India's Globalization

By: Lara Mejia Alejandro Luis Raul Lopez Rubio

India's Globalization
India

contains about a of the

fifth of the world;

population

developing

indeed, some of its constituent states

have
bear

larger

populations

than

most
and

developing countries. The study brings to abundant quantitative

qualitative data on the analysis.

India's Globalization
While

India has made substantial strides, it

still represents a case of limited integration compared with such dynamic economies

as China, Korea, and Mexico. However,

even this limited integration has had enormous consequences for India.

India's Globalization

The study delineates three broad periods in Indias recent economic history: (1) the period prior to liberalization (195657 through 197475), characterized as one of autarky and command and control economy; (2) the period of intermittent incremental liberalization(197576 through 199091); and 3) the period after the paradigm shift to an outward-oriented economic policy in 1991.

India's Globalization
The

study

finds

that,

whatever

the

consequences of globalization elsewhere in the developing world, the case of the

critics has little merit when examined in

relation to the Indian experience. The Indian case does not bear out the

predictions of the critics.

India's Globalization
1.

Instead of economic stagnation, India

has seen acceleration in its average annual rate of economic growth, from 3.4

percent in the pre-globalization period to

about 6 percent. That figure may soon reach 7 percent.

India's Globalization
2.

Instead of deindustrialization, there has been industrial growth and, indeed, acceleration in the industrial growth rate. The average annual rate of industrial growth has jumped from 5.2 percent during the period of autarky to 7.0 percent after 1991. At the last rate, the value of manufacturing doubles about every ten yearsnot exactly deindustrialization.

India's Globalization
3.

Instead of denationalization, business in

India is now more competitive and is venturing forth into the global market.

Increased imports and the entry of foreign

multinationals have not swamped it. Essentially, India is master of its own

economy.

India's Globalization
4.

Instead of economic destabilization, the globalization of Indias economy has led to fewer economic crises. The period of economic autarky before globalization was essentially one long, enduring crisis. Since the paradigm shift to economic liberalization in 1991, there has been a marked absence of economic crisis in India.

India's Globalization
5.

Instead of impoverishment, India has seen a long and unprecedented period of welfare enhancement. The period before globalization featured high levels of poverty. There has been a secular decline in poverty since 1975and inequality has not increased much. Of more concern is the matter of growing regional disparities in India.

India's Globalization
India

has been a significant beneficiary of

the globalization process. Rather than support the case of the critics, Indias

experience strongly repudiates those

critics.

India's Globalization
The

policy conclusion that flows from the

experience is that India should, in general, be more open to globalization in the

interest of sustaining the acceleration in

growth and, therefore, the welfare of its people.

India's Globalization
The

agenda for reform to this end is well-

established in the reform community. What is required is more energetic action

to implement it, but there are, of course,

constraints in doing so that are built into the larger political system.