Vous êtes sur la page 1sur 19

Critical Evaluation of Globalization in India

Aravind Preeti Singh Neha Sharma Roshan Kumar Priyanka Singh Bidisha Goswami

What is Globalization?

Globalization has made the world flat as evidenced by the growing service sector within India

Globalization in India

The idea behind the new economic model, LPG was to make INDIA one of the fastest growing economies of the world. The Indian economy was in major crisis in 1991

foreign currency reserves went down to $1 billion inflation was as high as 17% Fiscal deficit was also high and NRI's were not interested in investing in India

Information Technologys Impact

India produces about 100,000 new engineers a year. About 3 times the number of the U.S.

But still only 1.6 million people are employed in IT and Service Center jobs.

Key centers include Bangalore, New Delhi,

Gurgaon, and Hyderabad.

U.S. Companies in India

IT Services-design, support, and or production

Adobe, Cisco Systems, Dell, Google,


Packard, General Motors, IBM, Intel, Microsoft, Motorola, Texas Instruments, Yahoo

Disparate Taxation

Only 35 million people pay income tax to the federal government.

Formal Sector

Over 1 billion pay NO federal taxes!

Informal Sector
Largely agricultural or village based

Growing Middle Class

Over 200 million people falling into a growing

middle class of consumers.

Technically defined as those earning between $4000-$21,000 a year.

This actually only accounts for 60 M. Middle class-ness seems to include those going from living on $5 a day to $10.

Education is far from Universal

Compulsory and free education (6-14 yrs) guaranteed with the Right to Education Bill 2005

Virtually un-enforceable Literacy rate of India stands at 59%

Realitys Impact

Economic conditions necessitate children as day workers in cottage industries or in agricultural.

Lacking Infrastructure

Major cities are not connected at this point by a

highway system.






eventually connect New Delhi-Mumbai-BangaloreChennai-Kolkata. - $12 billion

Currently only 3,700 miles of highways!!!

40% of farm produce goes to waste as a result of poor


Scheduled Improvements

New $430 million Bangalore International Airport

to be completed by April 2008.

and operated)

(European built

Roads to the airport are uncertain

Vallapardam Ship Terminal in Kochi (southwest coast of Kerala) to be completed by Dubais DP World at a cost of $555 million

The Caste System

Indias source of strength and tragic weakness! Though outlawed in the constitution; it remains a

strong force controlling upward mobility

Changing laws is easier than changing minds

Compare it to the Civil rights movement in the

United States

Steps Taken to Globalize Indian Economy

The following measures were taken to liberalize and globalize the economy.

1. Devaluation: To solve the balance of payment problem Indian currency were devaluated by 18 to 19%. 2. Disinvestment: To make the LPG model smooth many of the public sectors were sold to the private sector. 3. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide range of sectors such as Insurance (26%),

defense industries (26%) etc.

4. NRI Scheme: The facilities which were available to foreign investors were also given to NRI's.


The merits of globalization are as follows There is an International market for companies and for consumers there is a wider range of products to choose from. Increase in flow of investments from developed countries to developing countries, which can be used for economic reconstruction. Greater and faster flow of information between countries and greater cultural interaction has helped to overcome cultural barriers. Technological development has resulted in reverse brain drain in developing countries.


The outsourcing of jobs to developing countries has resulted in loss of jobs in developed countries. There is a greater threat of spread of communicable diseases. There is an underlying threat of multinational corporations with immense power ruling the globe. For smaller developing nations at the receiving end, it could indirectly lead to a subtle form of colonization.


India gained highly from the LPG model GDP increased to 9.7% in 2007-2008 In respect of market capitalization India ranks fourth in the world

But even after globalization, condition of agriculture has not

improved, the share of agriculture is only 17%

But seeing the positive effects of globalization, it can be said that very soon India will overcome these hurdles too.