Students should read Chapter 4 Globalisation and the Indian Economy Class 10 Social Science Notes provided below. These notes have been prepared based on the latest syllabus and books issued by NCERT, CBSE and KVS. These important revision notes will be really useful for students to understand the important topics given in the chapter Globalisation and the Indian Economy in Class 10 Social Science. We have provided class 10 Social Science notes for all chapters.

Revision Notes Chapter 4 Globalisation and the Indian Economy Class 10 Social Science

Chapter 4 Globalisation and the Indian Economy is an important chapter in Class 10 Social Science. The following notes will help you to understand and easily learn all important points to help you score more marks.

PRODUCTION ACROSS COUNTRIES:

1. Until the middle of the twentieth century, production was largely organized within countries.
2. Colonies such as India export the raw materials and food stuff and imported finished goods.
3. Trade was the main channel connecting distant countries. This was done before large companies called multinational corporation (MNCs) emerged on the scene.
4. An MNC is a company that owns or controls production in more than one nation.
5. MNCs set up offices and factories for production in regions where they can get cheap labour and other resources.
6. MNCs are not only selling its finished products globally but more important, the goods and services are produced globally.
7. As a result, production is organized in increasingly complex ways.

INTERLINKING PRODUCTION ACROSS COUNTRIES:

1. In general, 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 factories of
production is assured.
2. The money that is spent to buy assets such as land, building, machines and other equipment is called investment. The investment made by the MNCs is called foreign investment.
3. The benefit to the local company of such joint production is two-fold.
(i) MNCs can provide money for additional investments, like buying new machines for faster production.
(ii) MNCs might bring with them the latest technology for production.
4. But the most common route for MNC investments is to buy up local companies and then to expand production.
5. Many of the top MNCs have wealth exceeding the entire budget of the developing country government.
6. We see that there are a variety of ways in which the MNCs are spreading their production and interacting with local producers in various countries across the globe.
7. MNCs are exerting a strong influence on production at these distant locations.
8. As a result, production in these widely dispersed locations is getting interlinked.

FOREIGN TRADE AND INTEGRATION OF MARKETS:

1. Foreign trade creates an opportunity for the producers to reach beyond the domestic markets i.e., markets of their own countries.
2. For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.
3. In general, with the opening of trade, goods travel from one market to another.
4. Foreign trade thus results in connecting the markets or integration of markets in different countries.

WHAT IS GLOBALISATION?

1. A large part of the foreign trade is also controlled by MNCs.
2. A result of greater foreign trade has been greater foreign trade has been greater integration of production and markets across countries.
3. Globalization is this process of rapid integration or interconnection between countries.
4. MNCs are playing a major role in the globalization process.
5. More and more goods and services, investments and technology are moving between countries.

FACTORIES THAT HAVE ENABLED GLOBALISATION:

1. Rapid improvement in technology has been on a major factor that has stimulated the globalization process.
2. For instances, the past 50 years have seen several improvements in transportation technology.
3. Even more remarkable have been the development of information and communication technology.
4. Technologies in the areas of telecommunications, computers, and internet have been Download more materials in free at changing rapidly.

Liberalization of foreign trade and foreign investment policy:

1. Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up.
2. The government can use trade barriers to increase or decrease foreign trade and to decide what kind of goods and how much of each, should come into the country.
3. The Indian government, after Independence, had put barriers to foreign investment.
4. This was considered necessary to protect the producers within the country from foreign competition.
5. Barriers to foreign trade and foreign investment were removed to a large extent.
6. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.
7. Removing barriers or restriction set by the government is what is known as liberalization.
8. The government imposes much less restriction than before and is therefore said to be more liberal.

WORLD TRADE ORGANISATION:

1. We have seen that the liberalization of foreign trade and investment in India was supported by some very powerful international organization.
2. These organizations say that all barriers to foreign trade and investment that are harmful.
There should be no barriers.
3. World Trade Organization (WTO) is one such organization whose aim is to liberalize international trade.
4. Though WTO is supposed to allow a free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers.
5. On the other hand, WTO rules have forced the developing countries to remove the trade barriers. 

IMPACT OF GLOBALISATION IN INDIA:

1. In the last twenty years, globalization of the Indian economy has come a long way.
2. 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.
3. As a result, these people today, enjoy much higher standards of living than was possible earlier.
4. MNCs have increased their investments in India over the past 20 years, which means investing in India has been beneficial for them.
5. Several of the top Indian companies have been able to benefit from the increased competition.
6. Moreover, globalization has enabled some large Indian companies to emerge as multinationals themselves!
7. Globalization has also created new opportunities for companies providing services, particularly those involving IT.

THE STRUGGLE FOR A FAIR GLOBALISATION:

1. People with education skill and wealth have made the best use of new opportunities.
2. On the other hand, there are many people who have not shared the benefits.
3. Fair globalization would create opportunities for all and also ensure that the benefits of globalization are shared better.
4. The government can play a major role in making this possible.
5. Its policies must protect the interests, not only of rich and the powerful but all the people in the country.
6. It can support small producers to improve their performance till the time they become strong enough to compete.
7. If necessary, the government can use trade and barriers.
8. In the past few years, massive campaigns and representatives by people’s organizations have influenced important decisions relating to trade and investments at the WTO.
9. This has demonstrated that people also can play an important role in the struggle for fair globalization.

Objective Type Questions

Question. The most common route for MNC investment is :
(a) Set up production jointly with some of the local companies of these countries.
(b) To buy up local companies and then to expand production.
(c) Place orders for production with small producers then sell these under their own brand names to the customers.
(d) All of the above
Answer : (b) To buy up local companies and then to expand production.

Question. Removing barriers or restrictions set by the government is known as :
(a) privatisation
(b) globalisation
(c) liberalisation
(d) socialisation
Answer : (b) globalisation

Question. Which one of the following was the main aim of World Trade Organisation?
(a) To promote trade in poor countries.
(b) To promote trade in rich countries.
(c) To liberalise international trade.
(d) None of the above.
Answer : (c) To liberalise international trade.

Question. “MNCs keep in mind certain factors before setting up production”. Identify the incorrect option from the choices given below
(a) Availability of cheap skilled and unskilled labour
(b) Proximity to markets
(c) Presence of a large number of local competitors
(d) Favourable policy of the government.
Answer : (c) Presence of a large number of local competitors

Fill in the blanks-

Question. __________ is the process of rapid integration or interconnection between countries.
Answer : Globalisation

Question. Removing barriers or restrictions set by the government is known as __________
Answer : Liberalisation

Question. ________ has played a major role in spreading out production of services across countries.
Answer : Information and communication Technology (IT)

Question. Governments can use ________. to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
Answer : Trade barriers

Question. Chinese toys are more popular in the Indian markets because of the ________ and ______.
Answer : Cheaper prices and new designs

Question. The aim of ________ is to liberalise international trade.
Answer : World Trade Organisation (WTO)

Question. __________ an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world.
Answer : Ford motors

Assertion – Reason Type Questions

Question. Assertion (A) : The aim of WTO is to liberalise international trade and it started at the initiative of the developing countries.
Reason (R) : Nearly 160 countries of the world are currently members of the WTO (as on June 2014).
Options:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (d) A is false but R is true.

Question. Assertion (A) : Large MNCs in the garment industry in Europe and America order their products from Indian exporters.
Reason (R) : These large MNCs with worldwide network look for the costliest goods in order to maximise their profits.
Options:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (c) A is true but R is false.

Question. Assertion (A) : Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai.
Reason (R) : This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks.
Options:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (a) Both A and R are true, and R is the correct explanation of A.

Question. Assertion (A) : In general, MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs.
Reason (R) : At times, MNCs set up production jointly with some of the local companies of these countries.
Options:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (b) Both A and R are true, but R is not the correct explanation of A.

Question. Assertion (A) : Because of the cheaper prices and new designs, Chinese toys become more popular in the Indian markets.
Reason(R) : Within a year, 70 to 80 percent of the toy shops have replaced Indian toys with Chinese toys.
Options:
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (a) Both A and R are true, and R is the correct explanation of A.

VERY SHORT ANSWER QUESTIONS

Question. Why had the Indian Government put barriers to foreign trade and foreign investment after independence? State any two reason.
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. Why had the Indian Government put barriers to foreign trade and foreign investment after independence? State any one reason.
Answer : The Indian government after independence had put barriers to foreign trade and investment.
• This was done to protect the producers within the country from foreign competition.
• To protect the Indian economy from foreign infiltration in industries affecting the economic growth of the country as planned.

Question. Why is ‘tax’ on imports known as a trade barrier?
Answer : Tax on imports is known as a trade barrier because it increases the price of imported commodities. It is called a barrier because some restriction has been set up.

Question. Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources?
Answer : MNCs set up offices and factories for products in regions where they can get cheap labour and other resources so that—
• the cost of production is low
• the MNCs can earn greater profits.

Question. Explain ‘what is investment? Give a few examples of investment.
Answer : Investment is buying of an asset in the form of a factory, a machine, land and building, etc. (Physical assets) or shares (monetary assets) for the purpose of making or sharing profits of the enterprises concerned.
Common investments are: buying land, factories, machines for faster production, buying small local companies to expand production, cheap labour, skilled engineers, IT personnel, etc.

SHORT ANSWER QUESTIONS

Question. How did our markets get transformed before emerging MNCs?
OR
How was the trade the main channel for connecting different countries until the middle of the twentieth century?
Answer : Until the middle of the twentieth century, production was largely organised within countries. What crossed the boundaries of these countries were raw materials, food stuff and finished products. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries.

Question. What is WTO? What is its main aim and also mention one of its limitation?
Answer : World Trade Organisation an International Organisation that dealing with rules of international trade and making trade between countries should be trade.
Its main aim is to liberalise international trade.
Limitation: Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers.

Question. What are the factors that MNCs take into account before setting up a factory in different countries?
Answer : • Availability of cheap labour.
• Availability of raw materials and close to the markets.
• Policy of the government that protect the interest of MNCs.

Question. How the globalisation and greater competition among producers – both local and foreign producers has been advantage to consumers?
Answer : a) There is greater choice before these consumers.
b) The quality of the products have improved and the customers get the products at lower prices.
c) People enjoy higher standard of living

Question. What were the reasons putting barriers to foreign trade and foreign investment by the government of India after Independence?
Answer : To protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up. India allowed imports of only essential items such as machinery, fertilisers, petroleum etc.

Question. What do you understand by globalisation? Explain in your own words.
Answer : Globalisation means integrating an economy with the world economy. As a result of globalisation, the different countries of the world become economically interdependent on each other.
It is the process by which whole world becomes a single market.
It is the process of rapid integration or interconnection between countries through foreign trade and foreign investments.

LONG ANSWER QUESTIONS

Question. Mention the working process of Multi National Corporations.
Answer : a) A MNC is a company that owns or controls production in more than one nation.
b) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources.
c) This is done so that the cost of production is low and the MNCs can earn greater profits.
d) MNC is not only selling its finished products globally, but more important, the goods and services are produced globally.
e) The production process is divided into small parts and spread out across the globe.

Question. What is fair globalisation? What measures can be taken by the Govt. of India to make globalisation more fair?
Answer : Fair globalisation means creating equal opportunities for all and also ensuring that the benefits of globalisation are shared in a better way.
The government can play a major role in making this possible. Its policies must protect the interests, not only of the rich and the powerful, but all the people in the country.
It can ensure that labour laws are properly implemented and the workers get their rights.
It can support small producers to improve their performance till the time they become strong enough to compete.
If necessary, the government can use trade and investment barriers. It can negotiate at the WTO for ‘fairer rules’.
It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.

Question. Describe any five strategies adopted by the MNCs to earn more and more profit.
Answer : a) MNC is not only selling its finished products globally, but more important, the goods and services are produced globally.
b) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.
c) MNCs set up production where it is close to the markets.
d) MNCs look for government policies that look after their interests to earn more profits.
e) Many of the top MNCs have wealth exceeding the entire budgets of the developing country governments. With such enormous wealth, MNCs have tremendous power to determine price, quality, delivery, and labour conditions.

Question. How has information and communication technology increased the pace of globalisation? Explain.
Answer : Information and communication technology increased the pace of globalisation. Information and communication technology (IT) has played a major role in spreading out production of services.
In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly.
Telecommunication facilities (tele- graph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices.
Computers have now entered almost every field of activity. You might have also ventured into the amazing world of internet, where you can obtain and share information on almost anything we want to know.
IT has created various new opportunities

Case Study

Question. Read the extract given below and answer the questions that follows:

Having assured themselves of these conditions, MNCs set up factories and offices for production. 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. Any investment is made with the hope that these assets will earn profits.
At times, MNCs set up production jointly with some of the local companies of these countries. The benefit to the local company of such joint production is two-fold. 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.
But the most common route for MNC investments is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so. To take an example, Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as Parakh Foods. Parakh Foods had built a large marketing network in various parts of India, where its brand was well-reputed. Also, Parakh Foods had four oil refineries, whose control has now shifted to Cargill. Cargill is now the largest producer of edible oil in India, with a capacity to make 5 million pouches daily!
There’s another way in which MNCs control production. Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world.

Question. At times, MNCs set up production jointly with some of the local companies and the benefit to the local company is:
(a) MNCs can provide money for additional investments.
(b) MNCs might bring with them the latest technology for production.
(c) Both (a) and (b)
(d) None of the above.
Answer : (c) Both (a) and (b)

Question. Investments by MNCs are made surely for:
(a) Development of nation.
(b) To generate employment for local youth.
(c) For profit.
(d) All of the above
Answer : (d) All of the above

Question. The most common route for MNC investments is:
(a) Set up production jointly with some of the local companies of these countries.
(b) To buy up local companies and then to expand production.
(c) Large MNCs in developed countries place orders for production with small producers.
(d) All of the above
Answer : (b) To buy up local companies and then to expand production.

Question. Investment means:
(a) Money to buy equipment.
(b) Money to buy land.
(c) Money to buy buildings.
(d) Money to buy assets.
(e) All of the above
Answer : (e) All of the above

Question. Name the largest producer of edible in India.
(a) Parakh foods
(b) Kargil foods
(c) McCain Foods
(d) Kohinoor Foods
Answer : (b) Kargil foods