Shivaji University,

kolhapur.
(ycsrd)

presented by – santosh khot.

Topic Name:-

Advantages and Disadvantages of

Globalization
INTRODUCTION
After crisis of 1991, India was helped by IMF with conditions of
structural reforms. From this structural reform India enter into a new
economic world. world of
LPG (liberalization, privatization, globalization).
GLOBALISATION
• Meaning and definition
Russi mody –
‘‘Globalisation is a two way traffic, first it means free
competition. High productivity using new technology and second selling
goods in a single market of a whole world.” This definition emphasises
two major aspects of globalisation. firstly there will be free competition
in the economy. And secondly, globalisation leads to a single market of
the whole world.
The World Bank –
Globalisation means (a) gradual abolishment of import
controls over all items including consumption goods.
(b) Reducing the rate of import duty.
(c) privatising public sector enterprises. The definition explains
the process globalisation.
Advantages of Globalisation
• 1) Better capacity utilisation –
The major advantage of globalisation claimed is in the form of
better utilisation of capacities of the economy. better utilisation of capacities
would lead to economics of scale. By button (1987) and Kim and park they
pointed out that globalisation lead to better utilisation of productive
capacities of the different sectors of the economy. Use of productive
capacity generates economies of large scale. such as division of labour
marketing economies, technological economies etc.
2) Improvement in Reserves and Exports –
According to sukumar basu (1992) globalisation of Indian
economy would give three major benefits.
a) globalisation would help to improve India's foreign exchange
reserves.
b) globalisation would help to increase confidence of India's
creditors.
Advantages of Globalisation
• Foreign investors and non-residence Indians. This would help to getting
more inflow of foreign capital.
• c) Globalisation would encourage entry of more MNC’s and direct foreign
investment in India.
• “ in other words, globalisation of the economy would help to create
comparable investment climate in a country.
3) Easy and Quick Technology Transfer –
Globalisation leads to rapid increase in knowledge which in
turn leads to faster development of the country. There is continuous
research and development work going all around the world.it includes new
technology, new resources, and new markets. if new technology rapidly
and easily transferred from one part to the other part of the world it will help
economic progress.
Advantages of Globalisation
• 4) Helps to change attitudes of the people
Globalisation of the economy would lead to favourable change in management
skill and labour attitude. This advantage arises in this way globalisation leads to
invitation /appointment of foreign managerial personnel or top officers in the
industries of the country. This people would bring with them there life-style. There
life style will have good influence on the Indian society and labour community.
• 5) Globalisation Fulfils Three Expectations –
K.S.Krushnaswami pointed out that there are three expectations from the
globalisation of the economy.
a) globalisation leads to foreign competition in the domestic market.
b) globalisation leads to reduction of the cost of production and improving
efficiency and productivity.
c) globalisation leads to free mobility of capital and technology.
Disadvantages or Risk of globalisation
• 1) International Situation not Favourable –
The success of the globalisation policy depends upon international
environment it was favourable when South-East Asian countries adopted this policy.in
the present situation the international environment is not favourable.
2) Beneficial to small sections –
The globalisation experience of other countries tells that it leads to devlope
the culture of consumerism in the society. The consumerism cover maximum 20% of
population. This will be upper and upper-middle class of the society. Thus the rest of
population will not get benefit from the globalisation.
3) Reality Ignored –
Indian economy is basically rural and agrarian in character. This reality is
ignored by the framers of the globalisation policy.
In this context following points are emphasised.
a) The private foreign capital may not flow to agriculture sector.
b) There will not be automatic adjustment in agriculture.
c) The problem of population growth has been neglected by the makers.
Disadvantages or Risk of Globalisation
4) Danger of Increase in Debt –
The most important disadvantage of globalisation of Indian economy is
increasing debt. Many of developing countries are already under heavy debt. In such a
situation globalisation would lead to more and more import and higher import bills.
5) Not Suitable to India –
India was not truly ready for the reforms like globalization. The awareness about
these changes was lacking in the society.
6) Beneficial to Rich Countries –
The important argument against globalisation is that it would help only the rich
countries or group of 7 nations. The cost of benefit of rich countries will have to be paid
by developing countries like India. India will have to become submissive to the external
pressure.
Thank you…!