Globalisation is the new buzzword that has come to dominate the world since the nineties of the last century with the end of the cold war and the break-up of the former Soviet Union and the global trend towards the rolling ball.

• There is increased reliance on the market economy

• renewed faith in the private capital and resources,

• a process of structural adjustment spurred by the studies and influences of the World Bank and other International organisations

• Globalisation has brought in new opportunities to developing countries.

The process of globalisation includes opening up of world trade, internationalisation of financial markets, population migrations more generally increased mobility of

persons, goods, capital, data and ideas

• India opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans.

• The response was a number of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations.

• The new policy regime radically pushed forward in favour of a more open and market oriented economy.

Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included:

• scrapping of the industrial licensing regime• reduction in the number of areas reserved

for the public sector• amendment of the monopolies and the

restrictive trade practices act• start of the privatisation programme• reduction in tariff rates and change over to

market determined exchange rates.

The rich countries of Europe have seen the greatest decline in global GDP share by 4.9 percentage points, followed by the US and Japan with a decline of about 1 percentage point each.

Within Asia, the rising share of China and India has more than made up the declining global share of Japan since 1990.

During the seventies and the eighties, East Asian countries and during the eighties South Korea, along with China and India, contributed to the rising share of Asia in world GDP

• One heartening feature of the evolution of the world economy during the last two to three decades has been the outstanding economic success of China and India – two of the world’s most populous and hitherto extremely poor countries.

• Starting out with the world’s largest absolute numbers of people living in poverty, in narrow economic terms the two countries have achieved impressive growth

• The liberalisation of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates.

• India’s average annual growth rate almost doubled in the eighties to 5.9%. Indian Economy experienced a GDP growth of 9.0 percent during 2005-06 to 9.4 percent during 2006-07.

• Over the past decade FDI flows into India have increased Technology advancement

By 2025 the India's economy is projected to be about 60 per cent the size of the US economy.

The transformation into a tri-polar economy will be complete by 2035, with the Indian economy only a little smaller than the US economy but larger than that of Western Europe.

By 2035, India is likely to be a larger growth driver than the six largest countries in the EU, though its impact will be a little over half that of the US.India, which is now the fourth largest economy in terms of purchasing power parity, will overtake Japan and become third major economic power within 10 years

• India’s share of world merchandise exports increased

• Exports have reached a record figure of US $ 102.7 billions during the financial year 2005-06. India’s exports grew by 22.5 per cent in August 2010 to 16 billion US Dollars.

• Significant liberalisation of external trade has taken place smoothly, which has imparted competitive efficiency to the domestic sector almost upto the global best standards in many of the sectors

The commodities which experienced higher growth cutting across diverse sectors and destinations during 2010 are:

The sectors registering healthy exports growth include:

cotton yarn, gems and jewellery, iron ore, engineering and petroleum, oil and lubricants.

However, the readymade garments, handicrafts, handlooms and carpets sectors are still in bad shape.

Impact on India

Over the years more and more sectors opened up:

• foreign direct investments • portfolio investments

facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors

Adoption of Globalization and liberalization principles has widened the horizon of Indian Consumers worldwide. Consumers in India have become more conscious. Market information in India has become clear.

Liberalized policies have led the industrial sector to grow at a faster pace. BPO, IT, ITES, Retail and Insurance sector have performed well. Both male and female have got equal opportunity in that sector. The success for India is the reduction in gender inequality in India.

The BRIC report reflects considerable confidence in the future of the Indian economy, though it is necessary to see the fine print to realise that while India would be a super power in 2050, "if development proceeds successfully", the per capita income would still not be at a high end.

What is important to recognise is that the report leans on the demographic strength that India derives from its huge young workforce.

In order to harness the demographic advantages, the quality of labour force, (in terms of relevant skills which need to be sustained, reoriented and upgraded in a globally competitive era) and the physical health of the workforce become crucial.

Education and health, therefore, provide the link between supply and demand for labour through increases in productivity.

• This issue is particularly important for the Indian economy, where services have grown faster than manufacturing in the last ten years.

• Services have grown at an annual rate of 8 per cent while manufacturing has grown by 6 per cent.

• The faster growth of services is largely due to the fast growth of the use of IT in domestic and foreign industry and services.

• But fast growth overall has been jobless, that is, in both the formal manufacturing as already noted above, and also in the formal services sector.

• Many Indian economists have argued that this pattern of growth is lopsided and unsustainable.

• They suggest that India will need to have fast growth of low-skill manufactured exports to remedy the situation and avoid social unrest.

Sustaining the growth momentum and achieving an annual average growth of 7-8 % in the next five years.

Simplifying procedures and relaxing entry barriers for business activities.

Checking the growth of population; India is the second highest populated country in the world after China. However in terms of density India exceeds China as India's land area is almost half of China's total land. Due to a high population growth, GNI per capita remains very poor.

Boosting agricultural growth through diversification and development of agro processing.

Expanding industry fast, by at least 10% per year to integrate not only the surplus labour in agriculture but also the unprecedented number of women and teenagers joining the labour force every year.

Developing world-class infrastructure for sustaining growth in all the sectors of the economy.

Allowing foreign investment in more areas Empowering the population through universal

education and health care. India needs to improve its HDI rank, as at 127 it is way below many other developing countries' performance.