NCERT Solutions for Class-10 Economics Chapter-4 Globalisation and Indian Economy

The solutions for Chapter 4 Globalisation and Indian Economy are provided below, and students can refer to NCERT Solutions for Class 10 for other subjects as well.

Exercise Pages No 72- 73

1. What do you understand by globalisation? Explain in your own words.

Answer:

Globalization refers to the increasing interconnectedness and interdependence of economies, cultures, societies, and individuals worldwide through the exchange of goods, services, information, technology, ideas, and people. It involves the breaking down of barriers to trade, investment, and communication, leading to a more integrated and interconnected global economy.

Globalization transcends national boundaries, creating opportunities for collaboration, innovation, and cultural exchange, but also have challenges such as economic inequality, cultural homogenization, and environmental degradation.

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 imposed barriers to foreign trade and investment primarily for the following reasons:

1. Protection of Domestic Industries: Barriers such as tariffs, quotas, and import restrictions were implemented to protect domestic industries from foreign competition, especially during the early stages of industrialization when they were relatively weak and vulnerable.
2. Balance of Payments Concerns: Restrictions on imports were used to control the outflow of foreign exchange and maintain a favorable balance of payments position, particularly during times of foreign exchange scarcity.
3. Industrial Policy Goals: Import substitution industrialization (ISI) strategy aimed to promote domestic production of goods that were previously imported, thereby reducing dependence on foreign suppliers and promoting self-sufficiency in key industries.
4. National Security: Restrictions on foreign investment, especially in sensitive sectors, were imposed to safeguard national interests, prevent foreign control over strategic assets, and protect national security.
5. Economic Sovereignty: The government sought to maintain control over the national economy and prevent undue influence or interference from foreign entities, ensuring that economic decisions aligned with domestic priorities and development objectives.

However, the Indian government wished to remove these barriers for several reasons:

1. Economic Growth and Development: Removal of trade and investment barriers was seen as essential for stimulating economic growth, enhancing competitiveness, and attracting foreign capital and technology to fuel industrialization and modernization.
2. Integration into the Global Economy: Opening up to foreign trade and investment was necessary for integrating India into the global economy, expanding market access for domestic products, and promoting exports as a driver of growth and development.
3. Technological Advancement: Increased foreign investment and participation in the economy could bring advanced technology, managerial expertise, and best practices, fostering innovation, productivity, and efficiency gains in domestic industries.
4. Job Creation and Poverty Reduction: Greater foreign investment and trade could create employment opportunities, especially in export-oriented industries, contributing to poverty reduction and improving living standards for the population.
5. Enhanced Competitiveness: Exposure to international competition would compel domestic industries to become more competitive, innovate, and improve quality standards, leading to higher productivity and efficiency across sectors.

3. How would flexibility in labour laws help companies?

Answer:

Flexibility in labor laws can benefit companies in several ways:

1. Adaptability: Flexibility allows companies to adapt quickly to changing market conditions, demand fluctuations, and technological advancements without being constrained by rigid labor regulations.
2. Cost Efficiency: Companies can optimize labor costs by adjusting workforce size, composition, and compensation structures based on business needs, seasonal variations, and project requirements, improving cost efficiency and competitiveness.
3. Innovation and Productivity: Flexible labor laws encourage innovation and productivity improvements by enabling companies to experiment with new work arrangements, performance incentives, and skill development programs that enhance workforce engagement and motivation.
4. Employment Generation: Reduced regulatory burden and administrative hurdles make it easier for companies to hire and retain employees, leading to job creation, especially in sectors with high growth potential and labor-intensive activities.
5. Investment Attraction: Flexible labor laws create a favorable business environment that attracts domestic and foreign investment, fostering entrepreneurship, industrial development, and economic growth.
6. Human Capital Development: Flexibility allows companies to invest in human capital development initiatives such as training programs, skill upgrades, and career development pathways, enhancing employee capabilities and long-term competitiveness.

4. What are the various ways in which MNCs set up, control or produce in other countries?

Answer:

Multinational corporations (MNCs) employ various strategies to set up, control, or produce in other countries, including:

1. Foreign Direct Investment (FDI): MNCs establish subsidiaries, branches, or joint ventures in foreign countries through direct investment, gaining control over production facilities, distribution networks, and market operations.
2. Outsourcing: MNCs subcontract specific tasks, functions, or processes to third-party vendors or service providers in other countries, leveraging cost advantages, specialized expertise, and economies of scale.
3. Licensing and Franchising: MNCs grant licenses or franchises to local businesses in foreign markets, allowing them to use proprietary technologies, trademarks, or business models in exchange for royalties, fees, or profit-sharing arrangements.
4. Joint Ventures: MNCs form strategic partnerships or joint ventures with local companies, governments, or investors to share risks, resources, and expertise in exploring new markets, developing infrastructure, or launching new products.
5. Contract Manufacturing: MNCs contract local manufacturers or suppliers in foreign countries to produce goods or components on their behalf, often under strict quality standards, specifications, and delivery schedules.
6. Acquisition and Merger: MNCs acquire or merge with existing businesses in foreign countries to gain access to established market presence, brand reputation, distribution channels, or intellectual property rights.
7. Greenfield Investments: MNCs undertake greenfield investments by building new production facilities, offices, or infrastructure from scratch in foreign countries, customizing operations to suit local conditions and preferences.
8. Strategic Alliances: MNCs forge strategic alliances or partnerships with local governments, industry associations, academic institutions, or non-profit organizations to advance common goals, address shared challenges, or promote sustainable development.

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 often advocate for liberalization of trade and investment in developing countries for several reasons:

1. Access to Markets: Opening up developing country markets provides developed countries with access to new markets for their goods and services, increasing their export opportunities and potential profits.
2. Investment Opportunities: Liberalizing investment regulations in developing countries allows developed countries’ businesses to invest in these regions, leading to potential economic growth and profit generation.
3. Resource Extraction: Liberalization may facilitate easier access to natural resources in developing countries, benefiting developed countries’ industries that rely on these resources for manufacturing and production.
4. Economic Growth: Developed countries believe that liberalization can promote economic growth in developing countries by fostering competition, attracting foreign investment, and enhancing efficiency in resource allocation.
5. Globalization: Advocates of liberalization argue that it fosters global economic integration and cooperation, leading to mutual benefits and prosperity for all participating countries.

However, developing countries should demand certain considerations and concessions in return for liberalizing their trade and investment policies:

1. Protection of Domestic Industries: Developing countries should negotiate measures to protect their nascent industries from unfair competition, including safeguards, tariffs, and subsidies where necessary.
2. Technology Transfer: Developed countries should support technology transfer initiatives to help developing countries build their technological capabilities and enhance their competitiveness in global markets.
3. Capacity Building: Developed countries should provide assistance and support for capacity building programs in developing countries, including education, training, and infrastructure development, to facilitate their integration into the global economy.
4. Fair Trade Practices: Developing countries should demand fair trade practices and regulations to prevent exploitation by multinational corporations and ensure equitable benefits from trade and investment liberalization.
5. Policy Space: Developing countries should retain policy space to implement measures for economic development, poverty reduction, and environmental sustainability, without undue interference from developed countries or international financial institutions.

6. “The impact of globalisation has not been uniform.” Explain this statement.

Answer:

The statement “The impact of globalization has not been uniform” highlights the unequal distribution of the benefits and costs associated with globalization across different regions, countries, and socioeconomic groups. Several factors contribute to this non-uniform impact:

1. Economic Disparities: Globalization benefits developed countries more than developing countries due to disparities in technology, infrastructure, and capital.
2. Regional Inequality: Within countries, globalization favors urban areas with better infrastructure and connectivity, leaving rural and remote areas behind.
3. Social Inequality: Globalization widens the gap between skilled workers and marginalized groups, leading to job insecurity and income inequality.
4. Environmental Impact: Globalization can lead to uneven environmental effects, with some regions experiencing degradation while others benefit from sustainable practices.
5. Cultural Diversity: Globalization promotes cultural homogenization in some areas while others strive to preserve local traditions and identity.

7. How has liberalisation of trade and investment policies helped the globalisation process?

Answer:

The liberalization of trade and investment policies has facilitated the globalization process in several ways:

1. Increased Trade Flows: Liberalization removes barriers to trade such as tariffs, quotas, and trade restrictions, promoting the free flow of goods and services across borders. This encourages international trade and enhances economic integration among countries.
2. Foreign Direct Investment (FDI): Liberalization of investment policies allows for easier cross-border investment flows. This attracts foreign direct investment (FDI) as companies seek to access new markets, resources, and opportunities, fostering economic growth and development.
3. Market Access: Liberalization grants businesses access to larger markets beyond domestic boundaries. This expands market opportunities for producers and exporters, driving economic expansion and job creation.
4. Technology Transfer: Globalization facilitated by liberalization enables the transfer of technology, knowledge, and expertise across borders. This helps enhance productivity, innovation, and competitiveness in domestic industries.
5. Efficiency and Competition: Liberalization encourages competition by exposing domestic industries to global markets. This incentivizes firms to improve efficiency, quality, and innovation to remain competitive, leading to overall economic growth and development.
6. Integration into Global Value Chains: Liberalization enables countries to participate in global value chains, where different stages of production are dispersed across multiple countries. This facilitates cost-effective production, diversification, and access to new technologies and markets.
7. Financial Integration: Liberalization of financial markets promotes the free flow of capital across borders, facilitating investment, financing, and risk management activities on a global scale.

8. How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.

Answer:

Foreign trade leads to the integration of markets across countries by creating interdependencies and facilitating the exchange of goods, services, and resources. It happens in the following way:

1. Increased Interdependence: Foreign trade creates mutual dependencies between countries as they depend on each other for goods and services that they cannot produce domestically or produce less efficiently.
2. Price Convergence: Trade allows goods and services to flow freely across borders, leading to price convergence between countries. As prices equalize, consumers and producers in different countries have access to similar pricing information, leading to market integration.
3. Standardization of Products: To facilitate trade, countries often adopt common standards and regulations for products and services. This standardization promotes compatibility and interoperability, making it easier for goods and services to be traded across borders and integrated into global markets.
4. Technology Transfer: Foreign trade facilitates the transfer of technology, knowledge, and expertise between countries.

Example: Let’s consider the smartphone industry. Companies like Apple, Samsung, and Huawei manufacture smartphones in various countries worldwide, including China, South Korea, and the United States. Through foreign trade, these companies source components and raw materials from different countries, assemble smartphones in one location, and distribute them globally. As a result, consumers worldwide have access to a wide range of smartphones with similar features and functionalities, leading to market integration in the global smartphone market.

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:

Predicting the exact future of globalization is challenging, but we can speculate on potential trends and outcomes based on current trajectories and emerging developments. What the world might be like twenty years from now can be:

1. Increased Interconnectivity: Advancements in technology and communication will further increase global interconnectedness.
2. Expanded Global Trade and Investment: Liberalized economies and participation in global value chains will drive growth in trade and investment flows.
3. Technological Revolution: Artificial intelligence, automation, biotechnology, and renewable energy will reshape industries and economies.
4. Shift in Economic Power: Emerging economies like China and India will play a more significant role in shaping the global economy.
5. Challenges of Inequality and Sustainability: Income inequality, environmental degradation, and social unrest may persist, necessitating efforts for inclusive growth and sustainability.
6. Cultural Fusion and Diversity: Globalization will continue to promote cultural exchange, fostering a blend of cultures and ideas.
7. Resilience and Adaptation: Flexibility, innovation, and collaboration will be essential for addressing emerging challenges and seizing new opportunities.

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:

In response to these arguments, I would acknowledge that globalization has both positive and negative impacts on a country’s development, including India. Here’s how I would address each perspective:

Argument 1: Globalization has hurt our country’s development.

Counterargument:

1. Acknowledge Challenges: It’s true that globalization has brought challenges such as increased competition, job displacement in certain sectors, and cultural homogenization, which can have adverse effects on some segments of society.
2. Income Inequality: Globalization can exacerbate income inequality by disproportionately benefiting certain groups or regions while marginalizing others, widening the gap between the rich and the poor.
3. Environmental Concerns: Rapid industrialization and globalization can lead to environmental degradation, pollution, and resource depletion, posing long-term sustainability challenges for countries like India.
4. Dependency on Foreign Markets: Overreliance on global markets and external sources of finance can make countries vulnerable to external shocks, market fluctuations, and economic crises, as seen in past episodes of financial contagion and volatility.

Argument 2: Globalization is helping India develop.

Counterargument:

1. Economic Growth: Globalization has fueled India’s economic growth by promoting trade, investment, and technology transfer, attracting foreign capital, stimulating entrepreneurship, and creating employment opportunities across various sectors.
2. Poverty Reduction: Globalization has lifted millions of people out of poverty in India by increasing access to markets, expanding export-oriented industries, and fostering income generation, particularly in rural areas.
3. Technological Advancement: Globalization has facilitated the transfer of advanced technology, knowledge, and best practices to India, driving innovation, productivity gains, and industrial modernization in key sectors.
4. Integration into Global Economy: Globalization has positioned India as a competitive player in the global economy, enhancing its visibility, influence, and participation in international forums, trade negotiations, and strategic partnerships.

In conclusion, while globalization presents challenges and opportunities for India’s development, its overall impact depends on how effectively the country harnesses its benefits while mitigating its risks. Policymakers need to adopt a balanced approach that maximizes the gains from globalization while addressing its negative consequences through targeted interventions, inclusive policies, and sustainable development strategies.

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 _____________ ___________________________________________ . 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 globalization. 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 access to large consumer base, cost advantages, and growth potential. While consumers have more choices in the market, the effect of rising competition and innovation has meant greater efficiency among the producers.

12. Match the following.

(i) MNCs buy at cheap rates from small (a) Automobiles producers

(ii) Quotas and taxes on imports are used to (b) Garments, footwear, sports regulate trade items

(iii)Indian companies who have invested abroad (c) Call centres

(iv) IT has helped in spreading of (d) Tata Motors, Infosys, Ranbaxy production of services

(v) Several MNCs have invested in setting up factories in India (e) Trade barriers up factories

Answer:

(i) MNCs buy at cheap rates from small producers (b) Garments, footwear, sports

(ii) Quotas and taxes on imports are used to regulate trade items (e) Trade barriers

(iii) Indian companies who have invested abroad (d) Tata Motors, Infosys, Ranbaxy

(iv) IT has helped in spreading of production of services (c) Call centres

(v) Several MNCs have invested in setting up factories in India (a) Automobiles producers

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.

(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.

(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:

(i) (b) goods, services and investments between countries.

(ii) (a) set up new factories.

(iii) (c) of workers in the developing countries

NCERT Solutions For Class 10 Economics Chapter 4 Globalisation and Indian Economy– This article includes free NCERT Solutions For Class 10 Economics Chapter 4 Globalisation and Indian Economy to help students of Class 10 learn the solutions and ace their exams.

It has been developed by the subject matter experts at GFG, according to the latest CBSE Syllabus 2023-24, and guidelines to help the students of Class 10 create a solid conceptual base for Class 10 Economics Chapter 4 Globalisation and Indian Economy.

The solutions to all the exercises in Class 10 Economics Chapter 4 Globalisation and Indian Economy of your NCERT textbook have been collectively covered in NCERT Solutions Class 10 Social Science.