1. Meaning of Globalisation
When trade, commerce and culture move around seamlessly across boundaries of nations, we say ‘globalization’ has begun. It facilitates free exchange of intellectual ideas, products and services and technologies among nations. It promotes Foreign Direct Investment in poorer countries accelerating their growth.
2. Characteristics of globalization ..
• Globalization fosters growth and interconnectivity of various sectors of economy across nations. It promotes cross-border connectivity, free trade environment and interdependency of nations.
• In addition, it facilitates spread of global businesses, dismantling of cultural barriers, lowering of tariffs on export or import.
• Cross border Migration of workforce and promotes a global avenue for new investments.
• The vast concept of globalization aids the following..
2. Capital investment
3. movement of people,
4. dissemination of knowledge
3. Emergence of Globalisation
Exchange of goods, ideas, services and knowledge perhaps started in the dawn of modern civilization. The existence of the Silk Rod, marine expeditions by Europe’s sea-faring nations, exchange of scholars between China and India were some of the ways in which nations learned to benefit from each other’s resources, both material and intellectual. The Industrial Revolution and the reconstruction of economy through global trade soon after the Second World War quickened the pace of globalization.
After China began to make giant strides in its economy after the reform in the late 80’s and early 90s, it became clear to one and all that globalization was a benign economic idea. The invigoration of the World Trade Organiztion (WTO) and the collective surge among nations to allow each other free access in goods and services led to irreversible push towards globalization.
Despite instances where globalization has played havoc with the economy of nations, the voices in support of globalization are far louder today than those opposed to it.
4- Liberalisation – Meaning in Indian context
Liberalization is the easing of government controls on trade and commerce. It is an economic term, not a sociological term. In particular, it refers to reductions in restrictions on international trade and capital. Liberalization is often treated as synonymous with deregulation—that is, the removal of state restrictions on business. In principle the two are distinct (in that liberalized markets can still be subject to government regulations—for example, to protect consumers), but in practice both terms are generally used to refer to the freeing of markets from state intervention.
5. Characteristics of Liberalization in India
The following are some of the features of liberalization that was initiated as a part of economic reforms of 1991 –
• Abolition of the previously existing License Raj in the country. License or Permit Raj is a complicated system of regulations, licenses, and restrictions that were imposed to run and set up businesses between 1947 and 1990.
• Reduction of interest rates and tariffs.
• Curbing monopoly of the public sector from various areas of our economy.
• Approval of foreign direct investment in various sectors.
• Economic liberalization in India integrated the above features and in general waived off several restrictions to become more private sector-friendly.
5. Privatisation – Meaning & characteristics
(To be written later.)