UNIT NO. 1

Presented by :-

Adhishree N. - 104Daliya Kulkarni - 137

Kshiteeja Sule - 87 Maya Kamath - 83

Prajakta Patange - 105Sonchita Debnath - 94

CONCEPT OFLiberalizationPrivatization Globalization

INTRODUCTION July 1991, India has taken a series of measures

to structure the economy and improve the BOP position. The new economic policy introduced

changes in several areas. The policy have salient feature which are :-

1. Liberalization (internal and external) 2. Extending Privatization.3. Globalization of the economy.

LIBERALIZATIONLiberalization refers to relaxation of previous government restrictions usually in areas of social and economic policies.

In other words Liberalization means progressive elimination of government interference.

IMPACT OF LIBERALIZATION Economic Collapse

Cultural Collapse

Increasing Inequalities

PRIVATIZATIONIt refers to the transfer of assets or service functions from public to private ownership or control and the opening of the closed areas to private sector entry.

The logic behind Privatization was the bad performance of the Public sectors.

WHY THERE IS A NEED FOR PRIVATIZATION ?

Though the PSUs have contributed heavily to develop the industrial base of the country , they are number of shortcomings which are identified below :-

Loss of a large number of PSUs Delay in implementation of projects Over – staffed resulting in lower labor

productivity

ADVANTAGES OF PRIVATIZATION

• Reduce burden

• Modernize public units

• Improve decision marking policy

• Revives sick units

• Industrial growth

• Increase the foreign investment.

GLOBALIZATION Globalization implies integration and

interconnection between countries.

Globalization opens up the economy for foreign direct investments.

According to IMF :-

The growing economic interdependence of countries worldwide through increasing volume and variety of cross border transaction.

FACTORS THAT HAVE ENABLED GLOBALIZATION

Technology

Foreign Trade and Investment Policy

Main Organization for facilitating Globalization

International Monetary Fund (IMF)

International Bank for Reconstruction and Development (IBRD)

World Trade Organization (WTO)

PROS AND CONS OF GLOBALIZATION

Pros of Globalizatio

n Free flow of capital Wide market for

companies Greater source of

information Cultural intermingling

Cons of Globalization

Widening gap between rich and poor

Unemployment Loss of domestic

industries Dominance of foreign

industries

IMPACT OF GLOBALIZATION Effects on Import –

Export policy. Effects on Foreign

currency. New Technology and

Production methods. Advantage to

Consumers. Small Producers

Suffers New Jobs

FURTHER WE ARE GOING TO STUDY

2. Impact of Globalization on our every day life

3. Impact of Globalization on Industry , Employment and Migration

4. Impact of Globalization on Agriculture

INFORMATION AND COMMUNICATION TECHNOLOGY

INFORMATION TECHNOLOGY

IT refers to INFORMATION TECHNOLOGY

IT is defined as creation, gathering, processing, storage and delivery of information.

Information technology includes www(world wide web),telephone, fax, e-communication, internet.

IT processes raw data into useful information.

IT Industry is the most widely operated industry in the world.

IMPACT OF INFORMATION TECHNOLOGY

WORLD WIDE WEB (WWW)

GLOBAL POSITIONING SYSTEM

BROAD CASTING TECHNOLOGY

TELEPHONY

APPLICATIONS OF INFORMATION TECHNOLOGY

BUSINESS EDUCATION INDUSTRY IN HOME PRODUCT DESIGN PRODUCT MANUFACTURING URBAN STUDIES FISHING ENTERTAINMENT OCEAN STUDY

ADVANTAGES OF INFORMATION TECHNOLOGY

MULTIPURPOSE USES HELPS GOVERNMENT IN

MAINTAINING RECORDS AND EFFICIENT

GOVERNANACE. PROGRESS IN BUSINESS..QUICK AND EFFICIENTANYWHERE ANY TIME

DISADVANTAGES OF INFORMATION TECHNOLOGY BRAIN DRAIN LACK OF SPIRIT OF RESEARCH LESS IMPORTANCE OF BOOKS

COMMUNICATION TECHNOLOGY

COMMUNICATION is a process of exchanging thoughts, words,opinions,emotions etc. for personal and business purpose.

Due to communication world has become a global village.

Communication has proved to be a catalyst for the process of globalization.

With globalization communication system has improved tremendously.

MODES OF COMMUNICATION TELEPHONEE-MAILMOBILE PHONESSOCIAL NETWORKING SITESVIDEO- CONFERENCINGINTERNET

ADVANTAGES OF COMMUNICATION SYSTEM

MESSAGECAN BE COMMUNICATED TO MASSES AT A TIME.

FIELD OF EDUCATION HAS PROSPERED DISTANCES HAVE SHORTENED WORLD WIDE COMMUNICATION CAN BE USED BY BOTH LITERATES AND

ILLITERATES REMOTE AREAS CAN BE WELL CONNECTED CHEAP SOURCE OF CONVEYING MESSAGE

DISADVANTAGES OF COMMUNICATION SYSTEM

NO SOCIAL BONDING ADDICTION OF GADGETS IMPERSONAL RELATIONSHIPS STRESS INSIGNIFICANCE OF FAMILY SYSTEMLACK OF CONCENTRATION AMONG

STUDENTSIGNORANT TOWARDS SPORTSANXIETY AND HYPERNESS

IMPACT OF GLOBALIZATION ON

INDUSTRY

GLOBALISATIONGlobalization signifies a process of internationalization plus liberalization, in which the world

has become a small village due to the concept of globalization. The competition has become

intense in every field. Nations fight with game plan to sustain their economy, by introducing new policies and announcing incentives to support mainly their economic- indicators. After

the world economy was open to attack, the Indian economy has initiate to concentrate on the

development of small industrial base, which had contribute positively to the India’s GDP;

India’s GDP growth is better than other developing countries with the developed small

industrial sector.

PARAMETERS OF GLOBALISATION

1. Reduction of trade barriers to permit free flow of goods and services among

nation-states;2. Creation of environment in which free flow of capital

can take place amongnation-stated;3. Creation of environment, permitting free flow of

technology; and4. Last, but not the least, from the point of view of

developing countries, creationof environment in which free movement of labour can

take place in differentcountries of the world.

SMALL SCALE INDUSTRY AND ITS IMPORTANCEEconomic development of a country is directly related to the level of industrial growth.

Expansion of industrial sector leads to a greater utilization of natural resources, production of goods and services, creation of employment opportunities and improvement

in the general standard of living. India has also been striving to develop the country’s industrial base over since independence. It has framed various policies

aimed at development of industries in the public and private sectors. Special emphasis has been laid on

small-scale industries. Small-scale industries play a key role in our planned development with its advantages of

low investment, high potential for employment generation, diversification of the industrial base and dispersal of industries to rural and semi urban areas.

THE SMALL-SCALE INDUSTRIES SECTOR HAS BEEN APPROPRIATELY GIVE A STRATEGIC POSITION IN OUR PLANNED ECONOMY TOWARDS THE FULFILLMENT OF THE SOCIO ECONOMIC OBJECTIVES PARTICULARLY IN ACHIEVING EQUITABLE GROWTH. P.N.DHAR AND H.F.LYDALL IN INTRODUCTION TO THEIR BOOK, “THE ROLE OF SMALL ENTERPRISE IN INDIAN ECONOMIC DEVELOPMENT” HAVE OBSERVED THAT ‘THE PROMOTION OF SMALL SCALE INDUSTRIES HAS BEEN WIDELY RECOMMENDED AS ONE OF THE MOST APPROPRIATE MEANS OF DEVELOPING INDUSTRY IN OVER POPULATED BACKWARD COUNTRIES’.

POSITIVE EFFECTS OF GLOBALISATION

The various beneficial effects of globalization in Indian Industry are that it brought in huge amounts of foreign

investments into the industry especially in the BPO, pharmaceutical, petroleum, and manufacturing industries. As huge amounts of foreign direct

investments were coming to the Indian Industry, they boosted the Indian economy quite significantly. The benefits of the effects of globalization in the Indian Industry are that many foreign companies set up

industries in India, especially in the pharmaceutical, BPO, petroleum, manufacturing, and chemical sectors and this

helped to provide employment to many people in the country. This helped reduce the level of unemployment

and poverty in the country. Also the benefit of the Effects of Globalization on Indian Industry are that the foreign companies brought in highly advanced technology with them and this helped to make the Indian Industry more

technologically advanced.

NEGATIVE EFFECTS OF GLOBALISATION

The various negative Effects of Globalization on Indian Industry are that it increased competition in the

Indian market between the foreign companies and domestic companies. With the foreign goods being

better than the Indian goods, the consumer preferred to buy the foreign goods. This reduced the amount of profit of the Indian Industry companies.

This happened mainly in the pharmaceutical, manufacturing, chemical, and steel industries. The negative Effects of Globalization on Indian Industry are that with the coming of technology the number

of labor required decreased and this resulted in many people being removed from their jobs. This

happened mainly in the pharmaceutical, chemical, manufacturing, and cement industries.

INDIA’S PROBLEM

High growth but problem of unemployment.

Need to generate 10 million jobs per year.

Multi party rule, hence need to accommodate political ideology with economic reality (reservations, labour law reforms).

CONCLUSION

The effects of globalization on Indian Industry have proved to be positive as well as negative. The government of India must

try to make such economic policies with regard to Indian Industry's Globalization that

are beneficial and not harmful.

IMPACT OF GLOBALIZATION ON EMPLOYMENT AND

INCREASE IN MIGRATION

NUMBER OF JOBS (EMPLOYMENT)

Economic globalisation may first have an impact on the number of jobs available in the economy, and thus affect key macro-

economic variables such as the unemployment rate and the employment-

to-population ratio. The issue is made more complex by the fact that the impact can be

different at the micro-economic level (establishment, enterprise, economic

activity) and at the macro-economic level (total

economy), as well as in the short/long term. Off shoring is a case in point .

Closing an enterprise in country A to move it to country B may result in job losses in a

particular economic activity of country A. It may also result in job gains for country A as

a whole because of higher productivity in the remaining enterprises, higher wages,

and higher consumption demand. This optimistic view seems to be supported by

some of the latest ILO analyses, according to which the number of jobs available in the

world is higher than ever before [2]. Factors other than economic globalization, such as demographic growth, may however be the

real cause of this situation.

CHANGES IN EMPLOYMENTChanges in wages and employment are not the only ways

in which an economy responds to immigration. There are at least two other adjustment mechanisms (see e.g.

Dustmann, Glitz and Frattini 2008). First, immigration may change the mix of goods and services produced in the economy and thus the occupational and industrial

structure of the labour market. For example, the immigration of low-skilled workers may expand the

production (provision) of certain products (service) that use low-skilled labour intensively. The expansion of the sector will then increase demand and drive wages back up. Similarly, immigration may change the technology

used for producing (providing) certain products (services). For example, the immigration of skilled workers may encourage the adoption of more skill

intensive technologies which would again affect labor demand.

MIGRATIONSA great and increasing number of people are moving between countries and

continents. For the OECD countries it is estimated that about 30 per cent of migration

is linked to labour. Labour migration is directly fostered by regional agreements

liberalising the movement of people as in the EU, by changing patterns of

specialisation, and by the development of multinational enterprises moving key

personnel to, from and between their foreign affiliates. The development of transport

and communication facilities serves as a catalyst. Migration leads to significant

inflows and outflows of workers whose impact on labour markets is still unclear. In

developed countries migrants may ease labour shortages and be part of the solution to

population ageing. In developing countries, however, migration to more developed

countries may result in a brain drain .

MIGRATION AND THE ECONOMIC CRISIS

In the global economy’s current state of financial crisis, the three economically and culturally divisive aspects of migration will likely be intensified by drastically changing labor market conditions. According to a 2009 report by

the Migration Policy Institute, declining GDP in most developed countries has already led to a decreased demand for

labor, with migrants bearing the brunt of job loss in areas such as construction, manufacturing, and services (Fix et al,

2009).

With trade and foreign direct investment (FDI) severely faltering in the year following the financial crisis of 2008, many

migrants in the export sector lost their jobs and were forced to return home, while many potential migrants from

developing countries have been deterred from making the trip across borders.

Although it is still too early to gauge the

true impact of the crisis thus far, many economists believe that this turnaround in migration flows is potentially the biggest

since the Great Depression (Fix et al, 2009).

In China, internal, cyclical migration from rural areas to industrialized coastal regions is a widespread phenomenon;

workers spend much of the year living away from home and instead in eastern provinces where they can find

manufacturing work and return home briefly to celebrate the Chinese New Year with their families. In the year after the

recession, however, approximately 12 million of these migrant workers were unemployed and remained in their home

provinces after their yearly vacation, rather than returning to the coastal area (Fix et al, 2009).

POVERTY AND MIGRATION RELATIONS

Migration rate varies across caste groups and villagers ,with the highest incidence among chronically poor people living in remote villages. Overall mobility levels have grown: in the number of households with

at least one person working outside the village. In remote villages, migration involved all the poorest i.e. disabled, old and sick. migration involves many costs

and risks especially considering the globalisation. Although migration is not an easy and ideal way of

earning money. Poverty does play an important role in the change in migration during globalisation as many

people from rural areas come to urban areas and try to earn money and settle down to support there family.

IMPACTS OF MIGRATIONThe impacts of immigration on the labor market critically depend

on the skills of migrants, the skills of existing workers, and the characteristics of the host economy. They also differ between the short and long run when the economy and labor demand

can adjust to the increase in labor supply. The immediate short run effects of immigration on the wages and employment of existing workers depend particularly on the extent to which migrants have skills that are substitutes or complements to those of existing workers (e.g. Boras 1995). If the skills of

migrants and existing workers are substitutes, immigration can be expected to increase competition in the labor market and

drive down wages in the short run. The closer the substitute, the greater the adverse wage effects will be. Whether and to what extent declining wages increase unemployment or inactivity

among existing workers depends on their willingness to accept the new lower wages. If, on the other hand, the skills of

migrants are complementary to those of existing workers, all workers experience increased productivity which can be

expected to lead to a rise in the wages of existing workers.

TWO ASPECTS

INFORMATION TECHNOLOGY

COMMUNICATION TECHNOLOGY

GLOBALIZATION OF AGRICULTURE , CORPORATE FARMING AND FAMER’S SUICIDES

IMPACT OF GLOBALIZATION ON AGRICULTURE

New economy policy and New agricultural policy

Opportunities and Threats Opportunities to Export agricultural

products Increase Income from framing Bridge the Technological gap Diffusion of better Agricultural technologies Lots of room to grow in Food processing Marketing of fresh Agriculture produce

OTHER SIDE OF GLOBALIZATION Land reform Polluting rural environment Diluted land ceiling legislation Changes in cropping pattern Eco crisis Loss of bio-diversity

Other impacts of globalization on agriculture

o Problems of subsidy o Public and private investmentso Danger to food sufficiency at national levelo Efforts to reduce subsidies in U.S and U.Ko Application of TRIP and agriculture in India.

Agrarian crisiso Indebted farmerso Introduction SEZo Povertyo Water scarcityo Farmers committing suicides

CORPORATE FARMING

Corporate farming is a term used to describe companies that own or influence farms and 

agricultural practices on a large scale.

FAMILY FARMSFAMILY FARMS ARE SMALL FARMS WHILE CORPORATE FARMS ARE LARGE SCALE

OPERATIONS

Arguments In favor of corporate farming

1.Consolidation of Land holdings2.Production for Exports3.Huge marketing of agricultural producer

Arguments against of corporate farming

1.Internalproblems of agribusiness firms.2.Lack of farming experience.

FARMERS SUICIDEDue to large scale mechanization of farming large number of landless peasants who will then work as contract labors in village or in the cities. Those farmer’s who will not get work on corporate farm or in cities , will have no source of income , no food to it . Such farmers then commit suicides.

REASONS OF FARMER’S SUICIDE.

absence of adequate social support infrastructure at the level of the village and district,

uncertainty of agricultural enterprise in the region, indebtedness of farmers, rising costs of cultivation, plummeting prices of farm COMMODITIES , lack of credit availability for small farmers, relative absence of irrigation facilities, repeated crop failures, dependence on rainfall for farming, rural living and easy access to poisons, and lack of political will and insight in the region

CONCLUSIONThe process of reforms according to many

economists and social scientists is not fast enough to achieve the goals . Jeffrey

Sachs, director of Harvard University’s center for international development and a noted economist , pointed out that the reform process in India had a long way to go . He feels that without a focus on the

“twin pillars” of social and economic strategies , the future would be bleak for

India , especially in the context of competition all around