Discuss critically the social dimensions of globalization in India.

 It is strongly refuted that the current pace of globalisation reflects on the economic front only. The ramifications of globalisation process reflect directly in the social and cultural arena of human life as well. Consequently understanding social and cultural dimensions of the phenomenon of globalisation is essential to the development of a rational and considered response to it. The social dimension of globalization refers to the impact of globalisation on the life and work of people, on their families and their societies. Concerns and issues are often raised about the impact of globalisation on employment, working conditions, income and social protection. Beyond the world of work, the social dimension encompasses security, culture and identity, inclusion or exclusion and the cohesiveness of families and communities etc.

a) Withdrawal of National Government from Social Sector

The liberalisation of the economy resulted in a general reduction in the role of the State in economic governance. The reduction in the government’s economic role reflected in a decline in the public spending. Total government expenditure in India in public spending increased at a per annum rate of 11.0% during the 1960s, 7.1% in the 1970s, 6.46% in the 1980s, but it declined to a per annum rate of 4.7% in the 1990s. The consequence of the reduction in the role of the government and the public sector and its replacement with private sector means that the access of people to employment, capital and social services like education, housing and health services will be much less. The structural adjustment policies of the national government involving the relinquishing of economic activities from the public sector into the hands of the private sector, i.e., the state moving away from economic planning and leaving economic decisions to the market, will result in the withdrawal of social protection to the public. Reducing social benefits in order to reduce payroll fringe costs to increase competitive ability leads to “social dumping” which means a process that lowers production costs through low wages and substandard social conditions.

In India the social sector expenditure as a proportion to GDP had been stagnant in the 1990s and there had been a definite shift away from rural development (Dev and Mooji 2002). The share of health expenditure had been stagnant and that of education had been declining. The government is further trying to reduce the size of current expenditure by reducing expenditure on pensions, subsidies etc.

b) Labour Reforms and Deteriorating Labour Welfare

Deregulation and privatisation of state enterprises have been key components of structural adjustment programmes introduced by International Financial Institutions as conditionalities attached to aid packages to developing countries and for the acceleration of economic liberalisation. Labour market deregulation has been an important feature of the structural adjustment programme. There has been explicit deregulation, whereby formal regulations have been eroded or abandoned by legislative means, and implicit deregulation whereby remaining regulations have been made less effective through inadequate implementation or systematic bypassing. Such deregulation has been based on the belief that excessive government intervention in the labour market through such measures as public sector wage and employment policies, minimum wage fixing, and employment security rules is a serious impediment to adjustment and should therefore be removed or relaxed. States around the world has felt compelled to ease labour standards, modify tax regulations and generally relax standards of security and oversight in the bid to attract more and more FDI. This progressively lowered labour standards. The big corporate companies like TNCs and MNCs have evolved a vendor system of subcontracting for their production. The companies give out their work to labourers, through contractors, who in turn deliver the output to the company. This results in job insecurity of the labourer and worsening of labour welfare since there is no checking system for their welfare.

The current pace of globalisation also results in casualisation or informalisation of the work force causing low wages for labourers and less job security, although it created employment opportunities to some of the work force. The growth of the informal sector means that the traditional employment related benefits and mechanisms of protection are not available to those employed in this sector. Increased mechanisation and use of new technology demand more skilled labour and displace unskilled labour. The new technologies and fast changing market – the resultant features of globalisation – also tend to make existing skills obsolete and require upgradation, new skills and multi-skilling. It also opens up new markets, which workers can reach by adapting existing or traditional skills.

Liberalisation of the economy has in some sectors caused loss of employment without creation of new employment. Opening up of the market and free flow of trade and low tariffs encouraged flow of foreign goods lowering the employment opportunities of Indian labourers. For example, thousands of silk spinners and twisters of Bihar have totally lost their job due to the import of China-Korea silk yarn as weavers and consumers prefer this yarn because it is somewhat cheap and shiny.

c) Feminisation of Labour

Women have entered the labour force in large numbers in countries that have embraced liberal economic policies. Industrialisation in the context of globalisation is as much female-led as it is export-led (UN 1999). The overall economic activity rate of women for the age group 20-54 approached 70% in 1996. The highest absorption of women has been witnessed in the export oriented industrial sector. This is especially the case in the export processing zones and special economic zones and in those labour intensive industries that have relocated to developing countries in search of cheap labour (Hillary 1999). Investors have demonstrated a preference for women in the soft industries such as apparel, shoe- and toy-making, data processing, semiconductor assembling industries that require unskilled to semi-skilled labour. Nevertheless this did not ensure a better status for women in any way. The informal sector where women were absorbed in large numbers along with globalisation offer very poor labour conditions. Such industries where women were mostly engaged happened to be highly labour intensive, service oriented and poorly paid. In many countries workers in the export processing zones find unionisation and collective bargaining nearly impossible. In call centres in India women comprise an estimated 40% of the workforce.

d) Poverty

Opening up of economies was primarily visualised as a mechanism where trade would function as “an engine of growth” and the fruits of growth would “trickle down” to the poor. However, the results have been mixed, with many countries observing widening inequalities in their economies, contrary to the conventional trade theory prescriptions (Bardhan 2003). The internalisations of trade has opened up vistas for globalisation of production, creating profound changes in the labour market, such as widening wage disparity, increasing contractualisation of work, skill-based segregation of work, etc. The globalisation and liberalisation policies resulted in impoverishing more and more people of the lower strata the world around. Industrialisation and genetic engineering of food and globalisation of trade in agriculture accelerated poverty in the agriculture-based nations of the world. The globalisation of non-sustainable industrial agriculture adversely affected the incomes of the farmers of the developing and least developed countries through a combination of devaluation of currencies, increase in costs of production and a collapse of commodity prices, all resulting from the liberalisation of the economy.

In India the first generation reforms concentrated on the industrial economy and the agricultural and rural sector were neglected. In the urban sector the large metropolitan cities are the most immediately affected from liberalisation and globalisation, with significant changes in land use and work patterns. The claims made in the beginning of reforms that they are going to bring about employment growth does not seem to be true after studying the data for the post-reform period (Chadha and Sahu 2002; Sunderam 2001).

Economic liberalisation and globalisation had a direct impact both on rural and urban poverty. The substantial changes the institutional arrangement for rural credit, a key factor in helping the poor to escape poverty, due to the reforms in the banking sector have gone against the interests of the rural poor. The unsustainable development practices also lead to the impoverishment of the poor. The decline in social sector expenditure or stagnation in social sector expenditure in proportion to GDP also went against the interests of the poor. In urban areas, the large scale private investment, both foreign and Indian, led to the acquisition of city lands which in turn affected the poor, mainly slum dwellers, hawkers, destitutes, street dwellers as they were pushed out of the city to the peripheries which are marked by degeneration with low value employment and poor living conditions.

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