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CHAPTER - I, , BUSINESS, TRADE AND COMMERCE, Section-I, Nature and Concept of Business, Human activities can be classified into two:1.Economic Activities, 2.Non Economic Activities, 1. Economic Activities, Economic activities are those activities which are undertaken by, people to earn money. The primary objective behind every, economic activity is to earn money. Economic activities may be, business, profession or employment.

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Examples for Economic Activities, A worker working in a factory, A teacher teaching in a school, A doctor runs his-own clinic, Practice of a lawyer, Farmer cultivates his land, Activities of a business man

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Non Economic Activities, Non economic activities are those activities which are undertaken, by people without the intention of earning money. They are done, for getting psychological satisfaction or as a hobby., Examples:House wife cooking food for her family, Boy helping an old man to cross the road, Gardening as a hobby, Playing Football

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Human Activities, , Economic Activities, , Business, , Profession, , Non Economic Activities, , Employment, Religious, , Patriotic, , Social

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Business, Business is an economic activity carried out regularly, with the objective of earning profit. Business carries an, element of risk and uncertainty. It is concerned with, production, purchase and sale of goods or supply of, services to earn profit. Manufacturing, trading, mining,, banking,, activities., , transport,, , insurance, , etc., , are, , business

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Features of Business, , , An Economic Activity, , , , Production and purchase of goods and, services, , , , Sale or exchange of goods and services, , , , Regularity in dealings, , , , Profit motive, , , , Element of risk, , , , Uncertainty of return, , , , Creation of utility

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Profession, Profession is an occupation, in which application of, special knowledge and skill of a person is necessary. It, involves rendering of personal services of a special and, expert nature. They get fee as return for their service., Services of doctor, lawyers, charted accountants etc., are example for profession.

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Employment, Employment refers to an occupation in which, people work for others regularly and get salary or, wage in return.

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Difference between Business, Profession and Employment, Basis, of, Difference, , Business, , Profession, , Commencement A business can A person can engage, start at any time in his profession only, after, getting, membership, of, a, professional body., , Employment, , An employee can work in, an office only after getting, appointment letter from, his employer., , Nature of work Production or Rendering, of Performing the works, purchase and personalized expert assigned, by, the, sale of goods service, employer, and services, Qualification, , No. minimum, qualification is, required, in, business, , In, profession In, employment, specialized, qualification is decided, knowledge, and by the employer., training is required

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Basis of, Difference, , Business, , Profession, , Employment, , Reward, Risk, , Profit, High risk in, business, , Transfer of, ownership, , We can sell the, ownership of a, business to another, person, In business, capital, investment is, needed, , Fees, Fees is generally, regular, so there is, very little risk, It is not possible in, profession, , Wage or salary, Salary is fixed, and regular, so, there is no risk, It is not possible, in employment., , Capital, Investment, , Code, Conduct, , In profession, limited capital, investment is, needed for, establishment of, office, of In business there In, profession, is no code of professional code, conduct to be of conduct to be, followed, followed., , In employment, no Capital, investment is, needed, , Norms, of, behavior, laid, down by the, employer are to

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Classification of Business Activities, , On the basis of function we can classify business activities into, two:-, , I.Industry, II.Commerce, I.Industry, It is that part of business activities which is concerned with, production of goods and extraction of materials. It includes, business activities like raising and processing natural, resources, manufacturing or assembling goods, construction of, buildings etc. Industries can be classified into three broad, categories namely primary, secondary and tertiary.

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1.Primary Industries, It includes all those business activities, which are concerned with, extraction of natural resources, reproduction and development of, living organisms, plants etc. Primary industries can be classified into, two namely extractive industries and genetic industries., 1 (A) Extractive Industry, Extractive industries extract or draw out products from natural, sources like soil, water, air etc. It extract timber from forest, fish, from sea, coal and iron are from soil etc. Primary industries supply, basic raw materials to manufacturing industries., Eg. Mining, hunting, fishing from natural sources, fruit gathering

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1 (B) Genetic Industries, The industries which are concerned with, reproduction or multiplication of certain species of, plants or animals to earn profits from their sale are, known as genetic industries., Eg. Agriculture,poultry farming,Agriculture nursery,, breeding, pisciculture (fish farming), forestry etc., , cattle

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2.Secondary Industries, These industries engaged in the process of, manufacturing goods or constructing building roads etc., Secondary Industries use the raw materials supplied by, the primary industry. Secondary industries can be further, subdivided into two:A) Manufacturing Industry, B) Construction Industry

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2(A) Manufacturing Industry, Manufacturing Industries are engaged in the process of, converting raw materials into finished good and create form, utilities. They convert cotton into textile, timber into furniture,, iron ore into steel etc. On the basis of methods of operation, used for production, we can classify manufacturing, industries into four categories., , a. Analytical industry, b. Synthetic industry, c. Processing industry, d. Assembling industry

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2 (B) Construction Industry, These industries are engaged in the construction of buildings,, dams, bridges, roads, canals etc. The raw materials required for, these industries are supplied by the manufacturing industries, and extractive industries. Construction industries outputs are, always immovable.

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3. Tertiary Industry, Tertiary industries are providing support service to primary, and secondary industries. Tertiary Industries consists of, banking, Insurance, advertising, communication etc.

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Industry, , Primary, , Extractive, , Genetic, , Secondary, , Manufacturing, , Tertiary, , Construction, , Business=Industry + Commerce, Commerce=Trade + Aids to Trade

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II. Commerce, Commerce includes trade and aids to trade. Buying and selling, of goods is termed as trade. But there are a lot of activities that, facilitates the process of trade. These are called aids to trade, (helpers to trade).Aids to trade include banking, insurance,, communication, advertisement and warehousing.

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Trade, Trade is the central activity (nucleus) of commerce. Trade refers, to buying and selling of goods and services with the objective of, earning profit. It helps the movement of goods from the producer, to the ultimate consumers. Traders are the connecting link, between producer and consumer. In the absence of traders,, producers will have to go in search of consumers. Trade may be, of Internal Trade or External Trade.

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Aids To Trade, These are services which help in removing various hindrances, which arise in the process of trade. The important aids to trade, are transportation, communication, banking, insurance,, warehousing, and advertising., , Transportation,  Communication,  Banking,  Insurance,  Warehousing,  Advertisement,  Insurance, 

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Trade, , Home Trade, , Wholesale Trade, , Foreign Trade, , Retail Trade, , Import, , Export, , Entrepot

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Objectives of Business, Economic Objectives, , 1.Earning Profit, 2.Innovation, 3.Creation of Customers, 4.Productivity, 5.Workers performance, and attitude, , Social Objectives, , 1.Supply Quality goods at, Reasonable price, 2.Welfare of employees, 3.Community Service

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Role of Profit in Business, Securing profit is the basic requirement of a business. Profit, making is essential in business due to the following reasons., , 1.Profit is a source of Income, 2.Profit is essential for growth and expansion, 3.Profit is the index of business performance, 4.Profit Increases the efficiency of business, 5.Profit enhances prestige

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Business Risks, Risk means the possibility of loss. In business risk is unavoidable., Business enterprises usually face two types of risks. They are:1.Speculative risk, Speculative risk involves both the possibility of gain as well as, loss. It may arise due to change in demand, change in the price, of raw material etc. it may increase or decrease., Business Risk, Speculative, , Pure, , 2. Pure Risk, Pure risk involves only the possibility of loss or no loss. The, chance of fire, theft, etc. are examples of pure risk.

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Nature of Business Risk, ➢, , Business risk is due to uncertainties, , ➢, , Risk is an essential part of every business, , ➢, , Profit is the reward for risk taking, , ➢, , Risk depends mainly upon the nature and size, of business

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Methods of dealing with Business Risk, No business enterprise can escape from the presence of risk. There, are many ways for a businessman to deal a risk situation., , , , , , , , , Take precautionary measures like fire fighting, equipments., Take an insurance policy to cover various types of, risks., Decide not to enter into high risk business, transaction., Take measures like create provisions in the current, earning as in the case of provisions for bad debts.

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Causes of Business Risk, 1.Natural Causes, 2.Economic Causes, 3.Human Causes, 4.Government Causes, 5.Physical Causes

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Factors to be considered while starting a business, ➢, , Selecting the line of business, , ➢, , Size of the firm, , ➢, , Choice of form of ownership, , ➢, , Location of the business, , ➢, , Financial requirements, , ➢, , Physical facilities, , ➢, , Work force, , ➢, , Launching the enterprise, , OR, , OR, , SMALL BUSINESS, , OR

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Section-2, , BUSINESS, TRADE AND COMMERCE, Business is not merely an activity to earn income or, profit. Value of business is more than just a profit, making activity .Business satisfies human needs, and wants by providing goods and services., Business activities led to growth and development, of any country .Business (Industry +commerce)is, the major contributor of India's GDP., India's GDP in 2017 (Rs.) = 182 lakh crores

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History of Trade and Commerce, Trade and commerce have played a vital role in, making India to evolve as a major player in the, economic world in ancient times. Archaeological, evidences have shown that trade and commerce, was the basis of the economy of ancient India., Commercial cities like Harappa and Mohenjodaro, were founded in 3300 B.C. The civilisation had, established commercial connections with foreign, countries., Maritime, transport is the, shipment of, goods (cargo), and people by, sea and other, waterways.

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Indigenous Banking System, In ancient India indigenous banking system played a, prominent role in lending money and financing, domestic and foreign trade with currency and Hundi., As economic life progressed, money served as a, medium of exchange .The introduction of metallic, money and its use accelerated economic activities., With the development of banking, people began to, deposit precious metals with lending individuals, functioning as bankers or Seths, and collect money, from them.

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Hundi, Hundi refer to financial instruments (as bill of exchange) evolved, on the Indian sub-continent used in trade and credit, transactions. Hundis normally regarded as bills of exchange,, they were more often used as equivalents of cheques issued by, indigenous bankers. They were used;, ➔, ➔, , ➔, , as credit instruments (to borrow money ),, as remittance instruments (to transfer funds from one, place to another),, for trade transactions (as bills of exchange).

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Types of Hundis, Category, , Functions of Hundi, , 4.Dekhan-har, , Darshani, , Payable to the presenter or, bearer., , 5.Jokhmi, , Muddati, , The term ‘Jokhm’ mens, ‘risk’. Such hundi is usually, drawn, against, goods, shipped on vessel and a, certain risk involved. If, goods lost in transit, the, drawer or holder bears the, coasts, and the Drawee, carries no liability., , Name of, Hundi

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Rise of Intermediaries, Intermediaries played a prominent role in the, promotion of trade. They helped manufacturers, especially in foreign trade. Intermediaries consist of, commission agents, brokers and distributors both, for wholesale and retail goods. Bankers began to, act as trustees and executors of endowments., Foreign trade was financed by loans.

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TRANSPORT, Transport by land and Sea (maritime) was, popular in the ancient times. Roads as a means of, communication had assumed key importance in the, entire process of growth. Pepper was particularly, valued in the Roman Empire and was known as, ‘Black Gold’. Various empires conflict each others to, dominate the route for this trade.It was in the search, for an alternate route to India for spices that led to, the discovery of America by Columbus in the, closing years of 15th century and also brought, Vasco da Gama to the shores of Malabar in 1498.

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Major Trade Centres, There were all kinds of towns—port towns,, manufacturing towns, mercantile towns, and pilgrimage, towns. Their existence is an index of prosperity, of merchant communities and professional, classes. The following were the leading trade centres, in ancient India:, 1.Pataliputra: It was not only a commercial town, but, also a major centre for export of stones., 2.Peshawar: It was an important exporting centre for, wool and for the import of horses., 3.Indraprastha: It was the commercial junction on the, royal road where most routes leading to the east, west,, south and north come together.

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Major Trade Centres, 4.Taxila: It was a city of financial and commercial, banks. The city occupied an important place as a, Buddhist centre of learning. The famous Taxila, University flourished here., 5.Mathura: It was a centre of trade and people here, live depends on commerce. Many routes from, South India touched Mathura and Broach., 6.Ujjain: Cloths were exported from Ujjain to, different centres. It also had trade relations through, the land route with Taxila and Peshawar.

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Major Trade Centres, 7.Varanasi: It grew as a major centre of textile, industry and became famous for beautiful gold silk, cloth and sandalwood workmanship. It had links with, Taxila and Bharuch., 8.Surat: It was the centre of western trade during the, Mughal period. Textiles of Surat were famous for their, gold borders (zari). It is noteworthy that Surat hundi, was honoured in far off markets of Egypt and Iran., 9.Kanchi: Today known as Kanchipuram, it was here, that the Chinese used to come in foreign ships to, purchase pearls, glass and rare stones and in return, they sold gold and silk.

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Major Trade Centres, 10.Kaveripatta: Also known as Kaveripatnam, it was, scientific in its construction as a city and provided, loading, unloading and storage facilities of merchandise., Foreign traders had their headquarters in this city. It was, the centre of trade for perfumes, cosmetics, scents, silk,, wool, cotton, corals, pearls, gold and precious stones;, and also for ship building., 11.Madura: It was the capital of the Pandayas who, controlled the pearl fisheries of the Gulf of Mannar. It, attracted foreign merchants, particularly Romans, for, carrying out overseas trade.

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Major Exports and Imports, Exports:, Exports consisted of spices, wheat, sugar, indigo,, opium, sesame oil, cotton, parrot, live animals and, animal products—hides, skin, furs, horns, tortoise, shells, pearls, sapphires, quartz, crystal, lapis,, lazuli, granites, turquoise and copper etc., , Imports:, Imports, included, horses,, animal, products,, Chinese silk, flax and linen, wine, gold, silver, tin,, copper, lead, rubies, coral, glass, amber,, etc.

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POSITION OF INDIAN SUBCONTINENT IN, WORLD ECONOMY ( 1 AD UP TO 1991), Between the 1st and the 7th centuries BC, India is, estimated to have the largest economy of the ancient and, medieval world, controlling about one- third of the, world’s wealth. The country was often referred to as, ‘Swaranbhumi’ and ‘Swarndweep’ in the writings of, many travelers, such as Megasthenes, Faxian (Fa Hien),, Xuanzang (Huen Tsang) and others. They repeatedly, refer to the prosperity of the country.

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POSITION OF INDIAN SUBCONTINENT IN, WORLD ECONOMY ( 1 AD UP TO 1991), The pre-colonial period in Indian history was an age of, prosperity for Indian economy .Despite the growing, commercial sector, it is evident that the 18th century, India was far behind Western Europe in technology,, innovation and ideas. With the increasing control of, the East India Company causing lack of freedom and, no occurrence of agricultural and scientific, revolution, limited reach of education to the masses,, population growth and preference to machines over, manual skills made India a country which was, prosperous but with people who were poor.

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POSITION OF INDIAN SUBCONTINENT IN, WORLD ECONOMY ( 1 AD UP TO 1991), The British empire began to take roots in India in, the mid – 18th century. Condition of Indian, Economy slowly changed.This changed the, condition of the Indian economy from being an, exporter of processed goods to the exporter of raw, materials and buyer of manufactured goods.

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India begins to Reindustrialise, After Independence, the process of rebuilding the, economy started and India went for centralised, planning. The First Five Year Plan was implemented, in 1952. Due importance was given to the, establishment of modern industries, modern, technological and scientific institutes, space and, nuclear programmes. Despite these efforts, the, Indian economy could not develop at a rapid pace., Lack of capital formation, rise in population, huge, expenditure on, defence, and, inadequate, infrastructure were the major reasons. As a result,, India relied heavily on borrowings from foreign, sources, and, finally,, agreed, to, economic, liberalisation in 1991.

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Indian Economy at Present, The Indian economy is one of the fastest growing, economies in the world today. Rising incomes, savings,, investment, opportunities,, increased, domestic, consumption and educated younger population ensures, growth for decades to come. The high growth sectors, have been identified, which are likely to grow at a rapid, pace world over and the recent initiatives of the, Government of India such as ‘Make in India’, Skill India’,, ‘Digital India’ and roll out of the Foreign T rade Policy, (FTP 2015-20) is expected to help the economy in, terms of exports and imports and trade balance., , India's GDP in 2017 (Rs.) = 182 lakh crores

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Indian Economy at Present

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Make in India, ‘Make in India’ is an initiative launched by the Government of India, on 25 September 2014,to encourage national as well as international, companies to manufacture their products in India. The major, objective behind this project is to create employment opportunities, and enhance skill development in 25 sectors of the economy. The, selected 25sectors are as follows: