CONCEPT AND DEFINITION OF GLOBALIZATION
- In very simple terms globalization can be depicted as increasing global interconnectedness.
- It is a process rather than an outcome, which refers to the trend toward the growing interconnectedness of different parts of the world, not to their being interconnected.
- It primarily is an interchange of economic, social, cultural, political, technological attributes that takes place between societies when different societies come into contact with each
- Though this interchange is going on for times immemorial, this process was termed as “globalization” for the first time around the second half of 20th For eg in ancient times world particularly Europe, Asia and Africa were interconnected through silk route . Then came colonialism and slave trade which were also drivers of globalization.
- The most common definition of present day globalization refers to the growing integration of various countries to the world economy. It results mostly from a freer movement of capital, products and information, which affects not just the economy, but also, the political, cultural, social and environmental arenas
- ECONOMIC GLOBALIZATION : means dismantling of barriers of business , trade , migration of human resources , money etc reflected in growing global trade , emergence of trans national companies (TNCs) , common-unified markets etc
- POLITICAL GLOBALIZATION : refers to dilution of soverignities in the favour of multinational institutions in form of regional and global bodies like UN , IMF , WTO etc. In broader terms emergence of democratic political culture replacing authoritarian regimes of latin America , Africa , middle east etc is an indicator of political globalization
- CULTURAL GLOBALIZATION : also referred to as globalization of values means emergence of trans-national , ethical and cultural framework changing very nature of different societies. Notions of social justice , idea of freedom , emergence of global civil society etc are the aspects of universalistic value system which is crossing boundaries today.
OLD VS NEW GLOBALIZATION
- Old globalization was based on coercion and exploitation while in new globalization little coercion works :
- Globalisation had begun with the overseas expansion of capitalism in the form of imperial conquests and white colony The process of imperialism had brought the Asian, African and Latin American countries under the European political and economic domination. These countries were compelled to _open-up’ their economies for unfettered penetration by the global industrial capital. This phase has generally been referred to as the “widening phase” of globalisation. During this phase, the economic integration of the world was confined to international trade and colonial exploitative relationships.
- New developments in the field of communications have forced the economic powers to renounce the use of force for the exploitation of the colonies’. Instead, indirect pressure through World Bank, IMF, GATT, WTO, etc., is generated on the capital-starved developing societies to make structural adjustments to accommodate the interests of the Multi-National Companies (MNCs).
- Another important shift from the earlier phase is that the contemporary form of globalisation has witnessed the setting up of production centres by the MNCs in the developing countries accompanied by a tremendous increase in the velocity of capital flow across national boundaries.
- The third distinctive feature is the remarkable growth in Foreign Direct
Investment (FDI) which has been many times higher than world trade and world output.
- with the arrival of computer-aided communication network, the
international movement of capital has acquired an independent life of its own, unrelated to the needs of international trade.
FACTORS AIDING GLOBALIZATION IN INDIA
- Technology: has reduced the speed of communication manifolds. The phenomenon of social media in the recent world has made distance insignificant.
- The integration of technology in India has transformed jobs which required specialized skills and lacked decision-making skills to extensively-defined jobs with higher accountability that require new skills, such as numerical, analytical, communication and interactive skills. As a result of this, more job opportunities are created for people.
- LPG Reforms: The 1991 reforms in India have led to greater economic liberalisation which has in turn increased India’s interaction with the rest of the world.
- Faster Transportation:Improved transport, making global travel easier. For example, there has been a rapid growth in air-travel, enabling greater movement of people and goods across the globe.
- Rise of WTO:The formation of WTO in 1994 led to reduction in tariffs and non-tariff barriers across the world. It also led to the increase in the free trade agreements among various countries.
- Improved mobility of capital: In the past few decades there has been a general reduction in capital barriers, making it easier for capital to flow between different economies. This has increased the ability for firms to receive finance. It has also increased the global interconnectedness of global financial markets.
- Rise of MNCs: Multinational corporations operating in different geographies have led to a diffusion of best practices. MNCs source resources from around the globe and sell their products in global markets leading to greater local interaction.
IMPACT OF GLOBALIZATION ON INDIAN SOCIETY
1.IMPACT OF GLOBALIZATION ON WOMEN IN INDIA
Although Women holds unique position in any society, they still belong to a disadvantaged class of society due to various social barriers and impediments . Globalization is having both positive and negative impacts on women in India . They are as discussed below :
- It has opened up broader communication lines and brought more companies as well as different worldwide organizations into India- this provides more opportunities for women as it provides new platform to work.
- With new jobs for women, there are opportunities for higher pay, which raises self- confidence and brings about independence particularly financial.
- It has also promoted equality among sexes as globalization has power to uproot traditional treatment towards women to afford them equal stance in society .
- It has increased rate of Women in urban areas have become more independent and self-sufficient. Due to new job opportunities in urban areas even women are migrating to cities.
- The lower middle class is experiencing a shift in the way family relations worked. Traditionally women stayed at home taking care of domestic needs and Now most of the women are setting out of their private spaces to earn a living.
- Globalization has led increase in education of women, it has led to an improvement in health care facilities, leading to reduction of MMR and IMR leading to better health status of women
- It has led to an increase in independence of women especially in urban This has been manifested through inter-caste marriages, single mothers, live-in relationships etc
- The women in rural settings have been influenced by globalization through media and through numerous intervention programs like non-profit organizations, increasing self- confidence of women and motivating them to fight for their rights
- Though employment opportunities for women are increasing, they are mostly crowded in low paying jobs, have less social Further most of the female workers are in unorganized sector.
- Women are suffering two As women in developing countries move into the work force, their domestic responsibilities are not alleviated. Women work two full time jobs ; one at home and other at workplace which adds to mental stress
- Exploitation of women in work place has emerged as a new issue eg sexual harassment at workplace , no gender equality in pay .
- Globalization has occurred with the persistence of patriarchal mindset of Indians, this has led to problems for women like commodification of women, use of social media to harass women, increase in violence against Women continued to be perceived as weak , inferior , second-class citizens .
- As consumers, women are increasingly facing a consumer culture which reduces them to commodities and as producers, women are exposed to work exploitation and occupational hazards
- Additionally abuse , prostitution and dowry related suicides/murders are on the increase despite modernization and globalization.
2.IMPACT OF GLOBALIZATION ON INDIAN CULTURE
- Globalization affects culture in many ways. Over the ages India has had an open approach to cultural influences ( eg cultural influences of Aryans, Turks , Mughals , Europeans etc ) and has been enriched because of
- The last few decades have seen major cultural changes leading to fears that our local cultures would be overtaken or become part of a homogeneous culture. Thus there are heated debates in our society today about changes in clothes, styles, music we listen, films we watch , languages we speak , body language etc.
- Today due to hi-tech communication technologies pace of cultural penetration has increased tremendously . We can say that acceleration of globalization hastens the pace of cultural change . Today one of the most important debate regarding the impact of globalization on culture is Homenization vs Glocalization of culture .
Homogenization versus Glocalization of culture:
- A central controversy is that all cultures will become similar, that is Others argue that there is an increasing tendency towards glocalisation of culture.
- Glocalisation refers to the mixing of the global with the local culture. It is a strategy often adopted by foreign firms while dealing with local traditions in order to enhance their
- In India, we find that all the foreign television channels like Star, MTV, Channel V and Cartoon Network use Indian languages. Even McDonald sells only vegetarian and chicken products in India and not its beef products, which are popular abroad. McDonald’s goes vegetarian during the Navaratri festival. In the field of music, one can see the growth of popularity of ‘Bhangra pop’, ‘Indi pop’, fusion music and even remixes.
Homogenization of Culture : The idea that cultures would become more similar and homogeneous with the spread of globalization has been encompassed under the ‘Convergence thesis’ by contemporary sociologists. To cite an example, one can make an argument by saying that 21st century India appears more similar to 21st century USA rather than a 19th century.The rate at which various parts of Indian society are experiencing westernization and modernization gives us ample evidence that indeed Indian culture is becoming more oriented towards the West in the past few years.
- Family structure: Joint family has been adversely affected due to There has been an increase in nuclear families. This can be clearly manifested in the increasing number of old age homes that are present now. The diversity in family forms has given way to a dominance of nuclear family in the globalized India
- Food: due to opening up of food joints like McDonalds, KFC , Subways across the country, there has been a homogenization of food available across the country, but there has also been heterogenization in Old restaurants are now replaced by Mc. Donalds. Fast food and Chinese dishes have replaced juice corners and Parathas.
- Borrowing of money has become more acceptable now as compared to the Taking loans is very common due to increasing access to financial institutions
- In place of old cinema halls, multiplex theatres are coming
- Use of English has increased manifold in urban areas, this has led to a homogenization in language across the country, but the rural areas have been less affected by
Glocalization of Culture
- Food: India has its unique cuisine, but the cuisines of foreign countries have become more easily available, they are modified to suit the taste buds of Indians (like Paneer Tikka Burger in McDonalds). This has led to a wide variety of food being available, leading to Customization of foreign dishes to suit Indian taste buds. For example Lacing traditionally bland Chinese food with a generous sprinkling of Indian spices
- French, German and Spanish are taught to students right from school level along with indigenous languages, this is an exemplification of hybridization of culture
- Movies: popularity of foreign movies has increased, Hollywood, Chinese, French and Korean movies are quite popular among the urban Along with this, dubbing of these foreign movies in local languages is testimony of increased glocalization.
- Festivals: celebrations of Valentines’ day, Friendship day are examples of change in cultural values related to However, along with these new days, traditional festivals are celebrated with equal enthusiasm.
- Marriage: Importance of marriage is decreasing, there has been an increase in divorce, increase in live-in relationships, and single parenting is Marriage used to be considered as bonding of the souls; but today marriage is becoming professional and contractual. However, despite change in forms of marriage, it has not declined as an institution.
- Fashion : Dressing and fashion are the areas where one finds this blend as being the most visible. Be it wearing a saree with blouse or wearing a three piece suit during a wedding reception or wearing of the mysore turbon over a western dress are live examples of this phenomenon
- Social Media : Today social media apps like Facebook , whatsapp , Instagram etc provide language options in vernaculars and local mother tongues also like Gujarati , Marathi , Punjabi etc.
Resurgence of Cultural Nationalism
- Due to threats of homogenization of cultures , globalization has given rise to cultural campaining to defend local identities. European countries have campaigned against the threat of Americanization . Even in India this trend can be observed . eg Shiv Sena activists campaigning against Valentine’s Day celebrations in India .
- Revival of Yoga in the country as well as in the international level can be seen in the popularity of the ‘Art of Living’ course by Ravi Shankar, or the celebration of International Yoga day across the world
- There has been a revival of ayurvedic medicines in the country as well as outside AYUSH health policy has laid emphasis on promotion of traditional forms of medicines and therapies including Ayurveda , Unani , Homepathy , Naturopathy etc
- Due to increasing uncertainty by inter-linkage with the outside world, there has been religious revivalism. This can be manifested in the use of religion to attract voters, or mobilizing people on the basis of
- Increasing demand for local handicraft products in global market: such as Chikenkari or bandhani.
- Due to increasing global tourism, locals are making efforts to preserve their diversity and revive their
3.IMPACT OF GLOBALIZATION ON YOUTH
- Unemployment among youth has become a serious problem. Young migrants are pushed and pulled into the cities only to find a stressed local In the absence of critical infrastructure many youth suffer from the mismanagement of scarce resources, corruption, and sometimes natural calamities that devastate overpopulated areas.
- Religious, civic and ethnic conflicts also weaken economic prosperity available in cities, which often directly involve young
- Change in career preferences: The most highly regarded careers like government services, engineering, and medicine are giving way to high- paying jobs in high tech and the
- Present day youth, with its more materialistic ambitions and more globally informed opinions, are gradually abandoning the austere ways and restricted traditional Indian Youth demand a more cosmopolitan society that is a full-fledged member of the global economy.
- In addition to the dynamic, global, economic forces effecting India, globalization has brought change to India’s rich Youth see themselves as global teenagers. They belong to a much bigger community than the community they were born into. The younger generation is embracing western popular culture and incorporating it into their Indian identity.
- Consumerism has permeated and transformed the traditional beliefs and practices of the Indian The traditional Indian dress is declining, especially among urban youth, in favour of new fashions particularly from the west ( “ The Jeans – T shirt culture). Buying the latest cars, televisions, electronic gadgets, and trendy clothes has become quite popular.
- The younger poor population is particularly susceptible to the allure of costly products seen in advertisements and when they cannot respond to these ads, they get Crime and depression can be the result of their frustration.
- Globalization also is changing family institutions/structures, and the nuclear family is increasingly the norm. Youth are not as close to their grandparents as were earlier generations and spend less time with the older generation resulting in loss of wisdom handed down from generation to
- Globalization has led to an increase in uncertainty among youth; this underlying instability may serve to magnify the tensions and lack of control they experience on a daily Uncertainty is because of the breakdown of traditional norms, weakening of social relations like that of family and marriage, uncertainty in career due to market economy and day to day disruptions caused by technology globally. This has led to an increase in cases of depression and suicide among the youth.
- Most religious activities are becoming irrelevant to the They want to see changes in religion. Atheistic values among youth is rising. They are not internalizing traditional ideas; rather, they are merely tolerating them.
- Politically they have become more aware of their rights and are also against irrational practices.
The evaluation of the effects of globalization is as a mixed bag, both good and bad. Economic globalization has improved study and job opportunities and provided greater employment opportunities. But it has also made the poor even poorer. But importantly, there is no going back from globalisation. Only adaptation is the way forward.
4.IMPACT OF GLOBALIZATION ON CASTE SYSTEM
Due to globalization, there has been changes in the traditional caste system in following ways:
- Due to globalization, there has been expansion of economic opportunities, education and liberal thoughts, which has resulted in weakening of the caste People got the high paying jobs in multinational companies on the basis of talent not caste or class. Which help the lower caste and class people to become economically sound and there is upward mobility .
- Today Indian diaspora living abroad get the identity of Indian not from caste or class they were belongs to.
- Inter caste marriages are becoming more common and are being accepted On marriage portals you can observe “ Caste no bar “ marriage advertisements increasing day by day.
- Traditional division of labour was breaking down due to industrialization; this was given a boost by
- Increasing use of modern communication facilities, increased interaction between members of different castes has led to decrease in feeling of
- Globalization has resulted into growing urbanization, which has facilitated secular pattern of living and hence impacted “separation of contact” aspect of caste system.
5.IMPACT OF GLOBALIZATION ON FAMILY
- Increasing mobility of younger generation in search of new employment and educational opportunities allegedly weakened the family relations.
- Nuclearization of families : Another striking impact is a gradual change took place in the family structure from joint / extended families to nuclear family pattern.
- Traditional authority structure i.e. head of the family i.e. father / grandfather/karta started losing his authority to the breadwinner of the family.
- Even within the nuclear family one can witness the changing marital roles and distributions of power. Total subordination of women to men and strict disciplinarian role of father towards children are also changing.
- Rise in individualism: Younger generation, particularly those with higher education and jobs, no longer believe in total surrender of their individual interests to family interest. The individualism is increasing even within the family structure. The increasing costs of education, health services and new job opportunities opened up for the women outside the house once again brought the role of family into question
- Emergence of single parent families enabling unmarried individuals to adopt children. Concept of living families is also emerging where couples live together but without marrying .
- Independent decision making : younger generations are leading entirely a different way of life. In the process of finding their partners / mates, younger generations are depending mostly on internet marriage sites like ‘com, Bharat Matrimony.’ Family involvement in finding a groom / bride is reduced to nominal.
- With more women joining the workforce system, the care of aged within families has
ECONOMIC IMPACTS OF GLOBALIZATION
Indian Economy has been affected by wave of globalization in following ways :
- LIBERALIZATION It includes:
- General reduction of role of state in economic governance
- Decline in the government / public sectors in key industries
- Decline in role of state in providing public social services like education , health etc
- Entry of MNCs in Indian economy
- It includes selling publically owned assets to private sector, abolition of license raj , disinvestments in PSUs etc
- FDI ( FOREIGN DIRECT INVESTMENT )
- Foreign Direct Investment (FDI) is money invested in production by a foreign party rewarded with part-ownership of production. Of the three important aspects of Liberalization – finance, trade and investment – financial Liberalization has been the most pronounced. During this globalization era there has been progressive and extensive Liberalization of controls on financial flows and markets Leading to economic globalization. Economic globalization and financial Liberalization centres on the movement of capital of which FDI was a major form.
- EXPANSION OF INFORMATION AND COMMUNICATION TECHNOLOGIES
- The internet provides a genuinely global system of communication and information. Satellites and cable TV has created an abundance of choice in news and entertainment. Today Netflix, Hot star, amazon prime etc has global viewership. Even outsourcing of services has been made easier as never before
- OUTSOURCING OF SERVICES
- In a more globalized world IT became the backbone of the business world. Outsourcing is required in different areas like Finance, Health, Accounting etc. India has emerged as a key leader in this sector .
- POSITIVE IMPACTS :
- Due to policies of Privatization and liberalization of economy, along with the process of globalization, the growth rate of the Indian economy accelerated from29 per cent per annum during the 1980s to 6.06 per cent per annum during 1991-92 to 2005-06. The Indian economy has been recording a growth rate of about 8-9 per cent per annum since 2003-04.
- Globalization has led to an increase in innovations in the economy and has pushed the culture of start-ups in the Startups can access finance and investments from anywhere around the globe .
- Access to global capital resources via the stock market and international debt depending on the economic potential of nations and their
- Sharp reduction in industries reserved exclusively for public sector has led to increase in efficiencies , improved quality of products due to entry of private sector stimulating competition.
- Increase in tourism and development of tourist destinations in India- leading to increase in foreign reserves
- Vast expansion of sectors like IT, telecommunication and A notable revolution has occurred in the telecom sector. In the pre -reforms era, this was entirely in the hands of the central government and due to lack of competition, the call charges were quite high. Further, due to lack of funds with the government, the government could never meet the demand for telephones. In fact, a person seeking a telephone connection had to wait for years before he could get a telephone connection. Now the things are completely different.
- The biggest contribution of globalisation is in the field of quality and development of products with various features to suit the Now wide choices are available to select goods, which has led to better quality of products due to greater competition.
- Globalization has improved access to health technology (medicines, vaccines and medical equipments and knowhow).This has led to improvement of health care But globalization has also led to a greater threat of spread of communicable diseases like Ebola etc.
- Globalization has increased the demand for education due to the economic payoffs of higher education to global, science based, knowledge. University training has become more of a necessity to get good job in a globalized world.
- Globalisation, by promoting economic growth in developing countries, tends to reduce poverty to some extent as :
- Globalization has led to increased foreign investment in the country and large scale industrialization in secondary and tertiary sectors.
- Faster industrialization created a lot of job opportunity for the unemployed people.
- It led to consumer oriented economy that created more demand and more production ehich further boosted per capita income.
- Gender equality and acceptance of women in the work force increased which brought double income to a family
- Export of agricultural products increased which further distributed wealth to the rural regions.
- Increased production led to increased revenue for the government which enhanced its capability to spend on social welfare and healthcare schemes.
- NEGATIVE IMPACTS
- Boost to urbanization and industrialization, which has also led to unplanned growth of urban centres leading to formation of more
- Indian Economy has become more vulnerable to global shocks like East Asian crisis 1997, Global Financial crisis (2007-08),European crisis etc.
- Globalization has adversely affected many established companies (like organisations manufacturing Ambassador Cars or Fiat cars etc) which failed to face competition from established global players and vanished from Indian markets
- Steep and fast reductions in custom duties have snatched large part of Indian market from Indian Industry and passed it on to imports from established global Stiff competition especially from cheap Chinese goods has affected Indian manufacturing industry particularly MSMEs adversely.
- For its survival in the face of global competition, Indian industry has transformed itself from labour intensive processes to Capital intensive processes by automatic This has resulted in high rate of unemployment in India.
- There has been a tremendous increase in consumerism for goods and services giving way to consumerist culture in our society .
- According to some scholars poverty rates have increased despite globalization. For instance :
- Automation and introduction of latest technology can replace poor workers if they are not trained timely.
- Economic growth in India is sometimes considered as the jobless growth.
- Increase in concentration of wealth in hands of very few
Therefore we may call globalization a double edged sword.
1.IMPACT OF GLOBALIZATION ON EMPLOYMENT
Increasing privatisation, trade liberalisation, opening up of global trades through reduction in tax and non tax based barriers, innovation and easy patent policy amongst countries have expanded the scope of economic globalisation.
It not only encourages Foreign direct investment in green field/brown field projects leading to direct and indirect job creation , supplementing the domestic investments in trajectoring high growth rate of GDP growth.
It also reduces the power of trade unions and encourages informal contractualization and lock outs. Eg. Archaic Labour laws preventing the growth of industries are being thrown out of statutes and instead more power is granted to business men to manage the human resources as per global standards that encourages transformation to big economy.
The advocates of globalization have always been of the view that globalization would result in significant increases in labour intensive manufacturing and thereby exports, thus promoting employment opportunities and income generation in developed economy but globalization also brings in new technology and promotes robotic manufacturing and Artificial intelligence driven world where there is less and less need of labour.
In the Indian context of post economic reforms, the rate of growth of the economy and the rate of growth of employment have accelerated, but the economy as also employment remains undiversified. Both interpersonal and inter-regional income inequalities remain high and seem to have increased. The quality of employment remains very poor for a major portion of workers.
Globalisation brings along with it piece rates or a shift towards informal employment, without minimum wages and work benefits. On one side it causes casualization of labour but on other side it makes Indian manufacturing price competitive and promotes exports. But the real wages of casual labour increased faster than in the past- both among agricultural and industrial workers.
- There has been a massive shift from organised sector to a high requirement of skilled labour which could work in faster than ever growing unorganized sector.
- The most striking feature of Globalisation is that there is a massive international and intranational migration of labour.
- (a) Person with technical knowhows and professional expertise moved to the western industrialised world into IT and software industry, later this industry expanded into india as Business process outsourcing, IT and software. When exports from Indian BPO/IT industry increased the migration, pattern transformed from IT to highly professional workforce (Doctors/ Financial investment advisors /bankers and IT)
(b)In 1990s the less skilled/semi-skilled workers migrated to the oil exporting countries in the middle east. But later the pattern of demand of labour in middle east countries has shifted towards services, operations and maintenance workers requiring high skills.
- All these have enhanced the employment opportunities for the Indian labour, particularly when the country boasts to have very large pool of English speaking
- These are not only employment opportunities but also a way for india to balance its BOP account through foreign exchange Remittances from Indian diaspora worldwide. India is largest foreign exchange earner through remittances.
There is increased feminization of the workforce with the international laws being imbibed into Indian statutes after liberalization.
The international laws are now more enforced upon india as we get more and more connected to the globalized world therefore as a result the Child labour between the age 5-14 years have significantly reduced and persists primarily in rural and agricultural activities on account of socio-economic compulsions.
Industrial relations: Increasingly, consultation, co-operation and consensus are taking the place of coercion and confrontation. This is reflected in the reduced number of man days lost.
2.IMPACT OF GLOBALIZATION ON INFORMAL SECTOR
- Globalization tends to benefit large corporations (flipkart, ola, uber, Zomato, swiggy, big bazaar) which can move quickly and easily acrossborders and have deep pockets to invest in technology and expansion. They compete with a large number of unskilled self-employed producers and traders who loose their market share but this puts a pressure on low skilled workers and petty producers by weakening their bargaining power and subjecting them to enhanced Self employment has become a precarious situation for semi/un skilled workers in today’ globalised world.
- Globalisation leads to growth of informal economy as there is a slow pace of development of jobs in formal economy. Women are pushed to the lower income end of the informal economy.
Thus, globalization of the economy tends to reinforce the links between poverty, informality, and gender.
- globalization has lead to new opportunities for those who work in the informal economy in the form of new jobs for wageworkers or new markets for the self-employed.
- There has been a radical restructuring of production and distribution in key industries characterized by outsourcing or subcontracting through global commodity The net result is that more and more workers are being paid very low wages to reduce the overall cost of production, be competitive and get into the global chain of productions.
3.IMPACT OF GLOBALIZATION ON AGRICULTURE
- India entered in the process of globalization by 1991, when there was a severe economic crisis in the country. To overcome the economic crises, India approached the International Monetary Fund for financial assistance.
- IMF granted such assistance on the condition to make some structural changes and reforms in Indian Economy. In 1994, 124 countries along with India were signed Dankel Proposal, giving the final pass to proposal World Trade Organization was established in January 1995. The member countries involved themselves in globalization through WTO.
- These reforms and changes can be broadly classified into three areas: Liberalization, privatization and globalization (LPG). India signed GATT too and opens up its economy to the world market.
- As India is the country which is known as agrarian economy, it is essential to know that how agricultural sector in the country is connected to this process. Initially the World Trade Agreement of 1994 brought agriculture within its policy framework. The obligations and disciplines incorporated in the agreement which seek to reform trade in agriculture and provide the basis for market-oriented policies on agriculture, relate to the aspects of market access, domestic support, export competition/subsidies, and Trade Related Intellectual Property Rights (TRIPS).
- With globalization making headway everywhere, Government had to introduce reforms in agricultural sector too. Reforms in agricultural policies were felt necessary for achieving trade liberalization in the agricultural sector
General consequences of globalization on Indian agriculture–
Following are some positive consequences of globalization on Indian agriculture.
A) Positive Consequences-
- Availability of modern Agro- technologies:
- There is availability of modern agro technologies in pesticides, herbicides, and fertilizers as well as new breeds of high yield crops were employed to increase food production.
- These technologies included modern implementations in irrigation projects, pesticides, synthetic nitrogen fertilizer and improved crop varieties developed through the conventional, science-based methods available at the time.
- Use of High Yielding Varieties (HYVs) like IR8 a semi-dwarf rice variety. HYVs significantly outperformed traditional varieties in the presence of adequate irrigation, pesticides, and fertilizers.
- Rise in production and productivity:
- Due to adoption of HYV technology the production of food grains increased considerably in the country.
- Growth of National Income-
- Receiving the international market for the agricultural goods of India, there is an increase in farmer’s agricultural product. New technology, new seeds, new agriculture practices etc. helped to grow the agricultural product.
- From the monetary point of view the share of agriculture sector in the economy is raised to 14.2% of the GDP (2010-11).
- New areas employment-
- While exporting agricultural products it is necessary to classify the products, its standardization and processing, packing etc. Therefore, after LPG the agro allied industries has created employment in various sector like packing, exporting, standardizing, processing, transportation and cold storage etc.
- The industries depending on agriculture are stored and it made an increase in employments. Agriculture is the biggest unorganized sector of the Indian economy accounting for more than 90% share in the total unorganized labour force. The share of agriculture in total employment stands at 52.1%
- Agriculture as a prime moving force-
- The growth of agricultural sector in India has correspondent relation with industrial growth and national income in India. It is assumed that 1% increase in the agricultural growth leads to 0.5% increase in the industrial output and 0.7% increase in the national income in India. Especially after LPG the agricultural sector in India is developing rapidly
- Rise in the share in trade
- Because of the conditions of WTO all of the countries get the same opportunities, so there is an increase in the export of agricultural products.
- According to data provided by World Bank, India’s share in exports (goods and services) rose from 0.54%in 1990 to 0.67% within five years after globalization took place i.e. upto 1999. Indian exports rose by 103% during the same period.
- Growth of Agro exports –
- The prices of agricultural goods are higher in the international market than Indian markets. If the developed countries reduced grants, they have to increase in the prices. So there will be increase in the export in Indian market and if the prices grow, there will be profit.
- Agricultural products account for 10.23% of the total export income of the economy, while agricultural imports account for just 2.74% of the total imports. Agricultural exports was 33.54 billion $ in the year 201-13.
- Reduction in poverty-
- It is also true that globalization is commonly characterized as increasing the gap between the rich and the poor, but it is a matter of looking at poverty in relative terms. India’s prior concern is to remove poverty, which is worse than death, and if India makes efforts, globalization can be a key to get rid of it.
- Moreover, the percentage of people below the poverty line has been decreasing progressively, from 36 percent in 1993-94 to 21.9 percent in 2011-12.
These are some positive consequences of globalization on Indian agriculture. But as far as a developing country like India is concerned the negative consequences are proved as more effective. These are as follows.
B) Negative Consequences-
- Migration of labours-
- For the Indian farmer, who is already paralyzed by low productivity and lack of postharvest storage facilities has resulted in heavy loss of produce and revenue. It is only because of low tariff in imports due to liberalized import duties which came as a bombshell.
- The domestic farmer could not stand the competitiveness of international market, which has resulted in migration of labor from agriculture to other industrial activities.
- Lower income of rural farmers
- According to Nobel Prize-winning economist Joseph Stiglitz, Trade agreements now forbid most subsidies excepted for agricultural goods. This depresses incomes of those farmers in the developing countries who do not get subsidies. And since 70 per cent of those in the developing countries depend directly or indirectly on agriculture, this means that the incomes of the developing countries are depressed.
- Lessening international competitiveness–
- In India 60% of population depend on agriculture. This pressure on agriculture is increasing day by day because of the increasing population. Because of marginal land holding, the production cost of Indian farmers is high and the quality and standardization of agro produce is much neglected.
- Along with this, the curtailment in subsidies and grants has weakened the agricultural sector. On the contrary before the reduction in grants by WTO, developed countries had distributed grants on large scale. They had grown the amount of the grants on large scales in agriculture during 1988-1994.
- So they have not to face many difficulties if there is a reduction in grants. On this background the farmers are not in a position to compete international market.
- Abnormal hike in Fertilizers and Pesticide prices-
- Immediately after globalization Indian rupee was devaluate by 25% and Indian crops became very cheap and attractive in the global market, which led Indian farmer for export and encouraged them to shift from growing a mixture of traditional crops to export oriented ‘cash crops’ like chilli, cotton and tobacco.
- These need far more inputs of pesticides, fertilizers and water than the traditional crops require. It automatically increased Fertilizer and pesticide prices by 300%.
- Electricity tariffs have also been increased-
- Pre liberalization, subsidized electricity policy helped farmers to keep the costs of production low. The electricity costs increased dramatically when farmers turned to the cultivation of cash crops, which needed more water, hence, more water pumps were needed and there was higher consumption of electricity.
- Price crash-
- As per reforms of WTO, Indian government removed import tariffs and duties. Earlier these were working as cushion to protect and encourage domestic producers. By 2001, India completely removed restrictions on imports of almost 1,500 items including food.
- As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down. As a result, most of the farmers committing suicides in Maharashtra were concentrated in the cotton belt till 2003 (after which paddy farmers followed the suicide trend).
- Similarly, Kerala, which is world renowned for pepper, has suffered as a result of 0% duty on imports of pepper from SAARC countries. Pepper, which sold at Rs.27,000 a quintal in 1998, crashed to Rs.5000 in 2004, a decline of 81%.
- Fall in agricultural employment-
- In 1951, agriculture provided employment to 72 per cent of the population and contributed 59 per cent of the gross domestic product. However, by 2001 the population depending upon agriculture came to 58 per cent whereas the share of agriculture in the GDP went down drastically to 24 per cent and further to 22 per cent in 2006-07. This has resulted in a lowering the per capita income of the farmers and increasing the rural indebtedness
IMPACT OF GLOBALIZATION ON ENVIRONMENT
Globalization has also created some areas of concern, and prominent among these is the impact that it has had on the environment.
- Activists have pointed out that globalization has led to an increase in the consumption of products, which has impacted the ecological cycle. Increased consumption leads to an increase in the production of goods, which in turn puts stress on the environment.
- Globalization has also led to an increase in the transportation of raw materials and food from one place to another. Earlier, people used to consume locally-grown food, but with globalization, people consume products that have been developed in foreign countries. The amount of fuel that is consumed in transporting these products has led to an increase in the pollution levels in the environment.
- It has also led to several other environmental concerns such as noise pollution and landscape intrusion.
- Transportation has also put a strain on the non-renewable sources of energy, such as gasoline. The gases that are emitted from the aircraft have led to the depletion of the ozone layer apart from increasing the greenhouse effect.
- The industrial waste that is generated as a result of production has been laden on ships and dumped in oceans. This has killed many underwater organisms and has deposited many harmful chemicals in the ocean. The damage caused to ecosystem from the oil that spilled from one of the leaking containers of British Petroleum in 2010 is just one of the examples of the threat globalization poses to the environment.
- Due to globalization and industrialization, various chemicals have been thrown into the soil which have resulted into the growth of many noxious weeds and plants. This toxic waste has caused a lot of damage to plants by interfering in their genetic makeup. It has put pressure on the available land resources.
- Lowering environmental Standards : As countries compete for global trade opportunities, they experience increased pressure to offer lower prices. In areas of the world without sufficient regulatory oversight, dirty industries and practices can thrive by exploiting resources for profit, resulting in a pocket of intense environmental damage. This also gives countries with stricter environmental regulations a comparative disadvantage against countries without stringent oversight, possibly leading countries to relax their own environmental rules to lower the compliance costs on their industries.