GLOBALIZATION

The term globalization means

international integration.
Globalization is a process
through which the diverse
world is unified into a single
society.

Presented By: -
Sushil Kumar
SITUATION OF INDIAN ECONOMY

BEFORE GLOBALIZATION
In early 1991, a major economic crisis
surfaced in India.

 Growing fiscal deficit

 Deficit in BOP
 Excessive borrowing
 Insufficient foreign exchange
reserve
 Negative industrial rate of growth
 Increased inflation
WHAT IS GLOBALIZATION ?

 Opening up of world trade

 Internationalization of financial markets
 Development of advanced means of
communication
 Growing importance of MNCs
 Population & goods migration
 Exchange of technology & Knowledge
IMPACT ON INDIAN ECONOMY

GDP Growth Rate Year

5.6% 1980-91
7.00% 1993-01
7.5% 2003-04
8.5% 2004-05
9.0% 2005-06
9.2% 2006-07
10% Expected
IMPACT ON INDIAN ECONOMY

Foreign Exchange reserves Year

$ 39 billion 2000-01

$ 107 billion 2003-04

$ 145 billion 2005-06

$ 180 billion 2007-08

$ 200 billion Expected

STEPS TAKEN TO GLOBALIZE
INDIAN ECONOMY

 Devaluation

 Disinvestment

 Allowing foreign direct investment (FDI)

 NRI scheme
GROWTH OF INDIAN ECONOMY
 Formation of new economic reform known as LPG
model

 Increase in investments by foreign investors and

companies.

 India on 4th rank for market capitalization.

 New fiscal policies and budgets in favor of foreign

investors and companies.

 Worth of textile, retail, banking, IT and finance

industries increases rapidly.
Direct Investment vs Portfolio Investment (U.S. $ million)
1991-921992-931993-941994-951995-961996-971997-981997-98 1998-99
(April- (April-
Dec) Dec)

Direct 129 315 586 1314 2133 2696 3197 2511 1562
Investme
nt

Portfolio 4 224 3567 3824 2748 3312 1828 1742 -682

Investme
nt

Total 133 559 4153 5138 4881 6008 5025 4253 880
foreign
investm
ent

Source: Reserve Bank of India

IMPACTS OF GLOBALIZATION
INDIAN AGRICULTURE

 Exposure to global links of markets

 Use of technology & investments
 Improvement in yields
 Getting better prices & secured off take
 Tie-up with many companies link with
food materials
POSITIVE IMPACT OF
GLOBALIZATION ON INDIAN
ECONOMY
 Highly positive in almost all spheres of economic &
social life
 GDP increase
 Exports have boomed
 Incidence of poverty has been reduced
 Employment has surged
 Begging by India for economic aids has stopped
 Longer term inflation rate has gown down
 Scarcity of goods have disappeared
 Quality of products have improved
POSITIVE IMPACT OF
GLOBALIZATION ON INDIAN
ECONOMY
 India has become progressively vibrant &
internationally competitive
 Better technological development for
common man
NEGATIVE IMPACT OF
GLOBALIZATION ON INDIAN
ECONOMY
 Lowering per capital income of farmers
 Increasing the rural indebtedness
 Unemployment due to privatization
 faulty & restrictive policies of Indian politicians
made difficulty commercial farming causing many
farmers committed suicides
 Using old British Indian laws of land acquisition
the state government forcing farmers to sell there
lands for industries at prices they considered
justified
 Adverse effect on our natural sources & precious
environment
FUTURE OF INDIAN ECONOMY
 Globalization will economically recolonize the developing
third world.

 Internationalization of finance capital

 Concentration & Centralization of industrial capital

 Country is in a debt trap

 Unemployment due to privatization

 Effect on our natural source & our precious environment

 u
ThThank
a n k yo

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