INTRO- GLOBALIZATION Globalization means the process of integration or interconnection between countries through the movement of goods, services, people, capital (money), and information. In simple terms, it is the process that turns the world into one large market — where countries are connected economically and culturally. “Globalization is the process by which the world’s economies, societies, and cultures are becoming interconnected through increased cross-border trade, investment, and communication.” Globalization has grown to include far more than just trade. This includes: Multinational Corporations (MNCs) are the main driving force behind globalization. MNCs play a central role in connecting national economies and spreading globalization. MULTINATIONAL CORPORATIONS (MNCs) An MNC is a company that owns or controls production and business operations in more than one country. It is also known as Transnational Corporation. *Aims / Objectives of MNCs *Role of MNCs in Globalization *Benefits from MNCs to Local Companies Benefits Explanation / Example 1. Capital Investment MNCs bring foreign money that helps local companies expand business and production. 2. Transfer of Technology Local firms get access to advanced machines and modern production methods. 3. Better Skills and Standards Workers and managers learn new techniques and improve quality of work. 4. Increased Demand for Local Goods MNCs buy raw materials and parts from local suppliers, creating new business. 5. New Business Opportunities Local small businesses grow as suppliers, transporters, or service providers. 6. Access to Global Markets Collaboration with MNCs helps local firms export goods and enter global trade. 7. Improved Competitiveness Local companies upgrade quality and efficiency to compete globally. IMPACT OF GLOBALIZATION Positive Impacts Negative Impacts 1. More foreign investment 1. Unequal benefits 2. Expanded markets 2. Loss to small industries 3. Advanced technology 3. Job insecurity 4. More employment 4. Environmental damage 5. Growth of Indian companies 5. Cultural erosion 6. Better quality & lower prices 6. Rural sector left behind 7. Global exchange of ideas 7. Economic dependence FACTORS THAT ENABLED GLOBALIZATION 1. Rapid Improvement in Technology 2. Liberalization of Foreign Trade and Investment Policy 3. Role of Multinational Companies (MNCs) 4. Growth of Communication Networks 5. Development of Global Financial Systems 6. Trade Agreements and International Organizations 7. Political and Economic Reforms in Developing Countries NEW ECONOMIC POLICY 1991 It was Introduced in 1991 by the government of India under Prime Minister P. V. Narasimha Rao and Finance Minister Dr. Manmohan Singh. The New Economic Policy of 1991 marked a major turning point in India’s economic history. It shifted India from a closed and controlled economy to an open and market-oriented economy. Reason: India faced a serious economic crisis – low foreign exchange, high inflation, and high debt. The main feature of NEP 1991 was LPG policy – Liberalization, Privatization, Globalization.
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