Q and Ans L-4 Eco Globalization in Indian Economy

 

Question 1. In matter of years, how have markets been transformed ?

Answer: The markets have been transformed because now latest models of cameras, cars, watches, mobile phones etc. are available there.

Question 2. What is MNC or Multi-National Corporation ?

Answer: MNC or Multi-National Corporation is a company that owns or controls production in : more than one nation.

Question 3. In which regions MNCs set up offices and factories for production ?

Answer: MNCs set up offices and factories in regions with features as mentioned below : Close to the market. Availability of skilled/unskilled labour at low cost. Favourable government policies.

Question 4. What is investment and foreign investment ?

Answer: The money that is spent to buy assets such as land, building, machines and other equipment is called investment. Investment made by MNCs is called foreign investment. Question 5. How MNCs control production across globe ? Mention any one way.

Answer: Large MNCs in developed countries place orders for production with small producers such as garments, footwear etc.

Question 6. What is Ford Motors ? When did it come to India and what did it do ?

Answer: Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent ?1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra.

Question 7. What was effect of importing Chinese toys to India ?

Answer: Chinese toys became popular in the Indian markets.Within a year, 70 to 80 per cent shops have replaced Indian toys with Chinese toys.

 Question 8. What is the result of greater foreign investment and greater foreign trade ? Answer: Greater foreign investment and greater foreign trade leads to greater integration of production and markets across countries.

 Question 9. What is globalisation ?

Answer: Globalisation is process of rapid integration or interconnection between countries. The countries are connected by movements of goods, services, investments and technology. Question 10. How information and communication technology is useful in foreign trade ? Answer: Telecommunication facilities – telegraph, 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.

Question 11. What is a trade barrier ?

 Answer: Restrictions on foreign trade are called trade barrier. For example tax on imports is a trade barrier.

 Question 12. Why had the Indian government after independence put barriers to foreign trade and foreign investment ?

 Answer: The Indian government put barriers to protect the producers within the country from foreign competition. Industries were just coming up and the competition from imports would not allow the Indian industries to come up.

Question 13. What is liberalisation ?

Answer: Removing barriers or restrictions set by the government is known as liberalisation.

Question 15. What is the aim of World Trade Organisation ?

Answer: The aim of World Trade Organisation is to liberalise international trade.

Question 17. Which Indian companies have emerged as multi-national companies as a result of globalisation ? Name any two. Answer: Tata Motors (Automobiles) Infosys (IT) Ranbaxy (Medicines) Asian Paints (Paints).

Question 18. How many workers are employed in small-scale industries in India ?

Answer: The small-scale industries in India employ the largest number of workers (20 million) in the country, next only to agriculture.

Question 19. How have workers suffered under the flexible labour laws ? Mention any two points.

 Answer: Workers are now employed on a temporary basis so that the employers do not have to pay workers for the whole year. , Wages are low and workers are forced to work overtime to make both ends meet.

 Question 20. How can the globalisation be made more fair ? Write two steps and what will be its effect ?

 Answer: (1) The government must protect the interest of all the people in the country. The government can ensure that labour laws are properly implemented and the workers get their rights. (2) Fair globalisation would create opportunities for all, and also ensure that the benefits of globalisation are shared better.

QUESTIONS OF 3/5 MARKS Answers should he in about 80/100 words.

Question 1. What changes have taken place in our markets during the last few years ?

 Answer: In the last few years, our markets have been transformed as mentioned below : There is a wide choice of goods and services in the markets. The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are available in the markets. Not only this these products are affordable and within reach of the people. Thus a few years back, there were only few brands of different goods in the markets. A consumer did not have real choice and had no option to purchase a particular brand. But now he has a number of options between Indian as well as foreign brands.

Question 2. “Information and communication technology has played a major role in spreading out production of services across countries.” Justify the statement with examples. [CBSE 2016] Or Explain the factors that have enabled globalisation. Or How has information and communication technology stimulated globalisation ? Explain with example.

 Answer: The factors that have enabled globalisation are as given below : 1. Technology : In the past fifty years, several improvements in technology have taken place. For example, in transportation technology, containers are used for the transportation of goods which are placed in containers that can be loaded intact on to ships, railways, planes and trucks. Containers have led to huge reduction in port handling costs and increased the speed with which exports can reach markets. Similarly, the cost of air transport has fallen. This has enabled much greater volumes of goods being transported by airlines. (2) Information technology : Telecommunication facilities – telegraph, moblie phones, fax – are used to contact one another around the world and to communicate from remote areas. This has been facilitated by satellite communication devices. Internet enables to send instant electronic mail and talk across the world at negligible costs. Now a news magazine published for London readers can be designed and printed in Delhi. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet e., e-banking. (3) Liberalisation of foreign trade and foreign investment policy : Removing barriers or restrictions set by the government is liberalisation. Under liberalisation goods can be imported and exported easily. Foreign companies are allowed to set up factories and offices in other countries. Thus liberalisation has enabled MNCs to increase their investments in other countries as India. As a result of greater foreign investment and greater foreign trade, there is greater integration of production and markets across countries. Globalisation is this process of rapid integration of interconnection between countries.

Question 3. “Globalisation and competition among producers has been of advantage to the consumers.” Give arguments in support of this statement.

Answer: Globalisation and competition among producers has been of advantage to the consumers in the ways as mentioned below : Now there is more choice for the consumers in the markets. For example in the field of toys, the markets are flooded with Chinese toys which are cheaper and of better quality than Indian toys. People now have a choice between Indian toys and Chinese toys. The consumers now have products of better quality. The prices of various products have come down due to competition among the producers/manufacturers. Globalisation has led to improvement in the standard of living of people.

 Question 4. What is a trade barrier ? “Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can he imported. This is known as quotas. Can you explain using the example of Chinese toys, how quotas can be used as trade barriers ? Do you think this should be used ? Discuss.

 Answer: Trade barrier means restrictions to increase or decrease foreign trade and to decide what kinds of goods and how much of each should come into the country. Tax on imports is a trade barrier because this will lead to increase in the price of the product. In such a situation foreign products will become costlier than Indian goods and the Indian producer will be in a position to sell their products and earn profits. In case of Chinese toys, quotas can be used as trade barrier because the government can put restrictions on the number and type of toys that can be imported into the country In such case, there will be less competition between Indian toys and Chinese toys. The Indian toy makers may also not suffer losses. Quotas should be used as trade barriers in the interest of the Indian toy makers.

Question 5. Barriers on foreign trade and investment were removed to a large extent in India since 1991.” Justify the statement. [CBSE 2016] Or Why had the Indian government put barriers to foreign trade and foreign investments after independence ? [CBSE 2016]

Answer:
Indian government has put barriers to foreign trade and foreign investments after independence because:

• It wanted to protect the producer within the country from foreign competition.
• As the industries were just coming up in 1950’s and 1960’s the competition from inputs at that stage would not have allowed these industries to come up.
• Indian allowed imports of only essential items such as machinery fertilizers, petroleum, etc.

Question 6. Give arguments in favour of WTO. Or Write a short note on World Trade Organisation.

Ans. (1) World Trade Organisation was set up in 1995 at the initiative of the developed countries. Its aim is to liberalise international trade. Its headquarters is at Geneva. WTO establishes rules regarding international trade among countries of the world in an open,uniform and non-discriminatory manner. In 2006,149 countries of the world were its members. (2) With the liberalisation of foreign trade and investment, it is necessary to have an international

Question7. What steps have been taken by the government to attract foreign investment ? Answer: The steps taken by the government to attract foreign investment are as mentioned below : Industrial zones, called Special Economic Zones (SEZs) are being set up. SEZs are to have world class facilities : electricity, water, roads, transport, storage etc. Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years. The government has also allowed flexibility in labour laws g., workers can be hired for short period.

Question 8. Describe the steps that may be taken make globalisation more ‘fair’.

Answer: The following steps may be taken to make globalisation more fair : Labour laws should be implemented properly to avoid exploitation of the workers. The government should protect the interest of the small producers by using trade and investment barriers till they are in a position to compete with large producers or MNCs. The government should negotiate at the WTO for “fairer rules”. The government should align with other developing countries to fight against the domination of developed countries.

Question 9. Give arguments in favour of WTO. Or Write a short note on World Trade Organisation.

 Ans. (1) World Trade Organisation was set up in 1995 at the initiative of the developed countries. Its aim is to liberalise international trade. Its headquarters is at Geneva. WTO establishes rules regarding international trade among countries of the world in an open,uniform and non-discriminatory manner. In 2006,149 countries of the world were its members. (2) With the liberalisation of foreign trade and investment, it is necessary to have an international organisation to supervise the trade between countries. It sees that all the countries in the world liberalise their policies. It allows free trade for all i.e., in developing and developed countries. It implements the rules for trade in all the countries. WTO looks after to make globalisation more fair to create opportunities for all and also ensure that the benefits of globalisation are shared better.

Question 10. The impact of globalisation has not been uniform.” Discuss with the help of examples. Or Discuss the impact of globalisation on India. [CBSE 2016]

Answer: Impacts of globalisation in India are
(i) It has improved the productivity and efficiency of Indian companies in the use of resources through the process of competition.
(ii) The growth rate of the economy has gone up with the increase in foreign investment and foreign technology in India.
(iii) It has allowed the consumers to enjoy a wider range of goods and services at lower costs.

 Question 11. Describe the major problems created by the globalisation for a larger number of small producers and workers. Or Describe the effects of globalisation on small producers and workers.

Answer: Small producers such as producing batteries, capacitors, toys have been hit hard due to competition with the MNCs. They could not compete on the issue of price and quality. As a result of it, their production decreased and many units were closed. Many workers became jobless. Many employers prefer to employ workers on temporary basis which means workers’ jobs are no longer secure. Women are denied their fair share of benefits. Workers have to put in very long working hours without any overtime.