Globalization, Brexit and India

Abstract

Globalization during the last four decades has facilitated TOT (Technology Transfer), improved TFP (Total Factor Productivity) and ushered phenomenal growth of Transnational Corporations (TNCs). However, there are detractors who feel that it has become an instrument of global commercial capital to exploit the Less Developed Countries (LDCs). This subprime crisis in US and its contagion impact in 2007-08 has brought to the centre stage the toxic role of globalization in emasculating national sovereignty. The recent referendum in Great Britain (Brexit) is indicative of this angst. This paper tries to bring out the contrasting prospective of globalization, the findings of Brexit referendum and the impact it has on India, as it ventures into third generation economic reforms. The paper strongly argues that manufacturing cannot be a panacea for growth as robotization and competition from well entrenched global manufacturing hubs has seriously dented India's export trajectory. We need to explore opportunities available in the service sector, particularly in terms of aggregate like e-commerce. The paper underscores the importance of aggregates over large companies and tourism as a major employment provider. The central focus of the paper is exhorting the state to pay greater attention to social sector investment, quality primary education as they will be the real stepping stone to durable growth and improvement in Human Development Index (HDI) in order to harvest the fruits of globalization.

Keywords: TOT, TFP, LDC, BREXIT, HDI