This page contains the NCERT Economics class 11 chapter 3 Liberalisation, Privatisation and Globalisation: An Appraisal from Unit II Economic Reforms Since 1991. You can find the solutions for the chapter 3 of NCERT class 11 Economics, for the Short Answer Questions, Long Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 11 Economics related topic Liberalisation, Privatisation and Globalisation: An Appraisal question and answers.
EXERCISES
1. Why were reforms introduced in India?
Reforms were introduced in India due to the following reasons:
1.
Economic Challenges:
–
Introduced in response to a balance of payments crisis.
–
Aimed to enhance efficiency and international competitiveness of the economy.
2.
Policy Measures:
–
Stabilisation Measures: Short-term actions for correcting balance of payments and controlling inflation.
–
Structural Reform Measures: Long-term initiatives to improve economic efficiency and global competitiveness.
3.
Liberalisation:
–
Eliminated restrictions, opening up various economic sectors.
–
Introduced comprehensive reform policies in 1991.
4.
Industrial and Financial Sector Reforms: Deregulated industries and reformed financial sectors, including banks and foreign exchange markets.
5.
Trade and Investment Policy Reforms: Liberalised trade and investment to increase international competitiveness and attract foreign investments.
6.
Tax and Foreign Exchange Reforms:
–
Reduced taxes on individual incomes and corporations.
–
Simplified tax systems with the introduction of Goods and Services Tax Act in 2016.
–
Devalued the rupee and moved towards market-determined exchange rates.
7.
Addressing Disparities: Aimed to address inequalities and ensure inclusive growth and development.
2. Why is it necessary to became a member of WTO?
Becoming a member of the World Trade Organisation (WTO) is considered necessary for several reasons as specified below:
1.
Access to Global Markets: WTO membership provides countries with access to the markets of other member countries, facilitating international trade.
2.
Rule-Based Trading System: The WTO operates on a set of established rules, promoting a fair and predictable trading environment.
3.
Dispute Settlement Mechanism: Members have access to a structured process for resolving trade disputes, which helps in protecting their trading rights.
4.
Opportunity for Development: Developing countries, in particular, can benefit from technical assistance and capacity-building programs offered by the WTO.
5.
Influence on Global Trade Policies: Being a member allows countries to have a say in the formulation of global trade policies and standards.
6.
Promotion of Good Governance: The transparency requirements of the WTO encourage good governance and administrative reforms in member countries.
7.
Economic Growth and Job Creation: Open trade policies facilitated by WTO membership can lead to economic growth and job creation.
These points highlight the various advantages and the necessity of becoming a member of the World Trade Organisation.
3. Why did RBI have to change its role from controller to facilitator of financial sector in India?
The Reserve Bank of India (RBI) had to change its role from controller to facilitator of the financial sector in India due to the financial sector reforms introduced in the country. The followin are the various reasons:
1.
Financial Sector Reforms:
–
–
2.
Establishment of Private Banks:
–
The reforms led to the establishment of private sector banks, both Indian and foreign.
–
The foreign investment limit in banks was raised to around 74%.
3.
Autonomy in Banking Operations:
–
Banks fulfilling certain conditions were given the freedom to set up new branches without the approval of the RBI.
–
They were also allowed to rationalise their existing branch networks.
4.
Resource Generation and Managerial Aspects:
–
Banks were permitted to generate resources from both India and abroad.
–
However, certain managerial aspects were retained with the RBI to safeguard the interests of account holders and the nation.
5.
Involvement of Foreign Institutional Investors: Foreign Institutional Investors (FII) such as merchant bankers, mutual funds, and pension funds were allowed to invest in Indian financial markets.
4. How is RBI controlling the commercial banks?
The Reserve Bank of India (RBI) controls the commercial banks in India through various norms and regulations. Here’s how:
1.
Regulatory Norms: The RBI sets various regulatory norms for banks, including the amount of money that banks can keep with themselves.
2.
Interest Rates and Lending: It fixes interest rates and regulates the nature of lending to various sectors.
3.
Branch Expansion and Rationalization:
–
Banks fulfilling certain conditions are given the freedom to set up new branches without the approval of the RBI.
–
They are also allowed to rationalize their existing branch networks.
4.
Resource Generation: Banks are permitted to generate resources from both India and abroad.
5.
Managerial Aspects: While banks have been granted certain freedoms, the RBI retains control over certain managerial aspects to safeguard the interests of account holders and the nation.
6.
Involvement of Foreign Institutional Investors: Foreign Institutional Investors (FII) such as merchant bankers, mutual funds, and pension funds are allowed to invest in Indian financial markets.
5. What do you understand by devaluation of rupee?
Devaluation of the rupee refers to the reduction in the value of the Indian rupee relative to foreign currencies. This is an important aspect of foreign exchange reforms. Here’s what it entails based on the provided passage:
Foreign Exchange Reforms and Devaluation of Rupee:
–
In 1991, as an immediate measure to resolve the balance of payments crisis, the rupee was devalued against foreign currencies.
–
This led to an increase in the inflow of foreign exchange.
–
The devaluation set the tone to free the determination of the rupee value in the foreign exchange market from government control.
–
Now, the exchange rates are more often determined by market forces based on the demand and supply of foreign exchange.
6. Distinguish between the following
(i)
Strategic and Minority sale
(ii)
Bilateral and Multi-lateral trade
(iii)
Tariff and Non-tariff barriers.
(i) Strategic and Minority Sale are distinguished as below:
Aspect
Strategic Sale
Minority Sale
Stake Sold
Significant portion, often more than 50%.
Smaller stake, usually less than 50%.
Control
Often results in a change of management and control.
Does not result in a change of control.
Objective
To strengthen strategic position or enter new markets.
To raise capital without altering operational structure.
Involvement
High level of involvement and commitment from the buyer.
Limited involvement and commitment.
(ii) Bilateral and Multi-lateral Trade are distinguished as below:
Aspect
Bilateral Trade
Multi-lateral Trade
Number of Parties
Involves two countries.
Involves multiple countries.
Agreements
Specific terms and conditions between two countries.
Global rules and agreements facilitated by organizations like WTO.
Focus
On improving trade between the two specific countries.
On establishing global trade rules and reducing trade barriers.
Flexibility
More flexible and can be tailored to specific needs.
Less flexible, adhering to broader international standards.
(iii) Tariff and Non-tariff Barriers are distinguished as below:
Aspect
Tariff Barriers
Non-tariff Barriers
Nature
Taxes imposed on imported goods.
Quotas, embargoes, and other regulatory requirements.
Purpose
To make imported goods more expensive and protect domestic industries.
To restrict the quantity or type of goods that can be imported.
Measurement
Can be easily quantified as it is a tax.
Harder to quantify as it involves various regulations.
Visibility
More transparent and visible to the public.
Less transparent and can be more complex to understand.
7. Why are tariffs imposed?
Tariffs are imposed for various reasons. Some of the reasons why India imposed tariffs are as follows:
1.
Protection of Domestic Industries:
–
Tariffs were used as a tool to protect domestic industries from foreign competition.
–
By keeping tariffs very high, the government aimed to reduce the efficiency and competitiveness of imports, thereby supporting local manufacturers.
2.
Revenue Generation: Tariffs serve as a source of revenue for the government.
3.
Control Over Imports: High tariffs and tight control over imports were part of a regime to regulate and restrict the inflow of foreign goods.
4.
Encouragement of Local Industries: By imposing tariffs, the government aimed to encourage the growth and development of local industries.
8. What is the meaning of quantitative restrictions?
Quantitative restrictions refer to the limits set by a country on the quantity of goods that can be imported or exported. Here’s the meaning based on the provided passage:
Quantitative Restrictions:
–
These are restrictions that were placed on the quantity of goods that could be imported or exported.
–
India followed a regime of quantitative restrictions to protect domestic industries.
–
This involved tight control over imports and maintaining high tariff rates.
–
The trade policy reforms aimed at dismantling these quantitative restrictions, along with reducing tariff rates and removing licensing procedures for imports.
9. Those public sector undertakings which are making profits should be privatised. Do you agree with this view? Why?
No. As per my view, those public sector undertakings which are making profits should be not be privatised. My Arguments Against Privatising Profitable PSUs are as follows:
1.
Stable Revenue Source: Profitable PSUs provide a consistent and reliable source of revenue to the government, which can be crucial for funding public welfare and development projects.
2.
Fulfillment of Social Objectives: Many PSUs are established with specific social objectives, such as serving remote areas, providing essential services, or creating employment opportunities. Privatisation could shift the focus to profit-making, potentially neglecting these social goals.
3.
Control Over Strategic Sectors: Some profitable PSUs operate in strategic or sensitive sectors. Keeping them under government control ensures that national interests and security are prioritized.
4.
Balancing Market Power: In industries where the private sector has significant market power, a profitable PSU can provide a balancing force, ensuring fair competition and preventing monopolies.
5.
Investment in Long-term Projects: PSUs are often more willing to invest in long-term projects that may not yield immediate profits but are beneficial for the country in the long run. Privatisation could lead to a focus on short-term gains.
6.
Stability in Times of Economic Downturn: Profitable PSUs can provide stability and support to the economy during times of recession or economic downturn.
7.
Promoting Research and Development: Some profitable PSUs play a key role in research and development activities, contributing to innovation and technological advancement.
In light of these considerations, it may be beneficial to retain ownership of profitable PSUs, ensuring that they continue to serve the public interest while contributing to the national economy.
10. Do you think outsourcing is good for India? Why are developed countries opposing it?
Yes. I think that outsourcing is considered beneficial for India for several reasons:
1.
Job Creation: It has led to the creation of numerous jobs, particularly in the IT and service sectors, contributing to employment generation.
2.
Economic Growth: The inflow of foreign capital due to outsourcing contributes significantly to India’s GDP and overall economic growth.
3.
Skill Development: Exposure to international standards and practices through outsourcing helps in enhancing the skills and capabilities of the workforce.
4.
Utilization of Talent Pool: Outsourcing enables the utilization of India’s large pool of skilled professionals, providing them with ample opportunities to work on diverse and global projects.
5.
Increase in Foreign Exchange Reserves: The revenue generated from outsourcing adds to the country’s foreign exchange reserves.
6.
Boost to Ancillary Industries: The growth of industries related to outsourcing, such as telecom and office space providers, further contributes to economic development.
Outsourcing has indeed played a pivotal role in India’s economic progress, providing numerous benefits in terms of employment, skill development, and economic growth.
11. India has certain advantages which makes it a favourite outsourcing destination. What are these advantages?
India has become a favorite outsourcing destination due to several advantages, as specified below:
1.
Cost Efficiency: Outsourcing services to India is cost-effective as companies save on operational and labor costs.
2.
Availability of Skilled Manpower: India has a large pool of skilled professionals in various sectors, ensuring that companies can find the expertise they need.
3.
Time Zone Advantage: India’s time zone allows for 24/7 business operations, especially for companies in the West.
4.
High-Quality Services: Indian outsourcing firms maintain high standards of quality and security, ensuring that the services provided meet global standards.
5.
Strong IT Infrastructure: India has a robust IT infrastructure, facilitating seamless outsourcing of IT and IT-enabled services.
6.
Government Support: The Indian government has implemented policies that are favorable for the outsourcing industry, including tax benefits and incentives.
7.
Language Proficiency: A significant portion of the Indian population is proficient in English, reducing language barriers in business communications.
8.
Fast Adaptation to New Technologies: Indian professionals are quick to adapt to new technologies, ensuring that outsourcing services remain up-to-date and competitive.
These advantages contribute to India’s attractiveness as a global outsourcing hub, providing benefits for both the outsourcing companies and the Indian economy.
12. Do you think the navaratna policy of the government helps in improving the performance of public sector undertakings in India? How?
Yes. I think that the navaratna policy of the government helps in improving the performance of public sector undertakings in India. Here’s how:
1.
Enhanced Autonomy: The Navaratna status provides PSUs with greater managerial and operational autonomy, allowing them to take various decisions independently to run the company efficiently.
2.
Encouragement for Profit-Making: The policy is aimed at encouraging PSUs to perform better and generate profits. Greater operational, financial, and managerial autonomy is also granted to profit-making enterprises referred to as Miniratnas.
3.
Facilitation of Global Expansion: The Navaratna status enables PSUs to expand themselves in global markets and raise resources independently from financial markets.
4.
Improvement in Efficiency: With greater autonomy and the ability to make timely decisions, PSUs can improve their efficiency and competitiveness in the market.
5.
Accountability and Professionalism: The policy infuses professionalism and holds the PSUs accountable to all stakeholders, ensuring that quality products and services reach the public at a nominal cost.
6.
Contribution to National Development: Many of the profitable PSUs under the Navaratna category were originally formed with the intention of providing infrastructure, direct employment, and contributing to national development.
In summary, the Navaratna policy plays a significant role in enhancing the performance of PSUs in India by providing them with greater autonomy, encouraging profitability, and ensuring accountability and professionalism. This, in turn, contributes to the national economy and development.
13. What are the major factors responsible for the high growth of the service sector?
The major factors responsible for the high growth of the service sector are as follows:
1.
Liberalization of the Economy: The economic reforms initiated in the 1990s liberalized various sectors, including services, leading to rapid growth and development.
2.
Increase in Foreign Direct Investment (FDI): The service sector, particularly IT and BPO, witnessed a significant increase in FDI, contributing to its growth.
3.
Advancements in Technology: Rapid advancements in information technology and communication have played a crucial role in the growth of the service sector.
4.
Skilled Workforce: India has a large pool of skilled professionals in various service sectors, particularly in IT, finance, and engineering, which has attracted many global companies to outsource their operations.
5.
Cost Advantage: India offers a cost-effective solution for various services, making it a preferred destination for outsourcing.
6.
Government Policies: Supportive government policies, including tax benefits and incentives, have also contributed to the growth of the service sector.
7.
Globalization: The integration of the Indian economy with the global economy has opened up new opportunities for the service sector.
8.
Rise in Consumer Demand: The increase in income levels and consumer demand within the country has also played a significant role in the growth of services like retail, hospitality, and entertainment.
These factors together have contributed to making the service sector a dominant part of the Indian economy, driving growth and creating employment opportunities.
14. Agriculture sector appears to be adversely affected by the reform process. Why?
The agriculture sector appears to be adversely affected by the reform process due to several reasons:
1.
Decline in Public Investment: Since 1991, there has been a decrease in public investment in agriculture, particularly in crucial infrastructure such as irrigation, power, roads, market linkages, and research and extension, which were instrumental in the Green Revolution.
2.
Increase in Cost of Production: The partial removal of fertilizer subsidy has led to an increase in the cost of production, adversely affecting small and marginal farmers.
3.
Policy Changes and International Competition: The agriculture sector has undergone numerous policy changes, including a reduction in import duties on agricultural products, low minimum support prices, and the lifting of quantitative restrictions on agricultural imports. These changes have exposed Indian farmers to increased international competition.
4.
Shift Towards Cash Crops: Export-oriented policy strategies in agriculture have resulted in a shift from the production of food grains for the domestic market to the production of cash crops for the export market. This shift has put pressure on the prices of food grains.
5.
Adverse Effects on Small and Marginal Farmers: The reforms and the associated increase in costs, along with exposure to international competition, have particularly affected small and marginal farmers, leading to distress in the agriculture sector.
In summary, the reform process has led to a decrease in public investment, an increase in the cost of production, exposure to international competition, and a shift in agricultural practices, all of which have adversely affected the agriculture sector in India, particularly the small and marginal farmers.
15. Why has the industrial sector performed poorly in the reform period?
The industrial sector has performed poorly in the reform period due to various reasons:
1.
Decreasing Demand for Industrial Products: There has been a decrease in the demand for industrial products due to factors such as cheaper imports and inadequate investment in infrastructure.
2.
Exposure to International Competition: The reforms compelled developing countries like India to open up their economies, making their industries vulnerable to imported goods. Cheaper imports have replaced the demand for domestic goods, and domestic manufacturers are facing stiff competition from imports.
3.
Inadequate Infrastructure: The infrastructure facilities, including power supply, have remained inadequate due to a lack of investment, hindering the growth of the industrial sector.
4.
Policy Changes: The industrial sector has undergone numerous policy changes, including a reduction in import duties on industrial products, low minimum support prices, and the lifting of quantitative restrictions on industrial imports. These changes have exposed Indian industries to increased international competition.
5.
Disinvestment: The government’s policy of disinvestment in public sector enterprises (PSEs) has also impacted the industrial sector. The assets of PSEs have been undervalued and sold to the private sector, leading to a substantial loss to the government.
6.
Fiscal Policies: Economic reforms have placed limits on the growth of public expenditure, especially in social sectors, which has indirectly affected the industrial sector. The reduction in tax revenues and the scope for raising revenue through custom duties have also impacted the sector negatively.
In summary, the industrial sector’s poor performance during the reform period can be attributed to decreasing demand, exposure to international competition, inadequate infrastructure, policy changes, disinvestment, and restrictive fiscal policies.
16. Discuss economic reforms in India in the light of social justice and welfare.
The economic reforms in India, initiated in the 1990s, have had mixed impacts in terms of social justice and welfare. Here’s an assessment based on the given document:
1.
Growth and Employment: The GDP growth rate has increased in the reform period, but this growth has not translated into sufficient employment opportunities, raising concerns about inclusive growth and equitable distribution of benefits.
2.
Reforms in Agriculture:
–
Agriculture, a sector that employs a large portion of the population, has not benefitted significantly from the reforms.
–
Public investment in agriculture, especially in crucial infrastructure like irrigation, power, roads, and research, has declined.
–
The partial removal of fertilizer subsidy has increased the cost of production, adversely affecting small and marginal farmers.
–
Policy changes, such as reduction in import duties on agricultural products and lifting of quantitative restrictions, have exposed Indian farmers to increased international competition.
–
A shift towards cash crops for export has put pressure on food grain prices, affecting food security and farmers’ livelihoods.
3.
Reforms and Fiscal Policies:
–
Economic reforms have placed limits on the growth of public expenditure, especially in social sectors, impacting welfare programs.
–
Tax reductions and incentives for foreign investment have reduced the government’s revenue, further limiting its ability to spend on social welfare.
4.
Disinvestment:
–
The policy of disinvestment in public sector enterprises has been criticized for undervaluing assets and resulting in a loss to the government.
–
The proceeds from disinvestment have often been used to offset revenue shortages rather than investing in social infrastructure.
5.
Globalization and Inequality:
–
Market-driven globalization has been criticized for widening economic disparities among nations and within the country.
–
The benefits of growth have been concentrated in certain sectors like IT, finance, and entertainment, while vital sectors like agriculture and industry, which provide livelihoods to millions, have been neglected.
6.
Impact on Small Industries: Reforms have adversely affected small industries, as seen in the example of the powerloom textile industry in Andhra Pradesh, where power cuts led to wage cuts and a crisis in livelihoods.
Conclusion: While the economic reforms in India have led to significant growth and development, their impact on social justice and welfare has been mixed. The benefits have not been evenly distributed, leading to increased inequalities and challenges, particularly in agriculture and small industries. There is a need for more inclusive policies and targeted interventions to ensure that the benefits of growth and development reach all sections of society.
SUGGESTED ADDITIONAL ACTIVITIES
1. The table given below shows the GDP growth rate at 2004-05 prices. You have studied about the techniques of presentation of data in your Statistics for Economics course. Draw a time series line graph based on the data given in the table and interpret the same.
Year
GDP Growth Rate (%)
2005-06
9.5
2006-07
9.6
2007-08
9.3
2008-09
6.7
2009-10
8.6
2010-11
8.9
2011-12
6.7
2012-13
5.4
2013-14
6.4
2014-15
7.4
Time Series Line Graph for GDP Growth rate at 2004-05
Interpretation of the Hypothetical Time Series Line Graph:
–
Initial Rise (2005-06 to 2007-08): The GDP growth rate shows an increasing trend, peaking at 9.6% in 2006-07. This period represents a phase of robust economic growth.
–
Sharp Decline (2007-08 to 2008-09): There is a noticeable decline in the growth rate, dropping to 6.7% in 2008-09. This could be attributed to the global financial crisis during that time, which impacted economies worldwide.
–
Recovery and Growth (2008-09 to 2010-11): Post the financial crisis, the economy shows signs of recovery and growth, reaching a growth rate of 8.9% in 2010-11.
–
Declining Phase (2010-11 to 2012-13): After 2010-11, there is a declining trend in the GDP growth rate, reaching as low as 5.4% in 2012-13. This period might have been challenging for the economy, possibly due to domestic or global factors.
–
Gradual Recovery (2012-13 to 2014-15): The economy starts to recover gradually, with the GDP growth rate increasing to 7.4% in 2014-15. This indicates a positive turnaround and growth momentum.
2.
Observe around you — you will find State Electricity Boards (SEBs), BSES and many public and private organisations supplying electricity in different states and union territories. There are private buses on roads alongside the goverment bus services and so on.
(i)
What do you think about this dual system of the co-existence of public and private sectors?
(ii)
What are the merits and demerits of such a dual system? Discuss.
(i) Dual System of Co-existence of Public and Private Sectors:
The dual system, where both public and private sectors co-exist and provide services, is a characteristic feature of a mixed economy like India. This system aims to combine the strengths of both sectors to achieve economic efficiency, social justice, and balanced regional development.
–
Public Sector: It operates in areas where the motive is not just profit, but also social welfare, infrastructure development, and providing essential services to all parts of the society, including the remote and underprivileged areas.
–
Private Sector: It brings in innovation, efficiency, and competitiveness, often leading to better quality services and products.
(ii) Merits and Demerits of the Dual System:
Merits:
–
Competition: The presence of both sectors ensures competition, which can lead to better services and products.
–
Efficiency: Private sector tends to be more efficient and profit-driven, which can lead to cost-effectiveness.
–
Innovation: Private companies often invest more in research and development, leading to innovation.
–
Choice for Consumers: Consumers have more options to choose from, leading to better satisfaction.
Demerits:
–
Inequality: The private sector may only focus on profitable regions, leading to inequality in service distribution.
–
Profit Motive: The private sector’s focus on profit might lead to expensive services, making them inaccessible to the poor.
–
Neglect of Non-profitable Sectors: Essential sectors that are not profitable might be neglected by the private sector.
–
Exploitation: There might be exploitation of resources and employees in the absence of proper regulations.
In conclusion, while the dual system has its advantages in terms of efficiency, innovation, and providing choices to consumers, it is crucial to have regulations in place to ensure that the disadvantages such as inequality, neglect of non-profitable sectors, and exploitation are mitigated.
3. With the help of your parents and grandparents prepare a list of multinational companies that existed in India at the time of independence. Now put a (✔) mark against those which are still growing and a (×) against those which do not exist any more. Are there any companies whose names have changed? Find out the new names, the country of origin, nature of product, logo and prepare charts and display in your class.
At the time of India’s independence in 1947, the presence of multinational companies (MNCs) was limited due to the country’s closed economy and policies favoring domestic industries. However, there were a few MNCs operating in India during that time. Below is a list based on available information and common knowledge, as this information might not be readily available to your parents and grandparents:
1.
Unilever (Hindustan Unilever Limited) – ✔ (Still growing)
–
Country of Origin: United Kingdom/Netherlands
–
Nature of Product: Fast-moving consumer goods (FMCG)
–
Logo: The Unilever logo is a blue ‘U’ shape made up of 25 different icons representing the company’s sub-brands.
2.
Nestle – ✔ (Still growing)
–
Country of Origin: Switzerland
–
Nature of Product: Food and beverages
–
Logo: The Nestle logo features a bird’s nest with a mother bird feeding her chicks, symbolizing care and nourishment.
3.
Colgate-Palmolive – ✔ (Still growing)
–
Country of Origin: United States
–
Nature of Product: Personal care products
–
Logo: The Colgate logo is a simple red and white wordmark, while the Palmolive logo features a green palm leaf.
4.
Siemens – ✔ (Still growing)
–
Country of Origin: Germany
–
Nature of Product: Engineering and electronics
–
Logo: The Siemens logo is a simple wordmark with the company’s name in blue letters.
5.
Philips – ✔ (Still growing)
–
Country of Origin: Netherlands
–
Nature of Product: Electronics
–
Logo: The Philips logo features a shield with stars and waves, along with the company’s name.
6.
GlaxoSmithKline (GSK) – ✔ (Still growing)
–
Country of Origin: United Kingdom
–
Nature of Product: Pharmaceuticals and consumer healthcare
–
Logo: The GSK logo is a simple wordmark with the company’s initials in orange letters.
7.
Coca-Cola – ✔ (Still growing, but had exited India in 1977 and re-entered in 1993)
–
Country of Origin: United States
–
Nature of Product: Beverages
–
Logo: The Coca-Cola logo features the company’s name in its signature cursive script in red.
8.
IBM – ✔ (Still growing, but had exited India in 1978 and re-entered in 1992)
–
Country of Origin: United States
–
Nature of Product: Information technology and consulting
–
Logo: The IBM logo features the company’s initials in blue letters with horizontal stripes.
Please note that the list above is not exhaustive, and the status of these companies might have changed over time. Additionally, the task of finding companies that do not exist anymore or have changed their names might require extensive research. You can use online resources, libraries, or reach out to local business historians for more detailed information. Once you have gathered all the necessary information, you can create charts and display them in your class as per your teacher’s instructions.
4. Give appropriate examples for the following:
Nature of Product
Name of a Foreign Company
Biscuits
Shoes
Computers
Cars
TV and Refrigerators
Stationery
Now, find out if these companies which are mentioned above existed in India before 1991, or came after the New Economic Policy. For this, take the help of your teacher, parents, grandparents and shopkeepers.
Nature of Product
Name of a Foreign Company
Existence Before or After 1991
Biscuits
Nestle
Existed before 1991
Shoes
Nike
Came after 1991
Computers
Dell
Came after 1991
Cars
Hyundai
Came after 1991
TV and Refrigerators
LG
Came after 1991
Stationery
Faber-Castell
Existed before 1991
Explanation and Verification:
1.
Biscuits – Nestle: Nestle, a Swiss multinational company, has been present in India since 1912, initially as the Nestle Anglo-Swiss Condensed Milk Company. They have a wide range of products, including biscuits.
2.
Shoes – Nike: Nike, an American multinational corporation, entered the Indian market in the early 1990s after the New Economic Policy was introduced.
3.
Computers – Dell: Dell, an American multinational computer technology company, started its operations in India in 1996, after the economic reforms.
4.
Cars – Hyundai: Hyundai Motor India Limited, a subsidiary of the South Korean automobile manufacturer Hyundai, was established in 1996, post the economic reforms.
5.
TV and Refrigerators – LG: LG Electronics India Pvt Ltd, a subsidiary of the South Korean multinational LG, started its operations in India in 1997.
6.
Stationery – Faber-Castell: Faber-Castell, a German manufacturer of high-quality art supplies and stationery, has a long history in India, dating back to the 19th century.
To verify the existence of these companies in India before or after 1991, you can engage in discussions with your teacher, parents, grandparents, and local shopkeepers. They can provide firsthand accounts and experiences, especially for companies that have been around for a longer period. Additionally, you can also conduct online research to gather more information and confirm the details.
5. Collect a few relevant newspaper cuttings and from the internet on meetings organised by WTO. Discuss the issues debated in these meetings, and find out how WTO facilitates world trade.
Collecting newspaper cuttings and information from the internet would require you to actively search and compile data from various sources. However, the following details provide a general overview based on common knowledge and past events related to the World Trade Organization (WTO) meetings.
Issues Debated in WTO Meetings:
1.
Trade Liberalization: Discussions on reducing trade barriers and tariffs to promote free trade among member countries.
2.
Agricultural Subsidies: Debates on the fairness and impact of agricultural subsidies provided by developed countries to their farmers.
3.
Intellectual Property Rights: Negotiations on the protection of intellectual property rights and balancing it with the need for access to essential medicines and technology.
4.
Dispute Settlement: Resolving trade disputes between member countries.
5.
E-commerce: Establishing global rules and regulations for e-commerce to ensure fair competition and consumer protection.
6.
Environmental Standards: Integrating environmental considerations into trade policies.
7.
Development Agenda: Addressing the needs and concerns of developing and least-developed countries in the global trading system.
How WTO Facilitates World Trade:
1.
Providing a Negotiating Forum: WTO provides a platform for member countries to negotiate and agree on trade rules and policies.
2.
Setting Trade Rules: It establishes international trade rules to ensure that trade flows as smoothly, predictably, and freely as possible.
3.
Dispute Settlement: WTO has a structured process for resolving trade disputes between member countries, ensuring that trade tensions do not escalate into conflicts.
4.
Monitoring Trade Policies: It monitors the trade policies of member countries to ensure transparency and adherence to WTO agreements.
5.
Technical Assistance and Training: WTO provides technical assistance and training to developing countries to help them implement WTO agreements and participate effectively in the global trading system.
6.
Enhancing Cooperation: It fosters cooperation between different countries and international organizations involved in global trade.
To get specific details and the latest updates on WTO meetings, you would need to refer to newspapers, official WTO releases, and reliable news websites. After collecting the information, you can discuss and analyze the issues debated in these meetings and understand in depth how WTO facilitates world trade.
6. Was it necessary for India to introduce economic reforms at the behest of World Bank and International Monetary Fund? Was there no alternative for the government to solve the balance of payments crisis? Discuss in the classroom.
The necessity for India to introduce economic reforms at the behest of the World Bank and International Monetary Fund (IMF) in 1991 was a subject of significant debate. Here are some points that can be discussed in the classroom to understand different perspectives:
Points Supporting the Necessity of Reforms:
1.
Severe Economic Crisis: India was facing a severe economic crisis, with dwindling foreign exchange reserves, a high fiscal deficit, and a balance of payments crisis. The situation was so dire that India had to airlift its gold reserves to secure a loan from the IMF.
2.
Conditionality for Financial Assistance: The World Bank and IMF provided financial assistance to India, but it came with the conditionality of implementing structural economic reforms. These reforms were aimed at stabilizing the economy and promoting sustainable growth.
3.
Opening Up the Economy: The reforms led to the liberalization, privatization, and globalization of the Indian economy, making it more open and competitive.
4.
Attracting Foreign Investment: The reforms were crucial in attracting foreign direct investment (FDI) and foreign institutional investment (FII), which were vital for boosting the economy.
Points Against the Necessity of Reforms:
1.
Loss of Economic Sovereignty: Critics argue that by accepting the conditions laid down by the World Bank and IMF, India compromised its economic sovereignty.
2.
Adverse Impact on Vulnerable Sections: The structural adjustment programs had adverse impacts on the vulnerable sections of society, leading to increased inequality and social unrest.
3.
Alternative Solutions: Some believe that India could have explored alternative solutions to solve the balance of payments crisis, such as boosting exports, curbing non-essential imports, or seeking financial help from friendly countries.
4.
Rushed Implementation: The reforms were implemented rapidly, and critics argue that a more gradual and calibrated approach could have been more beneficial.
Conclusion: The necessity of introducing economic reforms at the behest of the World Bank and IMF in 1991 remains a topic of debate. While the reforms helped in stabilizing the economy and promoting growth, they also had social and economic costs. The discussion can lead to a deeper understanding of the complexities involved in economic decision-making and the trade-offs that policymakers often have to make.
In the classroom discussion, students can be encouraged to explore different perspectives, analyze the short-term and long-term impacts of the reforms, and contemplate alternative strategies that could have been adopted.
