VIKAS BHARATI PUBLIC SCHOOL

CLASS –X
ECONOMICS CH-4
GLOBALISATION AND THE INDIAN ECONOMY

1. Define Multinational Company. (MNC)

Ans : A MNC is a company that owns or controls production in more than one nation. MNCs set up
offices and factories for production in regions where they can get cheap labour and other resources.
The MNC is not only selling its finished products globally, but the goods and services are produced
globally.

2. What do you understand by globalisation? What are the advantages of globalization?

Ans. Globalisation means integrating the economy of a country with the economies of other countries
under conditions of free flow of trade, capital, technology, cultures and movement of persons across
borders.

ADVANTAGES OF GLOBALISATION:

1. Lowers poverty in developing countries with increased employment which provides income
through trade and investment.
2. People get variety of goods. They get opportunity to get goods at competitive price.

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3. Local companies have prospered through supplying raw materials to the foreign industries.
4. Top Indian companies have benefitted for successful collaborations with foreign
companies.
5. Globalisation has enabled some large Indian companies to emerge as multinationals themselves.
For eg. Tata Motors , Ranbaxy , Infosys etc.
6. Due to competition, domestic industry also becomes competitive, which leads to industrial
development. Further improvements in management practices and workplace arrangements.
7. Exchange of technology leads to technical development in the country.
8. It leads to increase in foreign exchange reserves.
9. Globalization increases level and income of the country and ultimately leads to higher
economic growth.

3. What has enabled globalisation in India?

Or
How is information technology connected with globalisation? Would globalisation have been
possible without expansion of IT?

TECHNOLOGY
Information and communication technology (or IT in short) has played a major role in spreading out
production of services across countries.
(a) The developments in information and communication technology, in the areas of
telecommunications, computers, Internet has been changing rapidly.
(b) 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.
(c) Internet also allows us to send instant electronic mail (e-mail) and talk (voice-mail) across
the world at negligible costs.
* Globalisation would not have been possible without expansion of IT.

4. What was the reasons for putting barriers to foreign trade and foreign
investment by the Indian government? Why did it wish to remove these
barriers?
1. The Indian government, after Independence, had put barriers to foreign trade and
foreign investment.
2. This was considered necessary to protect the producers within the country from foreign
competition.
3. Competition from imports at that stage would not have allowed these industries to come
up.

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 Thus, India had imposed barriers on imports.
1. In 1991, the Indian government decided that the time had come for Indian producers to
compete with producers around the globe.
2. It felt that competition would improve the performance of producers within the country since
they would have to improve their quality.
3. This decision was supported by powerful international organisations.
4. It was also felt the domestic manufacturers would invest more in research and development
and would become capable of selling their products at international market by competing
with their foreign counter parts.
Thus, barriers on foreign trade and foreign investment were removed to a large
extent. This meant that goods could be imported and exported easily and also
foreign companies could set up factories and offices here.

5. Globalisation will continue in the future. Can you imagine what the world would be
like twenty years from now? Give reason for your answer.
Ans. After twenty years, world would undergo a positive change which will possess the following
features—healthy competition, improved productive efficiency, increased volume of
output, income and employment, better living standards, greater availability of information
and modern technology.
Reason for the views given above : These are the favourable factors for globalisation :
(a) Availability of human resources both quantity wise and quality wise.
(b) Broad resource and industrial base of major countries.
(c) Growing entrepreneurship
(d) Growing domestic market.

6. What is G20 Summit and its purpose?

Ans. The G20 or Group of 20 is an intergovernmental forum comprising 19 sovereign countries, the
European Union (EU), and the African Union (AU). It works to address major issues related
to the global economy, such as international financial stability, climate change mitigation and
sustainable development.

7. Examine the significance of role of G20 and its significance in the light of India’s
present role.
Ans. As one of the fastest-growing major economies, India has a significant role to play in this
forum.
1. One way India can contribute to global economic growth is through its domestic policies.
2. The Indian government has implemented a series of economic reforms over the past few
years to attract foreign investment, improve infrastructure, and promote
entrepreneurship.
3. These reforms have led to an increase in foreign investment and improved economic
growth. For example, the government has launched the “Make in India” initiative to
promote manufacturing and create jobs, and the “Digital India” campaign to improve
digital infrastructure and access to technology. By sharing its experiences with other G20
countries, India can help other economies adopt similar policies that can spur growth and
development.
4. Another way India can contribute to global economic growth is through its engagement
with other G20 countries on issues related to international trade. The global trade system
is under threat due to rising protectionism and trade tensions between major economies.

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5. As a strong advocate of free trade, India can work with other G20 countries to promote a
more open and inclusive trading system that benefits all countries, particularly developing
economies.