NCERT Solutions for Class 10 Social Science Economics Chapter 4 Globalisation and the Indian Economy
Q Globalisation has led to improvement in living conditions:
Q Fill in the blanks.
Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of ________ . Markets in India are selling goods produced in many other countries. This means there is increasing ________ with other countries. Moreover, the rising number of brands that we see in the markets might be produced
Q What are the various ways in which MNCs set up, or control, production in other countries?
Ans MNCs set up factories and offices for production in other countries. At times, MNCs set up production jointly with some of the local companies of these countries. But the most common route for a MNC to invest is to buy up local companies and then to expand production. MNCs with huge wealth can do so quite easily. Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are some examples of industries where production is carried out by a large number of small producers around the world. These products are then supplied to the MNCs, which sell these products under their own brand names to the customers.
Q How would flexibility in labour laws help companies?
Ans Companies nowadays are facing intense competition. This competition is compelling them to provide the consumers more value for their money. This may happen only when they reduce their cost. Salary and wages are the significant part of their cost. Hiring people for a flexible time duration will help the companies to manage their hiring costs because in the busy period they may hire more labour while in lean period they may reduce manpower, thus reducing their operational costs. Without flexibility in labour laws, companies will not be able to hire and remove people easily which may hamper their production plans.
Q How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
Ans Foreign trade creates an opportunity for the producers to reach beyond the domestic markets. The producers can sell their products not only in markets located within the country, but they can also compete in markets located in other countries of the world. When the goods travel from one market to another, prices of similar goods in the two markets tend to become equal. Similarly, for the buyers, import of goods produced in another country expands their choice of goods beyond what is domestically produced. So, the choice of goods in the markets increases. This has also raised their standard of consumption at par with their counterparts in other countries. For example, when IPhone-12 was launched in USA, it was also launched in India at the same time and buyers in India also started placing their orders for the same. Foreign trade thus results in connecting the markets or integration of markets in different countries.
Q 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?
Ans At the time of independence, India received its industrial structure in very shattered and backward form. So, in order to give it an environment for growth, the Indian government put barriers to foreign trade and foreign investment to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to grow up.
But around 1991, the Indian government had realised that in order to improve the functioning of the Indian economy, the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.
Q How has liberalisation of trade and investment policies helped the globalisation process?
Ans Liberalisation is the process of removing barriers or restrictions to trade and investment set by the government. After the Second World War, almost all the countries of the world adopted protectionist policies regarding foreign trade. But their negotiations for liberal trade continued. With the formation of WTO, most of the countries liberalised their policies regarding foreign trade and foreign investments. Increased foreign trade and investment facilitated the movement of goods and production facilities to other countries and this process led to the globalisation or the interconnecting or integration of economies of the world.
Q Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
Ans Developed countries want developing countries to liberalise their trade and investment policies because developed countries view developing countries as an ideal source and destination for their purpose. Countries want their companies to set up their production facilities in developing countries due to the availability of cheap raw material and cheap labour. In the same way, countries want to sell their products in developing countries because in most of the developing countries, the level of income is rising. So, developed countries search for possibility of higher profit and demand in the developing countries.
Developing countries must ask for better reach of their products in developed countries so that the indigenous industries may also prosper. They may also ask the developed countries for investment in the development of public goods so that the productive capacity of developing countries may also increase.
Q “The impact of globalisation has not been uniform.” Explain this statement.
Ans Globalisation has not proved to be favourable for every section of the society. However, it has provided many positive results in the form of better technology, higher investments flow, increased trade flows, more choices for the consumers, origin of new industries etc. But there are some examples where globalisation has proved to be detrimental for some sections. For example, increased competition with cheaper products of MNCs has led to the closing down of local industries which has resulted into large unemployment and expansion of unorganised sector. Similarly, due to foreign companies, Indian companies have also been demanding flexible labour laws which has resulted into the irregularity of the employment of workforce and reduced the surety of their job tenure. So, it can be said that the impact of globalisation has not been uniform.
Q Suppose 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?
Ans Globalisation is a mixed bag. It is not an absolute boon or absolute curse. It has merits and demerits both which are following:
Q Globalisation will continue in the future. Can you imagine the world would be like twenty years from now ? Give reasons for your answer.
Ans Globalisation is a never-ending process. In the coming time its magnitude is going to increase. Now foreign investment is mobilising production facilities from one country to another but MNCs still maintain their national character. But twenty years from now the MNCs will become so integrated with the countries that it will be difficult to separate the identity of the company with the country.
Hindustan Unilever and Maruti are such companies even in the present times. The foreign trade will increase manifold and the reach of competitive products will be to every corner of the world. The consumers will be consuming same products in all the parts of the world. Their consumption will tend to be standardised. There will be no barrier on the movement of the people and people from all over the world will be able to work wherever they want to. Similarly, the level of technology will have improved a lot and this will bring improvement in productivity.