Chapter 4

NCERT
Class 10
Economics
Solutions
3. Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials,

Question:

Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials, marketing and information network, (b) improvements and modernisation of technology, (c) timely availability of credit at reasonable interest rates.

(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.

Answer:

(a) All these three things (i) better roads, power, water, raw material, marketing and information system, (ii) improvement and modernization in technology and (iii) timely availability of credit at reasonable rate of interest can lead to small scale By improving the quality of production of the producers and reducing the cost of production, the competitiveness of small scale industries will be increased.

(b) On proper implementation of liberalization policies, multinational companies are willing to invest in all sectors like roads, water, raw material, marketing, information system, technology, key, modernization and banking etc. Their aim is to earn money and by providing these facilities to industrialists they can earn a substantial amount of money.

(c) Government definitely has an important role in providing these facilities. For the development of all these facilities, a huge amount of investment is required, that is, the returns of its investment are delayed. On the one hand, the government can expand these facilities by investing on its own, and on the other hand, by providing financial assistance, it can encourage private investment to expand these facilities.

(d) The government should invite foreign Indians to invest in the country, adopt a liberal policy for investment in these areas and promote the private sector.

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