Globalization and Indian Society: Liberalisation, Privatisation, and Globalisation
Globalization and Indian Society
Liberalization refers to the end of license, quota, and many more restrictions and controls which were put on industries before 1991.
Measures were taken for Liberalization
- Abolition of licensing policy for all industries except in few industries
- Liberalization permitted entry of new private sector banks and foreign banks in India, also the insurance sector is opened up for the private sector
- Security Exchange Board of India was formed to protect the interest of the investors
- No restriction on expansion or contraction of business activities.
- Freedom in fixing prices.
- Liberalization in import and export.
- Easy and simplifying the procedure to attract foreign capital in India.
- Privatization implies a reduction in the role of the public sector and increases in the role of the private sector in business and non-business activates. In India, the concept of privatization gained importance, especially in the post-reform period i.e. since 1991.
- Disinvestment of the public sector means the transfer of public sector enterprise to the private sector.
Board of Industrial and Financial Reconstruction (BIFR) board was set up to revive sick units in public sector enterprises suffering a loss.
- Navratna Status is given to nine public enterprises based on performance. They are given full financial and managerial freedom to make them global giants.
- 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 integration the national economics with the world economy. It implies the free flow of goods and services, capital, technology, and labour across the national borders.
The main purpose of globalization is to exploit global opportunities for local growth.
The main element of globalization include the following
- Introduction of Foreign Exchange the Government of India introduce FEMA in 1999 by replacing Foreign Exchange Regulation Act 1973.
- 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 refers to general custom duty on most of the items. The reduction in import duty has resulted in cheaper import into India
- Liberalization of Foreign Investment: Th government of India has liberalized foreign investment (FDI) since 1991. FDI is allowed in a number of sectors, which can go up to 100%.
- Signing of WTO Agreements: India has signed a number of WTO agreements in order to expand India’s trade worldwide. Such as TRIPs, TRIMs, GATS, and agreement on Agriculture
- Corporate Farming has gained importance since the post-reform period. Corporate farming is undertaken by large corporate firms either by buying the land or taking land on a lease basis.
- Corporate farming refers to farming undertaken by corporate firms. The corporate firms purchase prime agricultural land from the farmers who are willing to sell their land.
- The corporate firms may also purchase or take on the lease wasteland from the State government for the purpose of agriculture-related activities.
- The agricultural production is meant for their captive food processing a requirement for sale in the open market.
- Several states such as Maharashtra, Gujarat, Goa, Madhya Pradesh, Tamil Nadu, Punjab and others have permitted corporate farming.
- IEEFL, Pune (Subsidiary of Ion Exchange India), Jamnagar Farms Pvt. Ltd. (Subsidiary of Reliance Industries), SYP agro, Ahmedabad, etc.
What is globalisation? Discuss the positive and negative impact of globalisation on employment
- Globalization means integration the national economics with the world economy. It implies the free flow of goods and services, capital, technology, and labour across the national borders.
- The main purpose of globalization is to exploit global opportunities for local growth.
The positive impact of Globalisation on employment
- Employment in the service sectors: The employment in the service sector has increased from 20 % in 1991 to over 30% in 2019 the main reason is the growth of service sector on accounts of liberalisation privatisation and globalisation.
- Impact of FDI on employment: Due to the TRIMs agreement the member country of WTO treats foreign investment at per with domestic investment. Therefore or a number of restrictions on foreign investment have been removed. As result there has been increasing in FDI in India, which resulted in increase in employment opportunities is especially in urban areas.
- Increase in contractual workers: Due to globalization, the share of contractual and casual labours 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.
- Introduction of labor-saving devices: Globalisation demand that forms need to be competent there is pressure on the firms to improve the quality and to be cost-effective. As resulted business firms resort to the labour saving devices such as high speed Machine, Computerization for computing, Processing, and analysing information etc. Therefore there is an increasing number of job cuts across the various industries in India.
- Negative growth on employment in public sector: Due to liberalization the government has disinvested some of the public sector unit. This has resulted in a 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.
- 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 globalisation on the Agriculture Sector?
- Increase in Production: Globalization can increase agricultural production by the exchange in technology and industrial development.
- Diversification of cropping: Due to Globalization farmers have switched from traditional food items to non-food items like horticulture and medicinal plantations etc.
- Better Price: Farmers can get a better price for their producing quality output due to competition.
- Increase Export: Liberalisation has increased the volume of export of agriculture output.
- Lack of self-sufficiency: A country under globalization, cannot achieve self-sufficiency in food production because it is forced to produce only those goods in which has comparative advantages
- Price instability: Due to constant fluctuations in product prices domestic prices will not be stable. This affects both consumers and farmers
- Affects poor farmers: The benefits of globalization are being enjoyed by the rich farmers who are growing exportable crops but poor farmers are left unnoticed
- Entry to MNCs: Multinational Companies have entered Indian agriculture with their huge investment, modern techniques, and aggressive marketing. Our poor farmers cannot face such competition.
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References: MSBC books and Manan Prakashan, Smart Notes
Globalization and Indian Society include liberalisation, privatisation, and globalisation, positive and negative impact of globalisation on employment, positive and negative impact of globalisation on the Agriculture Sector