NCERT Solutions For Class 10 Economics Chapter 4 Globalisation And The Indian Economy

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NCERT Solutions For Class 10 Economics  Chapter 4 Globalisation And The Indian Economy Long Answer Questions

Question 1. What do you mean by Globalisation? What are the effects of globalization in India?

Or

“The impact of globalization is not uniform”. Explain.

Answer:

Globalization is the integration or interconnection between countries through trade and foreign investments by multinational corporations (MNCs).

Positive Impacts:

  1. Greater choice and improved quality of goods at a competitive price raise the standard of living.
  2. MNCs have increased investments in India.
  3. Top Indian companies emerged as multinationals.
  4. Created new opportunities for companies providing services like IT sector.
  5. Collaborations with foreign companies help a lot to domestic entrepreneurs.

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Negative Impacts:

  1. Indian economy faced the problem of brain drain.
  2. Globalization has failed to mark its impact on unemployment and poverty.
  3. Cut in farm subsidies.
  4. Closure of small industries.

NCERT Solutions For Class 10 Economics Chapter 4 Globalisation And The Indian Economy

Question 2. What is WTO? What are the aims of WTO? What are the drawbacks of WTO?

Answer:

WTO (World Trade Organisation) is an organization that is in favor of increasing world trade through globalisation.

The Aims Of WTO Are:

  1. To liberalize international trade by allowing free trade for all.
  2. To promote international trade among the countries of the world in an open uniform and nondiscriminatory manner.
  3. Removal of both import and export restrictions.

The Drawbacks Of WTO Are:

  1. WTO is dominated by the developed countries.
  2. WTO is used by developed countries to support globalization in areas that are not directly related to trade.
  3. Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers.

Question 3. What are MNCs? How do the MNCs function? What are the main guiding factors of MNCs?

Answer:

MNCs are Multinational corporations. It is a company that owns or controls production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheap labor and other resources, closer to the markets.

This is done to reduce the cost of production and the MNCs can earn greater profits. MNCs not only sell their finished products globally but also the goods and services are produced globally.

The production process is divided into small parts and spread across the globe. The main guiding factors of the MNCs are:

  1. Cheap production
  2. The closeness of the production unit to the markets.
  3. Favorable government policies.

Question 4. Examine the impact of globalisation in India.

Answer:

  1. First, Multi-National Companies have increased their investments in India over the past 15 years, MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food, or services such as banking in urban areas. In these industries and services, new jobs have been created. Also, local companies supplying raw materials, etc., to these industries have prospered.
  2. Secondly, several of the top Indian companies have been able to benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
  3. Moreover, globalization has enabled some large Indian companies to emerge as multinationals themselves. Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), and Sundaram Fasteners (nuts and bolts) are some Indian companies that are spreading their operations worldwide.
  4. Globalization has also created new opportunities for companies providing services, particularly those involving IT. The Indian company producing a magazine for the London-based company is an example.
  5. Besides, a host of services such as data entry, accounting, administrative tasks, and engineering are now being done cheaply in countries such as India and are exported to developed countries.
  6. For a large number of small producers and workers, globalization has posed major challenges. Batteries, capacitors, plastics, toys, tires, dairy products, and vegetable oil are some examples of small manufacturers, that have been hit hard due to competition. Several of the units have shut down rendering many workers jobless.

There is a greater choice for consumers who now enjoy improved quality and lower prices for several products. As a result, these people today enjoy higher standards of living than before.

Question 5. Mention two problems that forced India to undertake a new economic policy after 1991.

Answer:

Factors responsible for The Need For Change In Economic Policy Are:

  1. Bad performance of the public sector.
  2. The public sector could not achieve the desired goal.
  3. The balance of payment deficit of India had been rising continuously since 1980 – 81.
  4. Excess of anticipated expenditure over estimated revenue (i.e., fiscal deficit).
  5. Rising prices.

Question 6. Explain the various liberalization measures undertaken by the government of India.

Answer:

Measures of liberalization taken by the Government of India:

  1. Abolition of Industrial Licencing and Registration.
  2. Concession from Monopolies Act.
  3. Freedom for Expansion and Production to Industries.
  4. Increase in the Investment limit of the Small Industries.
  5. Freedom to Import Technology.
  6. Freedom to Import Capital Goods.

Question 7. Describe the changes that have occurred in India due to the adoption of the policy of liberalization and globalization.

Answer:

Visible Changes:

  1. There are better services in the communication sector such as telephone, color television, and other electronic goods at low prices.
  2. Many food processing companies have taken over the market, such as Coca-Cola, Pepsi, and other food products.

Invisible Changes:

  1. The share of India in trade and services in the world has increased.
  2. Foreign direct investment in India has increased.
  3. Foreign exchange reserves have increased.
  4. Price rise in terms of percentage has declined.
  5. Marginal growth in industry and employment opportunities is shown.

Question 8. In what ways has competition affected workers, Indian exporters, and foreign MNCs in the garment industry?

Answer:

Most of the workers have been badly affected by competition. Many people are forced to work in temporary jobs and at lower wages. Their earning is a meager fraction of what the intermediaries earn in the process.

Indian exporters are forced to improve the quality of their products to withstand competition. Those who have failed to do so had to shut down their shops. Many smaller manufacturers have become bankrupt in the process.

MNCs are usually in profit. They buy cheap and sell dear. A cloth that may cost ₹100 for procurement can sell at more than ₹ 5000 in the US market. Thus, MNCs usually make windfall gains in the process.

Question 9. “One of the present debates in India is whether companies should have flexible policies for employment”. Based on what you have read in the chapter, summarise the point of view of the employers and workers.

Answer:

Many companies advocate the implementation of hire and fire policies so that they can work without thinking about the pressure from workers’ unions. It sounds idealistic, but the real world is not ideal.

A worker does not work just for himself but also for his family members. When a worker loses his job, his family and his society also get affected. Hence, worker’s interests should always be the top priority while formulating employment policies.

Question 10. Suggest any three values that can play an important role in making globalization a process that benefits all nations alike.

Answer:

Three values that can play an important role in making globalization a process that benefits all nations alike are:

  1. Social justice
  2. Global interdependence
  3. Responsible behaviour
  4. Ethical economic practices
  5. Just interaction globally without domination
  6. Respect for other communities

Question 11. In this era of globalization, it is important for the Indian government to take steps to protect manufacturers. Which three values will be displayed by the government in doing so?

Answer:

Following are the values that will be displayed by the government in taking steps to protect the manufacturers:

  1. Empathy towards Indian manufacturers
  2. Responsible behaviour
  3. Sensitivity towards local needs
  4. Care and concern for society

Question 12.

  1. What are the ways in which Ravi’s small production unit was affected by rising competition?
  2. Should producers such as Ravi stop production because their cost of production is higher than the producers in other countries? What do you think?

Answer:

  1. The following are the ways in which Ravi’s small production unit was affected by rising competition:
    1. The government removed restrictions on imports of capacitors as per its agreements at WTO in 2001.
    2. Competition from the MNC brands forced Indian television companies purchasers of Ravi’s capacitors, to move into assembling activities for the MNCs!
    3. Moreover, television companies preferred to import because the price of the imported item was half the price charged by people like Ravi.
    4. Ravi now produces less than half the capacitors that he produced earlier and has only seven workers in place of 20 workers.
  2. No, producers such as Ravi should not stop their production but should reduce their costs by adopting advanced technology and production methods and raising their production standards. Also, the government should provide loans and protect them.

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