Global interaction, rather than insulated isolation, has been the basis of economic progress in the world.

Trade, along with migration, communication, and dissemination of scientific and technical knowledge, has helped to break the dominance of rampant poverty and the pervasiveness of nasty, brutish and short lives that characterized the world. And yet, despite all the progress, life is still severely nasty, brutish and short for a large part of the world population. The great rewards of globalized trade have come to some, but not to others. Amartya Sen, Foreword, Make Trade Fair, Oxfam 2002

Globalization and its Meaning

Broadly speaking, the term globalization means integration of economies and societies through cross country flows of information, ideas, technologies, goods, services, capital, finance and people.

Historical Development Worldwide

After 1945, there was a drive to increase integration. The United Nations Monetary and Financial Conference, commonly known as the Bretton Woods conference, was a gathering of 730 delegates from all 44 Allied nations to regulate the international monetary and financial order after the conclusion of World War II. There agreements were signed to set up the International Bank for Reconstruction and Development (IBRD), the General Agreement on Tariffs and Trade (GATT), and the International Monetary Fund (IMF). In the last two decades, the process of globalization has proceeded with greater vigour.

Onset of Globalization in India

In the beginning of the 90s India faced serious economic crisis. Deficit in Current Account of Balance of Payments amounted to 10 billion US dollars. Even a loan of 1.8 billion US dollars from IMF and substantial decrease in imports didnt help much as Indias Forex Reserve dwindled to a meagre amount, which was just sufficient to provide for imports for two weeks. This also fatally affected Indias credibility as a debtor, so availability of loans also dried up. In search of a solution India signed the GATT (later renamed as WTO) in 1991 and adopted the L-P-G (Liberalization, Privatization, and Globalization) policy. The new trade regime ensured free and fair trade among countries. The emphasis so far has been on free rather than fair trade! Some of the steps taken to liberalize and globalize our economy were: 1. Devaluation: To solve the balance of payment problem Indian currency were devaluated by 18 to 19%. 2. Disinvestment: To make the LPG model smooth many of the public sectors were sold to the private sector. 3. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide range of sectors such as Insurance (26%), defense industries (26%) etc. 4. NRI Scheme: The facilities which were available to foreign investors were also given to NRI's.

Effects of Liberalization: Economy

When the Narasimha Rao government had introduced neo-liberal economic reforms in 1991, a veritable euphoria had swept the country. But more than two decades after the flood gates opened, its effects can at best be described as partially positive.

Pros:1. The recent reports show that Indian economy grew at the record breaking and astonishing pace of 8.6% growth in real GDP in 2010-2011. 2. Indias BOP has shown significant growth. During the fiscal 2009-10, the net invisibles surplus stood at US$ 39.6 billion. 3. Products and services available in domestic market has largely diversified and giving rise to competition and customer satisfaction. 4. Employment opportunity has significantly risen owing to BPOs, KPOs and free movement of labour. 5. Investment and share market has seen considerable rise too as capital can freely move from one country to another now. 6. Venture capital is made simpler. This will allow small businesses to get started quicker and easier.

Cons:1. "Liberalization" in short has not raised the investment ratio; on the other hand it has made the demand constraint on the economy more pronounced. 2. The collapse in the growth rate of the primary sector is continuous, while that of the secondary sector occurs mainly in the latter half of the nineties. Taking both sectors together in the nineties witnessed growth rates that were distinctly lower than in the latter half of the eighties 3. If we take triennium averages, then there was a reduction of 1.6 percent in Gross tax Revenue and 1.3 percent in Net Tax revenue. 4. The current daily status unemployment rate rose between 1993-4 and 1999-00 for rural males, rural females and urban males, the rise for rural males being the steepest (29 percent). 5. Poverty is widespread in India, with the nation estimated to have a third of the world's poor. According to a 2005 World Bank estimate, 41.6% of the total Indian population falls below the international poverty line of US$ 1.25 a day (PPP, in nominal terms 21.6 a day in urban areas and 14.3 in rural areas)

Effects of Liberalization: Society 1.

Access to television grew from 10% of the urban population (1991) to 75% of the urban population (1999). Cable television and foreign movies became widely available for the first time and have acted as a catalyst in bulldozing the cultural boundaries.

2. Scientific and technological innovations have made life quite comfortable, fast and enjoyable. 3. Trade liberalization led to an increase in the poverty gap in the rural districts where industries more exposed to
liberalization were concentrated.

4. Globalization is the fundamental

cause for food culture to be transformed. People of a particular country not just eat their own foods but also others foreign foods. For example, we gorge upon delicacies from Macdonalds or KFC or Mainland china, while sometimes we tend to ignore our own traditional food.

5. The insertion of technology on a people not culturally ready for it will force out the natural cultural timeline. For
example, the advent of VCRs and later CD/DVD players has positively and hugely affected the number of movie viewers in our country. This has resulted in the decline of the number of theatre goers.

Multinational Corporation
The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries. Till 1991, India was more or less a closed Economy. The rate of growth of the economy was limited. The contribution of the local industries to the countrys GDP was limited that were the main cause of shortage of funds. In an effort to revive the industries and to bring the country back on the right track, the government began to open various sectors such as Infrastructure, Automobile, Tourism, Information Technology, Food and Beverages, etc to the Multinational Corporations. The MNCs slowly but reluctantly began to pour capital investment, technology and other valuable resources in the country causing a surge in GDP and upliftment of the economy as a whole. The opportunities for developing economies are significant as well. Through the application of capital, technology, and a range of skills, multinational companies' overseas investments have created positive economic value in host countries and improvement in the standards of living of the country's population, as consumers have directly benefited from lower prices, higher quality goods, and broader selection.

The top 10 MNC's in India are: Microsoft, Nokia, Toyota, Intel, Coca-Cola, Sony, IBM, General Electric, Nike and Citigroup. Conclusion:It is critical to comment clearly if is Globalization is a blessing or curse for India. What can clearly be stated though is that India has failed to take the full advantage of it. Opening up of Indian economy has presented a new vista of opportunities in fields of employment, business, education, technology, consumption and global understanding. Yet India remains to be on the lower side of the world Human Development Index (122nd). Problems of population, illiteracy, unemployment and corruption are plaguing the worlds largest democracy. These problems cannot be addressed without an overhaul of Indias economy and social structure.