Globalization, Income Inequalities, and Regional Disparities in India are inter-related and each of the individual concepts like globalization, income inequality, and regional disparity has contributed to the rise in poverty in India in spite of the immense growth of the Indian economy.
India is a fast developing country and has achieved prominence with regard to the information technology sector. The country is proud of its vast pool of talent that is attracting foreign direct investments from various foreign countries. The significant foreign companies are queuing in India to utilize this vast pool of talent at low cost by providing them employment in the branches of the respective foreign companies established in India. These companies have also arranged for training facilities to sharpen the skills of their employees by sending them abroad for specialized training sessions. The huge foreign direct investments are attracted mainly the outsourcing industry which is the booming industry in India.
The outsourcing industry initially started off with back office operations as well as customer services. The American companies pioneered the outsourcing business they first established their offices in India and then hired Indian citizens to accomplish their projects. The outsourcing industry has increased job opportunities for Indian citizens. Specially the ITES industry in India employs a major chunk of the youth in India and has created employment avenues even for the retired senior citizens. The scope of job opportunities in ITES include Collection services for Mutual Funds, collection of Insurance Premiums, non voice work, bank end jobs, technical support, financial management and analysis, accounting jobs and so on. The IT outsourcing industry employs software developers. The outsourcing industry employs people with different specializations for example, people specializing in human resource development.
The economic reforms that have evolved out of the globalization process and aided in the entry of various foreign companies in the different sectors in India like the banking sector which was earlier comprised of the nationalized banks and the Reserve bank of India now includes prominent private sector banks like Hong Kong and Shanghai Bank, Standard Chartered Bank, Hong Kong Bank, Citibank. The insurance sector is no way behind and comprises of renowned names like:
- AXA
- Aviva
- AIG
- Prudential
- Met Life
- ING Vyasya
- Allianz
These foreign companies have collaborated with Indian companies to aide in the growth of the insurance sector and the collaborations have become very successful. Some of the collaborations have are Tata AIG, ICICI Prudential, and Bajaj Allianz. The collaborations offer both insurance products as well as mutual funds. Globalization has led to the entry of private companies in the Insurance sector which was earlier controlled by the public sector companies like Life Insurance Corporation of India and General Insurance Corporation. The automobile sector has also shares a major portion of foreign direct investment and attracted companies like:
- Daimler Chrysler
- Honda
- Hyundai
- Yamaha
- Suzuki
- Renault
- Honda
The companies produce luxury as well as low cost cars that has been made keeping in view the upwardly mobile middle classes. The electronic sector has been immensely facilitated by the globalization process and is proud of the companies like:
- Samsung
- Sony
- Intel
- Toshiba
- Motorola
- Seagate
- Matsuhita
- Cisco
But all these developments and the flow of foreign direct investment has not been able to resolve the issue of poverty and is can also be said that it has increased income inequalities in India. The Indian small scale industry which once acted as the backbone of India and was a source of employment to a large chunk of the general masses in India is not able to keep track of the severe competition and is fast losing its popularity.
The process of globalization has made the poor poorer and the rich richer as huge inflow of funds have aided the growth of the prominent Indian companies and the middle classes who are engaged in jobs earn lucrative salary. Therefore, the purchasing power has increased which has encouraged the rise in the prices of commodities. The rising prices restrict the poor people from purchasing them since even the prices of the necessary commodities have risen. The poor are therefore left with nothing to save and reinvest and are also not in a position to provide education to their children so that at least they can earn substantially and eradicate poverty. It seems that the poor have fallen into a vicious circle which is restricting their growth. The above reasons have aggravated the incidence of globalization, income inequalities, and regional disparities in India.
Globalization, Income Inequalities and Regional Disparities in India has contributed to the rise in incidence of poverty. Income inequalities are directly proportional to poverty. According to the assumption of the experts, the globalization process has aided in the worsening of the condition of the poor classes in India. They also believe that the progress of globalization accompanied with the increase in the price index though has aided in the rise of income but could not bring in rationality in the income rise.
Regional disparity is another reason behind inequality in India. The unskilled labor in India is mainly engaged in the manufacturing and the agricultural sector. The daily wages offered to the labors in eastern India is substantially low compared to that of the northern part of India. The daily wage earned by a labor in the manufacturing sector in India from West Bengal if for example is approximately Rs.40 per day then the daily wage earned by a labor in the manufacturing sector from Rajasthan is approximately Rs. 100 and more. Similarly, the unskilled laborers in the state of Maharashtra are again quite low. The agricultural industry is another industry in India which employs unskilled labor. The average income of an agriculturalist in Punjab or Haryana is more than that of West Bengal and the main reason behind this fact is that agriculturalists in Haryana and Punjab are mostly engaged in the production of wheat. Most of the wheat produce of India is exported to foreign countries and hence the agriculturalists earn substantial high revenues in comparison the rice producers who earn comparatively less revenues a large chunk of the produce is consumed by the Indian citizens themselves. The high revenues earned by the agriculturists help them in purchasing better quality seeds and better inputs which aids is the production of better quality wheat and hence the amount of foreign exchange also rises.
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