Globalisation:
Globalisation means integrating the economy of a country with the economies of other countries under conditions of free flow of trade and capital, and movement of persons across borders. Globalisation has both positive and negative impacts on an economy. These are discussed below:
Case in favour of Globalisation:
1. It will improve allocative efficiency of resources, capital output ratio, increase labour productivity, exports and inflow of capital.
2. It will bring world class technology, increase competition, and boost the rate of economic growth.
3. It will help to restructure the production and trade pattern in a capital scarce, labour abundant economy in favour of labour intensive goods and techniques.
4. Foreign capital will be attracted and with its entry, updated technology will also enter the country.
5. With the entry of foreign competition and the removal of import tariff barriers, domestic industry will be subjected to price reducing and quality improving effects in the domestic economy which will benefit consumers.
6. It creates employment opportunities in the economy.
7. It has resulted in the unrestricted flow of goods and services among different countries of the world.
Case against Globalisation:
1. It leads to redistribution of economic power and increases inequalities among nations.
2. One study reveals that in the globalising world, the economies are moving away from each other rather than coming closer.
3. Globalisation is increasing pressure on economies for structural and conceptual readjustments.
4. Public is going through the pains and uncertainties of structural and conceptual readjustments for the sake of benefits yet to come.
5. Globalisation is unfair from the view point of developing countries as none of the MN Cs has set up manufacturing plants in India or signed any technology transfer agreement with any Indian company like INTEL, AMO and CISCO.
6. It has also resulted in unemployment because of the use of capital intensive techniques.