Economics

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Economics

  1. 1. Impact of LPG<br /> on <br />Indian Economy <br />(With reference to Service Sector)<br />
  2. 2. WHAT IS GLOBALIZATION?<br />The trend toward countries joining together economically,<br />Education<br />Society <br />Politics and <br />Viewing themselves not only through their national identity but also as part of the world as a whole. <br />
  3. 3. Impact of Globalization on Indian Economy<br />highly positive in almost all spheres of economic and social life and virtually no negative effect.<br />India's economic growth has been high<br />exports have boomed<br />incidence of poverty has been reduced<br />employment has surged<br />begging by India for economic aid has stopped<br /> long-term inflation rate has gone down<br />scarcity of goods have disappeared.<br />the quality of products have improved substantially <br />Overall India has become progressively vibrant and internationally competititive.<br />
  4. 4. Impact of Globalization on THE SERVICE SECTOR<br />Service sector is the lifeline for the social economic growth of a country.<br />The real reason for the growth of the service sector is due to the increase in urbanization, privatization and more demand for intermediate and final consumer services.<br />In advanced economies, the growth in the primary and secondary sectors are directly dependent on the growth of services like banking, insurance, trade, commerce, entertainment, etc.<br />
  5. 5. The Bright Side of Globalization<br />The rate of growth of the Gross Domestic Product of India has been on the increase from 5.6 per cent during 1980-90 to 7% in the 1993-2001 period.<br />The foreign exchange reserves (as at the end of the financial year) were $ 39 billion (2000-01), $ 107 billion (2003-04), $ 145 billion (2005-06) and $ 180 billion (in February 2007). <br />In respect of market capitalization India is in the fourth position with $ 894 billion <br />
  6. 6. WHAT = GLOBALISATION?<br />PRIVITIZATION<br />+<br />LIBERALIZATION<br />
  7. 7. LPG –Globalization (Freedom to choose?) Liberalization, Privatization, <br />LPG surely has the power to do a lot of good. But at what cost?<br />Pursuing LPG at an alarming rate defeats the very purpose of developing the countries.<br />Many LPG policies become being an end in themselves instead of being the means to an end.<br />
  8. 8. Privatization (Freedom to choose?)<br />Govts. have no business to be in business. (Exceptions like steel industry in Korea, Taiwan do exist)<br />Privatization  More efficient. <br />Costs – Trimming payrolls.<br />Replacing unproductive workers.<br />Social costs<br />Where does privatization leave countries which have no safety nets in place? <br />
  9. 9. Liberalization (Freedom to choose?)<br />Removal of government interference in trade, capital markets, financial markets, etc.<br />The thrust has been on trade liberalization <br />main idea being to utilize comparative advantage.<br />IMF argues that with liberalization, new and efficient jobs would be created as they replace the old unproductive ones. <br />Not instantaneous.<br />
  10. 10. Sequencing and Pacing LPG<br />Need for safety nets.<br />Adequate regulatory framework.<br />Uniform policies of IMF does not suit all.<br />Thus, customize the policy framework for each country.<br />Proper sequencing helps in adapting and responding to the challenges of globalization.<br />Balancing of the trade agenda in favor of developing countries.<br />
  11. 11. IMPACT ON INDIAN ECONOMY <br />India’s growth rate in the 1970’s was very low at 3%.<br /> Though India’s average annual growth rate almost doubled in the eighties to 5.9%, it was still lower than the growth rate in China, Korea and Indonesia. <br />The pick up in GDP growth has helped improve India’s global position. <br /> India’s position in the global economy has improved from the 8th position in 1991 to 4th place in 2001; when GDP is calculated on a purchasing power parity basis.<br />
  12. 12. During 1991-92, The Indian economy grew by 0.9%only.<br />However the GDP growth accelerated to 5.3 % in 1992-93, and 6.2% 1993- 94.<br /> A growth rate of above 8% was an achievement by the Indian economy during the year 2003-04.<br />India is ranked 18th among the world’s leading exporters of services with a share of 1.3% in world exports<br />India’s GDP growth rate can be seen from the following graph since independence<br />
  13. 13. Indian Service Sector<br />Is one of the major contributors to both employment and national income in recent times. <br />Trading, transportation and communication, financial, real estate and business services, community, social and personal services come within the gambit of the service industry<br />Services account for more than 60 per cent of world GDP and trade in services has grown.<br />
  14. 14. Indian exports of services<br />
  15. 15. India’s -Export of Commercial Services<br />India has become one of the top five exporters of services amongst developing countries.<br />India’s exports of services are mainly to the EU and the US.<br />India’s export services growth rate was 16.3 in 2005-06, 25.9% in 2006-07,36.9% in 2007-08 and 33.3% in 2008-09.<br />India has been deemed as a major exporter of services in the world with a market share of 2.72% in 2008 as against 0.6% in 1995.<br />
  16. 16. Conclusion<br /><ul><li>Indian economy has made rapid strides in the process of globalisation.
  17. 17. Globalisation is increasing:</li></ul>the integration of national markets <br />the interdependence of countries world wide for a wide range of goods, services, and commodities. <br /><ul><li>The most important lesson that we must learn from the crisis is that we must be self-reliant. </li></li></ul><li><ul><li>India’s trade reform programme resulted in strong economic growth in the globalization age.
  18. 18. In particular, difficult decisions are to redress the fiscal imbalance, by:</li></ul>reducing subsidies,<br />completing the process of tariff and tax reform,<br />and stepping-up privatization of state-owned enterprises.<br /><ul><li>The efforts are needed to balance the trade and consider expansion of trade in other countries of the world.</li></li></ul><li>THANK YOU<br />BY GROUP 5:<br />AMANDEEP OBEROI<br />AVNEET KAUR <br />KAVERI CHOPRA<br />SMRITI BABBAR<br />MEHAK SUKHRAMANI<br />

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