Page 189 - DECO303_INDIAN_ECONOMY_ENGLISH

Indian Economy

Notes opening of barriers across borders and the interdependence of countries. In economic contexts,
it is frequently understood to refer nearly exclusively to the effects of trade, especially trade
liberalisation or “free trade”.

Notes In his budget speech of 2007-08, the Finance Minister Chidambaram put forth a
proposal to promote Mumbai as a world class financial centre and to make financial
services the next growth engine of India.

The International Monetary Fund describes globalisation as, the growing economic
interdependence of countries globally through rising volume and variety of cross-border
transactions in goods and services, freer international capital flows, and more quick and extensive
diffusion of technology. The World Bank describes globalisation as the “Freedom and ability of
individuals and firms to initiate voluntary economic transactions with residents of other
countries”.

You must keep in mind that globalisation can also depict the following things:
It shares numerous characteristics with internationalisation and is often utilised
interchangeably. Few prefer the word globalisation to focus on the erosion of the nation-
state or national boundaries.
The creation of a global village—closer contact between different parts of the world with
enhancing possibilities of personal exchange, mutual understanding as well as friendship
between “world citizens”, and development of a global civilisation.

Economic globalisation—there are four features to economic globalisation, referring to
four varied flows across boundaries, viz., flows of goods/services, that is, free trade (or at
least freer trade), flow of people (migration), of capital and of technology. A result of
economic globalisation is enhancing relations among members of an industry in various
portions of the world (easily termed as globalisation of an industry), with a matching
erosion of national sovereignty in the economic sphere.
In the area of management, globalisation is a marketing or Strategic term that depicts the
emergence of international markets for consumer goods typified by identical customer
needs and tastes enabling, for instance, selling the same cars or soaps or foods with
identical ad campaigns to people in various cultures. This usage is compared with
internationalisation, which explains the activities of multinational companies tackling
across borders in either financial instruments, commodities, or products that are widely
tailored to local markets.
Globalisation provides extensive opportunities for truly global development but it is not
progressing evenly. Few countries are becoming integrated into the global economy more
rapidly than others.

It is important for you to keep in mind that countries that have been able to integrate are
observing faster growth and decreased poverty. For example, outward-oriented policies brought
dynamism and higher prosperity to much of East Asia, transforming it from one of the poorest
regions of the world forty years ago, to one of the most developed. And as living standards rose,
it turned possible to make progress on democracy and on economic problems like the
environment and working standards.
The elimination of barriers to the movement of goods and services, in some instances even to
the movement of personnel resulted in increasing specialisation of nations. They started involving
more and more in export of those goods where they have comparative benefit over other.

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