Globalization has provided both opportunities and challenges for India since economic reforms began in the early 1990s. GDP growth increased from 3% to nearly 9% at times, and per capita income growth also increased sharply. However, globalization has also been criticized for unequal distribution of benefits both within and between countries. Agriculture employment and contribution to GDP declined significantly, increasing rural indebtedness. While FDI and foreign portfolio investment grew at times, they also experienced fluctuations and decreases in other periods. Financial volatility from global capital markets also increased risks. Overall, globalization provides opportunities but developing countries require support to fully benefit and address challenges.

1. Globalization: Challenges and Opportunity Loveleen Kaur Chawla Priyanka Chawla

2. Introduction In early 1990s there were major policy reforms in Indian economy. The reforms were popularly known as LPG model (Liberalization,Privatization and Globalization model). Globalization has been identified with the policy reforms of 1991 in India. Go globally and think globally become the requirement under new reforms.

3. Opportunities Globalization led to the increased market access, capital and technology.GDP of India increased from 3% to 5.6% from 1970 to 1991 because of liberalization and to the peak at 7.8% in 1996-97 that improved 8 th position in 1991, 4 th in 2001. Last 5 years economic improvement is been of 8% and recent year 8.98%. Per capita income grew by 3.7% to 3.1% from 1990-91 to 1980-81 during next 11 years 1992-93 to 2002-03.There is sharp acceleration in per capita income of 7.2% p.a. from 2003-04 to 2007-08. YEAR GROSS DOMASTIC PRODUCT 1990-91 TO 1994-95 6.14% 1995-96 TO 1999-00 6.12% 2000-01 TO 2003-04 6.40% 2004-05 TO 2007-08 8.98%

4. The fluctuation in Foreign portfolio Investment were much sharper then FDI, The FPI rate decreases by 36% from period 1990-00 and again shows upward growth rate in period 00-07 was 22.1%. India’s foreign exchange reserves have grown significantly since stood at 309.7 at end of march 2008 to 5.8 billion at end of march 1991 YEAR Foreign portfolio Investment 1990-91 TO 1994-95 75.8% 1995-96 TO 1999-00 45.2% 2000-01 TO 2003-04 46.3% 2004-05 TO 2006-07 65.4%

5. Challenges Agriculture sector:- In 1951, agriculture provided employment to 72 % of the population and contributed 59 per cent of the gross domestic product. 2001 the population depending upon agriculture decreased 58 % whereas the share of agriculture in the GDP went down drastically to 24 % and further to 22 % in 2006-07 resulted increasing the rural indebtedness. Decreased FDI:-The data of FDI shows 50% (approx) gradual upward growth from 90-00. The FDI growth decreased by 20% from period 2000-07. YEAR Foreign Direct Investment 1990-91 TO 1994-95 24.2% 1995-96 TO 1999-00 54.8% 2000-01 TO 2003-04 53.7% 2004-05 TO 2006-07 34.6%

6. Unbalanced Distribution of Benefits:- its gains are not equally distributed, both between and within countries developed and developing. inequality is rising in many countries, particularly in the OECD countries. Worse, job and income insecurity is increasing, particularly for unskilled labor. The urban poor will suffer when food prices rise. Financial Volatility :-Globally integrated markets have financial volatility as a permanent feature, the frequency of financial crises increasing with the growth in international capital flows. The human costs of such financial volatility can be very high, as shown by the effects of the Asian crisis – Bankruptcies poverty increase rising unemployment reduced schooling reduced public services increased social stress and fragmentation More human insecurity :-Crime, disease, and loss of cultural identity.

7. Conclusion Globalisation should not be thought of as a solution to everything. It merely provides opportunities. Those who take advantage, they flourish and those who do not they sink. Globalisation is not supposed to produce equality of outcome but it produces equality of opportunity for those with right mindset. Hence the developing countries have to focus on economic restructuring building market supporting institutions and creating efficient regulatory mechanisms.Left to themselves the low income countries cannot travel long. What in fact needed is the international assistance and a support mechanism so as to facilitate their participation in the process of globalisation. The challenge of the hour is to make globalization work towards global prosperity through disaggregate development. The critically necessity in this context are the collective and cooperative actions which should be realized by all countries of the world and particularly the developed ones.

8. Thank You