Define Globalization and Privatization. Discuss their objectives.

Definitions

• Globalisation, in the policy sense used after 1991, means lowering borders for trade, foreign investment, technology, and (selectively) labour, under a WTO-era rule book.
• It is also a cultural process: media, brands, and migration make distant tastes local; that social meaning is part of the definition, not a decoration.
• Privatisation means sale of public-sector equity (disinvestment), contracting-out of public services, and opening sectors once reserved for the state to private firms.
• It is not the same as liberalisation: liberalisation is the removal of licence-permit controls; privatisation is a change of owner or operator. India used both after the balance-of-payments crisis.

Objectives of globalisation

• Expand markets for exports and gain foreign exchange; integrate with global value chains rather than only import-substituting behind tariffs.
• Attract foreign direct investment for capital, technology, and management, which domestic saving and public investment were not delivering at the required pace.
• Raise competitive pressure so that Indian firms upgrade quality; the objective is efficiency, not charity from abroad.
• Access global science, standards, and services (IT-enabled exports from Bengaluru and Noida illustrate the intended gain).
• A political objective, often unstated in textbooks, is to lock in reform so that a later cabinet cannot easily return to autarky.

Objectives of privatisation, and the joint caution

• Reduce the fiscal burden of loss-making public enterprises and recycle sale proceeds to the budget.
• Improve productive efficiency where political interference and soft budget constraints had weakened PSU performance.
• Deepen capital markets by listing and spreading share ownership; invite strategic partners in sectors from aviation to banks as policy allowed.
• In infrastructure and social services, privatisation’s objective is sometimes only to plug a delivery gap, which can clash with equity if user charges rise.
• Both projects can widen regional and class inequality; objectives of growth and competition therefore need a public-goods and regulation rider, or they become slogans rather than social policy.