We are providing many paragraphs, long essay in very simple language with the boundaries of different words here. Here you can find Essay on MNCs Role in India in English language for students in 1000 words. In this article cover Topic : Introduction of MNC, Arrival of MNCs in India after 1991, Some important roles played by MNCs in India, The impact of MNCs on the development of a country, MNCs may damage the economies of the underdeveloped countries and MNCs in India as a harbinger of growth and development.
Multinational corporations (MNCs) are compared to those corporations: its assets and businesses are more than one country, including their home country. These corporations have office or manufacturing units in different countries and usually have a corporate head office Is responsible for coordinating global management. MNC companies were either US or European or Japanese.
However, late Indian companies have also started establishing their footprint at international level. Multinational companies are like a double-edged sword, on the one hand it creates jobs, brings technology, provides industry best practices; On the other hand, multinational companies work as lobbies in influencing government policies in their favor and can shut down local industries and products due to their economic and technical skills. After the economic reforms of 1991, multinationals performed in India. LPG (liberalization, privatization, globalization) reforms opened the Indian economy to companies all over the world. Multinational companies are also known as 'international companies'. India hosts the largest multinational companies from the United States and Europe.
These are large industrial footprints and they have spread their network through the network of branches in the field of operation, marketing and human resources. Multinational companies come to India via FDI route there are two routes in Foreign Direct Investment (FDI), automatic route and approval route. There is no requirement for foreign investors by the government or the RBI under the automatic route, but under the approval route, the Foreign Investment Promotion Board (FIPB) has approved the investment. The government has reserved some important areas for approval routes, e.g. Banking, civil aviation, atomic energy, defense industry etc.
Some important roles played by multinationals in India are as follows:
• Technology transfer is the most important role played by multinationals in India and around the world Technology transfer. The quality of production and productivity increases from the transfer of state of the art technology to developing countries. India has not yet received technology from multinational companies, but has also been beneficial for technical know-how, which in turn has resulted in an increase in the number of employees.
- Capital investment when multinationals come to India, they are responsible for non-debt generating capital flows. In the pre-1991 period, multinationals did not play a lot in the Indian economy. The country was dependent on external commercial borrowing for the development of the sectors of the economy. A very large balance of payment crisis was made through this uncertain model. After the 1991 economic reforms, multinationals contributed to a positive balance of payments. Therefore, when multinationals invest in India, it goes into non-debt making capital. Mostly, they contribute to the growth of India's GDP.
- Multiplayer effects multinationals contribute to increase the income and increase employment opportunities. Higher wages, which have contributed to the management and engineering graduates of Hindustan Unilever, Goldman Sachs, Toyota, Google etc., have increased the per capita income of India. Maruti-Suzuki and Hero-Honda cooperation have contributed to increase employment.
- Exports of MNC have contributed a lot to our exports. As India offers cheap labor and land, it is both economical and beneficial for multinational companies to invest in India. When multinationals export their goods to other countries, this gives us direct benefits
- Managerial Practices Multinational companies have also brought the best managerial practices in India. Human resource management, financial control, operations and advertising strategies have been followed by Indian resources.
- Increasing competition promotes the penetration of multinationals in the host country's economy. This increase in the result of competition with the reduction of prices, which is beneficial for the end user. In the Indian market, the entry of electronic giants like LG, Sony and Samsung promoted competition in the electronic segment and reduced the prices of electronic items.
- Infrastructure MNCs have also invested in the infrastructure sector. This investment has contributed to our economic development and development. To extend our horizons, power projects (General Electric), Telecom (Vodafone, Telenor), Delhi-Mumbai Industrial Corridor (Japan), India have been greatly benefited.
The influence of multinational companies on the development of a country is extremely uneven. In some ways the impact of multinationals in India has been positive. They have brought new technology and products, so there is a wide choice of consumers and awareness about international standards. They indirectly made Indian companies more competitive because they brought in competition. But e) The negative aspects of their entry into our country are serious. In many situations these enterprises have already widened the high income gap between CF; The rich and the poor promote the interests of small well-being of well-paid modern workers and it increases the level of wage R-1LC in the country. Since they are mostly located in urban areas, MNCs are spoiling the already existing imbalance between rural and urban areas, as well as contribute to rural-urban migration. They move resources far beyond the much needed food production so that the demands of the local elite can be met. These products encourage inappropriate consumption patterns through advertising and their monopoly market power uses inappropriate (capital) technology. Such capital intensive technique is negligible or reduces job creation.
However, multinational companies improve the country's foreign exchange situation, although their long-term impact may be to reduce foreign exchange earnings of current and capital accounts. Due to the rehabilitation of profits, interest, royalties, management fees, etc., due to large scale import and capital accounts of the intermediate goods, the current account may be bad. Actually, the RBI has said that the average rate of profit of multinational companies is between 20 percent and 25 percent, which is sufficient amount to be taken out of the country.
However, multinational companies contribute to public revenue in the form of corporate taxes, but their contributions should be reduced as a result of concessions, excessive investment allowances, hidden deficiencies and tariff protection by the local government, often by offset tax revenue, multinationals Can underestimate the economies of underdeveloped countries because of their superior knowledge, Global contact and advertising skills prevent the emergence of small-scale local enterprises. Due to their vast resources
Although many MNCs initially promise to transfer technology to the host country, they seldom do so. Even if they do this, they transfer the latest sophisticated technology but not obsolete techniques. The development of multinational companies in India is a major factor for this. The most important reason for the 1991 LPG reforms' was some other convenient reasons: market availability, cheap land and labor.
Therefore, the multinational corporation has been the forerunner of the development and development of India's economy. In the 'Make in India' program, multinational companies will be encouraged. Protecting areas, insurance of high investment will diversify our economy and choice of products. However, the government should be cautious against the violent instances of multinational companies. Therefore, it can be said, "You can not live without them or with them."