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ECONOMICS (UNDERSTANDING ECONOMIC DEVELOPMENT) - 10 - Social Science solution

Class 10 - Chapter 4: GLOBALISATION AND THE INDIAN ECONOMY

NCERTChapter 4Solution

1. What do you understand by globalisation? Explain in your own words.

Answer:

Globalisation is the process of increasing integration and interdependence among countries through trade, investment, technology, communication and movement of people.

Under globalisation, countries become connected with one another and goods, services, information and capital move more freely across national boundaries.

Features of Globalisation

  1. Expansion of international trade.
  2. Increased foreign investment.
  3. Rapid flow of information and technology.
  4. Growing role of multinational corporations (MNCs).
  5. Greater integration of world markets.

Hence Globalisation has transformed the world into a closely connected global economy.

2. What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?

Answer:

Reasons for Imposing Trade Barriers

  1. To protect domestic industries from foreign competition.
  2. To encourage the growth of Indian industries.
  3. To promote self-reliance after independence.
  4. To prevent excessive dependence on foreign countries.
  5. To save foreign exchange reserves.

Reasons for Removing Trade Barriers

  1. To increase competition and efficiency.
  2. To attract foreign investment.
  3. To improve product quality.
  4. To encourage exports.
  5. To integrate India's economy with the global economy.

As a result, India adopted the policy of liberalisation in 1991.

3. How would flexibility in labour laws help companies?

Answer:

Flexible labour laws allow companies to adjust their workforce according to business requirements.

Benefits to Companies

  1. Companies can hire workers when production increases.
  2. They can reduce the workforce when demand falls.
  3. Labour costs can be controlled more easily.
  4. Production becomes more competitive.
  5. Companies can respond quickly to market changes.

However, excessive flexibility may reduce job security for workers.

4. What are the various ways in which MNCs set up, control or produce in other countries?

Answer:

Multinational Corporations (MNCs) operate in different countries through various methods.

Methods Used by MNCs

  1. Setting up Production Units: Establishing factories in other countries.
  2. Buying Existing Companies: Purchasing local companies to gain control over production.
  3. Joint Ventures: Forming partnerships with local companies.
  4. Contract Manufacturing: Placing orders with local producers.
  5. Subcontracting: Outsourcing production to smaller firms.

These methods help MNCs expand their global operations and markets.

5. Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

Answer:

Developed countries favour liberalisation because it allows their companies easier access to foreign markets.

Reasons

  1. Access to large consumer markets.
  2. Availability of cheap labour.
  3. Opportunity to invest and earn profits.
  4. Expansion of multinational corporations.

What Developing Countries Should Demand

  • Fair access to developed countries' markets.
  • Transfer of modern technology.
  • Reduction in trade barriers imposed by developed countries.
  • Fair treatment of agricultural exports.
  • Protection of workers' rights.

This would make globalisation more balanced and beneficial.

6. "The impact of globalisation has not been uniform." Explain this statement.

Answer:

The effects of globalisation differ among countries, industries and groups of people.

Positive Impact

  • Consumers have more choices.
  • Many industries have expanded.
  • Employment opportunities have increased in some sectors.
  • Technology has improved rapidly.

Negative Impact

  • Small producers face tough competition.
  • Some workers lose jobs.
  • Income inequalities may increase.
  • Benefits are not equally distributed.

Therefore, globalisation has benefited some groups more than others.

7. How has liberalisation of trade and investment policies helped the globalisation process?

Answer:

Liberalisation refers to the removal of restrictions on foreign trade and investment.

Contribution to Globalisation

  1. Encouraged foreign companies to invest.
  2. Increased international trade.
  3. Facilitated movement of capital and technology.
  4. Expanded markets for producers.
  5. Strengthened economic integration among countries.

Thus, liberalisation has accelerated the process of globalisation.

8. How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.

Answer:

Foreign trade connects producers and consumers of different countries, leading to integration of markets.

Example

Indian software companies provide services to clients in the United States, Europe and Asia. Consumers in these countries use services developed in India, while Indian companies earn income from global markets.

This creates economic links between countries and integrates their markets.

9. Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.

Answer:

Globalisation is likely to become stronger in the future.

Possible Changes

  1. Greater use of digital technology.
  2. Faster communication worldwide.
  3. Expansion of international trade.
  4. Growth of multinational companies.
  5. Increased online education and healthcare services.
  6. More international cooperation in science and technology.

Advances in technology and transportation will make the world even more interconnected.

10. Supposing you find two people arguing. One is saying globalisation has hurt our country's development. The other is telling globalisation is helping India develop. How would you respond to these arguments?

Answer:

Both arguments contain some truth because globalisation has produced both positive and negative effects.

How Globalisation Helps

  • Increased foreign investment.
  • Greater employment opportunities.
  • Improved technology.
  • More choices for consumers.
  • Expansion of exports.

How Globalisation Can Hurt

  • Small producers may suffer from competition.
  • Some traditional industries may decline.
  • Job insecurity may increase.
  • Benefits may not reach all sections of society.

Hence Globalisation should be managed carefully so that its benefits are shared widely while reducing its negative effects.

11. Fill in the blanks.

(i) Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of globalisation.

(ii) Markets in India are selling goods produced in many other countries. This means there is increasing integration with other countries.

(iii) Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because India provides a large market and favourable investment conditions.

(iv) While consumers have more choices in the market, the effect of rising competition and unpredictability has meant greater uncertainty among the producers.

12. Match the following.

Column A Column B
(i) MNCs buy at cheap rates from small producers (b) Garments, footwear, sports items
(ii) Quotas and taxes on imports are used to regulate trade (e) Trade barriers
(iii) Indian companies who have invested abroad (d) Tata Motors, Infosys, Ranbaxy
(iv) It has helped in spreading of production of services (c) Call centres
(v) Several MNCs have invested in setting up factories in India for production (a) Automobiles

13. Choose the most appropriate option.

(i) The past two decades of globalisation has seen rapid movements in

Answer: (b) goods, services and investments between countries.

Explanation: Modern globalisation is characterised by the rapid movement of products, services and capital across national boundaries.

(ii) The most common route for investments by MNCs in countries around the world is to

Answer: (b) buy existing local companies.

Explanation: Acquiring existing companies is often easier and faster than establishing new factories.

(iii) Globalisation has led to improvement in living conditions

Answer: (d) none of the above.

Explanation: The benefits of globalisation have not reached everyone equally. Some groups have benefited significantly, while others have faced challenges.