Tuesday, 18 February 2014

Impact of Globalization on Indian Villages

International trade has registered manifold increase (3-4 times or more) as a proportion to Gross Domestic Product (GDP) compared to eighties. Two decades earlier, restrictions were in force on foreign trade, exports, imports, foreign direct investment, technology transfer etc. to protect Indian economy for self reliance. Globalization is believed to affect most the earnings and the living standards of people in the urban areas. NGO's and several organizations are studying the impact of globalization on value system and employment. People describe its impact in relation to literacy, skills, growth and development mostly on urban life but its effect on rural livelihood that impacts more than 60 percent of Indian population is seldom discussed.

In Indian villages, people still live in houses made of mud barring houses of few rich and progressive farmers. Houses constructed for people in the name of "Indira Awaas Yojna" are poorly designed and offer limited accommodation. These houses are in no way better than the houses in which poor villagers are already residing. Dwelling units made in the name of "Indira Awaas" are so small that a family of three to four people can not live comfortably in these houses. This appears sheer wastage of public money in the name of subsidy for helping poor people.
 An amount of INR 45000 was allocated for single unit earlier that has been recently increased to INR 70000. Even this amount is meager for construction of a house at prevailing building material and labor costs. The worst thing about the Indira Aawas is the location of these houses as land for construction of such houses is usually government owned land and it is mostly far away from the villages. People in villages prefer to stay in clusters and large spaced houses. They can stay in muddy houses but they can not stay in clumsy and one or two room houses. They may reside in open space but not in space constrained houses. Occupation of such houses has been taken by the people but majority of occupants are still staying in their mot houses. Farming communities are yet untouched from the wind of globalization.

Moreover few of the problems which have been introduced by globalization at a rural scale are:

a) Rural Population still increases whereas total cultivable land availability remains unchanged.  Therefore, the average per household land availability continues to decrease. Moreover, the existing inheritance system and demographic accidents result in a continually increasing intra-village economic differentiation. Each child has the right to inherit the same share of their parental property. This and the number of heirs in previous generations thus determines the present socio-economic status of South Indian villagers. Since among previous generations there were only few families with only one heir there is now an increasing economic differentiation among villagers.  The few large landowners usually purchase more land from those whose land no more provides even for their subsistence. Thus the number of Landless villagers who depend on their income from work as agricultural labourer increases. The lot of the increasing numbers of poor villagers is made even worse by the increasing mechanisation the few large landowners introduce which reduces the demand for agricultural labour.

b)  Profitability of cultivating different crops has hardly increased: As the cost of crop inputs has risen more than the crop prices farmers receive, their net earnings have hardly increased. Farmers also complain about the growing shortage of village labourers and the resulting rising daily wage rate .

c) Changing crop prices: The falling price of sugar on the world markets in 2008 and the declining sugarcane prices this caused had a devastating effect on villages where sugarcane was the major cash crop. Many farmers went bankrupt and committed suicide. This and mechanisation led to a decrease in the demand for village farm labourers, whose poverty increased. Moreover, it made urban migration a survival strategy for increasing numbers of poor villagers. As there is still insufficient urban demand for the growing numbers of unskilled rural/urban migrants they swelled the urban slums which in turn led to increasing urban violence and crime. Even when crop prices increased on the World Markets farmers still complained that their conditions continued to get worse because the middlemen who sold the crops on the world market did not pass on to the producers the higher world market prices and moreover the costs of farm inputs also increased.

d) Farming lost its attraction: Most South Indian rural parents want their children to obtain a University Degree. A survey I conducted in 2011 among 15 year old village school children asking them what they would like to be doing 10 years hence indicated that only four out of 154 youngsters wanted to be farming in their villages while the rest all wanted to become certificated professionals.

e) World Food Shortages: The world shortage of rice was responsible for the doubling of paddy resale prices within India and resulted in decreasing levels of living particularly among the landless rural poor.

But, as we know every coin has two sides there are numerous advantages of Globalization on the rural scale or the Indian Village.The impact of globalization has been felt by the Indian rural market as much as the urban counterpart.Hence, we can see that today changes are taking place rapidly in all walks of life and rural areas are no exception to this. Improved infrastructure facilities, economic liberalization, renewed emphasis on agribusiness and small industries, fast changing agricultural technology, scope for commercialization of agriculture, greater budgetary provision for rural people are few reasons to mention. Moreover, various socio-cultural,psychological and political aspects of rural life are also changing. The farmers in the Indian village now have access to the advanced equipments for agriculture, which leads them to better yeilds and inturn it helps the economy of the country. Globalization also provides better exposure to the argricultural produces and ensures the farmers that they get the correct value for the produces, as the market due to globalization has gone competitive and more of buyers are there making the market even more diverse.

In the end I would like to say that the implications of globalisation for a national economy are many. Globalisation has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced by both domestic and international policies and economic conditions. It is thus clear that a globalising economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some extent, in decision-making at the national level.

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