GLOBALIZATION

Globalization means the economic intrgration of the country with the rest of the world. In other words, it is a process of integrating the various economics of the world without creating any hindrances in the flow of goods. And services techonology, capital and labour. This involves four comments.

1. Reduction of trade barriers in the from of custom duties or quantitative restrictions or quotas so as to permit free flow of good and services among different economic.

2. Creation of an environment in which free flow of capital (or investment) can take place between nation-states.

3. Creation of an environment for free flow of technology ,and .

4. Creation of an environment in which free flow of labour or human resources can take place among different countries of the world.
 ( Advantages of Globalisation)

Globalization generates many advantages for developing economy like India-among these the more important ones can be briefly summed up as follows;
1. Globalization helps in removing in efficiency. In the absence of globalization prolonged protection of domestic industry has serious damaging  effects on cost structure. Industries habitually fall asleep under protective umbrellas and become careless about cast.

Globalization serves to gives a boost to the long run average growth rate of the economy by ;
1. Improving the allocative efficiency of resources.
 2. Reducing the capital output ratio; and

Globalization helps to restructure the production and trade pattern in favour of labour-intensive goods and labour-intensive techniques.

Foreign capital is attracted to exploit the professional export oppoortunities along the above lines. With the entry of foreign capital, updated technology also enters the country.

With the entry of foreign competition and the removel of import tariffbarriers, domestic industry will be subject to price-reducing and quality improving effects in the domestic economy.

Uneconomic import subsitution will slowly disappear and cheaper imports, particulary of capital goods, will reduce the capital-output ration in manufacturing. Lower prices of manufactured goods will improve the terms of trade in favour of agriculture.

The main effect of globalisation is felt in the consumer goods industries.