WHAT DOES THE MNCs HELP THE MOST?
In present Scenario the FDI in all the sectors are increased by the government also the Foreign Companies are to be set up. These have some positive and negative effects on Consumers and Economy. All the relevant info are uploaded in the today's post.
c) MNCs Themselves
In the early 90s our planners decided to open up the economy. With Liberalization and Globalization, many MNCs entered the Indian market, which brought a huge change in the economic front. Today there are large numbers of MNCs that are operating in Indian markets. They are present in almost every sector of our economy. Recently they have entered in the sector of outsourcing that is commonly called as Call Centers. MNCs have demerits and merits both on our economy, but will the changing scenario globally, they are the need of time.
The consumer is one happy lot after the MNCs entered our market. Today every item from shoes to cars, from Pepsi to Mc Donald’s is available to them. The consumers have a wide variety to choose from. Take shoes for example. A few years back we only had Bata. Today we have Nike, Woodland, Red Tape and Reebok etc. The cost is very competitive and the quality has improved.
· Negative effect: Under the influence of globalization, most developed countries, instead of controlling the activity of MNCs are inviting them to invest in crucial sectors of their economy. Some feel that the rich countries are preparing a debt-trap for the poor countries. They provide poor countries assistance in the condition of introduction of liberalization an globalization, which makes way for functioning of MNCs. This increases the production of certain products. Exports also increase but imports increase more than the exports and that leads to a balance of payment problem. At critical moments, foreign forces strike again, capital starts to fly, value of domestic currency starts falling. Again the international agencies come to help with more strict terms and conditions and the helpless country becomes a victim and gets into a vicious circle from where it is not easy to come out.
· Positive effects: the technology that the MNCs bring with them is not just that of a product, but also of management of an enterprise, R & D, marketing, HRD, finance services and every other aspects of the enterprise. This is also an asset that remains with country. In the case of India, the number of hobs offered by the MNCs rose from 41,161 in 1994 to 44,053 in 1995 ( A rise of 3.84%)
MNCs itselfThe MNCs come into any country with an aim of making profit. They invest heavily in setting up a project. They are also more powerful than any government on the earth. It is also feared that people in developing countries may have to leave their traditional professions and depend on the jobs and products created by the modern capitalist institutions. It is pointed out that MNC investment is limited essentially to the supply of second hand plant and machinery which is declared obsolete in their country. Ultimately nations have to depend on their own capabilities to achieve progress. Respect has to be earned through demonstration of independence, competence and clear sense of purpose. The MNCs cannot provide development by themselves. They can only provide helping hand to the process of growth.