Padhle Economics Marathon Slides.huhyytpdf

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1. DEVELOPMENT

2. What is
development?
Developmentisavasttermwhichincludes
economicdevelopment,goodgovernance,
reducingpoverty,illiteracy,etc.
Themeaningofdevelopmentisdifferentfor
differentpeople

3. Itmeans,moredaysofwork
andbetterfamilyincome
throughprofitfromhis
wage.
Development
For landless laboursFor rich farmersFor Big Business
people
Itmeans,assuredhigh-
familyincomethrough
highersupportfortheir
crops.
Itmeans,ahighprofitfrom
hisbusiness.
Different people can have different development goals.
People can also have conflicting goals .

4. Income and Other Goals
MaterialisticGoals
•Income
•Money
People have mixed goals
Non-MaterialisticGoals
•Respect
•Education
•Safety

5. Itistheabilityofthenationtoimprovethe
livesofitscitizens.
Itcanbeinthefieldofagriculture,industries,
education,health,etc.
National Development

6. SingaporeisarichcountryandNorthKorea
ispoor.....!
Buthowcanwecomparetwocountries.....?

7. Countries are classified on the basis of income.
Worldbankconsidersincomeasoneoftheworld
developmentindicatorsorWDI.

8. Itisthetotalearningsofthepeoplewho
areearning.
What is a Country's
Income?

9. Classification of Countries on the Basis of Income
GivestheclassificationofcountriesonthebasisofAverageIncome
orPercapitaIncome.
TheaverageIncomeorPercapitaIncomewillbecalculatedbased
onmoneyearnedperpersoninthespecificareaofacertainyear.
Role of World Bank:
TotalincomeoftheCountry
Total Population
AverageIncome/
PercapitaIncome

10. While ‘averages’ are useful for comparison, they also hide
disparities

11. On the basis of
Income,
countries are
classified as:
Developed Country01
Underdeveloped Country02
Developing Country03
India comes under developing countries .

12. •CountrieswithapercapitaincomeofUS$12,056perannumand
Abovein2017,arecalledrichcountries.
•CountrieswithapercapitaincomeofUS$955perannumorless
in2017,arecalledlow-incomecountries.
•Indiabelongstothecategoryoflowmiddleincomeasitsincome
in2017wasUS$1820perannum.
World Bank states that:

13. Pros:
•Itgivesaclearunderstandingoftheincomeofthecountries.
•Itsetspecificparametersofcomparisonsuchasnationalincome
andpercapitaincome.
Cons:
•Itconsidersonlyasingleaspectandnototherimportantaspects
suchasliteracy,health,lifeexpectancy,etc.
•Incomedistributionbetweenthepeopleisnotvisible.
World Bank development report:

14. Other aspects which are important for
development of a country

15. Itisusedtomeasurehowdevelopmenthasimprovedhumanlife.
Ittakesthefollowingparametersintoaccountforranking
countries:
•LifeExpectancy
•IMR
•MaternalMortalityRate
•AdultLiteracyRate
•%ofBelowPovertyLinePopulation
•PerCapitaGDP,etc.
Human Development Index

16. Infant Mortality Rate
Indicatesthenumberofchildrenthatdiebeforetheageofone
yearasaproportionof1000livechildrenborninthatparticular
year.
Asitcanbeseeninthegraph,
IMRhassignificantlyreduced
onmostofthestateswhichis
anindicatorofdevelopment.
(Source-NationalFamily
HealthSurvey5)

17. Itistheagewhichapersonisexpectedtolive.
Life Expectancy
IndianMales:67.34yr
IndianFemales:69.64yr

18. Itisthetotalnumberofdyingmothers
outof1000motherswhilegivingbirthto
babiesinayear.
Materal Mortality Rate

19. Theliteracyratemeasurestheproportionoftheliterate
populationinthe7yearsandaboveagegroup.
Literacy Rate

20. Net Attendance Ratio
Itisthetotalnumberofchildren
ofagegroup14and15years
attendingschoolasa
percentageoftotalnumberof
childreninthesameagegroup.

21. Theestimatedminimumlevelofincomeneededtosecurethenecessities
ofLife.
Accordingtocaloriesconsumedperday,itis2400inruralareasand2900
inurban.
Poverty Line
StatePer Capita Income
for 2015-16 (In Rs)
Haryana
Kerala
Bihar
1,62, 034
1,40,190
31, 454
Infant Mortality Rate
per 1,000 live births
(2016)
Literacy Rate % (2011)
33
10
38
82
94
62
Net Attendance Ratio (per 100
persons) secondary (age 14 and
15 years ) 2013-14
61
83
43

22. Conclusion
•PerCapitaIncomeishighestinHaryanaandlowestinBiharwhich
indicatesemploymentstatusandscopeofearningarebetterin
Haryana.
•IMRisthelowestinKeralaandhighestinBihar.Thisindicatespoor
healthcarefacilitiesinBihar.
HighPerCapitaIncomedoesnotguaranteebetterhealthcarefacilities.

23. Conclusion
•TheliteracyrateishighestinKeralaandlowestinBihar.
•NetattendanceratioishighestinKeralaandlowestinBihar.

24. Conclusion
•AlltheseaspectsindicatethatPerCapitaIncomeisnotthebest
criteriatodecideondevelopment,butotherbasicfacilitiesand
qualityoflifealsomattermuchandmustbeproperlycountedfor
development.
•WeseethatpeopleinHaryanahavemoremoney(Income)butstill,
theylacksomebasicfacilities.
•Moneycan'tbuyallthegoodsandservicesthatyoumayneedto
livewell.ThisisduetolackofPublicFacilities.

25. FindNourishmentlevelinadults:
Government provides us the Public Facilities :
Body Mass Index (BMI)
Weight ( kg)
Height (m)2
BMI
Below 18.5
18.5 to 24.9
Above 25
Underweight
Normal
Overweight
BMIWeight Status

26. •Itisimprovingthehealthandnutrition
statusofpeople.
•Stateswithwell-functioningPDSarelikely
tohavegoodnutritionstatus.
Public Distribution System
(PDS)

27. •Developmentinconsiderationofthefutureandnature.
•Suchdevelopmentmeetstheneedsofthepresentwithout
compromisingtheabilityoffuturegenerationstomeettheir
needs.
Sustainable Development

28. Ways to achieve sustainable development
Scientific and
proper use of
natural resources
No increase in
pollution on
environmental
degradation .
Protection of flora
and fauna from
human
exploitation .
Moral use even of
inexhaustible
resources .
Maintaining
fertility of
cultivable land .

29. Source of Energy
•They cannot replenish
themselves by recycling and
replacement.
•They may be exhausted.
•Ex-minerals, fossil fuels like
coal.
•Theycanreplenishthemselves
byquickrecyclingwithina
reasonabletime.
•Theyarenotlikelytobee
exhausted.
•Ex-soil,forest,wildlife,
undergroundwater.
Renewable ResourcesNon-Renewable Resources

30. SECTORS OF
INDIAN ECONOMY

31. SECTORS OF INDIAN ECONOMY
ON THE BASIS OF NATURE OF ECONOMIC ACTIVITIES
Primary Sector
Secondary Sector
Tertiary Sector
ON THE BASIS OF EMPLOYMENT CONDITION
Organized Sector
Unorganized Sector
ON THE BASIS OF OWNERSHIP
Public Sector
Private Sector
Joint Sector

32. PRIMARY SECTOR
•Alsocalledagricultureandrelatedsector
•Formsthebaseforallotherproducts
•Examples-Mineralextraction(oil),Mining(coal,
iron),Agriculture,Fishing,Forestry

33. SECONDARY SECTOR
•Alsocalledtheindustrialormanufacturing
sector
•Naturalproductsarechangedintootherforms
throughmanufacturing
•Examples-Factoriesandworkshopscomeunder
thissector

34. TERTIARY SECTOR
•Alsocalledtheservicesector
•Essentialforthedevelopmentoftheprimaryand
secondarysector
•Examples-Jobscomeunderthissector,Banking
andotherservices

35. COMPARING THE THREE SECTORS
HOW CAN I COMPARE 1 KG OF RICE WITH A PACKET OF Biscuit ?
Values rather than good and services are included.
Values of only final goods are included asthe value of final goods
already includes the value of all the intermediate goods that are
used in making the final good.

36. GROSS DOMESTIC PRODUCT
The sum of values of final goods and services produced in all sectors, within a country, during a particular year provides the total production in a country is known as GDP or Gross Domestic Product.

37. HISTORICAL CHANGES IN THESE SECTORS

38. PRIMARY SECTOR
•Changing nature of farming ( NEW MACHINERIES).
•Excess of production.
•The emergence of new services ( STORAGE HOUSES) .

39. SECONDARY SECTOR
•Migration of people from the primary sector to the
secondary sector.
•As the production of goods increased, employment also
increased.

40. •In the past 100 years, there has been another shift from
the secondary to the tertiary sector in developed
countries.
•The service has become the most important, in terms of
total production.
•Most of the working people are also employed in the
service sector. These are observed in developed
countries.
TERTIARY SECTOR

41. RISING IMPORTANCE OF TERTIARY SECTOR
Development in agriculture and industries also leads to development in services.
Basic services increased like hospitals, education, police, courts,municipalities, banks, transport etc.
As the economic condition of the people has increased, this gave rise to some other services for comfort and personal well-being such as dining out, and tourism.
IT and communication have become essential. Production of these services has been rising rapidly.

45. TYPES OF
EMPLOYMENT
UNEMPLOYMENT
UNDEREMPLOYMENT
DISGUISED
UNEMPLOYMENT

46. •It refers to joblessness.
•It's a state where a person seeking employment is unable
to find it.
•Caused due to inflation, and drastic changes in the
working atmosphere.
UNEMPLOYMENT

47. Occurs when there is a mismatch in the availability of the job skill
required.
UNDEREMPLOYMENT
VISIBLEINVISIBLE
UNDEREMPLOYMENT

48. VISIBLE UNDEREMPLOYMENT
Referstowhenapersonwhocouldwillinglydoafull-timejobisemployedpart-time.
Occurswhenemployeesinfull-timejobsdon'tusetheirskills.
INVISIBLE UNDEREMPLOYMENT

49. Occurs when :
DISGUISED UNEMPLOYMENT
WORK WORKERS
E.g: 6 people are doing work which can be done by 2 people.
Commonly occurs in the agricultural sector.

50. MNREGA
(2005)
•It is calledMahatma Gandhi National Rural Employment Guarantee Act ( MANREGA 2005).
•The central government in India made a law•implementing the Right to work in about 625 districts of India.
•Under MGNREGA, all those who are able to work or are in need of work in rural areas are guaranteed 100 days of employment in a year by the government.
•If the government is failed to provide employment, it will giveunemployment allowances.

51. SECTORS ON THE BASIS OF CONDITION

52. MEASURES TO PROTECT WORKERS IN UNORGANISED sector
Farmersshouldbesupportedthroughadequatefacilitiesfor
timelydeliveryofagriculturalinputs,seeds,credit,storage,and
marketingoftheiroutputwhichwillalsohelpthecasualworkers.
Small-scaleindustryshouldbesupportedbyprovidingraw
materialsandmarketingtheiroutputwhichwillalsohelpthe
casualworkers.

53. SECTORS ON THE
BASIS OF
OWNERSHIP
PUBLIC SECTOR
PRIVATE SECTOR
•Theseareownedbythegovernment-centralor
state.
•Itaimsatsocialwelfare.
•Ex-LIC
•Theseareownedbyindividualsorgroupsof
individuals
•Itaimsatprofitmaximization.
•Ex-Reliance

54. PUBLIC SECTOR
PRIVATE SECTOR
JOINT SECTOR
Ownedbyboth
Governmentandprivate
individual
Exx-MarutiUdhyog

55. Money and
Credit

56. Moneyactsasmediumofexchange,
storesdifferentvalues
Generally,theseareseenaspaper
money&coin.
Money as Medium of Exchange

57. Money as Medium of
Exchange

58. Consider a case where money is not
used as medium
•Take the case of a shoe manufacturer.
•He wants to sell his shoes and buy
wheat
•For this he requires a wheat farmer who wants to buy shoes.
•THIS SYSTEM IS CALLED DOUBLE COINCIDENCE
OF WANTS.

59. This type of system is
also known as BARTER
SYSTEM.Barter is medium in which goods/services are exchanged
directly without a common unit.
Then why transactions were made in money ?
•Moneyworksasanintermediate.
•Itisusedasamediumofexchangeforgoodsand
services.

60. ANCIENT PERIOD
Grains, cattles
were used as
money.MEDIEVAL PERIOD
METALLIC COINS OF
GOLD, SILVER, COPPER,
LEAD WERE USED AS
MONEY
MODERN PERIOD
PAPER MONEY,
COINS ARE USED

61. Modern forms of Money

62. Forms of Money
CurrencyDeposits/Cheque
Paper NotesCoinsBanks

63. Why is Money accepted as a medium of
exchange?
•It is authorised by government of country.
•In India Reserve Bank of India issues currency notes
on the behalf of the government.

64. Modern Forms of Money
Cheque
Credit and Debit card

65. Deposition of Money in Banks
•People deposit money in banks and bank provide interest in the
deposited amount.
•People can withdraw the money as they require.
Demand Deposit
Depositsinthebankthatcanbewithdrawnondemand.
DemanddepositsshareanessentialfeatureoftheEconomy.
Ademanddepositisacceptedwidelyasameansofpayment
alongwiththecurrency.

66. Paper instructing bank to pay
a specific amount from the
person's account to the person
in whose name the check has
been issued.
Cheque

67. Working of Banks
Bank keeps
only small
part of
deposits as
cash
Major part of
cash is used
to give loan
to people.
Higher
interest
rates are
charged on
loans
Bank earns
from the
difference in
interests of
deposits and
loans

68. It is agreement in which the lender
supplies the borrower with money,
goods or services in return for the
promise of future payments.
Credit (Loan)

69. Advantage of a Loan
One can complete their goal with the help of the
money needed and then successfully be able to
repay the loan.
Lets look at the following story to
understand.

70. It is the festival season for two months and the
shoe manufacturer, Salim, has received an order
from a large trader in town for 3,000 pairs of
shoes to be delivered in a month's time.
To complete production on time, Salim has to
hire a few more workers for stitching and
pasting work. He has to purchase the raw
materials.
To meet these expenses, Salim obtains loans from
two sources. First, he asks the leather supplier
to supply leather now and promises to pay him
later. Second, he obtains a loan in cash from
the large trader as an advance payment for 1000
pairs of shoes with a promise to deliver the
whole order by the end of the month.
At the end of the month, Salim is able to
deliver the order, make a good profit, and repay
the money that he had borrowed.

71. Swapna,asmallfarmer,growsgroundnutonherthreeacresof
land.Shetakesaloanfromthemoneylendertomeettheexpenses
ofcultivation,hopingthatherharvestwouldhelprepaythe
loan.Midwaythroughtheseasonthecropishitbypestsandthe
crop
fails.ThoughSwapnasprayshercropswithexpensivepesticides,
itmakeslittledifference.Sheisunabletorepaythe
moneylenderandthedebtgrowsovertheyearintoalarge
amount.
Nextyear,Swapnatakesafreshloanforcultivation.Itisa
normalcropthisyear.Buttheearningsarenotenoughtocover
theoldloan.Sheiscaughtindebt.Shehastosellapartof
thelandtopayoffthedebt.
Disadvantage of Loan
However, the disadvange of loan is apparent when
one is not able to repay the loan or gets in loss.
Lets look at the following story to understand.

72. Swapna's situation can be described as a
debt trap.
It is situation in which a borrower is led
to a cycle of reborrowing, or rolling over,
their loan payments because they are unable
to pay the old loan .
This leaves them indebted all through their
life.
Debt Trap

73. Terms of Credit
Collateral
ModeofRepayment
Documentation
Interestrate

74. Collateral is an asset that the borrower owns
(such as land, building, vehicle, livestock, and
deposits with banks) and uses this as a guarantee
to a lender until the loan is repaid.
If the borrower fails to repay the loan, the
lender has the right to sell the asset or
collateral to obtain payment.
Collateral(Security)

75. The formal sector demands less rate of interest
compared to the informal sector.
At present, formal sectors demand 8% -12%
interest rate.
Interest Rate

76. Documents showing employment records and salary
before the bank agreed to give her the loan.
It also includes collateral papers, identity
proof and some other details.
Documentation

77. The borrower should pay back the interest and the
principal amount weekly or monthly by cash or
cheques as decided at the time of making an
agreement.
Mode of Repayment

78. Loans from Cooperatives

79. •Cooperative societies are small-scale organisations
formed by people themselves.
•The members of Cooperatives pool their resources in the
account of the cooperative and then extend loans to
those in need.
•Cooperatives also take loans from banks.
•There are several types of cooperatives such as Krishna
cooperatives, weaver's cooperatives, industrial worker's
cooperatives, etc.

80. IncludesBanksandCooperatives
Apartfromprofitmakingthey
alsohaveanobjectiveof
socialwelfare.
TheReservebankofIndia
supervisesitsfunctioning.
Termsofcreditarefairand
reasonable.
Bankrequirecollateraland
properdocumentationfor
gettingaloan.
Includesmoneylenders,traders,
employees,friendsandrelatives.
Theironlymotiveistoextract
profitasmuchaspossible.
Banksdonotsupervise.
Theyimposeverytoughand
sometimesveryunreasonable
termsofcreditonborrowers.
Repeatedborrowingcanleadto
debttrap.
FORMAL SECTOR CREDITINFORMAL SECTOR CREDIT

81. But why are poor people are still dependent on informal
source of credit?
•Lack of banks in some of the rural areas
•Proper documentation and collateral are not present in many of
the cases.
To overcome the problem, people created
SELF HELP GROUPS (SHGs)

82. Self Help Group
These are small groups of poor
people which promote small
savings among their members.
A typical SHG has 15 to 20
members, usually belonging to one
neighborhood, who meet and save
regularly.

83. Advantages of SHG
It helps borrowers to
overcome the problem of
lack of collateral
People can get timely loans
for a variety of purposes
and at reasonable interest.
SHGs are building blocks
of organization of the
rural poor.
The regular meeting of group
provides a platform to discuss
and act on a variety of social
issues such as health,
nutrition, domestic violence,
etc.It helps women to
become financially
indepedent.

84. BothSHGandCooperativesocieties,save
moneyandcangetloansfrombank.The
differencethatlieshereisthatSHG's
areusuallyofpoorpeople,andfoundin
ruralareas,whereascooperative
societiesarefoundinurbanareasand
consistofworkers,industrial
cooperativesetc

85. Globalisation
and The Indian
Economy

86. Globalisation is the
integration between
countries through
forgein trade and
forgein investment by
multinational
corporations (MNCs)

87. PRODUCTION ACROSS
COUNTRIES
Until the middle of the twentieth century,
production was largely organised within
countries.
Raw materials, foodstuffs and finished
products are being traded from long time.
Colonies such as India exported raw
materials and food stuff and imported
finished goods.
This was before large companies called
multinational corporations (MNCs) emerged
on the scene.

88. Multinational
Corporation
•A MNC is a company that owns or
controls production in more than one
nation.
•MNCs set up offices and factories for
production in regions where they can
get cheap labour and other resources.
•This is done so that the cost of
production is low and the MNCs can
earn greater profits.

89. •A large MNC, producing industrial equipment,
designs its products in research centresin the
United States.
•The components manufactured in China.
•These are then shipped to Mexico and Eastern
Europe where the products are assembled.
•The finished products are sold all over the
world.
•Meanwhile, the company’s customer care is
carried out through call centreslocated in India
How MNCs Spread Their Production

90. •In above example the MNC is not only
selling its finished products globally.
•But more important, the goods and
services are produced globally.
•This spreading of production reduces
the cost of manufacturing significantly.
Thus, the advantage of spreading out production across the
borders to the multinationals can be truly immense.

91. •Where it is close to the markets.
•Where there is skilled and unskilled labour
available at low costs.
•Where the availability of other factors of
production is assured.
•In addition, MNCs might look for government
policies that look after their interests.
Selection of Country for Production is Based upon :-

92. •The money that is spent by a company to
buy assets such as land, building, machines
and other equipment is called investment.
•Investment made by MNCs is called foreign
investment.
•Any investment is made with the hope that
these assets will earn profits.
Foreign Investment

93. •At times, MNCs set up production jointly with
some of the local companies of these countries.
•The benefit to the local company of such joint
production is two-fold.

94. •First,MNCscanprovidemoneyforadditional
investments,likebuyingnewmachinesforfaster
production.
•Second,MNCsmightbringwiththemthelatest
technologyforproduction.

95. •ButthemostcommonrouteforMNC
investmentsistobuyuplocalcompaniesand
thentoexpandproduction.
•MNCswithhugewealthcanquiteeasilydoso.

96. Example:
•Cargill Foods, a very large American MNC,
has bought over smaller Indian companies
such as ParakhFoods.
•ParakhFoods had built a large marketing
network in various parts of India, where its
brand was well-reputed.
•Also, ParakhFoods had four oil refineries,
whose control has now shifted to Cargill.
•Cargill is now the largest producer of edible
oil in India, with a capacity to make 5 million
pouches daily!

97. There’s another way in which MNCs control production-
•LargeMNCsindevelopedcountriesplaceordersfor
productionwithsmallproducers.
•Garments,footwear,sportsitemsareexamplesof
industrieswhereproductioniscarriedoutbyalarge
numberofsmallproducersaroundtheworld.
•TheproductsaresuppliedtotheMNCs,whichthensell
theseundertheirownbrandnamestothecustomers.
•TheselargeMNCshavetremendouspowertodetermine
price,quality,delivery,andlabourconditionsforthese
distantproducers.

98. Thus, we see that there are a variety of ways in which the
MNCs are spreading their production and interacting with
local producers in various countries across the globe.
•By setting up partnerships with local
companies
•By using the local companies for supplies
•By closely competing with the local
companies or buying them up.

99. MNCs are exerting a strong influence
on production at these distant
locations. As a result, production in
these widely dispersed locations is
getting interlinked.

100. FOREIGN TRADE AND
INTEGRATION OF MARKETS

101. For a long time foreign trade has been the
main channel connecting countries.
In history you would
have read about the
trade routes
connecting India and
South Asia to markets
both in the East and
West and the extensive
trade that took place
along these routes.

102. •Toputitsimply,foreigntradecreatesan
opportunityfortheproducerstoreach
beyondthedomesticmarkets,i.e.,
marketsoftheirowncountries.
What then is the basic function of foreign trade?
•Producerscanselltheirproducenotonly
inmarketslocatedwithinthecountrybut
canalsocompeteinmarketslocatedin
othercountriesoftheworld.
•Similarly,forthebuyers,importofgoods
producedinanothercountryisonewayof
expandingthechoiceofgoodsbeyond
whatisdomesticallyproduced.

103. •Chinese manufacturers learn of
an opportunity to export toys to
India, where toys are sold at a
high price.
•They start exporting plastic toys
to India.
•Buyers in India now have the
option of choosing between
Indian and the Chinese toys.
Chinese Toys
in India

104. •Because of the cheaper prices and new designs,
Chinese toys become more popular in the Indian
markets.
•Within a year, 70 to 80 per cent of the toy shops
have replaced Indian toys with Chinese toys.
•Toys are now cheaper in the Indian markets than
earlier.

105. In the competition between Indian and Chinese toys, Chinese toys prove better.
For the Chinese toy makers, this provides an opportunity to expand business.
Indian buyers have a greater choice of toys and at lower prices.
The opposite is true for Indian toy makers. They face losses, as their toys are selling much less.

106. What is Globalisation
Globalisation is this process of rapid integration
or interconnection between countries.

107. FACTORS THAT
HAVE ENABLED
GLOBALISATION

108. •Rapid improvement in technology has been one major
factor that has stimulated the globalisation process.
•This has made much faster delivery of goods across
long distances possible at lower costs.
•The major changes were due to :-
Technology
Internet-It has helped us to send and receive data instantly.
Mobile Service-To facilitate communication on the go.
Satellites-To link connections from any parts of the world.

109. •Trade barriers are necessary after Independence to protect
the producers within the country from foreign competition.
•Around 1991, Indian government accepted the liberalisation
policy.
•The governmentcan use trade barriers to increase or
decrease (regulate) foreign trade and to decide what kinds
of goods and how much of each, should come into the
country.
Liberalisation of foreign trade and
foreign investment policy

110. •Tax on imports is an example of TRADE BARRIER.
•Removing barriers or restrictions set by the
government on trade is known as LIBERALIZATION.
•When the government imposes less restrictions than
before, it is said to be more liberal.

111. An organisation whose aim
is to liberalise international
trade.
Nearly 164 countries of the
world are currently members
of the WTO.
It's main aim is making rules
regarding international trade,
and sees that these rules are
obeyed.
WORLD TRADE ORGANISATION ( WTO )

112. Problems With WTO
•Though WTO is supposed to allow
free trade for all, in practice, it is
seen that the developed countries
have unfairly retained trade
barriers.
•On the other hand, WTO rules have
forced the developing countries to
remove trade barriers.

113. IMPACT OF GLOBALISATION IN INDIA

114. •Globalisationand 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.
For Consumers

115. •Forgein Investment increased in India.
•Employment opportunities increased.
•Rise to big MNCs.
•Latest technology and production
methods are within our grab.
For Producer

116. Moreover, globalisation has enabled some large Indian companies to emerge as multinationals themselves!
Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints

117. •Some of the Indian multinational companies such as
Tata Motors, Infosys, Ranbaxy, Asian Paints,
Sundaram Fasteners benefited with the globalization
as they have spread their operations worldwide.
•There are enough opportunities for skilled workers
but unskilled workers remained poor.

118. •Small producers face close competition with
such a well established firms. They can bear
small loses but small producers can not bear
such loss and ultimately end up selling their
company to MNCS.
•Eg. Batteries, capacitors, plastics, toys, tyres,
dairy products and vegetable oil are some
examples of industries where small
manufacturers hit hard due to competition.
For Small Producers

119. •No Job Security-With growing market competition
among industries employers prefers to hire the worker as
per need. Thus they can fire the worker at any time. Thus
there is no job security for the workers.
For Workers
•Very long working hours -Worker has to work for long
hours to meet the demands. They will have no choice than
listening to their employer.
•Low wages -Job opportunities are limited and number
of workers are far more than the opportunities. Thus
producers easily get cheap labor and workers are ready
to work at less wages.

120. THE STRUGGLE FOR A
FAIR GLOBALISATION

121. 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.

122. 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.
Fair globalisation would create opportunities for all, and also
ensure that the benefits of globalisation are shared better.

123. •It can insure that labour laws are properly implemented
and the workers get their rights.
•It can support small producers to improve their
performance till the time they become strong enough to
compete.
•If necessary, the government can use trade and
investment barriers. 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.
Steps Government Can Take

124. Role of People
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.