Q1. [3]
Examine the steps taken by the Central and State governments to attract foreign companies to invest in India.
Previously asked in CBSE board exam
2022 32/3/1 Q6 (b)
Generated by claude-sonnet-4-6 · 2026-06-15 06:58 · grounding rag
Model Answer
The Central and State governments have taken the following steps to attract foreign investment:
- Special Economic Zones (SEZs): Industrial zones called SEZs are being set up with world-class facilities like electricity, water, roads, transport, storage, and educational facilities. Companies setting up units in SEZs are exempt from paying taxes for an initial period of five years.
- Flexible Labour Laws: The government has allowed companies to relax labour laws — firms can hire workers on short-term, flexible contracts instead of regular employment, reducing labour costs to attract foreign companies.
Source: Globalisation and the Indian Economy, Chapter 4 — Steps to Attract Foreign Investment
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Explanation
- This is a direct textbook question. Examiners expect two clear points: SEZs (with details) and flexible labour laws.
- Mention the tax exemption for 5 years — it's a specific detail that earns marks.
- Avoid writing vague points like "government made policies." Be specific.
- 3 marks = ~2 developed points + brief elaboration each. No need for an introduction.
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