GLOBALISATION

 

The term ‘Globalisation’ has been extensively used in modern discussion of industrial policies and also national economic policies,besides in business circles.Generally, this term ‘Globalisation’ is considered as a synonym for the term ‘Internationalisation’.Strictly speaking, it is not so.Business with one or more foreign countries amounts to internationalization, whereas globalisation means adopting a global outlook for the business and business strategies are aimed at enhancing global competitiveness.Companies which have adopted global outlook “stop thinking of themselves as global marketers”.In these companies,the management and the staff are given training in planning business and how to develop that particular business all the world over,competing in international markets throughout the globe.Executives are trained in world wide operations and not mere domestic market or a few markets outside the country.Similarly.management staff is recruited from many countries and procurements are made throughout the world where they can have at the least cost,and investments are made in several countries where the anticipated returns are the greatest.

LIBERALISATION

Liberalisation is an essential pre-requisite for a successful privatisation.In the absence of liberalised rules and regulations,the private sector will not be willing to venture, due to several restrictions which would hinder the independent growth of the private sector institutions.We know that the industrial policy of 1991 announced by the government of India is nothing but economic and industrial liberalisation.This liberalisation has tremendously expanded the scope of the private industry in India.Prior to liberalisation,seventeen of the most important industries were exclusively reserved for the public sector.Further, in twelve of the most important remaining industries were allocated for the private sector..Even the industries are open to private sector,several regulations like industrial licensing,clearance from MRTP act and Foreign Exchange restrictions etc.,would hinder private investments.With the liberalisation policy,these restrictions were removed,offering large scope for the expansion of the private sector.Now only six industries are reserved for the public sector and even in some of these industries,selective entry of the private sectors is allowed.Industrial licensing is confined to only fourteen industries.These industries,subject to licensing,account for only fifteen percent of the value added in the manufacturing sector.The MRTP regulations regarding  entry and growth were scrapped.In short,private enterprises can now enter and grow in most of the industries.Further automatic approval of foreign investment upto fifty one per cent and foreign technology agreements are permitted for 48 priority industries.