Globalisation-3 Flashcards
imp of greater competition
Globalisation and greater
competition among producers - both
local and foreign producers - has been
of advantage to consumers,
particularly the well-off sections in the
urban areas. There is greater choice
before these consumers who now
enjoy improved quality and lower
prices for several products. As a result,
these people today, enjoy much
higher standards of living than was
possible earlier.Among producers and workers,
the impact of globalisation has not
been uniform.
how has mnc’s in india helped india
Firstly, MNCs have increased their
investments in India over the past 20
years, which means investing in India
has been beneficial for them. MNCs
have been interested in industries
such as cell phones, automobiles,
electronics, soft drinks, fast food or
services such as banking in urban
areas. These products have a large
number of well-off buyers. In these
industries and services, new jobs have
been created. Also, local companies
supplying raw materials, etc. to these
industries have prospered.
how globalisation helps top indian companies
Secondly, several of the top Indian
companies have been able to benefit
from the increased competition. They
have invested in newer technology and
production methods and raised their
production standards. Some have
gained from successful collaborations
with foreign companies.
Moreover, globalisation has
enabled some large Indian companies
to emerge as multinationals
themselves! Tata Motors (automobiles), Infosys (IT), Ranbaxy
(medicines), Asian Paints (paints),
Sundaram Fasteners (nuts and bolts) are some Indian companies which
are spreading their operations
worldwide.
how has globalisationprovided opporunities for budding companeis
Globalisation has also created
new opportunities for companies
providing services, particularly those
involving IT. The Indian company
producing a magazine for the London
based company and call centres are
some examples. Besides, a host of
services such as data entry, accounting, administrative tasks, engineering
are now being done cheaply in
countries such as India and are
exported to the developed countries.
what are sez’s
In recent years, the central and state
governments in India are taking special
steps to attract foreign companies to
invest in India. Industrial zones, called
Special Economic Zones (SEZs), are
being set up. SEZs are to have world class
facilities: electricity, water, roads,
transport, storage, recreational and
educational facilities. Companies who set
up production units in the SEZs do not
have to pay taxes for an initial period of
five years.
what other step has govt taken to attract foreigninvestment
Government has also allowed
flexibility in the labour laws to attract
foreign investment. In the recent years, the government
has allowed companies to ignore many of
these workers rights. Instead of hiring workers on a
regular basis, companies hire workers
‘flexibly’ for short periods when there is
intense pressure of work. This is done to
reduce the cost of labour for the company.
However, still not satisfied, foreign
companies are demanding more flexibility
in labour laws.
how are small producers affected by globalisation
For a large number of small producers and
workers globalisation has posed major
challenges.
Batteries, capacitors, plastics, toys, tyres, dairy products, and
vegetable oil are some examples of industries where the small
manufacturers have been hit hard due to competition. Several of the
units have shut down rendering many workers jobless. The small
industries in India employ the largest number of workers (20 million)
in the country, next only to agriculture.
how competetion leads to uncertain unemployment
Large MNCs in the garment industry in
Europe and America order their products
from Indian exporters. These large MNCs
with worldwide network look for the cheapest
goods in order to maximise their profits. To
get these large orders, Indian garment
exporters try hard to cut their own costs. As
cost of raw materials cannot be reduced,
exporters try to cut labour costs. Where
earlier a factory used to employ workers on
a permanent basis, now they employ workers
only on a temporary basis so that they do
not have to pay workers for the whole year.
Workers also have to put in very long
working hours and work night shifts on a
regular basis during the peak season. Wages
are low and workers are forced to work
overtime to make both ends meet.
who has benefitted from globalisation
The above evidence indicates that
not everyone has benefited from
globalisation. People with education,
skill and wealth have made the best
use of the new opportunities. On the
other hand, there are many people
who have not shared the benefits.
what is fair globalisation?>
Fair globalisation would create
opportunities for all, and also ensure
that the benefits of globalisation are
shared better.
what steps can govt take?
The government can play a major
role in making this possible. Its
policies must protect the interests, not
only of the rich and the powerful, but
all the people in the country.
i), the government can ensure that labour laws are properly
implemented and the workers get
their rights.
ii)It can support small
producers to improve their
performance till the time they become
strong enough to compete.
iii)If necessary, the government can use
trade and investment barriers.
iv)It can negotiate at the WTO for ‘fairer rules’.
It can also align with other developing
countries with similar interests to
fight against the domination of
developed countries in the WTO.
how can ppl he;p for fair globalisation
In the past few years, massive
campaigns and representation by
people’s organisations have
influenced important decisions
relating to trade and investments at
the WTO. This has demonstrated
that people also can play an
important role in the struggle for fair
globalisation.
