Globalization and the Indian Economy
1.
What are the special
economic zones (SEZs)? Why is the government setting up SEZs.
Ans: SEZs or Special Economic Zones are industrial areas with world class
facilities.
i)
Companies who set up
units in SEZs are exempted from tax for 5 years.
ii)
They are set up to
attract foreign investment.
2.
Why did the Indian
Government put the barriers to foreign trade and investment after independence?
Why did it wish to remove these barriers?
Ans:
i)
The Indian Government
after independence had put barriers to foreign trade and foreign investment.
ii)
This was considered
necessary to protect the producers within the country from foreign competition.
iii)
Industries were just
coming up in the 1950s and 1960s.
iv)
Competition from
imports at that stage would not have
allowed these industries to come up.
v)
Thus India allowed
imports of only essential items such as machinery, fertilizers, petroleum etc.
vi)
All developed countries
during the early stages of development have given protection to domestic producers
through a variety of means.
Reasons to remove barriers were:
a)
To face competition.
b)
To improve quality of
certain goods.
c)
To attract foreign
investments.
d)
To place orders for
production.
3.
Describe the factors
which have enabled globalization in India with examples?
Ans: Factors that have enabled Globalization in India are:
a)
Improvement in
Transportation: This has made the faster delivery of
goods across long distances possible at lower costs.
b)
Improvement in
Information and Technology: It has played a major role in
spreading out production of services across countries.
c)
Liberalization and
removal of trade barriers: also facilitated globalization as
MNC’s came to India to invest.
4.
The impact of
Globalization has not been uniform in India? Explain this statement.
or
“The impact of globalization has not been visualized uniformly among
producers and workers.” Support the statement with facts.
Ans: The impact of globalization has not been uniform among the producers
and workers.
Positive impacts:
a)
Globalization has been
beneficial for consumers, more so rich people
in the urban areas.
b)
A large number of jobs
have been created in various industries like cell phone, automobile,
electronics etc.
c)
The top Indian
companies have been able to benefit from the increased competition by adopting
advanced technology.
d)
It has also created new
opportunities for companies which provide services.
e)
Local companies
supplying raw materials to MNCs have prospered.
Negative Impacts:
a)
A number of industries
such as toys, batteries, plastics, vegetable oil etc. have been hit hard due to
foreign competition.
b)
Thousands of uneducated
and unskilled labourers have become jobless.
a.
Globalization has a
general impact on most of the small industries which employ the largest number
of workers only after agriculture.
5.
What is Globalization?
Explain.
Ans:
i)
Globalization is a
process of rapid integration or interconnection between countries.
ii)
More and more goods and
services, investments and technology are moving between countries.
iii)
Globalization is the
integration between countries through foreign trade and foreign investments by
Multi National Companies(MNCs).
6.
Describe the impact of
Globalization on small producers?
Ans:
a)
Globalization
encourages competition.
b)
Big industries and companies
have been able to compete, but the small producers were hit badly.
c)
They could not stand
the competition and had to shut down.
d)
Some industries like
batteries, capacitors, plastics, toys, tyres, dairy products vegetable oils are
the industries which have suffered a lot.
e)
Due to this, a lot of
people lost their jobs and faced unemployment.
7.
Explain the meaning of
fair globalization?
Ans: Fair globalization would create opportunities for all and also
ensure that the benefits of globalization are shared better.
i)
Government can play a
major role in making this possible.
ii)
Its policies must protect the interest of rich and poor both.
iii)
Labour laws properly implemented and the workers get their rights.
iv)
It can support small producers by putting some restrictions or barriers.
v)
It can negotiate at the WTO
for fairer rules.
8.
How globalization has
affected the lives of the people? Explain with any three examples.
Ans: Effects of globalization on the lives of people are:
i)
Increased their
investment in industries such as cell phones, automobiles, electronics, soft
drinks, fast food etc.
ii)
New jobs have been
created.
iii)
Local companies
supplying raw materials to these industries have prospered.
iv)
Increased competition.
v)
Several top Indian
companies have been able to benefit from the increased competition.
vi)
They have invested in
newer technology and production methods and raised their production standards.
vii)
Some have gained from
successful collaboration with foreign competition.
viii)
New opportunities for
service such as data entry, accounting, administrative tasks, and engineering
are now being done cheaply in countries such as India and are exported to the
developed countries.
9.
Explain the role of
technology in stimulating globalization process?
Ans: Rapid movement in technology has stimulated the globalization
process.
i)
Transportation
technology has made much faster delivery of goods across long distance possible
at lower costs.
ii)
There are even more
remarkable developments in information and communication technology.
iii)
Telecommunication facilities
are used to contact one another around the world, to get information instantly
and to communicate from remote areas.
iv)
Through internet, one
can obtain and share information on almost anything.
10. How has globalization created new opportunities for companies
providing services in India? Explain
Ans:
i)
Globalization has
created new opportunities for companies providing services particularly those
involving IT.
ii)
The Indian company
producing a magazine for the London based company and call centers are some
examples.
iii)
Besides, a host of services such as data
entry, accounting, administrative tasks, and engineering are now being done
cheaply in countries such as India and are exported to the developed countries.
11. How can the benefits of Globalization be shared
better? Explain.
Ans: The benefits of globalization can be shared better in the following
ways:
i)
The government policy
must protect the interest, not only of the rich and powerful, but of all the
people in the country.
ii)
The government can
ensure that labour laws are properly implemented and workers get their rights.
iii)
It can support small
producers to improve their performance till they become strong enough to
compete.
iv)
It can use trade and
investment barriers.
v)
It can negotiate at the
WTO for fairer rules.
12. Explain the various ways in which Multinational
Corporations set up or control production in other countries?
Or
Explain the various ways in which Multi National Corporations set up or
control production in other countries?
Ans: The multinational corporations setup or control production in other
countries in the following ways:
i)
MNCs are spreading
their production and interacting with local producers in various countries
across the globe.
ii)
By setting up
partnerships with local companies.
iii)
By using the local
companies for supply.
iv)
By closely competing
with the local companies or buying them.
13. “Foreign trade
results in connecting the markets or integration of markets in different
countries”. Explain.
Ans:
a)
Foreign Trade creates
an opportunity for the producers to reach beyond the domestic markets.
b)
For buyers, import of
goods produced in another country is one way of expanding the choice of goods
beyond what is domestically produced.
c)
Choice of goods in the
market rises.
d)
Prices of similar goods
in the two markets tend to become equal.
e)
Producers in the two
countries now closely compete against each other.
14. “Multi-National companies interlink productions across
countries”. Support the statement with three examples.
Ans:
a)
MNCs set up their
production where cheap labour is available .
b)
Where low cost of
production is available.
c)
Foreign investments by
MNCs are rising rapidly.
d)
Providing more and more
goods and services.
e)
Movement of people
between countries.
f)
Investments and
technology are moving between countries.
15. “Globalization and greater competition among producers
both local and foreign has been of advantage to consumers”. Support the
statement with examples.
Ans: Globalization and greater competition among producers
a)
Globalization and
greater competition among producers- both local and foreign producers has been
of advantage to consumers, particularly the well-off sections in the urban
areas.
b)
There is greater choice
before these consumers who now enjoy improved quality and lower prices for
several products.
c)
As a result, these
people today, enjoy much standards of living than was possible earlier.
16. Why did Indian government put barriers to foreign
trade? How was it justified?
Ans:
i)
The Indian Government
after independence had put barriers to foreign trade and foreign investment.
ii)
This was considered
necessary to protect the producers within the country from foreign competition.
iii)
Industries were just
coming up in the 1950s and 1960s.
iv)
Competition from
imports at that stage would not have
allowed these industries to come up.
v)
Thus India allowed
imports of only essential items such as machinery, fertilizers, petroleum etc.
vi)
All developed countries
during the early stages of development have given protection to domestic
producers through a variety of means.
17. How does foreign trade connect the markets of
different countries? Explain with examples?
Or
Explain with an example hoe foreign trade leads to integration of markets
across countries.
Ans:
a)
Through trade, goods
can travel from one market to another.
b)
Choice of goods in
the markets rises and prices become
equal.
c)
Producers compete
closely with each other.
18. Where do MNCs set up their production units? Explain.
Ans:
a)
MNCs set up production
units at such a place where they can produce their goods at a minimum cost.
b)
The place where markets
are closer.
c)
The place where skilled
and unskilled labour is available at low cost.
d)
Other factors of
production are assured.
e)
Government policies are
favourable.
Value Based
Questions
1.
“Information and
Communication technology has played a major role in spreading out production of
services across countries”. Support the statement with suitable examples.
Ans:
a)
Telecommunication
facilities are used to contact and communicate and to access information.
b)
Internet includes
transfer of technology, money and capital across countries.
c)
Speedy transfer of
information technology, money and capital integrate different countries if the
world.
2.
How can Globalization
be made more “fair” so that it benefits all people?
Ans:
i)
The government policy
must protect the interest, not only of the rich and powerful, but of all the
people in the country.
ii)
The government can
ensure that labour laws are properly implemented and workers get their rights.
iii)
It can support small
producers to improve their performance till they become strong enough to
compete.
iv)
It can use trade and
investment barriers.
v)
It can negotiate at the
WTO for fairer rules
vi)
People can also play an
important role in the struggle for fair globalization through massive campaigns
and representation by people’s organizations .
3.
“Globalization has been
advantageous to consumers as well as to producers”. Support the statement with
suitable examples.
Ans: Globalization has been advantage to producer in the following ways:
i)
The producers now have
access to the international markets.
ii)
Globalization has also
enabled free movement of capital.
iii)
Globalization has
enabled access to foreign investment in capital and technology.
Globalization has been advantageous to consumers in the following ways:
a)
Globalization has been
beneficial for consumers, more so rich people
in the urban
areas.
b)
There is greater choice
before these consumers who now enjoyed improved quality at lower price.
c)
A large number of jobs
have been created in various industries like cell phone, automobile,
electronics etc.
