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in Change and Development in Industrial Society by (30.9k points)
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Explain the changes brought in the sphere of Indian Industry by liberalization and globalization.

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India Government starred its liberalization policy in the 1990s. According to this, the government encouraged investment by private companies, especially foreign companies in India. The government allowed investment in areas like Telecom, Civil Aviation, and energy which were up to then reserved for the government. The licensing system was simplified or stopped. With this, it was not necessary to have a license to start many of the industries. Import restrictions were removed. With this, foreign goods were easily available in the local shops.

As part of liberalization, multinationals bought many of the Indian companies. For example, the Indian company ‘Parle Drinks’ was bought by the American Company Coca Cola. The annual sale of Parle Drinks was Rs. 250 crores. But Coca Cola spends 400 crores only for advertisement. Through attractive advertisements, the sale of coca-cola increased. Many traditional companies making soft drinks crumbled. As part of liberalization, some Indian companies became multinationals. As part of liberalization, the government is selling its shares in the public sector companies. This process is called disinvestment. This resulted in the loss of jobs of thousands of people working there.

The first public sector company to be sold like that was ‘Modem Foods’ which was formed to give people healthy food at a cheap price. 60% of the workers in this company were forced to retire within 5 years. This tendency to reduce the number of workers is found everywhere in the world. Big companies are reducing the number of their workers and the jobs are outsourced to smaller companies or houses. Multinationals give their jobs to developing countries as they can get the work done for less money.

Since the small companies compete to get orders from bigger companies, the situation in small companies is also bad. Employees are paid small salaries and other conditions are not good enough. In mall companies trade union activities are difficult. Today most big companies give their various jobs to smaller companies on contract basis. This process is called outsourcing. This is seen more in the private sector.

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