Class 10 Economics Chapter 4
Globalisation and the Indian Economy
Important Questions

Ans: Globalisation refers to the integration of a country’s economy with those of other nations, facilitated by the unrestricted flow of trade, capital, and the movement of people across borders. It is a complex process involving the interaction and integration of individuals, businesses, and governments on a global scale. The growth of Globalisation has been driven by advancements in transportation and communication technology.

Ans: Flexibility in labour laws offers advantages to companies in terms of competitiveness and adaptability. It allows company leaders to engage in negotiations regarding wages and employment termination based on prevailing market conditions, which can enhance the company’s competitive edge. The government has also implemented flexibility in labour laws to attract foreign investment. Companies are granted certain exemptions from labour regulations, allowing them to hire workers on a more flexible, short-term basis during periods of high workload. This approach helps reduce labour costs for businesses.

Ans: The Indian government initially imposed barriers to foreign trade and foreign investment in order to safeguard domestic producers, especially during the emergence of industries in the 1950s and 1960s. These measures aimed to shield domestic industries from foreign competition, which could have been detrimental to their growth at that early stage. Therefore, India primarily permitted the import of essential items such as machinery, fertilisers, and petroleum.However, in the New Economic Policy introduced in 1991, the government sought to remove these barriers. The rationale behind this shift was the belief that domestic producers were now capable of competing with foreign industries. It was believed that foreign competition would actually enhance the quality of goods produced by Indian industries. Additionally, this decision was supported by influential international organisations. As a result, the barriers to foreign trade and investment were gradually dismantled, enabling easier import and export of goods and the establishment of foreign companies’ factories and offices in India.

Ans: Liberalisation of trade and investment policies has facilitated the process of Globalisation by simplifying foreign trade and investment. In the past, many developing nations imposed restrictions and barriers on imports and foreign investments to safeguard their domestic industries. However, to enhance the quality of domestic products, these countries have removed these barriers. This involves reducing import tariffs, streamlining the inflow of foreign capital, encouraging foreign companies to establish a presence, and promoting foreign direct investment and investment from foreign funds. As a result, liberalisation has spurred the expansion of globalisation because businesses are now granted more autonomy in their decisions regarding imports and exports. This has led to a deeper integration of national economies into a more interconnected global system. Consequently, increased foreign investment and international trade have given rise to the proliferation of multinational corporations (MNCs), further propelling the Globalisation phenomenon.

Ans: Twenty years into the future, the world is expected to experience a positive transformation characterised by healthy competition, enhanced production efficiency, increased output volumes, improved income and employment opportunities, elevated living standards, widespread access to information, and the pervasive integration of modern technology.