In the field of economics, the term "Globalisation" signifies the integration of a nation's economy with the global economy. It's a multifaceted concept driven by various strategies aimed at fostering greater interdependence and integration worldwide.Globalization involves establishing networks and initiatives that break down social, economic, and geographical barriers. Its goal is to establish connections in a manner that events in one country can be influenced by occurrences happening in distant parts of the world.In simpler terms, Globalisation is the process of interaction and collaboration among individuals, businesses, and governments on a global scale.
CBSE Class 10 Economics Chapter 4, "Globalization and the Indian Economy" is indeed an important chapter in Class 10 Economics, as it offers students a comprehensive understanding of various economic aspects. This chapter lays the foundation for grasping essential economic concepts and terminology. The knowledge gained from studying "Globalization and the Indian Economy" helps students better comprehend the complexities of economics and its relevance to the Indian economy. Additionally, it serves as a valuable resource for students to address any doubts or questions they may have regarding different facets of India's economic landscape.
These large MNCs have tremendous power to determine price,quality, delivery, and labour conditions for these distant producers.
Globalisation has created conditions for increased job opportunities.
Transformation of Markets in recent years :
(i) The advent of globalisation and the policy of liberalisation has opened the market to the world. The economy of our country has rapidly grown with the onset of LPG, i.eLiberalisation, Privatization and Globalization reforms since 1991.
(ii) MNCs play a vital role in the world market and as a result, foreign trade and investment in the country has increased. MNCs are playing a major role in the market by introducing exchange oftechnology between countries.
(iii) Foreign trade affects the integration of domestic markets in different countries.
(iv) Also, globalisation has enabled some large Indian companies to emerge as multinational companies themselves. For example, Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines) aresome Indian companies which are spreading their operations worldwide.
Globalisation has contributed in booming the Indian economy in following ways :
(i) Greater competition among producers resulting from globalisation is a great advantage to consumers as there is wider choice regarding every product before them.
(ii) Due to globalisation, many MNCs have increased their investments in India, this has not only helped in the inflow of capital but also largely helped in employment generation.
(iii) Local companies supplying raw materials to industries that have been set as a result of globalisation, have prospered leaps and bounds.
(iv) Large Indian companies have emerged as multinational companies. This has helped our country to increase our contacts around the world. Globalisation has helped increase our GDP and per capita income, thus making the living standards better across the globe.
Globalisation is a multi-dimensional concept and the following points support it:
(i) Globalisation brings countries together in terms of their political relationships. When countries are trade dependent on each other, it helps to bring better political harmony among them.
(ii) Economically, globalisation has resulted in the flow of commodities, people and capital. Through it, the economies of countries grew to manifolds, also resulting in curbing the economic disparities.
(iii) Another dimension of globalisation is the exchange of ideas and technology.
(iv) Globalisation along with trade of ideas, capital, commodity and people also leads to homogenisation of communities. In this way, it supports the cultural acceptance among heterogeneous communities.
(v) The opening up of new sectors, change in global lifestyle, dominance of mass and social media and mass tourism are also the dimensions of globalisation.
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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.