Thursday, July 23, 2009

Globalization - every coin has two sides

Our domestic demand for products and services is still there while the demand from foreign countries has decreased. In the past (before 2006) we have expanded our businesses based on demand mostly from the outside our own country and foreign direct investments has been fuelling the success story of India. 2006 onwards we saw the demand from outside decreasing due to slowdown in economy globally. This has led to the fixed capital which we have incurred to increase our production in the form of manpower and machine is not getting fully utilized. In this situation the government policies try to support internal companies to use the unutilized resources on domestic market, while it tries to isolate various sectors from bidding for the domestic market by outside players. In one way this is disadvantage to globalization. So here is a situation of advantages and disadvantages of globalization. By the way I am not supporter of the left policies.