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Globalization and Challenges for Indian Development Model-Aurnob

Globalization and Challenges for Indian Development Model-Aurnob

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Published by Prof.Aurnob Roy

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Published by: Prof.Aurnob Roy on Nov 16, 2010
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11/16/2010

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Globalization- Challenges for Indian Development Model
By
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Prof. Aurnob Roy
(World Bank-Management Consultant, M. A-Economics, Lucknow University, UGC-NET, New Delhi-15 YearsResearch,Development & Teaching, MBA- B-School's Experience in India and Abroad)
Faculty, Strategic Management
Amity Business SchoolAmity University
Lucknow Campus THE MODEL OF GLOBALIZATION WAS GIVEN BY MICHEAL PORTER IN WHICH HEUSED 4 I'S NAMELY-1-INVESTMENT, 2-INDUSTRY OR MANUFACTURING-3-INFORMATION TECHNOLOGY AND 4-INDIVIDUAL CONSUMER OR MARKETIZATION.TO THISI HAVE ADDED THE 5TH I'S CALLED AS INTERNATIONAL BUSINESSWITHOUT WHICH A NATION WILL OPERATE UNDER NO TRADE CONDITIONS CALLEDAUTARKY. BUT WITH TRADEIT CAN PRODUCE BEYOND THEIR PRODUCTIONPOSSIBLITY FRONTIER, (PPF) SO AS TO PROMOTE, INTERNATIONAL BUSINESS ANDLOWER THE MANUFACTURING COSTSLIKE BARBIE DOLLS OF USAMADE BY MATTELTOYSARE NOWADAYSMADE IN CHINA AND THE PRIZESHAVE FALLEN FROM RS.500/-PER DOLL TO RS. 135/- PER DOLL.THE OPENING UP OF OVER 3000 ITEMSUNDER WTO REGIME POST-2001INCHINAINCREASED THE SALES OF COSMETICS, HALOGEN BULBS, TORCHESANDTOYS, CONDOMS ETC. AND MORE THAN RS. 5000 CRORE WAS THE LOSS TO THEINDIAN INDUSTRY. NOWWE GET DURING DIWALI RS. 100/-PER 500 PEICES OFSMALL BULBS FOR NIGHT DECORATIONHOME ILLUMINATION AND THENDURINGHOLI FESTIVAL WE HAVE THE PLASTIC BASED CHINESE SPRANKLERS.FURTHERMORE, THE INDIAN CONSUMER IS VERY PRICE CONSCIOUSRATHER THANQUALITY CONSCIOUSSO WE HAVE CHINESE MADE GANESHA AND LAXMIIDOLSDURING DIWALI AND ALSOWE HAVE SEVERAL IDOLS OF GODDESS MAADURGAMADE IN CHINADURING THE DURGA POOJA.THERE IS NO DOUBT THAT THE CHINESE INFRASTRUCTURE IS VERY STRONG. THECENTRAL GOVT IN MAINLAND CHINA HAS INVESTED ON HOUSES, DRAINAGE,ROADS, ONE ROOM ACCOMODATIONS AND FREE PUBLIC TOILETS UNLIKEBINDESHWARI DUEY'S SINCE 1960-SHULABH SHAUCHALYA WHEN 70 PER CENT OFURBAN INDIANS GO TO THE FIELDS FOR SANITATION AND THE OLIGOPOLISTICMARKET OF 225 MILLION MOBILE PHONES WITH MAJOR PLAYERS VIZ. VODAFONE-HUTCH, RELIANCE INFOCOM, AIR TEL, IDEA, SPICE, BSNL, TATA INDICOM ETC.BRINGING A COMMUNICATION REVOLUTION BUT A SANITATION REVOLUTION ININDIA IS FAR BEHIND WITH NO OLIGOPOLISTIC SANITATION MARKET WITH USERPRICE CHARGES TO MAKE IT SUSTAINABLE BUSINESS PROPOSITION WITH MARKETBASED PRIVATE PUBLIC PARTNERSHIP INITIATIVE. iNDIA HAS FIRST CLASS CARSHONDA ZX, TAYOTA COROLLA, INNOVA, QUALIS, GENERAL MOTORS, FORD-IKONETC. BUT THIRD CLASS ROADS PHYSICAL INFRASTRUCTURE. THIRD CLASSMANAGEMENT SYSTEMS. CORRUPTION AND BRIBERY IS THE ORDER OF THE DAYBOTH IN PUBLIC AND CORPORATE SECTOR. CORRUPTION AND MONEY INCENTIVESIN INDIA IS SEEN AS A TECHNIQUE OF MOTIVATION. TO SET UP A BUSINESS ININDIA WE REQUIRE 16 LICENSES EVEN NOW WHEREAS IN CHINA THERE IS SINGLEWINDOW CLEARANCE SYSTEM AND IN 15 MINUTES A FOREIGN COMPANY CAN SETITS BRANCH.
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CHINA STARTED ITS ECONOMIC REFORMS IN 1977 WITH AGRICULTUREAS THE KEYSTRATEGIC PLANK IN A COMMUNIST REFORMIST SET UP UNDER DENG XIO PENG.LATERTHE SPREAD EFFECTS WHERE IN OTHER SECTORS.HOWEVER, INDIA HAS FORGOTTEN AGRI-BUSINESS MGT. COMMERCIALIZATION OFAGRICULTURE MANAGEMENT RELYING MORE ON SUBSISTENCE FARMINGAGRICULTURE. MOST OF BELOW THE POVERTY LINE PEOPLE LIVE IN RURAL AREASWHERE WE HAVE HAD ON AN AVAERAGE 2 PER CENT PER ANNUM AGRICULTUREGROWTH WHEN THE REQUIREMENT IS 4 PER CENT AGRICULTURAL GROWTH. 90PER CENT OF THE CITIZENS IN MY NATIVE STATE OF UTTAR PRADESH DO NOTHAVE SANITATION SYSTEMS IN RURAL AREAS AND GO TO THE FIELDS TODEFECATE WHEREAS OUR MALLS ARE FULL WITH BRANDS LIKE MARKS ANDSPENCERWALMARTPANTALOONTESCO ETC. ALL WORLD CLASS IN A THIRD CLASSINSTITUTIONAL MANAGEMENT SYSTEM WITH SYSTEMATIC FAILURE OFIMPLEMENTATION AT GRASSROOT LEVELS. DECENTRALIZATION OF FINANCIALMANAGEMENT TO PANCHAYATS GLOCALIZATION LOW COST HOUSING, LOW COSTSANITATION SYSTEM, NATIONAL CULTURE BUILDING, LOW COST PRIMARYEDUCATION, LOW CAT TECHNICAL, JOB RELATED EDUCATION STATEGIES ARE THEFORTUNE AT THE BOTTOM OF THE PYRAMID MODEL YET TO BE ADOPTEDALONGSIDE GLOBALIZATION IN INDIA.SO FAR NO ATTEMPT HAS BEEN MADE ON A MASS SCALE TO HAVE FDI INAGRICULTURE OF JV WITH INDIAN AND MNC FIRMS ON GROWING EXOTIC VARIETYOF FLOWERS TO PROMOTE FLORICULTUE WITH COLD CHAINS.INDIA STARTED ECONOMIC REFORMS IN JULY-1991, WITH TRADE SECTORREFORMSAS IMMEDIATE BALANCE OF PAYMENTS PROBLEM (BOP) IN THE TRADESECTOR AS OUR FOREIGN EXCHANGE RESERVES WERE ONLY $2 BILLION DOLLARS,SUFFICIENT FOR 2 WEEKS OF IMPORTS AND DEVALUATION OF THE RUPEE BY OVER21 PER CENTBY THE GOVERNMENTPRIMARILY TO MAKE INDIA'S EXPORTS CHEAPERAND IMPORTS COSTLIER IN THE INTERNATIONAL MARKET. BY 199510% OF INDIASECONOMY COMPRIZED OF EXPORTS. TODAY, 35% OF INDIA'S ECONOMIC GNP AREEXPORTS ORIENTED. INDIA'S GNP IS A 1 TRILLION DOLLAR ECONOMY. THEWORLD'S LARGEST INVESTMENT BANK GOLDMAN AND SACHS HAVE PREDICTEDTHE EMEERGING MARKETS BRICS ECONOMY MODEL OF BRAZIL, RUSSIA, INDIAAND CHINA AND COUNTRIES TO WATCH FOR LOW LABOR COST AND KPO, LPO, BPOOUTSOURCING IN FUTURE YEARS BUT THE FACT REMAINS THAT THEY HAVE PUTCHINA AS NO. 1, INDIA AS NO. 2 AND USA AS NO. 3 WORLD ECONOMIC GIANTS INITS JANUARY 2007 ANNUAL REPORT. HOW WILL THIS BE POSSIBLE?THE LPG MODEL WAS PROPOGATED BY THE US-BASED AGENCIES- WORLD BANKAND THE IMF- DURING THE 1980'S AND MORE THAN 130 COUNTRIES AROUND THEGLOBE, HAVE ADOPTED ITWITH STRINGENT REGULATIONSLIKEBRINGINGDOWNTHE FISCAL DEFICIT BELOW 5% OF GNP, BRINGING DOWN THE CAD-CURRENT ACCOUNT DEFICIT (EXPORTS-IMPORTS=CAD) BY LESS THAN 1% OF GNPAS EARLIER IT WAS 3% OF GNP.MOREOVER, POVERTY IN INDIA WAS 38% OF GNP IN 1991 AND NOW, 2007IT ISAROUND 25% OF POPULATION LIVING BELOW THE POVERTY LINE. (BPL)VIZ. 1, 800CALORIES PER PERSONPER DAYIN URBAN AREAS AND 2, 400 CALORIESPERPERSONPER DAYIN RURAL AREAS. THIS DATA IS PROVIDED BY THE YOJNA BHAWAN
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