NCERT Solutions for Class 10 Economics Chapter 4 - Globalisation and the Indian Economy

This chapter discusses the Globalisation of the Indian Economy through Multinational Companies or MNCs. MNC is an international organisation that has its production spread over more than one country. MNCs often spread their production in other countries by adopting some ways. Sometimes, MNCs set up a joint production with some native companies of that particular country. The most common method of MNCs to spread production is buying up a local company. Another way to spread production internationally is to place orders to that country’s small producers. Along with it, MNCs also have some other advantages.

MNCs provide the money for investment in the developed and underdeveloped countries, thereby resolving the problem of lack of capital. They help in the unification of the world market. They facilitate the free flow of goods and services across the world. They always target underdeveloped countries for production. They also extensively use their natural resources to earn maximum profit. It results in the environmental degradation of that country.

They pay their employees more wages giving rise to economic inequality. They further choose to set up their enterprises in urban areas, thereby giving rise to the uneven development of various regions. It is also harmful to the democracy of that country as these MNCs can affect the elections of a country easily by financing the leaders. Thus, a leader cannot make a decision against them. These MNCs also sideline the local industries by their huge size. They also exploit the small producers by fixing the prices according to their own demand.

Globalisation is the process of free interaction of different economics all over the world. WTO stands for World Trade organization. It is an international organization which is made to make the World Trade more fair and free. However, the arrival of MNCs has failed to eradicate poverty from society. It has also destroyed many native enterprises of different nations. Hence, it is mandatory for the government to negotiate at the WTO for it. It must also adopt some policies to restrict these MNCs from eliminating native producers.