CBSE Class 10 Social Science Globalisation And The Indian Economy Notes

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Globalisation And The Indian Economy Class 10 Economics Revision Notes

Class 10 Economics students should refer to the following concepts and notes for Globalisation And The Indian Economy in standard 10. These exam notes for Grade 10 Economics will be very useful for upcoming class tests and examinations and help you to score good marks

Globalisation And The Indian Economy Notes Class 10 Economics

Globalisation and the Indian Economy

Various ways By which MNCs set up or control production in other countries:

- Set up production jointly with some of the local companies. Joint production provides money for additional investment and latest technology for production.

- To buy up local companies and then expand production.

- Place orders for production with small producers.

- By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up, MNCs are exerting a strong influence on production at these distant locations.

As a result, production in these widely dispersed locations is getting interlinked.

Foreign Trade and Integration of Markets :

- Exchange of goods - purchase and sale - across geographical boundaries of the countries.

- Goods travel from one market to another.

- Choice of goods in the market rises.

- Prices of similar goods in the two markets tend to become equal.

- Producers in the two countries closely compete against each other even though they are separated by thousand of miles. Thus foreign trade results in connecting the markets or integration of markets in different countries.

Trade Barriers and its importance :

- Various restrictions which are used by the government to increase or decrease Foreign Trade.

- Government uses trade barriers to increase or decrease Foreign Trade and to decide what kinds of goods and how much of each, should come into the country.

Special Economic Zones :

- Setting up of industrial zones by the central and state governments to attract Foreign Companies to invest in India which have world class facilities, electricity, water, roads, transport, storage, recreational and educational facilities.

Impact of Globalisation in India :

- Greater competition among producers - both local and foreign producers has been of advantage to consumers.

- There is greater choice before these consumers who now enjoy improved quality and lower prices for several products.

- Foreign investment has increased.

- Increased competition has encouraged top Indian Companies to invest in newer technology and production methods and raise their production standards.

- Globalisation has enabled some large Indian Companies to emerge as Multinational.

- Created new opportunities for companies providing services particularly those involving Information Technology.

Questions :

1. What are the various ways in which multinational companies set up, or control, production in other countries?
2. What is Foreign Trade? How does Foreign Trade lead to integration of markets across countries?
3. What are trade barriers? Why does Government uses Trade Barriers?
4. What are special economic zones? Why is the government setting up special economic zones?
5. What is the impact of Globalisation in India?

Important Questions for NCERT Class 10 Social Science Globalisation And The Indian Economy

Question. What do you know about Ford Motors?
Ans. It is an American company. It is one of the world’s largest automobile manufactures with production spread over 26 countries of the world.

Question. How are multinational corporations (MNCs) controlling and spreading their productions across the world? Explain.
Ans. Multinational Corporations (MNCs) usually set up production where it is close to the markets, where there is skilled and unskilled labour available at low costs and where the availability of other factors of production is assured. MNCs also might look for government policies that look after their interests.
Having assured themselves of these conditions, MNCs set up factories and offices for production. At times they set up production jointly with some of the local companies of these countries. They provide money to these local companies for additional investments like buying new machines for faster production. They also buy up local companies and then expand production. MNCs with huge wealth can quite easily do so.
There is another way in which MNCs control production. Large MNCs in developed countries place orders for production with small producers. The products are supplied to MNCs, which then, sell these under their own brand names to the customers. Thus, we see that there are a variety of ways in which the MNCs are spreading their production and interacting with local producers in various countries across the globe.

Question. How many countries are currently the members of the World Trade Organisations?
(a) 140 countries
(b) 145 countries
(c) 159 countries
(d) 149 countries
Ans. D

Question. Explain with examples how the opening up of foreign trade results in connecting the markets in different countries.
How does foreign trade play an important role in integrating the markets across the countries? Explain.
Ans. (i) Foreign trade gives opportunity to producers to sell their goods in other countries of the world. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.
(ii) For the ordinary consumers, the foreign trade proves very useful because the best brands of different articles are produced all over the world. Their choice of goods expands manifolds.
(iii) For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.
(iv) Foreign trade gives opportunity to producers in the two countries closely compete against each other even though they are far away from each other.
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.

Question. Why is fair globalisation essential?
Ans. Fair globalisation would create opportunities for all, and also ensure that the benefits of globalisation are shared better.

Question. Explain any three steps taken by the Indian Government to attract foreign investment.
Ans. In the recent years, the Indian Government has taken special steps to attract foreign companies to invest in India:
(i) The government has set up industrial zones called special Economic Zones (SEZs). SEZs provide world class facilities – electricity, water, roads, transport, storage recreational and educational facilities.
(ii) Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years.
(iii) The government has also allowed flexibility in the labour laws to attract foreign investment. The companies can now lower workers ‘flexibly’ for short period when there is intense pressure of work. This is done to reduce the cost of labour for the companies.

Question. What is liberalisation? What steps were taken by the government to liberate the Indian economy?
Ans. Removing barriers or restrictions set by the government is known as liberalisation:
(i) The Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered necessary 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 come up. Thus, India allowed imports of only essential items.
(ii) In 1991, the government decided that 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.
(iii) Barriers on foreign trade and foreign investment were removed to a large extent. Now, goods could be imported and exported easily and also foreign companies could set up factories and officers here.
(iv) With libralisations of trade, businesses are allowed to make decisions freely about what they wish to import or export.

Question. How does liberalisation of trade benefit businesses?
Ans. With liberalisation of trade, business are allowed to make decisions freely about what they wish to import or export.

Question. Ranbaxy is a multinational company which is associated with ......... .
(a) automobiles
(b) nuts and bolts
(c) medicines
(d) information technology
Ans. C

Question. Describe with an example the role of multinational corporations in the process of globalisation
Ans. MNCs have played a major role in the process of globalisation.
(i) MNCs are in search for locations around the world that are favourable for their production activities.
(ii) Foreign investment and foreign trade has increased.
(iii) A large part of the foreign trade is controlled by the MNCs.
(iv) MNCs are engaged in translocating capital, technology, people, goods and services across different nations of the world. This is how globalisation is promoted.
It can be further illustrated with the help of an example – Production of cars by Ford Motors in India would lead to interlinking of production. Ford Motors will produce various car components in India. Some other components may be produced elsewhere on the globe. Components produced in India will be shipped to Ford factories outside India. Components and other resources will be shipped to India for automobiles to be produced in India. All these processes will result in the interlinking of production.

Question. Information and communication technology or IT has stimulated the globalisation process. How would it influence the country like India where people still depend on agriculture and believe in their customs and traditions?
Ans. Rapid improvement in technology has been one major factor that has stimulated the globalisation process. For instances, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
Even more remarkable have been the developments in information and communica-tion technology. In the recent times, technology in the areas of telecommunication, computers, Internet has been changing rapidly. Telecommunication facilities (Telegraph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices. Computers have now entered almost every field of activity. Internet allows us to send instant electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.

Question. Analyse one good and one bad effect of globalisation on India.
Ans. One good effect of globalisation on India:
Globalisation has resulted in greater competition among producers—both local and foreign. As a result, quality of the products has been improved. At the same time prices of goods have been lowered.
One bad effect of globalisation on India:
For a large number of small producers and workers globalisation has posed a great problem. The small producers failed to compete and got perished. Several units have shut down rendering many workers jobless.

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