Globalisation and Economy
– Discover how globalisation impacts India’s economy, trade, foreign investment,
and MNCs’ influence.
Chapter 4 Globalisation And The Indian Economy
Class 10 NCERT Economics – Understanding Economic
Development | Questions Answers
Updated for 2024-2025 Exams
1. What do you understand by globalisation? Explain in
your own words.
Answer: Globalisation refers to the process of
increased interconnection and integration between countries. This occurs
through the movement of goods, services, capital, and people across borders. It
involves the spread of technology, investment, and trade on a global scale,
driven largely by multinational corporations (MNCs).
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: The Indian government initially put
barriers to foreign trade and foreign investment to protect its domestic
industries from foreign competition. In the early years after independence,
India’s industries were just developing, and they needed protection to grow and
survive. The barriers were meant to help local businesses thrive. However, in
1991, the government decided to remove these barriers as part of
liberalisation. The aim was to make Indian industries more competitive globally
and to improve the overall performance of the economy by integrating with the
world market.
3. How would flexibility in labour laws help companies?
Answer: Flexibility in labour laws allows
companies to hire workers temporarily, especially when there is an increase in
demand or workload, without having to offer long-term contracts and benefits.
This reduces the cost of labour for the companies and enables them to adjust
their workforce based on the market conditions.
4. What are the various ways in which MNCs set up,
control, or produce in other countries?
Answer: MNCs can set up, control, or produce
in other countries in several ways:
- By setting up joint ventures with
local companies. - By buying out local companies and
expanding production. - By placing orders with local
producers and controlling quality, pricing, and labour conditions. - By establishing factories and
offices in countries where they can benefit from cheaper resources and
labour.
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 want developing
countries to liberalise their trade and investment so that their own businesses
can expand and invest in new markets. By reducing trade barriers, developed
countries can sell more products and services globally. In return, developing
countries should demand fair trade practices, access to developed markets, and
support for building local industries, infrastructure, and technology transfer.
6. “The impact of globalisation has not been
uniform.” Explain this statement.
Answer: The impact of globalisation has varied
across different groups. While wealthy consumers and large corporations have
benefited from greater choices and higher profits, small producers and workers
have often faced challenges due to increased competition. Many small businesses
have struggled to survive against powerful MNCs, and workers have faced job
insecurity and lower wages due to flexible labour practices.
7. How has liberalisation of trade and investment
policies helped the globalisation process?
Answer: Liberalisation of trade and investment
policies has made it easier for goods, services, and capital to move across
borders. By removing trade barriers such as tariffs and quotas, countries have
opened up their markets to foreign businesses. This has allowed multinational
corporations to invest in and expand their operations globally, thereby
facilitating 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 integrates markets by
allowing producers and consumers from different countries to buy and sell goods
and services across borders. For example, India exports software services to
the United States, creating a connection between the two countries’ economies.
This trade links Indian software companies with American businesses, creating a
network of interdependent 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: In twenty years, globalisation is
likely to deepen, with more advanced technologies connecting people and
businesses worldwide. The use of artificial intelligence, automation, and
digital platforms may lead to faster trade, more efficient production, and new
ways of communication. However, challenges like inequality, environmental
issues, and job displacement due to automation may also increase, requiring
governments to create policies that ensure fair distribution of globalisation’s
benefits.
10. Supposing you find two people arguing: One is saying
globalisation has hurt our country’s development. The other is saying
globalisation is helping India develop. How would you respond to these
arguments?
Answer: I would explain that both viewpoints
can be correct. Globalisation has helped India by bringing foreign investment,
creating new jobs, and giving consumers more choices. However, it has also hurt
small producers and led to job insecurity for some workers. The key is to
ensure that the benefits of globalisation are distributed more fairly and that
policies are in place to protect vulnerable groups.
11. 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 globalisation. Markets in India are
selling goods produced in many other countries. This means there is increasing integration
with other countries. 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
of the large markets and lower production costs. While consumers have
more choices in the market, the effect of rising competition and integration
has meant greater competition among the producers.
12. Match the following:
(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 the 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 have seen rapid movements in
(b) goods, services, and investments between countries.
(ii) The most
common route for investments by MNCs in countries around the world is to
(b) buy existing local companies.
(iii)
Globalisation has led to improvement in living conditions
(d) none of the above (it has not uniformly improved living conditions
for all).