Effect of Globalization on Indian Poverty Level

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There has been an ongoing debate about the effect of globalization on Indian poverty level. According to some scholars, over the years, globalization has become a major factor behind the high economic growth in the country. The favorable economic conditions have put a positive impact on the overall standard of living of the country. However, there are some scholars who argue that globalization, as such, does not have any such significance in improving the poverty situation in India. By properly analyzing various factors, we can have an idea whether globalization really puts a positive impact to improve the poverty situation.

Globalization and economic growth

It was in the 1990s that the first economic liberalization policies were initiated by the then Finance Minister Dr Manmohan Singh to encourage the wake of globalization in India. Since then, the economic condition of India has significantly increased. Over the years, India has gradually become one of the fastest growing economies in the world. It has become the 4th largest economy in the world in terms of the purchasing power parity (PPP). It has been expected that the average yearly economic growth will range between 6% and 7%.

Due to the high economic growth, there has been rapid progress in the civic amenities. The per capita income has increased which has improved the standard of living of the masses. As economic growth is a great factor behind the improvement of the poverty, the rise in the economic condition of India had a favorable impact on the reducing the rate of poverty in the country.

Globalization and growth of employment

Globalization has also put a favorable effect on the employment scenario of the country. Over the years, due to the liberalization policies, India has become a consumer oriented market where the changes are brought by the demand and supply forces. Due to the high demand and the supply chains, there has been significant growth in the market. As such, more and more job opportunities are being created in different sectors. This has increased the per capita income considerably which has improved the poverty level to a great extent.

The growth of the various sectors has also opened up new employment opportunities which have put a positive impact on the overall poverty situation of the country. More and more industries are being introduced in the market to cater to the growing demand. Some of the well known industries that have recently become very popular in the country are personal and beauty care, agro products, health care, information technology and some other sectors. The service sector has a share of around 54% of the annual Gross Domestic Product (GDP). The share of the agricultural and industrial sectors in the annual GDP is 17% and 29%.

Growth of the agriculture sector and poverty

A major portion of the poverty level in India is from the rural areas whose staple form of income is agriculture and farming. Due to the globalization, Indian agriculture has improved to some extent which has helped to reduce the poverty problems of the rural masses.

Over the years, with the advent of more technology, there has been a significant change in the process of agriculture in the country. Earlier farmers used traditional farming techniques for growing crops. As such, they suffered a lot and the output was affected by a number of factors like pest problems, weather situations and lots more. Due to the globalization and introduction of better equipments, there has been a stark improvement in the techniques of agriculture. Today, farmers are using gadgets like rowers, tractors, electric pipelines and lots more for the cultivation of crops. This has increased the produce in terms of quantity as well as quality. As such, farmers have started earning more and have improved their per capita income and the standard of living.

The government has also taken several positive steps to improve the poverty situation in the rural areas. Irrigational projects have been undertaken, dams have been built and more facilities have been provided to the farmers to increase their agricultural produce. As lots of farmers are poor, they are not in a position to buy expensive equipments. To solve this problem and make them self sufficient, the government also grants financial help and loan to the farmers at very cheap rates. The government has set up the National Bank for Agriculture and Rural Development (NABARD) and various other Regional Rural Banks (RRBs) to financially help the farmers in need. Housing projects are also being undertaken to solve the accommodation problems of the poor.

Improvement in health care costs

Globalization has also positively affected the overall health care situation in the country. More and more medical innovations are coming in which are improving the health situation in India. The infant mortality rate and the malnutrition rate have significantly come down since the last decade.

All these factors clearly prove that the globalization helped reduce the India poverty level.

Foreign Trade | Corporate Globalization
Last Updated on 5/18/2011