* Globalisation – Introduction
Globalisation means different things to different people. In economics, globalisation refers to the increased openness of an economy to the international trade, capital flow, transfer of technology and free movement of labour.
Globalisation means the integration of the economies of the world resulting from free flow of trade, capital, labour and technology.
The term globalisation signifies new international economic order which includes –
1. Free flow of goods and services or trade between different countries of the world.
2. Free flow of capital between countries.
3. Free flow of technology among different countries of the world.
4. Free movement of labour or people internationally.
* Case for Globalisation of Indian Economy –
Many arguments have been given for the globalisation of the Indian economy since 1991 when structural reforms were initiated in India. Tariffs and Non Tariff barriers have been removed to promote free trade, foreign investment and import of technology from the developed countries.
Benefits of Liberalisation and Globalisation –
1. Shift from Import Substitution to Export-Led Growth Strategy –
The failure of import substitution strategy to achieve sustained growth of domestic industries forced India and other developing countries to follow export led growth strategy.
The strategy of development focused on export promotion requires that other countries shouldn’t prevent the imports to their countries through imposition of tariffs and non tariff barriers. This can be in a framework of a global economy with free movements of trade, capital and technology between countries.
2. Foreign Capital Inflows –
3. Globalisation and Transfer of Technology –
4. Increased Market Access –
5. Faster Economic Growth and Poverty Reduction –
6. Employment Argument –