Short Paragraph on Globalisation in India (553 Words)

Here is your short paragraph on globalisation in India!

Since 1985, India’s economy was moving gradually away from planned development and towards market orientation.


On 21 July 1991, Finance Minister, Manmohan Singh (who later became the prime minister), placed an Industrial Policy Statement before Parliament which was in tune with the approach of structural adjustment and globalisation of finance and investment.

Other developing countries and the former socialist countries (Russia and the East European countries) too changed their policies in a similar manner around the same time.

The World Bank, as indicated earlier, had been propounding the idea that the only way countries of the South could promote growth was by encouraging private enterprise and reducing the protection for labour. The argument was that too much protection to labour in the formal sector had resulted in a small section of the working class being more privileged than the vast majority of ill-paid workers.

The World Development Report of 1995 noted that, ‘[i]n many Latin American, South Asian and Middle Eastern countries, labour laws establish onerous job security regulations, rendering hiring decisions practically irreversible; and the system of worker representation and dispute resolution is often subject to unpredictable government decision-making, adding uncertainty to firms’ estimate of future labour costs’ (World Bank 1995: 34).


In order to ease this process, many countries (especially those in Central and South America) relaxed or removed legal protection to workers in the formal sector. In India, too, there have been persistent pressures from industry to allow closure of industries and reduce the protection given to permanent workers.

Following Independence, India decided to adopt the path of planned development as implemented in socialist countries such as the then Soviet Union, and it was also decided that the country would have a mixed economy with both the state sector (public sector) and private enterprise, the latter to exist under regulations and controls.

This included issuing of licences to start industry which would only be in areas that were not designated as core industries. We can briefly summarise the developments since 1950s till the era of liberalisation, which was ushered in by globalisation.

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