Economic Issues

Economic Issues

1. Free flow of finance capital

   • Investment
     • Private
       • Tata Jaguar Land Rover in UK
       • Reliance
     • Government
       • ONGC Videsh Ltd. in Vietman
     • Foreign
       • Microsoft, Nestle
       • Consumer sector
         • Food chains
       • Infrastructure sector
         • Airports
         • Nuclear power plants
   • Rare prior to 1990s
   • Both ways (India to foreign and vice versa)

2. Change in concept of Trade

   • WTO - 1995
     • Replaced GATT (1948)
     • Functions
       • Abolishing tariffs
       • Promotes FTAs
       • Promotes Free trade
       • Settles trade disputes
       • Organizes trade negotiations
     • Oversees rules of international trade
     • Agreements
       • General Agreement on Trade in Services (GATS) - 1955
         • Extends multilateral trading system to services
       • Trade Related Aspects of IP Rights (TRIPs)
         • Sets down minimum standards for most form of IP regulation within member countries
   • Trade in services, IP
   • Container Cargo ships
     • Special port facilities

3. Rise of TNCs

   • Due to growth of private companies
   • MNC
     • Operates in many countries, one HQ
     • Dabur, ONGC, Wipro, Aditya Birla, Amul, Godrej
   • TNC
     • Borderless
     • Nestle, Bayer, Unilever, Siemens, General Electric
   • Impact on labor market
     • Migration of skilled, semi-skilled
     • Growth of private sector = employment
   • Impact on small industries and shops
     • Competition from MNC
     • Efficient ones providing essential services are able to compete
   • Impact on agricultural sector
     • Direct sales to companies
     • New technology by MNCs
       • Opened up markets for Indian agricultural products