Page 111 - Understanding Economics for Class 10

(i) Can you explain how these three things would help Indian producers?
(ii) Do you think MNCs will be interested in investing in these? Why?
(iii) Do you think the government has a role in making these facilities available? Why?
(iv) Can you think of any other step that the government could take? Discuss.
Goyal Brothers Prakashan
Ans. (i) These three things would definitely help Indian producers.
(a) Better infrastructure will help the producers to complete their production on time
and make delivery on time
(b) Improvement and modernization of Technology will enable the producers to
produce products of better quality and at a reasonable rate.
(c) Timely availability of credit at reasonable interest rates will help them in running
their production smoothly.
All these things will enable producers to compete in the world market.
(ii) MNCs will not be interested in investing in these because Indian producers will start
competing with them in the market and can capture their market share.
(iii) yes, the government has an important role in making these facilities available.
It is the social responsibility of the government to provide basic infrastructure and
credit at low interest rate. Government should also keep a check on the corruption
in offices.
(iv) Government should keep a check that entrepreneurs are not being harassed. It can
use trade barriers to protect domestic producers from competition. It can also support
producers by giving them some kind of tax exemptions.

competition and uncertain employment
 Lives of workers have substantially changed due to Globalisation and the pressure of
competition.
 Workers’ jobs are no longer secure, because of the growing competition, these days most
employers prefer to employ workers ‘flexibly’.
Let us take the example of garment export industry in India to see how the workers have to
bear this pressure of competition.
 In Europe and America, large MNCs in the garment industry order their products from
Indian exporters. In order to maximise their profits, these large MNCs look for the cheapest
goods available with their worldwide network.
 Indian garment exporters try hard to cut their own costs so that they can get big orders
from MNCs.
 In order to do so exporters try to cut labour costs because cost of raw materials cannot
be reduced.
 To cut down costs, labour is employed on temporary basis so that employers do not have
to pay workers for the whole year whereas earlier, they used to employ workers on a
permanent basis.
 During the peak season, workers also have to work for long and work night shifts on a
regular basis. Their working hours have increased but their wages are low. Workers are
forced to work overtime to make both ends meet.
 MNCs has started making huge profits due to the increased competition among the
garment exporters, but workers are denied their fair share of benefits brought about
by globalisation.

Economics Class X E-97