negative Impacts: 

  1. Lack of self-sufficiency: A country under globalization imposed to produce only those goods which have comparative advantages so it cannot achieve self-sufficiency in food production.
  2. Price instability: It means fluctuation in prices. globalization leads to constant fluctuations in product prices. This impacts consumers as well as farmers.
  3. Affects poor farmers: The poor farmers not benefited due to low productivity and lower density of stakes. The advantages of globalization are being enjoyed by the rich farmers who are growing exportable crops.
  4. Entry to MNCs: Poor farmers cannot face competition with the global market due to modern techniques of production with huge investment and effective marketing.

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Reference: IDOL, Manan Prakashan

Reference: MHSB and Manan Prakashan

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