Answer to Question #67829 in Macroeconomics for Shailesh

Question

Examine the progress of Indian economy towards globalisation in the post reform years . comment on the slow pace of progress on globalisation and identify the major reasons.

Answer 1

India is one of the world’s largest emerging economies. It is a part of so called BRICS economies. Its development within post reform year was driven by several factors. The major ones are listed below:
- Globalization. Borders between countries virtually disappeared enabling cross-border movement of goods, services, technology, and capital.
- Attractive tax regime. Indian government reacted to opened opportunities creating favorable tax environment in India. As a result, international companies/corporations recognized India as one of the best places to set up Shared Services Centers and other kinds of business units.
- Internal developments. Availability of labour and natural resources, improvements in education on background of low wages rates enhanced already existing conditions for growth.
- Strong internal consumer demand. Quite high degree of internal consumer expenditure is another driver which boosts economical growth of India.
Despite recent global financial meltdown Indian economy is considered as one which has sufficient potential for further growth within the nearest future.