1991 was a crisis situation for Indian economy because of deficit balance of payment India was in a disastrous situation as they had only gold reserves left to meet the requirement for 3 weeks of imports After independence Indian economy chose to be a closed economy i e no imports and exports and to be self sufficient and fulfil need of everyone by products produce within India only But to get loan from World Bank they asked to change their policy and opt for open economy Thus Liberalization Privatization and Globalization concept was introduced Liberalization means relaxation of various government restrictions in the areas of social and economic policies Privatization is the process of transferring an enterprise or industry from the public sector to the private sector Globalization refers to the free movement of goods capital services people technology and information It is the action or procedure of international integration of countries Impact of globalization could be seen on different sectors of Indian economy they are as follows AGRICULTURE SECTOR Agriculture was the main occupation of majority of Indians before 1991 almost 60 population was only dependent on agriculture and also agriculture provided many raw materials for many non agriculture sector or industry Globalization impacted agriculture in following ways Globalization led to threefold benefits in the form of technological advancements quality enhancement and improved production techniques
Globalization led to introduction of many new techniques for introduction of organic and hybrid varieties of seed in India along with new irrigation methods Globalization led to opening up of new markets and more opportunities for India as after 1991 good produce could be exported and more money could be earned Globalization led to coming up of sophisticated farm machineries fertilizers etc along with it there was growth in food processing industry because of increasing demand for junk food INDUSTRIAL SECTOR Because of LPG policy India saw a tremendous change or reform in industrial sector as liberalization provided some relief in trade barriers privatization led to dissemination of excessive stake with public sector to private sector and globalization led to invitation of foreign direct investment in different sectors Major impact was seen on industrial sector in following ways The impact of globalization on the Indian Industry was that many foreign companies set up their 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 in reducing the level of unemployment and poverty in the country Also one of the benefit of the Globalization on Indian Industry was that the foreign companies brought in highly advanced technology with them and made the Indian Industry more technologically advanced Globalization opened gate for Indian industries in other countries also so they started investing abroad and entering into various kinds of agreements like joint ventures or mergers and acquisitions etc
This has raised their global competitiveness and also led to good reputation and name for India as a hub for investment Also globalization led to coming up of MNCs so it led to high competition for local industries so they also started working harder and tried to provide better quality at cheaper prices FINANCIAL SECTOR Globalization led to competition and innovation in financial sector as people became more aware about this sector after 1991 as many new policies and reforms came into existence Impact of globalization on financial sector was as follows Due to excessive competition domestic financial intermediaries also started to have risk intensive roles for their survival Also because of competition and technological developments the industry has been transformed from a conservative outlook to a highly dynamic one After 1991 financial sector played a positive and dynamic role by offering many innovative products to suit the varied requirements of the millions of prospective investors spread throughout the country IMPACT ON WHOLE ECONOMY Globalization impacted Indian economy as a whole in following ways FOREIGN DIRECT INVESTMENT LPG policy led to coming up of Foreign Direct Investments FDIs in many sectors as India is the hub of cheap labour and also natural resources
Foreign investment helps any country as it brings foreign currency and boost the reserves also provide a competitive edge in world economy EMPLOYMENT GENERATION Coming up of investment leads to creation of more industries and thus more employment opportunities for local people So globalization helped in curbing the problem of unemployment in India as unskilled semi skilled and skilled people got the opportunity to work and earn livelihood for themselves BETTER STANDARD OF LIVING Most positive impact of globalization was that people of India were having not good standard of living so after globalization when many industries were set up and employment was given to unemployed people then they earned income and provision of money led to better and healthy standard of living TECHNOLOGICAL ADVANCEMENT Globalization also led to coming up of latest technology of world in India so technological development gave boost to many sectors like banking medical etc also after 1991 only many Indian companies got the technology to compete in world economy and the result is that few of the best technology of world is with India whether in the field of computers telecommunication or science GLOBAL RECOGNITION Globalization led to coming up of many brands to India along with this it opened the doors for Indian brands to get recognition in whole world now many Indian companies are doing very well in international market and earning good profits thus giving boost to whole economy
