Social Science (087) — AI-generated practice question

MNCs possess enormous financial strength — in fact, many top MNCs have wealth exceeding the entire budgets of developing country governments. This gives them great power and influence.

Over local producers: MNCs easily buy up local companies. For example, Cargill Foods (USA) bought Parakh Foods in India, taking over its four oil refineries and marketing network, becoming India's largest edible oil producer.

Over governments: To attract MNCs, governments offer concessions like setting up Special Economic Zones (SEZs), tax exemptions for five years, and relaxing labour laws to reduce production costs for foreign companies.

Source: Chapter 4 — Interlinking Production Across Countries; Impact of Globalisation in India

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• The question has two parts: influence over local producers AND governments — address both for full marks.
• The Cargill–Parakh Foods example is directly from the textbook and is the expected example for influence over producers.
• SEZs and flexible labour laws are the textbook examples for government concessions — examiners look for these specifically.
• Avoid vague statements; use the textbook figures and examples (tax exemptions, MNC wealth exceeding government budgets) to score full marks.