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INTRODUCTION :
Globalisation is the new buzzword that has come to dominate the world since the nineties
of the last century with the end of the cold war and the break-up of the former Soviet
Union and the global trend towards the rolling ball. The frontiers of the state with
increased reliance on the market economy and renewed faith in the private capital and
resources, a process of structural adjustment spurred by the studies and influences of the
World Bank and other International organisations have started in many of the developing
countries. Also Globalisation has brought in new opportunities to developing countries.
Greater access to developed country markets and technology transfer hold out promise
improved productivity and higher living standard. But globalisation has also thrown up
new challenges like growing inequality across and within nations, volatility in financial
market and environmental deteriorations. Another negative aspect of globalisation is that
a great majority of developing countries remain removed from the process. Till the
nineties the process of globalisation of the Indian economy was constrained by the
barriers to trade and investment liberalisation of trade, investment and financial flows
initiated in the nineties has progressively lowered the barriers to competition and
hastened the pace of globalization
DEFINITION
Though the precise definition of globalisation is still unavailable a few definitions worth
viewing,
Stephen Gill: defines globalisation as the reduction of transaction cost of Transborder
movements of capital and goods thus of factors of production and goods.
Guy Brainbant: says that the process of globalisation not only includes opening up of
world trade, development of advanced means of communication, internationalisation of
financial markets, growing importance of MNC's, population migrations and more
generally increased mobility of persons, goods, capital, data and ideas but also infections,
diseases and pollution
IMPACT ON INDIA
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Strategies Initiated
Major measures initiated as a part of the liberalization and globalization strategy in the
early nineties included the following:
Disinvestment
Devaluation
Dismantling of The Industrial Licensing Regime
Allowing Foreign Direct Investment
Non Resident Indian Scheme
Throwing Open Industries Reserved For The Public Sector to Private
Participation
Abolition of the (MRTP) Act
The removal of quantitative restrictions on imports.
The reduction of the peak customs tariff
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Methodology
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Compare and analyse the growth statistics of various sectors of the economy.
Tabulating and estimating the GDP of the Indian economy.
To estimate the contributions made by the different sectors on Indias growth.
To analyse Indias current position among the world countries in terms of GDP
To determine the contributions made by India to the world economy.
Growth of GDP
Chart showing the growth in GDP
25
20
15
GDP
10
india
5
0
10 11 12
year
COUNTRY
INDIA
2000
5.5
2001
6
2002
4.3
2003
4.3
2004
8.3
2005
6.2
2006
8.4
2007
9.2
2008
9
2009
7.4
2010
7.4
The economic scenario in India has been pretty stable over the last 5 years. Despite the
economic downturn two years back the Indian economy has managed to remain stable.
The India GDP recorded for the period December 2010 stood at 7.4 percent. However
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2011
10.4
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Growth of FDI
Chart showing the source of FDI into India between
April 2000 and March 2011
FDI
MAURITIUS
SINGAPORE
USA
UK
NETHERLAND
JAPAN
CYPRUS
GERANY
FRANCES
OTHERS
During April-February 2010-11, Mauritius has led investors into India with US$ 6,637 million
worth of FDI comprising 42 per cent of the total FDI equity inflows into the country. The FDI
equity inflows from Mauritius is followed by Singapore at US$ 1,641 million and the US with
US$ 1,120 million, according to data released by DIPP.
Year
A. Direct investment
B. Portfolio investment
Total (A+B)
Rupees
crore
US $
million
Rupees
crore
Rupees
crore
2000-01
18406
4029
12609
2760
31015
6789
2001-02
29235
6130
9639
2021
38874
8151
2002-03
24367
5035
4738
979
29105
6014
2003-04
19860
4322
52279
11377
72139
15699
2004-05
27188
6051
41854
9315
69042
15366
2005-06
39674
8961
55307
12492
94981
21453
2006-07
103367
22826
31713
7003
135080
29829
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US $
million
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US $ million
140180
34835
109741
27271
249921
62106
2008-09
161536
35180
-63618
-13855
97918
21325
2009-10
176304
37182
153511
32375
329815
69557
India has been ranked at the second place in global foreign direct investments in 2010
and will continue to remain among the top five attractive destinations for international
investors during 2010-12 , according to United Nations Conference on Trade and
Development (UNCTAD) in a report on world investment prospects titled, 'World
Investment Prospects Survey 2009-2012'. India attracted FDI equity inflows of US$
1,274 million in February 2011. The cumulative amount of FDI equity inflows from April
2000 to February 2011 stood at US$ 128.642 billion, according to the data released by the
Department of Industrial Policy and Promotion (DIPP)The services sector comprising
financial and non-financial services attracted 21 per cent of the total FDI equity inflow
into India, with FDI worth US$ 3,274 million during April-February 2010-11, while
telecommunications including radio paging, cellular mobile and basic telephone services
attracted second largest amount of FDI worth US$ 1,410 million during the same period.
Housing and Real Estate industry was the third highest sector attracting FDI worth US$
1,109 million followed by power sector which garnered US$ 1,237 million during AprilDecember 2010-11. The Automobile sector received FDI worth US$ 1,320 million.
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10
11
12
YEAR
Countr
y
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
India
6
9.7
7.5 4.7
6.5 7.4
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7.9
7.5
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10 11 12
YEAR
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
India
35
35
25
25
25
25
25
25
25
25
25
25
In spite of the decline in the poverty rate, the number of rural landless families increased
from 35 per cent in 1987 to 45 per cent in 1999, further to 55 per cent in 2005. The
farmers are destined to die of starvation or suicide. Replying to the Short Duration
Discussion on Import of Wheat and Agrarian Distress on May 18, 2006, Agriculture
Minister Sharad Pawar informed the Rajya Sabha that roughly 1, 00,000 farmers
committed suicide during the period 1993-2003 mainly due to indebtedness.
In his interview to The Indian Express on November 15, 2005, Sharad Pawar said: The
farming community has been ignored in this country and especially so over the last eight
to ten years. The total investment in the agriculture sector is going down. In the last few
years, the average budgetary provision from the Indian Government for irrigation is less
than 0.35 percent. Employment and Unemployment Agricultural and allied sectors
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10
INDIA
5
0
1 2 3 4 5 6 7 8 9 10
year
Country 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
India
10.8
8.8
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Growth in Agriculture
In 1951, agriculture provided employment to 72 per cent of the population and
contributed 59 per cent of the gross domestic product. However, by 2001 the population
depending upon agriculture came to 58 per cent whereas the share of agriculture in the
GDP went down drastically to 24 percent and further to 22 per cent in 2006-07. This has
resulted in a lowering the per capita income of the farmers and increasing the rural
indebtedness. The agricultural growth of 3.2 per cent observed from 1980 to 1997
decelerated to two per cent subsequently. The Approach to the Eleventh Five Year Plan
released in December 2006 stated that the growth rate of agricultural GDP including
forestry and fishing is likely to be below two per cent in the Tenth Plan period. The
reasons for the deceleration of the growth of agriculture are given in the Economic
Survey 2006-07: Low investment, imbalance in fertilizer use, low seeds replacement rate,
distorted incentive system and low post-harvest value addition continued to be a drag on
the sectors performance. With more than half the population directly depending on this
sector, low agricultural growth has serious implications for the inclusiveness of growth.
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Social Services
Rate of Literacy
Chart showing the Literacy Rate in India
80
70
60
50
literacy rate 40
30
india
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12
year
Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
India
52
52
61
61
61
61
Though there is a increase in literacy rate, About the quality of education given to
children, the Approach to the Eleventh Five Year Plan stated: A recent study has found
that 38 per cent of the children who have completed four years of schooling cannot read a
small paragraph with short sentences meant to be read by a student of Class II. About 55
per cent of such children cannot divide a three digit number by a one digit number. These
are indicators of serious learning problems which must be addressed.
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30
india
20
10
0
1 2 3 4 5 6 7 8 9 101112
YEAR
Country
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
India
64.9 63.19 61.47 59.59 57.92 56.29 54.63 34.61 32.31 30.15 49.13 47.57
The Approach to the Eleventh Plan concedes that progress implementing the objectives of
health have been slow. The Report gave the particulars of the rates of infant mortality
(per 1000 live births) for India as 60 against Sri Lanka (13), China (30) and Vietnam (19).
The rate of maternal mortality (per 1, 00,000 deliveries) of India is 407 against Sri Lanka
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