Globalisation has become a sensitive subject, especially in underdeveloped countries like India. It has been subjected to criticism on various grounds. We shall look at it from the point of view of state activity.
Domination of the world economy by MNCs based in developed countries has led to the decline of powers of state in economic matters. The state has also been brought under pressure to implement policies determined by powerful international organisations and rich countries. Critics point out that it has led to the erosion of economic sovereignty of the state.
Loss of the power of the state to intervene in the operation of the market mechanism causes greater inequalities and adversely affects wage, employment opportunities and job security of the working class. In fact, the process of privatisation of existing public sector enterprises has accentuated this problem. Privatisation also implies transfer of control over resources of state to private capitalists who are supposed to pursue their private interests rather than social good.
As the state gradually withdraws from welfare activities, every individual is forced to look after herself or himself. Essential services like education and health become more expensive and beyond the reach of the poor. Decline in social security measures adversely affects the needy. Consequently, vulnerable social groups tend to become helpless.