Transnationalisation of capital and industrial sector under liberalism
By: Mohan Kumar, P.S.
Material type:
ArticlePublisher: 1998Description: p.369-76.Subject(s): India - Industries | Industry
In:
Asian Economic ReviewSummary: The paper analyses the effects of transnationalisation of capital and impact of liberalisation on Indian industries. The study starts with a brief sketch of the history of foreign direct investment from the 17th and 18th century when Mercantilists, Dutch traders and British East India company started international trade and financing of trade. The salient features of liberalisation, the pattern of foreign direct investment flows and the findings of important studies are dealt in the subsequent sections. Globalisation is not a new concept but an off spring of impeialism and colonialism where the superior powers overpower the inferior powers. The introduction of New Economic Policy in India in 1991 warrants some analysis regarding the role of FDI (foreign direct investment). Also some economies are found successful with liberalisation while some are found unsuccessful with liberalisation. The study critically evaluates some of the empirical studies conducted regarding the role of FDI and the impact on industries. The principal determinants of FDI flows to India are identified as availability of raw materials and large size of consumer population. The FDI flows doesn't in any way help to reduce prices or to boost growth rate/export rate, or even to strengthen the technological base. The multinational companies are engaged in exploiting local market since the rate of profitability in domestic sale is found higher to export sales. Hence the study concludes that economic reforms should be designed to suit to our objectives and constraints. Then only economic reforms and liberalisation policies will help to create a just world economic order. - Reproduced
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Articles
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Indian Institute of Public Administration | Volume no: 40, Issue no: 3 | Available | AR40670 |
The paper analyses the effects of transnationalisation of capital and impact of liberalisation on Indian industries. The study starts with a brief sketch of the history of foreign direct investment from the 17th and 18th century when Mercantilists, Dutch traders and British East India company started international trade and financing of trade. The salient features of liberalisation, the pattern of foreign direct investment flows and the findings of important studies are dealt in the subsequent sections. Globalisation is not a new concept but an off spring of impeialism and colonialism where the superior powers overpower the inferior powers. The introduction of New Economic Policy in India in 1991 warrants some analysis regarding the role of FDI (foreign direct investment). Also some economies are found successful with liberalisation while some are found unsuccessful with liberalisation. The study critically evaluates some of the empirical studies conducted regarding the role of FDI and the impact on industries. The principal determinants of FDI flows to India are identified as availability of raw materials and large size of consumer population. The FDI flows doesn't in any way help to reduce prices or to boost growth rate/export rate, or even to strengthen the technological base. The multinational companies are engaged in exploiting local market since the rate of profitability in domestic sale is found higher to export sales. Hence the study concludes that economic reforms should be designed to suit to our objectives and constraints. Then only economic reforms and liberalisation policies will help to create a just world economic order. - Reproduced
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