By Atul Sehgal
Globalisation as an interactive connection of global countries for mutual benefits has always been in existence through the course of history. In recent times, this term has acquired a restricted connotation – that pertaining to economic issues.
The last two decades have seen the emergence of revolutionary technologies in the area of communications. The evolution of new techniques of communication like wireless telephones, internet and mobile handset, telephone devices with 2G and 3G spectrum have heavily impacted global economic life. India is no exception to this impact.
As stated above, globalisation is not a new international phenomenon. Only in the last six or seven decades, especially post second world war, its modalities have become clearer, better defined, well documented and officialised. This started with the establishment of organisations like UNO, UNCTAD, UNESCO and World Bank and in recent decades WTO alongwith agreements like the GATT. Thus after 1990, India, in order to reap the benefits from economic integration of the world, catalyzed by technological developments, has taken many steps like industrial delicensing, bureaucratic downsizing, foreign investment facilitation, creation of regulatory framework and removal of import barriers in trade. These steps have shown their impact down the line.
The most significant parameters through which the impact of globalisation needs to be studied are the various indices of economic and social development – per capita income and GDP, percentage literacy ratio, life expectancy at birth, per capita availability of power/consumption of electricity, crime rate indices etc. Where does India stand today vis-à-vis the pre globalisation stage of late eighties in all these areas?
The average Indian has become more wealthy and productive during the above phase. Globalisation has definitely led to more scientific attitudes in life. It has effected a quantum jump in the living standards of the professional upper middle class. It has opened up opportunities to large business houses to diversify, expand, acquire offshore companies and enter into mergers and collaborations with international business entities. It has enabled foreign investors to invest in Indian companies and Indian stocks through the Indian stock exchanges. But has globalisation resulted in a quantum jump in the per capita GDP or income of the country? In early nineties, the per capita income of India was about USD 500. Today, as per records of NCAER (National Council of Applied Economic Research), the per-capita income stands at about USD 1000. This translates into an annual average growth rate of 3.5 per cent. The figure pales in significance when compared to the average gross economic growth rate of about 6.5 per cent declared by our official and non-official agencies. The average Indian’s earnings have grown by a measly 3.5 per cent over a 20 years period of economic reforms of which globalisation is a component. Thus, simply stated, the effect of globalisation on growth of income of an average Indian has been far from profound. It may be emphasised here that the above stated figures of per capita income do not account for decrease in purchasing power of the US Dollar, a trend witnessed from 2002 to 2010. The readers can draw their own conclusions about the actual growth in purchasing power of the average Indian.
The middle class and the upper class of the Indian society have, as stated above, benefitted from globalisation in a marked way. With the arrival of MNCs in automobile, telecommunications and information technology (hardware and software) sectors, employment opportunities have increased and so have salaries for professionals in the upper echelons of business organisations. But the lower class and the BPL (below Poverty Line) people have not benefitted from globalisation. In fact the economic plight of this section of Indian society has only worsened due largely to benefits of globalisation accruing only to upper classes and considerable erosion in purchasing power of rupee in recent years.
The six years, from 2004 to 2010 witnessed a huge spurt in money supply in the country sending prices of real estate, bullion and stocks soaring. The BSE sensex recorded a fivefold increase; bullion registered a four fold increase and average prices of real estate increased by 7 to 10 times. In the absence of sizeable growth in income of Indians, this was preponderantly the result of entry of colossal amount of money in India through FDI route. Understandably much of this money was unaccounted or ‘black’ money channelised through FDI route via tax heavens like Mauritius and Singapore. Tons of illegal money of politicians and businessmen stashed away in Swiss Bank or other safe havens was routed in this manner, converted into ‘white’ money and invested in India. Thus the government acted as the key agent and facilitator for conversion of illegal money into legal money by creating an instrument called participatory note. Where else in the world have we seen this happening?
The above entry of huge capital has not helped the common man because most of this money was absorbed in non productive investments like real estate and bullion thus pushing their prices into the non-affordable zone.
Globalisation has affected the average Indian in myriad ways. It has increased crass commercialism and made the average population more materialistic. Is it not evidenced by far more money spent on items of mass consumption, on comfort, luxury and entertainment? Fast food chains and outlets have bred fast food habits; exposure to western culture has brought permissiveness, especially among youngsters. In the name of greater individual independence, traditional virtues of joint family system are being jettisoned. Life in general, has become more competitive and consumerist which has bred enormous stress. Technological implements, in many cases, have been used for wrongful ends. An example is the ultra sound apparatus which has been brazenly misused for aborting female children in the womb. A highly skewed sex ratio of 940 females to 1000 males shows this. Crime and corruption have gone up and the average population has palpably grown more individualistic, intolerant, selfish and egoistic than before.
A commercial blend of Indian and western music with its loud notes and cacophony has replaced the lilting melodies of Bollywood composed in sixties, seventies and eighties. Today we get songs which are high in pitch but low in quality of lyrics. And our youngsters relish them – which shows the profound effect of globalisation on the tastes of our youth. It has diluted their taste of the classical, pure and has made the eclectic popular. Similar effects are observable in cine acting, theatre and dance. The worst effect of globalisation has been on the intellect of our educated elite. They are a confused lot today. The reason for this is heavy bombardment of ideas and information from all over and the inability of Indians to reconcile them with their traditional notions and concepts.
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