CBSE Class 10 Social Science Economics Globalization and the Indian Economy Hindi Assignment

Globalization and the Indian Economy Summary Class 10 Social Science

GLOBALIZATION is the process of rapid integration or interconnection between countries.

PRODUCTION ACROSS COUNTRIES:

Trade was the main channel of connecting distant countries before Multinational Corporations (MNCs) replaced it.

A Multinational Corporation(MNC) is a company that owns or controls production in more than one nation.
✔MNCs not only produce the goods and services globally but also sell its finished products globally. The production process is divided into small parts and spread out across the globe. This help in cost cutting.

INTERLINKING PRODUCTION ACROSS COUNTRIES –
✔MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured and government policies are favorable.
✔The money that is spent by MNCs to buy assets such as land, building, machines and other equipment is called foreign investment. Any investment is made with the hope that these assets will earn profits.
✔Sometimes, MNCs set up production jointly with some of the local companies of these countries.
✔The benefits to the local company of such joint production are
⮚ First, MNCs can provide money for additional investments, like buying new machines for faster production.
⮚ Second, MNCs might bring with them the latest technology for production.
✔ Sometimes, MNCs buy up local companies and then expand production.
✔ MNCs in developed countries place orders for production with small producers.

FOREIGN TRADE AND INTEGRATION OF MARKETS –
● Foreign trade allows producers to sell their goods outside their domestic nations.
● It allows producers to compete with producer of another country.
● It also reduces prices of goods and provides more choices to consumers.
● Foreign trade thus results in connecting the markets or integration of markets in different countries.

WHAT IS GLOBALIZATION –
⮚ Globalization is process of rapid integration or interconnection between countries.
⮚ MNCs are playing a major role in the globalization process.
⮚ More land more goods and services, investments and technology are moving between countries. Most regions of the world are in closer
⮚ Besides the movements of goods, services, investments and technology, one more way in which the countries can be connected is the movement of people between countries. Who move in search of better income, better jobs or better education.

FACTORS THAT HAVE ENABLED GLOBALISATION –

Technology:
⮚Rapid improvements in technology for instance, improvements in transportation technology have made much faster delivery of goods across long distances possible at lower costs.
⮚ Information and communication technology has made global transmission of information and communication possible at negligible costs.

Liberalization of foreign trade and investment policy:
⮚ Liberalization is a process of removing barriers or restrictions set by the government. Trade barrier is one such barrier. Governments can use trade barriers to increase or decrease(regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
⮚ With liberalization of trade, businesses are allowed to make decisions freely about the imports, exports and their investments.
⮚ Starting around 1991 in India, the government decided to lift many barriers on foreign trade andforeign investment to a large extent.

WORLD TRADE ORGANISATION –
● It is an international organisation whose aim is to liberalize international trade. It establishes rules regarding international trade, and sees that these rules are obeyed. At present 164 countries of the world are currently members of the WTO.
● Started at the initiative of the developed countries, it establishes rules regarding international trade.
● Though it is supposed to get international trade liberalized, however many developed countries have unfairly retained trade barriers. On the other hand, WTO has forced developing countries to remove all trade barriers.
⮚ For example, farmers in the USA are receiving massive sums of money from the US government to produce and export agricultural produce to other countries, due to which they can sell their produce at abnormally low prices in other countries, adversely impacting the farmers in these destination countries.

IMPACT OF GLOBALIZATION ON INDIA –

Positive impact:
● Increased investment by MNCs in India has led to the prosperous growth of local supplier companies in India.
● Increased competition benefitting Indian companies by inducing higher quality of goods.
● Creation of new opportunities for domestic service sector companies, in newer servicing fields like accounting, data entry, engineering etc.
● Some Indian companies have themselves developed into MNCs. For example, TATA Motors, Infosys, Asian Paints, Sundaram Fastener etc.

Negative impact:
● Small manufacturers and industries such as domestic industries of toys, tiers, vegetable oils etc. are unable to compete with large MNC's which is leading to their shut down.
● Due to increasing competition flexible employment culture have developed. Jobs are now unsecured.
● Most workers, today, are employed in the unorganized sector. Moreover, conditions of work in the organised sector have increasingly come to resemble the unorganised sector.

THE STRUGGLE FOR A FAIR GLOBALISATION –
Not everyone has benefited from globalization equally, people with education and skill have made the most out of it, while leaving many out. Fare globalization would create opportunities for all, and also ensure that the benefits of globalization are shared better.

Methods –
⮚ By using government policies. For example, strong implementation of labour laws, protection to small manufacturing units, use of trade and investment barriers etc.
⮚ Cases of unfair practices and domination of developed countries in WTO can be protested with the help of other developing countries.
⮚ People can also play a major role by being vocal about their concerns and asking for forming favorable policy.