Some of the aspects are:
a) Electronic economic system.
b) Liberalized economic policy
c) Trans-national corporations (TNC’s).
d) Globalized economic policy
Globalization has different aspects. In India, we often use the words liberalization and globalization. They are closely related, but they are different in meaning. India brought changes in its economic policy in 1991. Then the government declared a new economic package. The most important point there was liberalization. Liberalized economic policy, Transnational corporations, knowledge economy, and globalized economy are the main economic factors of globalization.
In the liberalization policy, Indian economy was open to world market. This marked the end of our past economic policies. Until then, the government had followed a policy of protecting public sector and controlling private sector. There were many laws and regulations that protected Indian markets and businesses from foreign competition. It was believed that the government has a big role to play in the welfare of the people.
The government had never given a thought to free market. Liberalization changed everything. It stressed free market. It removed all laws and regulations controlling imports. The policy was called ‘economic reforms’. Liberalization brought changes in all spheres of Indian economy. Changes happened in agriculture, industry, commerce, foreign investment, technology, public sector, and financial institutions. Import regulations were withdrawn. Licensing was ended. It was thought , that liberalization would help our economy.
Taking loans from institutions like International Monetary Fund was an aspect of liberalization. Such loans were given with certain conditions. The .main, condition is that we have to carry out the economic policies suggested by IMF. Then we have to reduce spending in social spheres like health, education, social security and so on. Subsidies had to be reduced. The country is forced to accept these conditions.
A driving force behind globalization is transnational corporations (TNCs). They are companies that manufacture and sell things or give marketing services in different countries. There are some 70,000 TNCs working in the world now. There are also small companies in this, as they have business only in 2 or 3 countries. But there are giants like Coca Cola, General Motors, Colgate, Palmolive, Kodak and Mitsubishi. Their main aim is profit. Some Indian companies are also becoming TNCs.
Electronic economic system is another aspect of globalization. It is the revolution in communication that made this development possible. As computer and the internet chains became widespread, it was possible for banks, corporations, fund managers and depositors to send money to any part of the world within seconds. Of course there is the possibility of the loss of ‘electronic money’ as the transaction happens with a click of the mouse. The rise of fall of share market is an example. We often see heavy losses in the share market. As changing money from one person to another or from one source to another has become very easy, the probability of losses also has increased.
In the past, the basis of economy was agriculture and industry. But globalization has changed it. Today’s economic system is burden-less or knowledge economy.
Knowledge economy is the economy based on computer software, media and entertainment products, and internet services based on information. It includes planning of materials, development, technology, marketing, selling and services and the workers and professionals involved in them. Their work is not limited to producing and distributing things.
This economy includes catering services event management like marriages, conferences, and other big functions: New professions about which we hadn’t even heard a few years ago are coming up. Event Management is an example.
Progress in technology has caused the globalization of world economy. In a matter of seconds, millions of dollars can be moved from one location to another. Capital and Security markets are open 24 hours. The main centers of money market are New York, Tokyo, and London. Mumbai is known as the financial capital of India.
