Ch.– 4 Globalization and the Indian Economy Extra Questions and Notes

By | December 17, 2018

Chapter-4 Globalization and the Indian Economy,

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CHAPTER-4

Globalization and the Indian Economy

INTRODUCTION

 VERY SHORT ANSWERS:-

1. What is the meaning of the market?  

Ans. The market is the place where there is a regular gathering of people for the purchase and sale of goods and services.

2. Who are consumers?                       

Ans. A consumer is a person who purchases goods and services for personal use.

LONG ANSWERS:-

1. How have markets been transformed in recent years? Explain with examples.

Ans. In recent years, markets have been transformed in many ways :

(1) As consumers, we have now a wide choice of goods and services before us.

(2) The latest models of digital cameras, mobile phones and television sets made by the leading manufacturers of the world are within our reach.

(3) Every season, new models of automobiles can be seen on Indian roads.

 (4) Earlier Ambassador and Fiat were the only cars on Indian roads. Today, Indians are buying cars produced by nearly all the top companies in the world.

(5) A similar explosion of brands can be seen for many other goods from agricultural equipment to heavy vehicles, from processed fruit juices to shirts and various electronic goods. This is a relatively recent phenomenon.

PRODUCTION ACROSS COUNTRIES

Very Short Answers:-

1. State the main motive of MNC.

 Ans. The main motive of the MNC is to earn greater profits.

2. Why are MNCs setting their customer care centres in India?                       

Ans. This is because India has highly skilled engineers who can understand the technical aspects of production and also has educated English speaking youths who can provide customer care services.

3. Define a multinational company.                                           

 Ans. A multinational company is a company that owns or controls production in more than one nation.

4. Name the major items imported by India.                           

 Ans. The major items imported by India are Petroleum, machinery, fertilizers, gold and silver, electronic goods, pearls and precious stones, etc.

INTERLINKING PRODUCTION ACROSS COUNTRIES

VERY SHORT ANSWERS:-

1. Differentiate between investment and foreign investment.  

Ans. The money that is spent to buy assets such as land, building, machines and other equipment is called investment. Whereas an investment made by MNCs is called foreign Investment.

2. What is meant by ‘foreign investment’?                  

Ans. The investment made by MNCs is called foreign investment.

3. What attracts the foreign investment?                   

 Ans. Special Economic Zones (SEZs) attract foreign investment.

4. Cargill foods, an MNC has bought over which Indian company?

Ans. Cargill Foods has bought over Parikh Foods.

5. What is the most common step taken by the producers to cut production cost?

Ans. The most common step taken by the producers to cut production cost is to reduce labour costs.

6. What is meant by ‘investment’?

Ans. The money that is spent to buy assets such as land, building, machines and other equipment is called investment.

7. Which institution has tremendous power to determine price, quality, delivery and labour conditions for distant producers?

 Ans. MNCs.

LONG ANSWERS:-

1. Explain the meaning of an MNC. How is it so successful in the current world scenario?

Ans. (1) An MNC is a company that owns or controls production in more than one nation.

(2) It is successful in the current world scenario for the following reasons :

(i) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNC can earn greater profits and become successful.

(ii) In the current world of globalization, the MNC is not only selling its finished products globally, but also the goods and services are produced globally. As a result, production is organized in increasingly complex ways.

(iii) The production process is divided into small parts and spread out across the globe. All these results in 50-60% cost savings for the MNCs.

 (iv) They not only invest a huge amount but bring with them the latest technology for production.

2. How is the MNC able to cope up with large demands all over the world and control prices?

Ans. (1) An MNC is a company that owns or controls production in more than one nation.

(2) They set up offices and factories for production in regions where they can get cheap labour and other resources.

 (3) The MNC not only sells its finished products globally but more importantly, the goods and services are produced globally.

(4)At times, MNCs set up production jointly with some of the local companies of these countries. But, the most common route ‘or MNC investments is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so.

(5) These large MNCs have tremendous power to determine price, quality, delivery and labour conditions for these distant producers. In this way, MNCs are able to cope up with large demands all over the world and control Prices.

3. Why did ‘Ford Motor Company’ want to develop Ford India as a component supplying base for its other plants across the globe? Explain.

 Ans. This has the following reasons :

 (1) Cost of labour and other resources is cheap in India. There are a large number of skilled and unskilled labourers available at low wages.

 (2) A number of local manufacturers in India supply auto-parts to Ford Motors which has tremendous power to determine price, quality delivery and labour conditions.

 (3) The company wants to develop India as a base for manufacturing car components because India and its neighbour, China have a large number of prospective buyers. They have great purchasing power.

4. How did ‘Cargill Foods’ become the largest producer of edible oils in India? Explain.

Ans. (1) Cargill Foods is a very large American MNC. It has bought over smaller Indian companies such as Parakh Foods.

 (2) Parakh Foods had built a large marketing network in various parts of India, where its brand was well-reputed.

(3) Parakh Foods had four oil refineries, whose control has now shifted to Cargill.

 (4) Cargill is now the largest producer of edible oil in India with a capacity to make 5 million pouches daily.

(5) Many of the top MNCs have wealth exceeding the entire budgets of the developing country government. With such enormous wealth, there is huge power and influence of these MNCs.

5. How do the MNCs help in the development of local companies? Explain with examples.

Ans. (1) MNCs can provide money for additional investments, like buying new machines for faster production.

(2) MNCs might bring with them the latest technology for production.

(3) They help to earn greater profits.

(4) They provide a large marketing network in various parts of the world.

 (5) They are helpful in increasing the brand names of the local companies.

6. Explain the various ways in which markets of different countries can be interconnected.

Or

 Where do the MNCs like to set up their production units? Explain any three points.

Or

 Explain by giving examples that Multinational Corporations (MNCs) are spreading their productions in different ways.                                                                                                                                 

Ans. (1) MNCs set up offices and factories in regions where they can get cheap labour and other resources.

(2) They set up production jointly with some of the local companies of these countries.

 (3) They buy up local companies and then expand production.

(4) They place orders for production with small producers of other countries.

(5) They closely compete with local companies.

5. Describe any five ways in which MNCs control their production in other countries.

Or

Describe any three features preferred by MNCs for setting up their production units.

Ans. (1) An MNC is a company that owns or controls production in more than one nation. MNCs set up offices and factories in regions where they can get cheap labour and other resources.

(2) MNCs control production in other countries in the following ways :

 (i) They buy up local companies and then expand production.

(ii) They place orders for production with small producers of other countries.

 (iii) They set up production jointly with some of the local companies.

(iv) They closely compete with local companies.

(v) Many of the top MNCs have enormous wealth. So these large MNCs have tremendous power to determine price, quality, delivery and labour conditions for the distant producers.

6. Describe any three factors that are required to set up MNCs.

Or

What is meant by the term MNCs? Describe any four factors that required to set up MNCs.

Ans. (1) A Multinational Corporation (MNC) is a company that owns or controls production in more than ‘one nation.

 (2) (i) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources.

 (ii) They set up production where it is close to the markets.

(iii) They establish production where there is skilled and unskilled labour available at low costs.

 (iv) They set up production where the availability of other factors of production is assured.

(v) They set up production where government policies are favourable to them.

7. What way is an MNC different from the national companies? Highlight any three points of distinction.

Or

 In what ways is an MNC different from other companies? Explain.                           

Ans. In the following ways, an MNC is different from other companies :

Multinational CompanyOther (National) Company
(1)It owns or controls production in more the country.

(2) It sets up offices and factories for production in regions where it can get cheap labour and other resources.

 

(3) Since the cost of production for an MNC is low, it can earn greater profits.

(1 ) It owns or controls production within than one nation.

(2) It has no such option.

 

 

 

(3) It has no such scope to earn greater profits.

 

 FOREIGN TRADE AND INTEGRATION OF MARKETS

 VERY SHORT ANSWERS:-

1. Write two positive effects of foreign trade.

Or

State any two advantages of foreign trade.                                                                      

Ans. (i) Foreign Trade creates an opportunity for producers to reach beyond the domestic markets.

(ii) Buyers have more choices of goods. Ant The main components of export of India are iron on’ and tea.                  

2.Define ‘foreign trade’.

Ans. Foreign trade creates an opportunity for producers to reach beyond the domestic markets.

3. Why do we trade with the rest of the world?  

Ans. We trade with the rest of the world because foreign trade creates an opportunity for the producers to reach beyond the domestic markets and earn greater profits.

4. What will happen if the tax is imposed on Chinese toys?

 Ans. Chinese toys will be costly and sell less while Indian toys will sell.                  

LONG ANSWERS:-

1. Explain any five strategies adopted by the MNCs to earn more and more profit.

Ans. The following are the strategies adopted by the MNCs to earn more and more profit :

(1) The MNC not only sells its finished products globally but more importantly, the goods and services are produced globally.

(2) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.

(3) MNCs 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.

(4) They look for favourable government policies so that they could earn a greater profit.

(5) Many of the top MNCs have wealth exceeding the entire budgets of the governments of developing countries. With such enormous wealth, these large MNCs have tremendous power to determine price, quality, delivery and labour conditions.

2. How does foreign trade integrate the markets of different countries? Explain with suitable examples.

Or

Mention any five features of foreign trade.                      

Or

 “Foreign trade is an important component of globalization.” Explain any three points in this regard.                                                                                                                 

 Ans. Foreign trade leads to the integration of markets in the following ways :

(1) Foreign trade provides an opportunity for both producers and buyers to reach beyond markets of their own country.

(2) There is a flow of goods, services and finance across different countries.

(3) There is huge competition among producers of various countries. This brings producers closer to each other.

 (4) Sometimes, the producer of other countries set up a joint venture with the local producers.

 (5) Prices of similar goods in the two markets tend to become equal.

                                                              WHAT IS GLOBALISATION?

LONG ANSWERS:-

1. Why is globalisation necessary for an economy?              

Or

 Explain the importance of globalization.                                                                    

Or

 How has globalisation enabled development of India? Explain with facts.            

 Ans. Globalisation is necessary for an economy  the following reasons :

(1)Globalisation brings greater foreign investment and greater foreign trade through the MNCs.

(2) The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. All these create income and employment opportunities in the economy.

(3) As a result of globalisation, more and more goods and services, investment and technology, are moving between countries. Most regions of the world are in closer contact with each other than a few decades back.

(4) Besides, people usually move from one country to another in search of better income. better jobs or better education. As consumers, people have greater choice for products. They now enjoy the improved quality and lower prices for several products and hence, a higher standard of living.

(5) Globalisation has created new opportunities for companies providing services, particularly those involving IT.

2.”MNCs are playing an important role in the globalisation process.” Justify the statement by giving any five suitable arguments.  

Ans. MNCs have helped in globalisation in the following ways :

 (1) MNCs are spreading their production to other countries where labour and other resources are easily available. In this way, they bring foreign investment in these countries.

(2) A large part of the foreign trade is also controlled by MNCs. Activities of most MNCs involve substantial trade in goods and services. The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries.

 (3) They buy up local companies and then expand production.

(4) They set up production jointly with some of the local companies.

(5) They use local companies for supplies. They bring new and advanced technology with themselves.

3. Explain the meaning of globalisation in your own words.

Ans. (1) Globalisation is the process by which the whole world becomes a single market.

 (2) It may be defined as the rapid integration and interconnection between countries through foreign trade and foreign investments by multinational corporations.

(3) In this process, we become economically interdependent at the international level.

(4) Producers from outside the country can produce and sell goods and services in India. We can also produce goods and services and sell them in other countries. The labourers can also move from one country to another country.

(5) We need fair globalisation which would create opportunities for all and ensure that the benefits of globalisation are shared better

4. Globalisation is two-faced. Explain.

 Ans. Globalisation is two-faced because of the following reasons :

 (1) Not everyone has benefited from globalisation. People with education, skill and wealth have made the best use of new opportunities.

(2) On the other hand, many small producers and workers have suffered as a result of the rising competition. They have not shared the benefits of globalisation.

(3) Globalisation is beneficial to MNCs but quite harmful to workers, small industries and traders who can not compete with MNCs.

 (4) It has enabled some large Indian companies to emerge as multinational such as Tata Motors, Infosys, Ranbaxy, etc. while many small-scale industries had to close down their units.

 (5) The globalisation and greater competition amongst the producers have been of great advantage to the consumers. They have now a greater choice and improved quality at lower prices.

FACTORS THAT HAVE ENABLED GLOBALISATION

 VERY SHORT ANSWERS:-

1. What is privatisation?

 Ans. Privatisation refers to shifting of the ownership or management of a government-owned enterprise to private ownership.

2. What is meant by trade barrier?             

Ans. Trade barriers refer to the laws, institutions or practices which make trade between countries more difficult or expensive than trade within countries.

3. Mention any two factors which have stimulated the globalisation process.

Or

 Write any two key factors that have enabled globalisation.                                

 Ans. Technology and liberalisation of foreign trade and foreign investment policy have stimulated the globalisation process.

4. When was India’s foreign trade liberalised?

 Ans. India’s foreign trade was liberalised from around 1991.

 LONG ANSWERS:-

1. Explain the role played by technology in the globalisation. Give three points.

Ans. (1) Rapid improvement in technology has been playing a key role in encouraging the globalisation process.

 (2) Improvements in transportation technology e.g., container manufacturing has made faster delivery of goods across long distances at lower costs.

(3) Improvements in IT sector has played a major role in spreading out production of services across countries.

 (4) Telecommunication facilities are used to contact one another around the world, to access information instantly and to communicate from remote areas.

 (5) Computers have now entered almost every field of activity. The Internet allows us to send instant e-mail and voice-mail across the world at negligible costs.

2. Globalisation will continue in the future. Can you imagine what the world like twenty years from now? Give reasons for your answer.

 Ans. (1) If globalisation continues in the future, the whole world would become a single market after twenty years from now.

 (2) This has the following reasons :

(i) MNCs would produce goods and services in those locations around the world which would be cheap for their production.

(ii) Foreign investment by MNCs would increase much more.

(iii) Also, foreign trade between countries would sufficiently rise.

 (iv) In addition, a large part of the foreign trade would be controlled by MNCs.

 (v) There would be a greater generation of production and markets across countries due to greater foreign investment and foreign trade.

(vi) More and more goods and services, investment and technology as well as people would move between countries.

3. What is trade barrier 7 Why trade barriers were imposed by the Indian Government? ExPlain any four reasons.          

Ans. (1) (i) Trade barrier is the restriction on import and export imposed by the government to protect the interest of the producers within the country. Tax on import is an example of a trade barrier.

(ii) Tax on imports is known as a trade barrier because some restrictions are set up on the trade of the product through the tax. The foreign product will be costly and its demand in the domestic market will automatically reduce.

(2) Indian government imposed barriers to foreign trade and foreign investment after independence for the following reasons :

(i) The government considered it necessary to protect the producers within the country from foreign competition.

(ii) The government used trade barriers to increase or decrease i.e., regulate foreign trade.

(iii) This is to decide what kinds of goods and how much of each, should come into the country.

 (iv) 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.

4. What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government after Independence? Why did it wish to remove these barriers later on?

Ans. (1) The government uses trade barriers for the following reasons :

(i)To protect producers within the country from foreign competition.

(ii) To increase or decrease foreign trade i.e., regulate foreign trade.

(iii) To decide what kinds of goods and how much of each should come into the county try.

 (2) Following are the reason’s that foreign trade policy of government changed in 1991 :

 (i) The time had come for the Indian producers to compete with producers around the globe as competition would improve performance.

(ii) Powerful international organizations persuaded and supported the step.

(iii) Liberalization was adopted to encourage free movement of goods, services and manpower across countries.

(iv) It paved the way for globalisation.

5.’Rapid improvement in technologies has been a major factor that has stimulated the globalisation process.’ Support the statement with suitable examples.

Ans. (1) Globalisation is the process of rapid integration or interconnection between countries.

(2) (i) Rapid improvement in technology has been playing a key role in encouraging the globalisation process.

 (ii) Improvements in transportation technology, e.g., container manufacturing have made faster delivery of goods across long distances at lower costs.

 (iii) There have been rapid developments in information and communication technology, e.g., telecommunications, computers, internet, etc. They have made easy access to any person or place around the world. Telecommunication has been facilitated by satellite communication devices. Computers have entered almost every field of activities. From the internet, we can obtain and share information on almost anything that we want to know. It allows us to send instant electronic mail i.e., e-mail and talk (voice-mail) across the world at negligible costs.

6. What led the Indian government to changes in trade and investment policy after 199087? Explain any three points.

Or

Why did India change its economic policy in 1991? Explain.                                        

 Ans. (1) The Government of India decided that the time had come for Indian producers to compete with producers around the lobe

 (2) It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

(3) The decision to remove trade barriers. was supported by powerful international organizations like IMF, WTO, etc.

(4) With the liberalisation of trade, business is allowed to make decisions freely about what they wish to import or export.

 (5) Goods could now be imported and exported easily and also foreign companies could set up factories and offices here.

7. In what three ways have liberalisation of trade and investment policies helped the globalisation process?                     

 Ans. (1) Removing barriers or restrictions set by the government is known as liberalisation.

(2) (i) With the liberalisation of trade, industries are allowed to make decisions freely about what they wish to import or export.

(ii) Goods are now be imported and exported easily.

 (iii) Companies can set up factories and offices in other countries e.g., Tata Motors, Infosys, etc.

 (iv) Activities of many MNCs have increased foreign investment and foreign trade which has led to greater integration of production and markets across countries’ and thereby globalisation process.

(v) Domestic companies are free to compete with producers around the globe.

8. Explain any three factors that have enabled globalisation possible.

Ans. Following are the factors that have enabled the process of globalisation.

(1) Improvement in transportation: This has made possible much faster delivery of goods across long distances at a lower cost.

 (2) Improvement in information and communication technology: It has played a major role in spreading out production of services across countries. Telecommunication facilities are used to contact one another around the world to access information instantly and to communicate from remote areas.

 (3) Liberalisation: Nations have removed many of the barriers to foreign trade and foreign investment and thus, promoted and facilitated globalisation.

(4) Multilateral trade agreement: This is to promote foreign trade and the free flow of investment.

 (5) Multinational Corporations: MNCs have increased foreign investment and foreign trade which has led to greater integration of production and markets across countries and thereby globalisation process.

‘World Trade Organization’

VERY SHORT ANSWERS:-

1. What is meant by ‘World Trade Organization’?

Ans. World Trade Organization (WTO) is one such organization whose aim is to liberalize International trade.

2. What was the main aim to form ‘World Trade Organization’?

 Ans. To liberalize international trade.

3. Which organisation lays stress on liberalisation of foreign trade and foreign investment?

Ans. World Trade Organisation (WTO).

 LONG ANSWERS:-

1. What does WTO stand for? Write its four features.          

Or

Give three arguments in favour of WTO.                                      

 Ans. (1) WTO stands for World Trade Organisation.

(2) (i) World Trade Organisation (WTO) is a powerful international organisation.

(ii) It aims at liberalising international trade.

(iii) It establishes rules regarding international trade and ensures that these rules are obeyed.

(iv) Nearly 164 countries of the world were the members of the WTO in July 2016.

 (v) WTO is supposed to allow a free trade for all countries. But in practice, it is found that the developed countries have unfairly retained trade barriers.

2. What is WTO? Describe various functions of WTO.                       

 Ans. (1) WTO is an organisation that intends to supervise and liberalise international trade.

(2) It deals with regulation of trade between participating countries.

(3) It oversees the implementation, administration and operations of the covered agreements.

(4) It is supposed to allow a free trade for all. It provides a forum for negotiations and for settling disputes.

(5) It is also a centre of economic research and analysis.

IMPACT OF GLOBALISATION IN INDIA

VERY SHORT ANSWERS:-

1. What is meant by ‘Special Economic Zones’ (SEZ)?                    

Ans. Special Economic Zones are the industrial zones that are being set up by the central and state governments to attract foreign companies to invest in India.

2.  Which sector has been benefited least because of globalisation in India?

Ans. Unorganised sector benefitted least because of globalisation in India.

3. Why did India set up SEZs?

 Ans. India set up SEZs to attract foreign companies to invest in India.

4. How has globalisation raised the competition in the market?                  

 Ans. In the process of globalisation, the government removes restrictions on imports that raise competition in the market with the MNCs also.

5. Write the impact of globalisation on the unorganised sector.

Ans. The impact of globalisation on the unorganised sector is negative.

LONG ANSWERS:-

1. Do you think that more Indian companies should emerge as MNCs? Explain four reasons to support your answer.                                                                                                     

Ans. (1) Yes, I think that more Indian companies should emerge as MNCs.

 (2) This has the following reasons :

(i) In that particular industries and services, new jobs would be created.

 (ii) Local companies supplying raw materials, etc. to these MNCs would prosper. Several of the top Indian companies have been able to benefit from the increased competition.

(4) Today, Indians are buying cars produced by nearly all the top.

(iv) Also, these companies would certainly gain from successful collaborations with foreign companies.

2. How do the large companies manipulate the market? Explain with examples.

Ans. The large companies manipulate the market in the following ways :

 (1) The large MNCs have tremendous power to determine price, quality, delivery and labour conditions for the small producers of other countries.

 (2) So, they have posed major challenges for a large number of small producers.

(3) For example batteries, capacitors, plastics, toys, dairy products and vegetable oils are some of the main industries where the small manufacturers have been hit hard due to competition.

(4) Several of the units have shut down rendering many workers jobless.

(5) Ford Motors, an American company came to India in 1995 and spent Z 1700 cores to set up a large plant near Chennai. By the year 2014, Ford Motors was selling 77,000 cars in the Indian markets, while another 77,000 cars were exported from India to South Africa, Mexico and Brazil.

3. Explain the impact of globalisation on Indian agriculture.

Or

What is the meaning of globalisation? Explain its any four impacts on Indian agriculture.

Ans. (1) Globalisation is the process by which the whole world becomes a single market.

 (2) (i) The impact of globalisation on Indian agriculture has not been positive. The agriculture sector in India has been badly affected by the globalisation.

(ii) Indian agriculture has been hit hard due to foreign competition.

 (iii) The liberalisation of foreign trade and investment in India was supported by some very powerful international organizations. World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. But in practice, it is seen that the developed countries have unfairly retained trade barriers e.g., on agricultural products.

 (iv) More than 60% of Indian population is still engaged in the agriculture sector while in the US, the share of this sector in total employment is a tiny 0.5%. Yet, this very small percentage of people in the U.S. receives massive sums of money from the US government for production and for exports to other countries.

(v) That is why US farmers can sell the farm products at abnormally low prices that adversely affects farmers in countries like India.

4. “Globalisation and greater competition among producers has been advantageous ESE to consumers.” Support the statement with examples.

Ans. (1) Undoubtedly, globalisation and greater competition among producers—both local and foreign producers—has been of advantage to consumers, particularly in the wall-off sections in urban areas.

(2) There is the greater choice before these consumers who now enjoy the improved quality and lower prices for several products. As a result, these people today, enjoy much higher standard living than was possible earlier.

 (3) For example, the latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world, are within our reach. companies in the world.

(5) A similar explosion of brands can be seen for many other goods: from shirts to televisions to processed fruit juices. Such a wide-ranging choice of goods in our markets is a relatively recent phenomenon.

5.”The impact of globalisation has not been visualized uniformly among producers and workers.” Support the statement with facts.

Or

Describe the impact of globalisation on Indian economy with examples.               

 Ans. The above statement is absolutely true that can be supported with the following facts :

(1)(i) Globalisation has enabled some large Indian companies to emerge as Multinational companies such as Tata Motors, Infosys, Ranbaxy, etc.

(ii) MNCs are able to find the cheapest goods in order to maximize their profits.

(iii) Globalisation has also created new opportunities for companies providing services, particularly those involving IT. While small producers have been hit hard due to competition.

 (2) On the other hand, globalisation and the pressure of competition have substantially changed the lives of workers.

(i) Their jobs are no longer secure. They now work on a temporary basis.

 (ii) They have to put in very long working hours.

 (iii) They have to work night shifts on a regular basis during the peak season.

(iv) Wages are low. They are denied their fair share of benefits.

6. What problems would be faced by the workers if employers cut down the cost of production to compete in the global market?                      

Ans. As the cost of raw materials cannot be reduced, employers try to cut their labour costs to compete in the global market. As a result, workers have to face the following problems :

(1) Where earlier a factory used to employ workers on a permanent basis, now they employ workers only on a temporary basis so that they do not have to pay workers for the whole year. That is, their jobs are no longer secure.

(2) Workers also have to put in very long working hours.

 (3) They have to work night shifts on a regular basis during the peak season.

(4) Wages are low and workers are forced to work overtime to make both ends meet.

 (5) Workers are denied a fair share of benefits brought about by globalisation.

7. “Globalisation has been advantageous to consumers as well as to producers.” Support the statement with suitable examples.                   

Ans. (1) To consumers : (i) Globalisation and greater competition among producers have been of advantage to consumers, particularly the well-off sections in the urban areas.

 (ii) There is the greater choice before these consumers.

(iii) They now enjoy the improved quality and lower prices for several products.

 (iv) lady, these people enjoy much higher standards of living than was possible earlier.

(2) To producers : (i) MNCs are able to find the cheapest goods in order to maximize their profits.

 (ii) Globalisation has enabled some large Indian companies to emerge as Multi-national corporations themselves. For example, Tata Motors, Infosys, etc.

(iii) Globalisation has created new opportunities for companies providing services, particularly those involving IT.

8. Analyze e Indian the role of globalisation on the economy.

Or

 What has been? the impact of globalisation on India?

Ans. (1) Globalisation has been advantageous to consumers, particularly the well-off sections in the urban areas. There is the greater choice before these consumers who now enjoy the improved quality and lower prices for several products.

(2) MNCs are able to find the cheapest goods in order to maximize their profits.

(3) Globalisation has enabled some large Indian companies to emerge as multinational corporations themselves e.g., Tata Motors, Ranbaxy, Asian Paints, etc.

(4) Globalisation has created new opportunities for companies providing services, particularly those involving IT. Besides, a host of services such as data entry, accounting, administrative task, engineering are now being done cheaply in countries such as India. Also, they are exported to the developed countries

(5) While for a large number of small producers and workers, globalisation has posed major I challenge. Small manufacturers have been hit hard due to competition. Workers’ jobs are no longer secure. They now work on a temporary basis.

9. Give any five arguments against globalisation.

Or

 `Bigger companies mean more exploitation.’ Give arguments to support the statement.

Ans. (1) Entry of MNCs in a domestic market may prove harmful for small-scale producers who are not able to compete with them.

(2) MNCs buy local companies. The most common route for MNCs investments is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so.

(3) The large MNCs have tremendous power to determine price, quality, delivery and labour conditions for the small producers of other countries.

(4) MNCs have posed major challenges for a large number of small producers. They have been hit hard due to competition.

(5) The small industries in India employ the largest number of workers in the country next only to agriculture. Several of these units have shut down due to tough competition by MNCs. As a result, many workers became jobless. These days most employers prefer to employ workers flexibly. So, the workers’ jobs are no longer secure.

10. Explain any three steps taken by the Central and State Governments to attract foreign companies to invest in India?                                

 Ans. Government attracts foreign investment in the following ways :

(1) Special Economic Zones have been set up to have world-class facilities such as cheap electricity, water, roads, transport, storage, recreational and educational facilities, etc.

(2) The companies set up their units in SEZs which are exempted to pay tax for the initial period of five years.

(3) Labour laws are made flexible.

(4) Instead of hiring workers on a regular basis, companies may hire worker’s `flexible’ for short periods when there is the intense pressure of work. This is done to reduce the cost of labour for the company.

(5) Governments remove barriers on foreign trade and foreign investment so that goods could be imported and exported easily and also foreign companies could set up factories and offices here.

11. What are Special Economic Zones? Why have they been set up?

Or

 What is the meaning of Special Economic Zones (SEZs)? Mention two features of SEZs.

Ans. (1) SEZs are Special Economic Zones where world-class facilities like water, electricity, roads and transport, recreation, education are available. They aim to attract foreign Companies to invest in India.

 (2) (i) They have been set up to attract foreign companies to invest in India.

 (ii) Companies with production units in the SEZs do not have to pay taxes for the initial period of 5 years.

 (iii) The government has also allowed flexibility in labour laws to attract foreign investment.

12. How does the rising competition affect the small Indian companies? Explain with three examples.

Or

How has globalization affected the small producers and workers? Explain.

Ans. (1) Small Producers (Companies) : (i)Small-scale producers had to face competition due to globalization.

 (ii) Small producers could not keep their cost of production low and hence, lost the market.

 (iii) They could not sell their commodities at a competitive price and had to lessen production.

(iv) Batteries, capacitors, plastics, toys, tires, dairy products, and vegetable oil are some examples of industries where small manufacturers have been hit hard due to competition.

(v) Several of the units have shut down rendering many workers jobless.

(2) Workers: (i) As a result of the closure of many small-scale industries, many workers lost their jobs. They now work on a temporary basis. Their jobs are no longer secure.

 (ii) They have to put in very long working hours.

 (iii) Their wages are low.

 (iv) They are denied their fair share of benefits.

13. Explain the ways competition has affected workers, Indian exporters and foreign MNCs in the garment industry.

Or

 In what ways has competition affected the workers and the Indian exporters of the garment industries? Explain.                                                                                                              

 Ans. Competition has affected workers, Indian exporters and foreign MNCs in the following ways :

Workers :

 (i) Their jobs are no longer secured. They now work on a temporary basis.

 (ii) They have to put in very long working hours.

 (iii) They are paid insufficient and low wages.

 (iv)They have to work night shifts on a regular basis during the peak season.

(v) They are denied their fair share of benefits.

(2) Indian exporters:

(i) They get orders from MNCs at cheaper rates.

 (ii) They try hard to cut their costs.

 (iii) They employ workers only on a temporary basis.

(3)Foreign MNCs :

 (i) They are able to find the cheapest goods in order to maximize their profits.

(ii) Competition among the garment exporters has allowed these MNCs to make large profits.

THE STRUGGLE FOR A FAIR GLOBALISATION

VERY SHORT ANSWERS:-

1.can play an important role in the struggle for fair globalisation?

Ans. Governments.

LONG ANSWERS:-

1. Why is there a need to make globalisation fair? How can the government make the globalisation a fair deal? Explain.

 Ans. (1) There is an urgent need to make globalisation fair for the following reasons :

(i)Globalisation has benefitted only well-off consumers and also producers with skill, education and wealth.

(ii) This has failed to eliminate poverty and bring economic equality. The rich have become richer and the population of poor is still on increase.

(iii) It also leads to the insecurity of jobs.

 (2) Our government can make the globalisation a fair deal in the following ways:

(i) Government policies must protect the interests of all the people in the country.

(ii) The government should ensure that labour laws are properly implemented and workers get their rights.

(iii) It should protect small producers until they are able to compete.

(iv) It should negotiate at the WTO for fairer rules and join hands with other developing countries with similar interest to fight against the domination of developed countries in the WTO.

2. How is free and fair trade necessary for the promotion of economic welfare activities? Explain.

 Ans. (1) Only free and fair trade would create opportunities for all.

(2) It would ensure that the benefits of globalisation are shared better.

 (3) While globalisation has benefitted well-off consumers and also producers with skill, education and wealth, many small producers and workers have suffered as a result of the rising competition. In this way, there are many people who have not shared the benefits of trade. However, the free and fair trade would ensure the benefits for those segments of society also.

3. “Only fair globalisation can give new shape to the world economy”. Explain.

Ans. Only fair globalisation can give new shape to the world economy. This has the following reasons :

(1) Many pieces of evidence indicate that not everyone has benefited from globalisation. For example, small producers, workers, etc. have not been benefited from this.

(2) People with education, skill and wealth have made the best use of new opportunities. On the other hand, there are many people who have not shared the benefits.

(3) Only fair globalisation would create opportunities for all and also ensure that the benefits of globalisation are shared better.

(4) The government can play a major role in making this possible. Its policies must protect the interests, not only of the rich and the powerful but also of all the people in the country.

(5) People can also play an important role in the struggle for a fair globalisation. In the past few years, massive campaigns and representation by people’s organisations have influenced important decisions relating to trade and investments at the World Trade Organisation.

4.’Information and communication technology has increased the pace of globalisation.”

Ans. (1) Undoubtedly, information and communication technology has increased the pace of the statement of globalisation. It has played a major role in spreading out production of services across countries.

 (2) In recent times, technology in the areas of telecommunications, computers, the internet has been changing rapidly.

 (3) Telecommunication facilities such as telephone including mobile phones, fax, etc. 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.

(4) Computers have now entered almost every field of activity. As a result of internet service; we can obtain and share information on almost anything that we want to know.

 (5) IT has created various new opportunities. The Indian company producing a magazine for the London based company and various call centres are some significant examples.

5.  What is globalisation? Why there is a need to make globalisation fair? Explain any two reasons.  

Ans. (1) Globalisation is the process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalisation process. More and more goods and services, investments and technology are moving between countries.

(2)(i) While globalisation has benefited well-off consumers and also producers with skill, education and wealth, many small producers and workers have suffered as a result of the rising competition.

 (ii) Fair globalisation would create opportunities for all and also ensure that the benefits of globalisation are shared better.

VALUE BASED QUESTIONS

1. The government can play a major role to ensure fair globalisation for the promotion of which social and economic values?

Ans. Social values: Fair globalisation would create opportunities for all and also ensure that the benefits of globalisation are shared better. In this way, it promotes equality in society. So, the government should play a major role to ensure fair globalisation for the promotion of social equality. Fair globalisation would boost up social status of the poor with their increased earnings. This could free them from the clutches of the rich and influential people and increase their status in society.

Economic values: There are many people who have not shared the benefits of globalisation. Small producers, workers, uneducated and poor have suffered a lot due to competition. Fair globalisation would create opportunities for all and thus, would increase the incomes of these downtrodden people. This would make them economically self-dependent. They would be keen to do business and set-up small-scale industries. This would lead to the eradication of poverty from the country.

2. Impact of globalisation is not always beneficial for a country. Explain the values hampered due to this.                  

 Ans. (1) We have seen that not everyone has benefited from globalisation. People with education, skill and wealth have made the best use of new opportunities. On the other hand, there are many people who have not shared the benefits. So, the rich have become very rich and the poor have become poorer. In this way, globalisation has hampered social and economic equality in the country.

(2) It also hampers economic self-sufficiency of the poor, uneducated and unskilled people of the country. Small producers have been hit hard due to competition. Several such units have been shut down. Many workers became jobless.

(3) It hampers the self-respect of the poor and developing countries. Developed countries are dominant in the WTO. WTO rules have forced the developing countries to remove trade barriers while developed countries have unfairly retained trade barriers.

(4) It promotes economic dependency on the MNCs. The large MNCs have tremendous power to determine price, quality, delivery, and labour conditions in other countries.

(5) Globalisation encourages regional disparity. MNCs are not interested to set up production where there is poor infrastructure.

3. In support of what values, the Indian government had put barriers to foreign trade and foreign investment, after independence?

Ans. (1) The Indian government wanted to provide economic security to the domestic producers. The government considered it necessary to protect the producers within the country from foreign competition. That was why the government had put barriers to foreign trade and foreign investment after independence.

(2) The government had promoted self-sufficiency to domestic producers in the country. 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.

 (3) To put barriers to foreign trade and foreign investment, the government promoted the feeling of nationalism.

 (4) That was helpful in the eradication of poverty. This was because, the domestic producers were encouraged to set up new business units, earn more and eradicate poverty.

 (5) This was a source of inspiration for the domestic producers to set up production units and earn more. Inspiration refers to an unconscious burst of creativity in an artistic Endeavour. It is a directing agent for a man to seek some purpose in life.

4. Free and fair trade is necessary for a country for the promotion of which social and economic values?

 Ans. (1) Social values : (i) Free and fair trade promotes world brotherhood. This is because through free and fair trade goods could be imported and exported easily and also foreign companies could set up factories and offices here. Foreign trade provides an opportunity for both producers and buyers to reach beyond markets of their own country. Also, there is a frequent movement of people across the countries.

 (ii) It promotes equality among nations or the regions by encouraging business activities in poor regions.

(iii) It encourages teamwork. This is because, in the trade process, people of different countries work together.

(2)Economic values : (i) It brings economic progress of every country of the world. The poor countries are also benefited and lead to self-sufficiency.

(ii) This is helpful in the eradication of poverty. The poor countries with their cheap labour and other resources are benefited the most. By establishing business units and encouraging business activities, it opens new opportunities to earn money. In this way, it eradicates poverty in such countries.

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