Globalization and Structural Changes in the Indian Industrial Sector
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Globalization and Structural Changes in the Indian Industrial Sector took place in the early 1990s when the government decided to open the markets to foreign investments by forming new economic polices.
Structural Changes in the Indian Industrial Sector and Globalization were initiated because the government wanted to encourage growth by doing away with supply bottlenecks that stopped efficiency and competitiveness.
Globalization implies the dismantling of trade barriers between nations and the integration of the economies of the nations through financial flow, trade in services and goods, and corporate investments between nations. Globalization has increased in the recent years due to the rapid progress that has been made in the area of technology especially in communications and transport. The Indian policies with regard to the industrial sector before globalization had imposed many restrictions on the sector with regard to the use and procurement of capital and raw material, type and nature of industry where the entry of private sector was allowed, the operation scale, and the various markets where they could supply. The Indian industrial policies favored firms of small size that were labor intensive.
The Structural Changes in the Indian Industrial Sector was brought about by the New Economic Policy of 1991 which did away with many of the regulations and restrictions. The various advantages of Globalization and Structural Changes in the Indian Industrial Sector are that it brought in huge amounts of foreign investments and this gave a major boost to this sector. Many foreign companies entered the Indian market and they brought in highly technologically advanced machines into the country as a result of which the Indian Industrial Sector became technologically advanced. With new companies being set up in the Indian Industrial Sector it provided employment opportunities for many people in the country which in its turn helped to reduce the level of poverty in the country. The number of factories in India in 1990-1991 stood at 110,179 and in 2003-2004, the figure increased to 129,074.
The various disadvantages of Globalization and Structural Changes in the Indian Industrial Sector are that with many foreign companies entering the sector increased the competition for the domestic companies. With foreign goods being better then the Indian products, the consumer in the country preferred to buy the foreign goods. This reduced the profit levels of the Indian companies and they had to resort to lowering the prices of their products which in turn further lowered their levels of profit. With highly advanced technology entering the Indian Industrial Sector, the number of labor required in the sector reduced. The number of labor in the Indian Industrial Sector in 1990-1991 was 81,62,504 and in 2003-2004, the figure has decreased to 78,70,081. Thus, Globalization and Structural Changes in the Indian Industrial Sector poses advantages and disadvantages for the country.
So the government of India must take steps in order to ensure that the changes in the structure of the Indian Industrial Sector are such that it facilitates globalization in a manner that is gainful and constructive for a country like India.
Last updated on 3/18/2011
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Globalization implies the dismantling of trade barriers between nations and the integration of the economies of the nations through financial flow, trade in services and goods, and corporate investments between nations. Globalization has increased in the recent years due to the rapid progress that has been made in the area of technology especially in communications and transport. The Indian policies with regard to the industrial sector before globalization had imposed many restrictions on the sector with regard to the use and procurement of capital and raw material, type and nature of industry where the entry of private sector was allowed, the operation scale, and the various markets where they could supply. The Indian industrial policies favored firms of small size that were labor intensive.
The Structural Changes in the Indian Industrial Sector was brought about by the New Economic Policy of 1991 which did away with many of the regulations and restrictions. The various advantages of Globalization and Structural Changes in the Indian Industrial Sector are that it brought in huge amounts of foreign investments and this gave a major boost to this sector. Many foreign companies entered the Indian market and they brought in highly technologically advanced machines into the country as a result of which the Indian Industrial Sector became technologically advanced. With new companies being set up in the Indian Industrial Sector it provided employment opportunities for many people in the country which in its turn helped to reduce the level of poverty in the country. The number of factories in India in 1990-1991 stood at 110,179 and in 2003-2004, the figure increased to 129,074.
The various disadvantages of Globalization and Structural Changes in the Indian Industrial Sector are that with many foreign companies entering the sector increased the competition for the domestic companies. With foreign goods being better then the Indian products, the consumer in the country preferred to buy the foreign goods. This reduced the profit levels of the Indian companies and they had to resort to lowering the prices of their products which in turn further lowered their levels of profit. With highly advanced technology entering the Indian Industrial Sector, the number of labor required in the sector reduced. The number of labor in the Indian Industrial Sector in 1990-1991 was 81,62,504 and in 2003-2004, the figure has decreased to 78,70,081. Thus, Globalization and Structural Changes in the Indian Industrial Sector poses advantages and disadvantages for the country.
So the government of India must take steps in order to ensure that the changes in the structure of the Indian Industrial Sector are such that it facilitates globalization in a manner that is gainful and constructive for a country like India.
Last updated on 3/18/2011
