Integración con Amazon EC2 Services

Problems Of Privatization

Privatization created more monopoly in the market and inequality in pricing which had led to negative externalities. Only through creation of competition and with regulatory measures we can control and minimize the problems of privatization in the economy.

Why should government own and run firms?

Lower cost: Public sector organizations were productively efficient and have economies of scale.

Better management: Government organizations have better management system than private.

Control of monopolies: Public sector enterprises will reduce and control the monopoly market.

Maximum benefit: Government provides maximum of net social benefits and not profit.

Greater control of the economy: Public sector can control the economy to a greater extent.

Fair distribution of resources: The available resources are allocated in an effective manner.

Apart from the above mentioned reasons Public sector is more efficient than private organizations. Private enterprises exploit workers and consumers more than the public sector enterprises. Profit is not the sole motive for public sector enterprises.

Globalization

Globalization means integrating the domestic economy with the world economy, moving towards a new world economic order which leads to integrated financial markets and trade. Globalization improves the effective allocation of resources and expenditure of a country along with economic growth. Globalization has helped developed countries more than the developing countries. Globalization has completely transformed the way Indian business used to operate.

Globalization is a process of integration of the world into one market by removal of all the political, geographical trade and business barriers among nations. Indian businesses should formulate the following strategies to overcome the challenges posed by globalization.

1.Behavioral strategy: continuous up gradation of skills, knowledge and technology of Human Resource is important for empowerment. Efforts should be made to develop a comprehensive version of managerial strategy which helps to improve the decision making skills and problem solving skills of the managers.

2.Operational strategy: producing quality products and maintaining the international quality is essential in the globalised market. Organizations must use various methods like TQM, JIT, Kaizen and others to improve the operational efficiency. Therefore organizations should plan a gradual transition in technological up gradation.

3.Marketing strategy: to maximize customer satisfaction, to render better services, and to introduce e-marketing, net marketing etc., Various marketing strategies should be followed to improve retail environment. 4.Investment for growing FDI: Due consideration should be given to the exchange rate, other risks like political risk and economic risk.

5.Governance: the business situation changed dramatically over the last few years. Quality is important for sustainable development in this competitive environment. Business opportunities are more with tough

6.Risk management strategy: international business is complex in nature and it leads to various types of risks. Which can be managed by insurance, letter of credit, joint ventures, but the top management should consider broader business strategies to define and overcome these risks.

Effects Of Globalization On Indian Economy

1. India’s share in the world export have increased from .53% (1950) to 1 % (2005)

2. Foreign exchange reserves had increased to $180billion (2007) 3. Export growth has increased to a maximum of 20 percent per

annum.

4. Current account deficit of 3% has reduced to 1.1%.

5. Reduction in external debt crisis from 8 billion in 1990 to $3billion in 2006

Benefits to consumers: Consumers were able to get large variety of goods with improved quality at a reasonable price.

Globalizing - World Evidence: 1. Expanding Trade 2. Increasing capital flow

3. Rising tourism and migration

4. Linking of farthest corners of the world by new technology. Forces Of Globalization:

1. Revolutionary changes have taken place in the field of Information technology.

2. Advancement in travel and transportation 3. Liberalization of trade regimes

Upshot Of Globalization:

1. Unprecedented economic growth 2. Multi-locational manufacturing 3. Surge in international trade

4. Explosive growth in capital movements 5. Increase in labour movement

6. Emergence of cultural commonalities The Way Forward:

1. Build on your strength 2. Develop a global force

3. Achieve excellence in areas of one’s comparative advantage 4. Build up an effective regulatory system

5. Develop a good social security network

Thus we can conclude by saying that globalization is progressing well world over, whether we like it or not it is bringing together different nations as one. We can see the evidence in the Indian economy. Government of India has also taken many steps towards globalization which has its own merits and demerits. It is evident that India has potential to face the situation. This is the macroeconomic environment prevailing in India as well as in other parts of the world.

Review Questions:

1. Distinguish between economic growth and economic development. 2. List out the sources of economic growth and development of

India.

3. Describe the pre and post economic scenario of India. 4. What are the major barriers to our economic transition?

5. Discuss the growth potential of the Indian economy after transition.

7. What are the major weaknesses of LPG? 8. Why government should own and run firms?

9. Define privatization. What are the advantages and disadvantages of privatization of public enterprise in India?

10. Discuss the effects of globalization on consumers, business and economy.