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Globalisation and Social Change a. The Economic Policy of Liberalisation Globalisation involves a stretching of social and economic relationships throughout the world. This stretching is pushed by certain economic policies. Very broadly this process in India is termed as liberalisation. The term liberalisation refers to a range of policy decisions that the Indian state took since 1991 to open up the Indian economy to the world market. This marked a break with an earlier stated policy of the government to have a greater control over the economy. The state after independence had put in place a large number of laws that ensured that the Indian market and Indian indigenous business were protected from competition of the wider world. The underlying assumption of such a policy was that an erstwhile colonial country would be at disadvantage in a free market situation. Liberalisation of the economy meant the steady removal of the rules that regulated Indian trade and finance regulations. These measures are also described as economic reforms. What are these reforms? Since July 1991, the Indian economy has witnessed a series of reforms in all major sectors of the economy (agriculture, industry, trade, foreign investment and technology, public sector, financial institutions, etc). The basic assumption was that greater integration into the global market would be beneficial to Indian economy. The process of liberalisation also involved the taking of loans from international institutions such as the International Monetary Fund (IMF). These loans are given on certain conditions. The government makes commitments to pursue certain kind of economic measures that involve a policy of structural adjustments. These adjustments usually mean cuts in state expenditure on the social sector such as health, education and social security. There is also a greater say by international institutions such as the World Trade Organisation (WTO). b. The transnational corporations Among the many economic factors driving globalisation, the role of transnational corporations (TNCs) is particularly important. TNCs are companies that produce goods or market services in more than one country. These may be relatively small firms with one or two factories outside the country in which they are based. They could also be gigantic international ones whose operations criss- cross the globe. Some of the biggest MNCs are companies known all around the world: Coca Cola, General Motors, Colgate-Palmolive, Kodak, Mitsubishi and many others. They are oriented to the global markets and global profits even if they have a clear national base. Some Indian corporations are also becoming transnational. We are, however, not sure at this point of time, what this trend may mean to the people of India as a whole. c. The electronic economy The ‘electronic economy’ is another factor that underpins economic globalisation. Banks, corporations, fund managers and individual investors are able to 77 shift funds internationally with the click of a mouse. This new ability to move ‘electronic money’ instantaneously carries with it great risks however. In Reprint 2026-27