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Globalisation of the Indian Economy
The advent of globalisation in India can be traced to the New Economic Policy that was pursued by the government way back in 1991 to put the ailing economy in place by generating a new wave of reforms which could boost the economic growth and usher in a new era of development and progress. The aim of the new policy was to bring about a realignment of domestic demand with available resources and to initiate changes in supply and production structures with a view to eliminating the external imbalance. The economy was to be liberalized and gradually integrated with the world economy by the dismantling of tariff walls, the protection of foreign direct investment and upgrading the technology of production in various fields. The broad thrusts of the programmes were financial stability, outward-looking policies and deregulation of domestic markets. Globalisation, Liberalisation and Privatisation were thus the broad contours of the New Economic Policy.A new spirit economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the Indian economy and stimulating foreign investment have moved India firmly into the front ranks of the rapidly growing Asia-Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. The opportunities generated consequently are galore and the leading MNCs have been typically quick on the uptake. Post 1991, India’s dynamic and highly competitive private sector has been the backbone of its economic policy. It accounts for over 75 percent of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations.
As of now, India is the most sought after market in the world and it is rapidly emerging as a stronghold in the world economy all owing to the process of globalisation. Foreign Direct Investment has immensely increased and India has embarked on an ambitious plan to emulate the success of globalisation and has thus opened up its economy to the world market. The term globalisation refers to the integration of the economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. In the context of our country it has implied opening up the economy to FDI by enabling foreign companies and international conglomerates to invest in different fields of economic activities and thereby carrying out massive import liberalization programmes by switching over from quantitative restrictions to reduction of tariffs, quotas and import duties.
In a nutshell it wouldn’t be wrong to say that Globalisation has allowed companies to increase their base of operations, expand their workforce with minimal investments, and provide new services to a broad range of consumers. India has gained highly from the globalisation as its GDP increased to 9.7% in 2007-2008. In respect of market capitalization, India ranks fourth in the world but something needs to done so as to improve the share of agriculture in GDP which is a dismal 17% despite the fact that India is primarily an agrarian economy.
Umang Joshi