Globalisation and Small Scale Industry
Chapter – VIII
GLOBALISATION AND INDIAN SMALL SCALE INDUSTRIAL SECTOR
Globalisation means gradual integration of economies through free movement of goods, services and capital which has significant impact on the economies of both developed and developing countries. Therefore, globalisation refers to a process of growing economic interdependence among different countries of the world. Thus, in the globalised era, the whole world is changing into a global village in the sense that economic activities in one part of the globe are affecting significantly the rest of the world. For this purpose, it becomes necessary for India to participate in the process of globalisation (Ashutosh, 2002). The New Economic Policy of 1991 aimed at making Indian economy competitive and much better integrated with the rest of the world. The liberalisation and economic reform process which included both short term and long term measures have direct and indirect bearing on the manufacturing sector of India in general and small scale sector in particular. The dynamics of change will bring about inflow of technology, resources and both human and physical capital that are scarce or costly to be procured locally in the developing economies like India. This will lead to rise in the productive capacity of the nation to supply increasingly diverse economic goods and services to its growing population. Therefore, globalisation can bring immense benefits to various countries that are able to harness the resulting opportunities for the proper development of their material and human resource endowments (Nemedia, 1997). Besides offering greater opportunities for economic growth, globalisation has also posed some important challenges which may be viewed as problems from the perspective of developing countries like India. With the launching of the process of liberalisation, globalisation and formation of WTO, the Indian small scale industrial sector will
219
have to upgrade its technology,
GLOBALISATION AND INDIAN SMALL SCALE INDUSTRIAL SECTOR
Globalisation means gradual integration of economies through free movement of goods, services and capital which has significant impact on the economies of both developed and developing countries. Therefore, globalisation refers to a process of growing economic interdependence among different countries of the world. Thus, in the globalised era, the whole world is changing into a global village in the sense that economic activities in one part of the globe are affecting significantly the rest of the world. For this purpose, it becomes necessary for India to participate in the process of globalisation (Ashutosh, 2002). The New Economic Policy of 1991 aimed at making Indian economy competitive and much better integrated with the rest of the world. The liberalisation and economic reform process which included both short term and long term measures have direct and indirect bearing on the manufacturing sector of India in general and small scale sector in particular. The dynamics of change will bring about inflow of technology, resources and both human and physical capital that are scarce or costly to be procured locally in the developing economies like India. This will lead to rise in the productive capacity of the nation to supply increasingly diverse economic goods and services to its growing population. Therefore, globalisation can bring immense benefits to various countries that are able to harness the resulting opportunities for the proper development of their material and human resource endowments (Nemedia, 1997). Besides offering greater opportunities for economic growth, globalisation has also posed some important challenges which may be viewed as problems from the perspective of developing countries like India. With the launching of the process of liberalisation, globalisation and formation of WTO, the Indian small scale industrial sector will
219
have to upgrade its technology,