Roadmap for Answer Writing

1. Introduction

• Brief Overview of Globalization: Define globalization and its role in connecting economies, increasing trade, and facilitating the movement of goods, services, and capital.
• Contextualize in Indian Scenario: Mention how India embraced globalization in the 1990s, especially post-1991 economic liberalization.

2. Positive Impacts of Globalization on the Indian Economy

• Rapid Economic Growth
  • Fact: India’s GDP increased from $270 billion in 1991 to $2.66 trillion in 2020 due to globalization and economic liberalization.
  • Source: World Bank, 2020.
  • Explanation: Discuss how liberalization led to faster economic growth through increased industrial activity, foreign investments, and better economic policies.
• Increased Exports
  • Fact: India’s share in global trade rose from 0.53% in 1991 to 2.1% in 2022.
  • Source: World Trade Organization, 2022.
  • Explanation: Explain the role of globalization in opening global markets to Indian goods and services, which spurred export growth.
• Foreign Direct Investment (FDI)
  • Fact: FDI inflows grew from 0.1% of India’s GDP in 1990 to 3.1% in 2021.
  • Source: Ministry of Commerce and Industry, 2021.
  • Explanation: Highlight how globalization attracted foreign capital, creating new business opportunities, infrastructure, and industries.
• Service Sector Growth
  • Fact: The IT sector’s contribution to India’s GDP grew from 1.2% in 1998 to nearly 10% in 2019.
  • Source: NASSCOM, 2019.
  • Explanation: Emphasize how globalization made India a global hub for services, particularly in IT, BPO, and customer support, leading to economic diversification.
• Employment Creation
  • Fact: Multinational companies (MNCs) invested in India, leading to job creation, especially for women.
  • Source: Economic Survey of India, 2020.
  • Explanation: Illustrate how MNCs boosted employment across sectors, particularly in urban areas.

3. Negative Impacts of Globalization: Widening Socio-Economic Inequalities

• Concentration of Wealth
  • Fact: The top 1% of India’s population owns over 40% of the country’s wealth.
  • Source: Oxfam Report, 2023.
  • Explanation: Discuss how the economic gains from globalization are disproportionately concentrated in the hands of a few, leading to increased wealth inequality.
• Displacement of Vulnerable Communities
  • Fact: Tribal communities have faced displacement due to development projects and economic zones, exacerbating socio-economic exclusion.
  • Source: Human Rights Watch, 2020.
  • Explanation: Explain how large-scale projects displace poor communities, often leaving them without land or livelihood.
• Fragmented Labor Market
  • Fact: Business process outsourcing (BPO) and MNCs have dismantled local industries, weakening workers’ bargaining power and increasing labor fragmentation.
  • Source: Indian Journal of Labour Economics, 2019.
  • Explanation: Discuss how the rise of outsourcing and MNCs disrupted traditional labor markets, leaving workers with fewer rights and unstable jobs.
• Digital Exclusion
  • Fact: Lower literacy rates and lack of access to technology exclude marginalized groups from participating in the digital economy.
  • Source: National Sample Survey, 2020.
  • Explanation: Illustrate how the digital divide has made it difficult for certain populations, like rural workers and unskilled laborers, to benefit from globalization.
• Jobless Growth
  • Fact: Despite rapid growth, job creation has not kept pace, particularly for low-skilled workers.
  • Source: Economic and Political Weekly, 2021.
  • Explanation: Describe how globalization has created growth without an adequate increase in jobs for unskilled workers, exacerbating unemployment in rural and marginalized areas.
• Regional Disparities
  • Fact: Globalization has disproportionately benefited certain regions, such as Bengaluru and Hyderabad, while states like Bihar and Uttar Pradesh lag behind.
  • Source: Indian Economic Review, 2020.
  • Explanation: Point out the uneven regional development, where some states and cities have prospered due to IT and industrialization, leaving others behind.

4. Conclusion

• Summary: Briefly recapitulate the positive impacts of globalization on the Indian economy, such as rapid growth, increased exports, and job creation, alongside its negative effects, such as wealth concentration, regional disparities, and labor fragmentation.
• Balanced View: Conclude by highlighting that while globalization has brought undeniable benefits to India’s economy, addressing its socio-economic inequalities is crucial to ensure that the gains are more evenly distributed.

Relevant Facts to Include in the Answer

1. Economic Growth: GDP from $270 billion (1991) to $2.66 trillion (2020) (World Bank).
2. Export Growth: India’s share in world trade increased from 0.53% (1991) to 2.1% (2022) (WTO).
3. FDI: FDI in India reached 3.1% of GDP in 2021 (Ministry of Commerce and Industry).
4. IT Sector: Contribution of IT to GDP increased from 1.2% (1998) to 10% (2019) (NASSCOM).
5. Wealth Concentration: Top 1% owns over 40% of India’s wealth (Oxfam, 2023).
6. Displacement: Tribes displaced due to economic zones and development projects (Human Rights Watch).
7. Labor Market Fragmentation: Impact of outsourcing and MNCs on labor (Indian Journal of Labour Economics, 2019).
8. Digital Exclusion: Marginalized communities left behind due to digital divide (National Sample Survey, 2020).
9. Regional Disparities: Disproportionate benefits to regions like Bengaluru and Hyderabad (Indian Economic Review, 2020).

By following this roadmap, you can structure your answer effectively, balancing the positive and negative impacts of globalization on India.