Liberalization is defined as making economics free to enter in the market and establish their venture in

the country.

Privatization is defined as when the control of economic is sifted from public to a private hand.

Globalization:- is described as the process by which regional economies, societies, and cultures have
become integrated through a global network of communication, transportation, and trade.

i. Interactions and interdependence among countries.

ii. Integration of world economy.

iii. Deterioration.

Effect of Globalization on India:

Globalization has its impact on India which is a developing country. The impact of globalization can be
analysed as follows:

1. Access to Technology:

Globalization has drastically, improved the access to technology. Internet facility has enabled India to
gain access to knowledge and services from around the world. Use of Mobile telephone has revolution
used communication with other countries.

2. Growth of international trade:

Tariff barriers have been removed which has resulted in the growth of trade among nations. Global
trade has been facilitated by GATT, WTO etc.

3. Increase in production:

Globalization has resulted in increase in the production of a variety of goods. MNCs have established
manufacturing plants all over the world.

4. Employment opportunities:

Establishment of MNCs have resulted in the increase of employment opportunities.

5. Free flow of foreign capital:

Globalization has encouraged free flow of capital which has improved the economy of developing
countries to some extent. It has increased the capital formation.

Negative effect of globalization:

Globalization is not free from negative effects. They can be summed up as follows:
1. Inequalities within countries:

Globalisation has increased inequalities among the countries. Some of the policies of Globalization
(liberalisation, WTO policies etc.) are more beneficial to developed countries. The countries which have
adopted the free trade agenda have become highly successful. E.g.: China is a classic example of success
of globalization. But a country like India is not able to overcome the problem.

2. Financial Instability:

As a consequence of globalization there is free flow of foreign capital poured into developing countries.
But the economy is subject to constant fluctuations. On account of variations in the flow of foreign
capital.

3. Impact on workers:

Globalization has opened up employment opportunities. But there is no job security for employees. The
nature of work has created new pressures on workers. Workers are not permitted to organise trade
unions.

4. Impact on farmers:

Indian farmers are facing a lot of threat from global markets. They are facing a serious competition from
powerful agricultural industries quite often cheaply produced agro products in developed countries are
being dumped into India.

5. Impact on Environment:

Globalization has led to 50% rise in the volume of world trade. Mass movement of goods across the
world has resulted in gas emission. Some of the projects financed by World Bank are potentially
devastating to ecological balance. E.g.: Extensive import or export of meat.

6. Domination by MNCs:

MNCs are the driving force behind globalization. They are in a position to dictate powers. Multinational
companies are emerging as growing corporate power. They are exploiting the cheap labour and natural
resources of the host countries.
7. Threat to national sovereignty:

Globalizations results in shift of economic power from independent countries to international

organisations, like WTO United Nations etc. The sovereignty of the elected governments are naturally
undermined, as the policies are formulated in favour of globalization. Thus globalization has its own
positive and negative consequences. According to Peter F Drucker Globalization for better or worse has
changed the way the world does business. It is unstoppable. Thus Globalization is inevitable, but India
should acquire global competitiveness in all fields.

Liberalisation:

It is an immediate effect of globalization. Liberalisation is commonly known as free trade. It implies

removal of restrictions and barriers to free trade. India has taken many efforts for liberalisation which
are as follows:

New economic policy 1991.

Objectives of the new economic policy.

i. To achieve higher economic growth rate.

ii. To reduce inflation

iii. To rebuild foreign exchange reserves.

FEMA:

Foreign exchange Regulation Act 1973 was repealed and Foreign exchange Management Act was
passed. The enactment has incorporated clauses which have facilitated easy entry of MNCs.

i. Joint ventures with foreign companies. E.g.: TVS Suzuki.

ii. Reduction of import tariffs.

iii. Removal of export subsidies.

iv. Full convertibility of Rupee on current account.

v. Encouraging foreign direct investments.

The effect of liberalization is that the companies of developing countries are facing a tough competition
from powerful corporations of developed countries.

The local communities are exploited by multinational companies on account of removal of regulations
governing the activities of MNCs.

Privatization: In the event of globalization privatization has become an order of the day. Privatization
can be defined as the transfer of ownership and control of public sector units to private individuals or
companies. It has become inevitable as a result of structural adjustment programmes imposed by IMF.

Objectives of Privatization are:

1.To strengthen the private sectors.

2.Government to concentrate on areas like education and infrastructure.

In the event of globalization the government felt that increasing inefficiency on the part of public sectors
would not help in achieving global standards. Hence a decision was taken to privatize the Public Sectors.

Causes of Inefficiency of Public Sectors:

i. Bureaucratic administration

ii. Out dated Technology

iii. Corruption

iv. Lack of accountability.

v. Domination of trade unions

vi. Political interference.

vii. Lack of proper marketing activities.

Privatisation has its own advantages and disadvantages Viz:

Advantages:

i. Efficiency

ii. Absence of political interference

iii. Quality service.

iv. Systematic marketing

v. Use of modern Technology

vi. Accountability

vii. Creation of competitive environment.

viii. Innovations

ix. Research and development

x. Optimum utilization of resources

xi. Infra structure.

However, privatization suffers from the following defects.

i. Exploitation of labour.

ii. Abuse of powers by executives.

iii. Unequal distribution of wealth and income.

iv. Lack of job security for employees.

Privatization has become inevitable in the present scenario. But some control should be exercised by the
government over private sectors.
E GOVERNANCE

The e in e-Governance stands for electronic. Thus, e-Governance is basically associated with carrying
out the functions and achieving the results of governance through the utilization of ICT (Information and
Communications Technology).

While Governance relates to safeguarding the legal rights of all citizens, an equally important aspect is
concerned with ensuring equitable access to public services and the benefits of economic growth to all.
It also ensures government to be transparent in its dealings, accountable for its activities and faster in its
responses as part of good governance.

However, this would require the government to change itself its processes, its outlook, laws, rules and
regulations and also its way of interacting with the citizens. It would also require capacity building within
the government and creation of general awareness about e-Governance among the citizens

ICT

provides efficient storing and retrieval of data, instantaneous transmission of information, processing
information and data faster than the earlier manual systems, speeding up governmental processes,
taking decisions expeditiously and judiciously, increasing transparency and enforcing accountability. It
also helps in increasing the reach of government both geographically and demographically.

In India, the main thrust for e-Governance was provided by the launching of NICNET in 1987 the
national satellite-based computer network. This was followed by the launch of the District Information
System of the National Informatics Centre (DISNIC) programme to computerize all district offices in the
country for which free hardware and software was offered to the State Governments. NICNET was
extended via the State capitals to all district headquarters by 1990. In the ensuing years, with ongoing
computerization, tele-connectivity and internet connectivity established a large number of e-
Governance initiatives, both at the Union and State levels.

Types of Government Interaction in e-governance.

G2G: Government to Government

G2C: Government to Citizen

G2B: Government to Business

G2E: Government to Employee