Answer in Brief
What are the distinctive features of a globalised economy ? Discuss.
The distinctive features of a Global Economy are :-
- Globalisation refers to the growing interdependence between different peoples, regions and countries in the world as social and economic relationships come to stretch world-wide.
- Although economic forces are an integral part of globalization, it would be wrong to suggest that they alone produce it. Globalisation involves a stretching of social and economic relationship throughout the world. This stretching is pushed by certain economic policies very broadly. This process in India is termed liberalization. The term liberalization refers to a range of policy decisions that the Indian state took since 1991 to open up the Indian economy to the world market. This marked a break with an earlier stated policy of the government to have a greater control over the economy.
- Among the many economic factors during globalization, the role of transnational corporations (TNCs) is particularly important.
- Since July 1991, the Indian economy has witnessed a series of reforms in all major sectors of the economy (agriculture, industry, trade, foreign investment and technology, public sector, financial institutions, etc). The basic assumption was that greater integration into the global market would be beneficial to Indian economy.
- Hie process of liberalization also involved the taking of loans from international institutions such as the International Monetary Fund (IMF). These loans are given on certain conditions. The government makes commitments to pursue certain kind of economic measures that involve a policy of structural adjustments. These adjustments usually mean cuts in state expenditure on the social sector such as health, education and social security. There is also a greater say by international institutions such as the World Trade Organisaiton (WTO).
Concept: Understanding Globalisation
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