5) Explain the concept of globalization as a national policy with particular references to the policy initiative taken by the Government of India since 1991.

 

IGNOU ASSIGNMENT 

Course Code : MCO – 04 

Course Title : Business Environment 

Assignment Code : MCO - 04 /TMA/2022-23 

Coverage : All Blocks 

5) Explain the concept of globalization as a national policy with particular references to the policy initiative taken by the Government of India since 1991.

Answer

Globalization can be defined as the process of international integration that results from the exchange of goods, ideas, and culture among nations. It has been a major force in the world economy for several decades, leading to increased economic growth, global trade, and cultural exchange. Governments have played a significant role in promoting globalization through policy initiatives that aim to reduce barriers to trade and investment, encourage innovation and entrepreneurship, and foster greater interconnectivity among nations. The Government of India has been actively pursuing policies to promote globalization since 1991, following a severe economic crisis that forced the country to adopt a more open and market-oriented approach to economic development. In this essay, we will discuss the concept of globalization as a national policy and examine the policy initiatives taken by the Government of India since 1991 in six key points.

1. Liberalization of the Indian Economy : In 1991, India faced a severe balance of payments crisis that led to a major economic recession. The government responded by initiating a series of economic reforms, which included liberalizing trade and investment policies, reducing government controls over the economy, and encouraging private sector development. This policy shift, known as liberalization, aimed to attract foreign investment, stimulate economic growth, and integrate India into the global economy. The government reduced trade barriers, abolished import licensing, and allowed foreign investment in most sectors of the economy. These policies helped to spur economic growth, increase foreign investment, and create new opportunities for Indian businesses.
2. Privatization n of Public Sector Enterprises : In addition to liberalizing trade and investment policies, the Indian government also pursued a policy of privatization, which involved selling off state-owned enterprises to private investors. The government recognized that many public sector enterprises were not performing well and were draining resources from the economy. Privatization aimed to improve the efficiency and competitiveness of these enterprises, while also generating revenue for the government. Since 1991, the government has privatized many public sector enterprises, including airlines, telecommunications, and power companies. Privatization has helped to improve the quality of services provided by these enterprises, increase competition, and create new jobs.
3. Promotion of Export-oriented Growth : The Indian government recognized that to integrate into the global economy, it needed to increase its exports. The government implemented policies to encourage export-oriented growth, including providing incentives to exporters, improving infrastructure, and reducing trade barriers. The government also signed trade agreements with other countries to increase market access for Indian goods and services. As a result of these policies, India's exports grew rapidly, with the country becoming a major exporter of goods such as textiles, pharmaceuticals, and software services.
4. Promotion of Foreign Direct Investment : Foreign Direct Investment (FDI) has been an important driver of economic growth in India since liberalization. The Indian government has pursued policies to encourage FDI, including allowing 100% FDI in many sectors, providing incentives to foreign investors, and creating a more favorable investment climate. The government has also established special economic zones to attract foreign investment and promote exports. FDI has helped to create new jobs, stimulate innovation and technology transfer, and improve the competitiveness of Indian firms.
5. Integration into Global Trade : The Indian government has actively pursued policies to integrate into the global trading system, including joining the World Trade Organization (WTO) in 1995. The government has also signed numerous bilateral and regional trade agreements to increase market access for Indian goods and services. These agreements have helped to boost exports and attract foreign investment, while also providing opportunities for Indian businesses to expand into new markets. The government has also played an active role in multilateral trade negotiations, advocating for the interests of developing countries and seeking to reduce trade barriers in key sectors such as agriculture.
6. Technology and Innovation : The Indian government has recognized the importance of technology and innovation in driving economic growth and competitiveness in the global economy. The government has implemented policies to promote technology and innovation, including increasing spending on research and development, providing tax incentives for research and development, and promoting collaborations between universities and businesses. The government has also implemented policies to encourage the growth of the technology sector, including creating special economic zones for technology companies and promoting the development of software and IT services. These policies have helped to stimulate innovation, promote entrepreneurship, and increase the competitiveness of Indian firms in the global market. The government has also encouraged the development of green technologies and sustainable practices to address environmental challenges and promote sustainable economic growth.

In conclusion, the Indian government has actively pursued policies to promote globalization since 1991, following a severe economic crisis that forced the country to adopt a more open and market-oriented approach to economic development. The policy initiatives taken by the government have aimed to reduce barriers to trade and investment, encourage innovation and entrepreneurship, and foster greater interconnectivity among nations. These policies have helped to stimulate economic growth, increase foreign investment, and create new opportunities for Indian businesses. While there have been some challenges and criticisms of these policies, overall, they have contributed to India's integration into the global economy and its emergence as a major economic power.