UPSC GS Paper I Indian Society Globalisation and Its Effects on Indian Society

Must‑Know

• Liberalisation, Privatisation, Globalisation (LPG) reforms initiated in 1991 under PM P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh as response to 1991 Balance of Payments crisis.
• Foreign Exchange Management Act (FEMA), 1999 replaced FERA, 1973 to facilitate external trade and payments and promote orderly development of foreign exchange market.
• India’s share in global merchandise exports increased from 0.6% in 1991 to 2.2% in 2022 (WTO data).
• Services sector contributed 54.4% to India’s GDP in 2022–23 (MoSPI data), driven by IT/ITES due to globalisation.
• BPO and ITES boom post-2000 led to rise in urban middle class and altered employment patterns, especially in cities like Bengaluru, Hyderabad, Pune.
• Globalisation contributed to growth of nuclear families in urban India, weakening joint family structure, especially in metropolitan areas.
• Rise of consumerism in India post-1991 evident in growth of malls, branded goods, and digital platforms like Amazon and Flipkart.
• McDonald’s entered India in 1996 via joint ventures (Connaught Plaza Restaurants, Hardcastle Restaurants), adapting menu to local tastes (e.g., McAloo Tikki).
• Globalisation increased exposure to Western culture, influencing Indian youth through media, fashion, and lifestyle choices.
• Growth of English-language media and private FM radio post-1999 (after TRAI Act) linked to globalisation and liberalisation of telecom sector.
• Rise of transnational marriages and diaspora connections intensified post-globalisation, with 3.2 crore Indians overseas (MEA, 2023).
• Cultural hybridisation seen in Bollywood films post-2000 (e.g., Dilwale Dulhania Le Jayenge) reflecting NRI narratives and global aesthetics.
• Agricultural distress in globalised economy due to exposure to volatile international prices, exemplified during 2008–09 when onion prices crashed post-import surge.
• WTO’s Agreement on Agriculture (AoA) constrains India’s subsidy limits (amber box), leading to disputes over food security subsidies (e.g., India’s public stockholding issue at Bali, 2013).
• Special Economic Zones (SEZs) Act, 2005 aimed to boost exports but faced criticism for land acquisition and tax revenue loss (CAG report 2013).
• India’s merchandise exports grew from $18 billion in 1990–91 to $447 billion in 2022–23 (DGFT data).
• Globalisation widened regional disparities: states like Tamil Nadu, Karnataka attracted more FDI than Bihar, Jharkhand (RBI FDI reports).
• FDI equity inflows into India: $848 billion (April 2000–March 2023), with major sources Singapore, USA, Mauritius (DPIIT data).
• Rise of informal sector in global value chains: 81% of India’s workforce in informal employment (ILO, 2022).
• Globalisation led to growth of contract labour in manufacturing and services, weakening job security and unionisation.
• Environmental degradation intensified due to industrial expansion under globalisation, e.g., pollution in Sipat (Chhattisgarh) due to thermal power plants.
• Urban sprawl in cities like Gurgaon and Noida driven by global corporate investments and real estate speculation.
• Globalisation enabled rise of social media platforms (Facebook, Instagram) influencing public discourse and political mobilisation (e.g., 2011 Anna movement).
• Digital divide persists: only 52% of rural households have internet access vs. 88% urban (NSSO 75th Round, 2017–18).

Difficulty Level

Intermediate – requires understanding of socio-economic shifts and interlinkages between economy, culture, and policy; direct questions are rare but integrated in sociology and essay papers.

Common UPSC Traps

Trap: Globalisation began in India only after 1991 – Fact: India had trade links since ancient times (e.g., spice trade with Rome); modern globalisation refers to post-1991 economic integration.

Trap: Globalisation uniformly benefited all sections of Indian society – Fact: It increased inequality; top 10% holds 57% of national income (World Inequality Report 2022).

Trap: Cultural globalisation means complete westernisation of Indian society – Fact: Indian society exhibits glocalisation, e.g., McDonald’s offering vegetarian options, reflecting cultural adaptation.

Trap: SEZs have significantly boosted employment in India – Fact: NITI Aayog (2018) noted SEZs created only ~7 lakh direct jobs despite large land use and tax exemptions.

Practice MCQs

Question: Which of the following best illustrates the concept of 'glocalisation' in the context of globalisation in India?
A) Closure of small textile units due to import competition
B) Adoption of Western-style nuclear families in urban areas
C) McDonald’s offering McAloo Tikki and vegetarian burgers in India
D) Increase in FDI inflows into the service sector
Answer: C
Explanation: Glocalisation refers to blending global products with local culture; McDonald’s adapting menu for Indian consumers is a classic example.
Why others fail: C is specific to cultural adaptation, while B reflects cultural change but not active blending.

Question: The rise in India’s services exports post-1991 is primarily attributed to:
A) Expansion of agricultural processing industries
B) Growth of IT and business process outsourcing
C) Increase in mineral exports to East Asia
D) Liberalisation of the textile sector
Answer: B
Explanation: India’s services export boom, especially to the US and Europe, is driven by IT/ITES sector enabled by globalisation and skilled workforce.
Why others fail: B is directly linked to services; A, C, D relate to goods, not services.

Question: Which of the following is a socio-cultural impact of globalisation on Indian society?
A) Increase in foreign exchange reserves
B) Rise in consumerism and brand consciousness
C) Adoption of inflation targeting by RBI
D) Expansion of SEZs in coastal states
Answer: B
Explanation: Globalisation has led to increased exposure to global brands and advertising, fostering consumerist culture in urban India.
Why others fail: B is socio-cultural; others are economic or policy outcomes.

Question: The Foreign Exchange Management Act (FEMA), 1999 replaced FERA, 1973 with the objective of:
A) Strict control over foreign exchange transactions
B) Facilitating external trade and promoting foreign investment
C) Nationalising foreign banks operating in India
D) Prohibiting remittances by NRIs
Answer: B
Explanation: FEMA was enacted to liberalise foreign exchange regime and support India’s integration into global economy.
Why others fail: A and D contradict FEMA’s liberal intent; C never occurred.

Question: Which committee recommended policy reforms that preceded the 1991 LPG model?
A) Narasimham Committee
B) Chelliah Committee
C) Rangarajan Committee
D) Sachar Committee
Answer: B
Explanation: The Raja J. Chelliah Committee (1985–91) laid groundwork for tax reforms integral to 1991 liberalisation.
Why others fail: Narasimham (banking), Rangarajan (economic policy), Sachar (minorities) had different mandates.

Last‑Minute Revision

• 1991: LPG reforms initiated after BOP crisis.
• FEMA, 1999 replaced FERA, 1973.
• WTO established in 1995; India a founding member.
• SEZ Act passed in 2005.
• India’s services exports > $250 billion (2022).
• Top FDI source: Singapore.
• Globalisation intensified after IT boom post-2000.
• ⚠️ Top 10% holds 57% national income (World Inequality Report 2022).
• NSSO 75th Round: 52% rural internet access.
• ⚠️ 81% workforce in informal sector (ILO).
• Glocalisation: global product, local adaptation.
• McDonald’s entered India in 1996.
• BPO growth linked to time-zone advantage with US.
• ⚠️ AoA restricts India’s farm subsidies.
• Bali Ministerial (2013) allowed temporary peace clause for food stocks.
• ⚠️ CAG 2013 report criticised SEZs for tax loss.
• Raja J. Chelliah: tax reform architect.
• Manmohan Singh: Finance Minister 1991–96.
• ⚠️ NITI Aayog (2018) noted low job creation in SEZs.
• TRAI Act passed in 1997, liberalised telecom.
• ⚠️ WTO’s Agreement on Agriculture (AoA) signed 1994.
• India’s merchandise exports: $447 billion (2022–23).
• ⚠️ Liberalisation began under P.V. Narasimha Rao govt.
• Rise in NRI marriages post-globalisation.
• ⚠️ Digital divide: rural 52%, urban 88% internet access (NSSO).