1.

What are the negative effects of liberalisation and globalisation on business and industry in India.

Answer»

Negative effects of liberalisation and globalisation are:

  • Free flow of capital: Liberalisation has improved flow of capital into the country which makes it inexpensive for the companies to access capital from investors. Lower cost of capital enables to undertake lucrative projects which they may not have been possible with a higher cost of capital pre-liberalisation, leading to higher growth rates.
  • Destabilization of the economy: Tremendous redistribution of economic power and political power leads to Destabilizing effects on the entire Indian economy.
  • Competition has increased for Indian firms.
  • Threat from multinational corporations.
  • Acquisitions and mergers are increasing day-by-day.


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