NCERT Solutions Class 10 Social Science (Economics) Chapter 4 (Globalisation and the Indian Economy)

NCERT Solutions Class 10 Social Science Economic 
(Understanding Economic Development)

The NCERT Solutions in English Language for Class 10 Social Science – Economic (Understanding Economic Development) Chapter – 4 (Globalisation and the Indian Economy) has been provided here to help the students in solving the questions from this exercise. 

Chapter – 4 (Globalisation and the Indian Economy) 

1. What do you understand by globalisation? Explain in your own words.
Answer – Globalisation in today’s world has come to imply many things. It is the process by which the people of the world are unified into a single society and function together. This term is also often used to refer to economic globalisation: the integration of national economies into the international economy through trade, foreign direct investments, capital flows, migration and the spread of technology.

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 had put barriers to foreign trade and foreign investment to protect domestic producers from foreign competition, especially when industries had just begun to come up in the 1950s and 1960s. At this time, competition from imports would have been a death blow to growing industries. Hence, India allowed imports of essential goods only.
In New Economic Policy in 1991, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries. This decision was also supported by powerful international organisations.

3. How would flexibility in labour laws help companies?
Answer – Instead of hiring workers on a regular basis, companies hire workers flexibly for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company. Flexibility in labour laws reduce cost and increase benefits of companies.

4. What are the various ways in which MNCs set up, or control, production in other countries?
Answer – The various ways in which MNCs set up or control production in other countries are   :

• Buy up a local production company.   
• Place orders for production with small producers, i.e., contract manufacturing.   
• By setting up a partnership (joint venture) with a local company.
• Setting up their wholly owned subsidiary in the other country.
• By licensing or franchising their brand to a local company.  

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 because then the MNCs belonging to the developed countries can set up factories in less-expensive developing nations, and thereby increase profits, with lower manufacturing costs and the same sale price. In my opinion, the developing countries should demand, in return, for some manner of protection of domestic producers against competition from imports. Also, charges should be levied on MNCs looking to set base in developing nations.

6. “The impact of globalisation has not been uniform.” Explain this statement.
Answer – “The impact of globalisation has not been uniform”. The truth of this statement can be verified if we observe the impact of MNCs on domestic producers and the industrial working class. Small producers of goods such as batteries, capacitors, plastics, toys, tyres, dairy products and vegetable oil have been hit hard by competition from cheaper imports. Also, workers are now employed “flexibly” in the face of growing competition. This has reduced their job security. Efforts are now on to make globalisation “fair” for all since it has become a worldwide phenomenon.

7. How has liberalisation of trade and investment policies helped the globalisation process?
Answer – Liberalisation of trade and investment policies has helped the globalisation process by making foreign trade and investment easier. Earlier, several developing countries had placed barriers and restrictions on imports and investments from abroad to protect domestic production. However, to improve the quality of domestic goods, these countries have removed the barriers. Thus, liberalisation has led to a further spread of globalisation because now businesses are allowed to make their own decisions on imports and exports. This has led to a deeper integration of national economies into one conglomerate whole.

8. How does foreign trade lead to the integration of markets across countries? Explain with an example other than those given here.
Answer – Foreign trade leads to integration of markets across countries by the processes of imports and exports. Producers can make available their goods in markets beyond domestic ones via exports. Likewise, buyers have more choice on account of imports from other countries. This is how markets are integrated through foreign trade. For example, Japanese electronic items are imported to India, and have proved to be a tough competition for less-technologically-advanced companies here.

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 – The whole world would become a single market twenty years from now. The reasons behind this are:

• MNCs would produce goods and services in those locations around the world which would be cheap for their production.
• MNCs explore new areas to expand their activities and thus development takes place.
• Foreign investment by MNCs would increase much more which encourages technological advancement. It helps in the emergence of new MNCS.
• There would be greater movement of people between countries.

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 the people who are involved in the argument are not wrong, since both of them can back their claims with information.

It is clear that benefits of globalisation have not led to uniform development of all sections of society in India. There have been very positive developments as well as negative developments due to globalisation. The following points will give more clarity on the positive impact and negative impacts of globalisation in India.

Globalization – Positive Impact on India

• India has been beneficial for MNCs which can be seen from the rising investments spread over the past 20 years.
• For companies in the services sector many new opportunities were created due to Globalization, particularly in the IT industry.
• Globalisation has enabled some large Indian companies to emerge as multinationals themselves, and they are spreading their operations worldwide, some of the examples of such companies are Infosys (IT), Asian Paints (paints), Tata Motors (automobiles),Ranbaxy (medicines), Sundaram Fasteners (nuts and bolts).
• MNCs have shown keen interest in industries such as banking in urban areas, fast food, soft drinks, automobiles, cell phones, electronics.
• Many new jobs have been created in the services and industries mentioned above. Raw materials are supplied to these companies by the local companies, which in turn allows these local companies to prosper.
• Different types of services such as engineering, accounting, administrative tasks, data entry are now being done cheaply in countries such as India and are exported to the developed countries.

Negative Impacts in India – Due to Globalisation

• Due to competition, small manufacturers have been hit hard and some examples of such industries are vegetable oil, dairy products, tyres, toys, plastics, capacitors, batteries.
• Many workers went jobless as several of the units had to be shut down.
• This is a significant negative impact In India, because next to agriculture, the small industries employ the largest number of workers (20 million).

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 _______. 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 by MNCs in India. MNCs are investing in India because of ______. While consumers have more choices in the market, the effect of rising ______ and ______ has meant greater ____ among the producers.
Answer –
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 trade 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 cheaper production costs. While consumers have more choices in the market, the effect of rising demand and purchasing power has meant greater competition among the producers.

12. Match the following.

Answer –

13. Choose the most appropriate option.

(i) The past two decades of globalisation has seen rapid movements in
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investments and people between countries.
Answer – (b) goods, services and investments between countries.

(ii) The most common route for investments by MNCs in countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnerships with local companies.
Answer – (b) buy existing local companies.

(iii) Globalisation has led to improvement in living conditions
(a) of all the people
(b) of people in the developed countries
(c) of workers in the developing countries
(d) none of the above
Answer – (d) none of the above

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