Class 10 Social Science Notes — Chapter 20: Globalisation and the Indian Economy
Integration of economies through trade, capital and technology; India after 1991.
Detailed NCERT notes
- Globalisation = rapid integration of countries through movement of goods, services, capital, technology and (to some extent) people.
- Key drivers: technology (transport, IT, containers), MNCs, government policies (liberalisation), free trade agreements.
- MNCs (multinational corporations) set up production across countries to reduce cost, tap markets and access resources — via FDI, joint ventures, and outsourcing.
- India's economic policies pre-1991: 'protection' — tariffs, quotas, licensing (License Raj) to shield domestic industry.
- 1991 reforms (LPG — Liberalisation, Privatisation, Globalisation): dismantled licensing, reduced tariffs, opened economy to foreign investment, exchange rate reforms. Triggered by the Balance of Payments crisis.
- Impact on Indian economy:
- Positive — greater choice for consumers, improved quality, new jobs in IT/BPO, rising exports, entrepreneurship, foreign investment inflow.
- Negative — competition hurt small manufacturers, contract-based labour with fewer rights, cheaper imports affected agriculture, urban-rural gap widened.
- World Trade Organization (WTO, 1995): sets rules for global trade; developing countries argue rules favour developed nations.
- Fair globalisation demands: safety nets for workers, protection for small producers, better labour laws, environmental standards, WTO reform, technology transfer.
- Role of government: infrastructure, education, social security, regulation of MNCs, protection of small businesses.
Formulas & key results
Mind map
- MNCs and foreign trade → globalisation
- Enabling factors: technology, policy, MNCs
- LPG 1991 reforms
- Impact + fair globalisation
Tricks & shortcuts
- LPG = Liberalisation + Privatisation + Globalisation (1991).
- WTO founded 1995.
Common mistakes to avoid
- Thinking globalisation = only benefits.
- Confusing MNCs with foreign trade — MNCs actively invest, not just trade.
Competency-based questions & answers
- Q. How can globalisation be made fairer?A. Government safeguards for small producers, better labour rights, environmental norms, fair trade practices, WTO reform, and investment in skills for workers.
- Q. Why did India adopt LPG reforms in 1991?A. A balance-of-payments crisis, high fiscal deficit and inefficient License Raj led to reforms opening the economy to competition, foreign investment and market forces.