Aasha Academia - Tuition Center
CBSE - Grade 11
Commerce
1. NATURE AND PURPOSE OF BUSINESS
HISTORY OF TRADE AND COMMERCE
India has himalayas in the north borderd by water
in south. India got connected to adjoining
Foreign countries through the network of roads
leading to slik routes .
The maritime routes linked the east and west by
sea and were used for trade of spices Known as
spice route.
The trade was mainly carried out by water and
land . The civilization like harappa and
Mohenjodaro had established commercial
connections with mesopotamia and traded in
Gold ,silver, copper , coloured gem stones ,etc.
there were some trade regulations different types
of coins and weighing practices .
IMPORTANCE OF BUSINESS IN THE DEVELOPMENT OF ECONOMY
The progress of economic life take place many
developments which are as follows :
1. The money was channelised into further investment and
this help in the growth of indigenous banking system .
2. Hundi and chitties were used as document that transfers
money from one to another For trading activities .
[Link] are different types of hundis practised by Indian
merchants
[Link] coins become the common medium of exchange.
[Link] banking system plays an important role in lending money and financing
domestic trade .
5. The Skilled artisans worked and converted raw materials into finished goods for the Development
of workshops
Rise in intermediaries
In promotion of trade intermediaries plays an important role . Commission agent distributors and
brokers helps in expanding trade .indigenous
banking system helps the Traders , manufacturers
with capital funds for growth. Later commercial
and industrial Banks also giving both short term
and long term loans to traders , and manufacturers.
Trade centers
Many leading trade centers were developed in
ancient times for the import and export Of goods .
Major export of goods are wheat, sugar, indigo ,
cotton animals product , gold Silver, copper
etc .Some trade centers in ancient times are;
Peshawar: it was the exporting center for wool
and importing center of horses . There is a
huge commercial transactions between
India ,china, and rome.
Patliputra- it is also known as patna today. It is
also a major export center of stones. Mathura- the people here subsisted on commerce . And many
routes from south India
Touched mathura and broach .
Taxila- it was the important land route between India and central asia . It was also the city of financial
and commercial banks .
Surat- it was famous for gold borders (zari) and surat hundi was honoured in far off markets of Egypt
and Iran.
Export and imports
Major imports include copper , glass, coral, lead, flax, gold, silver, chinese silk, animal Products . And
exports include spices , wheat, sesame oil ,indigo, sugar, live animals and Theirproductslike
skin,fur,shells,pearl,quartz,crystaletc.
Transport – In ancient times trade was maintained by land and sea transport
Land transport have a trade route in the south spreading east and west trade routes was suitable for
safety and speed .
sea transport is also called maritime trade and it was the another most important branch
of global trade . Pepper was also called as “black gold” also traded by the sea Transport.
Indian Economy Growth
In order to develop the economy authorities initiated the reconstruction of the economic
development policies . The five year plan was implemented in 1952 to established modern
industries . Due to lack of capital Formation , rise in population and huge expenditure on
defence Indian economy Could not develop . Later on the highly growth sectors were
identified which are Grown at a rapid pace . The initiatives of government of india as “skill
India” , “digital India” and foreign trade policy helps the economy in trade balance .
Concept of BUSINESS
It refers to an occupation in which people engage in activities related to sale and Purchase of
goods and services with the main aim of earning profit .
These activities are classified into two groups ;economic and non economism
Characteristics of business activities
1. An economic activity- business is an economic activity, its main motive is
to earn profit or livelihood not the sympathy and emotion.
2. Production of goods and services -every business firm either
Manufactures the goods that deals in or buy from producers to sold . Goods include the item
of daily use such as sugar, ghee, pen, paper etc. and services include banking ,
transportation ,electricity etc.
3. Sale of goods and services – business involve exchange or sale of goods and services .there
is sale or exchange of goods and services in between seller and
the buyer .
4. Profit earning–businesscan’tsurviveforalongperiodwithoutearning profit . Profit is the main
purpose of business. So by making larger no. of sales businessman
Earn their higher profit.
5. uncertainty of return- lack of knowledge relating to the money that the Firm earn in a given
time is uncertainty of return.
6. Element of risk- uncertainty of exposure to loss, cause by some undesirable Events like
change in fashion , taste ,method of production etc
Distinction between Business,Profession and employment
Classification of business activities
Business activities are classified into two categories ; Industry and Commerce
Industry –the term is used for those activities which involve technical and mechanical skills .
It further divided into three parts ;
1. Primary industry –these include the activities with the extraction and production of
natural resources and development of living organisms , plants etc
these are divided into two parts
(a) Extractive industry
(b) geneticindustry
[Link] industry – it uses primary industries as their raw material to produce finished
goods.
it further divided into two parts
(a) Manufacturing industry
(b) construction industry
3. Tertiary industry- it provide support and service to both primary and secondary industry in
The form of transport , banking , insurance and warehousing ,advertising etc It is also known
as service industry .
commerce – it include two types of activities trade and auxiliaries to trade for buying and
selling or goods is termed as trade. And the activities that are required to Facilitate the
purchase and sales of good are called auxiliaries to trade . It include Transport and
communication , banking and finance , insurance warehousing and advertising.
Objectives of business
1. Market standing – it refer to the position of enterprise in relation to their
competitors the firm aim at standing on stronger footing.
2. Innovation –it is the introduction of new ideas or methods .no firm can be success
in The competitive world without innovation .
3. Productivity –it is used to measure the efficiency to ensure survival and progress .
Firm Must aim at greater productivity through best resources .
4. Physical and financial resources – any firm require these resources to be able to
produce And supply goods and services to its customers .
5. Earning profit – every business must earn profit for their survival and growth in
long term.
6. Social responsibility - it refer to the obligation of business firm to contributing
resources for solving problems in a desirable manner .
Business risk
The term refer to the possibility of losses due to unexpected [Link] of business
risk
1. Business risk arise due to uncertainties- it refer to the lack of knowledge about
future such as natural calamities , change in demand and price, change in
government policies etc.
2. Risk is the essential part of every business- no any business can avoid risk , it may
vary from business to business.
3. Degree of risk depends mainly upon the nature and size of business- nature and size
of Business are the main factors which determine the amount of risk in a business .
4. Profit is the reward for risk taking - “no risk, no gain” principle applies to all types
of Business . Greater the risk involved in a business , higher is the chance of profit.
It is the reward for risk taking
1. natural cause- people have little control over calamities like flood , earth quake,
heavy rains, Etc .
[Link] cause - itincludesuchunexpectedeventslikedishonesty,carelessness,strikes,
negligence of employees etc.
3. Economic cause – it is related to demand for goods , competition , price , collection
of dues From customers etc.
[Link] cause- the events like political disturbance, mechanical failures, change in
exchange Rates etc.
