11th Commerce Full Study Material English Medium

s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww wwww wwww
ww ww ww ww ww
g VIVEKANADA
. O rgrg
O VIDYALAYA
. O rgrg
O MATRIC . O rgrgHR SEC SCHOOL
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P adaada PANNAIKADU .wP.P adaada PIRIVU .P.P adaada . P. adaada
P
www www www w
www w
www
ww ww ww ww ww
g .O rgrg
O .O rgrgKODAIKANAL
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P ww.P.P w w.P.P w w.P.P ww.P.P
ww ww ww ww ww
g
ww
i .O . rgrg
O
ww
i
COMMERCE
.O . rgrg
O
ww
i .O . rgrg
O
ww
i .O . rgrg
O
ww
.
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad .P.P adad .P.P adad
wwww wwww www w www w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia.
XI STANDARD
s s s s s
.wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
l a ia i . l a ia i . l a ia i . l a ia i . laalia.
ww.P.P
a
adada
s as a l
ww
COMMERCE FULL MATERIAL
.P.P
a
adada
s as a l
w w.P.P
a
adada
s as a l
w w.P.P
a
adada
s as a l
ww.P.P
a
adada
s as
ww
ww ww
ww ww
ww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
w w w w w
ww
ww w NAME ww
ww w : __________________________
ww
ww w ww
ww w ww
ww w
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
a a
lalai i . a a
lalai i . a a
lalai i . a a
lalai i . a laalia.
adaada REG NO adaad:a__________________________
s s s s s s s s s s
. P. P . P. P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
PREPARED s aslaal
BY
ia i .
s aslaalia.
www www www www www
ww ww ww P.VAHEESWARANww M.COM., M.PHIL. DCA., B.ED B
ww
g .O rgrg
O .O rgrg
O PG ASSISTANT OF
.O rgrCOMMERCE
O g & ACCOUNTANCY
.O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
VIVEKANANDA
adada
VIDYALAYA MATRIC a
adada
HR SEC SCHOOL a
adada
ww.P.P ww.P.P w w.P.P
PANNAIKADU PIRIVU, w w.P.P
KODAIKANAL MAIN ROAD, ww.P.P
ww
ww ww
ww ww
ww ww
ww ww
ww
DINDIGUL DISTRICT.
g O
. i. r
O gr g O
. i. r
O grg .O rgrg
O .O rgrg
O .
l
asa alia l
asa alia CELL: l
asa al
9791324143ia i . l
asa alia i . aslaalia
a s
a a s
a a s
a a s
a a s
a
.P.P adad .P.P adad .P.P
EMAIL:
adadnpvasu92@gmail.com .P.P adad .P.P adad
wwww wwww www w www w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P.Padaada . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s as laalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww w ww wwww ww ww wwww
ww khzt ez;wgw h;fwSf;F> ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i . tzpftpay; sghlj; as laa ia i .
l jpy; ey;y kjpg;ngz; s asl
faal
isi
a i . ngw Ntz;Lk; svd; aslaa ia i .
l Nehf;fj;jpy;
w s aslaalia.
.wP.P adaadvspikahd
a
Kiwapy;.wP.P adaadgbg;
a
gjw;f;F trjpahf .wP.P adaadvdJ
a
5 tUl gzp .wP.P ad aada ij nfhz;.LP.P
mDgtj; adaada
www ww w www ww w w
www
ww ww ww ww ww
,e;j material – ia njhFj;Js;Nsd; s . jkpo; topapy; Padasalai- apy; fpilj;j
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
material
s aslaalia i . – ia mbg; g
s
ilahf
as laalia i . itj; N j vdJ
s aslaa
ghzpapy;
l i
a i . vdJ khzth;
s af
slaa
Sf;
lia iF. Vw;wthW
s aslaalia.
a a
adadjahh; a a
adadnjhFg; a a
adadkhzth; andagwada Ntz;Lk; vd;.wPP a
adada
ww.P.P nra;j ,e;
w w.P.jP ig midj;
w w.P.J P fSk; gad;
ww.P.P w w .
ww
ww ww ww ww ww ww
Nehf;fj;jpNyNa Padasalai – apy;wwntspapl;Ls;Nsd;. vdJ ww ,e;j njhFg;gpy; VNjDk; ww
g gpiofs; i .O . rgrFiwfs;
O g ,Ue;jhy; i .O . rgrg J nfhs;sTk;i . O.O
O
rhpnra;
grg jq;fpa khzth;.O
rgpd; i f . rgrg ey;y
O
Sk; .
a s
a
l
asa al a i
a sa asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adadkjpg;ngz;fis ngw .P.P
dad Lk; vd;w Nehf;fPj;ajdapNyNa
aNtz; . .P d ,ij njhFj;P
. J.Pas;daNdsd;. .P.P adad
wwww ww w w www w ww ww www w
ww ww ww ww ww
jw;nghOJ muR ntspapl;Ls;s GJ ghl Gj;jf njhFg;G kpfTk; fLikahd
g . O rgrcs;
O g sjhy; khzth;.fO.s;O rgrrpuk
g gl;L gbf;f Ntz; . O rgrg
O . O rgs
O rg ,e;jr;
Kiwapy;
s aslaalia i .
s as laalia i
s aslaal i
a i . b a #o; e p
piyapy;
iyapy;
s aslaalia i
cs; .
s aslaalia.
. P. adaadR+oypy;
P
a vd;dhy; .,ad; P. adaa
P wdamstpw;f;F kpf .Pvspikahf
. adaada
P tpdhf;fSf; . FP
P.
ada
adatpilfis njhFj;J . P. adaada
P
wwww ww ww wwww ww
wpAs;
w wwww
ww midtUk; w w
Njh; r;rp ngw Ntz;Lk; vd; www Nehf;fj;jpy; cUthf; wfw Nsd;. ww
g . O rgrg,Jtiu vdJ mj;
O . jO
O grg Material – fisAk;
rid . O rgrg ntspapl;L je;j iPadasalai
O . O rgrg
O
s aslaalia i .
s as laalia i .
s aslaal i
a i .
s aslaal a i .
s aslaalia.
.wP.P adaad&a Namma Kalvi.P,izajsj; . adaada
P
jpw;f;F kpf;f aed;
. P. P
daadwap.
. P. adaada
P . P. adaada
P
www wwww w
www wwww w
www
ww ww ww ww ww
g .O rgrgkhzt ez;gh;fNs!!
O .O rgrgNeuj;ij rhpahf i.O
O
gad;rgrggLj;jp nfhs;Sq;if.O
O
s;r. grgrhpahd
.O
s a
Neuj;
slaal
j
ia i
py;
.
rhpahd Kiwapy; s as laalia
gbj;
i .
J ntw; w p ngw; s
W aslaal
mLj; a i .
j fl; l epiyf; F s a laa
nry;
s l a i
y Ntz; ba s aslaalia.
a
adada adadaa a
adada adada a a
adada
ww.P.P ,Wjp epiyapy; w w.P.P
cs; s ha; . Neuj; i j tPzw .P.fP
hf;
w hNj! mLj; J vd; d w .P.P
nra;
w a Nghfpwha; vd; g w
ij w.P.P
ww
ww ww ww wwww ww ww ww ww
Kjypy; jPh;khdp. kjpg;ngz;fis ng ngWtjpNyNa
WtjpNyNa ftdj;ij it. Kad;why; KbahjJ
g
i .O . rgrg
O i .O . Ogrg
r,Uf; Fk;. f~;lg;glal;lia .O . rggbj;
O rg jhy; ey;y Kd; i .O . Ogrg
rdw; .
a
vJTkpy;
s
a
l
asa al a i iy. fbdkhf jhd;
a sa asal al a i
a sa asa L i
a s
a
l
asa al a i N ;wj;ij
a s
a aslaalia
.P.P adadmiltha;. .P.P adad .P.P adad .P.P adad .P.P adad
wwww w w
wswp gUtj;jpy; eP ngWk; w w
wwntw;wpNa cd; tho;wfw w ww w
wwf w
ww ww
gs; ww ;iwf KOtijAk; jPh;kw w
hdpf;
g NghfpwJ
. O rgrvd;
O g gij ed;whf ftdk; . O rgrg nfhs;. jpdKk;i.Ofhiyapy;
O rgrg
O gbg;gjw;f;F OKd;
. rgrg cd;
O
s a
,yf;s
a i i .
lalFa vd;d vd;gij ,U s as
a i
la i
laepkplk; .
Nahrpj; J s
ghh; a
.s
a i .
laePlanry;tJ rhpahd ghijah s as
a i i .
lala vd;Wk;!!!! s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww wwciog;igAk; rpe;jpj; wg;w ghh;. gpwF gbf;w wMuk;gp. ftdk; rpjwhky; ww
ww
ww cd; ngw;Nwhhpd;
ww ww wwwJw wwfww ww ww
gbg;gpy; ftdj;ij nrYj;Jtha;. gpwF ePahfNt Kaw;rp nra;J ey;y kjpg;ngz;fisAk;
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s asl
ngWtha;
aalia i . . ey; y kjpg; n gz;
s af
s l a
is
a lia i . ngw tho; j J
; f; f s;
s .
aslaal i
a i .
s aslaalia i .
s aslaalia.
.wP.P adaada cq;fSf; .wP.P
ada
afdahf ehq;fs;!!!! .wP.P adaada .wP.P adaada .wP.P adaada
www ww w www ww w www
ww ww
cd; ntw;wpNa vq;fs; ntw; ww wp!!!!! ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i . cq; f s; ntw;
s
w as laa
papy;lia i .
ngUikg; g hl ehq;
s
f aslaa
Sk;l i
a i .
fhj; j pUf; f pNwhk; ! !!!!!!
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada adada a a
adada
ww.P.P WISH w w P.P
.YOU ALL THE BEST FOR w w.P.P
YOUR ANNUAL EXAMINATION
ww.P.P 2019 w w.P.P
ww
ww ww ww wwww ww ww ww ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a sa asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad .P.P adad Mrphpah; .PP
. adad
wwww ww w w www w ww ww www w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s a slaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww ww ww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
HISTORICAL BACKGROUND
s a slaalia i . OF COMMERCE
s aslaa lia i . IN THE SUB-CONTINENT
s aslaalia i .
s aslaalia.
www www www ww w www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
sa slaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w.P.P w w.P.P ww.P.P ww.P.P
ww
ww wwww wwww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w ww ww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g  rgrg rgrg rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a sa
l a
asa l a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g  rgrg rgrg rgrg rgrg
a i
lala . O
i . O a
lalai . O
i . O a
lala i . O
i . O a
lalai . O
i . O laalia.
s as s as s as s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww III. SHORT ANSWER wwww QUESTIONS: wwww ww ww wwww
ww ww ww ww ww
g 1. Explainrthe grg meaning of the term.O“Vanigam”. rgrg rgrg rgrg
l a ia. O
i . O l a ia i . O l a ia. O
i . O l a ia. O
i . O laalia.
s a
s a l The word vaniyam or vanipam s as a l would have had a Dravidian s as a l origin. s as a l s as
.wP.P adaada . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
w  The earlyw w
ww produced their products w
wwwand goods in their lands ww bartered their surplus w
ww
ww
ww wwTamils ww wwwwand wwwand
that is
g . O rgrghow trade came into existence.
O . O rgrg
O . O rgrg
O . O rgrg
O
s a l alia i .
a The word ‘Vanigam’ has
s s aslaal
beenia i .
widely used in sangam s aslaa lia i
literature
. like Purananurusand aslaalia i .
Thirukkural. s aslaalia.
a
adad2.aState the meaning .ofP.P a
dada
aMaruvurapakkam a
adada a
adada a
adada
ww.P.P w w andw w.P.P
Pattinapakkam. ww.P.P ww.P.P
ww
i). Maruvurpakkam:
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al 
a i Poompuhar had the ‘Maruvurappakam’
a s
a
l
asa al a i (inland town).
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It had market .P.P adand
ad bazaars where many .P.P
dad
amerchants met for the purpose
.P.P adadof selling or buying.P.P adad
ww ww
different commodities and food stuff. ww ww ww
g PREPARED . O rgBY
O rg P.VAHEESWARAN i.M.COM., O rgrgM.PHIL., DCA., B.ED i.O.O
O rgrg PAGE
. O rgrg3
O
s as
a
lalai i .
s as
a
lala i .
s a s
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s aslaalia. i. s as laalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww wwww wwww
ww  Ex: w w
Tondi, Korkai, Puhar and Muziri. ww ww ww
g rgrg
ii).i.Pattinapakkam:
O O . O rgrg
O . O Orgrg . O rgrg
O
s as laal a i .
s aslaa lia i .
s as laa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Pattinapakkam .wP.P aisdaa a
adCoastal town.
.wP.P adaada .wP.P adaada .wP.P adaada
www  Theywwere
w
ww engaged in different kinds w
wwof fishing pearls, and conches w
ww and produced salts and w
wbuilt
w
ww w ww ww ww
g .O rgrg
ships.
O .O rgrg
O .O Orgrg .O rgrg
O
s
3. as l
Whataalia i
is
.
the role of Sangam s asl
inaa lia
trade
i .
development of s as l
ancientaa lia i .
Tamilnadu? s aslaalia i .
s aslaalia.
a
adada adadaa adada a a
adada a
adada
ww.P.P  The main w w
tradew. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww w routes were passing through ww ww thick forests over Western wwww Ghats. ww
ww
 Many g such ports were developed gduring the Sangam period. g
g
i O r
O r
. i. roads g
i .O . r rg
O i .O . Or rg i .O . rgrg
O .
a sa

asal al a
Main known as
a
l a
Peruvali
s
a asa l a i were built for surface
a s
a
l a l a i
transportation.
asa a s
a
l
asa al a i
a s
a aslaalia
.P.P adad4. What are the ports.Pdeveloped . adad by Pandiya kingdom?
P .P.P adad .P.P adad .P.P adad
wwww www w ww w w www w www w
ww ww ww ww ww
 Port towns like Tondi, Korkai, Puhar and Muziri were always seen as busy with
g . O rgrg
O . O rgrg
O
s as
a
lalai i .
markets to imports and
s
exports.
as
a
lala i i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  They were engaged
P . P. adaadinadifferent kinds of .fishing
P P. adaadpearls,
P
a and conches .and P. P
ada
adaproduced salts and built . P. adaada
P
ww ships. ww ww ww ww
g  iDomestic
. O rgrg trade used to Boatsi.O
O likergr‘Padagu’,
O g ‘Thimil’, ‘Thoni’, . O Orgr‘Ambu’
g ‘Odampunai’ ietc… . O rgrg
O
s as laal a i .
s aslaa l a i .
s as laa lia i .
s aslaal a i .
s aslaalia.
.wP.P adaada  Foreign trade while .wP.P
ada Marakalam, Vangam,
adaKalam, .wP.P adaadNavai
a etc.. were used. adaada
.wP.P .wP.P adaada
www w
ww in Arthasasthra about w
wcreation
w www www
ww 5. What was focused ww ww of wealth? ww ww
g i.O rgrg gave importancei.O
Kautilya
O for rgrthe
O g State in relation to.O.O rgrg taxation, industry,
treasury, .O rgcommerce,
O rg
s as laal a i .
s aslaa l a i .
s as laa lia i
s aslaalia i .
s aslaalia.
a
adada adada
agriculture and conservation a of natural resources. adada a a
adada a
adada
ww.P.P w w.P.P w w.P.P w w.P.P w w.P.P
ww
ww  Arthasasthra ww ww focused on creation ofwwealth www as the means to promote wwwwthe well being of the state. ww
ww
g IV. Long
.O O grg
rAnswer Questions Orgrg
. i.O .O Orgrg .O rgrg
O .
l a
asWhatlia i . l a lia
asa of business? asaasa l a lia i . l
a s
1.a a are the hindrances a s
a a s
a a s
a
wwww i. Hindrance w w w
ofwplace ww w w www w www w
ww ww ww ww ww
 rProduction takes place in one rgcentre
g . O O grg . O O rg and consumers are . O
spread
Orgrg throughout the country . O rgand
O rg world.
s as
a i i .
lala Rail, air, sea and land s as
a i
la i .
latransports bring the products
s as
a i i .
latolathe place of consumer.saslala a i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ii. Hindrance of
wwwwtime ww ww wwww wwww
ww ww ww ww ww
 Consumers want products whenever they have money, time and willingness to buy.
g . O rgrg
O . O rgrg
O
s as laalia i . Goods are produced s a l
in
s aa ia i .
anticipation
l of such different
s as laa lia i .
regional centers. s aslaalia i .
s aslaalia.
.wP.P adaada  So that they.P.can adabe
P
ada
distributed at the .
rightP. P
daada
atime to the consumers. . P. adaada
P . P. adaada
P
www w
www wwww w
www w
www
ww ww ww ww ww
iii. Hindrance of risk of loss
g .O O grg
rFire, .O rgrgmay bring huge loss ito.O.the
O Orgrbusiness.
g .O rgrg
O
s as laalia i . theft, floods and laccidents
s as aa lia i .
s as laa l a i
s aslaalia i .
s aslaalia.
a
adada  Insurance companies a
adada serve to cover the.P a a losses.
adaofdsuch
risk
a
adada a
adada
ww.P.P w w.P.P w w . P w w.P.P w w.P.P
ww
ww ww ww ww ww wwww ww
ww
iv. Hindrance of knowledge
g 
.O O grg
rAdvertising and communication .O rgrg help in announcing ithe
O .O Orgrg of new products and
arrival .O rgrg uses to
their
O .
asal alia i . l
asa a lia i . asal a l a i . l
a sa a s
a a s
a a s
a a s
a
.P.P adad the people. ad
.P.Pad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg4
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s as laalia. i. s aslaalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww v. Hindrance ww of finance ww ww ww
g 
. O O grg and other financial.Oinstitutions
rBanks rgrg
O provide fundsi.and O rghelp
O rg in transfer of funds . O rgenable
toO rg the
s as laalia i .
s as laalia i .
s aslaal a i .
s as laalia i .
s aslaalia.
.wP.P adaada da a smoothly.
functioning ofabusiness
.wP.Pad .wP.P adaada .wP.P adaada .wP.P adaada
www 2. State thewconstraints www in barter w ww w
system. www www
ww w w ww ww
i). Lackrg rgrg rgrg rgrg
g
l alia.Oi . Oofrgdouble coincidence l al
of Wants
ia.Oi . O l alia.Oi . O l alia.Oi . O laalia.
a s as a  Unless two personsa s as
who a have surplus have the
a s as a
demand for the goods s as
possessed
a a by each other, a s as
.P.P adada . P.Padada . P.Padada . P.Padada . P.Padada
wwww barter w w
ww not materialize. ww
could ww w w www w www w
ww ww ww ww
g ii). Nonr–gexistence of common measure rgrg of value rgrg rgrg
i . O . O rg i . O . O i .O . O i .O . O .
a s
a
l al a i
asa Barter system could a s
a
l
asnotal a i
a determine the valueaof s
a
l al a i
ascommodities
a to be exchanged
a s
a
l al a i
asa as they lacked a s
a aslaalia
wwww commonly www wacceptable measures to ww w
evaluate
w each and every w
commodity.
ww w www w
ww ww ww ww ww
 It was difficult to compare the values of all articles in the absence of an acceptable medium of
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala exchange. s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaadaiii). Lack of direct.Pcontact
P . adaadabetween producer.P
P and
. P
ada
adaconsumers . P. adaada
P . P. adaada
P
ww ww ww ww ww
 It was not possible for buyers and sellers to meet face to face in many contexts for exchanging
g . O rg g
ther commodities for commodities.
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  This hindered .wP.P
daadprocess
athe a of barter in all.P
. adaada sense.
practical
P . P. adaada
P . P. adaada
P
www w
ww stock wwww w
www w
www
ww iv). Lack ofwsurplus w ww ww ww
g  .O rgrg of surplus stocki.was
Absence
O O rgrone
O g of the impediments.Oin.O rgbarter
rg system. If the buyers .O rgand
O rg sellers
s as laalia i .
s as laal a i .
s aslaalia i
s as laalia i .
s aslaalia.
a
adada do not have surplus a
adadathen no barter was possible. adadaa a
adada a
adada
ww
ww 3. Explain the ww wdevelopment
w of Commerce ww and Trade in North
ww ww ww India. wwww
g  Balban rgrg was the first sultan rgrgpaved the way in the
who rgrg forest and helped traders
dense rgrgto move
i .O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa from one market place a s
a
l al a i
asato others. a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
wwww  The www w
important trade centers were ww w w
Delhi, Mumbai, Ahmadabad, www w
Sonar, Sonar goon, w w
Jaunpur,
ww
ww ww ww ww ww
Lahore.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lali i .
a India’s handicraft commanded s as
a i i .
lala a good foreign market. s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  India imported
P . P. ad
P aada dry fruits, precious
horses, . P. P
daada
astones, glassware, raw . P.
silk, P aada etc.. from Kabul,.P.P
adcorals, adaada
ww ww ww ww ww
Arabia, Europe, West Asia and China.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa
lia i .Indian products were
s as la li
exported
a a i . to East Africa, Malaya,
s aslaalia i .
China and Far East.
s as laalia i .
s aslaalia.
.wP.P adaad4.a Briefly explain.Pthe . adaacoastal
P da trade in ancient
. P. adaadaTamilnadu. .P.P
P adaada . P. adaada
P
www w
www wwww w
www w
www
ww ww
 The ‘Maruvurappakam’ ww
and ‘Pattinapakkam’ had market and w w
bazaars. ww
g  .O rgrgtowns like Tondi, Korkai,
O .O rgrPuhar
O g and Muziri were.O rgrg seen as busy markets
O .O rgrgimports
O
s as laalia i .Port
s as laalia i .
s aslaalia always
i .
s as laalia i .with
s aslaalia.
a
adada and exports.Pad a a adadaa a
adada a
adada
ww.P.P w w. .Pad w w.P.P w w.P.P w w.P.P
ww
ww  Coastal ww wregion
w people engaged inwcoastal ww trade and developed w
w wwintercontinental trade contacts.
w
their wwww
g .OBoats
i . rgrg like ‘Padagu’, ‘Thimil’,
O i .O . rg‘Thoni’,
O rg ‘Ambu’ ‘Odampunai’
i .O . rgrgetc… were used in demostic
O i .O . rgrgtrade.
O .
a s
a
l al a i
asa Kalam, Marakalam, a s
a asal a
Vangam,
l a i
Navai etc.. were a s
a
l al a i
asafor crossing oceans foraforeign
used s
a
l al a
asa trade. i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg5
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 5. What do you ww know about the overseas ww trading partners wwof ancient Tamilnadu? ww
g  iForeigners
. O rgrg who transacted business
O . O rgrgwere known as Yavanars.
O . O rgrg
O . O rgrg
O
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Arabs who traded .wP.P
daadaTamil were called ‘Jonagar’.
awith .wP.P adaada .wP.P adaada .wP.P adaada
www  Pattinappalai
w
wwpraised Kaveripumpattinam w
wwas a city where variouswforeigners www of high civilization. www
ww ww ww w ww
g  Many
.O rgrg
O such ports were developedrgduring
.O Org the Sangam period. .O rgrg
O .O rgrg
O
s as

laalia i .
Kaveripumpattinam s
was asla
the
alia i .
chief port of the s
Kingdom aslaal
of
ia i .
Cholas. s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w.P.P w w.P.P w w.P.P ww.P.P
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l al a i
asa OBJECTIV OF aBUSINESS s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww www w www w www w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg6
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P.Padaada TrbTnpsc
. P. adaada
P . P. adaada
P
ww III. SHORT ANSWER ww QUESTIONS: ww ww ww
g 1. What . do
O rgyou
O rg mean by human activities? . O rgrg Explain.
O . O rgrg
O . O Orgrg
s aslaalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia.
.wP.P adaada I. Economic Activities .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
ww undertaken with theww
Activities
w
ww of earning money areww
object
w
ww economic activities.ww
called www
ww ww
g Examples:
.O rgrg
O .O rgrg
O .O Orgrg .O Orgrg
s aslaalia 
i .
Production of s
goods a
s l
byaalia i .
manufacturers s a
s laalia i.
s a
s laalia i.
s a
s laalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  Distributionw w. P.P w w.P.P w w. P.P ww. P.P
ww
ww wwww of goods by wholesalers ww
ww ww
ww ww
ww
 Selling
g by retailers
g
i O
. . r rg
O i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i Accounting practice
a s
a
l
by
asa al a i
chartered accountants
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad II. Non-Economic.P.Activities Padad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
Activities undertaken to satisfy social and psychological needs are called non-economic activities.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslalai i
Examples:
a .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P.Padaada  Cooking food . P. P
daadfamily
afor a
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 Celebrating festivals ww ww ww
g .O Ogrg
rWatching movies in a theatre . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Doing meditation .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
ww on: a) Business b) Profession ww w www www
ww 2. Write short w notes
w ww ww ww
g a).
.O rgrg
Business:
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia

i .
Business refers to s as
any
laalia
human
i .
activity undertakens aslaa
on
lia
a
i .
regular basis with s
the aslaali
object
a i .
to earn profit s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww wwproduction, distribution,wpurchase
through
ww ww and sale of goodswand
w wwwservices. wwww
g
i .
 rEconomic
O . Ogrg activities performed
i . O . rgrgfor earning profits.” i-.O.James
O rgrg Stephenson
O i .O . rgrg
O .
a sa
l al a i
asa b). Profession: a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.P.are
wwww  Professions
www w those occupations which
ww w w involve rendering of personal
www w services of a special
wwand
w w
ww ww ww ww ww
expert nature.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . A profession is something
s as
a
lalai i .which is more than
sa a a
job.
slalai Iti .is a career for someone
s as
a i i .
lala competent
who is
s aslaalia.
. P. adaada
P . P. adaadaareas.
in their respective
P . P. adaada
P . P. adaada
P . P. adaada
P
ww 3. Explain the concept
ww of ‘Business’.
ww ww ww
g  . O rgrg refers to any human
O
Business . O O grg undertaken on a .regular
ractivity O rgrg basis with the object
O . Oto rgearn
O rg profit
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada through production,
.wP.P adaaddistribution,
a purchase and
.wP.P adaadaof goods and services.adaada
sale
.wP.P .wP.P adaada
www w
wwactivities performed for w w
ww profits.” - James Stephenson www www
ww  “Economic ww w
earning ww ww
g  .Business
O rgrg activities are connected
O .O rgrwith
O g raising, producing.O orO grg
rprocessing of goods. .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
da Industry creates form utility ato goods by bringing materialsa into the form. a a
.P.P a ada .P.P adada .P.P adada .P.P adada .P.P adada
ww
ww  4. Briefly statewthe w w
wwhuman objectives of a w ww w w
business. www w www w
ww w w ww ww
g i). Economic rgrg Objectives rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l al a i
asa  It refers to the objective a s
a
l al a i
asaof earning profit. asaasa la l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  To be www
pursued
w to achieve the profit w
objective,
ww w www w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg7
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s aslaalia. i. s aslaalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww wwww wwww
ww ww
ii). Social Objectives ww ww ww
g . O Ogrg to be achieved for.Othe
rDesired rgrbenefit
O g of the society. i.O rgrg
O . O Orgrg
s a
s laalia i .
s aslaalia i .
s aslaal a i .
s a
s laalia i .
s a
s laalia.
.wP.P adaada  No activity.P . P
daadbusiness
ofathe a should be aimed
. P. adaatadgiving
P
a any kind of trouble
. P.Padatoadthe
a society.
. P. adaada
P
www www
iii). HumanwObjectives
w wwww w
www w
www
ww w ww ww ww
g .O rgrgIts include economici.Owell-being
O rgrg
O of the employees,rgrsocial
.O O g satisfaction of .O Orgrg and
employees
s a
s laalia i
development
.
of human s a
s laa
resources.l a i .
s aslaalia i.
s a
s laalia i.
s a
s laalia.
a
adada a
adada adadaa adadaa a
adada
ww.P.P IV. Long Answer ww. P.P w .
wP.P ww. P.P ww. P.P
ww
ww ww ww Questions ww
ww ww
ww ww
ww
1. Explain
g gthe characteristics of
g gBusiness.
g rr
i.O.O rr
i.O.O i .O . rgrg
O i .O . rgrg
O .
a a
lai
sasi.laaProduction or Procurement
a a
i
saslaalaof Goods: a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Goods must .Pbe
. P
dad
aproduced or procured w inw P.Padato
.order d
satisfy human wants. .P.P adad .P.P adad
wwww ww w w ww www w wwww
ww ww ww ww ww
ii. Sale, Transfer or Exchange:
g . O rgrg must be sale or exchange
O . O rgrgof goods or services. i.O.O
O rgrg . O rgrg
O
s as
a
lalai
 i . There
s as
a
lalai i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P.Padaada  When a person . P. P
ada cloth for his personal
adaweaves . P. adaadconsumption,
P
a
. . adaada because there is no.P.P
it is not business
P P adaada
ww wsale. ww ww ww
ww
ww wwww
transferwor
ww ww ww ww wwww
iii. Dealing
g . O rgrgin Goods and Services:
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa i
a i .
l Goods produced may s asl
be
aa ia i .
l consumer goods like cloth, s aslaa ia i .
l brush, bag etc., sasal
pen, l a ia i .
s aslaalia.
.wP.P adaada  Services refer .wP.P adatoadactivities
a like supply.wP.P aofdaa
da
electricity, gas or water,
.wP.P
ada
adatransportation, banking,.P.Padaada
www ww w w
ww www w
www
ww ww
insurance. ww ww ww
g .O rgrg of Dealings: i.O.O
iv. Regularity
O rgrg .O rgrg
O .O rgrg
O
s aslaali
a i

.
An isolated dealings aslaa
inl a i
buying and selling doess asl
notaalia i .
constitute business. s aslaalia i .
s aslaalia.
a
adada a
adada
ww.P.P  The w w.P.P
transactions must be regular. w w.P.P w w.P.P ww.P.P
ww
ww wwww ww ww ww ww wwww
 The buying and selling must be recurrent to constitute business.
g .O
v.aProfit
i . rgrMotive
O g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  An important
.P.P adafeature
d of business is profit .P.P adamotive.
d Business is an P adad activity by which.P.P
. economic
. P adad
wwww humanww w w
beings make their living.ww w
ww w www w wwww
ww ww ww ww
 It is in fact, the attraction of profit which spurs people to do business.
g . O rgrg business with profession
O . O rgrg and employment?
O . O rgrg
O . O rgrg
O
s aslalai
2. Compare
a i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaadS.no
P
a Transactions . P. adaada Business .P.P
P adaada Profession .P.P adaada Employment . P. adaada
P
wwww ww ww ww
ww wwww wwww
ww 1
ww
Qualifications No qualification
ww Qualification must
ww Minimum
ww
g . O rgrg
O . O rgrg
O . O rgrg
O qualification
. O rgrg
O
2
s aslaa ia i .
l Basic Motive Earning s aslaa ia i .
lprofits Service
s aslaalia i . l
Earning
s as aa ia i .
l wages or s aslaalia.
.wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaadsalary
a
.wP.P adaada
www 3 Capital ww w Small capital w
ww Limited capital ww www No capital required www
ww ww ww ww
g 4 .ORiskrgrg
O Uncertaini.and O rgIrregular
O rg Regular and .O rgrg
Certain,
O Fixed and .O O grg
rregular
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adad5a adaa
adPossible ad a
adapossible a
adadNota a
adada
ww.P.P Transfer of w w.P.P w w.P.P Not w w.P.P transferable ww .P.P
ww
ww Interest wwww ww ww ww ww wwww
g 3. Discuss rgrgany five objectives rofgrgbusiness? rgrg rgrg
i . O . O i . O . O i .O . O i .O . O .
a s
a
l al a i
asi.aEconomic Objectives:asaasa l al a i
a s
a
l
asaa l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  To the
ww w
objective
w of earning profit. w
ww w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg8
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww ww ww ww
wbest
w
ww  To w w
achieve the profit objective, w w
this includes creation of customers, ww regular innovations and ww
g . O Ogrg
rpossible use of availablei.resources.
O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada ii. Social Objectives: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www  It’sw
w
ww to be achieved for the w w
w of the society. ww ww w www
ww desired
w ww benefit ww
g .O grg business operates in
rSince
O .O Ogrg by utilizing itslascarce
arsociety
.O rgrresources,
O g .O rgrg
O
s aslaalia i .
s aslaa lia i .
s as a lia i .
s aslaalia i .
s aslaalia.
a iii. Organizational Objectives:
a a a a
.P.P adada .P.P adada .P.P adada .P.P adada .P.P adada
wwww  It’swan www w
organization intends to accomplish ww w w during the coursewofw w
wits w
w existence in the economy w w
wlike
w
ww w ww ww
g
i . O . rgexpansion
O rg and modernization,
i . O . rgrgsupply of quality goods
O i . O
torg
. O
consumers,
rg customers’ satisfaction.
i .O . rgrg
O .
a s
a
l a
asiv.l a i
a Human Objectives:asaasa l a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P . adad
P P.Padad
.fulfillment adad
.Pemployees
. P .P.P adad
wwww  It’s www
aimed w at the well-being as wellww w
as w of expectations ww wof
w as also of w
people
ww w
ww ww ww ww ww
who are disabled, handicapped and deprived of proper education and training.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala It may thus includesaseconomic a i i .
lala well-being of thesa s
a
lalai
employees,i . social satisfactions as
a
lof
a
i i .
laemployees. s aslaalia.
. P. adaada v. National Objectives:
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww ww ww ww ww wwww
ww ww ww ww ww
 To provide employment opportunity to its citizen for earn revenue.
g . O O grg
rBusiness . O rgconducted
O rg . O rgrgof the country in mind.
O . O rgrg
O
s aslaalia i . activities
s
should
aslaa lia i .
be keeping
s athese
slaalia i .
goals
s aslaalia i .
s aslaalia.
.wP.P adaad4.a Distinguish between .wP.P adaadaeconomic and non .wP.P
ada
adaeconomic activity..P.P adaada . P. adaada
P
www www ww w wwww w
www
ww S.no Transaction ww Economic ww Activity ww
Non-Economic Activity ww
g 1 ai.O rgrg
O
Motive Sole .O rgrg is to earn money ior
O
motive .O Ogrg
rUndertaken for satisfaction.O rgof
O rg social,
s asla l a i .
s aslaa lia i
financial
.
gain. s aslaal a i .
psychological or s aslaal
emotional
ia i .
needs. s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww 2 ww
MoneywMeasurement
w It can be w ww
valued.
w ww be valued.
It cannot
ww wwww
g 3 i .O . rgrg
Relationship
O Toi.O . rgrg of wealth.
creation
O i .O . Ogrgnot create wealth. .OO
rDo i . rgrg .
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad4 Duration .P.P adad It’s repetitive. .P.P adad adad
It’s not repetitive.
.P.P .P.P adad
wwww www w ww w w ww w w www w
ww ww ww ww ww
5 Source of Initiation To satisfy human needs and To the satisfy emotional pleasures.
g . O rgrg
O wants. O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s a
CLASSIFICATIONslaa lia i .
OF BUSINESS s aslaa ia i .
l ACTIVITIES sasal l a ia i .
s aslaalia.
www www ww w ww w www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww ww ww ww ww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg9
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww ww
ww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww ww
ww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al
asSHORT
III. a a i
ANSWER QUESTIONS:a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.P.Extractive
P adad
.PGenetic
. P .P.P adad .P.P adad
wwww 1. Distinguish w w
between
ww industries w
and
ww w industries. www w wwww
ww ww ww ww ww
S.NO gEXTRACTIV INDUSTRIES grg GENETIC grg INDUSTRIES .OO
g . O r
O r g . O r
O . O r
O rgrg
s as1.
a i i .
lala To those activities s as
a i
lawhich i .
la are concerned with s as
a
laToi i .
la those activities which s as
a i i .
lalaundertaken for
are s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww of production of wealth wwfrom air, reproduction wofw plants and animals wwith w
ww
ww extraction
wwww ww
ww ww
ww wwww
water, soil. object of making profit
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s asl a
2.alia i . Examples: agriculture,
s aslaa ia i .
lmining, fishing, forestry, s aslaalia i .
Examples: Nurseries, raising,
s aslaa ia i .
l seeding plants, s aslaalia.
.wP.P adaada hunting. .wP.P adaada .wP.P adaada cattle forming. .P.P adaada . P. adaada
P
www www www w
www w
www
ww ww ww ww ww
2. What do you mean by tertiary industries?
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaali
a i . They do not produce goods.
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  These industries ada utility services.Pand
adaproduce adathem at a profit. .PP
adasell a
adada a
adada
ww.P.P w w.P.P w w . P w w . ww.P.P
ww
ww ww
whelp
w ww
ww ww
ww ww
ww
 They trade, industry and commerce.
g .O O grg term also includes auxiliaries
rThis .O rgrg to trade like banking,
O .O rgrg
insurance,
O .O
warehouse, advertisement rgrg etc.
O .
l
asa alia i . l
asa alia i . l
asa alia i . l
a sa a s
a a sa a s
a a s
a
.P.P adad3. Write any three characteristics
.P.P adad of commerce. ad
.P.Pad .P.P adad .P.P adad
wwww w w
wwdeals with all economicwactivities w w
ww undertaken for profit. www w wwww
ww  Commerce ww w ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr10
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww
wservice
w ww ww wwww
ww  It involves ww an exchange of goods and ww for profit. ww ww
g i.O rgrgis an incentive for undertaking
Profit
O . O rgrg all commercial activities.
O . O rgrg
O . O rgrg
O
s aslaa l a i .
s aslaa lia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaad4.aNarrate commerce.Pwith . adaad
P
anaexample.
. P. adaada
P . P. adaada
P . P. adaada
P
www  It refers w
w w activities which w
wallwthose
tow
w
ww
wnecessary
arew for bringing goods
w
wwfrom w the place of production w
wwtow
ww ww ww
g the place
.O rgrg of their consumption.
O .O rgrg
O .O rgrg
O .O rgrg
O
s a
slaa lia i .
Commercial operations s asla
deal
a lia i
with
.
the buying and s asla
selling
a lia
of
i .
goods, the exchange s asl
ofaalia i .
commodities and s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww.P.P the contribution w w. P.P w w. P.P w w. P.P ww. P.P
ww
ww wwww of finished products”ww ww wwww wwww
- Evelyn g
g
i . O . rgrg
O i . O . rgrg
O i . O . r Thomas
O rg i O . rgrg
O
.insurance, .
a sa
 l
asa a l a
Its i includes not only trade
a sa
l
asa a
butl a i
also services such as
a
l a l
transport,
s
a asa a i warehousing, packaging,
a s
a
l
asa al a i and
a s
a aslaalia
.P.P adad banking. .P.P adad .P.P adad .P.P adad .P.P adad
wwww ww w w www w ww w w wwww
ww ww ww ww ww
IV. Long Answer Questions:
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s s
a
lala i
1. aExplain i . the various kinds
s as
a
lala i i
of. industries on the
s as
a
lala i i
basis . of size.
s as
a
lalai i .
s aslaalia.
. P. adaada  Micro Industries
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww wwww ww ww wwww
ww A Unit w w
where in investment in plant ww and machinery is upto Rs.w25 w lakhs in case of manufacturing ww
g and
. O Ogrg Rs. 10 lakhs in case.O
rupto of O grg enterprises.
rservice . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Small Industries .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
ww unit wherein investment w
wwin plant and machinerywisw w
wmore
w than 25 lakhs but does www
ww ww
A manufacturing ww ww not
g exceed
.O rgrgRs. 5 crore. In casei.O
O ofO rgservice
rg enterprises these .O rgrg are Rs. 10 lakhs and
limits
O .O Ogrg2 crore
rRs.
s aslaa lia i .
s aslaa l a i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada respectively a
adada a
adada adadaa a
adada
ww
ww  Medium wwww
Industries ww ww wwww wwww
g A manufacturing
rgrg unit wherein investmentrgrg in plant and machinery rgrg is more than 5 crore but
rgrgdoes not
i . O . O i . O . O i . O . O i . O . O .
a sa
i
aslaalaexceed Rs. 10 crore.asaInaslacase i
ala of service enterprises
a s
a aslaathese i
la limits are Rs. 2 crore
a s
a aslaaland i
a Rs. 5 core
a s
a aslaalia
wwww respectively ww w w www w ww w w wwww
ww ww ww ww ww
 Large Industries
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala iA i .manufacturing unit
s as
a
wherein
lala i i .investment in plant
sand
as
a
lala i i .
machinery is exceeds Rs.
s as
10a i i .
lala In case of
core.
s aslaalia.
. P. adaada service unit investment
P . P. adaadain equipment exceeds
P . P. P
daad5acrore.
aRs. . P. adaada
P . P. adaada
P
ww ww
2. Compare Industry, Commerce and Trade.
ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
S.no
s aslaa lia i .
Transactions
s asla
Industry
a lia i .
s aslaa l a i .
Commerce
i
s aslaaTrade
lia i .
s aslaalia.
.wP.P adaad1a Scope .wP.P
ada
adaConsists of all activities
.wP.P adaadComprises
a
trade
.wP.P aada
adComprises exchange of.P.P adaada
www ww w involving conversion
w
ww of auxiliaries to trade ww w goods and serviceww
w
www
ww ww ww ww
materials into finished
g O
. i.O rgr g goods. i.O rgrg
O .O rgrg
O .O rgrg
O
s
2 aslaa lia Capital s
Largeaslaa l a i
Capital
.
s asl
Mediumaa li
a i
of
.
capital Smalls aslaalia
Capital
i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww.P.P w w.P.P w w. P.P w w. P.P ww. P.P
ww
ww 3 Risk ww ww High Risk ww ww Low Risk wwww No Risk wwww
It representsrg Supply
g 4
i .
Side
O . rgrg
O i . O . O rg Side ItSiderepresents i . O . rgrg Demand It represents
O i . O . rgrg both
O .
a saaslaala i
a saaslaala i
a s
a aslaala i supply
a s
a
and
aslaala idemand
a s
a aslaalia
.P.P adad5 Utility Creation
.P.P adaItdcreates form utility .P.P adadIt creates place utility.P.P adItad creates possession.P.P adad
wwww ww w w www w ww w w utility wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgrg11
O
s as
a
lala i i .
s as
a
lala i .
s as
a
lala i
s a s
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s aslaalia. i. s as laalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww ww wwww
ww 3. What are w w
the characteristics ofw w
commerce? ww ww
g i).
. O rgrg
Economic
O Activity: . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It consists of
.wP.P ada ada which are undertaken
activities
.wP.P adaadfora earning profits. adaada
.wP.P .wP.P adaada
www w
ww buys goods with the aim w
wofwselling them at a profit.ww ww w www
ww  Aw trader
w ww ww
g .O rgrg
ii). Exchange
O of Goods and Service:
.O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
 It involves s
exchangeaslaalia i
and
.
distribution of s
goodsas laal
and
ia i .
service. s aslaalia i .
s aslaalia.
a
adada a
adada
ww.P.P  Goods w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww ww ww may be purchased forwsale. ww
w wwww ww ww
g
i . O . r
O grgCommerce comprises.O
i
trade
. rgrgand aids of trade. i.O.O
O rgrg i .O . rgrg
O .
a s
a
l al a i
asa iii). Profit Motive: asaasa l al a i
a s
a asal al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  The motive .P.P adaofdcommercial activities.Pis.P atodaearn
d
profit. .P.P adad .P.P adad
wwww ww w w ww w w ww w w www w
ww ww ww ww ww
 Any activity which does not have the aim of profit will not be a part of commerce.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i
iv). . Regularity of Transaction:
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P An isolated
. P. P
ada
adatransaction does not imply . P. P
daada
acommerce. . P. adaada
P . P. adaada
P
ww v). Creationww of Utilities: ww ww ww
g . O rgrgCommerce Creates Place
O . O rg
O rg time utility for help
utility, . O rgrincrease
to
O g the volume ofi.trade.O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaal a i .
s aslaalia.
.wP.P adaad4.a Write short notes .wP.P
ada
adaon: .wP.P adaada .wP.P adaada .wP.P adaada
www ww w ww w ww w www
ww a. Analytical ww industry: ww ww ww
g .O rgrg Industry which analyses
Analytical
O .O rgrgand separates different
O .O rgrg from the same imaterials,
elements
O .O rgrg as in
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaal a i .
s aslaalia.
a
adada the case of oil refinery.
adadaa adadaa a
adada a
adada
ww
ww b. Genetic Industry:
ww ww wwww wwww ww ww
g These rgrgindustries remain engaged rginrgbreeding plants and animals rgrgfor their use in further reproduction.
rgrg
i . O . O i . O . O i . O . O i . O . O .
a s
a
l al a i
asa Example: The seeds,asanursery l al a i
asa companies, poultry, a s
a
l al
asdiary,a i
a piggery, hatcheries, a s
a
laal a
asnursery,i fisheries, a s
a aslaalia
wwww apiary. ww w w ww w w ww w w www w
ww ww ww ww ww
c. Construction Industry:
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i
These. industries are involved
s as
a
lalai i
in. the construction of
s a i
building,
as lala i . dams, bridges, roads,
s as
a i i .
lala as tunnels
as well
s aslaalia.
. P. adaada and canals. .P.P
P . P. adaada
P . P. adaada
P
ww ww
5. Briefly explain the auxiliaries to trade.
ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s
i)lTrade:
as aalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Trade is .wPan
. P aada part of commerce.
adessential .wP.P adaada .wP.P adaada .wP.P adaada
www ww w w
wwbuying and selling. ww ww w www
ww ww
 The term ‘trade’ is used to denote ww ww
g .O rgrgTrade may be classified
O .O rgrginternal trade and external
into
O .O rgrtrade,
O g wholesale trade or .O rgrgtrade.
retail
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adadaii. Transportation: adadaa adadaa a
adada a
adada
ww
ww ww ww all the goods produced
 Selling www
at w
or near the production place wwww is not possible. ww ww
g
i . O . rgrgHence, goods are to be
O i . O
sent
. rgrgto different places where
O i . O . rthey
O grg are demanded.
i .O . rgrg
O .
a s
a
l al a i
asa  The medium awhich s
a
l al a i
asamoves men and materials a s
a
l a
asfroml a i
a one place to anotherasa isa l al a i
a transport.
called
s a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr12
O g
s aslaalia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww ww ww ww ww
ww iii. Banking:ww ww ww ww
g . O rgrgTo start the business ior
O . O rgrun
to
O rg it smoothly we require . O Ogrg
rmoney. . O rgrg
O
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Banks supply
.wP.P adaadmoney.
a
www w
ww funds can be obtained ww w ww w ww w
ww ww
 Necessary ww from bank. ww ww
g iv. Insurance:
.O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Business a
involves
adada various types of risks. a
adada a
adada a
adada
ww
ww ww building, machinery,ww
 Factory
ww w w
furniture etc, must be protected ww against fire, theft and
ww wwwother
w
g
i . O . rgrgrisks.
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  Insurance provides a sa
l al a i
asaprotection in all such cases. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww v. Warehousing: www w ww w w ww w w ww ww
ww ww ww ww ww
 Warehousing helps business firms to overcome the problem of storage and facilities.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala  Prices are thereby s aslaa i
la i .
maintained at a reasonablealevel
s s
a i i .
lalathrough continuous supply s as
a i i .
lalaof goods. s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa ia i .
l SOLE PROPRIETORSHIP s aslaalia i .
s aslaalia i .
s aslaalia.
www www ww w ww w ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww ww ww ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w ww w w ww w w ww ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
 s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww ww ww ww
ww wwww
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a
asa l a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  www w ww w w ww w w ww ww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr13
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s aslaalia. i. s aslaalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada 
.wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w w ww w ww w www
ww  www ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
wwww ww w w ww w w ww w w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaadIII.
P
a SHORT ANSWER aQUESTIONS:
. P. P
daada
. P. adaada
P . P. adaada
P . P. adaada
P
ww 1. How is it possible ww to maintain secrecy in wsole
w proprietorship? ww ww
g Since
. O rgrhe/she
O g manages all the.affairs O rgrgof the business, the secrecy
O . O rgrgcan be maintained easily.
O . O rgrg
O
2.s as l
Whataa ia i .
l is unlimited liability? s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www When his w
ww assets are not sufficient
wbusiness w
www to pay off the business w w he has to pay from
wwdebts w
wwhisw
ww ww ww ww ww
personal
g . O rgrg property.
O .O rgrg
O .O rgrg
O .O rgrg
O
a l
3.sWrite
s aa lia i .
any three characteristics s aslaalia i .
of Sole Proprietorship. s aslaalia i .
s as laalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P i. Unlimited w w.P.P
Liability w w.P.P w w.P.P ww.P.P
ww
When his business assets are not sufficient to pay off the business debts he has to pay from his
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
personal
asal a l a i property.
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad ii. No Separate Entity .P.P adad .P.P adad .P.P adad .P.P adad
ww It concern ww comes to an end with death, ww disability, insanity and insolvencyww of the individual. ww
g O rgrg
O
iii.aiMaintenance
. of Secrecy ai.O rgrg
O . O rgrg
O . O rgrg
O
s as lala i .
s aslala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada Since he/she manages
P . P. adaadall
P
a the affairs of the business,
. P. adaadathe secrecy can be maintained
P . P. adaada easily.
P . P. adaada
P
ww 4. Give some examples ww of Sole trading business. ww ww ww
g . O rgrgFruit sellers
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa ia i .
l  Retail trade sasal l a ia i .
s aslaalia i .
s as laalia i .
s aslaalia.
www ww w
 Handicrafts ww w ww w www
ww ww ww ww ww
g . O rgrgTailoring shops
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
 Beauty parlorasa slaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada adada a
adada a
adada a
adada
ww.P.P 5. Define Sole w
tradingw.Pbusiness.
. P w w.P.P w w.P.P ww.P.P
ww
 It is that form of business organization which is owned and controlled by a single individual.
g
i .O . rgrg
O i .O . rgrg
O i O
.the. rgrg
O i O . rgrg
O
.enterprise”. .
a saasala l a i
He receives all the profits
a s
a
l
asa aand
l a i risks all of his property
a s
a
l
asa a
in
l a i success or failure
a
of
s
a
the
asal al a i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad .P.P adad - Wheeler .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr14
O g
s as laa lia i .
s aslaal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww IV. Long Answer ww Questions ww ww ww
g 1. Explain . O rgrgthe characteristics
O . O rgrgSole trading business.
of
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada i. Ownership by one .wP.P
daada
aman: .wP.P adaada .wP.P adaada .wP.P adaada
www ww w ww w www www
ww  This ww is owned by single person.ww ww ww
g .O rgThe
O rg sole trader contributes .O rgrgrequired capital. i.O.O
the
O rgrg .O rgrg
O
s as
ii.
laalia i
Freedom
.
of work and s asl
Quickaalia i .
Decisions: s aslaal a i
s aslaalia i .
s aslaalia.
a
adada a
adada adada a a
adada a
adada
ww.P.P  Since thew w. P.P w w. P.P w w. P.P w w. P.P
ww
ww ww w windividual is himself aswaw wowner,
w he need not consultww anybody
ww else. wwww
 Hence
g
i . O . rgrg he can take quicki.decisions.
O O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
aiii.l al a i
asaUnlimited Liability: asaasa l al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  When his P.Padad assets are not sufficient
.business .P.P adatodpay off the business.debts P.Padadhe has to pay from his.P.P adad
wwww ww w w ww w w www w www w
ww ww ww ww ww
personal property.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
iv.a
lalai i .
Enjoying entire profit:
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  He strives.Ptirelessly
P . adaada for the improvement
P . P. adaand
P
ada
expansion of his .P . adaada and enjoys all the.P.P
business
P adaada
ww ww
benefits of his hard work. ww ww ww
g O rgrg
v.aMaintenance
. O of Secrecy” ai.O rgrg
O . O rgrg
O . O rgrg
O
s as la lia i .
s asla l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Since he/she adaada all the affairs of the
.wP.manages
P .wP.P
daada the secrecy can be
abusiness, .wP.P
daada
amaintained easily.
.wP.P adaada
www w
wwadvantages of Soleww w ww w w www
ww 2. What are w w
the trading business? www ww
g i. Easy .O O grg
rFormation: .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  No legal formalities a
adadaare required to initiate adatrading concern. .PP
aa dasole a
adada a
adada
ww.P.P w w.P.P w w.P.P w w . w w.P.P
ww
ww  Any w ww capable of enteringww
person
w ww a contract can start wit,w
into wprovided
w he has the necessary wwww
g resources
rgrg for it. rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asii.aIncentive to Work hard: a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  There is
ww w
a w
direct relationship betweenww w w
effort and reward. www w www w
ww ww ww ww ww
 The grgfact that the entire profit can
grg be taken by himself .without grg sharing with anybody else
grginduces
g . O r
O . O r
O O r
O . O r
O
s as laaliai.him to work ceaselessly. s aslaaliai. s aslaaliai. s aslaaliai. s aslaalia.
. P. adaadaiii. Small Capital: .P.P
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Small capital is an important as well as specific advantage of sole proprietorship.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . Sole proprietor can
s
start
aslaalia i .
business with small capital.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iv. Credit Standing: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww  Sincewhis w private properties are held ww liable for satisfying business ww debts. ww
g  .O rgrcan
He
O g get more financial.assistance O rgrg from others
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada v. Flexibility: .P.P a
adada adada a a
adada a
adada
ww.P.P w w w w.P.P w w.P.P w w.P.P
ww
ww  The w wwwtrader can easily adjust w
sole ww to the changing requirements
w
himself wwww of his business. ww ww
g 3. What
i .O . rgrgthe disadvantages
are
O i .O . O grgSole trading business?
rof i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asi.a Limited Capital: asaasa l al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  The w w w
ww is contributed by onewindividual
capital ww w w only, www w www w
ww w w ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr15
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ii. LimitedwManagerial
w Skill: ww ww ww
g O
. Ogrg person’s intelligence
rSingle . O O grgexperience may not help
rand . O rghim
O rg beyond a certain stage. . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Since he has .wP.P tod
a ada on each and every activity,
afocus .wP.P adaada his managerial ability .wP.P
ada to be limited.
aisdabound .wP.P adaada
www w
wLiability:
w ww w ww w www
ww iii. Unlimited ww ww ww ww
g .O rgThe
O rg creditors have thei.O rgrgto recover their duesi.Oeven
right
O rgrgfrom the personal iproperty
O .O rgrg of the
O
s aslaalia i .
s aslaal a i .
s as laal a i .
s aslaal a i .
s aslaalia.
a proprietor. a a a a
wwww  In case www w
the business assets are not w w
wsufficient
w to pay their debts. ww w w www w
ww ww ww ww ww
g iv. Lack rgrofg Specialization: i.O.O rgrg rgrg rgrg
i . O . O i .O . O i .O . O .
a s
a
l al a i
asa  Since the business a sa
l al a i
asa is small and the financial
unit a s
a
l al a
asresources
a i are limited. asa
a slaal a i
a s
a aslaalia
.P.P adad .P . adad
P .P.P adad P.Padad
.advantages. .P.P adad
wwww  Experts
wwwin
w different fields cannot be
ww employed
w w to secure maximum
ww w w www w
ww ww ww ww ww
v. Hasty Decisions:
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . Sole proprietor is
s more
as
a
lalai i .
likely to take hasty decision
s as
a
lalai i
as . he need not consult
s a
anybody
as
i i
lala else..
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg HINDU UNDIVIDED
O . O rgrg FAMILY AND
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i PARTNERSHIP
.
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
ww wwww ww ww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a asal al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a asal al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr16
O g
s aslaalia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww wwww ww
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
www www ww w www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w ww w w www w w
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i
lala  i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  ww wwww ww ww wwww ww
ww
ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
www www ww w www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  .P.P adad .P.P adad .P.P adad .P.P adad
ww w
ww ww ww ww ww

g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
III.
s a a
SHORT
s
i i .
lala ANSWER QUESTIONS: s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww 1. What is the meaning wwww of Joint Hindu Family ww wBusiness?
w wwww ww
ww
ww ww ww ww ww
“When two or more families agree to live and work together, invest their resources and labour
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia
jointly i . and share profits or
s aslaa
losseslia i .
together, then this family
s aslaais
lia i .
known as composite l
family
s as aaliaori .HUF”
s aslaalia.
.wP.P adaad2.aWrite any 3 features .wP.P
ada
aofdaHUF. .wP.P adaada .wP.P adaada .wP.P adaada
www www ww w www w
ww
ww ww
i. Governed by Hindu Law
ww ww ww
g .O Ogrg
rbusiness .O O grg
rFamily .O rgrg under the Hindu law.
O .O rgrg
O
s aslaaliThe
a i . of the Joint Hindu
s aslaalia i . is controlled and
s aslaa lia i .
managed
s aslaalia i .
s aslaalia.
a
adadaii. Minor also a co-parcener adadaa a
adada a
adada a
adada
ww
ww In a Joint www w Family firm even a w
Hindu
wwborn baby can be a co-parcener.
w
new wwww wwww
g
i . rgrg
iii. Management
.O O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa Joint Hindu Family are a s
a
l
asa al a
controlled
i
and managed a
by s
a
l a l a i
asaperson who is known as
one a s
a
l a
asa .
‘Karta’
l a i
a s
a aslaalia
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr17
O g
s aslaalia i .
s aslaal a i .
s aslaa l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s as laalia. i. s aslaalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 3. Explain the w w
nature of liability of karta.ww ww ww
g i.O Orgrg the Karta, the liability
Except . O rgrall
of
O g other members is limited . O rgrtog their shares in the business.
O . O rgrg
O
s aslaal a i .
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  The amount .ofP.debt adaadcan
P
a be recovered from his
. P. P
ada property also. adaada
adapersonal . P. P . P. adaada
P
www w
www of Coparceners? ww www w wwww w
www
ww 4. What is the w w
meaning ww ww
argJoint rgrga new born baby can be
g  In
l alia.Oi . O rg Hindu Family firmi.O
l al a
even
i . O l alia.Oi . Ogrg
arco-parcener.
l alia.Oi . rgrg
O laalia.
a s asa The head of the family
a s as a
member is called Karta. And
a s as a
other members are called a s as a
Coparceners. a s as
wwww  Today w w w
ww succession Act 2005 iswapplicable
Hindu ww w w to all male and female ww
ww members of a HUF. ww www w
ww w w ww
g 5. Define Partnership.
rgrg rgrg rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa “The relations whichaexist s
a
l al a i
asabetween persons, competent a s
a
l al a i
asa to make contracts, who a s
a
l al
asagree a i
a to carry on a a s
a aslaalia
.P.P adad .Pin
. adad
wwww lawful business
www w common with a view ww to
w wprivate gain”. ww ww www w
ww ww ww ww ww
- Prof. Haney
g . O Or grg . O r
O grg . O r
O grg . O rgrg
O
6. What
s as
a
lalai i
is. the minimum and
s as
a
maximum
lalai i . number of members
s as
a
lalai ini .the partnership concern?
s as
a
lalai i .
s aslaalia.
. P. adaada Minimum numbers
P . P. adaofadpersons
P
a
are 2. . P. adaada
P . P. adaada
P . P. adaada
P
ww w ww ww ww
ww
ww wwww
Maximumwnumber of partners 10 in banking
ww ww
sector and 20 in Non-banking
ww ww
sector.
wwww
g . O
is.O
grgmeaning of Partnership
rthe . O rgDeed?
O rg . O rgrg
O . O rgrg
O
7. What
s aslaalia i
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  A partnership firm .wP.P aadabe formed through an
adcan adaada among two or more
.wP.agreement
P .wP.P
ada
adapersons. .wP.P adaada
ww  In Indiaw w
the agreement may be oral or ww writing. ww ww
g  Partnership
.O Orgrg agreement is alsoi.O rgrg as partnership deed.i.O.O
known
O rgrg .O rgrg
O
s aslaalia i .
s as laal a i .
s aslaal a i
s as laalia i .
s aslaalia.
a
adada8. Who is called a Secret a
partner?
adada adadaa a
adada a
adada
ww.P.P w w.P.P w w.P.P ww.P.P w w.P.P
ww
ww  A secretwpartner www is one whose association ww wwis not known to the general ww wwpublic. wwww
g  Other rgrgthan this distinct feature, rhegrgis like rest of the partners ringrgall respects. rgrg
i . O . O i . O . O i . O . O i .O . O .
a9.s
a
l al a i
asa is meant by Joint and
What a s
a
l al a
asSeveral
a i
Liabilities? a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad .P . adad
P adad
.P.for
P .P.P adad .P.P adad
wwww  Every www
partner w is jointly and severally w w
liable
ww all acts of the firm. ww ww www w
ww ww ww ww ww
 It means that in case the assets are inadequate for meeting the claims of creditors, even their
g . O Orgrg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lalapersonal properties should s as
a i
lalbe i .
a made available. saslala a i i .
s as
a
lalai i .
s aslaalia.
ada
adaIIV. adaada adaada adaada adaada
ww. P. P Long Answer ww . P P
Questions
. ww . P. P ww. P. P ww . P. P
ww
ww ww ww ww ww ww ww wwww
1. What is the implied authority of Karta?
g . O OrgrgIn a joint family firm, . O rgrgKarta has the impliedi.O
O rgrg to enter into a contract
O . O rgrg
O
s aslaalia i .
s as laalia i .
only
s aslaal a i .
authority
s as laalia i . for debts
s aslaalia.
.wP.P adaada and pledge
.wP.P aada
adthe property of the firm .for P. P
daadordinary
athe a purpose of the . P. adaada of the firm. .P.P
businesses
P adaada
www w
wwKarta is the senior mostwmale w w
wwmember wwww w
www
ww ww
 The w of the family.ww ww
g .O OrgrgThe members of the ifamily .O rgrghave full faith and confidence
O .O rgrg in Karta.
O .O rgrg
O
s aslaalia i .
s as laal a i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada  Only kartaais a a to deal with outsiders.
d entitled adadaa a
adada a
adada
ww.P.P w w.P.Pad w w.P.P ww.P.P w w.P.P
ww
ww  Other
ww wwmembers can deal withwoutsiders ww only with the permission
w ww ww of Karta. wwww
g 2. Can a
.O Orgrg is admitted in
minor
.O rgrgJoint Hindu Family
the
O .O rgbusiness
O rg – Why? Orgrg
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia. i.O s aslaalia
.
a a s  In a partnership a a s
minor cannot become a a s
co-partner though he may be a s
admitted
a to the a a
.P.P adad . P.Padad . P.Padad . P.Padad . P.Padad
wwww w
benefit w
ww of partnership. ww w w ww ww www w
ww ww ww ww ww
g PREPARED . O OrgBY
rg P.VAHEESWARAN i.M.COM., O rgrgM.PHIL., DCA., B.ED i.O.O
O rgrg PAGE
. O rgr18
O g
s aslaalia i .
s as laal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s aslaalia. i. s as laalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww w www ww ww ww ww wwww
ww  Inwwa joint hindu family firm even ww a new born baby can be w awpartner. ww
g . O rgrgThe member ship of ithe
O . O rgrg can be acquired only
family
O . O rgrbirth.
by
O g . O rgrg
O
s aslaalia i .
s aslaal a i .
s as laa lia i .
s as laalia i .
s aslaalia.
.wP.P adaada  As soon asathe
.wP.Pad
da male
a child is born in theafamily
.wP.Pad
da a that child becomePa amember.
.w.Pad
da a
.wP.P adaada
www 3. What are the
w
wwcontents of Partnership w
ww Deed? ww w www
ww ww ww ww ww
g .O rgrgName of the Firm i.O.O
O rgrg .O rgrg
O .O rgrg
O
s aslaalia i .
 Nature of the s aslaa
proposedl a i
business s as laa lia i .
s as laalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P w
 Durationw. P.P w w. P.P w w. P.P ww. P.P
ww
ww wwww of partnership ww ww ww ww ww
ww
g
i . O . rgrgCapital contribution i.O.O
O rgrg i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i  Withdrawal from
a sa
l a
the
asa l a i
firm
a s
a asal a l a i
a s
a asal al a i
a s
a aslaalia
.P.P adad  Interest .Pon
. P
dad
acapital .P.P adad .P.P adad .P.P adad
wwww ww ww ww w w ww w w wwww
ww ww ww ww ww
 Loan from partners
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .  Retirement
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Goodwill . P. P
daada
avaluation . P. adaada
P . P. adaada
P . P. adaada
P
ww 4. Explain the ww types of dissolutionwof w partnership firm. ww ww
g . O rgrWithout
O g the order ofathe . O rgrg and
court
O . O rgrg
O . O rgrg
O
s aslaalia i .
s asla lia i .
s as laa lia i .
s as laalia i .
s aslaalia.
.wP.P adaada  By orderP
.wof.P
daadcourt.
athe a
www w
worder
w of the court: ww w ww w www
ww a. Without the ww ww ww ww
g i.OBy
. i.O rgragreement
g or mutual consent:
.O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia s aslaalia i .
s as laa lia i .
s as laalia i .
s aslaalia.
a  A firm may bea dissolved when all the partners
a agree to close the affairs aof the firm. a
wwww  Just ww
waswa partnership is createdwby ww w w
contract, it can also be terminated w w
ww by contract. wwww
ww ww w ww ww
g ii. By
rgrginsolvency of all the ipartners rgrg but one: rgrg rgrg
i . O . O . O . O i .O . O i .O . O .
a s
a
l al a i
asa  If any of the partners a sa
l al a i
asa adjudged an insolvent a ita
s
a s l a l a i
isanecessary to dissolve the a s
a
l a
afirm.
s a l a i
a s
a aslaalia
wwww iii. When the
ww wobjective
w becomes illegal:
ww w w ww w w wwww
ww ww ww ww ww
 When the business carried on by the partnership becomes illegal, the partnership firm is
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala
automatically dissolved. i i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada iv. By notice of.P.dissolution:
P adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww
 In the case of partnership at will when any partner gives in writing to all the other partners
ww
g . O rgrgindicating his intention
O . O rgdissolve
O rg . O rgrgbe dissolved.
O . O rgrg
O
s aslaalia i .
s aslaalia i .
to the firm, thela
s as a
firm
lia i .will
s as laalia i .
s aslaalia.
.wP.P adaada b. Dissolution through .wP.P
ada
adacourt: .wP.P adaada .wP.P adaada .wP.P adaada
www w
wwmay order dissolution wofw w
wwa firm at a suit of awpartner w
ww in any of the following www
ww The court ww w ww
g rgrg
.circumstances.
O O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laa lia i .
s as laalia i .
s aslaalia.
a
adada  When a partner a
adadabecomes insane .P.P a
adada a
adada a
adada
ww.P.P ww.P.P w w w w.P.P ww.P.P
ww
ww wwww incapacity of any w
 Permanent ww
partner
w ww ww ww
ww
g
i . O . rgrgMisconduct of any partner
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  Transfer of interest a sa
l al a i
asato third person a s
a asal a l a i
a s
a asal al a i
a s
a aslaalia
wwww  ww
Continued
ww loss ww w w ww w w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr19
O g
s aslaalia i .
s aslaal a i .
s as laa l a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww
ww wwww wwww
ww 5. Write anyw w
three differences between ww Dissolution of Partnership ww and Dissolution ww
g of Firm.
. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadS.no
a Dissolution
.wP.P adaadaof Partnership.P.P adaada Dissolutionad
. P. P ofaadaFirm . P. adaada
P
www www w
www w
www w
www
ww 1 ww ww ww ww
Only one or more of the partners terminate their All the partners terminate their connections with
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
connections with the firm.
s aslaalia i .
s athe
slaalia i .
firm.
s aslaalia i .
s aslaalia.
a
adad2a It may or may
ada the business of .the
adabring a
dada It brings the business
afirm ada firm to an end. .PP
aofdathe a
adada
ww.P.P w w.P.not
P w w P.P ww.P.P ww .
ww
ww to an end.wwww ww ww ww
ww ww
ww
3 The business will continue even after dissolution. It cannot be continued in the case of dissolution
g
i O
. i.O rgrg i .O . rgrg
O of firm.
i .O . rgrg
O i .O . rgrg
O .
6.
a s
a
l al a
asa the procedureafor
Write s
a
l al a i
asaRegistration of a Firm. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.P.the
wwww  Name
www w
of firm. w
ww w wwww wwww
ww ww ww ww ww
 grgThe principal place of.O business.
g . O r
O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala  Name of other splaces as
a i i .
lalawhere the firm carriedson as
a i
la i .
labusiness. s as
a
lalai i .
s aslaalia.
. P. adaada
P  Names . P.
and
ada
P
ada
addresses of all the . P.
partners.
adaada
P . P. adaada
P . P. adaada
P
wwww wwww ww
ww wwww wwww
ww ww ww ww ww
 The date on which each partner joined the firm.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .  The duration of
s
the
aslaali
firm.
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www w
ww www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i . JOINT STOCK
s asla li
COMPANY
a a i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
ww wwww ww ww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w w
ww w wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww ww
ww wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www w
ww www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
ww wwww ww ww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w w
ww w wwww wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE. O rgr20
O g
s aslaalia i .
s aslaal a i .
s a slaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada 
www w w ww w www w
ww
ww  www ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  adadaa a
adada a
adada a
adada
ww
ww  ww ww ww
ww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www ww w www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
ww ww ww ww
ww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  .P.P adad .P.P adad .P.P adad .P.P adad
ww w
ww ww ww ww ww

g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
III. aSHORT
s s
a
lalai i . ANSWER QUESTIONS:
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaad1.aWhat are the advantages
P . P. adaadof
P
a
Companies? . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww i. Large Capital ww ww ww ww
g i.O A Ogrg
rcompany can secure large . O rgrg compared to a solei.trader
O
capital O rgrgor partnership.
O . O rgrg
O
s aslaal a i .
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Large amount.P.ofP ad aada is necessary for conducting
capital
. P. adaada business on a large.P.scale.
P adaada
P . P. adaada
P
www w
www wwww w
www w
www
ww ww
ii. Limited Liability ww ww ww
g .O rgrgliability of a shareholder
The
O .O risgrlimited.
O g .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  In the case .ofP.P aa daada limited by guarantee,
company a a
a liability is restrictedatodadthea amount that he has adada
adadhis a
ww.P.P w w w w.P.P ww .P.P ww .P.P
ww
ww ww to contribute in the event
guaranteed
ww wof
ww w winding up of the company. wwww wwww
g iii. Transferability
rgrg of Shares rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l al a i
asa  Transaction of Shares a s
a
l al a
asbetween
a i
two individualsaiss a
l al
aeasy.
s a a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  So there
www
is wliquidity of investment. ww w w www w w
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr21
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 2. What is meant ww by Private Company? ww ww ww
g i.O It.Orisgragtype of company which . O rgrformed
is
O g with minimumi.two O Orgshareholders
rg and two directors.
. O rgrg
O
s aslaal a i
s aslaalia i .
s as laal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The minimum.P.requirement adaada with respect to.Ppaid
P . adaad
P
upacapital of ₹1, 00,000. ad
. P. P aada . P. adaada
P
www  Maximum
w
wwofw200 persons can become www w
shareholders in a privatew wwww
company.
w
www
ww ww ww w ww
g  The
.O rgrname
O g of private company .O O grg be suffixed with pvt
rshould .O Orgror
ltd g (p) ltd. .O rgrg
O
s aslaa
lia i .
Ex. Scientific s
publishing aslaalia i
services
.
private Limited, s as laali
Chennai.
a i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P 3. What is meant ww. P.P w w. P.P w w. P.P ww. P.P
ww
ww wwwby
w Government Company? ww ww wwww wwww
 A public
g
i . O . rgrg enterprise incorporated
O i . O . rgrgunder the Indian Companies
O i . O . Orgrg Act, 1956 is calledi.O a government
. rgrg
O .
a sa
l al a i
asa company. a s
a
l
asa al a i
a saasal al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad adad
.P.government.
P .P.P adad
wwww  These companies
ww ww are owned and managed
www w by the central or thewwstate
w w “Government
wwww
ww ww ww ww ww
Companies” as any company in which not less than 51% of the is held by.
g . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i . - Section
s as
a
lalai
617 i .
of the Companies Act,
s as
a i
1956
lala i .
s aslaalia.
. P. adaad4.aWhat is meant by .Foreign
P P. adaadaCompany?
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww ww ww
ww  A foreignw
ww w
company means a companyw
ww w
which is incorporated in a country
wwww
outside India under the
wwww
law
g . O rgrgcountry.
O . O rgrg
O
s aslaaliof
a i .that
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  After the establishment .wP.P adaada of business in India, .wP.P adaa da following documents
the
.wP.P
ada be filed with the adaada
adamust .P.P
www w ww w w
w w w
w wwww
ww w w w w
Registrar of Companies within 30 days from the date of establishment. w w ww
g IV. Long .O O grg
rAnswer Questions .OO rgrg .O Orgrg .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adad1.a What are the contents a
adada of Memorandum ada a a
ofdAssociation? a
adada a
adada
ww.P.P ww.P.P w w.P.P w w.P.P w w.P.P
ww
ww i). Name wwww
Clause: ww ww wwww ww
ww
g
i . O . rgrgThe name clause requires
O i . O . rgtorgstate the legal and recognized
O i . O . Orgrg name of the company. i .O . rgrg
O .
a sa
l al a i
asa  The companyaname s
a
l al a i
asais allow to be registered. a saasal al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ii). Situationww ww
Clause: www w ww w w www w
ww ww ww ww ww
 It requires to show the physical location of the registered office of the company.
g . O r
O grg . O rgrg
O
s as
a i i .
lala  It is required toskeep as
a i i .
lalaall the company registers s as
a
lin
a
i
la i .
this office. s as
a
lalai i .
s aslaalia.
. P. adaada iii). Objective.Clause:
P P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 It is required to state the ancillary objectives.
g . O r
O grg . O rgrg of the main objectives.
O
s aslaalia i .  To facilitate the
s asla li
achievement
a a i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iv). Liability Clause: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w ww w w
w ww w w
wdebt
w
ww  It wwrequires to state the extent ww to which shareholders of w w
the company are liable to the ww
g .O rgrgobligations of the company.
O .O rgrg
O .O Orgrg .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada  There are a a
d a limited by shares
companies aanda a
dadlimited by guarantee. ad a a a
adada
ww.P.P ww.P.Pad w w.P.P w w.P.Pad w w.P.P
ww
ww v). Capital wwwwClause: ww ww wwww ww
ww
g
i .O . r
O grgIt requires to state the.O
i . rgrg authorized sharei.O
company’s
O . Orgrg
capital.
i .O . rgrg
O .
a sa
l al a i
asa  It is also required a s
a
l al a i
astoa list the company’s assets a sa
l al
asunder a i
a this clause. a s
a
l
asa al a i
a s
a aslaalia
wwww ww ww www w ww w w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr22
O g
s aslaalia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww wwww ww ww
ww 2. What are w w
the contents of Articles ww of Association? ww ww
g . O O grg of shares, capital,.Ovalue
rAmount rgrgand type of shares. i.O.O
O rgrg . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
.wP.P adaada  Rules regarding .wP.P
ada of shares and debentures.
adaissue .wP.P adaada .wP.P adaada .wP.P adaada
www  Manner www
of transfer of shares. ww www www ww w
ww ww ww ww
g
l alia.Oi . Ogrg
 rDeclaration of dividends. rgrg
l alia.Oi . O l alia.Oi . rgrg
O l alia.Oi . rgrg
O laalia.
a s as a  Borrowing powers a s
ofas a
the company. a s as a a s as a a s as
ww  Sealwofwthe w w w w w w ww
ww
ww ww company. wwww ww ww wwww
g 3. What
i .O . rgrmeant
is
O g by Prospectus?
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a
asMeaning:
a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  According w w
wwto Section 2(36) of thewCompanies www w Act, any document w w
wwinviting the public to wbuy ww
wwits
ww ww w ww w
shares or debentures comes under the definition of prospectus.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai
Contents:i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  The name, . P. adaada and occupation .ofP.P
addresses
P adaada and managing directors.
directors . P. adaada
P . P. adaada
P
wwww w ww
w ww
wand
w wwww ww ww
ww  The ww number and classes of shares ww debentures issued. ww ww
g rgrParticulars
g about the directors, rgrg secretaries and the treasures rgrg and their remuneration. rgrg
l a ia. O
i. O The amount for the l a ia.
minimum
O
i . O subscription. l a ia. O
i . O l a ia. O
i . O laalia.
s as a l s as a l s as a l s as a l s as
.wP.P adaada  The estimated.wP.P
ada of preliminary expenses.
adaamount .wP.P adaada .wP.P adaada .wP.P adaada
www  Name
w
wwand address of the auditors, www
bankers and solicitors ofw ww
the
w
company. ww w
ww ww ww w ww
g 4. What is rgrmeant
g by Multi National rgrg Company? i.O.O rgrg rgrg
l alia.Oi . O l alia.Oi . O l al a i l alia.Oi . O laalia.
a s as a  It operates in a s
moreas athan one country a s as a a s as a a s as
.P.P adada  Carries .Pout
. P da
adaproduction, marketing .Pand
. P da
adaresearch activities on .P . adada Scale in those.P.P
P
international
adada
wwww www w www w www w ww ww
ww ww
countries. ww ww ww
g
i .O . rgrgSeeks to maximize profits
O i .O . rgrworld
O g over.
i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  A domestic company a s
a
l al a i
asa or a foreign companyasacan l al a i
asabe a MNC. a s
a
l
asa al a i
a s
a aslaalia
wwww Examples: www w www w www w ww ww
ww ww ww ww ww
Microsoft Corporation, Nokia Corporation, Nestle, Coca-Cola, International Business Machine,
g . O rgrg Sony Corporation.i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as
a
lalaiPepsiCo,
i .
s as
a
lala i
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaad5.a What is meant.P
P by
. P
ada
adaHolding and Subsidiary
. P. adaadcompany?
P
a
. P. adaada
P . P. adaada
P
ww i). Holding ww Companies: ww ww ww
g . O rgrgAs per Section 2(87)
O . O rgrg
“subsidiary
O company” in.O rgrg to any other company
relation
O . O rgrgmeans a
O
s as laalia i .
company in which
s aslaa ia i .
l holding company. sasal
the l a ia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Controls .wP.the
P
ada
adacomposition .wP.P
of the Board
ada
aofdaDirectors. .wP.P adaada .wP.P adaada
www w
ww or controls more than w
wone-half
w w
ww either at its own. ww ww w
ww ww
 Exercises ww of the total sharewcapitalw
g ii).
.O rgrg
Subsidiary
O Companies:i.O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  In relationato a a other company meansadaacompany a a a
adadacompany. a
adada
ww.P.P w w. P.Pdad any
w w. P.P d in which the holding
w w. P.P ww. P.P
ww
ww  Controls
ww ww the composition of the wwwBoard
w of Directors. ww ww wwww
g
i . O . rgrgExercises or controlsi.O
O
more
. rgrgthan one-half of the itotal
O . O . rgshare
O rg
capital either at its own
i . O . rgrgtogether
O .
a s
a aslaala i with one or more.
a s
a aslaala i
a s
a aslaala i
a s
a aslaala i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr23
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i
CO-OPERATIVE
.
s aslaali
ORGANIZATIONa i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P ww.P.P w w.P.P ww.P.P ww.P.P
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww wwww www w wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr24
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
g 1. What . are
O rgrthe
O g disadvantages of Cooperatives?
. O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s a slaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada i. Limited funds .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www  Co-operative
w
www societies have limited ww w w w
www w
www
ww ww ww membership. ww ww
g .O grg principle of one-man.Oone-vote
rThe
O rgrg and limited dividends
O .O rgalso.
O rg .O rgrg
O
s aslaa lia i .
s a slaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a ii. Lack of secrecy a a a a
wwww  Business w w
wwsecrets cannot be maintained w w
ww in cooperatives. www w wwww
ww ww ww ww ww
g  rBecause
grg all members are aware rgrgof the activities of the enterprise.
rgrg rgrg
i . O . O i . O . O i . O . O i .O . O .
a sa
l a
asiii.l a i
a Limited scope a saasal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  www w
Co-operative societies cannot be w w
introduced
ww in all industries. www w wwww
ww ww ww ww ww
 Theirgrg scope is limited to.only grcertain areas of enterprise. g
g . O r
O O r
O g . O r rg
O . O rgrg
O
a
2.sWrite
as
i i .
lala a note on Housing cooperatives. s a s
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  To provide.P
P . adaada accommodation to
P
residential . P. adaadmembers
P
their
a
on ownership . P. P
daada
abasis or rent. . P. adaada
P
ww ww ww ww ww
 These societies advance loans to members, repayable over a period of 15 to 20 years.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa li
a i . The member-tenant,
s a sla li
however,
a a i . can own the houses
s asla li
after
a a i .
paying the cost.
s aslaalia i .
s aslaalia.
.wP.P adaad3.aWhat is meant by .Producers P. adaada cooperative society?
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
www wwww w
www w
www
ww  Producer
ww cooperatives are established
ww and operated by producers.
ww ww
g  .O O grghelp increase marketing
rTo .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s a slaalia i .possibilities and production
s aslaalia i efficiency.
.
s aslaalia i .
s aslaalia.
a
adada  They are organized a
adadato process, market, .and a
dada their own products.
adistribute a
adada a
adada
ww.P.P w w.P.P w w P.P w w.P.P ww.P.P
ww
ww wwww ww ww ww
 Examples: Cooperative weavers’wsocieties, w Cooperative match ww factories. ww
g 4. Write .O a.O grg on cooperative forming
rnote .O rgrsocieties.
O g .O rgrg
O .O rgrg
O .
l
asa a lia i l
asa alia i . l
asa alia i . l
a sa  When various a a s
a a s
a a s
a a s
a
.P.P adad .P.Pad
d
farmers in a village pool their
.P.P adland
ad together. .P.P adad .P.P adad
wwww  Purchase
w w
wwthe necessary inputs forwthe ww w w
cultivation, and market the
w w
wcrops
w jointly. wwww
ww ww w ww ww
g  One
. O rgrgmember-one-vote is iprinciple.
O . O rgrg
O . O rgrg
O . O rgrg
O
s
5. as
a
Write
i i .
lala a note on industrialscooperatives. as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  It is organized wwwwby small scale producers. ww ww wwww wwww
ww ww ww ww ww
g  ItOundertakings
rgrg are a useful means
O rgrgof developing small scale O grg cottage industries. .OO
rand rgrg
l a ia. i . O
l It is very useful in obtaining l a ia. i . O
l raw materials in improving l a ia. i . O
l the quality of products.sasal l a ia i . laalia.
s asa s as a s as a s as
www IV. Long Answer w
ww Questions ww w www www
ww ww ww ww ww
1. What are the principles of cooperatives? (Any 5)
g .O
i. rgrg
Voluntary
O and Open Membership: .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a a voluntary organizations,
adadare a a to all people able atodause
adadopen a a a
adada
ww.P.P  Cooperatives
w w.P.P w w.P.P w w.P.P d its services without ww.P.P
ww
ww wwww social, racial, politicalww
gender, ww
or religious discrimination.ww ww ww
ww
g
iii.
.O . rgrg
Democratic
O Member: .OO
i . rgrg i .O . rgrg
O i .O . rgrg
O .
a sa
l a l a i
asa  Control Cooperatives a s
a
l al a i
asa are democratic organizations a s
a
l al a i
asa controlled by their amembers. s
a
l
asa al a i
a s
a aslaalia
wwww  Those
w w
ww who buy the goods or w ww
use
w w
the services of the cooperative. www w wwww
ww ww w ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr25
O g
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww wwww ww ww
ww ww
iii. Member’s Economic Participation: ww ww ww
g . O rgrgMembers contribute iequally
O . O rgrgto, and democratically
O . O rgrg the capital of the cooperative.
control,
O . O rgrg
O
s as laalia i .
s aslaal a i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  This benefits
.wP.P adaadmembers
a in proportion toad
.wP.Pad
thea abusiness they conduct with
.wP.P adaadthe
a cooperative rather adaada
.P.P
www w
wwon the capital invested. ww
than ww w www ww ww
ww w w ww ww
g .O rgrg
iv. Autonomy
O and Independence:
.O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
 Cooperatives s
are aslaalia i
autonomous,
.
self-help s as laa
organizationslia i .
controlled by theirs aslaalia
members.
i .
s aslaalia.
a
adada a
adada adadaa a
adada a
adada
ww.P.P  If the w w. P. P ww. P. P w w. P. P w w. P. P
ww
ww ww wwco-operative organization ww wenters
w into agreements with ww other
w w organizations. wwww
v. Education, Training, and Information”
g
i . O . rgrg
O i O rgrg
O
.education
. i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i  Cooperatives
a s
a
l
provide
asa al a i and training
a sa
l
for
asa al a i
members, elected l al a
representatives,
a s
a asa i managers
a s
a aslaalia
.P.P adad .P.P
and employees.
adad .P.P adad .P.P adad .P.P adad
wwww www w ww ww www w ww w w
ww ww ww ww ww
 Members also inform the general public about the nature and benefits of cooperatives.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
2. aWhat
s s
a
lalai i . are the advantages
s as
a
lalai ofi . cooperative society?
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada i). Voluntary Organization:
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 The membership of a cooperativew w
society is open to all. ww ww
g  . O rgrgperson with commoni.interest
Any
O O rgrg can become a member.
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaal a i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The membership .wP.P
adais kept low
adafee .wP.P adaada .wP.P adaada .wP.P adaada
www www ww w www ww w
ww ii. Easy formation: ww ww ww ww
g .O O grg
rCooperatives can be formed
.O Ogrg easily when compared
rmuch .O rgtorga company.
O .O rgrg
O
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a  Any 25 members a who have attained majority acan join together for forming a a cooperative society. a
wwww iii. Democracy: www w ww ww www w ww w w
ww ww ww ww ww
g  rg Agco-operative society is run rgrong the principle of ‘onei.O man rgrone
g vote‘. rgrg
i . O . O r i . O . O . O i .O . O .
a s
a
l al a i
asa  It implies that allamembers s
a
l al a i
asa have equal rights ainsamanaging asal al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww iv. Limited liability:
www w ww ww www w ww w w
ww ww ww ww ww
 The liability of the members in a cooperative society is limited to the extent of their capital
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . contribution.
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  They cannot
P . P.be
P
ada
adapersonally held liable for
. P. adaadebts
the
P da of the society. .PP
. adaada . P. adaada
P
ww v. Each for all
ww and all for each:
ww ww ww
g . O rgCo-operative
O rg . O rgrg on the basis of selfi.O
O rgrand
O g mutual help. . O rgrg
O
s as laalia 
i . societiesaare
s asla lia i .formed
s as laal a help
i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Therefore P adaada contribute their efforts
.wmembers
. P .wP.P adatoadpromote
a their commonPwelfare.
.w.P adaada .wP.P adaada
www w
wwtypes of Cooperative w
wwsociety? www ww w
ww 3. What are w w
the ww ww ww
g i). Consumers
.O rgrg Cooperatives: i.O.O
O rgrg .O rgrg
O .O rgrg
O
s as laalia i .
s aslaal a i
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada  It’s organized by a
adada
consumers that want to adada
achievea better prices or quality a
adada
in the goods or services a
adada
ww.P.P w w.P.P ww.P.P w w.P.P w w.P.P
ww
ww they w ww
purchase.
w ww ww ww ww wwww
g  They rgrg also supply essentiali.O commodities
rgrg through Public Distribution rgrg System (PDS). rgrg
i . O . O . O i . O . O alia.Oi.O .
a s
a a la
ii).
s a i
alProducers Cooperatives:
a s
a aslaala i
a saas laala i
a s
a asla a s
a aslaalia
.P.P adad .P.P adad adad
.P.operated
wwww  Producer www w
cooperatives are established ww ww
and by producers. www w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr26
O g
s as laalia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww
wincrease
w ww ww ww ww wwww
ww  To help ww marketing possibilities ww and production efficiency. ww ww
g  . O rgrg
Example,
O Cooperative weavers’ . O rgrg societies, Cooperative
O . O rgcarpenting
O rg units, Cooperative
. O rgrg match
O
s as laalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada factories.
www iii). Marketing
w
wCooperatives:
w ww w ww w www
ww ww ww ww ww
g  Its
.O rgrassociations
O g of small producers
.O rgrg formed for the purpose
O .O O grgmarketing their produce.
rof .O rgrg
O
s as laal

ia i .
To perform certain s aslaali
marketing
a i .
functions such as s aslaa
grading,lia i .
warehousing, s
advertisingaslaalia i
etc.,
.
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww.P.P iv). Credit Cooperatives: w w. P.P w w. P.P w w. P.P w w. P.P
ww
 They g are those formed for the g purpose of providing short-term g financial help to their members.
g
i O r
O r g
. i.Credit societies may belaagriculturali O
. i. r
O r g
i O
. i. r
O r g
i .O . rgrg
O .
a s
a asal al
 a
a s
a asa l a credit societies
a s
a
l
asa a
or l a
non-agricultural credit
a s
a
l al a
societies.
asa i
a s
a aslaalia
.P.P adad v). Housing Cooperatives: .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
 To provide residential accommodation to their members on ownership basis or on rent.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . People who intend to
s as
a
lalai
build i .
houses of their own join
s as
a
lala i i
together. and form housing
s as
i i
societies.
a
lala .
s aslaalia.
. P. adaada  These societies
P . P . P
ada
adaadvance loans to members, . P. P
daada over a period ofP15
arepayable . . adatoad20
P
a years.
. P. adaada
P
ww 4. Write a note ww on Consumer cooperative ww society. ww ww
g  iIts . O rgrg
organized
O by consumers ithat . O O grg to achieve better prices
rwant . O rgorrgquality in the goods ior.O.services
O rgrg they
O
s as laal a i .
s aslaal a i .
s aslaa lia i .
s aslaal a i
s aslaalia.
.wP.P adaada purchase. .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
ww essential commodities
wsupply ww w w w
ww (PDS).
wSystem w
www
ww  They also ww ww through Public Distribution ww ww
g  Nationally,
.O rgrg the most widely
O .O rgrg cooperative form isi.Othe
used
O rgrcredit
O g union, with some .O Ogrgmillion
r90
s as laalia i .
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
a members. a a a a
.P.P adada . P.P adada . P.Padada . P.Padada . P.Padada
wwww  Credit unions w w
ww are essentially cooperatives w w
wwof people that use banking ww w w
services. www w
ww ww ww ww ww
 Example: rgrg Students’ cooperative rstores,
grg Cooperative provision rgstores
g
i . O . O i . O . O i . O . O rg and supermarketsi.O . rgrg
O .
a5.
s
a
l al a
asWhether
a i misuse of a
a
l al a i
asa is possible in co-operatives.
funds
s a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P . adad
wwww  Yes, misuseww wof
w funds is possible in w
co-operatives.
ww w ww w w www w
ww ww ww ww ww
 If the members of the managing committee are corrupt, they can swindle the funds of the
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
cooperative society.
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Many cooperative
P . P . P
ada
adasocieties have been . P
faced
. adaafinancial
P da problems and
. P. P
daada down because ofPadaada
aclosed . .P
wwww w www w www w www w ww
w
ww w
corruptionwand misuse funds.
w w w w w w
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
MULTINATIONAL CORPORATIONS
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr27
O g
s as laalia i .
s aslaal a i .
s aslaa l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww wwww wwww ww ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www ww w www www ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww wwww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w www w ww ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  wwww w
www w
www www w
ww ww ww ww ww

g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  w w.P.P w w.P.P w w.P.P ww.P.P
ww
ww

g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a
 l a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w www w ww ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as

a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada 
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww

g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
III.
s a l a
SHORT
s a lia i . ANSWER QUESTIONS: s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www 1. What are the advantages
ww w of MNC’s? www www ww w
ww ww ww ww ww
i. Low Cost Labour
g .O rgrg
O .O rgrg
O .O rgrg
O O
.lowerrgrg
O
s aslaa lia i . MNC set up their
s asla li
facilities
a a i .in low cost countries
s
and
aslaalia i .
produce goods and service
s aslaat
alia i . cost.
s aslaalia.
a
adada  It gains cost a
adada and sells its products a
da services of good quality
adaand a
adaatdalow cost. a
adada
ww.P.P w w.P.advantage
P w w.P.P w w.P.P ww.P.P
ww
ww ww ww ww ww
 Thiswis w not available to smaller companiesww which operate at regionalww level. ww
g ii.i O . rgrg
.Improvement
O in Balanceaofi.O . rgrg Position
Payment
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a sa
l
asa l a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  MNCs helpPthe
. .P adahost
d countries to increase .P.P
dad exports.
atheir .P.P adad .P.P adad
wwww w w
wwthey help the host country www w www w ww ww
ww  As w w
such, ww to improve upon its Balance ww of Payment position. ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr28
O g
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iii. Improvement ww in Standard of Living ww ww ww
g 
. O O grgproviding super quality
rBy . O O grg and services, MNCs
rproducts . O rgrhelp
O g to improve the standard . O rgrgof living
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada of people of host
.wP.P adaadcountries.
a
www 2. What are the www
disadvantages of MNC’s?ww www www ww w
ww ww ww ww
g i. Danger
.O rgrgfor Domestic Industries
O .O rgrg
O .O rgrg
O .O rgrg
O
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia.
a
adada
s  MNCs, because a
of
adada
s
their vast economic power, a
adadaposes a danger to domestic a s
Industries.
adada a
adada
s
ww
ww  Domestic wwwwindustries cannot face challenges wwww posed by MNCs. ww ww wwww
g .O . O grg domestic industries.O
rMany have
. rgrgto wind up, as a resulti.ofO.O
O rgrg from MNCs.
threat
.O . rgrg
O .
l
asii.alia i l
asa alia i l
asa al a i l
asa alia i aslaalia
a s
a a Deprivation of Job Opportunity a s
a of Local People a s
a a s
a a s
a
wwww  MNCs w
wmay w
w not generate job opportunities w w
ww to the people of home w w
wcountry.
w ww w w
ww ww ww ww ww
g iii. Culturergrg rgrg rgrg rgrg
a
lalai . O
i . O a
lalai . O
i . O a
lalai . O
i . O a
lalai . O
i . O laalia.
s a s a s a s a s a
adaada  MNCs tend.P.toP
s s s s s
. P. P apromote
daada alien culture in host
. P. adacountry
P
ada to sell their products.
. P. adaada
P . P. adaada
P
wwww  They w wwpeople forget about their
w
make www w cultural heritage. www
own
ww ww ww
ww ww ww w ww
g OO
. rIngrgIndia, e.g. MNCs havei.O rgrg a taste for synthetici.food,
created
O O rgrgsoft drinks etc.
O . O rgrg
O
s as laalia i .
s aslaal a i .
s aslaal a i .
s aslaalia i .
s aslaalia.
www www www www ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
GOVERNMENT
O ORGANIZATION
.O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w www w ww w w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww  ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr29
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www w w ww w ww w www
ww  www ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww ww ww wwww wwww ww
ww
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  www w ww w w ww w w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww 
ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww  ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
adaSHORT ANSWER
adaIII. a
adada a
adada a
adada a
adada
ww.P.P w w.P.QUESTIONS:
P w w.P.P w w.P.P ww.P.P
ww
ww 1. List the areas ww w w
where the state or centralwownership
ww
w is a preferred form wwwwof business organization. ww
ww
g Justify .O O grg choice of areas. .OO
ryour rgrg .O rgrg
O .O rgrg
O .
l alia i .
asa Most of the industrial a l alia i . l alia i .
asathe period of pre independence. l
a s
a a s
a s a
progress was limited in a s
a
during a sa a s
a
wwww  Publicwsector
w w
ww industries were deliberately w w
ww set up in these backward w w
wregions.
w wwww
ww w ww ww ww
g  The rgrgovernment
g located new enterprise
rgrg in backward areas. rgrg rgrg
a i . O
i . O
lala Example: Bhilai SteelsaPlant a i . O
i . O
lalain Madhya Pradesh saslala a i . O
i . O a
lalai . O
i . O laalia.
s as s s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww 2. What are the different wwww kinds of organizations ww wwthat come under the public ww ww sector? wwww
ww ww ww ww ww
i). Departmentalgrg Undertaking
g .O r
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . It is the oldest form
s aof
slaali i .
organization.
a s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  No distinction .wP.P
ada
adawas made between the .wP.P adaadfunctions
routine
a
.wP.P
of the Government.adaada .wP.P adaada
ww ww ww ww ww
 A public enterprise is run as a separate full-fledged ministry.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i . For example, Indian
s aslaalia i
Railways, . Post and Telegraph
s aslaalia i .
services, All India Radio,
s aslaalia i .
Doordarshan.
s aslaalia.
a
adadaii). Public Corporation a
adada a
adada a
adada a
adada
ww
ww
 It is form of public enterprise which is created as an autonomous unit, by a special Act of the
g
i .O . rgParliament.
O rg i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  It is created by aaStatute. s
a
l al a i
asa It is also known asaasastatutory l al a i
asa corporation. asaasa l al a i
a s
a aslaalia
.P.P adad . adad
.PLife
P P.P
.of adad .P . adad
P .P.P adad
ww
ww
ww  Examples:
ww www w Insurance Corporation
wwww w w India, the Indian w w
Airlines,
wwww the Air India International,
ww
ww
ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr30
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iii). Government ww Company ww ww ww
g O
. O grg company in which.O
r“Any not rgrless
O g than 51% of the paid-up . O rgrgshare capital is heldi.by
O O OgrgCentral
rthe
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaal a i .
s aslaalia.
.wP.P adaada Government a
.wP.Pad
orda a Government or partly
State
.wP.P adaadby
a the Central Government
.wP.P adaadaand partly by State.P.P adaada
www www
Governments. ww w www w
www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O - Section
.O rgrg2(45) of the Companies
O .O Ogrg 2013
rAct,
s as laalia
i .
Examples: Food s aslaalia
Corporation
i .
of India, ONGC. s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P 3. List the names w w. P.P ww. P.P w w. P.P w w. P.P
ww
ww wwwofwsome enterprises under ww wthe
w public sector and classify wwwwthem. ww
ww
 Indian g railways g – Departmental undertakings
g
i O r
O r g
. i.Indian Post and telegraph i O
. i. r
O r g
i .O . rgrg
O i .O . rgrg
O .
a saasal al
 a
a sa
l
asa al a – l a
Departmental
a s
a asa l a i undertakings
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Bharat Heavy .P.P
dad
aElectricals Limited .P.–P
dad
aGovernment Companyww .P.P adad .P.P adad
wwww www w ww ww ww www w
ww ww ww ww ww
 Life Insurance Corporation of India – Statutory Corporation
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .State Trading Corporation
s as
a
lalai i . – Statutory
s as
a
lalai i .
Corporation
s as
a
lalai i .
s aslaalia.
. P. adaad4.aDefine Departmental
P . P . P
daada
aundertakings. . P. adaada
P . P. adaada
P . P. adaada
P
ww  It is thewoldest w form of organization.
ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l
aalia i
No. distinction was made
s asla lia i
between
a . the routine functions
s aslaali
of
a i .
the Government.
s aslaalia i .
s aslaalia.
.wP.P adaada  A public enterprise .wP.P adaaisdarun as a separate full-fledged
.wP.P adaadaministry. .wP.P adaada .wP.P adaada
www www ww w www www
ww ww ww ww ww
 For example, Indian Railways, Post and Telegraph services, All India Radio, Doordarshan.
g .O rgrg .O rgrg .O rgrg .O rgrg
5. What
l alia is.O
i meant by Government l alia i . O
Company? l alia i . O l alia i . O laalia.
a s as a a s as a a s as a a s as a a s as
.P.P adada  Any company.P.inP da not less than 51%
adawhich .P.P
a paid-up share capital
dadthe
aof .P.P adaisdaheld by the Central.P.P adada
wwww www w ww ww www w www w
ww Governmentww or State Governmentww or partly by the CentralwGovernment w and partly by ww
State
g
i .O . rgrg
Governments.
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.-P
dad 2(45) of the Companies
aSection .P.P adad Act, 2013 .P.P adad
ww  Examples: ww Food Corporation of India, ww ONGC. ww ww
g IV. Long . O O grg
rAnswer Questions: .OO rgrg . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaa1.
P daWhat are the advantages . P . adaada and disadvantages
P . P. adaada of Departmental
P . P. P
daada
aundertaking? . P. adaada
P
wwww a). ADVANTAGES: wwww ww ww wwww wwww
ww ww ww ww ww
g i. EasyrFormation:
grg rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  It is easy to set up sa adepartmental
s a l undertaking. s as a l s as a l s as
www  The www
departmental undertaking is ww w
created by an administrative www decision of the w
Government,
ww
ww ww ww ww ww
involving no legal formalities for its formation.
g
l
ii. a ia. i.Ogrand
O
Direct
l
r g
Control of l a ia
Parliament
l .Oi . rgrg
O or State Legislature: l alia.Oi . rgrg
O l alia.Oi . rgrg
O laalia.
.P.P adada  The departmental .P.P
a
adadundertaking .P.P
is directly
dada
aresponsible .P.P
to the Parliament adaordathe State legislature.PP
. adada
ww ww ww ww ww
through its overall head i.e. the minister concerned.
g
i .O . rgrgMaintained:
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
iii.
asal aSecrecy
l a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Strategic industries.P.P adad like defense and .Patomic . adad power cannot be .P
P adadmanaged other than.P.P
better
. P adad
wwww w w
ww departments. ww ww www w www w
ww ww
government ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr31
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww wwww ww ww ww ww
ww  Department ww undertakings can maintain ww secrecy in their working. ww ww
g iv. iLesser
. O rgrgBurden of Tax on Public:
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Earnings of.P.departmental adaada
P . . P
daada paid into Government
undertaking areaentirely
P . P. adaadtreasury,
P
a resulting in ad
. P. P aada
www lesser
w w on the public. wwww
wwburden
tax
w wwww wwww
ww ww w ww ww
g v. Instrument
.O rgrg of Social Change:
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa li

a i .
Government can s as
promote
laalia i .
economic and social s aslaa
justicelia i .
through departmental s aslaalia i
undertakings.
.
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  It can be w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww wwwwused by the Government, ww asw
w an instrument of social change.
ww ww wwww
b). DISADVANTAGES
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
i.
asa a l a i
Red-tapism:
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Therewis .Ptoo
. adamuch
P d
of procedures which .P.P
dad
aresults in delay. .P.P adad .P.P adad
wwww ww w www w ww w w ww w w
ww ww ww ww ww
 Commercial organization cannot afford delay in taking decisions.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
ii.
a
lala i i .
Incidence of Additional
s aslalai i
Taxation:
a .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Losses.incurred
P. adaadaby a departmental enterprise
P . P. adaadaare met out of the treasury.
P . P. adaada
P . P. adaada
P
wwww ww ww wwww ww ww ww ww
ww ww
 This very often necessitateswadditional w taxation the burden ww of which falls on the common ww
g . O rgrgman.
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iii. Lack of Competition: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
wwServants are given control w
wof
w these undertakings who w w
w not have business outlook w
wwor
ww ww
 Civil ww ww may ww
g .O rgrgcommercial experience.
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
 So, they run s
the aslaalia i
undertaking
.
in their own s asla
fashion
alia i .
without considering s
theaslaalia i .
sovereignty of the s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w.P.P
consumers.
w w w.P.P w w.P.P w w.P.P
ww
iv. Casual Approach to Work:
g
i .O . rgrgAs officers of a departmental
O i .O . rgrg undertaking are subject
O i .O . rgrg
O to frequent transfers; i O
.they
. rgrdevelop
O g a .
a s
a aslaa l a i
a sa aslaal a i
a saaslaal a i
a s
a aslaal a i
a s
a aslaalia
.P.P adad adad approach to work. .P.P
sense ofPcasual
. .P adad .P.P adad .P.P adad
wwww w w
wawresult, the operational efficiency w w
ww of the undertaking suffers w w
ww a lot. ww w w
ww  Asww ww ww ww
g v. Government
. O rgrg Interference: i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lala i
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P
 There is an d
. P. P aada government interference
a excessive . P. adaada and control in department
P . P. adaadaorganization.
P . P. adaada
P
wwww ww
 These wwundertakings are not given wwwfreedom
w to decide their w ww
own wpolicies.
w ww ww
ww ww ww w ww
g . O rgrgCentralized control leads
O . O rto
Ogrgdelay in action. . O rgrg
O . O rgrg
O
2.
s a laa
What
s
ia i . l a ia
l are the featuressasofalPublic corporation? i .
s aslaa ia
l 5)
(Any
i .
s aslaalia i .
s aslaalia.
www i. Special w
Statute:
ww www ww w ww w
ww ww ww ww ww
 A public corporation is created by a special Act of the Parliament or the State Legislature.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia
 i . The Act defines
sits
aslaalia i
powers, . objectives, l
functions
s as aalia i .
and relations with the
s aslaa ia i
ministry
l . and the
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P Parliament.
w w.P.P w w.P.P w w.P.P w w.P.P
ww
ii. Separate Legal Entity:
g
i.O . rAgrpublic
O g corporation is a.separate
i O . rgrg legal entity with perpetual
O i .O . rgrgsuccession and common
O i .O . Ogrg
rseal. .
a s
a
l
asa a l a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It has an existence,
.P.P adad independent of the Government..P.P adad .P.P adad .P.P adad
wwww w w w
w properly; can make contracts w w
ww and file suits, in its own ww w w ww w w
ww  It can ww own ww ww name. ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr32
O g
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s aslaalia. i. s aslaalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iii. Capitalw w
Provided by the Government: ww ww ww
g 
. O O grg capital of a public corporation
rThe . O rgrg is provided by thei.OGovernment
O rgrg
O or by agencies . O rgrg by
controlled
O
s aslaalia i .
s aslaalia i .
s aslaal a i .
s as laalia i .
s aslaalia.
.wP.P adaada the government.
www  However,
w
ww many public corporations ww w
have also begun to raise w
w
ww from the capital market.
money www
ww ww ww w ww
g iv. Financial
.O rgrg Autonomy:
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia
i .
A public corporation s aslaalia
enjoys
i .
financial autonomy. s aslaalia i .
s as laalia i .
s aslaalia.
a
adada a
adada
ww.P.P  It prepares w w. P. P w w. P. P ww. P. P w w. P. P
ww
ww wwww its own budget; and has ww wauthority
w to retain and utilize
ww wits
w earnings for its business. wwww
v. Management by Board of Directors:
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i Its management is
a s
a
l
vested
asa al a i
in a Board of Directors,
a sa
l al a i
appointed
asa or nominated
aby
s
a
l
the
asa al a i
Government.
a s
a aslaalia
.P.P adad  But therewis .Pno
. adGovernmental
P ad interference.P.P aindathe
d
day-to-day working .Pof
. P
dad
athe corporation. .P.P adad
wwww ww w ww w w ww ww www w
ww ww ww ww ww
3. What are the Features of Government Company? (Any 5)
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s ai.
slalai i .
Registration
a under the
s aslalai
Companies
a i . Act:
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  A Government
P . P. P
ada
adacompany is formed through . P. P
ada
adaregistration P. adaada Act, 1956; and is.P.P
under the .Companies
P adaada
ww ww
subject to the provisions of this Act, ww like any other company.ww ww
g 
. O O grg
rHowever, the Central Government . O rgrg may direct that any
O . O rofgrthe
O g provisions of the Companies . O rgrg Act
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada shall not apply
.wP.P adatoadaaGovernment company .wP.P
ada apply with certain modifications.
aordashall .wP.P adaada .wP.P adaada
www w w
w ww w ww w www
ww ii. Executive ww Decision of Government:ww ww ww
g .O rgArgGovernment company
O .O rgrcreated
is
O g by an executive
.O rgdecision
O rg of the Government,
.O rgrgwithout
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a seeking the approval
a of the Parliament or the aState Legislature. a a
wwww iii. Separate w w
ww Entity:
Legal ww w w ww ww www w
ww ww ww ww ww
 rAg Government company is arg legal
g
i . O . O rg i . O . O rg entity separate from i . O
the
. rgrGovernment.
O g
i .O . rgrg
O .
a s
a
l al a i
asa  It can acquire property; a s
a
l al a i
asa can make contracts and a sa
l al a i
asafile suits, in its own name.
can a s
a asal al a i
a s
a aslaalia
wwww iv). Own Staff:
ww w w ww w w ww ww www w
ww ww ww ww ww
 A Government company has its own staff; except Government officials who are sent to it on
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . deputation.
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Its employees
P . P. P
daadnot
aare a
governed by civil . P adaadarules.
service
. P . P. adaada
P . P. adaada
P
ww w ww ww ww
ww
ww wwww
v). Free fromwProcedural Controls:
ww ww ww ww wwww
g . O rgArgGovernment company
O . O rgfree
isO rg from budgetary, accounting . O rgrg and audit controls,
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i applicable
. to
s aslaalia.
.wP.P adaada Government
.wP.P
daada
aundertakings. .wP.P adaada .wP.P adaada .wP.P adaada
www w
wwadvantages and disadvantages ww w ww w www
ww 4. What are w w
the ww of Public w w
corporation? ww
g A). ADVANTAGES
.O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adadai. Bold Management a
dadtoa Operational Autonomy:
adue adadaa a
adada a
adada
ww
ww  A public wwwwcorporation enjoys internal ww wwoperational autonomy;ww wwit is free from Governmental
as wwww
g control.
rgrg rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa It can, therefore, run a s
a
l al a i
asaa businesslike manner. asaasa
in l al a i
a s
a asal al a i
a s
a aslaalia
wwww ww w w ww w w ww ww www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr33
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ii. Legislative wwControl: ww ww ww
g  . O rgrg of a public corporation
Affairs
O . O Orgrgare subject to scrutiny . O O grgCommittees of Parliament
rby . O rgrgor State
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada Legislature. ad
.wP.Pad
aa
www  The Press
w
wwalso keeps a watchful eye w
wonwthe working of a publicwcorporation. ww w www
ww ww ww w ww
g iii). Qualified
.O rgrg and Contented Staff:
O .O Orgrg .O rgrg
O .O rgrg
O
s aslaal

ia i .
Public corporation s asl
offersaalia i .
attractive service s asl
conditionsaa lia
to
i .
its staff. s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  As suchww w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww it is able to attract qualified wwwwstaff. Because of qualified wwwwand contented staff, industrial ww
ww
relations
g problems are not much g severe.
g
i O r
O r g
. i.Staff has a motivation tolalwork i O Or r g
. i. hard for the corporation. i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al
 a
a s
a asa a
a sa
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad iv. Tailor-Made Statute: .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
 The special Act, by which a public corporation is created, can be tailor-made to meet the specific
g . O rgrg
O . O rgrg
O
s as
a
lalai i .needs of the public
s aslalai
corporation.
a i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  So that the corporation
P . P. adaada can function in the
P . P. adaadmanner
best
P
a
. adaada
to achieve its.objectives.
P P . P. adaada
P
ww v). Not affected ww by Political Changes: ww ww ww
g  . O rgrg a distinct legal entity,
Being
O . O aOrgpublic
rg corporation is noti.O much rgrgaffected by political changes.
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It can maintain .wP.P
daada of policy and operations.
acontinuity .wP.P adaada .wP.P adaada .wP.P adaada
ww B). DISADVANTAGES: ww ww ww ww
g i. Autonomy
.O rgrg and Flexibility, Only
O .O OrgrTheory:
in g .O rgrg
O .O rgrg
O
s aslaal

ia i .
Autonomy and s asl
flexibilityaalia i .
advantages of a public s aslaa lia
corporation
i .
exist only in s as
theory.
laalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  In practice, w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww wwww there is a lot of interference wwww in the working ofwaw wpublic
w corporation by ministers, ww
ww
g government
rgrg officers and otherrg politicians. rgrg rgrg
i . O . O i . O . O rg i .O . O i .O . O .
a s
a
l al a i
asaMisuse of Monopolistic
ii.
a s
a
l
asa a
Power:l a i
a sa
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.inadad
wwww  Public corporations
www w often enjoy monopoly
ww w w their field of operation.
ww w w www w
ww ww ww ww ww
 As such, on the one hand they are indifferent to consumer needs and problems; and on the other
g . O rgrg
O . O rgrg
O
s as
a
lalai i .hand, often do not
s as
a
hesitate
lalai i
to. exploit consumers.
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaadaiii. Rigid Constitution:
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 The constitution of a public corporation
ww is very rigid.
ww ww
g  . O rgrg a public corporation
O
Hence, . O Orgrg not be flexible in itsi.operations.
could O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
.wP.P adaadaiv). Low Managerial .wP.P
daada
aEfficiency .wP.P adaada .wP.P adaada .wP.P adaada
www w
ww civil servants, who doww w w
wpossess management knowledge ww w www
ww  Quitewoften w not ww and skills, are appointedww
g .O rgrthe
by
O g government on the .O.O rgrg .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada  Board of Directors, a
adada of a public corporation. a
adada a
adada a
adada
ww
ww v. Problem of www
Passing
w a Special Act: ww ww wwww ww
ww
g  A rgrpublic
g corporation cannot rbegrgformed without passing arspecial
grg Act; which is a time rconsuming
grg
i . O . O i . O . O i . O . O i . O . O .
a s
a
l al a i
asa and difficult process. a s
a
l
asa al a i
a sa
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad P.Padad
.scope .P.P adad .P.P adad .P.P adad
wwww  Hence, www
the w for setting up public
ww wcorporations
w is very w
restricted.
ww w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rg P.VAHEESWARAN i.M.COM., O OrgrgM.PHIL., DCA., B.ED i.O.O rgrg PAGE
. O rgr34
O g
s aslaalia i .
s aslaal a i .
s aslaa l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 5. What are w w
the features of Departmental ww organization? w w
(Any 5) ww
g i. Ultimate
. O rgrgResponsibility: i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The ultimate .wP.P
daada
aresponsibility for the management
.wP.P adaada of a departmental .wP.P
daada
aundertaking lies with the ad
.wP.Pad
aa
www www w
ww to the Parliament or State www w
wwthe
ww ww
minister concerned; who is responsible ww ww Legislature for the affairs ww
of
g .O rgrg
departmental
O undertaking. rgrg
.O O .O rgrg
O .O rgrg
O
s as laali

a i .
The minister, in s a
turn,slaalia i
delegates
.
his authority s asla
downwards
alia i .
to various other s aslaal
management
ia i .
levels, in s aslaalia.
a
adada adada a a
adada a
adada a
adada
ww.P.P w w. P.P
the departmental undertaking. www w w. P.P w w. P.P w w. P.P
ww
ww ww ww w ww ww ww
ww
ii. Governmental Financing:
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal ala i The departmental
a s
a
l
asa al a i
undertaking is financed
a
l a
through
s
a asa l a i annual budget l al a
appropriations
a s
a asa i by the
a s
a aslaalia
.P.P adad Parliament P.P
.or athedadState Legislature. .P.P adad .P.P adad .P.P adad
wwww www w ww w w www w ww w w
ww ww ww ww ww
 The revenues of the undertaking are paid into the government treasury.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aiii.
s
a
lalai i .
Accounting and Audit:
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  The departmental
P . P. adaadaundertaking is subject
P . P. P
ada
adato the normal budgeting, . P. adaadaccounting
P
a and audit.P.P adaada
ww ww
procedures, which are applicablew towall Government departments. ww ww
g O
iv. Managed
. rgrg by Civil Servants:i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The departmental .wP.P adaadundertaking
a is managed
.wP.P adabyadacivil servants, who.P are
. P
ada to same service adaada
adasubject .P.P
www w
ww as applicable to civil servants w
ww of the Government. ww w
www ww ww
ww ww
conditions ww ww
g v. Sovereign
.O rgrg Immunity:
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a  A departmental undertaking
a cannot be sued anybody,
a without the consent of
a the Government. a
ww ww ww ww ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad RESERVE .P.P
dad
aBANK OF INDIA .PP
. adad .P.P adad
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www ww w www ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adada a a
adada a
adada a
adada
ww
ww ww ww ww ww ww ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr35
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  ww www w ww w w www w wwww
ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i
lala  i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  ww wwww ww ww wwww wwww
ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  w
www wwww w
www w
www
ww ww ww ww ww
g . O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
 s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww III. SHORT ANSWER wwww QUESTIONS: ww ww ww
ww ww
ww
g 1. Mentionrg the
rg importance of banking rgservices.
rg rgrg rgrg
i . O . O i . O . O i .O . O i .O . O .
a s
a asal al a i
 It plays a vital role by a s
a
l
asa al a
providing
i
the money. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  The word w w
Bank,
ww normally refers to w w
commercial
ww bank. www w wwww
ww ww ww ww ww
 Central Bank is the most important one among them.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
laEvery nation has one scentral
la as
a i i . a
lala bank. It is owned by stheaslaGovernmenti
la i . of the country.s as
a
lalai i .
s aslaalia.
. P. adaada  In India the Reserve
P . P. adaadBank
P
a
of India (RBI) .
isP P
the
.
ada
adacentral bank. . P. adaada
P . P. adaada
P
ww ww ww ww ww
2. Explain the origin of RBI.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l a ia .
al In 1926 the Royal Commission
i
s aslaa ia i .
l on Indian Currencysand aslaa ia i .
lFinance made recommendation s aslaa ia i .
l to create a s aslaalia.
.wP.P adaada central bank. .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
wwthewRBI Act 1934 was passed. wwww w
www w
www
ww  As a result, ww ww ww ww
g ai.RBI O rglaunched
O rg in operations ifrom.O rgrApril
O g 1, 1935. .O rgrg
O .O rgrg
O
s a la l a i .
s a laal a i .
s a laalia i .
s a laalia i .
s a laalia.
adada  RBI was established
a s a s
a a share capital of ₹5acrores a s
d a divided into sharesPofad₹100 a s
a each fully paid up. adada a s
.P.P .P.P adadwith .P.Pad . .Pad .P.P
wwww  After independence,
www w the Government ww
of
w w
India passed Reserve Bank
w
wAct,w
w 1948. wwww
ww ww ww ww ww
g  From rgrgJanuary 1, 1949, RBI istarted rgrgfunctioning as a government rgrgowned central bank of rgrg
India.
i .O . O .O . O i .O . O i .O . O .
a s
3.
a
l al a i
asa are the persons involved
Who a s
a
l al a i
asain RBI administration? a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  One Governor w w
ww and Four Deputy Governor ww w w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr36
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww  Ten Directorsww from various fields ww ww ww
g i.O Two rgrgGovernment Officialsi.O.O
O rgrg . O rgrg
O . O rgrg
O
s aslaal a i .
s aslaal a i
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  Four Directors .wP.P
daadaeach local boards. Padaada
–aOne
.w.P .wP.P adaada .wP.P adaada
www w
ww Questions www w
ww w
ww
ww IV. Long Answer ww ww ww ww
g 1. Classify.O rgrgthe various functions
O .O rgrg of Reserve Bank
O .O rgrof
O g India. .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada The functions of the aRBIa a be grouped under three
dadcan a a
adadheads. a
adada a
adada
ww
ww  Leadership
wwww and Supervisory Functions wwww wwww wwww
 rTraditional
Ogrg
g Functions andrgrg rgrg rgrg
i .O . i .O . O i .O . O i .O . O .
a s
a
l al a i
asa  Promotional Functions. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad P.Padad
.Supervisory .P.P adad .P.P adad .P.P adad
wwww A. Leadership w
and
ww w Functions www w w
ww w w
ww w
ww ww ww ww ww
 India being the fastest growing economy in the world, India is expected to play a major role in
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala the world affairs bysa s
a i i .
lalacountries.
many
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Such functions
P . P. ada
P
ada
get prominence in current
. P. adaada
P
scenario. . P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww ww ww
 India’s Representative in World Financial Institutions
ww ww
g . O rgrg  Regulator and
O . O rgrg
O . O Ogrg
rSystem . O rgrg
O
s aslaalia i .
s aslaalia i Supervisor
. of Indian Banking
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada . adaada Authority
.PMonetary
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
www Closely Monitoringw w
www Parameters w
www w
www
ww ww w
Economic ww ww
g .O rgrg  Promptly Responding
O .O rgrg to New Challengesi.O.O
O rgrg .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal a i
s as laalia i .
s aslaalia.
a
adada B. Traditional Functions a
adada a
adada a
adada a
adada
ww
ww wwww and Financial Advisorwto
 Banker ww
w the Government wwww wwww
g
i . O . rgrgMonopoly of Note Issue
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  Banker’s Bank a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
wwww  Controller
www w of Credit and Liquidity
www w w
ww w w
ww w
ww ww ww ww ww
C. Promotional Functions
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai
The i . RBI performs a wide
s as
a
lalai
range i . of promotional functions
s as
a
lalaito i .
support national objectives.
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Nurturing. P. P
daada Habits among thePPublic
aBanking . . adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww ww
 Grievance Settlement Measures ww ww ww
g . O rgrgAgricultural Development
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  Promotionaof
.wP.Pad
daSmall
a Scale Industries adaada
.wP.P .wP.P adaada .wP.P adaada
www w
ww Foreign Trade ww www w
ww w
ww
ww ww
 Facilitates ww ww
g .O rgrgSupports Cooperativei.O
O rgrg
Sector
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaal a i .
s aslaalia i .
s as laalia i .
s aslaalia.
a2.
adada Explain the organizational
a
adada structure of
a
adada RBI. a
adada a
adada
ww
ww  Thewhead ww office of the RBI is situated
w wwww in Mumbai. This central wwwwoffice has 33 departments wwwwin
g
i . O . r2017.
O grg
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  It has four zonal aoffices s
a
l al a i
asa in Mumbai, Delhi, Calcutta a s
a
l al a i
asa and Chennai functioning a s
a
l al
asunder a i
a local boards a s
a aslaalia
.P.P adad adad
.Pgovernors
. P .P.P adad .P.P adad .P.P adad
wwww with w w
deputy
ww as their heads.
www w w
ww w w
ww w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr37
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww
whas
w wwww ww ww ww
ww
ww  It also ww 19 regional offices and w11
w sub-offices (2017). ww ww
g . O O grgRBI is governed by a.O
rThe rgrg Board of Directors.i.O.O
Central
O rgrg . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
.wP.P adaada  The 21 member .wP.P
ada is appointed by the aGovernment
adaboard .wP.Pad
da a adaadof;
of India. It consists
.wP.P
a
.wP.P adaada
www www w
ww governors appointed for waw
w w
ww
ww ww One governor and four deputy ww ww period of four years, ww
g .O rgrg Ten directors from
O .O rgrg fields
various
O .O rgrg
O .O rgrg
O
s aslaalia i .
 Two s asl
Governmentaalia i .
officials s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww
wwFour directors - one each from
wwww local boards. ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w w w w w w w w
ww
ww wwww wTYPES
www OF BANK ww ww wwww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwww ww ww ww
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www ww w w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w ww w w w
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www www ww w w
ww
ww ww ww ww ww
g  Orgrg rgrg rgrg rgrg
l alia. i.O l alia.Oi . O l alia.Oi . O l alia.Oi . O laalia.
ww w
ww ww ww ww ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr38
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
g 1. Write . Oa.O grg note on Local Area.OBanks,
rshort rgrg Give two examples.
O . O rgrg
O . O rgrg
O
s as laalia i
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Local Area Bank .wP.P
daada was introduced byPathedaad
ascheme .w.P
a in August 1996. adaada
RBI
.wP.P .wP.P adaada
www  LABs w arew
w
wsmall
w private sector bankswestablished ww w in rural and semi-urban
w
ww areas. www
ww w ww ww
g  Each
.O rgrgbank serves two or three
O .O rgrg
adjoining
O districts only.
.O rgrg
O .O rgrg
O
s as laa
lia i .
Examples: Coastal s as
Local
laalia
Area
i .
Bank, Vijayawada, s aslaali
Andhra
a i .
Pradesh. s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww wwSubhadra Local Area Bank ww ww Limited, Kolhapur, Maharashtra.
wwww wwww
2. What aregthe objectives involved in g
g
i . O . r rg
O i . O . r Regional
O rg Rural Banks? g
i .O . r rg
O i .O . rgrg
O .
a saasalal a i
The RRBs were formed
a sa
l
asa al a i
under the Regional
a s l
Rural
aasa al a i
Bank Act 1976, jointly
a s
a
l al a i
asa the Central
by
a s
a aslaalia
.P.P adad Government, P.PadaGovernment,
.State d .P.P
and a sponsor
adabank.
d .P.P adad .P.P adad
ww ww ww ww ww
 They are established as low cost institutions in rural areas.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
Their objective is to develop
s as
a
lalai i .
rural economy.
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  As on 31.3.2016,
P . P. P
daada were 56 RRBs in India
athere . P. P
ada
adawith 14,494 branches. .P.P adaada . P. adaada
P
ww  They are ww regulated and supervised by ww NABARD. ww ww
g . O rgrg Examples: Pallavan
O . O rgrg Bank – Salem, Tamil
Grama
O . O rgrg
Nadu.
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P adaadPandiyan
a da a
Grama Bank –aThirumangalam,
.wP.Pad
Madurai ad
.wP.Pad
aa
.wP.P adaada
www w
ww of Agricultural and w
wCo-operative
w www www
ww 3. Mention thewpurposes w ww banks ww ww
g  All
.O O grg
rcooperative banks in IndiaOare
. i.O rgrgowned by its customersO
. iwhorgrgare farmers, small traders
O .O grg others.
rand
O
s as l
aalia i .
Cooperative banks in s asl
Indiaaalia
are either urban based s
oraslaal
rural
ia .
based. s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P  All cooperative w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww ww ww banks in Tamil Nadu ww ware
w registered under Tamil wwwNadu
w Cooperative Societies wwwwAct
1983.
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa They are controlled abysaboth l al a i
asa RBI and the State Government. a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Their objective.P.isP dad
aproviding service to rural.Pand
. adaagricultural
P d
development. .P.P adad .P.P adad
ww ww ww ww ww
IV. Long Answer Questions
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
a
lalai
1.sasExplain i . the varioussatypes s
a i i .
lala of banks based s as
a
lon
a
i i .
la organization with s as
a i
la i .
laexamples? s aslaalia.
. P. adaada i). Commercial Banks
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Banks which accept deposits from the public and grant loans to traders, individuals, agriculture,
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . industries, transport,
s aetc.
slaaliaini .order to earn profit.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada Examples: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww ww State Bank of India ww ww ww
g .O rgrg Karur Vysa Bank i.O.O
O rgrg .O rgrg
O .O rgrg
O
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Standard ada
adaChartered Bank a
adada a
adada a
adada
ww
ww ii). Development ww ww Banks ww ww wwww wwww
g
i . i.Ogrg finance requiredlafor
OrHuge
i .O . rgrg
investment,
O expansion and modernization
i .O . rgrg
O of big industries
i .O . O grgothers
rand .
a sa
l al a
asa are granted by a separate a sa
l a i
asa type of banks calledadevelopment sa
l
asa al a i
Banks. a s
a
l
asa al a i
a s
a aslaalia
wwww  They w w
wwalso called industrial banks. w w
wwThe objective of development w w
ww banks is not profit. ww www w
ww ware
w ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr39
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww Examples: ww ww ww ww
g . O rgrg Industrial Finance
O . O rgrg
Corporation
O of India – IFCI . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada .wP.Pad
da a Development Bank
 SmallaIndustries
.wP.P
adaIndia –SIDBI
adaof .wP.P adaada .wP.P adaada
www ww w www w
ww w
ww
ww ww MUDRA bank (for the development ww of micro industries) ww ww
g .O rgrg
iii). Cooperative
O Banks
.O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia

i .
All cooperative s a
banksslaa l
in
ia i .
India are owned by s
itsaslaalia i
customers
.
or members whos as laa
arelia i .
farmers, small s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww.P.P traderswand w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww www others. ww ww ww ww wwww
 Cooperative
g banks in India are g either urban based or rural g based.
g
i O r
O r g
. i. All cooperative banksla i O
.Tamil
. r
O r g
i O r
O rg
. i. Tamil i .O . rgrg
O .
a s
a
l
asa al a

a saasa inl a i Nadu are registered
a s
a
l
asa al a
under Nadu Cooperative
a s
a asal al a i Societies Act
a s
a aslaalia
.P.P adad 1983. ww .P.P adad .P.P adad .P.P adad .P.P adad
wwww ww www w w
ww w w
ww w
ww ww ww ww ww
Examples:
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .  Tamil Nadu
s
State
as
a
lala i i
Apex . Cooperative Bank
s a–
s
a
lalai
Head i . Office, Chennai
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Madurai . P. P
ada
adaDistrict Central Cooperative . P. P
ada
adaBank Ltd. . P. adaada
P . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww ww Batlagundu Cooperative Urban ww Bank Ltd. Dindigul District ww ww
g O
iv).i.Foreignrgrg Banks
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaal a i .
s aslaa lia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  Banks which .wP.P
daadaregistered office in aPforeign
ahave .w.P adaadacountry and branches .wP.P
ada are called foreign adaada
aindaIndia .P.P
www ww w www w
ww ww
ww
ww banks.ww ww ww ww
g
l alia. i.Ogrg banks open theirlaoffices
OrThese
lia.Oi . rgrin
O g big cities and port towns
l alia.Oi . rgonly.
O rg
l alia.Oi . rgrg
O laalia.
a s as a  In 2017, there were
a s as
42 a Foreign Banks in India a s
andas a
all of them were scheduled a s as a
banks. a s as
wwww Examples: ww ww w w www w w
ww w w
ww w
ww ww ww ww
g
i . O . rgrg Bank of America i–.O
O
ThegUSA
. r rg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i  Barclays Bank
a sa
l a l a
as–aThe UK i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad  Deutsche.P.P adaBank
d
– Germany ww .P.P adad .P.P adad .P.P adad
wwww ww w w ww w
ww w w
ww w
ww ww ww ww ww
v). Regional Rural Banks – RRBs
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . The RRBs were formed
s as
a
lala i i .
under the Regional
s
Rural
as
a
lalai i .
Bank Act 1976, jointly
s as
i i .
lala the Central
a by
s aslaalia.
. P. adaada
P Government, . P. P
daadaGovernment, and a sponsor
aState . P. adaadbank.
P
a
. P. adaada
P . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww  They ware
w established as low costw w
institutions in rural areas. Aswon w 31.3.2016, there were 56 wwRRBs
g . O ringrIndia
O g with 14,494 branches. . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada Examples: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
wPallavan
w w
wwTamil Nadu w
ww w
ww
ww ww Grama Bank, Salem, ww ww ww
g .O rgrg Pandian Grama Bank,Thirumangalam,
O .O rgrg
O Madurai O rgrg Tamil Nadu
. iDirstict,
O .O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia .
s as laalia i .
s aslaalia.
a  Paduvai Bharathiyar
a Grama Bank, Villiyanur,
a Puducherry. a a
wwww 2. Explain w the w w
wwtypes of banks based w w
ww on ownership pattern. w
ww w w
ww w
ww w ww ww ww
g  rAny grg bank in which not less rthan
grg 51 percent of shares.Oare rgrowned
g by the Government rgrare
g called
i . O . O i . O . O i . O i . O . O .
a s
a
i
aslaala Government banks a s asla
or
a public
i
ala sector commercialsbanks.
a a aslaala i
a s
a aslaala i
a s
a aslaalia
.P.P adad .Pare
. adad
P adad
.P.banks.
wwww  All of w
them
ww w joint stock company www w
type w
ww w w
ww w
ww ww ww ww ww
g PREPARED . O rgBY
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww Examples: ww ww ww ww
g IFCI,
. O rgrgSIDBI, EXIM Bank, ietc.
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  All banking.Pcompanies . adaada owned by private
P . P. adaadaare called private sector
people
P . P. P
ada
adacommercial banks.
. P. adaada
P
www  All cooperative
w
www banks are ownedwbyw w
wwmembers from the public.
wits w
www w
www
ww ww ww ww
g
l a li
 rThis
a.Oi . Ogrg is called nationalization
l alia.Oi . rg
Oofrgbanks. 6 more banks werergnationalized
l alia.Oi . Org in 1980.
l alia.Oi . rgrg
O laalia.
a s as a  Today there only a s
19 as a
nationalized banks (2017).a s as a a s as a a s as
.P.P adada . P. adada
P . P. adada
P . P. adada
P . P. adada
P
wwww Examples: ww w w www w w
ww w w
ww w
ww ww ww ww ww
i). Nationalized Banks:
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i Indian bank, Indian
a s
a
l
asa al a i
Overseas Bank, Oriental
a s
a
l
Bank
asa al a i
of Commerce.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad ii). Public Sector adad
.P.Banks:
wwww ww w w www w w
ww w w
ww w
ww ww ww ww ww
State Bank of India, IDBI Bank Ltd. And all nationalized banks
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i
iii). i .Private Sector Banks:
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P Lakshmi . P. adaadBank,
Vila
P
a Karur Vysya Bank,
. P. P
ada
adaKotak Mahindra bank. .P.P adaada . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P
daada
aFUNCTIONS OFww P.Padaada
.COMMERCIAL .wP.P
BANKS adaada .wP.P adaada
www ww w ww w
ww w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w w
ww w w
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww wwww ww
ww ww
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www ww w www w
ww w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w w
ww w w
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr41
O g
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada
ww
ww wwww ww ww wwww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w ww w w www w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
adaSHORT ANSWER QUESTIONS:
adaIII. adaada adaada adaada adaada
ww. P. P ww . P . P ww . P. P ww . P. P ww. P. P
ww
ww 1. What is E-Banking? wwww ww ww wwww ww
ww
g  Banking
. O rgrg through internet is called
O . O rgrE-Internet
O g banking.
. O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It can also be called .wP.P adaasadaelectronic banking. adaada
www  To performing w
ww banking operation through w
wwinternet by using computer w
wwand mobile phone. ww www
ww ww ww ww
g  Thisrgcan done by a customer from rgrhome
g or office of the world rgrand
g all 24 hours of 7 days. rgrg
l alia.Oi . Org l a lia.Oi . O l alia.Oi . O l alia.Oi . O laalia.
a s a
s a Money banks have s
their
a as a
own websites. a s as a a s as a a s as
.P.P adada . P.P adada . P.Padada . P.Padada . P.Padada
wwww 2. Write a short w w
note w
w on - RTGS. ww w w www w wwww
ww ww ww ww ww
 It was
g
i . O . rgrglaunched by the RBI iin.O.2013.
O rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l

asa al a i
The transactions are
a
l
settled
s
a asa a l a
on i real time basis.
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  RTGS facility.P is.P
dad
aavailable between 9.00 w am .Pto
. P
dad
a4.30 pm on weekdays.ww .P.P adad .P.P adad
wwww ww w w ww w ww wwww
ww ww ww ww ww
 RTGS transfers are not allowed on Sundays and bank holidays.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
 a
lalai i .
Minimum limit for RTGS
s as
a
lala i i .
transaction is 2 lakhs.
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaad3.aBriefly explain the.P
P . adaada banking services
Diversified
P . P. P
ada
aofdacommercial banks. .P.P adaada . P. adaada
P
ww  Competition
ww in the banking industry has
ww reduced their profits.
ww ww
g aia . O rgcommercial
O rg . O rgrg
O . O rgrgdiversified financial service.
O . O rgrg
O
s asla l The
i . banks started
s aslaa lia iidentifying
. and offering a
s asla
new
lia i .and
s aslaalia i .
s aslaalia.
.wP.P adaada  They are purely.P.other adaadthan
P
a banking service. adaada
. P. P . P. adaada
P . P. adaada
P
www w w
wallwsuch w
www service is also called w
ww banking.
wuniversal w
www
ww  Providing ww banking and otherwfinancial w ww ww
g  iSuch.O rgrservice
O g are: .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal a i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Bank adad a a
Assurance adadaa a
adada a
adada
ww
ww www w Merchant Banking ww ww wwww ww
ww
g
i .O . rgrg  Retail Banking
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
 Housing a s
a
l a l
aFinance
s a a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad . P.P adad . P.Padad . P.Padad . P.Padad
wwww w w w
w Mutual Fund ww w w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr42
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww wwww wwww wwww
ww 4. Explain - NEFT. ww ww ww ww
g  iThis. O rgwas
O rg launched by the RBI . Oin rg2005.
O rg . O rgrg
O . O rgrg
O
s as laal a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Transactions do.P.not P
ada under real time basis.
adaoccur . P. adaada
P . P. adaada
P . P. adaada
P
www  Once inw www
every
w half hour from 8.00 am w w
tow
w
7.30 pm. 23 settlementsw ww
are
w w
allowed in a day.
w
www
ww w ww w ww
g  NEFT
.O rgrgtransfers are not allowed
O .O rongrgSundays and bank holidays.
O .O rgrg
O .O rgrg
O
s as
laalia i
IFSC
.
is provided by s
IDRBTaslaalia i .
Hyderabad. s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P 5. What do you w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww wmean
ww by Core Banking Solutions?
w ww ww wwww wwww
 ‘CORE’ g stands for ‘Centralized Online g Real time Exchange’. g
g
i O r
O r g
. i.the centralized server oflathe i O r
O r g
. i.bank, all the details of lall i O
.the. r rg
O i .O . rgrg
O .
a s
a

asal al a
In
a s
a asa l a
a s
a asa al a i accounts of all the
a s l al
branches
aasa a i of the bank
a s
a aslaalia
.P.P adad are available.ww .P.P adad .P.P adad .P.P adad .P.P adad
wwww ww www w www w www w
ww ww ww ww ww
 Similarly anyone can deposit money into the account.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
 a
lalai i
Entry. of the transactions
s ais
s
a
lalai i .
recorded in the centralized
s as
a
lalai
server i . of the bank in real
s
time
as
i i .
lala can be seen
a and
s aslaalia.
. P. adaada in all the branches
P . P. P
daadthe
aof a bank.
. P. adaada
P . P. adaada
P . P. adaada
P
ww  This facility ww is called core banking solutions. ww ww ww
g IV. Long . O rgAnswer
O rg Questions . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad1.a Discuss the .Pvarious . adaada primary functions
P . P. adaada performed .P
P by
. P
ada commercial adaada
adathe .P.P
www wwww w
www w
www wwww
ww banks. w w w w w w w w
g The O rgrg functions of a commercial
O
.primary .O rgrgbank are of three types.
O .O rgrg are:
O
They .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Accepting a
adadaDeposits a
adada a
adada a
adada
ww
ww wwww Granting Loans and Advances. ww ww wwww wwww
g
i .O . rgrg Creation of Credit
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asI.aAccepting Deposits asaasa l al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  The ww w w
basic deposit accounts offered w w
ww by commercial banks are w w
wlisted
w below. www w
ww ww ww ww ww
g . O rgrgIn these days banks compete
O . O rgrgwith each other to attract
O . O rgcustomers
O rg by adding facilities.
. O rgrg
O
s as
a i i .
lala  Broadly depositsaccounts as
a i i .
lala can be classified into s as
a i i .
la deposits and timesasdeposits.
lademand a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww A. Demand Deposits ww ww wwww wwww wwww
ww ww ww ww ww
These deposits are repayable on demand on any day. This consists of savings deposits and current
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l a ia
deposits.
a l i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Savings .wP.P adaada
Deposits .wP.P adaada .wP.P adaada .wP.P adaada
www ww w www www www
ww ww
 Current Deposits
ww ww ww
g .O rgDeposits
O rg .O rgrg
O .O rgrg
O .O rgrg
O
s as
B.
laali
Time
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada They include fixed.Pdeposits a
adada and recurring deposits a
dada are repayable afterPaaperiod. a
d a a
adada
ww.P.P w w . P w w.P.P awhich
w w. .Pad w w.P.P
ww
ww ww wFixed
w Deposits (FD) ww ww wwww wwww
g
i .O . rgrg Recurring Deposits
O i .O . rgrg
(RD)
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asII.a Granting Loans andaAdvances s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  It isw w w
ww money in order to earn
lending w w
winterest
w income. www w www w
ww w ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr43
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P . adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww
wprovide
w ww ww ww
wwith
w wwww
ww  Banks ww specific sums as loans ww which are repayable along ww interest. ww
g . O O grg
rAdvances are credit facilities. O rgprovided
O rg for short period . Oto Ogrg
rbusiness community. i.O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaal a i .
s aslaalia.
.wP.P adaada  But both terms .wP.P aadaused interchangeably.
adare .wP.P adaada .wP.P adaada .wP.P adaada
www i). Advances ww w ww w ww w www
ww ww ww ww ww
g .O rgrg  Overdraft i.O.O
O rgrg .O rgrg
O .O rgrg
O
s aslaa lia i .
 Cash s asla
Credit
al a i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adada a a
adada
ww.P.P w w. P. P w w. P . P w w. P. P w w. P. P
ww
ww ww ww Discounting of Billsww ww ww ww wwww
ii). Loans
g
i .O . rgrg
O i O rgrg
O
.provide
. i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
Generally commercial
a s l
banks
aasa al a i the following
a
l
loans.
s
a asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad .P.P
 wHousing
adadLoan .P.P adad .P.P adad .P.P adad
wwww ww w ww w w ww w w www w
ww ww ww ww ww
 Consumer Loans
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .  Vehicle Loans
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada Loan
 Educational
P . P . adaada
P . P. adaada
P . P. adaada
P
ww ww Jewel Loan ww ww ww
g O
III.i.Creationrgrg of Credit
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Apart from.Pthe . P
ada
adacurrency money issued byad
. P . P aadaRBI, the credit money
the
. P. aindaadcirculation
P
a created by ad
. P. P aada
www w
wwwbanks influence economic wwww w
wa w w w
www
ww ww
commercial ww activities of a country w tow large extent. ww
g
l a lia. i.Ogrg money of commercial
OrCredit
l alia.Oi . rg
O rg is far greater in volume
banks
l alia.Oi . rgrthan
O g the currency money.
l alia.Oi . rgrg
O laalia.
a s as a  The volume, the a s as a
purposes and the sector to s a
which
a s a this credit money is to
a s a
bes achannelized - all a s as
.P.P adada . P.Padada . P.P adada . P.Padada . P.Padada
wwww theseware w w
wwimplemented by commercial w w
wwbanks under the guidance w w
wofwthe RBI. www w
ww w ww ww ww
g 2. Explain rgrgthe various secondary rgrg functions of i.commercial rgrg banks. rgrg
i . O . O i . O . O O . O i .O . O .
a s
a
l a l a i
asa  Apart from the basic a sa
l al a i
asora primary functions commercial a s
a
l al a i
asa banks render various a sa
l a
other
l a i
asa services which a s
a aslaalia
wwww w w
ww as secondary functions.
are known ww w w ww w w www w
ww ww ww ww ww
g . O O grg services can be broadly
rThese . O rgrclassified
O g into Agency Services
. O rgrg and General Utilityi.Services.
O O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i .
s aslaalia.
. P. adaada I. Agency Functions
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
ww wagents
w of customers andwprovide ww certain services. Theyware w ww
ww
ww Banks act ww wasw ww
w wwwwcalled Agency Functions wwww
g which are rgrgas follows: rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Transfer of Funds sasal s as a l s as a l s as
.wP.P adaada P.P
.wand adaada .wP.P adaada .wP.P adaada .wP.P adaada
www  Collection
ww w Payment of Cheques ww w ww w www
ww ww ww ww ww
 Conduct Share Market Transactions
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa li
a i . Preparation of Income
s aslaali
Taxa i .
Return
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Dealing in .Foreign a
adadaExchange a
adada adada a a
adada
ww.P.P w w P.P w w.P.P w w.P.P w w.P.P
ww
ww www wwww ww ww wwww
 Actingwas Correspondent
g .O
II.aGeneral
i . rgrg utility functions i.O.O
O rgrg i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa l a i
a sa
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad In addition to primary,
.P.P adad secondary and agency .P.P adad
functions, commercial banks
.P.P adaoffer
d some services for.PP
. adad
wwww w w
ww of the customers. They w
ware w
w called general utility services. ww w w www w
ww the general w w
welfare ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr44
O g
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P .Padaada . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww They are asw w
follows. ww ww ww
g . O O grg of demand drafts and
rIssue . O rgrg Cheques
bankers’
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Accepting .Bills P. adaofadExchange
P
a
. . adaada
on behalf of Customers
P P . P. adaada
P . P. adaada
P
www  Safety
w
ww
wlockers w
www w
www w
www
ww ww ww ww ww
g
l alia.Oi . Ogrg of credit
 rLetters
l alia.Oi . rgrg
O l alia.Oi . rgrg
O l alia.Oi . rgrg
O laalia.
a s as a  Travelers cheques a s as a a s as a a s as a a s as
P . P. adada
P . P. adada
P . P. adada
P
wwww  Gift cheques ww w w www w wwww wwww
ww ww ww ww ww
 Reference
g service
g
i O
. i. r
O r g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w wwww wwww
ww ww ww ww ww
g . O r
O grg . O r
O grg WAREHOUSING . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  ww w w www w wwww wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr45
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww  ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada 
www w w www w
ww w
ww
ww  www ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  a
adada a
adada a
adada a
adada
ww
ww  ww ww wwww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w w
ww w w
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  w
www w
www w
www w
www
ww ww ww ww ww
g  rgrg rgrg rgrg rgrg
l alia.Oi . O l alia.Oi . O l alia.Oi . O l alia.Oi . O laalia.
.P.P daSHORT ANSWER
adaIII. .P.P adada
QUESTIONS:
.P.P adada .P.P adada .P.P adada
wwww 1. Differentiatewthe
w w
wwwarehouse warrant from www w
the warehouse receipt. ww
w
ww w w
ww w
ww w ww ww
g S.Noi.O . rgrg
O Warehouse Warrant i .O . rgrg
O i .O . rgrgWarehouse Receipti.O.O
O rgrg .
a sa
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad 1 It is a document
.P.P adaofdtitle goods .P.P adadIt is not a document of.Ptitle. adaof
P d goods .P.P adad
wwww www w www w w
ww w w
ww w
ww ww ww ww ww
2 It can be negotiated It cannot be negotiated
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s a i i .
3alala It can be given a collateral
s s as
a i i .
lala security. s
a i i .
lala be given a collateralssecurity.
Itscannot
a as
a
lalai i .
s aslaalia.
. P. adaad2.aComment on cold .storage
P P. adaadawarehouse.
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwww ww
ww ww
ww
ww ww ww ww ww
 Goods are transported in refrigerated containers and stored in refrigerated warehouses.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s a
slaa ia i .
l These warehouses aresused aslaa ia i .
l for storing perishablesgoods aslaa ia i .
l like fruits, vegetables, s aslaa ia i .
l butter, fish,
eggs, s aslaalia.
.wP.P adaada meat, etc. .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
www w
www w
www w
www
ww ww ww ww ww
 Goods stored in cold storages without deterioration in quality, can be made available throughout the
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaali i
year.
a .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adadIV.a a
adada a
adada a
adada a
adada
ww.P.P Long Answer w w.PQuestions
. P w w.P.P w w.P.P w w.P.P
ww
1. Explain the different types of warehouses.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
a.
l
asa a i
Private
l a Warehouses
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It’s built and .P.P
dad by private businessPaenterprises
aowned . .Pad
d in order to store
.P.P
dadproducts produced byPadad
athe . .P
wwww www w www w w
ww w ww
ww
ww them.w w ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr46
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  They ware
w exclusively for their usewand w are not meant for otherw w
manufacturing or business units. ww
g b. Government
. O rgrg Warehouses i.O.O
O rgrg . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  They are .created P. adaadaand operated by the
P . P. P
daada
aGovernment to implementad
. P. P
adaprogrammes of the adaada
the
a .P.P
www w
www
Government.
w
www w
www wwww
ww ww ww ww ww
g
l alia i . Ogrg services mostly lavailable
 rTheir
.O alia.Oi . rgrgto government only. i.O.O
O l al a i
rgrg
l alia.Oi . rgrg
O laalia.
a s as a  A detailed study on
a s as
all athe above warehouses aiss as
givena at the end of this s
chapter.
a as a a s as
wwww c. Public Warehouse www w www w www w wwww
ww ww ww ww ww
 Itgis open for public at large. g
g
i .O . r rg
O i .O . r rg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a
 i They may be owned
a s
a
l
by
asa al
ana i individual or some
a
l
agency.
sa asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad  These warehouses .P.P adadoperate as per the rules .P.P
dad
aand regulations formedw by.Pthe
. adaGovernment.
P d .P.P adad
wwww www w www w ww w wwww
ww ww ww ww ww
d. Co-operative Warehouses
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . There are warehouses
s as
a
lalai
owned i . and managed by the
s as
a
lalai i
marketing . co-operative societies.
s as
a
lalai i .
s aslaalia.
. P. adaada  They are set.P.up
P adatoadprovide
P
a
warehousing.P adaada to their members. .P.P
facilities
. P adaada . P. adaada
P
ww ww ww
 Example, National Co-operative Development Corporation (NCDC).
ww ww
g . O rgrgWarehouses
O . O rgrg
O . O rgrg
O . O rgrg
O
s as a li
e.laGeneral
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  They are ordinary .wP.P adaadwarehouses
a which arePuseful
.w.P adaadafor storing most of the .wP.P
daadfood
adry a grains, fertilizers. adaada
.P.P
www w w
w w w
w w w
w wwww
ww ww w w
 Protective measures against rat, insects, etc. are undertaken by them. w w ww
g 2. Explain .O rgrgthe advantagesi.O
O of rgwarehousing
O rg functions..O rgrg
O .O rgrg
O
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada (i) Storage adadaa a
adada adadaa a
adada
ww
ww  There www
iswa time gap between the time ww wwof production and the time ww wofwconsumption. ww
ww
g  rAnd grg a gap between demand rand
grgsupply. rgrg rgrg
i . O . O i . O . O i .O . O i .O . O .
a s
a
l al
as(ii) a i
a Price Stabilization asaasa l al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .Pby
. adad
wwww  www
Warehousing w ensures price w
stabilization
ww w supplying goods as w
and
ww w
when demanded. www w
ww ww ww ww ww
 It acts as a cushion to absorb price fluctuations.
g . O rItgrsupplies
O g the goods at more . O rg
O orrgless uniform prices throughout . O rgrg the year.
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada (iii) Equalization .of
P P. P
daada and Supply Padaada
aDemand . . P . P. adaada
P . P. adaada
P
wwww wwww wwww wwww ww
ware
w
ww  Warehousing ww equalizes the demand ww and supply of goods bywstoring w thee goods when they ww
g . O rnot
O grgdemanded and releasing . O rthem
O grg when there is a demand. . O rgrg
O . O rgrg
O
s aslaalia
 i . Thus the consumers
s asl
get
aalia
the i . commodities regularly
s aslaa ia
even
l i .during the off-season
s a l a ia
periods.
s a l i .
s aslaalia.
.wP.P adaada (iv) Business Finance .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww
 Based g on the goods deposited in a warehouse, the depositor can get finance from banks and
g O
. i.O r r g .O rgshowing
O rg .O rbygrgthe warehouse keeper.i.O.O
O rgrg
s aslaalia other financial institutions
s aslaalia i .
by the receipt issued
s aslaalia i .
s aslaal a i
s aslaalia.
a
adada (v) Risk bearing .P.P adadaa a
adada adadaa a
adada
ww
ww wwww ww ww ww
 In case of damage to the goods, w w
warehouse keeper compensates ww the loss caused to the owner ww of
g .O O grggoods.
rthe .O rgrg
O .O rgrg
O .O rgrg
O .
l alia i .
asa  Thus, warehousesabear l alia i .
asathe loss of risk involved l alia i . l alia i . aslaalia
a s s a sinas a
storage of goods. a s asa a s
adad a adad a adad a adad a adad a
ww
ww wwww ww ww ww ww ww
ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr47
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i . TRANSPORTATION
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w.P.P ww.P.P w w.P.P ww.P.P
ww
ww wwww ww
ww wwww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w ww ww ww w w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  w w.P.P ww.P.P w w.P.P ww.P.P
ww
ww wwww ww
ww wwww ww
ww

g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a

asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w ww ww ww w w wwww
ww ww ww ww ww

g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s a
s
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada 
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
III. SHORT ANSWER QUESTIONS:
ww ww ww
g O grg
rbill O rgrg O rgrg O rgrg
1. What
l a ia. is.O
i of lading? l a ia. i . O l a ia. i . O l a ia. i . O laalia.
.wP.P adaada  It is a document adaada the terms and conditions
.wP.containing
P .wP.P adaadaof the contract of carriage.
.wP.P adaada .wP.P adaada
www w
wby
w the shipping companywand w
wwsigned by the captain ofwthe ww w www
ww  It is issued ww w w ship. ww
g  It .O rgrg
acknowledges
O the receipt of .O thergrgoods
O g described in it on.O rgrgthe ship.
board
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  It also serves as.P.anP a
da receipt of goods..PP
adaofficial a
adada a
adada a
adada
ww.P.P w w ww . w w.P.P ww.P.P
ww
ww  It is a document wwww of title of goods. ww ww wwww ww
ww
g 2. What is rchartergrg party? rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa Goods are to be consigned a sa
l al a i l
asain large quantity, it is aadvantageous
s
a asa al a i
to hire the whole
a s
a
l a
apart
s l a i
a of the ship. a s
a aslaalia
wwww  The document w w
ww through which this contract ww
ww is made is known as ‘Charter w w
ww Party’. wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr48
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  The person ww who hires the ship is known ww as ‘Charter’. ww ww
g  . O rgcharter
O rg party brings thei.vessel O rgrgand crew under the control
O . O rgrofg the charters.
O . O rgrg
O
s aslaaliaThe
i .
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The charter becomes .wP.P adaadresponsible
a
to the third
.wP.P
daada for the acts of the master
aparties .wP.P adaadand
a
crew of the ship. .P.P adaada
www ww w ww w ww w w
www
ww IV. Long Answer
ww Questions
ww ww ww
g .O rgrgdifferent typesi.of
O O O grg
rtransport. .O rgrg
O .O rgrg
O
1. Explain
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada Transport system a
dadbea classified in differentadaways a a a
adadofatransport, the ways.P.P a
adada
ww.P.P w w.P.P acan
w w.P.P d depending on the w w.types
P.P ww
ww
ww ww ww wwww ww ww
and means of transport and also the motive power used in transport. ww ww
g
i .O
A. Surface . rgrgTransport
O i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a sa
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Transport of people
.P.P adad and goods by land vehicles .P.P adadis known as Surface .transport. P.Padad .P.P adad
ww  It is also ww called as ‘Land Transport’. ww ww ww
g . O rgrg
O  Pack Animals
. O rgrg- horse, mule, donkey
O . O rgrg and elephant etc., i.O.O
camel,
O rgrg
s as
a
lalai i .
 s a
Bullocks
a ia
lalCarts i .
s as
a
lalai i .
s as
a
lala i
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww Road Transport ww w ww ww
ww
ww ww ww ww w wwww ww
ww
g rgrg  Motor Lorries rgrand g Buses rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Tramwayss as a l s as a l s as a l s as
.wP.P adaada .wP.Padaada .wP.P adaada .wP.P adaada .wP.P adaada
www ww w Railway Transport ww w ww w www
ww ww ww ww ww
B. Water Transport
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaali
a i . “Water is a free gift
s aof
slaa li i
nature’.
a .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Water transport a a
adaisdthe a
adada goods etc. by barge, a
adadaship or sailboat over.P.P a
adada
ww.P.P w w.P.P process of moving
w w.P.people,
P w w.P.boat,
P ww
ww
ww ww w www wwww ww
ww
a sea, wocean, lake, canal, river,etc. w
g .O O grg Transports are of two
rWater .O O grg
rtypes .O rgrg
O .O rgrg
O .
l
asa alia i . l
asa a lia i . l
asa alia i . l
a s
a a sa a s
a a s
a a s
a
.P.P adad  Inland
.P.P
dad
aWaterways .P.P adad .P.P adad .P.P adad
wwww w w
wOcean
w Waterways ww w w ww w w wwww
ww ww
 ww ww ww
g C. Air . O O grg
rTransport . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Air transport
P . P. a aadafastest and the costliest
is dthe
P . P. P
daadaof transport.
amode . P. adaada
P . P. adaada
P
ww ww air transport is now one w
ofw wofwoverseas transport. ww w
ww
ww  Commercialww ww wwww the most prominent modes wwww ww w
g  rThe grgmodern air transport .has rgitsrggrowth with the invention rgrofgAirplane by Wright iBrothers. rgrg
l a ia. O
i . O l a ia O
i . O l a ia. O
i . O l a a. O
i . O laalia.
s as a l  Air transport is a form s as a l travel in vehicles suchsaas
of s a l
helicopters, hot air a
balloons,
s s a lblimps, gliders, s as
.wP.P adaada .wP.P adaada adaada
.wP.orP .wP.P adaada .wP.P adaada
www hang ww w
gliding, parachuting, airplanes, ww w
jets anything else that can
ww w
sustain flight. www
ww ww ww ww ww
2. Discuss the advantages of transport.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .  It increases thes l a li
efficiency
as a a i . of production s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adaexpands the market .P.P
adand a
adada a
adada a
adada
ww.P.P  It develops
w w.P.P w w w w.P.P ww.P.P
ww
ww
 It aids to economic growth
g
i .O . rgrg
O i .O . rgrg
O .O . rgrg
O .O . rgrg
O .
and mass Production lalia i
a s
a
l
asa al a i  It helps in specialization
a sa
l
asa a l a i
a s
a asa i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It encourages
.P.P adadinnovations in product.Pproduction . adad and designing .P.P
P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr49
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg INSURANCE i.O.O
O rgrg . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia

i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww  ww ww wwww wwww wwww
g
i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww III. SHORT ANSWER
ww QUESTIONS:
ww ww ww
g 1. Define . O rgrg
O
Insurance. . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada “Insurance is .aP.plan adaadby
P
a themselves which large
. P. adaadanumber of people associate
P . P. adaadaand transfer to the.P.P
P adaada
www w w w w
www w
www w
www
ww shoulders wwofwall, risk that attacks to individuals”.
ww ww ww
g .O rgrg
O .O rgrg
O .O grg
rAccording
-O to John Merge .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a2.
adada Give the meaning of cropa
adadainsurance a
adada a
adada a
adada
ww
ww  This policy wwwwis to provide financial support wwwwto farmers in case of a w wwfailure due to drought orwflood.
crop
w ww
w
g  It generally
rgrg covers all risks ofi.O lossrgror
g damages relating to .production rgrg of rice, wheat, millets, rgroil
g seeds.
i . O . O . O i O . O i . O . O .
a s
a aslaala i
a s
a aslaala i
a s
a aslaala i
a s
a aslaala i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr50
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww ww ww ww
ww 3. Write a notewon w IRDAI ww ww ww
g  iIRDAI
. O rgrg– Insurance Regulatory
O . O rgrg
Development
O and Authority . O of
OrgrIndia
g is the statutory, independent
. O rgrg and
O
s aslaal a i .
s aslaalia i .
s asl a
a lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada apex body that.P . adaadaregulates and supervises
governs,
P . P. adaathe
P daInsurance Industry.in P. P
daada
aIndia. . P. adaada
P
www  It was constituted
w
www in the year 2000 bywParliament w
www of India Act called w
ww Act, 1999.
wIRDAI wwww
ww ww w ww ww
g  Presently
.O rgrg IRDAI headquarters
O .O
isrg
OinrgHyderabad. .O Orgrg .O rgrg
O
s
IV.aslaali
Long
a i .
Answer s
Questions aslaalia i .
s asl a
a lia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adadaa a
adada
ww
ww 1. Explain w wwvarious types of w
the
w ww
Insurance
w wwww wwww
g i). Liferg Insurance
rg rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa  Life Insurance may a s
a
l
asbeal a i
a defined as a contract a s
a
l a l a i
asawhich the insurance company
in a sa
l al a i
asa called insurer a s
a aslaalia
.P.P adad .Pto
. adad
wwww ww w
undertakes w insure the life of a ww w
person
w called assured in ww w
exchange
w of a sum of money w
called
ww w
ww ww ww ww ww
premium which may be paid in one lump sum or monthly, quarterly, half yearly or yearly.
g . O r
O grg . O rgrg
O
s as
a i i .
lala Life insurance policies s as
a i i .
a of many kinds. Some
lalare s as
a i i .
la are given below: saslala
oflathem a i i .
s aslaalia.
. P. adaada
P  . P adaadaLife Policy
P
Whole
. . P. adaada
P . P. adaada
P . P. adaada
P
ww ww  Joint Life Policy (JLP)
ww ww ww
g . O rgrg  Annuity Policy
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s asl a
a lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada ii). Non – Life Insurance .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www wasw
w the insurance not related w
wtowhuman but related to properties. ww w ww w
ww ww
It refers ww ww ww
g iii). O
.Fire rgrInsurance
O g .O rgrg
O .O Orgrg .O rgrg
O
s aslaalia i .
s aslaalia i .
s asl a
a lia i .
s aslaalia i .
s aslaalia.
a
adada Fire insurance a
adada is a contract whereby the
a
adada insurer, in consideration
adadaaof the premium paid, a
adada
ww
ww undertakes ww wtow make good any loss or ww wdamage
w caused by a fire w ww a specified period upto
during
w wwwthe
w
g amount rgrgspecified in the policy. rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al
asiv). a i
a Marine Insurance asaasa l al a i
a s
a
l
asa a l a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad .P . adad
P .P.P adad
wwww  It is
ww w
a wcontract of insurance under
ww w which
w the insurer undertakes
ww ww to indemnify the insured
ww w
inw
ww ww ww ww ww
g . O r
O grgthe manner and to the.O extent thereby agreed against marine losses.
rgrg
O
s as
a i i .
lala  The insured pays s as
a
the i i .
lalapremium in consideration s as
a
laof i i .
la the insurer’s guarantee s as
a i i .
a good the
lalmake
to s aslaalia.
. P. adaada
P losses . P adaadfrom
P
arising
.
a
marine perils or . P adaad
P
perils
. of
a
the sea. . P. adaada
P . P. adaada
P
ww ww ww ww ww
v). Health Insurance
g . O rgrgIn mid 80’s, most ofi.the
O O Ogrg
rhospitals . O Orgrg owned and treatment . O rgrwas
O g
s aslaalia i .
s aslaal a i . in India were
s asl a
a lia i .
government
s aslaalia i . free
s aslaalia.
.wP.P adaada of cost..P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
www the health insurancewexists w
wwwprimarily in the formwofw w
ww
w‘Mediclaim wwww
ww ww
 Presently w policy’. ww
g O rgrg
vi). .Miscellaneous
O Insurance .O rgrg
O .O Orgrg .O rgrg
O
s aslaalia i .
s aslaalia i .
s asl a
a lia i .
s aslaalia i .
s aslaalia.
a
adada  Motor a
adada
Vehicle Insurance a
adada adadaa a
adada
ww
ww ww wwBurglary Insurance ww
 ww wwww wwww
g
i . O . rgrg  Cattle Insurance
O i .O . rgrg
O i .O . Orgrg i .O . rgrg
O .
a s
a
l
asa al a i
 Crop Insurance
a s
a
l
asa al a i
a s
a
l
asa a l a i
a sa
l
asa al a i
a s
a aslaalia
wwww 
ww w Sports
w Insurance ww w w ww ww ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr51
O g
s aslaalia i .
s aslaal a i .
s asl a
a l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww wwww ww ww ww ww
ww 2. Explain w thew principles of insurance. ww ww ww
g i).aUtmost
. O rgrgGood Faith
O . O rgrg
O . O rgrg
O . O rgrg
O
s as la lia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  According.to P. P
daadprinciple,
athis a both insurerP
. . P
ada should enter into contract
adainsured
and
. P. adaada in good faith. .P.P
P adaada
www www w w
www that impacts the subject w w
wwmatter. wwww
ww  Insured ww should provide all the information ww ww ww
g OO grg should provide all.O
. i. rInsurer the rgdetails
O rg regarding insurance .O grg
rcontract.
O .O rgrg
O
s as laa lia s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada ii). Insurable Interest
adadaa adadaa a
adada a
adada
ww
ww  Thew ww must have an insurable
insured
w wwwinterest
w in the subject matter wof
ww w insurance. wwww
g  rInsurable
grg interest means some rgrpecuniary
g interest in the subject rgrg matter of the insurance rgcontract.
i . O . O i . O . O i . O . O i . O . O rg .
a s
a
l a
asiii).l a i
a Indemnity a s
a
l
asa al a i
a s
a asal al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad P.Padad
.means .P.P adad .P.P adad .P.P adad
wwww  Indemnity
www w security or www
compensationw against loss or w
damages.
ww w ww w w
ww ww ww ww ww
 This principle ensures that the insured does not make any profit out of the insurance.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i . This principle of
s as
a
indemnity
lalai i . is applicable to property
s as
a
lalai i .
insurance alone.
s as
a
lalai i .
s aslaalia.
. P. adaada iv). Causa Proxima
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwww ww ww ww ww
ww  The word
ww ‘Causa proxima’ means w
w‘nearest cause’.
ww ww
g . O O grg direct, the most dominant
rThe . O rgrg and most effective
O . O rg
O rg of loss should i.be O rgtaken
O rg into
s as laa li
a i .
s aslaalia i .
s as laalia i . cause
s aslaal a i .
s aslaalia.
.wP.P adaada consideration.ada
ada
.wP.Pcompany .wP . adaada
P .wP.P adaada .wP.P adaada
www  The www
insurance is not liable
www
for there mote cause. ww w ww w
ww ww ww ww ww
v). Contribution
g .O rgrg
O O
.may rgrg
O .O rgrg
O .O rgrg
O
s as laa lia
 i . The same subject
s asl
matteraalia i . be insured with more
s as laa ia
than
l i . one insurer then it
sis
asl a i
known
a l a i . as ‘Double
s aslaalia.
a
adada a
adada
ww.P.P Insurance’.
w w.P.P w w.P.P w w.P.P w w.P.P
ww
ww ww ww wwww ww
ww wwww
 In such a case, the insurance claim to be paid to the insured must be shared on contributed by all
g .O O grg
rinsurers .O O grg
rsum .ofO rgrg
O .O rgrg
O .
asal a lia i . in proportion lto
asa alithe
a i . assured by each one
asal alia i . them. l
a s
a a s
a a s
a a sa a s
a
.P.P adad3. Discuss the causes .P.P adad of risk. .P.P adad .P.P adad .P.P adad
wwww www w www w ww w w ww w w
ww (i) Naturalw w
Causes ww ww ww
g  Human grg beings have little.control grg over natural calamities like
grgflood, earthquake, lightning, grg heavy
. O r
O O r
O . O r
O . O r
O
s as laaliai. rains, famine, etc. saslaaliai. s as laaliai. s aslaaliai. s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  These result
wwww in heavy loss of life, property,
wwww and income in business.
ww ww ww ww
ww ww ww ww ww
(ii) Human Causes
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa li
a i . Human causes include
s aslaali
such
a i . unexpected events
s alike
s laalia i .
dishonesty, carelessness
s aslaa
or
lia i .
negligence of
s aslaalia.
.wP.P adaada employees,.P adaada of work due to power
stoppage
. P . P. P
daada strikes, riots, management
afailure, . P. adaada inefficiency, etc. .P.P
P adaada
www w
www w
www wwww wwww
ww (iii) Economic
ww Causes
ww ww ww
g .O O grg
rFinancial .O ringrginterest rate for borrowing,
O .O rgrlevy
O g of higher taxes, etc., .O Ogrg come
ralso
s as laa lia i . problems likeaia
s asla l rise
i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada under this type adof a a as they result in higher
adcauses a
adadaunexpected cost of .operation a
adada of business. a
adada
ww.P.P w w.P.P w w.P.P w w P.P w w.P.P
ww
ww (iv) Other Causes ww ww wwww ww
ww wwww
g .O O grg are unforeseen events
rThese .O O grg political disturbances,
rlike .O rgrg
mechanical
O failures such as .O rgrg
the
O bursting .
l a lia i .
asa of boiler, fluctuations l
asinalia i . l alia i .
asalead to the possibility ofasabusiness l alia
asa risks.i . aslaalia
a s
a a s
a a exchange rates, etc. which a s
a a s
a
wwww www w www w ww w w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr52
O g
s as laa lia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrgSERVICE BUSINESS
O . O rgrgIN INDIA
O . O rgrg
O
s aslaalia i . EMERGING
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P ww.P.P w w.P.P ww.P.P w w.P.P
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww wwww www w wwww w
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr53
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g  . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww
g
i . i. rgrg
OO
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a
asa l a
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i
lala  i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  ww wwww wwww wwww wwww
ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa ia
l  i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www  ww www www www www
ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
 s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  ww.P.P w w.P.P ww.P.P ww.P.P
ww
ww wwww wwww ww
ww ww
ww
g
i . O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a
asa l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww

g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i
lala  i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww

g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww ww
ww

g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr54
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g ai.O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s asla l a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww

g O
. i.O r
r
gg .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal i
a s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  a
adada a
adada a
adada a
adada
ww.P.P  w w. P. P ww. P. P w w. P. P w w. P. P
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww III. SHORT ANSWER
w w
ww QUESTIONS: ww wwww www w www w
ww ww ww ww
g 1. What are rgrthe
g types of franchising? rgrg rgrg rgrg
a i . O
i . O a i . O
i . O a i . O
i . O a i . Oi . O laalia.
s asla)
a laProduct/ trade name s a lala
franchising:
s s aslala s aslala s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  In this wwwtype,
w the franchisee exclusively wwwwdeals with a manufacture’s wwwwproduct. wwww
ww ww ww ww ww
 Examples include Kidzee, French Loaf outlets, Bharat Petroleum bunks,Patanjali products, etc.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa i
a i .
b)l Business format franchising: s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P adaada .wP.P adaada .w P.Padaada .wP.P adaada
www  When a
wwwfranchisor awards rights covering
www all business aspects as
wwwa complete business package
www to
ww ww ww ww ww
the franchisee it is called as business format franchising.
g O r g rg
.i.OExamples: .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal i
a s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
dada
aPizza a
ada Color plus, Zodiac,
adTitan, a
adada beauty parlour. .P.P a
adada
ww.P.P McDonald’s,
w w.P.P Hut. KFC, Hot breads, ww.P.P w w.P.Lakmé
P w w
ww
2. List the steps in factoring process.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .toO . rgrg
O .
a s
a
l
asa al a i Goods are sold on
a s
a
l
asa a
creditl a i
basis, an invoice is raised
a sa
l
asa aand
l a i a copy of the same
a
is
sa
l
asa a
sentl a i the factor.
a s
a aslaalia
.P.P adad  The debtww .P.P
amountadaddue to the firm is transferred
.P.P adad to the factor through.P adad
P
assignment.
. .P.P adad
wwww ww wwww www w www w
ww ww ww ww ww
 On the due date, the amount is collected by the factor from the customer.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslala i
3. Describe
a i . the benefits of Logistics.
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Decrease in.P.Costly
P adaadaErrors
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 Inventory Management
ww ww ww
g . O O grg
rIncreased . O rgrg
O . O rgrg
O . O rgrg
O
s aslaal i
a  i . Customer
s aslaali
Service
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Organizational .wP.P
ada
adacontrol .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww
 Scalability and speed. ww ww ww
g 4. Explain .O O grgpoints of differences.O
rthe rgrg Logistics and Supply
between
O .O rgChain
O rg Management. i.O rgrg
O
s aslaal i
a i .
s aslaalia i .
s aslaalia i .
s aslaal a i .
s aslaalia.
a
adadaS.No Logistics Management a
adada a a
adadSupply a
adada a
adada
.P.P .P.P .P.P Chain Management
.P.P .P.P
wwww www w wwww www w www w
ww ww ww ww ww
1 It deals with the efficient management of a To identify the dynamic nature of the value
g
i .O . rgrg
O i .O . rgrg
O i O . rgrg
O
.itself i .O . rgrg
O .
a s
a
l
asa al a i static gap between
a
Demand.
s
a
l
asa al a i creation
a sa
l
asa al a i such as responsiveness,
a sa
l
asa al a i quality and
a s
a aslaalia
.P.P adad .P.P adad .P.P adadesign.
wwww www w wwww www w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr55
O g
s aslaal i
a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P . adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww ww ww
ww wwww
ww 2 ww
It focus on cost minimization. ww It focuses on profit ww maximization ww
g .O rgrg
O .O rgrg
O . O rgrg
O . O rgrg
O
s
3 lalia
as a i . It is supply driven. lalia
s as a i .
s as a li
It is demand
l a a i . driven.
s aslaalia i .
s aslaalia.
www www ww w w
ww www
ww 5. What is the w w
impact of e-commerce on buyers? ww ww ww
g  i.O rgrg could have a globali.access
Buyers
O O rgrgto information about ivariety
O .O rgrgof products and services
O .O O grg
ravailable in
s as laal a i
the
.
market s aslaal a i .
s aslaal a i .
s aslaalia i .
s aslaalia.
a
adada a
adada adadaa a
adada a
adada
ww.P.P  They could w w. P. P w w. P . P w w. P. P w w. P. P
ww
ww wwwwbuy the products/services wwwround
w the clock from anywhere wwwwin world wwww
g  Electronicr g g and software products
r g g could be downloaded gimmediately after purchase
r g r g gthrough
. O O r . O O r . O O r . O O r .
a s
a aslaaliaei.– commerce mode.asaaslaaliai. a s
a aslaaliai. a saaslaaliai. a s
a aslaalia
.P.P adad  Individuals could .P.P adsell
ad their used products .through P.P adade – commerce mode.with P.Padarelative
d ease. .P.P adad
wwww www w ww w w w
ww w www w
ww  Buyerswcan w bargain and negotiate w w
better terms and conditionswwith w respect to buying knowledge ww
g products.
rgrg rgrg rgrg rgrg
IV. a i
lLong . Oi . O a i . O
i . O a i . O
i . O a i . O
i . O laalia.
s as a la Answer Questions: s aslala s aslala s aslala s as
. P. adaad1.a Enumerate the
P . P. P
daada
acharacteristics of . P . adaada
P
franchising. . P. adaada
P . P. adaada
P
wwww wwww ww ww ww
ww wwww
ww ww ww ww ww
 Franchise relationship is based on an agreement which lays down terms and conditions of this
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . relationship.
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The term of adaada may be for 5 years
.wP.franchise
P .wP.P aadmore.
ador a
P
The franchise .agreement
. adaada may be renewed.P.P
P adaada
www www ww w w
www w
www
ww ww
with the mutual consent of the parties.
ww ww ww
g .O O grg franchisee agrees to.O
rThe pay rgrspecified
O g royalty to a the .O rgrg
O
franchiser, as per terms aofi.O the rgrfranchise
O g
s as laalia i .
s aslaalia i .
s asla lia i .
s asla l a i .
s aslaalia.
a
adada agreement. Pad a a adadaa a
adada a
adada
ww.P.P w w. .Pad w w.P.P w w.P.P w w.P.P
ww
ww  Thew ww virtually sets up the
w
franchiser wwwbusiness
w for the franchisee. wwww wwww
g .O O grg
rFranchiser may give training .O rg
O torgpersonnel working in .the O O grg
rfranchisee’s organization..OO rgrg .
l alia
asElucidate i . l alia i .
asa of factoring. asaasa l alia i . l
a s
2.
a a the a
features sa a s
a a s
a
wwww i) Maintenance
w w
wwof book-debts ww w w w
ww w www w
ww ww ww ww ww
g A factor
. O rgrg takes the responsibility
O . O rofgrgmaintaining the accounts
O . O rofgrdebtors
O g of a business institution.
. O rgrg
O
s as
a i
la
laCredit
ii)
i .
coverage s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
ww w ww w ww
ww
ww wwww the risk burden ofww
The factorwaccepts loss
ww of bad debts leaving thewseller
wwww to concentrate on his wwwcore
w
business.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l a
iii)
a
ia i .
lCash advances s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada Around eighty.percent P. adaadaof the total amount of
P . P . adaada receivables is paid.P.asP
P
accounts
ada ada
advance cash to the . P. adaada
P
www w
www wwww w
www w
www
ww ww ww ww ww
client.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as
iv)
laali i .
Collection
a service
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada Issuing reminders, a
ada part payments,.Pcollection
adreceiving a
adada of cheques form .part a a factoring service. adada
dadthe
aof a
ww.P.P w w.P.P w w . P w w P.P ww .P.P
ww
ww w ww
w wwww wwww w ww
w
v) Advice to clients
g
iFrom
.O . rgrthe
O g past history of debtors,
i .O . rgthe
O rg factor is able to provide i .O . O grg regarding the credit
radvices i .O . O grg
rworthiness .
a s
a asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad of customers, perception
.P.P adad of customers about.Pthe . adaproducts
P d of the client, etc.ad
.P.Pad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr56
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P . . adaada
TrbTnpsc
P P . P. adaada
P
wwww ww ww wwww wwww ww
ww
ww 3. Describewthe w benefits of Outsourcing. ww ww ww
g O
i).aFocusing
. rgrg on Core Activitiesi.O.O
O rgrg . O rgrg
O . O rgrg
O
s as la lia i .
s aslaal a i
s aslaa lia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  Companies.Pcan . P
ada on their core competence,
adafocus . P. adaada a few areas where
P . P. athedaadcompany
P
a has distinct PP
. . adaada
www wwww w
www w
www w
www
ww ww
capability. ww ww ww
g .O O grgrest of the activities can
rThe .O Ogrgoutsource to outside agencies.
rbe .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
a
adada ii). To Fill up Economic a a
adadDevelopment a
adada adada a a
adada
ww.P.P w .P.P
w w .P.P
w w .P.P
w w .P.P
w
ww
ww  Outsourcing
wwww stimulates entrepreneurship, wwww encourages employment wwww opportunities, expands ww ww
g
i . O . rexports,
O grg enables tremendous
i . O . rgrowth
Ogrg of the economy. .OO
i . rgrg i .O . rgrg
O .
a s
a
l al
asiii). a i
a Encourages Employment a s
a
l al a i
asa Opportunities a s
a
l
asa a l a i
a s
a
l
asa a l a i
a s
a aslaalia
.P.P adad adad
.P.that
P adad
.P.non
wwww  Companies
ww w w are outsourcing w w
their
ww core activities w w
provide
ww chances for other w w
small
ww
ww ww ww ww ww
business units to take up the activities.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala This paves way forsmore as
a i i .
lalajob opportunities and snew as
a i
la i .
laemployment avenues. salala
s
a i i .
s aslaalia.
. P. adaada iv). Reduction in .Investment
P P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww wwww wwww ww
ww
ww ww ww ww ww
 Companies through outsourcing avails the services of outsiders which in turn reduces the
g . O O grg
rinvestment . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . requirements.
s aslaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  The amount.P.soP aada can be utilized.P
adavailable . adaada and this increases
productively
P . P. P
daadprofits.
athe a
. P. adaada
P
www wwww w
www w
www w
www
ww v). Quest for ww Excellence ww ww ww
g .O O grg
rOutsourcing enables the ifirms
.O rgrtog pursue excellence ini.O
O two rgrways
O g namely excelling.themselves O rgrg in
O
s as laalia i .
s aslaal a i .
s aslaa l a i .
s aslaa lia i .
s aslaalia.
a
adada the activities they a a and excel outsiders byadaextending
adaddo a a a
d a contracting out. Padada
their capabilitiesathrough a
ww.P.P w .P.P
w w .P.P d
w w .P.Pad
w ww. .P
ww
ww 4. Explain w wwpoints of differences
the
w wwww between BPO and wwwKPO.
w ww ww
g i). Business
i .O . rgrg Process Outsourcing
O i .O . rgrg
(BPO)
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a
asMeaning
a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa a l a i
a s
a aslaalia
wwww  BPOww w w
meansw
w getting contractualww w w w
services
w of external companies w w
ww or group of companies w w
wwto
ww ww ww
g . O rcomplete
O grg special work or process
. O rgrg of a company. i.O.O
O rgrg . O rgrg
O
s as
a i i .
lala For example call centers, s as
a i i .
laladata entry etc. s as
a
lala i
s as
a
lala i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww Need for BPOww ww wwww wwww ww
ww
ww ww ww ww ww
 To focus on key function
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laali
a i . Benefit of efficiency
s aslaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  Cost cutting.P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
w wwww w w w
ww
ww  Economic
ww growth and developmentw
wwww wwwww ww www
g .O O grg
rIncreasing .O rgrg
O .O rgrg
O .O rgrg
O
s as laali
a i . profit
s aslaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
a
adada  Catering to.P the a
ada demand
addynamic a
adada adada a a
adada
ww.P.P w w . P w .P.P
w w .P.P
w w .P.P
w
ww
ww ii). Knowledge wwww Process of Outsourcingw(KPO)
ww
w wwww ww ww
g Meaning
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  KPO refer to outsourcing a s
a
l al a i
asa of Knowledge basedaProcess. s
a
l
asa a l a i
a s
a
l
asa a l a i
a s
a aslaalia
wwww ww w w www w www w w
ww w
ww ww ww ww ww
g PREPARED . O rgBY
O g
s as laalia i .
s aslaal a i .
s aslaa l a i
s aslaa lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  It means ww obtaining high end knowledge ww work from outside w w
the organization in order tow w
run the
g . O O grg successfully and.O
rbusiness in O grg effective manner. .OO
rcost rgrg . O rgrg
O
s aslaa lia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  In short KPO .wP.P
daadaget knowledge related,
afirms .wP.P
daada
ainformation related, work done
.wP.P adaadfrom
a outside firm and adaada
.P.P
www w
ww high value work carried
it involves
w
whighly
w skilled staff. www ww ww
ww ww ww ww ww
g Need for
.O rgrKPO
O g .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
 Usage of best s asl
skillsaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  Ultimate w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww ww use of knowledge ww ww wwww ww ww
g Reduction of expenditure g
g
i O r
O r g
. i.  Special focus on principal i .O . r rg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa a l a
a sa
l
asa a l a i functions
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad  Outsources .P.P adareduces
d
risk .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
5. Write a note on e-commerce models.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s ai).
s
a
lala i i
Business. to Customers
s (B
as
a
lala
2 iC) i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  This is fastest
P . P. P
daada
agrowing segment in e – . P adaada spare.
P
commerce
. . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Under this model, business concern sells directly to consumers
g . O rgrg to Business (B 2 B)i.O.O
O rgrg . O rgrg
O . O rgrg
O
s aii).
slaa li i .
Business
a s aslaa l a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Under the model, .wP.P adaadbusiness
a concerns transact
.wP.P
ada one another through ainternet.
adawith .wP.Pad
da a
.wP.P adaada
www w
ww Snapdeal, Filipkart,wAlibaba, w
ww Indamart, Trade India. w
wwCom etc. ww w
ww  For w w
instance, w ww ww
g O rgrg to Consumer (Ci.O
iii).i.Consumer
O 2i.O rgrg
C) .O rgrg
O .O rgrg
O
s aslaa l a i .
s aslaa l a s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Under this.P.model, a
adada customers sell directly a
adadato other customers.P.through a
adada online classified.P.P a
adada
ww.P.P w w P w w.P.P w w P w w
ww
ww ww or through auctionworw
advertisement
ww wthrough
w mobile or through www w places.
market ww ww
g iv). Customer
i .O . rgrg to Business (C 2i.B)
O O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l a l a i
asa  This model is reverse a sa
l
astoa l a i
a auction model. a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  Products www w
like automobile, electronic www w
items furniture. www w ww w w
ww ww ww ww ww
 Example grg Naukri.com, and.O Monster.com
grg are examples of Indian grg companies
g . O r
O r
O . O r
O . O rgrg
O
s as
a ia i
lalBusiness
v).
. to Government s as
a i
la(Bla2 G)i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  This model.P.envisages
P adaada selling products
P . P. P
daada
aand services by business . P. adaada to Government.P.P
P
consumer
adaada
ww ww ww ww ww
organization.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa li
a i . For instance TCS operates
s aslaa lia i .the passport application
s aslaalia i
process. for the Government
s aslaali
ofa i .
India as part
s aslaalia.
.wP.P adaada off - line process.
ww ww ww ww ww
g .O rgrg
O .O rgrgCHAPTER – 17i.O.O
O rgrg .O rgrg
O
s aslaa lia i .
s aslaa lia i .
s aslaal a i
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w.P.SOCIAL
P RESPONSIBILITY w w.P.P OF BUSINESS
w w.P.P w w.P.P
ww
ww ww ww ww ww wwww ww ww
g I. CHOOSE rgrg THE BEST ANSWER: rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l
asa a l a i
a sa
l
asa a l a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr58
O g
s aslaa lia i .
s aslaa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
II.
a
l a
asVERY
a l a i
SHORT ANSWERa s
a
l al a i
asa QUESTIONS: asaasa l al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww 1. What dowyou
ww
ww mean by Social wResponsibility? ww w w ww w w ww w w
ww w w ww ww
g  O
. rgrg businessman earnsi.prosperity
Every
O O rgrg from business iand
O . O rgshould
O rg give back the ibenefit . O rgrg of this
O
s as
a
lala i i .
s as
a
lala i .
s as
a
lala i .
s as
a
lala i .
s aslaalia.
prosperity to society.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  This benefit wwww
is the moral responsibility ww w
ofw business. ww ww ww ww
ww ww ww ww ww
g  It rcan grgbe said to be social responsibilityrgrg of business. i.O.O rgrg rgrg
l a i
a . O
i . O l a ia. O
i . O l a a i l a ia. O
i . O laalia.
2.
s aGive
s a l the meaning of s as a l
Social Power? s as a l s as a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Businessmen w
wwwhave considerable social w
ww
wpower. wwww wwww
ww ww ww ww ww
 Their decisions and actions affect the lives and fortunes of the society.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa
l i
a i .
Businessmen should l
assume
s as aalia i .
social obligations l alia
commensurate
s as a i . with their socials l al
power.
as a
ia i .
s aslaalia.
a
adad3.a What is a free.P.enterprise? a
adada a
adada a
adada a
adada
ww.P.P ww P w w.P.P w w.P.P w w.P.P
ww
ww
 A business enterprise which accepts and discharges social obligations enjoys greater freedom.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal a
l a i
Social responsibilities
a s
a
l
are
asa al a i
essential for avoiding
a
l al a
governmental
s
a asa i action against
a
l a
business
s
a asa l a i
.
a s
a aslaalia
wwww 4. Who are www
called
w Stakeholders? ww w w ww w w ww w w
ww ww ww ww ww
 A business grg organisation is a.O coalition
grg of several interest .groups grgor stakeholders.
g . O r
O r
O O r
O . O rgrg
O
s as
a i i .
lalaExample – shareholders, s as
a i
la i .
lacustomers, employees, suppliers,
s as
a i i
lala etc. .
s as
a
lalai i .
s aslaalia.
. P. adaada  Business should,
P . P. P
ada
adatherefore, work for the. P. adaada of all of them rather
P
interest . P. P
ada
adathan for the benefit of. P. adaada
P
ww ww ww ww ww
shareholders.
g
ila.O .Orgrg . O rgrg
O . O rgrg
O . O rgrg
O
5. aWhat
s s laa i is ethical
s asla li
Responsibility?
a a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  This includes.P the
. P aada of the firm that.Pis.P
adbehavior daada by society but notPa
aexpected . .
daada in law.
codified
P . P. adaada
P
www w
www wwww wwww wwww
ww ww ww
 There is an element of voluntary action in performing this responsibility.
ww ww
g III. SHORT .O rgrg ANSWER QUESTIONS:
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adad1.a Define the Concept a
adadaof Social Responsibility? a
adada a
adada a
adada
ww
ww ww
“Social Responsibilityww requires managers wwww
to consider whether their action wwwwis likely to promote thewpublic ww
w
good, torgadvance the basic beliefs ofrg
g
i .O . Org i .O . Oour
rg society, to contributei.O . Ogrgstability, strength and
torits
i O . rgrg
.harmony”.
O .
a saasal al a i
a s
a
l
asa al a i
a s
a
l al a i
asa - Peter F. Drucker a s
a
l
asa al a i
a s
a aslaalia
wwww wwww ww w w ww w w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr59
O g
s as laal i
a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 2. Why youwdo w think Social Responsibility ww of business ww is needed? ww
g . O rgrg is expected to bei.responsible
O
Business O rgrg
O to society due to
. O rgrgfollowing reasons i.O.O
O
the rgrg
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaal a i
s aslaalia.
.wP.P adaada  Self-Interest
www w
ww of Society ww w www www
ww ww
 Creation ww ww ww
g .O rgrgSocial Power
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Image in a the a a
d Society a
adada a
adada a
adada
ww.P.P w w.P.Pad w w.P.P w w.P.P ww.P.P
ww
ww ww Awareness
 Public
ww ww
ww ww ww ww
ww
g
i . O . rgrgFree Enterprise i.O.O
O rgrg i .O . rgrg
O i .O . rgrg
O .
a i).s
a
l
asa al
Creation
a i
of Society a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad P.Padad
.creation P.P
.the adad .P.P adad .P.P adad
wwww  Business www
is aw of society and w
uses
ww w resources of society. www w wwww
ww ww ww ww ww
 Therefore, it should fulfill its obligations to society.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
ii).
s a a i
Social
s
i .
lala Power: s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Businessmen.P
P . P
have
ada
adaconsiderable social . P
power.. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Their decisions and actions affect the lives and fortunes of the society.
g . O rgrg
O . O rgrg obligations commensurate
O . O rgrgwith their social power.
O . O rgrg
O
s asla

alia i .
Businessmen should
s
assume
aslaalia i .
social
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadiii).
a Free Enterprise: adaada
.wP.P .wP.P adaada .wP.P adaada .wP.P adaada
ww  A business ww enterprise which accepts ww
and discharges social obligations ww enjoys greater freedom. ww
g i.O rgrg responsibilities are essential
Social
O .O rgrg for avoiding governmental
O .O rgrgaction against business.
O .O rgrg
O
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adad3.a What are the .benefits a
adada derived by employees a
adada of a Socially a
da
adaResponsible a
adada
ww.P.P w w P.P w w.P.P w w.P.P ww.P.P
ww
ww ww ww ww ww
businesswenterprise?w ww ww ww
g i.O . rgrg and regular payment
Timely
O i .O of
. rgwages
O rg and salaries. i.O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Proper working .P.P
dad
aconditions and welfare amenities.
.P.P adad .P.P adad .P.P adad
wwww w w
ww for better career prospects. ww w w www w wwww
ww  Opportunity ww ww ww ww
g  O
. rgrgliving conditions likei.O
Better
O rgrg transport, canteen,i.crèches
housing,
O O rgrg etc.
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Timely training
P . P. P
daaddevelopment
aand a .
. P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wtoww
w wwww wwww
ww 4. Enumerate ww the points relating ww why business units ww are Socially ww
g Responsible?
. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Business ad
.wP.Pad
aa
ww ww
 Investors ww ww ww
g .O rgrgEmployees
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
 Government s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w.
 Competitors
P.P w w. P.P w w. P.P ww. P.P
ww
ww wwww ww
ww ww ww ww
ww
g
i . O . rgrgSociety
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa  Customers asaasa l al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  Suppliers
www w ww w w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P . adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww ww ww
ww
ww 5. List the w w
kinds of Social Responsibility. ww ww ww
g  . O rgrg Responsibility i.O.O
O rgrg . O rgrg
O . O rgrg
O
s aslaa lia .
Economic
i
s a slaa l a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Legal Responsibility .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww
ww ww
 Ethical Responsibility
ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s asla
a lia i .
Discretionary Responsibility
sa slaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a a
adadIV. a
da
adaQUESTIONS a
adada a
adada a
adada
w .P.P LONG ANSWER w .P.P w .P.P w .P.P w .P.P
ww
ww w wwww w ww ww w wwww w wwww w
1. Explain in detail the concept and need for Social Responsibility?
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
Meaning
l
asa a l a i :
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Every businessman .P.P adad earns prosperity from .P.P
dad
abusiness and should w .P.P
give
dad the benefit of thisPadad
aback . .P
wwww ww w w ww w w ww w ww
ww
ww w w
prosperity to society.
w w w w ww
g . O rgrg
O . O rgrg of business. i.O.O
O rgrg . O rgrg
O
s as

a
lala i This
i . benefit is the moral a
s as
responsibility
lala i i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaadaNeed for Social Responsibility:
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
wwww ww
wofw ww ww ww ww ww
ww
ww i). Creation ww Society ww ww ww
g . O rgrgBusiness is a creationi.O
O ofO grg and uses the resources
rsociety . O rgrofg society.
O . O rgrg
O
s aslaa lia i .
s aslaa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada a aada fulfill its obligations
 Therefore, itdshould
.wP.P .wP.P adatoadasociety. .wP.P adaada .wP.P adaada
www ii). Socialw ww w
Power: ww w ww w w
ww
ww w ww ww ww
g rgrBusinessmen
g have considerable rgrg social power. rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia.Oi . O l a ia.Oi . O laalia.
s as a l  Their decisions and
s as a l
actions affect the lives ands a a l
fortunes
s of the society. s as a l s as
a
adada a
adada a
adada a
adada a
adada
ww.P.P  w w
Businessmen.P.P should assume social w w.P.P
obligations commensurate w w
with.Ptheir
. P social power. w w.P.P
ww
iii). Free Enterprise:
g
i .O . rgrg
O i .O . rgrg
O i O . rgrg
O
.social i .O . rgrg
O .
a s
a
l
asa a l a i  A business enterprise
a s
a
l
asa a l a
whichi accepts and discharges
a s
a
l
asa al a i obligations enjoys
a s
a
l
asa al a i
greater freedom.
a s
a aslaalia
.P.P adad  Socialw .P.P adad
responsibilities are essentialw
adad governmental action
.P.avoiding
for P .P.P
dad
aagainst business. .P.P adad
wwww ww w ww w ww w w w
ww w
ww ww ww ww ww
iv). Image in the Society
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i
 . A business can improve
s as
a
lala i i .
its image in public by
s as
a
lalai
assuming i . social obligations.
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Good relations . P. adaad
P
a
with workers, consumers . P . P
daadsuppliers
aand a
P. adaadof
help in the .success
P
a business.
. P. adaada
P
ww
ww v). Law and ww Order ww ww ww
g . 
O rgrAny
O g business unit can survive . O rgrgand grow only whenithere
O . O rgrisglaw and order in society.
O . O rgrg
O
s aslaa lia i .
s aslaa lia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada  If business exploits
.wP.P adaada the weaker sections .wP.P
of ada for too long, these asections
adasociety .wP.Pad
da a will take
.wP.P adaada
www w
wwin their own hands. ww ww w ww w w
ww
ww thewlaw
w ww ww
g 2. Illustrate
.O rgrg with examples
O .O rgrgarguments for i.Social
the
O O rgrg Responsibility?
O .O rgrg
O
s aslaa lia i .
s aslaa lia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
a
adada i). Protection of Stakeholders a
adada Interest a
adada a
adada a
adada
ww
ww  A business wwwworganisation is a coalition ww wofwseveral interest groups w wstakeholders.
orw w wwww
g  Example rgrg – shareholders, customers, rgrg employees, suppliers, etc.
rgrg rgrg
i . O . O i . O . O i . O . O i .O . O .
a s
a
l a l a i
asa Business should, therefore, a s
a
l a l a i
asa work for the interest a s
a
l al a i
asofa all of them rather than a s
a
l a
asforl a i
a the benefit of a s
a aslaalia
wwww shareholders.
ww w w ww w w ww w w w
ww w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr61
O g
s aslaa lia i .
s aslaa l a i .
s aslaal a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s aslaalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ii). Promotion ww of Society ww ww ww
g i.O rgrg is a sub-system ofi.society.
Business
O O rgrg
O . O rgrg
O . O Orgrg
s a
s laal a i .
s a
s laal a i .
s aslaalia i .
s a
s laalia i .
s a
s laalia.
.wP.P adaada  It draws support .wP.P
daadsustenance
aand a from societyain
.wP.Pad
dathea form of inputs. Padaada
.w.P .wP.P adaada
www  Socially w w
w
responsible behavior is essential
w
ww to sustain this relationship w
wwbetween business and society. www
ww ww ww ww ww
g rgrg
iii). Assessment
.O O of Social Impact rgrg
.O O .O Orgrg .O Orgrg
s a
s laalia 
i .
During the course s a
s
of
laa
itslia i .
functioning, a business s aslaalia
enterprise
i.
makes several s a
s laa
decisionslia i.
and actions. s a
s laalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w
 Its activities
. P. P w w.P . P ww. P. P w w. P. P
ww
ww wwww exercise a strong influence wwww on the interests and values ww of society.
ww wwww
iv). Organized
g Social Power
g
i .O . r rg
O i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
aasa l a l
 a i Large corporations
a have
s
a
l
asa al a i
acquired tremendous social
a s
a
l
asa al a
poweri through their l
asa al
multifarious
a s
a
a i operations.
a s
a aslaalia
.P.P adad adad
.P.may
wwww  Social power
ww w w be misused in the absence
www w of social responsibility.
www w www w
ww ww ww ww ww
 There should be a equilibrium between social power and social responsibility.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a ia
lalPublic
v). i . Opinion
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P.Padaada  Adoption of.P.social Padaadaresponsibility as an.P.objective adaada will help to improve
P . P. adaadthe
P
a
public opinion of
. P. adaada
P
ww business.
ww ww ww ww
g . O rggood
O rg public image is a ivaluable . O rgrg asset for business. i.O.O
O rgrg . O rgrg
O
s as laa 
lia i .A
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
.wP.P adaada  For example.Pmaintaining . adaada parks, traffic islands
P . P. adaadand
P
a organizing awarenessacamps
. P. P
daada etc.,
. P. adaada
P
www w
wwwarguments against w w
wwSocial w
www w
www
ww 3. What arewthe w ww Responsibility? ww ww
g i). Dilution
.O rgrg of Economic Goalsi.O.O
O rgrg .O rgrg
O .O rgrg
O
s as laa lia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  By accepting a
dadaresponsibility, business
asocial adaadacompromise with economic
will a
adadagoals. a
adada
ww.P.P w .P.P
w w .P.P
w w .P.P
w w .P.P
w
ww
ww  Business wwwwis an economic institution ww wwand its only responsibility wwwwis to make maximum possible ww
ww
g .O O grg for its owners. .OO
rprofits rgrg .O rgrg
O .O rgrg
O .
l a
asii). lia i . l alia i . l alia i . l alia i . aslaalia
a s
a a Lack of Social Skill asaasa a s
a asa a s
a asa a s
a
wwww  Business w w
wworganizations and theirwmanagers w w
ww are not familiar with w w
wsocial
w affairs. www w
ww ww w ww ww
 There grg are special social service grgorganizations such as .Government grg and Non-Governmental
g . O r
O . O r
O O r
O . O rgrg
O
s as
a i i .
lala Agencies which cansasbetter a i i .
lala deal with social problems. s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada iii). Burden on Consumers
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 If business deals with social problems, cost of doing business would increase.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa li
a i . These costs will be
s
passed
aslaalia i .
on to consumers in the
s as
form
laalia i .
of higher prices.
s aslaalia i .
s aslaalia.
.wP.P adaada iv). Responsibility.Pwithout . adaada Power
P . P. adaada
P . P. adaada
P . P. adaada
P
www wwww w
www w
www w
www
ww  Business ww organizations possess only ww economic power and notw w
social power. ww
g .O rItgrisgunjust to impose social
O .O rgrg
responsibilities
O with social .O rgrg
power.
O .O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  If business.isP.P a
dada to intervene in social
aallowed a
dada it may perpetuate P
aaffairs a
dadavalue system. a
adada
ww.P.P w w w .P.P
w w .its.P
w
aown
w .P.P
w
ww
ww v). Misuse w wResponsibilities
ofw w ww ww wwww ww
ww
g .O O grg
rAcceptance .O rgrg
of social responsibilities
O will involve diversion
.O rgrg of precious managerial
O .O rgrtime
O g and .
l a lia i .
asa talent on social action l alia i .
asaprogrammes. l
asa alia i . l
a s
a a s
a a s
a a s
a a s
a
wwww  It may
w w
wresult
w in dilution of valuable w w
wcorporate
w resources. www w www w
ww ww ww ww ww
g PREPARED . O rgBY
O g
s as laa lia i .
s aslaal a i .
s aslaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s as laalia. i. s as laalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 4. Discuss w thew different groups w w
benefited out of Social ww Responsibility of ww
g business?
. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s as laalia i .
s as laalia i .
s as laalia i .
s aslaalia.
.wP.P adaadai). Responsibility towards .wP.P adaadaOwners .wP.P adaada .wP.P adaada .wP.P adaada
ww  Run w thewbusiness efficiently. ww ww ww
g  .O rgrg and appreciation iof.O.capital.
Growth
O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s as laal a i
s as laalia i .
s as laalia i .
s aslaalia.
a
adada  Regular and.P fair ada on capital invested.
adareturn adadaa a
adada a
adada
ww.P.P w w . P w w.P.P w w.P.P w w.P.P
ww
ww ii). Responsibility ww ww towards Investors ww ww wwww wwww
g  Ensuring
rgrg safety of their investment, rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a s
a
l al a i
asa Regular payment of a s asal al
interest,
a
a i
a s
a asal al a i
a saasal al a i
a s
a aslaalia
wwww  Timely w w
repayment
ww of principal amount.
ww w w ww w w www w
ww ww ww ww ww
iii). Responsibility
grg towards Employees
g . O r
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
la i i .
la Timely and regular spayment as
a i i .
lala of wages and salaries. s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Opportunity.Pfor
P . P aada career prospects. .P.P
adbetter adaada . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Timely training and development.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s
iv).
as laali i .
Responsibility
a towards
s as la li
Suppliers
a a i .
s as laalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  Availing reasonable .wP.P adaadacredit period. .wP.P adaada .wP.P adaada .wP.P adaada
ww  Timely ww payment of dues. ww ww ww
g .O rgrg
v). Responsibility
O towards Customers .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s as laalia i .
s as laalia i .
s as laalia i .
s aslaalia.
a
adada  Products and.P.services a
adada must be able to take a
adadofa the needs of the customers.
care a
adada a
adada
ww.P.P w w P w w.P.P w w.P.P w w.P.P
ww
ww  Products ww ww and services must be qualitative ww ww wwww wwww
g  There
i .O . rgrg must be regularity in
O i .O . rgrg of goods and services
supply
O i .O . rgrg
O i .O . rgrg
O .
a s
5.
a
l
asHowal a i
a do you classify a sa
l al
asSocial
a a i
Responsibility? a s
a asal al a i
a saasal al a i
a s
a aslaalia
wwww i). Economic w w
wResponsibility
w ww w w ww w w www w
ww ww ww ww ww
g  rg Argbusiness enterprise is basically rgrg an economic entity.i.O.O rgrg rgrg
a i . O
i . O
lala Its primary social sresponsibility a
lalai . O
i . O a i
lalagoods and services. saslala a i . O
i . O laalia.
s as as is economic s a
produce
s s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww  Therewisw wlittle discretion in performing wwthis responsibility. ww ww
ww
ww ww w ww ww wwww wwww
ii). Legal Responsibility
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . Every business has
s aa
s laalia i .
responsibility to operate l
within
s as aalia i
the. laws of the land.
s as laalia i .
s aslaalia.
.wP.P adaada  Since these .wP.P adaadare
laws
a
meant for thew .wP.P
good
daadthe
aof a
society, a law w .wP.P
abiding adaaenterprise
da .wP.P
is a socially adaada
www ww w ww ww www
ww ww
responsible enterprise as well.
ww ww ww
g .O rgrg Responsibility i.O.O
O rgrg .O rgrg
O .O rgrg
O
s as
iii).
laalia Ethical
i .
s as laal a i
s as laalia i .
s as laalia i .
s aslaalia.
a
adada  This includes a a
dadbehavior
athe of the firm .that a a
aisdadexpected by society but ada in law.
adacodified a
adada
ww.P.P w w.P.P w w P.P w w.P.not
P w w.P.P
ww
ww  There ww wiswan element of voluntarywaction www in performing this responsibility. wwww wwww
g iv)..O
i . rgrg
Discretionary
O Responsibility
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  This refers to purely a sa
l al a i
asavoluntary obligation that a s
a
l al a i
asana enterprise assumes, for a sa
l al a
asinstance,
a i
providing a s
a aslaalia
wwww w w
ww contributions to educational
charitable
w w
ww institutions. ww w w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr63
O g
s as laalia i .
s as laal a i .
s as laal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww wCHAPTER-
w 18 ww ww
g . O rgrg BUSINESS ETHICS
O . O rgrg AND CORPORATE
O . O rgrGOVERNANCE
O g . O rgrg
O
s aslaalia i .
s a slaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
.wP.P adaadI.aCHOOSE THE.PBEST . adaadaANSWER:
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
www wwww wwww w
www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
sa slaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a aslaalia
wwww www w ww w w ww w w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lala i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s
II. aslaal
VERY
ia i .
SHORT ANSNWER s aslaa lia i .
QUESTIONS: s aslaalia i .
s aslaa lia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww 1. What is ethics? wwww wwww wwww ww
ww
g  Business rgrg ethics may be defined rasgrga set of moral standards to
rgrbeg followed by owners,i.O managers
rgrg and
i . O . O i . O . O i . O . O . O .
a s
a
i
aslaalabusiness people. asaaslaala i
a s
a aslaala i
a s
a aslaala i
a s
a aslaalia
.P.P adad adad
.P.determine
P P.Padad
.behavior .P.P adad .P.P adad
wwww  These w w
standards
ww the conduct w
and
ww w of business w
people.
ww w wwww
ww ww ww ww ww
g 2. What rdo grg you mean by code? rgrg rgrg rgrg
a i . O
i . O
lalaThe organisation principles a i
lalare . O
i . O
a defined in the written a
lalai . O
i . O a
lala i . O
i . O laalia.
s as s as s asdocument called code. s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww 3. State two wways w w ww ww
ww
ww wwww by which ethics wwww w
influences behavior? wwww ww
ww
g  To offer rgrg goods at fair prices.i.O.O rgrg rgrg rgrg
l a ia. O
i . O l a a i l a ia. O
i . O l a ia. O
i . O laalia.
s aal To pay taxes regularly.sa
s s a l s as a l s as a l s as
.wP.P adaada P.P
.wfor adaada .wP.P adaada .wP.P adaada .wP.P adaada
www 4. What is need
www Corporate Governance?
ww w ww w www
ww ww ww ww ww
 Balanced
g . O rgrg economic development
O . O rgrisgmade possible through
O . O
transparent
rgrg
O
management undergcorporate
.O r rg
O
s aslaalia i .
governance. s aslaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  All Stakeholders
w w.P.P interests are protected and
w w.P . P
promoted through corporate
w w.Pgovernance
. P . ww.P.P
ww
ww
5. What are MNCs?
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a
A i Multinational corporation
a s
a
l
asa a l a
is i an organization doing
a s
a
l al a
business
asa i in more than one
a
l a
country.
s
a asa l a i
a s
a aslaalia
.P.P adad  It engages in various .P.P adadactivities like exporting, .P.P
dad
amanufacturing in different
adad
.Pcountries.
. P .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s aslaa lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww III. SHORTwANSWER w QUESTIONS ww ww ww
g 1. Define . O rgrbusiness
O g ethics. . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada ‘A business that is.P inP
.
daadmaking
athe a of only money . P.
ada kind of business.’ adaada
aadapoor
isP . P. P . P. adaada
P
www w
www wwww w
www - Hendry Ford, ww w
www
ww ww ww ww
g 2. What .O O grg you mean by the
rdo .O Ogrg
rconcept of business .O Ogrg
rethics? .O rgrg
O
s as laalia i .
s aslaal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  It is a set of moral a
dada to be followed P
astandards a
dada managers and business a a
adadpeople. a
adada
ww.P.P w w.P.P w w.by.Paowners,
w w.P.P w w.P.P
ww
ww  These standards wwww determine the conduct ww wand
w behavior of business w ww
w
people. ww
ww
g  Business
i .O . rgrg ethics reflects the conduct
O i .O . rgrgin the context of business.
O i .O . rgrg
O i .O . rgrg
O .
a s
3.a
l
asWhyal a i
a is ethics necessary a s
a
l al a i
asa in business? asaasa l al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  Ethical w w
wstandards
w are often enacted w
wintow
w laws. ww w w www w
ww ww ww ww ww
g  rEthicsgrg and profits go together rgin
rgthe long run. rgrg rgrg
a i . O
i . O
lala It enhances the quality a i . O
i . O
laoflalife, standard of livingsand a ia. O
i .
lalbusiness.O a
lalai . O
i . O laalia.
s as s as as s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww 4. What are the wwwwbenefits of Corporate ww ww Governance to w ww Holders?
Share
w wwww
ww ww ww ww ww
 g
g . O r Ensures
O r g stable growth of.O organizations.
rgrg
O . O rgrg
O . O rgrg
O
s as laa ia i .
l  Reduces the cost of s aslaa i
a i .
l for companies. sasal
capital l a ia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Improves P.P
.wthe
daada
aimage of the company. .wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
5. Illustrate with example the working of a MNC
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i . India ranks 10 th in
sthe
aslaa i
a
world
l i . in factory output
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  The manufacturing a
adadasector accounts for.27.6% a a
adadGDP. a
adada a
adada
ww.P.P w w.P.P w w P.P w w.P.P w w.P.P
ww
ww wwww ww ww wwww ww
ww
 Example: IBM, Microsoft, Pepsi Co, Sony, Vodafone, Reebok, Nokia.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a
IV. lLONG
saasa al a i ANSWER QUESTIONS:
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad1. Explain the different .P.P adad key elements .P.P aofdadbusiness ethics..P.P adad .P.P adad
ww ww
i). Top Management Commitment
ww ww ww
g . O rItgrhas
O g a very important role . O rgguide
O rg the entire organization . O rgrtowards
O g . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .to
s as
a
lalai i . ethical behavior.
s as
a
lalai i .
s aslaalia.
. P. adaada  The top level
P . P. P
daada in any organisation
apersonnel . P. P aada work openly and.strongly.
adshould P. adaada
P . P. adaada
P
ww ii). Publication ww of a “Code” ww ww ww
g . O O grg
rGenerally organisations formulate. O rgrg their own ethical codes
O . O rgfor
O rg the conduct of the enterprise;
. O rgrg
O
s as laalia i .
s aslaal i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It should followed .wP.P adaadbya the employees of theaorganisation.
.wP.Pad
da a
www  Thew www
organisation principles are defined w
ww in the written document w
wcalled
w code. www
ww w ww ww ww
iii). Establishment
rgrg of Compliance rMechanism
g
l alia.Oi . O l al i
a .Oi . Ogrg l alia.Oi . rgrg
O l alia.Oi . rgrg
O laalia.
a s as a  To make sure that
a s a a
actual
s decisions match s
with
a aa
s afirm’s ethical standards,a s a a
suitable
s mechanism a s as
wwww should w
be
ww w
established. ww w w ww w w www w
ww ww ww ww ww
iv). Involving g Employees at All Levels
g
i O r
O r g
. i. It is the employees atladifferent i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al 
a
a s
a asa l a i levels who implement
a s
a
l
asa al a iethics policies to make lethical
a saasa al a i business a
a s
a aslaalia
.P.P adad reality.
. P.Padad . P.Padad . P.Padad . P.Padad
wwww  Therefore, w w
ww their involvement in ethics w w
wwprogrammes becomes awmust. ww w w www w
ww ww ww w ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr65
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww v). Measuring ww Results ww ww ww
g . O O grgorganizations from time
rThe . O Ogrgtime keep a check on ethical
rto . O rgrgpractice followed. i.O.O
O rgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laal a i
s a
s laalia.
.wP.P adaada  Although it.Pis.P daada to accurately measure
adifficult . P. P
adaend results of ethics programmes.
adathe . P.Padaada . P. adaada
P
www  Thew www
firms
w can certainly audit to monitor
w
wwwcompliance with ethical w
ww
wstandards. w
www
ww w ww ww ww
g 2. Describe rgrg the code of business rgrg ethics. rgrg rgrg
l alia.Oi . O l alia.Oi . O l alia.Oi. O l alia.Oi. O laalia.
a s a
s a
Meaning: a s a
s a a s a
s a a s a
s a a s a
s
wwww  Code ww
of w w
ethics documents the generally w w
ww accepted principles ofwethical w w
ww conduct. wwww
ww ww ww w ww
 rItggives
g
i . O . O rg a clear picture ofi.the O . rstandards
O grg that employees should
i . O . rgrg follow.
O i .O . rgrg
O .
a s
a
l al a i
asa  It guides them in adecision s
a
l a l a
asa making. i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww The code of ww w
business
w ethics can include the
wwwfollowing:
w www w ww w w
ww ww ww ww ww
 To offer goods at fair prices.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala To pay fair wages to s as
a ia i .
lalemployees
its and not to exploit
s as
a i i
lalathem. .
s as
a
lalai i .
s aslaalia.
. P.Padaada  To provide.P . adaada work atmosphere..P.P
P
congenial
adaada . P. adaada
P . P. adaada
P
ww ww ww ww ww
 To keep proper books of accounts and records.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaali
a i . To pay taxes regularly.
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad3.a Explain the significance .wP.P adaada of Corporate .wP.P adaaGovernance
da from .wP.P
daadapoint of
athe .wP.P adaada
ww ww ww ww ww
Stakeholders
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .  Good corporate
s asla li
governance
a a i . enables corporate
s asla li
success
a a i . and economic
s asla li
development.
a a i .
s aslaalia.
a
adada a a
adadgrowth a
adada a
adada a
adada
.P.P  Ensures.Pstable
. P of organizations..P.P .P.P .P.P
wwww ww w w www w www w ww w w
ww ww
 Aligns the interests of variouswstakeholders.
w ww ww
g
i .O . rgrgImproves investors’ confidence
O i .O . rgrg and enables raising
O i .O of
. rgcapital.
O rg i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  ReducesPthe
. .P adacost
d of capital for companies. .P.P adad .P.P adad .P.P adad
wwww w w
ww the image of the company. www w www w ww w w
ww ww
 Improves ww ww ww
g 4. Discuss . O rgrgthe role of International
O . O rgrg
O Benchmarking . O rgrgon the workingi.of
O O rgrg
O
s a a
lalai
Companies
s
i .
in India s as
a
lala i i .
s as
a
lalai i .
s as
a
lala i .
s aslaalia.
. P. adaada i). ASIA:
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 Independent Directors are a requirement ww for listed companiesw inwall Asian economies. ww
g OrThe
. O grg 2012 Singapore corporate . O rgrg governance code i.recommends
O O rgrg
O a majority ofOIndependent
. rgrg
O
s aslaa ia i .
l Directors. s aslaa lia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada  In China, the .wP.P
daadaCommittee is to be composed
aAudit .wP.P adaada of Independent Directors .wP.P adaadonly.
a
.wP.P adaada
ww USA ww ww ww ww
g  rThe grg Council of Institutional rInvestors,
grg Corporate Governance rgrg Policies state that at least
rgrg2/3rd of
i . O
i . O
laala the directors shouldsabe i . O
i . O
laaindependent. i
laala . O
i . O i
laala . O
i . O laalia.
s as s la s as s as s as
a
adada  The Nominating adad a a Corporate Governance
and
ada
adaCommittee is one of the
a a
adadstanding a
adada
ww.P.P w w.P.P w w.P.P w w.P.three
P committees,.PP
w w .
ww
ww ww
along
w w
with Audit Committee andwCompensation
ww
w Committee, w
ww by NYSE, to be composed
w
required
ww
ww
g .O O grg of Independent Directors.
rentirely .O rgrg
O .O rgrg
O .O rgrg
O .
l alia i .
asa  Formulation of various l a lia i .
asaCommittees: l
asa alia i . l
a s
a a s
a a s
a a s
a a s
a
wwww w w
ww  Audit Committee,ww www w www w ww w w
ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr66
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww  Advisory Committee, ww ww ww
g . O rgrg
O  Nomination . O rgrgRemuneration Committee,
and
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada ad
.wP.P
ada
aStakeholder adaada
Relationship Committee
www JAPAN ww www www www www
ww ww ww ww
g  rIngrgearly 2014, Japanese Prime rgrg Minister announcedi.O therggoal
rg of increasing thei.O percentage
rgrg of
i . O
i . O
laala women in executivesaspositions i . O
i . O
laala at Japanese companies i . O
laalato 30% by 2020. laala i . O laalia.
a s as a a s as a s as a s as
.P.P adada The UK .P.P adada .P.P adada .P.P adada .P.P adada
wwww  UK w www w
businesses had voluntary targets
w w
ww first set in 2011 i.e. w w w
whave
tow w 25% women on FTSE100 www w
ww w ww ww
Boards
g by 2015.
g O
ia. i. r
O r g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a
5. aDescribe
s
a slaal the benefits
a s
a
l
asa of
al a iincreasing the
a
number
s
a
l
asa al a i of MNCs.HICS
a s
a
l
asa AND
al a i
a s
a aslaalia
.P.P adad  To invest .P.P
dad
aconsiderable portion ofw .P.P
their
dad internationally. Padad
aassets . .P .P.P adad
wwww www w ww w www w www w
ww ww
 They are huge business organisation.
ww ww ww
g . O rgrgIt engages in international
O . O rgrproduction
O g . O rgrgin a number of countries.
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i . and operates
s as
a
lalai plants
i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  They take
. P. P
daada
amanagerial decisions on aP
. . adaadaperspective.
global
P . P. adaada
P . P. adaada
P
ww ww
 They produce in one or a fewwcountries w and sell them in most ww of the countries. ww
g . O rgrg
O . O rgrg@*@*@*@*@*@*@
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad-------------------------------------------------------------------------------------------------------
a
www www www www www
ww ww ww
CHAPTER – 19 ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i . SOURCES
s aslaalia i . OF BUSINESS
s aslaalia i .
FINANCE
s aslaalia i .
s aslaalia.
a
adadI.aCHOOSE THE.PBEST a
adadaANSWER: a
adada a
adada a
adada
ww.P.P w w . P w w.P.P w w.P.P w w.P.P
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w www w www w www w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr67
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g II. VERY .O rgSHORT
O rg ANSWERi.QUESTIONS: O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adad1)a Write a short.P a a debentures. adada
adadon
note a a
adada a
adada
ww.P.P w w . P w w.P.P ww.P.P ww.P.P
ww
ww  Debenturesww ww are an important instrument wwww for raising long term w wwwcapital.
debt wwww
g .O O grgindividual or person .subscribing
rThe O rgrg to debentures isi.called
O O rgrgdebenture holder. i.O.O
O rgrg .
l a
asWhatlia i . l alia i .
asapublic deposits?asaasa l al a i . l
asa al a i aslaalia
a s
2)a a do you mean a s
aby a s
a a s
a
wwww  Thew www w
companies invite public deposits
w w
wwby giving advertisementwinw w
wthew
w media. wwww
ww w ww ww
g  rItgroffers
g deposit schemes .for ragrlonger
g tenure. rgrg rgrg
l a ia. O
i . O l a ia O
i . O l a ia. O
i . O l a ia. O
i . O l alia.
s as a l s as a l s as a l s as a l s as a
. P. adaad3)a Name any two.P.sources
P adaada of funds classified
P . P. adaada under borrowed
P . P. adafunds.
P
ada
. P. adaada
P
wwww  Borrowed wwwwFunds wwww ww ww wwww
ww ww ww ww ww
g  rDebentures
grg rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Loan from Banks sand as a l
Financial Institutions s as a l s as a l s as
www  Publicwww
Deposits www ww w www
ww ww ww ww ww
 Lease Financing
g rgrg rgrg rgrg rgrg
4)sas laalia.O
Name i.Oany two internal s aslaalia O
i O
.sources
. of businesss aslaalia.Oi . O
finance. s aslaalia.Oi . O
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  w
Retainedw.P.earnings,
P w w.P.P ww.P.P ww.P.P
ww
ww ww ww wwww wwww wwww
g gTrade Debtors
g
i . i. r
O r
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a
asa  Bills Receivable, a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.Pfrom
ww
ww
ww  ww www
Surplus w disposal of old w
assets
wwww w wwww ww wwwwww
g 5) State any grg two factors that gaffect
g the choice of gsource g of finance. g g
. O r
O . O r
O r . O r
O r ia.O .Orr
s as laaliai.  Cost
s aslaaliai.
s aslaaliai.
s aslaal i
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  Risk
ww Factor
ww wwww ww ww wwww
ww ww ww ww ww
 Control
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .  Storage of
s aslaa
Developmentlia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadIII.
a
SHORT ANSWER .wP.P adaadQUESTIONS:
a
ww ww ww ww ww
1. Define Business finance.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i
“The . finance function is
s athe
slaalia i .
process of acquiring and
s asla li
utilizing
a a i . funds by a business.”
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
dada
aOsborn a
adada
ww.P.P w w.P.P w w.P.P ww.P.P
– R.C.
ww.P.P
ww
2. What is pledge?
g
i .O . rAgrcustomer
O g
i O . rgrg of an article withi.the
O
.possession O . Ogrg
rcreditor i .O . rgrloan.
O g .
aslaalia
l a 
a i transfers the
l a a i l a a i (banker) and lreceives
a a i
s asa l s asa l s asa l s asa l s
a
adad a  Till the repayment
a a
adad of loan, the article is.P a a
adadthe custody of the borrower.
under adada a a
adad a
ww.P.P w w.P.P w w . P ww.P.P ww.P.P
ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr68
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P . adaada
P . P. adaada
P
wwww w ww
w ww ww ww ww wwww
ww  If the wwdebtor fails to refund the loan, ww creditor (banker) will auction ww the article pawned andwadjust w
g . O O grgoutstanding loan from.O
rthe the rgsale
O rg proceeds. . O rgrg
O . O rgrg
O
s as laal i
a i .
s as laalia i .
s aslaa lia i .
s as laalia i .
s aslaalia.
.wP.P adaad3.a List sources of .wP.P
daada long-term and
araising .wP.P
ada
adashort-term finance.
www w w
w ww w w
wFinance
w www
ww Long Term wwFinance ww Short Term ww ww
g i).
.O rgrg
Shares
O .O rgrg
O i). Loans .O rgand
O rg Advances .O rgrg
O
s as laal i
a i .
s as laalia i .
s aslaa lia i .
s as laalia i .
s aslaalia.
a
adada ii). Debentures.P.P a
adada a
adadaii). Bank Overdraft.P.P a
adada a
adada
ww.P.P w w w w.P.P w w w w.P.P
ww
ww iii). Retained
wwwwEarnings wwww iii). Clean Loan wwww wwww
g iv). rPublic
grg Deposits rgrg iv). Trade rgrCredit
g rgrg
i . O . O i . O . O i . O . O i .O . O .
a s
a
l al a i
asa v). Long term loan from a s
a
l al a i
ascommercial
a banks a s
a
l a l a
asaPledge
v).
i
a saasal al a i
a s
a aslaalia
.Pneeded
wwww 4. For which w w
purpose
ww fixed capital ww w w
is in business? ww w w www w
ww ww ww ww ww
g  Forgthe g acquisition of fixed assets grg such as land, building, gplant
g and machinery , motorg g vehicles,
. O r
O r . O r
O . O r
O r . O r
O r
s as
i.
laaliafurniture a
and fixtures,setc.s laaliai. s aslaaliai. s as laaliai. s aslaalia.
. P. adaada  For the acquisition
P . P. adaaof
P da
intangible assets .
such P. P
as
ada
adagoodwill, patents, . P .
trademarks,
adaadand
P
a
copy rights. . P. adaada
P
ww ww ww ww ww
 For meeting promotion or preliminary expenses.
g
O . O rgrg
O . O rgrg
O
5. aWhat
s s laa i do you mean
sby
as laali i
working
a . capital
s asla li
requirement
a a i . of business?
s as laalia i .
s aslaalia.
.wP.P adaada  Short term finance .wP.P adaadusually
a
refers to finance .wP.P
daada
arequired by a firm for awperiod .wP.P
ada
adaof one year . .wP.P adaada
www www ww w ww www
ww ww ww ww ww
 It is also called as working capital finance.
g .O rgrisgrequired for investments
O .O rgring working capital or icurrent
O .O rgrgassets like cash andi.O
O rgrgbalance,
O
s as laa
l i
a i .It
s as laalia i .
s aslaa l a i .
s as laal a i .
bank
s aslaalia.
a
adada a
adadaand etc.
accounts receivables
a
adada a
adada a
adada
ww
ww  Working wwwwcapital is required for purchase wwww of raw material, salary wwwand
w wages of payment, operating wwww
g
i .O . rgrg
expenses.
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a saasal al a i
a s
a
l
asa a l a i
a saasal al a i
a s
a aslaalia
.P.P adadIV. LONG ANSWER .P.P adaQUESTIONS:
d .P.P adad .P.P adad .P.P adad
wwww w w
wwvarious sources w w w
wfinancing.
w ww w w www w
ww 1. List out w the
w ofw ww ww
g The
. O O grg sources of business
rvarious . O O grg can be classified .into
rfinance O rgthree
O rg categories on the basis . O rgofrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada i) Period Basis.P.P
P adaadii)
a Ownership Basis adaada
. P. P . . adaada
iii) Source of Generation
P P
Basis
. P. adaada
P
wwww A). On the basis w ww ww ww ww ww wwww
ww wwofwPeriod: ww ww ww
g i) Short
rgrg term finance ii)rMedium
grg term finance rgrg iii) Long term finance rgrg
l a i
a . O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s ai).
s a l
Short Term Finance s as a l s as a l s as a l s as
P . P. adaada
P . P . adaada
P . P. adaada
P
w i). Loans and w w
wwAdvances w w Overdraft iii). Clean w w w
www
ww
ww ww wii).
ww
w
Bank
wwwwLoan iv). Trade Credit
ww
v). Pledge vi). Discounting Bills of Exchange vii). Hypothecation
g O r gr g
. i.OLoans against the securities O r gr g
. i.O ix). Mortgage lalia. i.x). O rgrg
O .O rgrg
O
s as laal i
aviii). s as laalia s as a Commercial Paper
s as laalia i .
s aslaalia.
a
adadaii). Medium Term .Finance a
adada a
adada a
adada a
adada
ww.P.P w w P.P w w.P.P w w.P.P w w.P.P
ww
i). Loan from Banks ii). Loan from Financial institutions iii). Lease Financing
g
i .O . rgTerm
O rg Finance i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
iii).
asal aLong
l a i
a saasal al a i
a s
a
l
asa a l a i
a saasal al a i
a s
a aslaalia
.P.P adad i). Shares .P.P adad ii). Debentures .P.P adad iii). Retained adad
.P.Earnings
P .P.P adad
wwww w w
wDeposits
w w
wterm w
w loan from commercial w ww w www w
ww iv). Public ww v). Long ww wwbanks ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr69
O g
s as laal i
a i .
s as laal a i .
s aslaa l a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P.Padaada . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww B). On the Basis wwof Ownership ww ww ww
g i).
. O rgrg Fund
Owners
O . ii).
O rgBorrower
O rg Funds . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada i). Owners Fund .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www i). Equity w w
ww
Shares www
ii). Retained
w Earnings
w
www w
www
ww ww ww ww ww
g ii). Borrower
.O rgrg Funds:
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia
i).
i .
Loan from banks s aslaalia i .
ii). Loan from s
financialaslaalia i .
institution iii). s aslaalia
Debentures
i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w
iv). PublicwDepositsw. P. P w w.
v). LeasewFinancing
P. P w .
w P. P w w. P. P
ww
ww www www ww ww wwww
C). On the Basis
g
i . O . rgrg of Generation of iFunds
O .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a
i).i Internal Source
a s
a
l
asa al a i ii). External
a
l
Source
s
a asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad2. What are the .different P.Padad types of .P.P
short
adaterm
d
finances .P.P
given
adaby
d
commercial .P.P adad
ww ww ww ww ww
banks?
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i
laBank
i). i .
la Overdraft s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  It refers to .an
P P. P
daada
aarrangement whereby the . P.
bankP
ada
adaallows the customers. . P. adaada
P . P. adaada
P
ww ww ww ww ww
 To overdraw the required amount from its current deposit account within a specified limit.
g . O O grg
rInterest . O rgramount
O g . O rgrg
O . O rgrg
O
s as laali
a i . is charged only
s aslaali
ona i .
the actually
s asla li
overdrawn.
a a i .
s aslaalia i .
s aslaalia.
.wP.P adaada ii). Trade Credit .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
www www w w
www w
www
ww  Purchaser ww need not pay money immediately ww after the purchase. ww ww
g .O O grg credit appears in balance
rSuch .O rgrsheet
O g as Trade Creditors, .O rgrAccounts
or
O g Payable. .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Trade credit.P.isP a
dadasimple and convenient
avery a
dada of raising short term
amethod a
dada
afinance. a
adada
ww.P.P w w w w.P.P w .P.P
w w w.P.P
ww
ww iii). Mortgage wwww wwww ww ww wwww
g .O O grg is a type of loan taken
rThis .O O grg the bank by lodging.Owith
rfrom rgrgthe banker title deedsi.O
O ofO grg
rimmovable .
l alia i .
asa assets like land and l
asa alia i . l
asa alia i . l
asa al a i . aslaalia
a s
a a s
a building. a s
a a s
a a s
a
wwww  Business w w
wwpeople raise loans by depositing w w
ww the title deeds of theww www w
properties with the bank. ww www w
ww ww ww
g iv). Loans
. O rgrgagainst the Securities
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala Banks accept various s as
a i
types
i .
lala of securities like fixed s as
a i
ldeposit
a i .
la receipt, book debts, s as
a
lalai i
insurance
.
policies, s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww w ww wwto the goods and so on.ww w
ww
ww wwww shares, debentures, bonds
supplywbills,
wwww of company, document of
ww wtitle
w ww w
 Itgprovides loan on the basis of the aforesaid securities. g
g . O r rg
O . O rgrg
O . O r rg
O . O rgrg
O
s as l
v).
aa ia i .
lClean Loan s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Banks provide .wP.P
daada
aclean loan is loan given P.Padaadaany security or with.P
.wwithout . adaadasecurity.
P
personal . P. adaada
P
www www ww w w
www w
www
ww ww ww ww ww
 It simply grants loan without any physical security.
g
ia.O .Orgrg .O rgrg
O .O rgrg
O .O rgrg
O
3. aWrite
s s laal i short notes on
s asla li i .
a).Retained
a a Earnings
s aslaali
b).
a i . Lease financing
s aslaalia i .
s aslaalia.
a
adadaa). Retained Earnings: a
adada a
adada a
adada a
adada
ww.P.P w w.P.P w w.P.P w .P.P
w w w.P.P
ww
 Retained earnings refer to the process of retaining a part of net profit year after year and reinvesting
g
i .O
them . rgringthe business.
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It is also termed adaploughing
.P.asP d back of profit. .P.P adad .P.P adad .P.P adad
ww  It is described ww to be the most convenient ww and economical methodw ofwfinance. ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr70
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww b). Lease Financing: ww ww ww ww
g  iLease
. O rgrfinancing
O g denotes procurement. O rgrg of assets through lease.
O
s aslaal a i .
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  In such a situation .wP.P
daada is helping them toPaa dgreater
aLeasing .w.Pad
a a extent.
www  Leasingwhere
w
ww refers to the owning w wan
ofw
w
w asset by any individual w
wwhich
w will be given forwuse w
wwto
ww w ww w
g another
.O rgrgneedy business enterprise
O .O rgrong a rental basis.
O .O Orgrg .O rgrg
O
s
4. a laal
Write
s
ia i .
short notes ons as laa
a)
lia i .
owner’s funds s
b) a laalia
borrowed
s
i .
funds s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww a). Ownersw ww
Fund
w wwww wwww wwww
g  The rgrgprofits reinvested in the business
rgrg come under owner’s rgfunds. rgrg
i . O . O i . O . O i . O . O rg i .O . O .
a s
a
l al a i
asa  These funds are not a s
a
l al a i
asa to be refunded during
required a sa
l a
asthel a i
a life time of businessaenterprise. s
a
l
asa al a i
a s
a aslaalia
wwww b). Borrowed www
Funds
w ww w w ww w w www w
ww ww ww ww ww
 The term ‘borrowed funds’ denotes the funds raised through loans or borrowings.
g . O rgrg
O . O rgrg
O
s as
a
lalai i .For example debentures,
s as
a
lalai i
loans. from banks and a i
financial
s aslala i . institutions, public a i
deposits,
s aslala i . trade credit,
s aslaalia.
. P. adaada
P lease . P
financing,. ada
P
ada
commercial papers, P
factoring,
. . adaadetc.
P
a
represent borrowed . P adaada
funds.
. P . P. adaada
P
wwww wwww ww ww ww ww
ww  These borrowed
ww sources of funds provide
ww specific period beforew
ww w
which the fund is to be returned.
wwww
g . O rgrgany four personal
O . O rg
O rg . O Orgrg . O rgrg
O
5. Explain
s aslaalia i .
s as laalia i . investment avenues.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada i). Public Provident .wP.P
daada(PPF)
aFund .wP.P adaada .wP.P adaada .wP.P adaada
ww  It isw w
the safest long-term investment ww option for the investors in wIndia.
w ww
g .O rItgrisgtotally tax free. i.O.O
O rgrg .O Orgrg .O rgrg
O
s aslaalia i .
s as laal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  PPF account adad
can abeaopened in bank or postaoffice. a
d a a
adada a
adada
ww.P.P w w.P.P w w.P.Pad w w.P.P w w.P.P
ww
ww ii). Mutualw ww
Funds
w wwww wwww wwww
g
i
 rAn
.O . Ogrgindividual investorlawho i .O . rgrg to invest in equitiesi.O
wants
O and
. Orgrbond
g with a balance of .risk
i O . rgand
O rg return .
a s
a
l al a i
asa generally can invest a s
a ain
s l a i
amutual funds. a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad P.Padad
.people .P.P adad .P.P adad .P.P adad
wwww  Nowadays www w invest in stock w w
markets
ww through a mutual fund.
ww w w www w
ww ww ww ww ww
 Systematic
grg investment plan isgone of the best investment options grg in India.
g . O r
O . O r
O r g . O Or . O rgrg
O
s a a
iii).
s
i i .
lalaReal Estate Investment s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Real estate.P
P .
is P
daada
aone of the fastest growing . P. adaadain India.
P
sectors . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Buying a flat or plot is supposed to be the best decision amongst the investment options.
g . O rgrg
O . O rgrg
O
s aiv).
slaalia i
Unit. Linked Insurance
s as
Plans
laalia i .(ULIP)
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  ULIP is a .life P. ad
P aada
insurance linked product, . P. adaadaprovides risk cover.Pfor
which
P . P
ada
adathe policy holder along.P.P adaada
www w
www wwww wwww w
www
ww withwinvestment
w options. ww ww ww
g .O O grginvest in any number of
rTo .O rgrg investments suchi.O
O O grg bonds or mutual funds.
rstocks, .O rgrg
O
s aslaalia i .
s as laalia i .qualified
s aslaal a as
i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada
@*@*@*@*@*@ a
adada a
adada
ww
ww ww ww “It always seems wwwwimpossible until its done” wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . Orgrg i .O . rgrg
O .
a s
a
l
asa al a i
a s
a asal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr71
O g
s aslaalia i .
s as laal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww ww ww
ww ww ww CHAPTER – 20 ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
INTERNATIONAL
s aslaa l a i .
FINANCE
i
s aslaalia i .
s aslaalia.
www ww w ww w w
ww ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P ww.P.P ww.P.P w w.P.P w w.P.P
ww
ww wwww wwww ww ww ww ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww ww ww ww w
ww w ww w w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww ww ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
www ww w ww w w
ww ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adadII.a VERY SHORT.P.ANSWER a
adada QUESTIONS: a
adada a
adada a
adada
ww.P.P ww P ww.P.P w w.P.P w w.P.P
ww
ww 1) Who are w ww
Foreign
w Institutional www w
Investors? ww ww ww ww
g  .O
i FDI
. rgrisg an investment madei.by
O O . ragrcompany
O g or an individual
i .O . ringrone
O g country with business
i .O . Ogrg
rinterests in .
a sa
l al a i
asa another country. asaasa l al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  In thewform ww
ww of either establishingwbusiness ww
ww operations or acquiring w w
ww business assets in theww w w
w
otherw
ww w w ww
g country,
rgrg such as ownershipi.or controlling
rgrg interest in a foreign rgrg company. rgrg
a i . O
i . O
lala is a Depository a O
i . O a i . O
i . O a i . O
i . O laalia.
2)
s aWhat
s s as la
laReceipt? s aslala s aslala s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww w ww instrument issued byww w bank to represent a foreign ww
ww
ww wwww is a negotiable financial
A depositorywreceipt
wwww ww a w ww ww
company’s
g . O rgrgequity shares or securities.
O . O rgrg
O . O rgrg
O . O rgrg
O
3)sas l a
What
a
ia i .
l is a GDR (Global s aslaa ia i .
lDepository Receipt)? s aslaa lia i .
s aslaalia i .
s aslaalia.
www GDR is an ww w
instrument issued abroad by a ww w
company to raise funds in somew
wwforeign currencies and is w
listed
ww
ww ww ww ww ww
and traded on a foreign stock exchange.
g
ia.O .Orgrg .O rgrg
O .O rgrg
O .O rgrg
O
4)saWhat
slaal i is an American s aslaali i .
Depositary
a Receipt s aslaa li
(ADR)?a i .
s aslaalia i .
s aslaalia.
a
adada ADR is a dollar.P a
adada negotiable certificate a
adadarepresenting a non-US a
da
adacompany a
adada
ww.P.P ww . P
denominated ww.P.P w w.P.P in US market w w.P.P
ww
ww wwww wwww ww ww ww ww
which allows the US citizens to invest in overseas securities.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww ww ww ww w
ww w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr72
O g
s aslaalia i .
s aslaal a i .
s aslaa l a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s as laalia. i. s as laalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 5) What is a wwForeign Currency Convertible ww Bond? ww ww
g . O O grg currency convertible
rForeign . O rgbond
O rg is a special type ofi.O bondrgrgissued in the currencyi.O
O rgrgthan the
other
O
s aslaa lia i .
s as laalia i .
s as laal a i .
s as laal a i .
s aslaalia.
.wP.P adaada home currency.
www w
ww issue foreign currencyww www w
ww in foreign currency. ww www
ww  Companies ww convertible bonds to raise money ww
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s as laalia i .
s as laal i
a i .
s as laalia i .
s aslaalia.
a
adad1.a Explain the importance a
adada of international a
adada finance. a
adada a
adada
ww
ww  It helps in wwwcomparing
w the inflation rates wwwwand getting an idea about wwwwinvesting in international wwwdebt
w
g
i . rgrg
securities.
.O O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a l a i
asaIt helps in ascertainingathe sa
laal a
aseconomic i
status of the s l al a i
asa countries and in judging
various
a a a s
a
l
athe
s
al a i
aforeign market. a s
a aslaalia
wwww ww
 It helps inwunderstandingw w www
the basics ofwinternationalw organisations w ww
and w w
maintaining the balancew www
amongw
ww w w w w
g them.rg g rgrg rgrg rgrg
. O O r . O O . O O . O O
2.
s a a
What
s
i i .
lala are Foreign Currency s as
a i i .
lala ConvertiblesBonds? as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww convertible bond is wa w ww type of bond issued winwthe currency other thanww w
ww
ww  Foreign currency
wwww ww special wwww ww thew
home currency.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s a l a ia i .
al Companies issue foreign
s s as laalia
currency i . convertible bonds s as l a i
a i .
l money in foreign currency.
toaraise s as laalia i .
s aslaalia.
.wP.P adaad3.a Explain any three .wP.P adaaddisadvantages
a
.wP.P
of
daada
aFDI .wP.P adaada .wP.P adaada
ww ww ww ww ww
i). Exploiting Natural Resources:
g .O rgrg .O rgrg O rgrg .O rgrg
s a laa lia i 
. O The FDI Companies
s a laalia i
deplete. O natural resources
s alike
laal i
a i . O
.water, forest, mines etc.
s a laalia i . O
s a laalia.
a s a s a s a s a s
.P.P adada  As a result .P.P a
such
a
dadresources
.P.P
are not available adadfora the usage of common .P.P
dadain the host country. Padada
aman . .P
wwww w w
wOutflow
w www w ww w w wwww
ww ii). Heavy ww of capital ww ww ww
g .O OrgrForeign
g companies are.said O rgto
O rgtake away huge fundsi.O rgthe
inO rg form of dividend, royalty .O rgrfees
O g etc.
s l a lia i .
asa  This causes a huge s laalia
asoutflow i .
s as laal a i .
s as laalia i .
s aslaalia.
a
adad a adada a of capital from adathea a
d host country. adada a a
adad a
ww.P.P iii). w
Exploiting w.PCheap
. P Labour w w.P.P w w.P.P w w.P.P
ww
gForeign enterprises employgcheap labour force at a lower grpay in developing countries.
g . O r
O r g . O r
O r g . O r
O g . O rgrg
O
s as
a i i .
lala  They do not employ s as
a i i .
la people for higher posts
lalocal s as
a i i .
lainlathe management. saslala a i i .
s aslaalia.
. P. adaada
P  Thus they. P. P
are
ada
adastated to exploit the .
labourP. ain
P
daada
developing countries. . P. adaada
P . P. adaada
P
ww ww ww ww ww
4. State any three features of ADR.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .  ADRs are l
denominated
s as aalia i .only in US dollars.
s as laal i
a i .
s as laalia i .
s aslaalia.
.wP.P adaada  Theyware adaadaonly to investors who
.wP.issued
P .wP.P aaredaadAmerican
a
residents.ww .P.P adaada .wP.P adaada
www ww www ww www
ww ww ww ww ww
 The depository bank should be located in US.
g
ia.O .Orgrg .O rgrg
O .O rgrg
O .O rgrg
O
5. aState
s slaa l i any three features
s as laalia i .
of GDR.
s as laal i
a i .
s as laalia i .
s aslaalia.
a
adada a
adada instrument and can.Pbe a
dada freely like any other
atraded a
dada
asecurity. a
adada
ww.P.P w.P.P
 It is awnegotiable w w . P w w.P.P w w.P.P
ww
 GDRs are issued to investors across the country.
g
i .O . rgrgIt is denominated in any
O i .O .
grg
racceptable
O freely convertible i .O . rg
O rg
currency. i .O . rgrg
O .
a sa
l
asa a l a i
a saasal al a i
a s
a asal al a i
a s
a asal al a i
a s
a aslaalia
wwww ww w w www w ww w w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr73
O g
s aslaa lia i .
s as laal a i .
s as laal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P.Padaada . . adaada
TrbTnpsc
P P . P. adaada
P
ww IV. LONG ANSWER ww QUESTIONS:ww ww ww
g 1. Describe. O rgrg the importance
O . O rgrginternational finance?
of
O . O rgrg
O . O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s aslaalia i .
s a
s laalia.
.wP.P adaada  It helps in comparing .wP.P adaadathe inflation rates and .wP.P
daada an idea about investing
agetting .wP.Padaadain international debt.P.P adaada
www www www ww w w
www
ww securities.ww ww ww ww
g  iIt .O rgrg in ascertaining thei.economic
helps
O O rgrg status of the various
O .O Orgrcountries
g and in judging .O O grgforeign
rthe
s a
s laal a i .
s a
s laal a i .
s a
s laalia i.
s aslaalia i.
s a
s laalia.
a
adada market. a
adada a
adada a
adada a
adada
ww.P.P w w.P.P ww.P.P w w.P.P w .P.P
w
ww
ww  International wwwwFinancial Reporting System ww facilitates comparisonww
ww wofwfinancial statements made wwwwby
g variousrgrgcountries. rgrg rgrg rgrg
i . O . O i.O . O i .O . O i .O . O .
a sa
l al a i
asa It helps in understanding a s
a
l al a i
asathe basics of international a s
a
l al a i
asa organisations and maintaining a s
a
l al a i
asa the balance a s
a aslaalia
wwww among them.
ww w w ww w w ww w w w
ww w
ww ww ww ww ww
 International finance organisations such as IMF, World Bank etc. mediate and resolve financial
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
laladisputes among member s as
a
lalai
nations. i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P.Padaad2.a Distinguish between . P. adaada GDR and ADR.
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
S.No Basis Global Depositary Receipts American Depositary Funds
g .O r grg O r gr g O rgrg O rgrg
1 ala a i.O
ilaDenomination a l a ia
It is denominated
a l . i . O in terms of any
a laalia. i
It . O
is denominated only in
a laa
US
lia. i . O
dollars. a laalia.
s s s s s s s s s s
.wP.P adaada adaadaconvertible currency.
.wP.freely
P .wP.P adaada .wP.P adaada .wP.P adaada
ww
ww ww ww
To whom it is It is issued to investors in one or It is issued only to investors, who are
ww ww
2
g .O rgrg
O O rgrg simultaneously i.O
O
.markets rgrg of the Unitedi.O.O
O grg
rStates
s as laal i
a .
Issued
i across more
s aslaalia i .
s aslaal a i .
residents
s aslaal a i of
s aslaalia.
a
adada a
adada a
adada America.
a
adada a
adada
ww
ww 3 Listed in wwww Non-US Stock Exchange wwww American ww wstock
w exchange ww ww
g 4 i . rgrg
Approval
.O O Issue of GDR i .O . rgrg not require foreign i.O
does
O Issue
. rgrgof ADR requires approval
O i .O . rgfrom
O rg the .
a saasal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad
regulatory clearances.
.P.P adad Securities Exchange
.P.P adad Commission of.P.P adad
wwww ww w w ww w w Unitedw
w w
ww of America.
States
w
ww w
ww ww ww w ww
g 5 O rgrg
Negotiation It is negotiable rall
O grgover the World. It is
O rgrnegotiable
g only in Americargrg
s as
a
lala i . i . O
s as
a
lalai . i . O
s as
a
lalai . i . O
s aslaalia.Oi.O
s aslaalia.
. P. adaad3.a State any five.P.features
P adaada of FCCB. .P.P
P . P. adaada
P
wwww  FCCB w w
is w w by an Indian company
issued ww winwforeign currency. ww ww ww
ww
ww ww ww ww ww
g  These rgrg are listed and tradedi.O inrforeign
grg stock exchange and rsimilar
grg to the debenture. .OO rgrg
l a i
a . O
i . O l a a i . O l a ia. Oi . O l a ia i . laalia.
s as a l It is a convertible debt s as a l
instrument. It carries a
interest
s s a l
coupon. It is unsecured. s as a l s as
.wP.P adaada .wP.P adaada .wP.aPadaada .w adaada
P.aP .wP.P adaada
www  It givesww w
its holders the right to convert
ww wfor fixed numbers of shares
ww w at predetermined price. w
ww
ww ww ww ww ww
 It can be converted into equity or depository receipt after a certain period.
g rg g rgrg rgrg rgrg
laalia.O
4.sasExplain i.Or any five advantages a laalia.Oi . O of FDI. a laalia.O i . O
a laalia.Oi . O
a laalia.
a a s s a s s a s s a s s
.P.P adada i). Achieving Higher .P.P
dada
aGrowth in National .P.P
Income:
adada .P.P adada .P.P adada
wwww ww w w ww w w ww w w w
ww w
ww ww ww ww ww
Developing countries get much needed capital through FDI to achieve higher rate of growth in
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
national
asal al a i income.
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad ii). Help in Addressing .P.P adaBOP
d Crisis: .P.P adad .P.P adad .P.P adad
wwww ww w w ww w w ww w w w
ww w
ww  FDIww provides inflow of foreign wwexchange resources into aw w
country. ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr74
O g
s as laal i
a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s aslaalia. i. s as laalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww w www w ww
w wwww
ww  Thisww helps the country to solve ww adverse balance of payment ww position. ww
g iii).i.Faster
O rgrgEconomic Development
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaal a i .
s aslaa lia i .
s as laalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  FDI brings .wP.P
daada
atechnology, managementPand
.w.P
ada
adamarketing skills along with
.wP.P adait.ada .wP.P adaada
www w
wware crucial for achieving w
wfaster
w economic development ww w www
ww ww
 These ww ww of developing countries. ww
g rgrg Employment Opportunities
iv).i.Generating
O O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal a i .
s aslaa lia i .
s as laalia i .
s as laalia i .
s aslaalia.
a
adada FDI generates.P aa a
lotd ofaemployment opportunities a
adadain developing countries, a da
adaespecially in high skill ad a a
ww.P.P w w . Pad w w.P.P w w.P.P w w.P.Pad
ww
ww areas. ww ww ww ww ww ww ww ww
g
i .O . rgrg
v). Encouraging
O Competition in Host
i .O . rgrgCountries
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa  Entry of FDI intoadeveloping sa
l
asa a l a i
country promotes a s l al a i
asa competition therein.
healthy
a a s
a asal al a i
a s
a aslaalia
.P.P adad adad
.Pto.P adad
.P.countries
wwww  This leads
ww w w enterprise in developing
ww w w operating w w
efficiently
ww and effectively in
www w
the
ww ww ww ww ww
market.
grg
g . O r
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i . @*@*@*@*@*@ s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P adaada
P . P adaada
P . P adaada
P
----------------------------------------------------------------------------------------------------------------------------------------------
. . . . P. adaada
P
ww ww ww ww ww
CHAPTER- 21
g . O r
O grg . O r
O gr g . O rgrg
O . O rgrg
O
MICRO,
s aslaalia i . SMALL ANDsasMEDIUM laa lia i . ENTERPRISES s as laa ia i .
l AND SELF HELP s as laa ia i .
l GROUPS s aslaalia.
www I. CHOOSEwTHE w
ww BEST ANSWER:ww ww w ww w www
ww w ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaa lia i .
s as laalia i .
s as laalia i .
s aslaalia.
a
adada a
adada
ww
ww ww ww ww ww ww ww ww ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a sa
l
asa a l a i
a sa asal al a i
a s
a asal al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
II.
s aslaa
VERYlia i . SHORT ANSWER s aslaa ia i .
l QUESTIONS: sasal l a ia i .
s as laalia i .
s aslaalia.
.wP.P adaada .w P.Padaada .wP.P adaada .wP.P adaada .wP.P adaada
www 1. What do you
ww w understand by the ww manufacturing
w enterprises?
ww w www
ww ww ww ww ww
 They refer to the enterprises engaged in the manufacturing or production of goods pertaining to
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i . any industry specified
s aslaain
lia i .
the first schedule to
sthe
as laalia i .
Industries Development
sand
as laalia i .
Regulation Act,
s aslaalia.
a
adada a
adada
ww.P.P 1951. w.P.P
ww
 The manufacturing enterprises are defined in terms of investment in plant and machinery.
g
2. Give i .O . rgrg examples fori.Omicro
O
some . rgrg enterprises. i.O.O
O rgrg i .O . rgrg
O .
a sa
l
asa al a i
a sa
l
asa a l a i
a sa asal al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad  Clay Pot adad
.P.Making
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr75
O g
s aslaalia i .
s aslaa l a i .
s as laal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww
 Fruits and Vegetable Vendorsww ww ww
g . O rgrgRepair Shops
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  CottageP adaada
.wIndustries
. P .wP.P adaada .wP.P adaada .wP.P adaada
www w
wwIndustries, ww w www www
ww ww
 Small ww ww ww
g .O rgrgHandlooms
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laa lia i .
s aslaalia i .
s aslaalia.
a
adad3.a What is the aim ada a
ofda
NEEDS? a
adada a
adada a
adada
ww
ww ww
 To providingww entrepreneurship development wwww training to educated wwwyoung
w entrepreneurs. ww ww
g
i . i.Ogrg
OrPreparing business plans Orgrg
i . i.O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a
asa  Helping them to tie a s
a
l al a
asawith financial institutions
up a s
a ato
s l a l a i
aset up new business ventures, a sa
l
asa al a i
a s
a aslaalia
wwww 4. What is a w w
Self w
w Help Group? ww ww w w www w wwww
ww ww ww ww
g  rSelf grg Help Group is a small.Oinformal rgrg voluntary association. rgrg rgrg
a i . O
i . O
lala It’s created for thespurpose a i i . O
lala of enabling members a i . O
i . O
latolareap economic benefitsaout a i
lalof . O
i . O
a mutual help, laalia.
s as as s as s s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww w ww ww
ww
ww solidarity,
wwww and joint responsibility. ww
ww w wwww ww
ww
5. State the
g . O rgrg investment limit
O . O rgrfor
O g small enterprise . O rgrin
O g manufacturing . O
and
rgrg
O
s aslaalia
service
i .
sector. s aslaalia i .
s as laa lia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www wwww
 Manufacturing sector - More than wwww ₹25 lakhs but not exceeding www
₹5w Crores in small enterpriseswww w
ww ww ww ww ww
 Servicing Sector - More than ₹10 lakhs but not exceeding ₹2 Crores in small enterprises.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
III.
s aslaali
SHORT
a i . ANSWER s aslaali
QUESTIONS:
a i .
s as laa lia i .
s aslaalia i .
s aslaalia.
a
adad1.a State the investment a
adada limit for medium a
adadaenterprise engaged a
adadina a
adada
ww
ww
Manufacturing and service sector.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al
 a i Manufacturing sector
a s
a
l
asa a
-l a i
More than 5 Crores but
a s
a
not
asal a l a i
exceeding ₹10 Crores
a
in
sa
l al
medium a i
asa enterprises. a s
a aslaalia
.P.P adad  ServicingwSector .P.P adad- More than ₹2 Crores.Pbut . adanot
P d exceeding ₹5 Crores.PinP
.
dad
amedium enterprises ww .P.P adad
wwww ww w ww w w www w ww
ww ww ww ww ww
2. List out the products produced by MSME in Tamil Nadu?
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .  Textiles
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Leather.P . adaada
Products
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 Chemicals ww ww ww
g . O rgrgPlastics
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Garmentsad
.wP.Pad
aa
ww ww
 Jewellery ww ww ww
g 3. What .O O grgthe role and significance
ris .O rgrg
O of MSMEs .in O rg
O rg
Indian Economy?.O.O rgrg
s aslaalia i .
s aslaalia i .
s as laa lia i .
s aslaalia i
s aslaalia.
a
adada  Employment a
dada
aPotential a
adada a
adada a
adada
ww
ww  Low wwww
Production Cost wwww wwww ww
ww
g  rLow grg Investment rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l al a i
asa  Quick Decision a s l
asa
Making
a
al a i
a s
a asal a l a i
a sa
l
asa al a i
a s
a aslaalia
wwww  w w
Supplementary
ww Role ww w w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr76
O g
s aslaalia i .
s aslaal a i .
s as laa l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 4. Explain w w
any three features ofwSelf w Help Group. ww ww
g .O Ogrg motto of every group.Omembers
rThe rgrg should be “saving
O . O rgrg
first
O – credit latter” . O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia.
.wP.P adaada  The groups.P.need adaadnot
P
a be registered.
. P. adaada
P
www w w
ww should have only one w w
ww from one single family. w
www w
www
ww  Each wwgroup wwmember ww ww
g .O Ogrggroup is to be formed .with
rA O rgronly
O g men or only with women. .O Orgrg .O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i.
s a
s laalia i.
s a
s laalia.
a
adad5.a What are the .different a
adada ways in which ada
adabanks fund Self Help a a
adadGroups? a
adada
ww.P.P ww P.P ww.P.P w .P.P
w ww.P.P
ww
ww  Banks wwwlend
w directly to the SHGs.ww ww wwww ww
ww
g .O O grg provide loans to .the
rBanks O rgNGOs
O rg for onward lending .O rgtorgthe SHGs and ultimately
O .O rgrto
O g micro .
l alia i .
asa entrepreneurs. asaasa l alia i . l
asa alia i . l
a sa a s
a a s
a a s
a
wwww  Banks w w
wextend
w credit to the SHGswwith w w
wwthe NGOs serving as facilitators wwww ww w w
ww ww w ww ww
g IV. LONG rgrANSWER
g QUESTIONS: rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l alia.
s as a l s as a l s as a l s as a l s as a
. P.Padaad1.a What is the definition . P. adaada of MSME? .P.P
P . P. adaada
P
wwww Meaning: ww ww wwww wwww ww ww
ww ww ww ww ww
g . O rgrgIn India MSMED i.O
O
Act rgrg2006 was established
O . O rgfor
O rg developing and ienhancing . O rgrg the
O
s as laa ia i .
l competitiveness of Micro, s aslaal a
Small
i .
and Medium a laa
enterprises
s s
ia i .
l in India, small business s aslaa a i .
l defined on the
is s aslaalia.
www basis of ww w
investments in plant and w
machinery.
ww www ww w
ww ww ww ww ww
a). Classification of Manufacturing Enterprises:
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia
i).i .Micro Enterprises:
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada in plant and machinery a
da not Rs. 25 lakhs. .PP
adadoes a
adada a
adada
ww.P.P w.P.P
If thewinvestment w w.P.P ww . w w.P.P
ww
ii). Small Enterprises
g
i .O . rgrgIf investment in Planti.O
O and
. rgMachinery
O rg is more than i .ORs.
. rg25
O rglakhs but not exceedi.Rs. O . rg
O g
5rcrores. .
a saasal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad iii). Medium Enterprises:
.P.P adad .P.P adad .P.P adad .P.P adad
wwww ww w w w w
ww is more than Rs. 5 crores ww
wwbut not exceed Rs. 10 crores. ww w w
ww ww
If investment ww
in Plant and Machinery ww ww
g b).
. O rgrg
Classification
O O rgrg
of Servicei.Enterprises:
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada i). Micro Enterprises:
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww If ww
thewinvestment
w in equipment w wwnot Rs. 10 lakhs.
w
does wwww ww ww
ww ww ww ww ww
g ii). Small
rgrg Enterprises rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l If investment in
s a a l
equipment
s is more than Rs. s a
10s a l but not exceed Rs. s2ascrores.
lakhs a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www iii). Medium w w
wwEnterprises: w
www w
www wwww
ww ww ww ww ww
If investment in equipment is more than Rs.2 crores but not exceed Rs. 5 crores.
g O r gr g .O rgrg .O rgrg .O rgrg
laalia. i.O the advantages
2.sasExplain s aslaalia i
of. O MSMEs? s aslaalia i . O
s aslaalia i . O
s aslaalia.
a
adada i). Employment Potential a
adada a
adada a
adada a
adada
ww
 MSMEs generate more employment opportunities than large business concerns.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al 
a i They are mostly
a
labour
sa
l
asa al a i
intensive, thus they provide
a s
a
l
asa al a i
more employment
a s
a
l
asa al a
opportunities i to a larger
a s
a aslaalia
.P.P adad number of P.Padadin India.
.people .P.P adad .P.P adad .P.P adad
wwww ww w w www w wwww ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr77
O g
s as laalia i .
s aslaal a i .
s a slaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ii). Low Production ww Cost ww ww ww
g . O O grg do not require skilled
rMSMEs . O rgrlabourers
O g or professionals . O rtogrrun
O g the organisation. .O.O rgrg
s as laa lia i .
s as laalia i .
s as laa lia i .
s as laalia i
s aslaalia.
.wP.P adaada  It employs.cheap P. adaadlabour
P
a and thus minimizes
. P. adathe
P
adaoverhead.
. P. adaada
P . P. adaada
P
www  These
w
wware more cost efficient
wunits w
wwlarge scale units, thus
wthan w
ww production of goods
wfacilitates w
wwatw
ww ww ww ww ww
g .O O grgcost.
rlow .O rgrg
O .O rgrg
O .O rgrg
O
s as laa
iii). lia i
Low
.
Investment s as laalia i .
s as laa lia i .
s as laalia i .
s aslaalia.
a
adada adada a adada a adada a a
adada
ww.P.P  MSMEs w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww wwdo not require a huge capital ww wwto start the unit. ww ww ww ww
 Itgcan employ locally available g resources within the reach g of the owner.
g
i O r
O r g
. i. They help to perfect and i O
. i. r
O r g
i O r
O
. i. and rg i .O . rgrg
O .
a sa asal a l a

a sa asa l al apromote traditional family
a sa asal a l a
skills handicrafts.
a s
a asal al a i
a s
a aslaalia
.P.P adad iv). Quick Decision adad
.P.Making
wwww ww w w ww w w ww w w ww w w
ww ww ww ww ww
 MSMEs need not hire professional managers to run the management on a day to day basis.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i . In most cases, owner
s as
a
lalai
himself i . manages the enterprises.
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Hence, timely
P . P.
daada making becomesPeasy
adecision
P . . adaadand
P
a effective.
. P. adaada
P . P. adaada
P
ww v). Supplementary ww Role ww ww ww
g . O O grg play a complementary
rMSMEs . O rgrgrole to serve as a feeder
O . O torglarge
O rg scale industries. i.O rgrg
O
s as laa lia i .
s as laalia i .
s as laa lia i .
s as laal a i .
s aslaalia.
.wP.P adaada  They supply .wP.P adaada spare parts and.Pcomponents
accessories,
. adaada to large scale industries.
P . P. adaada
P . P. adaada
P
www w
ww objectives of SHGs? www w www w www w
ww 3. What arewthe w ww ww ww
g .O O grg
rFocusing on empowerment .O rofgrwomen.
O g .O rgrg
O .O rgrg
O
s as laa lia i .
s as laalia i .
s as laa lia i .
s as laalia i .
s aslaalia.
a
adada  Saving people adada a
from the clutches of money adada a
lenders adada a a
adada
ww
ww  Building ww wwcapacity of women andwtow wenable
w them to participateww ww
in generating activities. ww ww
g  rPromoting
grg entrepreneurshiprskills grg among women. .OO rgrg rgrg
i . O . O i . O . O i . i .O . O .
a sa
l a l a i
asa  Elevating the economic a sa
l al a i
asa standard of the member’s a sa
l a l a
asafamilies.i
a s
a asal al a i
a s
a aslaalia
wwww ww w w w w
w@*@*@*@*@*@*@
w ww w w ww w w
ww ww ww ww ww
g --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
rgrg rgrg rgrg rgrg
a i . O
i . O a i . O
i . O a i . O
i . O a i . O
i . O laalia.
s as lala s as lala CHAPTER s as la–la22 s as lala s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wTYPES
ww ww ww OF TRADE ww w ww
ww
ww ww ww ww
w ww w ww ww
g I. CHOOSE rgrg THE BEST ANSWER: rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
www ww w ww w ww w ww w
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
s as laalia i .
s as laa lia i .
s as laalia i .
s aslaalia.
a
adada adada a adada a adada a a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa asal a l a i
a sa asa l al a i
a sa asal a l a i
a s
a asal al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr78
O g
s as laa lia i .
s as laal a i .
s as laa l a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaal ia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadII.a VERY SHORT.P.ANSWER adaada
P QUESTIONS:
. P. adaada
P . P. adaada
P . P. adaada
P
www wwww w
www wwww w
www
ww 1. Give thewmeaning w of Trade? ww ww ww
g i.O The rgrbuying
O g and selling of goods .O rgrand
O g services consists of.O rgrg
trade.
O .O rgrg
O
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Trade acts as.an a
dada
aintermediary in the exchange ada a a
ofdcommodities between the a
da and consumer..PP
adaproducer a
adada
ww.P.P w w P.P w w.P.P w w.P.P w w .
ww
ww 2. What is Internal ww ww Trade? wwww wwww ww
ww
g
iBuying
.O . rgrgand selling of goodsiand
O .O . Ogrg within the boundaries
rservices i .O . rgrgof a nation are called iinternal
O .O . rgrgtrade.
O .
a sa
l
asa al a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad3. Mr. Vikram who . P.Padaruns
d a textile industry . P.Padad regularly procures . P.Padadcotton from .P.P adad
wwww Germany. w
wName
w w the type of trade w w
ww he is engaged in. ww w w www w
ww ww ww ww ww
g Thisrgisrgexample for Import Trade. rgrg rgrg rgrg
a i . O
i . O
lala Vikram of India a i . O
i . O a i . O
i . O a i . O
i . O laalia.
4.
s aWhen
s s as la cotton shirts
lasells s aslalaAmal of England,
to s aslala type of
what s as
. P. adaada Trade he is engaged
P . P. adaada in?
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
This is example for Export Trade
g
O . O rgrg
O . O rgrg
O
5. aHow
s slaa i do you classify
s asla li
Trade?
a a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Internal adaada
.wPtrade
. P .wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
 External trade
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
6. What
s aslaal ia i . are the classifications
s aslaalia i . of internal trade?
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
dada
aTrade a
adada a
adada a
adada
.P.P  Wholesale .P.P .P.P .P.P .P.P
ww ww
 Retail Trade ww ww ww
g 7. What .O Ogrgimport trade? .OO
ris rgrg .O rgrg
O .O rgrg
O .
l
asa al ia i . l
asa alia i . l
asa alia i . l
a sa a sa a sa a s
a a s
a
.P.P adad  Import.trade P.Padameans
d buying goods from .P.P aadaforeign
d country for domestic .P.P adaduse. .P.P adad
wwww w w
ww India imports petroleum w w
wwproducts from Gulf Countries. ww w w www w
ww ww
 Example: ww ww ww
g 8. Explain . O rgrgthe meaning ofi.O
O rgrg
Entrepot
O trade. . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada Export trade means.Pthe
P . P
adaof domestic goods to aforeign
adasale . P. P
daada countries.
. P. adaada
P . P. adaada
P
ww Examples: ww i). Export of Iron ore from w India
w to Japan ww ww
g . O rgrg ii). Selling of Teaifrom
O . O rgrIndia
O g to England. . O rgrg
O . O rgrg
O
s aslaal ia i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad9.a TVS is selling.Pmotor . adaada bikes in Europe.
P . P. adaaUnder
P da which type aof
. P. P
daadtrade
a can this
. P. adaada
P
www be classified? wwww w
www wwww w
www
ww ww ww ww ww
This gis a Multinational Trade g
g .O r rg
O .O r rg
O .O rgrg
O .O rgrg
O
10.
s aslaal ia i .
What is the currency s aslaalia i .
used in India inasinternal aslaalia i .
trade? s aslaalia i .
s aslaalia.
a
adada a
adada adada a
adada a
adada
ww.P.P In India the w .P.P
currency
w used for Indian w .P.P
Rupees.
w w w.P.P w w.P.P
ww
ww
III. SHORT g ANSWER QUESTIONS:
g O r
O r g
ia. i. is the classification i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a
1. aWhat
sa slaal
a sa
l
asa al a i of foreign trade?
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad i). Import Trade .P.P adad .P.P adad .P.P adad .P.P adad
wwww w w
wwmeans buying goods from w w
wawforeign country for domestic w w
wwuse. www w
ww Import trade ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr79
O g
s aslaal ia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ii). Export w w
Trade ww ww ww
g Export
. O rgrgtrade means the sale iof.O.domestic
O rgrg goods to foreigni.countries.
O O rgrg
O . O rgrg
O
s aslaalia i .
s aslaal a i
s aslaal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada iii). Entrepot Trade .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www Entrepotww
w
ww means importing ofwgoods
trade
w
ww from one country and ww w
exporting the same to w www
foreign
ww w ww w
g countries.
.O rgrgIt is also known as ‘Re-export
O .O rgrg trade’.
O .O rgrg
O .O rgrg
O
s
2. a laa
Give
s lia i .
two examples s a
ofslaalia i
Entrepot
.
trade. s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww  Indian ww w w
diamond merchants in Surat wwwimport
w uncut raw diamonds ww wfrom
w South Africa. They w wand
cut
w w
g polish
rgrg the diamonds in itheir rgrunits
g in India and re-export rgrgthem to the International rgrDiamond
g
i . O . O . O . O i . O . O i . O . O .
a s
a
l al a i
asa Market in Amsterdam. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad P.Padad
.Dubai, .P.P adad .P . adad
P .P.P adad
wwww  Singapore,
ww w w Hongkong are the
ww w w
largest Entrepot trade centers
ww w w
in the world. www w
ww ww ww ww ww
3. What do grg you mean by Export grg trade?
g . O r
O . O r
O . O rgrg
O . O rgrg
O
s as
a i i .
lalaExport trade means thessale as
a i
lalof i .
a domestic goods to foreign s as
a i i .
lalacountries. s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww Examples: ww ww ww ww ww ww wwww
ww ww ww ww ww
 Export of Iron ore from India to Japan
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaali
a i . Selling of Tea from
s
India
aslaalia i
to . England.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Export of jasmine .wP.P adaadflowers
a
from Madurai
daada
aSingapore
.wP.toP .wP.P adaada .wP.P adaada
ww  Export trade ww is necessary to sell domestic ww surplus goods, to makew w
better utilization of resources. ww
g aiTo .O rgrgforeign exchange, toi.increase
O
earn O rgrg national income. i.O.O
O rgrg .O rgrg
O
s asla l a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
a
adada  To generate employment a
adada and to increase Government a
adada revenue a
adada a
adada
ww
ww 4. What is Wholesale ww ww trade? wwww ww ww wwww
g
i . rgrg of goods in bulki.from
“Purchase
.O O O . rgrthe
O g manufacturers and.selling
i O . rgrg them in smaller quantities
O i .O . rgrgto other
O .
a s
a
laal a i
asintermediaries” is known a s
a
l
asa al
wholesale
a i
trade. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww 5. State the w w
w w
meaning of Retail trade? ww w w ww w w www w
ww ww ww ww ww
g Retail
. O rgrgtrade deals with the distribution
O . O rgrg of goods in small iquantities
O . O rgrg to the consumers. i.O.O
O rgrg
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i .
s as
a
lala i
s aslaalia.
. P. adaad6.a Name any three
P . P. P
retail
ada ada traders in your
. P. adaadlocality?
P
a
. P. adaada
P . P. adaada
P
wwww ww
 Saravanaww medical Centers, Dindigul ww ww ww ww wwww
ww ww ww ww ww
g . O rgrgUdhayam Super Market,
O . O rDindigul
O grg . O rgrg
O . O rgrg
O
s aslaa ia i .
l  Sangeetha Mobile s aslaa ia i .
l Dinndigul
Store, s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
wwwMedical Center, Dindigul
 Vijaya wwww wwww w
www
ww ww ww ww ww
7. State the
g . O rgrg main aim of trade?
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
 The buying and selling s aslaalia i .
of goods and services consists s aslaalia i .
of trade. s aslaalia i .
s aslaalia.
a
adada  The essence.P.ofP a
ada is to make goods and
adtrade a
dada
aservices a
adadawho need them and.P.P a
adada
ww.P.P w w w w.P.P available to those
w w.Ppersons
. P w w
ww
ww ww ww wwww ww ww wwww
are able and willing to pay for them.
g O r
O grg
. i. Trade .O rgrg
O .O rgrg
O .O rgrg
O .
l
asa ali
a acts as an l
asa ali
intermediary
a i . in the exchange l
asa ali
ofa i .
commodities between the
l
asa alia i .
producer and aslaalia
a s
a a s
a a s
a a s
a a s
a
.P.P adad consumer. .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr80
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a s laalia. i. s a slaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww
g 1. What . O O grg the features of.OInternal
rare rgrg
O trade? laia.O rgrg
O . O rgrg
O
s a s laa lia i .
s a slaalia i .
s as a l i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The buying and .wP.P
daada of goods takes placePawithin
aselling da a
.w.Pad the boundaries ofwthe .wP.P
daadacountry.
asame .wP.P adaada
www w
wfor
w goods and services is made w
wwin the currency of the home wwcountry. w
ww
ww  Payment ww ww ww ww
g i.O It.O grg transactions between
rinvolves .O rgrthe
O g producers, consumers .O rgrgthe middlemen.
and
O .O rgrg
O
s as laa l a i
sa slaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  In home trade.Pthe a
da prevailing in that country
adalaws a a have to be followed.
adadonly a
adada a
adada
ww.P.P w w . P ww.P.P w w.P.P w w.P.P
ww
ww  The goods wwwwmust be a part of domestic wproduction.
ww w wwww wwww
g 2. Explain rgrgbriefly the different rgrgtypes of Foreign trade?
rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a s
a
l a l a i
asi).aImport Trade a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  Import w w
wtrade
w means buying goodswfrom ww
ww a foreign country for w w w
ww use.
domestic w
ww w
ww ww w w ww
g  rExample.
grg India imports petroleum rgrg products from Gulfi.O Countries.
rgrg rgrg
a ia.
lalExportO
i . O a
lalai . O
i . O a
lala i . O a
lalai . O
i . O laalia.
s asii). Trade s as s as s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  Export
wwtrade
ww means the sale of domestic
ww ww goods to foreign countries.
ww ww ww
ww
ww ww ww ww ww
Examples: i). Export of Iron ore from India to Japan
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i . ii). Selling
s aslaali
ofa i .
Tea from India to England.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iii). Entrepot Trade .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www w w w
ww  Entrepot
ww www
trade means importing ofwgoods from one country and
wwww
exporting the same to foreign
wwww
g .O O grg
rcountries. It is also known .O as rg‘Re-export
O rg trade’. ai.O rgrg
O .O rgrg
O
s as laa lia i .
s aslaalia i .
s asla l a i .
s aslaalia i .
s aslaalia.
a
adada  E.g. Indian.P a
adada merchants in Surat.Pimport
diamond a
adadauncut raw diamonds.Pfrom a a Africa.
adadSouth a
adada
ww.P.P w w . P ww . P w w . P w w.P.P
ww
ww wwww ww
ww
@*@*@*@*@*@ wwww wwww
g
i . rgrg i . rgrg
O i . rgrg
--------------------------------------------------------------------------------------------------------
.O O .O .O O i .O . rgrg
O .
a s
a asal a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad CHAPTER
.P.P adad – 23 .P.P adad .P.P adad
wwww www w ww ww ww w w w
ww w
ww ww ww ww ww
CHANNELS OF DISTRIBUTION
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
I. a
s
CHOOSE
s
a
lala i i . THE BEST
s aslalai
ANSWER:
a i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www ww w ww w w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
ww wwww ww
ww wwww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww www w ww ww ww w w w
www
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr81
O g
s as laa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adadII.a VERY SHORT.P.ANSWER a
adada QUESTIONS: a
adada a
adada a
adada
ww.P.P w w P w w.P.P w w.P.P ww.P.P
ww
ww 1. Who is awmiddleman? ww
w ww ww ww ww ww
ww
g
iThe
.O . rgterm
O rg ‘Middlemen’ refersi.O to. Ogrgthose who are in the .link
rall i O . rgbetween
O rg the primary producer
i .O . rgrgand the
O .
a sa
laal a
asultimate i
consumer in thea s
a
l al a i
asa of goods or service.
exchange a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww 2. Define Wholesaler. www w www w www w ww ww
ww ww ww ww ww
g “A true
. O rgwholesaler
O rg is himself neither
. O rgragmanufacturer nor a retailer
O . O rgrbut
O g act as a link between . O rgrtwo”.
the
O g
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia i .
s a laalia.
s s s – Evelyn Thomas s s
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww 3. Define Retailer. wwww wwww wwww ww ww
ww ww ww ww ww
g Therretailer
grg is the last of the many rgrlinks
g in the economic chain rgrwhereby
g the consumer’s wants rgrg are
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l satisfied smoothly andsefficiently
as a l by retailers. s as a l s as a l s as
.wP.P adaada .wP.P adaada .wP.P adaada . P. adaada
P . P. adaada
P
www www www w
www
- S. Evelyn Thomas wwww
ww ww ww ww ww
4. Who isg a broker?
g .O r rg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . A Broker is one who s aslaalia
bargains i . for another and receives
s aslaalia i .
commission for his service.
s aslaalia i .
s aslaalia.
a
adada  He is paid .‘brokerage’ a
adada for his services. .P.P a
adada a
adada a
adada
ww.P.P w w P.P w w w w.P.P ww.P.P
ww
ww
 He brings buyer and the seller to the negotiating process and arranges for finalizing contracts
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa asal al a i between them.
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad5. What are the .classifications P.Padad of the adad
.P.merchant
P middlemen? .P.P adad .P.P adad
ww ww ww ww ww
 Brokers
g . O rgrgFactors
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P  Commission. P. adaa
P da
Agents . P. adaada
P . P. adaada
P . P. adaada
P
ww ww
 Del- Credere Agents ww ww ww
g . O rgrgAuctioneers
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Warehouse.wP.P
ada
adakeepers. .wP.P adaada .wP.P adaada .wP.P adaada
ww 6. Who are w w
the mercantile agents? ww ww ww
g i.O rgrg Agents are alsoi.called
Mercantile
O O rgrgfunctional middlemen.i.O.O
O rgrg .O rgrg
O
s as laal a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
a
adada  A businessman a
dada a person to buy Pand
aappoints a
dagoods on his behalf
adasell a a him the right to adada
adadgives
and a
ww.P.P w w.P.P w w. .P w w.P.P ww.P.P
ww
ww ww on the security of goods.
borrowwmoney
w ww ww He is known as mercantile ww wwagent. ww
ww
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a a
adad1. What do you .understand adada a by channels a
adaof a
d distribution? .PP a
adad a a
adad a
ww.P.P w w P.P w w.P.P w w . ww.P.P
ww
ww  A channel wwww is the route through which ww wwthe goods are passed onwtow wthe
w ultimate consumer. ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr82
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P.Padaada TrbTnpsc
.P. adaada
P . P. adaada
P
wwww w www ww ww wwww ww ww
ww  There wware direct channels of distribution ww without middlemen. ww ww
g . O Ogrg
rMiddlemen help in the flow . O rofgrgoods
O g towards the crores . O rgrconsumers.
of
O g . O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia.
.wP.P adaad2.a Who is a factor? .wP.P adaada .wP.P adaada .wP.Padaada .wP.P adaada
www w
wwis a mercantile agent to w w
ww goods are entrusted forww w
ww by a principal. ww w
ww  A factor ww w
whom sale ww
g grgtakes physical possession
. i. rHe
OO
.O rgofrgthe goods, though hei.does
O O Orgnot
rg obtain ownership ofi.O theOrggoods.
rg
s a
s laalia s a
s laalia i .
s a
s laal a i.
s a
s laal a i.
s a
s laalia.
a
adada  A factor sells a
goods
adada in his own name without arevealing
adada the name of his a
principal.
adada a
adada
ww.P.P ww.P.P ww.P.P w w.P.P ww.P.P
ww
ww  He is ww for his action.
wliable
w wwww ww
ww wwww
g 3. Explain
rgrgthe types of mercantile
rgrg agents. rgrg rgrg
i .O . O i.O . O i .O . O i .O . O .
a s
a
l al a i
asa i). Broker: a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww A ww w w
Broker is one who bargains w
for
ww w
another and receives w w
commission
ww for his service. He is
ww w w
paid
ww ww ww ww ww
‘brokerage’ for his services.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lalaii). Factor: s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P.Padaada A factor. P.
isP
ada
aadamercantile agent to whom. P. P
daada
agoods are entrusted for .
saleP. abydaada aprincipal.
P . P. adaada
P
ww ww ww ww ww
iii). Commission Agents:
g . O rgrgA commission agenti.O
O rgrgand sells goods on ibehalf
O . O rgrgof the principal for ia.Ofixed
O rgrg rate of
O
s as laalia i .
s aslaal a i .
buys
s aslaal a i .
s aslaal a i .
s aslaalia.
.wP.P adaada commission for.Pall . adahisadatransactions.
P . P. adaada
P . P. adaada
P . P. adaada
P
www wwww w
www w
www wwww
ww 4. Explain w anyw three characteristics ww of wholesalers.ww ww
g .O rgrgWholesalers buy goods
O .O rgrg from producers ori.O
O
directly rgrg
O
manufacturers, .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
a
adada  Wholesalers adabuyada goods in large quantities a a sell in relatively smaller
adadand a a
adadquantities, a
adada
ww
ww ww
 They wwneed large amount of capital ww wwto be invested in his business, wwww wwww
g
i .O . rgrgThey generally provide
O i .O . rgrg facility to retailers,i.O.O
credit
O rgrg i .O . rgrg
O .
a s
5.
a
laa
asWhatl a i
are the services a s
a
l al a i
asarendered by theawholesalers s
a
l
asa al a i
to the a s l
asa al a
manufacturers?
a
i
a s
a aslaalia
wwww i). Economies
w w
winwLarge Scale: www w www w ww w w
ww ww ww ww ww
g  rAgrwholesaler
g buys goods in rbulk grg and, thereby, enables.Othe rgrproducers
g to produce goods rgon
rg a large
a i . O
i .
lala scale. O a
lalai . O
i . O a
lalai i . O a
lalai . O
i . O laalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww  Large w wwproduction helps to reduce ww w w ww
ww
ww wwscale
w ww ww the cost of production per
wwwwunit.
wwww
ii). Assistance
g . O rgrg in Distribution: i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as laa ia i .
l  Wholesalers collectsasorders laa a i l a ia i .
l from a large numbersasofalretailers scattered over saaswide laa ia i .
l area and buy s aslaalia.
.wP.P adaada goods inw .wP.P
bulk
daada
afrom producers. .wP.P adaada .wP.P adaada .wP.P adaada
www ww www www ww w
ww ww ww ww ww
 He enables producers to reach customers scattered over different parts of the country by
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i . distributing goods through
s aslaalia i .
retailers located in different
s aslaalia i .
areas.
s aslaalia i .
s aslaalia.
a
adada iii). Warehousing.P adada a a
adada adadaa a
adada
.P.P Facility:
. P .P.P .P.P .P.P
ww ww
 A wholesaler holds large stock ofwgoods w in his private warehouse ww or in a rented warehouse.ww
g
i.O . rIngrthis
O g way he relieves the.Omanufacturer
i . rgrg
O from the function
i .O . rgof
O rgwarehousing. i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr83
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P . adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
g 1. What . O Ogrg the characteristics
rare . O rgrg of retailers? i.O.O
O rgrg . O rgrg
O
s aslaa lia i .
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
.wP.P adaada  Retailer generally .wP.P
daada dealing in a variety
ainvolves .wP.P
daaditems.
aof a
www www w
wnear
w the main market area. ww w ww w
ww  Retail trade ww is normally carried on inwor w ww ww
g  iGenerally,
.O rgrg retailers involve buying
O .O rgrgon credit from wholesalers
O .O rgrand
O g selling for cash to consumers. .O rgrg
O
s aslaa l a i .
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  A retailer has indirect a a
adadrelation with the manufacturer a
adada but a direct link with a a
athedadconsumers. a
adada
ww
ww 2. What arewthe ww functions of Wholesalers?
w ww ww ww ww ww
ww
g a. Collection
i .O . rgrg of Goods:
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a l a i
asa Wholesaler collectsathe s
a
l al
asgoods a i
a from manufacturers a saor
l al a i
asaproducers in bulk. asaasa l al a i
a s
a aslaalia
wwww b. Storagew w w
wGoods:
ofw w ww w w ww w w ww w w
ww ww ww ww
 Wholesaler collects and storesrgthem
g . O rgrg
O . O O rg safely in warehouses, . O rtill
Ogrgthey are sold out. .OO rgrg
s as
a i i .
lala Perishable goods like s as
a i i .
lala vegetables, etc. are sstored
fruits, as
a i i .
lalain cold storage facility.saslala a i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
wwww c. Distribution: wwww ww ww ww ww ww ww
ww ww ww ww ww
Wholesaler sells goods to different retailers. Thus he performs the function of distribution.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
d.
laa li i .
Financing:
a s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Wholesalers .wP.P
daada financial support Ptoaproducers
aprovide .w.Pad
da a and manufacturers
.wP.P adaby ada
providing money in.P.P adaada
www w
wwto them. ww w ww w wwww
ww ww
advance ww ww ww
g  rHe grgalso sells goods to retailer rgron
g credit. rgrg rgrg
l
e.a ia.
Risk
O
i . O Taking: l a ia. O
a
adada  Wholesaler.P.buys a a
adadfinished ada and keeps them
adaproducer ada warehouses till the.PP
aindathe a
adada
ww.P.P w w P goods from w w.Pthe
. P w w.P.P w w .
ww
ww ww ww ww ww ww ww ww
ww
time.
g .O Ogrg
rThey .O rgrthe
O g risk arising from .price, O rgrgspoilage of goods, and
O .O Ogrg
rchanges .
l
asa a lia i . are sold and assumes
asal alia i . l
asa alia i . l
asa alia i . in
aslaalia
a s
a a s
a a sa a sa a s
a
.P.P adad demand. .PP
. adad .P.P adad .P.P adad .P.P adad
wwww www w ww w w ww w w ww w w
ww 3. What arewfunctions w of Retailers? ww ww ww
g i). Buying:
. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala A retailer buys a wide s as
a ia i
lalvariety.
of goods from s as
a i
different
i .
lala wholesalers after estimating s as
a i i .
lala customer’s s aslaalia.
. P. adaada
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
wwww demand.wwww ww ww ww ww ww ww
ww ww ww ww ww
 He
g . O rgrgselects the best merchandise
O . O rgrgfrom each wholesaleri.and
O O rgbrings
O r g all the goods under . O
one
rgrgroof.
O
s aii).
s
iai .
laalStorage: s as
i
laalai .
s aslaalai .
s as
i
laalai .
s aslaalia.
.wP.P adaada  A retailer .maintains P. adaada a ready stock of goods
P . P . P
ada
adaand displays them in the. P. adaada
P
shop. . P. adaada
P
www w
www wwww wwww wwww
ww ww ww ww ww
iii). Selling:
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa li
a i . The retailer sells the
s as la li
goods
a a i . in small quantities
s aslaali
according
a i . to the demand taste
s asland
aalia i .
preference of
s aslaalia.
a
adada a
adada a
adada adada a a
adada
.P.P consumers..P.P .P.P .P.P .P.P
wwww www w ww w w ww w w ww w w
ww ww
 He employs efficient methods ofw w
selling to increase his sales w w
turnover. ww
g iv). i O . rgrg and Packing: i.O.O
.Grading
O rgrg i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a s
a asal al a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad  The retailerP adad the goods which are.not
. grades
. P P.P adad by manufacturers.Pand
graded
. adawholesalers.
P d .P.P adad
wwww w w
wwgoods in small lots for w w w
wconvenience
w ww w w ww w w
ww  He packs ww w
the of consumers ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr84
O g
s aslaa lia i .
s as laal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s as laalia. i. s as laalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww v). Risk-bearing: ww ww ww ww
g . O rAgrretailer
O g always keeps stock . O rgof
O rggoods in anticipationi.of O O grg and bears the risk.OofO
rdemand rgloss
rg due to
s as laa lia i .
s as laalia i .
s as laal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada adaadaprice fluctuations, etc.
fire, theft, spoilage,
.wP.P .wP.P adaada .wP.P adaada .wP.P adaada
www w
wwservices rendered w w
w wholesalers to retailers. ww w www
ww 4. Explain w the
w ww by ww ww
g i). Financial
.O rgrg Assistance:
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada  Wholesalers a
provide
adada financial assistance to a
retailers
adada by selling goods on a
credit.
adada a
adada
ww
ww  Thiswisw wdone
w by allowing credit towretailers ww purchasing goods from
w wwwwthem ww ww
g ii). Meeting rgrg the Requirements:i.O.O rgrg rgrg rgrg
i . O . O i .O . O i .O . O .
a s
a
l a l a i
asa  Due to limited capital a s
a
l al a i
asaand lack of space in ahis sa
l al a
asfacility
a i a retailer cannotas hold
a
l al a i
asa large variety of a s
a aslaalia
wwww products.
www w ww w w ww w w www w
ww ww ww ww ww
 The wholesaler removes this difficulty by selling goods as and when the retailer requires.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala
iii). i i .
Introduction of New a
lala
Products:
s as
i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Wholesalers
P . P. adaadnew
bring
P
a
products and their
. P. P
daadtoa the notice of retailers.
auses . P. adaada
P . P. adaada
P
ww ww w ww ww
ww
ww ww
 Thus retailers
ww wwww
get knowledge aboutwinnovated products and innovated
wwww
features.
ww ww
g . O rgrStability:
O g . O rgrg
O . O rgrg
O . O rgrg
O
s as
iv).
laa liaPrice
i .
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Wholesalers adaada price fluctuations .by
.wP.reduce
P P. P
daada supply and demand
aadjusting . P. adaadand
P
a save the retailers adaada
.P.P
www w w
w w w
w w w w
w w w ww
w
ww w w
from loss arising from price fluctuations. w w w w w w
g v). Economy
.O rgrg in Transport: i.O.O
O rgrg .O rgrg
O .O rgrg
O
s as laa lia i .
s as laal a i
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada  A wholesaler a
adada
often delivers goods at the door a
adadasteps of retailers and save a
adada
their time and cost of a
adada
ww
ww ww
transport.
ww wwww wwww ww ww
g 5. What rare grg the services rendered rgrg by retailersi.to rwholesalers?
grg rgrg
i . O . O i . O . O O . O i .O . O .
a s
a
l a l a i
asi).aHelp in Distribution:asaasa l al a i
a sa asal al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.P.the
wwww Retailers www w
relieve manufacturers andww w w
wholesalers of the burden of
ww w w
collecting and executing a w w
large
ww
ww ww ww ww ww
number grgof small orders from .various grg consumers.
g . O r
O O r
O . O rgrg
O . O rgrg
O
s as
a ia
lalMarket
ii). i . Information: sa s
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada Retailer supply.Pvaluable
P . adaada information to wholesalers
P . P. adaadaabout changes in tastes,
P . P. P
ada
adapreferences, fashion .
etc. P. adaada
P
ww ww ww ww ww
of consumers.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
iii).
laa lia i .
Large Scale Operation
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The manufacturers .wP.P adaadaand wholesalers are .wP.P adaadafrom the trouble of.Pmaking
freed . adaada individual sales to.P.P
P adaada
www www ww w wwww w
www
ww ww
consumers in small quantities. ww ww ww
g .O O grg enables them to operate
rThis .O rgron,
O g at relatively large scale .O rgand
O rg thereby fully concentrate .O rgrgon their
O
s as laa lia i .
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada other activities a
adada a
adada a
adada a
adada
ww
ww iv). Help inwPromotionwww wwww wwww ww ww
g
i . i.Ogrg
OrRetailers
i . i.O rgrg
participate in theOpromotional activities carried
i .O . O grgmanufacturers and wholesalers
rby i .O . rgrg such
O .
a s
a
l a l a
asa as short time offers, a s
a s laal a
acoupons, free gifts, sales a s l
contests,
a
al
asa etc.a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  Retailers w w
wwhelp in promoting the sale w w
wofwthe products. ww w w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr85
O g
s as laa lia i .
s as laal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww wwww ww ww
ww v). PersonalwAttention:
w ww ww ww
g . O O grgretailer is able to provide
rThe . O rgmore
O rg personal attentioni.to O O grgcustomers than the wholesaler
rhis . O rgrg is, He
O
s as laa lia i .
s aslaa lia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
.wP.P adaada adaada on the spot when.the
gives special services
.wP.P P. P
daada require minor repairs.
aarticles . P. adaada
P . P. adaada
P
www w
wwservices rendered w w
ww w
www wwww
ww 6. Explain w thew ww to consumers by Retailers. ww ww
g i). Regular
.O rgrgSupply of Goods: i.O.O
O rgrg .O rgrg
O .O rgrg
O
s as laa lia i .
s aslaa l a i
s aslaa lia i .
s aslaalia i .
s aslaalia.
a  a a a a
.P.P adada Retailers
.P.P adada
maintain a ready stock of
.P.P adada
various products of different
.P.P adada
manufacturers for sale to
.P.P adada
wwww ww
consumers.w w ww w w www w ww w w
ww ww ww ww ww
g  rThis grg enables the buyers to.Obuy rgrproducts
g as and when needed. rgrg rgrg
i . O . O i . O i .O . O i .O . O .
a s
a
l a
asii). l a i
a New Products Information: a s
a
l
asa a l a i
a s
a
l
asa a l a i
a sa
l
asa al a i
a s
a aslaalia
wwww  The ww w w
retailers provide important w w
information
ww about the new w w
arrival
ww of products through w w
their
ww
ww ww ww ww ww
personal. Selling efforts and effective display of products.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lalaCredit Facilities: saslala
iii). a i i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Sometimes.P
P . adaadaprovide credit facilities
P
retailers . P. adatoadtheir
P
a
customers. . P. adaada
P . P. adaada
P
ww ww ww ww ww
 It enable them to increase their level of consumption.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
iv).
laa lia i
Wide. Selection:
s aslaa lia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Retailers generally .wP.P adaadakeep stock of a variety .wP.P
ada
aofdaproducts adaada
of different manufacturers.
.wP.P .wP.P adaada
www ww w ww w www ww w
ww  Thiswenables w the consumers to make ww their choice out of a widewselection w of goods. ww
g .O rgrg
v).aiMiscellaneous
O Services ai.O rgrg
O .O rgrg
O .O rgrg
O
s as la l a i .
s asla l a i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
a
adada  Retailers provide a
adadfreea door delivery services a a customers.
adatodthe a
adada a
adada
ww
ww  They ww cash discounts on their
wallow
w wwwsales.
w ww ww wwww
g 7. What .O O grg the factors affecting
rare .O rgrg a channel of idistribution?
O .O rgrg
O .O rgrg
O .
l a lia i .
asi).aMarket Characteristics l
asa a lia i . l
asa a l a i . l
a s
a a s
a a s
a a sa a s
a
wwww ww w w ww w w w w
ww the route for distribution w
wwof w
ww  The w w
size of the market for the goods ww is a major factor while selecting ww ww
g . O rgrg
products.
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lala i i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Distribution.Pin.P
P
daadageographical area requires
alarge . P. adaadmore
P
a middlemen.
. P. adaada
P . P. adaada
P
ww ii). Numberwof w Consumers ww ww ww
g grg
rLarge rgrconsumers
g rgrgdistribution. rgrg
a l a li
a. O
i . O purchases madela
a
byia
l . O
i .
few O require centralized
a l a lia. O
i . O
a l alia. O
i . O
a laalia.
s s a s s a s s a s s a s s
.wP.P adaada  Large number .wP.P aofdaadconsumers
a
.wP.P
making purchases adaadin a
small quantitiesw .wP.P adaadmore
requires
a
middlemen. ww .P.P adaada
www ww w ww w ww ww
ww ww ww ww ww
iii). Cost and Time Involved in the Channel of Distribution
g .O O grg
rThe .O rgrg with the quality of iservice
O .O rgrgprovided by middlemen.
O .O rgrg
O
s as laa li
a i . channel cost should
s aslaa ligo
a i .along
s aslaa l a i .
s aslaalia i .
s aslaalia.
a
adada  Ordinary goods a
adadarea routed through economical a
adada channel even though ada time taken by the.PP
adathe a
adada
ww.P.P w w.P.P w w.P.P w w.P.P w w .
ww
ww ww
channel
ww for delivery is more. www
w ww ww wwww
g iv).i.Services
O . rgrg Required along with
O i .O . rgrgProduct
the
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a l a i
asa  Machinery or equipment a s
a
l a l a i
asa which need to be installed a s
a
l a l a i
asaand demonstrated should a sa
l
abe
s
al a i
asold with shorter a s
a aslaalia
wwww ww
channel. w w ww w w www w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr86
O g
s as laa lia i .
s aslaa l a i .
s aslaa l a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww
wbyw ww
wtrained
w wwww
ww  Technical ww services can be provided ww manufacturers or by their ww technicians. ww
g . O O grg
rTherefore a shorter channel . O rgrpreferred
is
O g for sales. . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada v). Life Cycle of the .wP.P
daada
aProduct .wP.P adaada .wP.P adaada .wP.P adaada
www ww
 An established
w product can selectwan ww w
ordinary channel. www www
ww ww w ww ww
g
l ali
 rBut
a.Oi . Ogrg a new product entering l alia.Oi . rgrinto
O g the market should
l alia.Oi . rgrgcarefully promoted iby
be
O l al a.Oi . rgrg
experienced
O laalia.
a s as a middlemen. a s as a a s as a a s as a a s as
wwww ww w w w w
w@*@*@*@*@*@
w www w www w
ww ww ww ww ww
g
i . rgrg i . rgrg
O i . rgrg
------------------------------------------------------------------------------------------------------------------------------------
.O O .O .O O i .O . rgrg
O .
a saasal al a i
a sa
l
asa al a i
CHAPTER a s
a
l al
asa– 24a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w w w
wwRETAILING www w www w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g II. VERY rgSHORT
rg ANSWER QUESTIONS rgrg rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a s
1.a
laa
asWhatl a i
is Retailing? a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww Retailing w w
is w w
the process of selling the w w
ww and services directlywtow
goods w
wthew
w ultimate consumers in w w
w w
small
ww ww ww ww
g quantities.
rgrg rgrg rgrg rgrg
a i . O
i . O
lala the meaning sof a i . O
i . O a i . O
i . O a i . O
i . O laalia.
2.
s asState as la
lamultiple shops. s aslala s aslala s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww wwidentical retail shops w wwsimilar appearance normally ww deal in standardizedwand w
ww
ww A number wwww of wwwith
w wwww wwww
branded
g . O rgrg consumer products iestablished
O . O rgrg in different localities
O . O rgowned
O r g and operated by.manufacturers
O rgrg
O
s as laa ia i .
l are called as Multiple Shops. s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada P.P
.wtwo adaada .wP.P adaada .wP.P adaada .wP.P adaada
www 3. Mention any
ww w benefits of Vending
ww w Machines. www www
ww ww ww ww ww
 Automatic vending machine is a new form of direct selling.
g O
. i.O r grg . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia  It is a machine soperated
aslaalia i . by coins or tokens. sa slaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adadataa convenient location a a
dada a a
adadpetrol a
adada
ww.P.P  Its arew w.P.P
placed w w.P.P w.P.P
such as railway stations,wairports, pumps, etc. ww .P.P
ww
4. What are specialty stores?
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a i
Speciality Stores deal
a
in
sa
al
asa al a i
particular type of product
a s
a
l
asa a
underl a i
one product line only.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adadIII. SHORT ANSWER .P.P adadQUESTIONS .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr87
O g
s as laalia i .
s aslaal a i .
s a slaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 1. Explain w w
the features of general ww stores. ww ww
g O
aiGeneral
. rgrg Stores sell a wide ivariety
O . O rgrgof products under one
O . O O grg most commonly found
rroof, . O rgin
O rg a local
s as la l a i .
s aslaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada market. .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www www w
wwneeds of the customerswresiding w
ww in nearby localities.ww ww w
ww  Residential ww areas to satisfy the day-to-day ww w
g  iThey.O rgrremain
O g open for long hours .O rgatrgconvenient timings. i.O.O
O rgrg .O rgrg
O
s as laal a i .
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
a
adada  Its provide credit a
dada to their regular customers.
afacilities a
adada a
adada a
adada
ww
ww  For example, wwww a provision store dealsww w
inw grocery, bread, butter, w www
toothpaste, soaps, washing powder, ww
ww
g soft
.O O grg confectionery, stationery,
rdrinks, .O rgrg cosmetics, etc. i.O.O
O rgrg .O rgrg
O .
l a
asGivelia i . l
asofalia i . l al a i
asa Hire PurchaseaSystem l
a s
2.a a any four points a s
a a distinction between a s
a s
a and a s
a
wwww Installment
w w
ww System of selling. www w www w ww ww
ww ww ww ww ww
g S.No .OO rgrgBasis Hire Purchase
. O rgrg System i.O.O
O rgInstallment
rg System . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaad01a Contract of Sale
P . P. adaaItdais not a contract of sale
P . P. adaada
P
It is a contract
. P. adaofadsale
P
a
. P. adaada
P
ww 02 ww Ownership passeswtow ww buyer only ww passes o the buyer as ww w
ww
ww Transfer www
ofw ww the ww
Ownership
ww ww w
g . O rgrg
ownership
O
after the final
. O rgrinstallment
O g has been paid rg
. O O
soon
rg as he has paid the ifirst . O O grg
rinstallment.
s
03 as laa ia i .
l Rights of buyer The s aslaa ia i .
l cannot hire, sell or pledge
buyer s aslaa ia i .
l the The buyer can do sanything aslaa a i
l with .
s aslaalia.
.wP.P adaada .wP.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www www articles bought.wwww w thew w
www
article. wwww
ww ww w w ww
g 04 Action
. O rgrgon default The seller
O . O
can
rgrgtake back the goods ini.O.O
O rgThe
rg seller can take backi.the O rggoods
O rg the
s as
i
laala i . case
s as a
i
ala
lof i .
default by buyer in payment s as
i
laalaof goods even if theresasislaadefault la ini .
s aslaalia.
a
adada a
adadany a a
adada adada a a
adada
ww.P.P w w.P.P installment w w.P.P payment w w.P.any
of P installment ww.P.P
ww
ww wwww wwww ww ww ww
ww
3. Explain the characteristics of super markets.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal a
l a i Supermarkets are
a s
a
l
asa a
generallyl a i situated at the main
a
l a
shopping
s
a asa l a i centers.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  The goods .P.P
are
dad
asold on cash basis only.wNo adad facilities are made available.
.P.credit
wwww www w ww w www w ww ww
ww ww ww ww ww
 Supermarkets are organized on departmental basis.
g . O rgrequires
O rg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .It huge investment.
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaad4.a What is meant
P . P. aby
P
daad‘Mail
a Order Retailing’?
. P. adaada
P . P. adaada
P . P. adaada
P
ww  Mail order
ww houses are the retail outlets
ww that sell their merchandise
ww through mail.
ww
g  . O rgrg is generally no direct
O . O Ogrg
rpersonal . O rgrbuyers
O g . O O grgtype of
rthis
s as laalia i .There
s aslaalia i . contact between
s aslaalia ithe
. and the sellers
s aslaalia in
i .
s aslaalia.
.wP.P adaada trading.
ww IV. LONG ANSWER ww QUESTIONSww ww ww
g 1. State .O O grg features of Departmental
rthe .O rgrg
O stores.ai.O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s asla l a i .
s aslaalia i .
s aslaalia.
a
adadai). Large Size: .P.P adada a a
adada a
adada a
adada
ww.P.P w w w w.P.P w w.P.P ww.P.P
ww
ww  A departmentwwww is a large scale retail wwwshowroom
w requiring a large ww wcapital
w investment by forming ww a
ww
g
i .O . rgrgstock company managed
joint
O i .O . rgby
O rga board of directors. i.O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa There is a Managing a s
a aslaal a
Director
i
assisted by a a s
general
a
laal a
asmanager i
and several a s
department
a
l al a i
asa managers. a s
a aslaalia
wwww ii). Wide Choice: www w www w www w ww ww
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr88
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  It acts wasw a universal provider of awwide w range of products fromwPin w to Car. ww
g  . O rgrsatisfy
To
O g all the expectedi.O humanOrgrg needs under one roofi.O.O rgrg . O Orgrg
s a
s laalia i .
s a
s laal a i .
s aslaal a i
s a
s laalia i .
s a
s laalia.
.wP.P adaadaiii). Departmentally .wP.P adaada
organized
www  Goods w w
w for sale are classified
offered
w
winto
w various departments.ww www www
ww ww ww ww
g  Each
.O rgrg department specializes
O .O Orgrone
in g line of product and.operates
O rgrg as a separate unit. i.O.O
O rgrg
s a
s l
iv).aalia i .
Facilities provided: s a
s laalia i .
s aslaalia i.
s a
s laal a i
s a
s laalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  It provides w w. P. P w w.P . P w w. P. P ww. P. P
ww
ww ww ww a number of facilities and wwwservices
w to the customers. ww
ww ww
ww
 Such
g as restaurant, rest rooms,grecreation, packing, frees home
g delivery, parking, etc.
g r rg
i.O.O r rg
i.O.O i .O . r rg
O i .O . rgrg
O .
a a sv). lai
aslaaCentralized purchasingsa a i
slalaa a a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad  All the purchases .P.P adaared
made centrally and .P . adad from the manufacturers.
P
directly .P.P adad .P.P adad
wwww ww w w ww w w w
ww w www w
ww ww ww ww ww
 It operates separate warehouses whereas sales are decentralized in different departments.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
2. aWhat
s s
a
lalai i . is meant by Consumer
s as
a
lalai i . Cooperative
s as
a
lalai
Store? i . Explain its
s
merits
as
i i .
lala in brief.
a s aslaalia.
. P.Padaada Meaning: . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww wwww
ww ww ww ww ww
A consumer’s cooperative store is a retail organisation owned, managed and controlled by the
g . O rgrg themselves to obtain
O . O O grg
rproducts . O rgrg low prices.
O . O rgrg
O
s asla
a li
a i .
consumers
s aslaalia i . of daily use
s as
at
laali .
reasonable
a i
s aslaalia i .
s aslaalia.
.wP.P adaada Merits: .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www ww w ww w w
ww www
ww  The capital ww of a cooperative store is w w
raised by issuing shares to members. ww ww
g  iThe .O rgmanagement
O rg of the store .Ois.O
grg
rdemocratic and entrusted .Oto Ogrgelected managing committee,
ran .O rgrg where
O
s aslaal a i .
s aslaalia i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada one man one vote adarule.
aisdathe a
adada a
adada a
adada
ww
ww  The cooperative wwww stores are very famous wwwinwTamilnadu. ww ww wwww
g  For .O O grg
rexample, Kamadhenu andOChinthamani
. i.O rgrg cooperative supermarkets
.O rgrg
O in Chennai, Karpagam
.O rgrg
O .
l alia i .
asa in Vellore, etc. l
asa alia l
asa alia i . l
a s
a a sa a s
a a sa a s
a
wwww 3. Describewthe
w w
ww role of chambers w w
wofwcommerce in promotion w
ww w of internal w www
trade.w
ww w ww ww w
g Meaning. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  The Chamber
P . P. aofdaad
P
a
Commerce and Industry a
. P. P aanadaassociation of business
isd
. P. P
daadindustrial
aand a houses like ad
. P. P aada
wwww ww wwfinanciers, manufacturers,
merchants, ww wetc.
w in a locality, region,wor w
ww w
state. wwww
ww ww ww w ww
g . O O grg main objective of these
rThe . O rgrassociations
O g is to promote . O rgrand
O g protect the interest.O.and rgrggoals of
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i
s aslaalia.
.wP.P adaada Indian commerce
.wP.P adaadanda industry.
www Functions:ww ww w ww w w
ww www
ww ww ww ww
 rThey act as national guardians rgrof
g trade, commerce and.O industry.
g
l alia.Oi . Ogrg l alia.Oi . O l alia i . rgrg
O l alia.Oi . rgrg
O laalia.
a s as a  They act as a s
catalyst
a as a
in strengthening the s
internal
a as a
trade of the country. a s as a a s as
.P.P adada adada
.P.Government
P adada
.Pformulation
. P .P.P adada .P.P adada
wwww  Interact
ww w w
with with regard
ww w w
to and w w
implementation
ww of related policies. www w
ww ww ww ww ww
Association
g
i . O . rgrg or Champers ini.India
O O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  Confederation ofaIndian sa
l al a i
asa Industry (CII) a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  Madrasww w
Chamber
w of Commerce, w
Chennai.
ww w w
ww w www w
ww ww ww ww ww
g PREPARED . O rgBY
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  Tamil ww Nadu Traders Associations. ww ww ww
g Role . Oof rgAssociation
O rg or Champers: . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
.wP.P adaada i). Transportation.Por . ad
P aada
inter-state movement ofPgoods
. . adaada
P . P. adaada
P . P. adaada
P
www w
www facilitate registration w
wwwof vehicles, surface wtransport w
www policies, construction w
wwofw
ww  ThewChambersw ww w ww
g .O O grg
rhighways and roads in promoting.O rgrg interstate movementi.O
O ofO grg
rgoods. .O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
a
adada ii). Harmonization CGST a
adada and SGST structure. a
adada a
adada a
adada
ww
ww iii). Marketing wwwwof agro products and related wwww issues ww ww ww
ww
g  rThe grg associations of agriculturists rgrg and other federations rginteract
rg with farming cooperatives rgrg to
i . O . O i . O . O i . O . O i . O . O .
a s a
i
aslaala streamline local subsidies a s
a
i
aslaalaand formulate marketing a s
a
i
aslaapolicies
la for selling agroas
a aslaala
products.
i
a s
a aslaalia
.Pduplication
wwww iv). Weights and
ww wwmeasures and prevention ww wof
w of brands www w www w
ww ww ww ww ww
 They help the Government in formulation and implementation of uniform policies in weights and
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i . measures and prevention
s as
a
lalai ofi . duplication of brands.
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada v). Promoting sound
P . P. P
daada
ainfrastructure . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 They interact with Government to construct roads, ports, electricity, railways, etc.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s aslaalia i .
@*@*@*@*@*@ s aslaa lia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www wwww wwww w
www
----------------------------------------------------------------------------------------------------------------------------------- w
www
ww ww ww ww ww
g .O rgrg
O .O rgrg CHAPTER –i.25
O O rgrg
O .O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaa l a i .
s aslaalia i .
s aslaalia.
a
adada a
adada INTERNATIONAL a
adada BUSINESS a
adada a
adada
ww
ww I. CHOOSEwTHE ww BEST ANSWER:ww
w ww ww ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s aasal a l a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww ww ww w w www w www w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
II. VERY gSHORT ANSWER QUESTIONS
g . O r rg
O .O rgrg
O .O rgrg
O .O rgrg
O
l a
1.saasWhat
a lia i .
do you mean s a
byslaalia i .
international a l
business?
s s aa lia i .
s aslaalia i .
s aslaalia.
a
adad a
adada a
adada a
adada a
adada
ww.P.P  ww.P.P
International business denotes all w w.P.P
those business activities w w.P.P
which take place beyond w w
the.P.P
ww
ww
geographical limits of the country.
g
i . i. Itgrinvolves
O r
O g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s aasal a l a
 not only
a s
a
thel
asa al a i
international movements
a s
a
l
of
asa a l a
goods i and services.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad2. What is meant .P.P
dad
aby Export Trade?ww .P.P adad .P.P adad .P.P adad
wwww ww ww ww www w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE. O rg90
O rg
s as laa lia i .
s aslaal a i .
s aslaa l a i
s a slaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww w ww
w wwww wwww wwww
ww When the ww firm of country sells goodswand w services to a firm of another ww country it is called export ww
g trade.
. O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad3.a What is meant .wP.P
daadImport
aby a Trade? ad
.wP.Pad
aa
www w
wbusiness
w w w
w w
wwof another country it iswcalled www
ww When the ww firm of a country wwpurchases goods from the w w
firm w
g import
.O rgrgtrade.
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada4. What is meant by
adadaaEntrepot Trade? a
adada a
adada a
adada
ww
ww When the ww w w of country imports goods
firm wwwwfor the purpose of exporting wwwwthe same goods to the firms wwof
ww
g some rgrother
g country with or without rgrgmaking any change in thergrgoods
g meant for export.O it is
rgrknown
g as
i . O . O i . O . O i . O . O i . O .
a sa
i
aslaalaEntrepot trade a s
a aslaala i
a saaslaala i
a saaslaala i
a s
a aslaalia
.P.P adad .P . adad
wwww 5. Give any two
ww w w reasons for w w
International
ww Business. www w www w
ww ww ww ww ww
g  Due rgrgto varying climatic iconditions rgrg prevailing acrossi.the rworld
grg certain resources .are rabundantly
grg
a
lalai . O
i . O
available in some a
countries.
lala . O
i . O a
lala O
i . O a
lalai O
i . O laalia.
. P. adaada  In such case.Pcountries
P . adaada with surplus resources
P . P. adaadhave
P
a to exchange them with
. P. adaadother
P
a countries for its adaada
.P.P
wwww deficit w ww
w
resources. wwww wwww wwww
ww ww ww ww ww
III. SHORT ANSWER QUESTIONS
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
1.
s as laalia
Describe i . importance s asl a
of
a
ia i .
l the external trade s aslaa ia i .
l an economy? sasal
to l a ia i .
s aslaalia.
www i). Unequal ww w
Distribution of Natural w
Resources.
ww www www
ww ww ww ww ww
 Countries across the world are not endowed with the natural resources of various types equally.
g .O rgrg
O O rgrg
O
.unevenly .O rgrg
O .O rgrg
O
s as laalia
 i . The natural resources
s aslaa
are
lia i . spread across
s athe
slaalia i .
various nations.
s aslaalia i .
s aslaalia.
a
adada ii). Specialization..P.P adadaa a
adada a
adada a
adada
ww
ww
 Certain countries specialize in the production of goods and services due to some natural
g .O O grg
radvantages. .O rgrg
O .O rgrg
O .O rgrg
O .
asal alia i . l
asa alia i . l
asa alia i . l
a sa a s
a a sa a sa a s
a
.P.P adad  Like abundant
.P.P
dad
aavailability of skilled labour,
.P.P adafavorable
d climatic conditions,
.P.P adadavailability of natural.P.P adad
wwww w w
ww technical know-how, etc., www w www w www w
ww ww
resources, ww ww ww
g iii).i.Cost
O rgrBenefit.
O g . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Production.Pcost
P . P
ada significantly among
adavaries . P. P
adacountries due to difference
adathe . P. adaadain socio economic,.P.P
P adaada
wwww ww ww demographical, technical
geographical, wwwwand political environments wwwprevailing
w therein. wwww
ww ww ww ww ww
g 2. What ris grgthe necessity for rEntrepot
grg trade? rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  The country may not s as a l any accessible trade sroutes
have as a l connecting the importing s as a l
country s as
.wP.P adaada . P . adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
www  There may
w w
wwnot have any bilateralwtrade w
www agreement between both w
ww
wthe country w
www
ww ww w ww ww
 Importer
g . O rgrg and exporter may
O . O
not
rgrshare
O g good economic relation . O rgrgwith each other i.O.O
O rgrg
l a
3.sasWhat
a lia i .
are the limitations s aslaalia i .
of international s aslaalia i
business?
.
s aslaal a i
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P a). Import of w w.P.P
Harmful Goods. w w.P.P w w.P.P w w.P.P
ww
ww
g  rInternational
grg business may lead
rgrgto import of luxuriousi.O goods,
rgrg spurious goods, dangerous rgrggoods.
i . O . O i . O . O . O i . O . O .
a sa
i
aslaala It may harm the well-being a s
a
i
aslaala of people. a s
a aslaala i
a saaslaala i
a s
a aslaalia
wwww b). Misuse of w w
Natural
ww Resources. www w www w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr91
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s aslaalia. i. s as laalia. i. s as laalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww wwww ww
wresources
w ww ww wwww
ww  Excessive ww export of scarce natural ww to various countries ww across the world may w w
lead to
g . O O grg depletion of the resources
rfaster . O rgrgin the exporting countries.
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaa lia i .
s as laalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  This in turn.Pmay . adaabring
P da about ecological.P
. adaadain the country from.which
disaster
P P. adaaditais exported.
P . P. adaada
P
www c). Rivalry w
w
wwwthe Nations.
among wwww wwww w
www
ww w ww ww ww
g
l alia.Oi . Ogrg competition forlaexports
 rAcute
lia.Oi . rgrg
O may lead to rivalry amongrg
l alia.Oi . Othe
rg nations.
l alia.Oi . rgrg
O laalia.
a s as a  This may lead toa s as a
conflict of interest among the
a s as a
countries and end up in wars
a s as a
among them. a s as
wwww IV. LONG ANSWER www w QUESTIONSww ww w w ww w w www w
ww ww ww ww
g 1. List out rgrgthe advantagesi.O ofrginternational
rg trade rgrg rgrg
i . O . O . O i .O . O i .O . O .
a s
a
l al a i
asi).aGeographical Specialization: a s
a
l
asa a l a i
a saasal al a i
a saasal al a i
a s
a aslaalia
wwww  Countries w w
ww across the world differww w w
significantly
ww in terms of natural w w
ww resources, capital equipment, www w
ww ww ww ww
manpower,
grg technology and land grgand so on.
g . O r
O . O r
O . O rgrg
O . O rgrg
O
s as
a i i .
lala International business s as
a i i .
laislarequired to exchange stheaslasurplus a i i .
la resources resulting s as
a i i .
lala geographical
from s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww
specialization for deficit resources in
ww ww
other countries ww ww wwww
ww ww ww ww ww
ii). Economic Development:
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laali
a i . International business
s aslaa li
helps
a i . the developing
s as laali
countriesa i . greatly in achieving
s as laali
rapid
a i . economic
s aslaalia.
.wP.P adaada .wP.P
development. adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww ww
 For example China, India, Brazil and
ww South Korea
ww ww
g .O rgrg of Employment:i.O.O
O rgrg .O rgrg
O .O rgrg
O
s a
iii).
s laaliGeneration
a i .
s aslaa l a i
s as laalia i .
s as laalia i .
s aslaalia.
a
adada  International a
adada generates employment ada
adaopportunities a a
dadexpansion. a
adada
ww.P.P w w.P.business
P w w.P.P by assisting
w w.P.P athe
w w.P.P
ww
ww  It provideswwww direct employment towthose ww people who are hired by
w wwwexport
w and import firms. ww ww
g iv). .Higher
i O . rgrg Standard of Living:i.O.O
O rgrg i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asa  The citizens of athesaascountry laa l a i
can buy more a sa
l al a i
asa of goods and services
varieties a sa
l al a i
asawhich cannot be a s
a aslaalia
wwww w w
wwcost effectively within w
produced w
whome
the w
w country. ww w w www w
ww ww w ww ww
g  rThis grg exchange of goods .O andrgrservices
g among the countries rgrgenhances the standard of
rgrliving
g of
a i . O
i .
lala people.O a
lala i i . O a
lalai . O
i . O a
lalai . O
i . O laalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww v). Prospectsw ww ww ww ww
ww
ww wwfor
w Higher Profit:
wwww wwww ww ww
g  rInternational
grg business helps the
rgrgfirms which producei.O goods
rgrg in excess to sell them atgrelatively
r rg
l a ia. O
i . O l a ia. O
i . O l a a i . O l a ia. O
i . O laalia.
s as a l higher price to various s as a l
countries in the internationals as a l
market. s as a l s as
.wP.P adaada adaada
.wP.them
www  This www
enables to earn higher w
profit.
ww ww w www
ww ww ww ww ww
2. Enumerate g the disadvantages g of international g trade
g O
. i.O r r g O
. i.O r r g . i.Org
O r .O rgrg
O
s as
a).
laali
Inhibition
a of Growth of Home
s aslaa lia Industries.
s as laalia s as laalia i .
s aslaalia.
a
adada  International a
adada may discourage the a
dada of indigenous industry. a
adada a
adada
ww.P.P w w.P.business
P w w.P.P agrowth
w w.P.P w w.P.P
ww
ww ww
 Unrestricted ww imports and severe wwwcompetition
w from foreign wwwcompanies
w may ruin theww
w w
home
g .O O grg
rindustries altogether. .O rgrg
O .O rgrg
O .O rgrg
O .
asal alia i . l
asa a lia i . asal alia i . asal alia i . aslaalia
a s
a a s
a a sa a sa a s
a
wwww b). Import of w w
Harmful
ww Goods. ww w w ww w w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr92
O g
s as laalia i .
s aslaa l a i .
s as laal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww ww
 International business may lead to w
ww w
import of luxurious goods, spurious
ww ww
goods, dangerous goods.
ww
ww
g . O rItgrmay
O g harm the well-being . O rgrpeople.
of
O g . O rgrg
O . O rgrg
O
s asla
c).
a ia i .
lShortage of Essential sGoods aslaa ia i .
l in Home Country. sasal l a ia i .
s as laalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Moreover wwww the export of essentialw wwww
commodities out of the greed w
ofw
w w more foreign exchange
earning w
www
ww ww w ww ww
g . O rmay
O grg result in absolute shortage . O rgrg of these goods at home
O . O rgcountry
O rg and people may have
. O rgrg to buy
O
s as
i i .
laala these commoditiessatasexorbitant laalai i . price in the local s as
i
laala
market. i .
s as
i
laala i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P d). Misuse of w w.P.P
Natural Resources. w w.P.P w w.P.P w w.P.P
ww
ww
 Excessive export of scarce natural resources to various countries across the world may lead to
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i faster depletion of
a
the
s
a
l
asa a l a i
resources in the exporting
a s
a
countries.
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad  This in turn.Pmay . adabring
P d about ecological.P adad in the country from.which
disaster
. P P.Padadit is exported. .P.P adad
ww e). Rivalry among
ww the Nations.
ww ww ww
g .O O grg competition for exports
rAcute . O rgrg
O may lead to rivalry among . O rgthe
O rg nations. . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  This may .lead
P P. P toa
ada a
dconflict of interest among
. P. P
adacountries and end up inawars
adathe . P. P
daadaamong them.
. P. adaada
P
ww 3. Distinguish ww between internalwand w international trade ww ww
g S.No iBasis
. O rgrg
O Internal iTrade . O rgrg
O . O rgrgInternational Trade i.O.O
O rgrg
s aslaal a i .
s aslaa l a i .
s aslaalia i .
s as laal a i
s aslaalia.
.wP.P adaad01
a Meaning
.wP.P aItdaadarefers to business .wP.P adaadtransactions
a dabusiness
It refers toathe
.wP.Pad
a transactions ad
.wP.Pad
aa
www w
ww transacted within w
wwthe geographical transacted w
ww in beyond the boundaries www
ww ww ww ww ww
g .O rgrg
O boundaries ofrg
.O Oarcountry
g .O rgrgof a country
O .O rgrg
O
s
02aslaalia i .
Participants in With s asl
inaa li
the
a i .
country people s aslaalia i .
Outside of the s as l
countryaalia i .
people s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P the business w w. P.P w w. P.P w w. P.P w w. P.P
ww
ww
03
g
i
Mode
. O . rgrgof transportIt is mainly
O i . O .
transported
rgrg
O
by roadways and g g
i . O . r r It is mainly transported
O i . O . rgby
O rg water .
a s
a aslaala i railways.
a s
a aslaala i
a s
a aslaala i and airways sa
a a s laala i
a s
a aslaalia
.P.P adad .P.P adad .P.P adad P.Padad
.currencies. .P.P adad
wwww 04 Currency ww w
used
w Local currency of a country.
ww w w Foreign
www w www w
ww ww ww ww ww
05 Risk Exposure The risks are relatively less. This risks are high
g . O r
O grg . O r
O grg . O r
O grg . O rgrg
O
a
06alala
s s
i i .
Scope of market The scope
s as
a i i .
lalaof market is Limited saslala a i i . The scope of market
s as
a i i .
lalisaunlimited s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g g @*@*@*@*@*@*@
g . O r
O r g . O r
O r g . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s as laalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad “Success
.P.P adadis the sum of small efforts, .P.P adadrepeated day in and.Pday . adaout
P d ” .P.P adad
wwww ww w w w w
wCHAPTER
w www w www w
ww ww ww - 26 ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr93
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww wwww
ww ww EXPORT w w
IMPORT PROCEDURES ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s a slaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www ww w ww w w
ww www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
sa slaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww ww w w ww ww w
ww w www w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww ww ww ww
ww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadII.a VERY SHORT.P.ANSWER adaada
P
QUESTIONSad
. P. P aada . P. adaada
P . P. adaada
P
www 1. What is meant
w
www by Indent? ww wwww w
www w
www
ww ww ww ww
g
l alia. i.Ogrgindent actually points
OrAn
l alia.to
O
i . rgrorder
an
O g received from abroad
l alia.Oi . rgrfor
O g export of goods. i.e..O
l alia
sale
i . rgrofg goods.
O laalia.
a s as a  The indent containsa s as
thea details in the box. a s as a a s as a a s as
wwww  Indent w w
wiswprepared in duplicate. ww ww ww w
ww w www w
ww ww ww ww
g 2. Writerg any
rg two export promotion rgrg institutions. rgrg rgrg
i . O . O i . O . O i .O . O i .O . O .
a sa
l al a i
asa  Export Promotion a s
a
l al a
asaCouncili
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww  State
ww w w
Trading Corporation ww ww w
ww w www w
ww ww ww ww ww
3. Mention grg the types of Indent.
g . O r
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala  Open Indent saslala a i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  Closed
ww wwIndent ww ww ww
ww wwww
ww ww ww ww ww
g . O rgrgConfirmatory Indent.i.O.O
O rgrg . O rgrg
O . O rgrg
O
4.
s a laa
What
s
ia i .
l is the Letter sofasacredit? l al a i
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www Letter of w
ww (LC) is an undertaking
Credit
w w
wwbyw its issuer that billswofwexchangew w drawn by the w w
www
foreign
ww ww ww ww w
dealer on
g . O rgrgthe importer will bei.O
O
honored
rgrg upon its presentation
O . O rgby
O rg exporter’s bank upi.to O ragrspecified
O g
s aslaalia
amount. i .
s aslaal a i .
s aslaalia i .
s aslaal a i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P III. SHORT ANSWER
w w.P.P QUESTIONS ww.P.P w w.P.P w w.P.P
ww
1. What are the contents of Indents?
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i  Quantity of goods
a s
a
l
asa al
senta i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad  Design P.P
.of
dad
agoods .P.P adad .P.P adad .P.P adad
wwww ww w w ww ww w
ww w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr94
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww
 Price ww ww ww
g . O rgrgNature of packing shipment
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s a slaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  Mode of shipment
www  Period
w
ww of delivery ww w www www
ww ww ww ww ww
g .O rgrgMode of payment i.O.O
O rgrg .O rgrg
O .O rgrg
O
s aslaalia i .
s a slaal a i
s aslaa lia i .
s aslaa lia i .
s aslaalia.
a 2. What is meaning of
a consular invoice? a a a
wwww  Where w
wthe w
w customs duties are charged w w
wwon the basis of value ofwgoods w w
ww at import’s port. ww www w
ww ww ww w
g  rThe grgcustoms officers are .empowered rgrg to open the consignment rgrg to calculate duties. i.O.O rgrg
i . O . O i O . O i . O . O .
a s
a
l al a i
asa  In order to avoid athis sa
l al a
asproblem
a i
s
a
l a l a i
asa invoice and sendsaitsaover
exporter obtainsaconsular l a l a i
asa to the importer. a s
a aslaalia
wwww 3. What is meant
ww w w Charter Party? ww w w www w www w
ww ww ww ww ww
 Agcharter party is a formal agreement grg between ship owner gand the exporter.
g . O r
O r g . O r
O . O r
O r g . O rgrg
O
s as
a i i .
lala The hiring of ship for s a s
a i i
lspecific
a
.
la voyage is called voyage s as
a i i .
lalacharter. s as
a
lala i i .
s aslaalia.
. P. adaada  This hiring.P
P .
of P
daada
aentire ship for a specific . P.
time P
ada
adaperiod is called time . P
charter. adaada
P . P. adaada
P
ww ww ww ww ww
4. Write a short note on Mate’s receipt?
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaali
a i . It is the document
s a sl
issuedaalia i
by . the captain of the ship
s aslaa ia i .
acknowledging
l the receipt
s a l
of
s aa ia
goods
l i . on board.
s aslaalia.
.wP.P adaada  This contains .wP.P
daada
adetails like quantity of w .wP.P
goods
daada
ashipped, number of packages .wP.P
ada
adacondition for packing. .wP.P adaada
www ww w ww www www
ww ww ww ww ww
 Where the Mate is satisfied with packing he/she issues clean receipt.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaali
a i . If he/she is not satisfied
s a slaali
with
a i . packing, he/she issues
s aslaa li
foul
a i . receipt.
s aslaa lia i .
s aslaalia.
a
adad5.a What is Bill of.P.Lading? adadaa a
adada a
adada a
adada
ww.P.P w w P w w.P.P w w.P.P w w.P.P
ww
 It refers to a document signed by ship owner or to his agent mentioning that goods specified have
g .O O grg
rbeen .O rgrg
O .O rgrg
O .O rgrg
O .
l
asa alia i . received.
asal alia i . l
asa a lia i . l
asa a lia i . aslaalia
a s
a a sa a s
a a s
a a s
a
.P.P adad  It wouldwbe.P.delivered adad to the importer .or
P P.P dadagent at the port of destination
ahis .P.P adad if good condition.P.P adad
wwww ww w ww w w www w www w
ww ww
subject to terms and conditions mentioned ww therein. ww ww
g IV. lLONG . O rgrANSWER
O g QUESTIONS . O rgrg
O . O rgrg
O . O rgrg
O
s as aa i
la i .
s a s
a
lalai i .
s as
a
lala i i .
s as
a
lala i i .
s aslaalia.
. P. adaad1.a What are the .procedures
P P. adaada
P relating .to P. P
daada trade?
aExport . P. adaada
P . P. adaada
P
ww i). Receiving ww Trade Enquiry ww ww ww
g rgrg rgrg rgrg rgrg
a laali
a. O
i . OIn the first place importer
a laalia. O
i . O
requests the exporter to
a i
supply
laa l a. O
i . Othe information given
a la
i
right
a l a. O
i . O
below.
a laalia.
s s s s s s s s s s
.wP.P adaada  Quantity
.wP.P adaadofagoods available. .P.P adaada . P. adaada
P . P. adaada
P
www ww w wwww w
www w
www
ww ww Price per unit ww ww ww
g .O rgrg Terms and conditions
O .O rgrofg shipment and payment
O .O rgrg
O .O rgrg
O
s aslaalia i .
s a slaalia i .
s aslaa lia i .
s aslaa lia i .
s aslaalia.
a
adada  Probable a a
adaddelivery time a
adada a
adada a
adada
ww
ww ii). Receiving ww wIndent
w and Sending Confirmation wwww ww ww wwww
g
i . i.Ogrgindent actually points
OrAn
i .to
O . rgrorder
an
O g received from abroad
i .O . rgrfor
O g export of goods. i.e..O
i
sale
. rgrofg goods.
O .
a s
a
l al a
asa  The indent contains a sa
l
athe
s
al a i
adetails in the box. asaasa l a l a i
a s
a
l
asa a l a i
a s
a aslaalia
wwww  Indent w w
wiswprepared in duplicate. ww ww w w www w www w
ww ww ww ww
g PREPARED . O rgBY
O g
s aslaalia i .
s a slaal a i .
s aslaa l a i
s aslaa lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iii). Arranging ww Letter of Credit ww ww ww
g . O O grg of Credit (LC) is an
rLetter . O rgrg
undertaking
O by its issuer ithat. O rg
O rg of exchange drawni.O
bills by Ogrgforeign
rthe
s aslaalia i .
s aslaalia i .
s aslaal a i .
s aslaal a i .
s aslaalia.
.wP.P adaada dealer on the a da a will be honored upon
importer
.wP.Pad .wP.P
adapresentation by exporter’s
adaits .wP.P adaadbank
a up to a specified adaada
.P.P
www amount.www www www wwww
ww ww ww ww ww
g .O rgrg Importer Exporter
iv). Obtaining
O .O Ogrg and RBI code Number
rCode .O rgrg
O .O rgrg
O
s aslaalia

i .
Exporter has to s as
apply
laali
in
a i .
Ayaab Niryatt Form s asl
2Aaaliato
i .
the Regional s a
Authorityslaalia
of
i .
the Director s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P General w w. P. P
of Foreign Trade in the region w w. P. P w w. P. P w w. P. P
ww
ww wwww wwww where the registered office wwwwof the company is located. wwww
 Exporter
g has to mention the number g in all the shipping documents.
g
i O r
O r g
. i. Inspection Certificate i O
. i. r
O r g
i .O . rgrg
O i .O . rgrg
O .
a s
a
l
v).
asa al a
Export
a sa
l
asa al a
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  After thewgoods .P.P adahave
d
been packed asw
adaspecifications
.P.the
per P d .P.P
of importer,
adadexporter has to apply.P.P
the
adad
wwww ww w ww w www w www w
ww ww ww ww ww
to the Export Inspection Agency in this connection.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i . The agency sends an
s as
a
lalai
inspectori . to inspect the consignment
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaad2.a Distinguish between
P . P. adaada Bill of Lading.P.and
P adaadaCharter Party .P.P
P
ww ww ww ww ww
S.No Basis Bill ofgLading
g . O rgrg
O . O r rg
O . O rgrg Charter Partyi.O.O
O rgrg
s a l
01
s aa ia i .
l Transferable It can s a l
be
s aa ia i . l a ia i .
ltransferred to third partysasbyal It cannot be transferred s asl a a i
tol third party
a s aslaalia.
.wP.P adaada .wP.P
daada
aendorsement and delivery.wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww
02 Loan Loan can be raised against it Loan cannot be raised against it
g O r
O
. iCrew gr g O r gr g
O remain the agent oflalia. iMaster
. icrew O rgrg
O .O rgrg
O
s a03
slaalia . Master
s aslaali
anda .
s as a
. and crew become
s aslaali
the
a i .agent of
s aslaalia.
a
adada a
dadaowner
aship a
adada a
adada period a
adada
ww.P.P w w.P.P w w.P.P exporter for .aP.temporary
w w P w w.P.P
ww
ww www It is not a lease ofwship ww wwww wwww
04 Lease w w It is a lease of ship
g .O O grg
rare .O rgrg in Export Trade?
O .O rgrg
O .O rgrg
O .
3. What i . the documents i .used i . i .
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad i). Documents.P adad to Goods:
Related
ww wIndent
w ww ww ww
g . O rgrg Certificate of origini.O.O
O rgrg . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P
 Certificate
. P. P
adaInspection
adaof . P. adaada
P . P. adaada
P . P. adaada
P
ww wwRelated to Shipment ww w ww ww
ww
ww ww
ii). Documents ww ww w wwww wwww
g . O rgr
O g Mate’s Receipt .O.O rgrg . O rgrg
O . O rgrg
O
s aslaalia i .
 Shipping s
Bill aslaalia i
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www ww w
ww Order
Shipping w
www w
www w
www
ww w ww ww ww
g . O rgr
O g Bill of Lading .O.O rgrg . O rgrg
O . O rgrg
O
s aslaalia i .  Marine Insurance s aslaalia i
Policy s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada ada
adaInvoice a
adada a
adada a
adada
ww.P.P w.P.P
 Consumer
ww
iii). Documents Related to Payment
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i  Letter of Credit
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Commercial
.P.P adadInvoice .P.P adad .P.P adad .P.P adad
ww wBills
w of Exchange ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr96
O g
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s aslaalia. i. s as laalia. i. s as laalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww wBank
w Certificate Payment ww ww ww
g 4. Explain . O rgrgthe various functions
O . O rgrg of Export Trading
O . O rgrgHouses.
O . O rgrg
O
s aslaal i
a i .
s as laalia i .
s as laalia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  Identifying.P . adaada market for a product
potential
P . P. adaada
P . P. adaada
P . P. adaada
P
www www w w
ww their response forwexport
weliciting w
wwwproposal. w
www
ww  Finding ww buyers and their agent and ww w ww
g grg
. i. rPreparing
OO the goods for delivery
.O rgrgat destination
O .O rgrg
O .O rgrg
O
s aslaal i
a s as laalia i .
s as laalia i .
s aslaa lia i .
s aslaalia.
a
adada  Determining a
buyer’s
adada creditworthiness a
adada a
adada a
adada
ww
ww  Negotiating
ww ww the transactions ww ww ww ww ww
ww
g  rFinancing
grg the transactions and rgrpaying
g for goods and service rgrgreceived. rgrg
i . O . O i . O . O i . O . O i .O . O .
a sa
l al a i
asa  Preparing document a s
a
l al a i
asfora international trade asaasa l al a i
a sa
l
asa a l a i
a s
a aslaalia
wwww  Settling
www
claim.
w ww w w ww w w wwww
ww ww ww ww ww
g . O r
O grg . O r
O grg @*@*@*@*@*@ . O rgrg
O . O rgrg
O
s as
a i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
lala------------------------------------------------------------------------------------------------------------------------------------------------- s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww wwCHAPTER
ww – 27 ww ww wwww
ww ww ww ww ww
g rgrg FACILITATORS rgrg OF INTERNATIONAL rgrg BUSINESS rg g
a laal i
a . O
i . O
a laalia. O
i . O
a laalia. O
i . O
a laa lia.Oi.Or a laalia.
I.
s CHOOSE
s THE BEST s ANSWER:
s s s s s s s
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal i
a i .
s as laalia i .
s as laalia i .
s aslaa lia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww ww ww wwww ww ww ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a asa l al a i
a s
a asal al a i
a sa
l
asa a l a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
II. VERY SHORT ANSWER QUESTIONS:
g
O . O rgrg
O . O rgrg
O
1. aWhat
s slaa i is WTO?
s as laalia i .
s as laalia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  The World.P . adaadOrganisation
Trade
P
a
(WTO) P
was
. . P aada
adestablished on 1s t January . P. adaada
1995.
P . P. adaada
P
www w
www wwww www w w
www
ww  The GATT
ww was renamed as WTO w
wwith some changes.
ww ww
g .O O grg has 164 member countries
rWTO .O rgrg as on 29 July 2016.i.O.O
O rgrg .O rgrg
O
i i . i i . i i i . laalia.
th
s a laal a s a laal a s a laal a s a laa l a s a

a s a s a s a s a s
.P.P adad2.a What do you .mean P.Padadaby World Bank? .P.P adada .P.P adada .P.P adada
ww ww
 International Bank for Reconstruction ww and Development International ww Bank for Reconstruction ww
g .O O grgDevelopment is commonly
rand .O rgrgknown as World Bank.
O .O rgrg
O .O rgrg
O .
l
asa al i
a i . asa l alia i . asal alia i . l
a sa  It is located ataWashingtona s
a a s
a a sa a s
a
.P.P adad .P.Pad
d DC. It has its offices
.P.P adad all over the world. .P.P adad .P.P adad
wwww w w
ww Drawing Rights? ww w w ww w w wwww
ww 3. What is Special ww ww ww ww
g PREPARED . O rgBY
O g
s aslaal i
a i .
s as laal a i .
s as laal a i
s aslaa lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww w ww
w w ww
w wwww
ww  SDRw w
was created by the IMF in the ww year 1969 as supplementary ww international reserve asset.ww
g  . O rgisrgdescribed as paper gold
It
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
.wP.P adaad4.a What is SAARC? .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www w
wAsian
w Association for wRegional ww w w
wwregional inter governmental www
ww  Southww w Cooperation is wthe w ww
g .O rgrg
organization
O and geo-political
.O rgunion
O rg of nations in South .O rgrg
Asia.
O .O rgrg
O
s as laalia i .
s aslaa lia i .
s aslaalia i .
s aslaa lia i .
s aslaalia.
a
adada  The member a
countries
adada include Bhutan, India, a
Nepal,
adada Srilanka, Pakistan anda
adada Maldives. a
adada
ww.P.P w w.P.P th w w.P.P w w.P.P w w.P.P
ww
ww  It was ww ww
established on 8 December www1985.
w It was founded at Dhaka ww wwin Bangladesh. wwww
g 5. What ris grgGATT? rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l al a i
asa International businessasinvolved a
l a l a i
asa complex issues among a s
a
l al a i
asavarious countries way back a s
a
l
asina l a i
a 1950’s. a s
a aslaalia
.P.P adad adad
.P.General
P .P.P adad adad
.Pat.P .P.P adad
wwww  As a result,
ww w w
the Agreement on
ww w w
Tariffs and Trade was w
signed
ww w Geneva on 30th w
October
ww w
ww ww ww ww ww
1947 by 23 countries.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
III.
s as
a i
la
laSHORT i . ANSWER QUESTIONS: s as
a
lala i i .
s as
a
lalai i .
s as
a
lala i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww 1. What is the wprimary
w motive ofwestablishmentw of WTO? ww ww
ww
 Improving the standard of living of people in member countries
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa ia i .
l Expansion of trade insgoods aslaa ia i .
l and services s aslaalia i .
s aslaa lia i .
s aslaalia.
.wP.P adaada  Ensuring full.P adaada and large steady
P
employment
. . P adaadavolume of real income
P
growth
. . P. P
daada
aand effective demand . P. adaada
P
www wwww wwww w
www w
www
ww ww ww ww ww
2. Name the affiliate of World Bank
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as
laali i .
International
a Development
s aslaa li i .
Association
a (IDA)
s aslaalia i .
s aslaa lia i .
s aslaalia.
a
adada  International Financial a
adadacorporation (IFC) .P.P a
adada a
adada a
adada
ww.P.P w w.P.P w w w w.P.P w w.P.P
ww
ww ww ww ww ww ww
 Multinational Investment Guaranteew w
Agency(MIGA) ww ww
g 3. What .O O grg the criticisms.O
rare of rgWorld
O rg Bank? laia.O rgrg
O .O rgrg
O .
asal alia i . l
asa a lia i . asa l i . l
a sa a s
a a s
a a s
a a s
a
.P.P adad i). Most Favored .Nation P.PadadPrinciples .P.P adad .P.P adad .P.P adad
wwww w w
w w ww w w www w www w
ww  This w iswthe core of WTO rules. ww ww ww
g  . O rgrg this rule member i.countries
Under
O O rgrg are advised not toi.O
O rgrg
discriminate
O among the home . O rgenterprises,
O rg
s as laalia i .
s aslaa l a i .
s aslaal a i .
s aslaa lia i .
s aslaalia.
. P. adaada
P
multi-nationalsaand
. P. P
daadaforeign enterprises. Padaada
. . P . P. adaada
P . P. adaada
P
wwww ii). Failure w
ww Tariffs on Agriculture
wReduce
tow w ww ww wwww wwww
ww ww ww ww
g  rWTO grg failed to convince the rUSA
grg and European Unions to
rgreliminate
g high tariff on agriculturergrg .
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  It defends high tariff s aon
s a lagriculture in USA andsEU. as a l s as a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  This would w
wwwundoubtedly hurt thewfarmers w
www in developing countries. w
www w
www
ww ww w ww ww
iii). Neglect
g . O rgrg of Cultural and Social
O . O rFactors
Ogrg .O rgrg
O .O rgrg
O
s as laalia i . WTO is criticized sfor
aslaa lia i .
promoting the domination s asl
of
aalia i .
multinational companies s asl a l
which
a
ia i . are feared to s aslaalia.
a
adada a
da
adaenterprises a
dada
aworld a
adada a
adada
ww.P.P eliminate w w P.P
.local from business
w w.P.P altogether. w w.P.P w w.P.P
ww
 The growth of MNC’s is feared to ruin cultural diversity of many developing countries.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa a l a i
a s
a aslaalia
.P.P adad4. How is the value .P.P adaof
d SDR determined .P.P adacurrently?
ww ww ww ww ww
g PREPARED . O rgBY
O g
s as laalia i .
s aslaa l a i .
s aslaal a i
s aslaa lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P . . adaada
TrbTnpsc
P P . P. adaada
P
wwww ww ww ww
wamount
w ww ww ww ww
ww ww
 It is calculated as the sum of specific ww of each basket currency ww value in US dollar based ww on
g . the
O rgspot
O rg exchange rates observed . O rgrat
O g noon London time. .O.O rgrg . O rgrg
O
s aslaal i
a i .
s aslaalia i .
s aslaalia i
s aslaalia i .
s aslaalia.
.wP.P adaada  IMF allocates.PSDR . adaadtoamember countries in.P.proportion
P adaada to their quota. .P.P
P
www wwww w
www wwww wwww
ww 5. Mentionwthe w functions of SAARC. ww ww ww
g grg
. i. rMonitoring
OO and co-coordinating
.O rgrgthe development programme
O .O rgrg
O .O rgrg
O
s aslaal i
a s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Determining a
inter-sectoral
adada priorities a
adada a
adada a
adada
ww.P.P w .P.P
w w w.P.P w .P.P
w w .P.P
w
ww
ww  Mobilizingwwww cooperation within and wwwoutside
w the region. wwww ww
ww
g  rDealing
grg with modalities of.Ofinancing rgrg rgrg rgrg
i . O . O i . O i .O . O i .O . O .
aIV.
s
a
l al
asLONG
a a i
ANSWER QUESTIONS: a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.Pobjectives
wwww 1. Point out w
the
ww w of WTO www w ww w w ww w w
ww ww ww ww ww
g  Improvingrgrg the standard of living rgrofg people in member countries rgrg rgrg
a i . O
i . O
lalaMaking optimum utilization a i . O
i . O
lala of world’s resources a i . O
i . O
lalafor sustainable development a i . O
i . O
lala of member laalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww countries. ww ww wwww ww ww ww ww
ww ww ww ww ww
 Expansion of trade in goods and services
g
O . O rgrg
O . O rgrg
O
s slaa
2. aWrite i down the functions
s aslaalia i . of WTO.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It is a forum .for P. P
daada
anegotiation and . P
formalization. adaofadtrade
P
a
agreement among. P. P
daada
athe member countries. . P. adaada
P
www wwww w
www wwww wwww
ww ww ww ww ww
 It settles disputes and grievances relating to trade among the member countries.
g .O O grg
rframes .O rgcode
O rg of conduct in orderi.O grg
rreduce
O .O rgrg
O
s asla

al i
a It
i . commonly acceptable
s aslaalia i .
s aslaal a to
i . trade barriers. lalia
s as a i .
s aslaalia.
a
adada  It regulates trade a
dada participating countries.
abetween a
adada a
adada a
adada
ww.P.P w .P.P
w w w.P.P w .P.P
w w .P.P
w
ww
ww ww ww ww ww
3. Describewthe w benefits of WTOww ww ww
g i.WTO O . rgrgis promoting international
O i .O . rgpeace
O rg and creating a conducting i .O . rgrg international trade. i.O.O
O rgrg .
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It settles the trade .P.P
dad
adisputes amicably amongPthe
. .P adamember
d countries.
.P.P adad .P.P adad
wwww w w
wwthe standard of living ofwpeople w w
ww by increasing their income w w
ww level from free trades ww ww w w
ww  It promotes ww w ww
g  WTO
. O rgrghas removed quantitative
O . O O grg
rrestrictions and non-tariff O
. rgrg
barriers.
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  It stimulates economic
P . P. adaadagrowth of developing
P . P. P
daada by providing them
acountries . P. P
daadamuch needed capitalPadaada
awith . .P
wwww and giving ww wrelated
w matters. wwww ww ww ww ww
ww ww ww ww ww
g 4. Highlights rgrg the functions of
rgrgIBRD rgrg rgrg
l a i
a . O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Assisting reconstruction s as a l of war-affected countries s as a l s as a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Promoting w
wwweconomic growth andwbalanced w
www growth of international w w
wwbusiness wwww
ww ww w ww ww
 Promoting infrastructural facilities like energy and transportation, road development, etc. in
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaal i
a i . member countries. s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Encouraging a
dada
aagricultural a
dada
adevelopment ada
adacountries a
adada
ww.P.P w .P.P
w and industrial
w w.P.P w .P.P
in developing
w by providing w .P.P
w
ww
ww
adequate resources
g
i .O . Ogrg
 rProviding resources for promoting
i .O . rgrg sanitation, education,
O i .O . rghealth
O rg care and small scale i .O . rg
Oenterprises
rg .
a s
a
l
asa al a i in member countries
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad5. Write down the .P.P
dad
afunctions of IMFw.P.P adad .P.P adad .P.P adad
wwww ww w w ww w ww w w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr99
O g
s aslaal i
a i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww w ww
w ww
ww wwww
ww  It actsw aswshort term credit institution ww at the international level. ww ww
g i.O It O grg machinery for ordinary
rprovides . O rgrgadjustments of exchange
O . O rgrates.
O rg . O rgrg
O
s as laal a i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It promotes economic .wP.P adaadastability and global.Pgrowth . adaadaby encouraging countries
P . P. adaadadopt
P
a sound economic adaada
.P.P
www w
ww policies.
and financial wwww w
www wwww
ww ww ww ww ww
g
l alia.Oi . Ogrg technical assistance
 It roffers
l a lia.Oi . O grg training to help member
rand
l alia.Oi . rgrgcountries strengthen iand
O l al a.Oi . rgimplement
O rg
laalia.
a s as a effective policies. a s as a a s as a a s as a a s as
P . P. adada
P . P. adada
P . P. adada
P
wwww  It helps member w w
ww countries correct their ww w w
imbalance in balance of payment. w
ww w www w
ww ww ww ww ww
g 6. Explain rgrghow far India has rbenefited
grg from IMF?rg g rgrg
i . O . O i . O . O i .O . Or i .O . O .
a s
a
l al a i
asi).aFree Convertibility of Indian a s
a
l a l a
asaRupee: i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Indian .P.P
rupee
adahasd become independent after .P.P
dad
athe establishment of IMF. .P.P adad .P.P adad
ww w www w
ww ww
 Earlier it was linked with pound sterling.
ww ww ww
g . O rgrgIts value is now determined
O . O rginrgterms of Gold.
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P
 Hence it isafreely
. P. P
daadaconvertible.
. P. adaada
P . P. adaada
P . P. adaada
P
wwww ii). Loan For ww ww ww ww ww
ww wwww
ww wDevelopment
w Activities: ww ww ww
g . O rgrgIndia got several loan facilities
O . O rgrgfrom IMF for its several
O .
development
O rgrg
O
projects.
. O rgrg
O
s as l a ia i .
l Ability To Purchase Foreign
iii).
a s aslaa ia i .
l Currency s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Government.wP.P adaofadIndia
a
is able to purchase . adaadacurrencies from time .toP.time
.wPforeign
P adaadtoameet the ever
P . P. adaada
P
www ww w ww w w
www w
www
ww ww ww ww ww
growing requirement of development activities.
g .O rgrg Advice
O .O rgrg
O .O rgrg
O .O rgrg
O
s as la li
iv).
a a i .
Expert
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  India used
a
atodad a
get expert advice from.P IMF
a
dasolving the economic
adafor a
dada
aproblems. a
adada
ww.P.P w w.P.P w w . P w w.P.P w w.P.P
ww
ww
 It has given valuable advice to India with regard to financing its 5 year plan.
g . rgrg Assistance during
v).i.Financial
O O i .O . rgrg Calamity
Natural
O i .O . rgrg
O i .O . rgrg
O .
a s
a asa l al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
adad  India has a d a lot of financial assistance
got adafrom
d IMF to solve the .economic adad crises arising from.P.P adad
ww.P.P w w.P.Pad w w.P.P w w P.P w w
ww
ww ww calamities like, floods,ww
natural
ww ww earthquake, aggressions
famine, ww wwof Chinese and Pakistanww w w
etc.
g . O rgrgIt gets technical assistance
O . O rgrfrom
O g IMF. . O rgrg
O . O rgrg
O
s as
a i
lvi).
a i .
laMembership in World s as
a
lala
Bank
i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww of its membership in w wwIndia could become member wwin the World Bank. ww w
ww
ww  Byww wvirtue
w ww IMF
w ww ww ww w
g . O rgrgSolve its balance of payments
O . O rgrg crisis.
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P adaada .wP.P
@*@*@*@*@*@*@*@
adaada .wP.P adaada .wP.P adaada
www ww w ww w w
ww www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asa l al a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w www w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE . O rg100
O rg
s as laalia i .
s aslaa l a i .
s a slaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww
ww ww ww CHAPTER – 28 ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i . BALANCE
s aslaaOF
lia i . TRADE AND BALANCE
s aslaalia i . OF PAYMENTS
s aslaalia i .
s aslaalia.
.wP.P adaadI.aCHOOSE THE.PBEST . adaadaANSWER:
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
www w
www wwww w
www
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www ww w w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
g II. VERY rgSHORT
rg ANSWER QUESTIONS rgrg rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a 1.s
a
laa
asWhatl a i
do you mean a s
aby
l al a i
asaBalance of payments? a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww Balance of w w w
ww refers to a systematic
payment w w
wrecord
w of all economic transactions ww w w between the residents w w
wwof
ww w ww ww ww
g one country rgrg and the residents ofi.foreign rgrgcountries during a particular rgrg period of time. rgrg
a i . O
i . O
lala do you mean sby a O
i . O a i . O
i . O a i . O
i . O laalia.
2.s asWhat as la
laBalance of trade? s aslala s aslala s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww the value of importwand w ww
ww
ww  Balancewofwtrade
ww denotes the difference wwwbetween
w wwwwthe value of export during wwww a
year.g g
g . O rr
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l a ia i .
al If the export of a country s aslaalia
exceeds
i . its imports, it shows
s aslaalia i .
favorable balance of trade. s aslaalia i .
s aslaalia.
www 3. Define Balance
www of payments www ww w w
ww
ww ww ww ww ww
“ The balance of payments for given period is a systematic records of all economic transactions taken
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia
placei . during the period l a
between
s as a lia i .residents of the l
reporting
s as aalia i .
countries.”
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada Monetary Fund.P.P a
adada
ww.P.P w w.P.P w w.P.P -w w.P.P
International w w
ww
4. What is the composition of private capital?
g
i .O . rgrg
O i .O . rgrg
O i O
.loan
. rgrg
O i .O . rgrg
O .
a s
a asal al a i
Private capital consists
a s
a
of l
asa al a i
foreign investments, long
a s
a
term
l
asa al a i and foreign currency
a s
a
l
asa l i
deposits
a a
a s
a aslaalia
ww w
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE. O rg101
O rg
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s as laalia. i. s as laalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww
ww ww
ww wwww
ww 5. Mentionwthe w components of banking ww capital. ww ww
g Banking. O rgrcapital
O g includes movement . O rgrginto external financial
O . O rgasset
O rg and liabilities commercial. O rgrg and
O
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada co-operative banks.Pauthorized . adaada to dealing in foreign
P . P. P
ada
adaexchange . P. adaada
P . P. adaada
P
www wwww w
www capital. w
www w
www
ww 6. Mentionwthe w components of official ww ww ww
g It includes
.O rgrg RBI’s holdings ofi.Oforeign
O rgrg currency and special
O .O rgrdrawing
O g rights (SDR) .O rgrgby the
held
O
s as laalia i .
s as laal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada Government a
adada a
adada a
adada a
adada
ww
ww III. SHORTwANSWER ww
w QUESTIONS ww ww ww ww ww
ww
g 1. Why
i .O . rgrBalance
is
O g of payment
i .O . rgrg
O prepared?
i .O . rgrg
O .O . rgrg
O .
a sa
l al a i
asa  Balance of payment a sa
l al a i
asisathe principal tool for analyzing
a s
a
l al a i
asa the monetary position a s
aof
l ali
asainternational trade asaaslaalia
a i
wwww of aw ww w
country.w w
ww w w
ww w wwww
ww w ww ww ww
g  rBalance
grg of payments help.O inrframing
grg monetary, fiscal.and rgtrade
rg policies of country. rgrg
a i . O
i . O
lala Government keenly a
lalai i . O a i O
i . O
lalaposition of its important a i . O
i . O laalia.
s as s as observes balance of s a
payments s as la partners in
latrade s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww makingww ww decisions.
policy ww
ww ww
ww wwww
ww ww ww ww ww
 It reveals whether a country produces enough economic output to pay for its growth.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa ia i .
l  It is reported eithersfor as laa ia i .
l quarter or for a year.
every s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaad2.a What does Balance .wP.P adaadaof payment disclose? .wP.P adaada .wP.P adaada .wP.P adaada
www ww w w
ww w
ww www
ww ww ww ww ww
 A Balance of Payment surplus indicates that country’s exports are more than its imports and its
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
government and residents
s as laali
are
a i .savers.
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  They are in position a
adadtoa have enough capital adafor its domestic production.
adapay a
adada a
adada
ww.P.P w w.P.P w w.P.toP w w.P.P ww.P.P
ww
ww
 As a result it boosts the economic growth in the short term.
g i.O A O grg of Payment deficit
rBalance .O rgrg to the fact that country’s
points
O .O rgrimport
O g is more than the .O rgrg
export.
O .
asal al a i . asa l alia i . l
asa alia i . l
a sa a sa a s
a a s
a a s
a
.P.P adad  It creates economic .P.P adaddevelopment in the short .P.P
dad
aterm. .P.P adad .P.P adad
wwww w w
ww credit items shown w w
ww in currents accounts? w
ww w wwww
ww 3. What arewthe w ww ww ww
g i.O rgrg Export(visible) i.O.O
Goods
O rgrg . O rgrg
O . O rgrg
O
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Invisible Exports
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  Transport ww ww sold abroad
service
ww
ww ww
ww wwww
ww ww ww ww ww
g  Banking
. O rgrg service sold abroad
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa

ia i .
l Insurance service soldsaabroad s laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Income received w
www on loan and investment w w in foreign countries
wwmade w
www w
www
ww ww ww ww ww
 Expenses
g . O rgrg incurred by foreign
O . O
tourists
rgrg in India
O .O rgrg
O .O rgrg
O
laal
4.sasState
ia i . the components s as laalia i .
of capital account. s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P  Private w .P.P
Capital
w w w.P.P w w.P.P ww.P.P
ww
ww
 Banking Capital
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a i Official Capital
a saasa l al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w w
ww w w
ww w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s as laal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww IV. LONG ANSWER ww QUESTIONSww ww ww
g 1. Write . O rgdown
O rg the structure . O Ogrgcapital account.OO
rof rgrg . O rgrg
O
s aslaa l i
a i .
s aslaa l i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada Capital account consists .wP.P adaadofa three components .P.P adaada . P. adaada
P . P. adaada
P
www www w
www w
www wwww
ww  Private ww Capital ww ww ww
g .O rgBanking
O rg Capital .O rgrg
O .O rgrg
O .O rgrg
O
s aslaa l i
a i .
s aslaa l i
a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Official Capital adada a a
adada adadaa a
adada
ww
ww i). Privatew ww
Capital
w wwww ww ww wwww
g Private
rgrg capital consists ofiforeign rgrginvestments, long term loan
rgrgand foreign currencyi.deposits. rgrg
i . O . O . O . O i . O . O O . O .
a s
a
l a
asii).l a i
a Banking Capital asaasa l a l a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad P.Padad
.external .P.P adad .P.P adad
wwww Banking www w
capital includes movement w
into
ww w financial asset w
and
ww w
liabilities commercial and
ww w w
co-
ww ww ww ww ww
operative banks authorized to dealing in foreign exchange.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as aa i i .
laOfficial Capital saslala
liii). a i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P It includes . P. adaadholdings
P
RBI’s
a
of foreign . P. adaadaand special drawing
P
currency . P. P
daada
arights (SDR) held by the. P. adaada
P
ww ww ww ww ww
Government.
g
ila.O .Orgrg .O .Orgrg . O rgrg
O . O rgrg
O
2. aDistinguish
s slaa i balance aof
s slaa ilpayment
a i and balance
s aslaalia i .
of trade
s aslaalia i .
s aslaalia.
.wP.P adaadS.
a
No Basis .wP.P adaada Balance of Payment .wP.P adaada adaada of Trade
.wPBalance
. P .wP.P adaada
ww ww ww ww ww
01 Meaning It is a systematic record of all economic Balance of trade is statement showing
g O
. i.O r gr g .O rgrg
O .O rgrg
O O
.and rgrg
O
s aslaa l i
a transactions
s aslaa l i
a i . happened between
s aslaali
the
a i . the net effect of export
s aslaalia i . import of
s aslaalia.
a
adada a
dada of one country and
aresident a
da of a country.PP
adaresident adadaa a
adada
ww.P.P w w.P.P w w.P.P w w . w w.P.P
ww
ww ww ww ww ww ww
foreign countriesww during a particular ww ww
g
i .O . rgrg
O period. i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a s
a
l
asa a l a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
.P.P adad 02 Nature of .P.P aItdarecords
d both the transactions .P.P adad It records only
.P.P adatransactions
d .P.P adad
wwww w w
ww relating to goods and w w
wservices
w w w
wwto merchandise , i.e. goods ww w w
ww ww
Transactions ww ww
relating ww
g . O rgrg
recorded
O . O rgrg
O . O rgtransactions
O rg . O rgrg
O
s as
a
lala i i .
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada03 Capital
P . P. P
ada capital transactionsadaada
aItdarecords . P. P
It does not record
. P. adaadacapital transactions .P.P
P adaada
wwww Transactions wwww wwww wwww ww ww
ww ww ww ww ww
g 04 Net rgrposition
g It always remains rgrg balanced in the sense rgItrgmay be at favorable ior.O.unfavorablergrg
l a i
a . O
i . O l a i
a . O
i . O l a ia. O
i . O l a a i O laalia.
s as a l that a a
receipt
s s l side is made equal to spayment as a l or in equilibrium a a
state.
s s l s as
.wP.P adaada .wP.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www w
ww side w
www w
www wwww
ww ww ww ww ww
05 Indicator It is true indicator of economic It is not true indicator of economic
g O r
O gr
. Economic g .O rgrg
O .O rgrg
O O rgrg
O
.relations
s aslaa l i
a i . performance
s aslaa l i
a i .
of an economy s aslaalia i . prosperity or economic
s aslaalia i . of s aslaalia.
a
adada adada a a
adada adadaa a
adada
ww.P.P Status w w.P.P w w.P.P country.ww .P.P w w.P.P
ww
3. Highlight the features of balance of trade.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i O
.other
. rgrg
O .
a s
a
l
asa a l aIt iis a systematic record
a s
a
of
l
asa aall
l a i
economic transactions
a s
a
l
asa a
between
l a i one country and
a
certain
s
a
l
asa al a i countries
a s
a aslaalia
.P.P adad of the worldw.P.P adad .P.P adad .P.P adad .P.P adad
wwww ww w www w www w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaa l i
a i .
s aslaa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a slaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  It is prepared ww for a period of three months ww or twelve months, i.e., w w
usually 12 months ww
g  iIt . O rgrg all receipts and payments
contains
O . O rgrg both visible and invisible
O . O rgrg
O . O rgrg
O
s a slaal a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It includes all economic.wP.P adaada transactions both recorded .wP.P adaadaon current account and .wP.P
daada account
acapital .wP.P adaada
www  Economic ww
wtransactions are recorded w
w
ww to double entry principle
according
w
ww of book keeping www
ww ww w ww ww
g .O rgrg
 . Accordingly
O receipts are recorded
.O rgrgon credit side and payments
O .O rgrgare recorded on debiti.side
O O rgrg
O
s as

laalia
It
i .
indicates a country’s s aslaali
position
a i .
in foreign trade s aslaalia i .
s aslaal a i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww @*@*@*@*@*@*@*@
w ww
w ww ww ww
ww
g --------------------------------------------------------------------------------------------------------
.O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O .
l
asa alia i . l
asa alia i . l
asa alia i . l
a s
a a s
a CHAPTER a s a s a s
.P.P adad .P.P adad .P.P
a
adad – 29 .P.P adad a
.P.P adad a
wwww ww w w w w
ww OF CONTRACTS www w wwww
ww ww ELEMENTS ww ww ww
g I. CHOOSE . O rgrg THE BEST ANSWER:
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww ww w w www w www w wwww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww II. VERY SHORT ww ww ANSWER QUESTIONS: wwww wwww wwww
ww ww ww ww ww
g 1. What ris grglaw? rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Law means a ‘set ofsasrules’ a l which governs our behavior s as a l and relating in a civilized s as a lsociety. s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  So there w
wwiswno need of Law in a uncivilized w
www society. w
www w
www
ww ww ww ww ww
2. Why should one know law?g g
g . O rgrg
O .O rr
O .O rgrg
O .O rgrg
O
s asl alia i .
a Society requires peace,sa slaalia
harmony,
i .
s a
justice, social security
slaalia i .
and order which is possibles aslaalia i .
only through s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P Laws. w w.P.P w w.P.P w w.P.P ww.P.P
ww
ww
 Every law has a particular field of activity to regulate and govern.
g
ia.O rgrg
.aO i .aO . rgrg
O i .O . rgrg
O i .O . rgrg
O .
3. aCan
a s
a slaal i minor enter
a
into
s
a
l
asa al a i Contract?
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad No, a minor w .P.P
cannot adaenter
d into contract. .PP
. adad .P.P adad .P.P adad
wwww ww w www w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 4. Who canwenter w into a Contract? ww ww ww
g The
. O rgIndian
O rg Contract Act specifies . O rgrgthat every person is competent
O . O rgrg to contract provided
O . O rhegrgis of the
O
s as laalia i .
s aslaa lia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada age of majority.Paccording . adaada to the law which.he
P P. P
ada to and who is of sound
aisdasubject . P. adaadmind.
P
a
. P. adaada
P
www w
www wwww w
www wwww
ww 5. Define Contract? ww ww ww ww
g .AO rgrg
“contract”
O is an agreement .O rgrg
enforceable
O by law. The iagreements.O rgrg not enforceablei.by
O O O grgare not
rlaw
s as laalia i .
s aslaa lia i .
s as laal a i .
s aslaal a i .
s aslaalia.
a
adada contracts. .P.P a
adada adada a a
adada a
adada
ww
ww ww ww ww ww - Indian
ww wwContract Act, 1872 ww ww
g III. SHORT rgrg ANSWER QUESTIONS rgrg rgrg rgrg
i .O . O i .O . O i .O . O i .O . O .
a s
1.a
l al
asDefine
a a i
Offer a sa
l
asa a l a i
a s
a asal al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww When one w w
wperson
w signifies to anotherww w w
wwwillingness to do or to w
his w w
ww from doing anything,wwith
abstain w
ww a w
ww ww w w
g view rgrtogobtaining the assentiof that
rgrgother person either toi.such rgract
g or abstinence, he is.said rgrtogmake a
a i . O
i . O
lalaproposal. a
lala . O
i . O a
lala O
i . O a
lalai O
i . O laalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww 2. What do you wwww mean by Agreement? ww ww wwww ww ww
ww ww ww ww ww
Every promise and set of promises
g . O rgrg
O . O rgrgforming considerationi.for
O O reach
Ogrg other is an agreement. . O rgrg
O
s as laa ia i .
l In short, Agreement =sOffer aslaa ia i .
l + Acceptance. s as laal a i .
s aslaalia i .
s aslaalia.
www 3. Define a Voidable
www Contract ww w www ww w
ww ww ww ww ww
An agreement which is enforceable by law at the option of one or more parties but not at the option
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia
of i .the other or others is
s a
asl a ia
voidable
a l i . contract.
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada This is the result ada
adacoercion, a
dada
afraud a
adada a
adada
ww.P.P w w.P.P of undue influence,w w.P.P and misrepresentation. w w.P.P w w.P.P
ww
4. What do you mean by Revocation?
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al The
a i revocation mean
a
the
sa
withdraw
l
asa a l a i of an offer power
a s
a
of
asal al i
attorney
a
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad5. Who is a promisor, .P.P adad promisee? .P.P adad .P.P adad .P.P adad
ww ww ww
A promisor – Contract Law – a person who makes a promise
ww ww
g A. O rgrg – Contract Law – a iperson
promise
O . O rgrtog whom a promise is made
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaadIV.
P
a LONG ANSWERadaQUESTIONS
. P. P
ada
. P. adaada
P . P. adaada
P . P. adaada
P
ww 1. Explain w w
the essentials of a Valid ww Contract ww ww
g i). Offer
. O rgand
O rg Acceptance . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s aslaa lia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada There must be.P two
. P
ada to an agreement namely
adaparties . P. adaada one party making .the
P P. P
daadaand the other partyPadaada
aoffer . .P
www accepting it.ww
w
www wwww w
www ww ww
ww ww ww ww
g ii). Legal
.O rgrRelationship
O g .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia 
i .
The parties must s a
haveslaa li
the
a i .
intention to create s a
legals laalia i .
relationship between them.s aslaalia i .
s aslaalia.
a
adada a
adada adada a a
adada a
adada
ww.P.P  An w w.P.P
agreement of Social or domestic w w.P.P
nature is not at all a w
contract. w.P.P w w.P.P
ww
iii). Lawful g Consideration
g
i O r
O r g
.i. As per Contract Act under i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a
a sa
l
asa a l a i Sec.2 (d) Consideration
a s
a asal al a
meansi something in return.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  A contract
adad consideration becomes
.Pwithout
. P .P.P
dad
ainvalid. .P.P adad .P.P adad
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s aslaa l a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww
wbe
w ww
wform
w ww ww ww ww
ww  It may ww in cash or kind or in any ww as specified in the act. ww ww
g iv).i.Lawful
O rgrg Object (Section 23)i.O.O
O rgrg . O rgrg
O . O rgrg
O
s as laa l a i .
s as laa l a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  The object.Pof.P daada
aagreement should be lawfulaand
. P. P
daadlegal.
a
. P. adaada
P . P. adaada
P
www  It must www w
not be immoral, illegal or
w
www to public policy. ww
opposed wwww wwww
ww ww ww ww
g v). FreergConsent (Section 13 & 14)rgrg rgrg rgrg
l a lia.O i . Org l a lia.Oi . O l alia.Oi . O l alia.Oi . O laalia.
a s as a  Consent of the s a
parties
a s a must be free and genuine.
a s as a
Consent means agreeing a s a
upons asame thing in the a s as
P . P. adada
P . P. adada
P . P. adada
P
ww same w w w ww w w w w
ww
ww wwsense
w at the same time i.e.wthere wwwshould be consensus –wadw w–widem. wwww
g 2. Difference rgrg between Contract rgrg and Agreement. rgrg rgrg
i . O . O i . O . O i .O . O i .O . O .
a s
a
l a l
asa Basis
S.No a i
a sa
l a l a i
asa Contracts a sa
l
asa al a i
Agreement
a sa
l
asa al a i
a s
a aslaalia
wwww 01 Definition www w It is an agreement ww ww
enforceable by It isww w w
every promise forming
ww w w
ww ww ww ww ww
law. consideration
g . O r
O grg . O r
O grg . O rgrg
O . O rgrg
O
02
s as
a i i .
lalaEnforceability Every
s as
a ia i
lalcontract. a i i .
is enforceablesalala Every promise is not
s s as
a
lalai i .
enforceable. s aslaalia.
. P. adaad03
P
a
Inter .
relationshipP. adaadItais includes an agreement.
P . P. adaada
P It is does not. P. adaadaa contract.
P
include . P. adaada
P
ww ww ww ww ww
04 Validity Only legal agreements are called An agreement may be both legal and
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i . contracts.
s as laa lia i .
s aslaalia i .illegal.
s aslaalia i .
s aslaalia.
.wP.P adaad05
a Legal Obligation .wP.P adaadEvery
a contract contains.wP.P adaada alegal It is not necessary .wP.P adaadfor
a every agreement adaada
.P.P
www www ww w ww w ww ww
ww ww obligation. w w w w
to have legal obligation w w
g 3. Explain .O rgrgthe classification
O .O O grgContract on the.Obasis
rof rgrg of the Validity.
O .O rgrg
O
s as laa lia i .
s as laa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada i). Valid Contract.P.P a
adada a
adada a
adada a
adada
ww.P.P w w ww.P.P w w.P.P w w.P.P
ww
ww  An agreementww ww which fulfils all the ww w w
essentials prescribed by law ww wonwthe basis of its creation.www
w
g .O O grgexample S offers to sell
rFor .O rgrgcar for Rs.2,00,000 toi.O
his
O T. rTgragrees
O g to buy it. .O rgrg
O .
l a
asii). lia i . l a lia i . l al a i . l alia i . aslaalia
a s
a a Void Contract (2(j))asaasa a saasa a saasa a s
a
wwww  A contract
w w
ww which does not satisfy w ww
w of the essential elements
any ww w w
of a valid contract is said w w w
towbe
ww ww ww ww ww
g . O rVoid.
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala For example A contract s as
a ia i
lalbetween .
drug dealers s
to a a i
laland
buy
s
i .
a sell drugs is a voidscontract. as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww iii). Voidablew ww 2(i) ww ww ww
ww
ww wwContract
w ww ww ww ww wwww
 An agreement which is enforceable by law at the option of one or more parties but not at the
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa ia i .
l option of the other sorasothers laa ia i .
l is a voidable contract. s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iv). Illegal Contract .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
 It is a contract which is forbidden by law.
g .O O grg
rAll .O rgrgbut all void agreements
O .O rgcontracts
O rg .O rgrillegal.
O g
s as laa li
a i . illegal agreementsla
s as a
are
lia i .
Void
s aslaalia i .
or
s asla li
are not necessarily
a a i .
s aslaalia.
a
adada v). Unenforceable.PContract a
adada a
adada a
adada a
adada
ww.P.P w w . P ww.P.P w w.P.P w w.P.P
ww
ww  Where ww wawcontract is unenforceable ww w w
because of some technicalw
ww i.e. absence in writingwbarred
w
defect
ww
w
g .O O grgimitation etc.
rby .O rgrg
O .O rgrg
O .O rgrg
O .
asal a lia i . asal a lia i . l
asa alia i . l
a s
a  If the parties a a sa a sa a sa a s
a
.P.P adad .P.Pad
d
perform the contract it will be
.P.P adavalid,
d but the court will.Pnot
. adacompel
P d them if they do ad
.P.Pad
wwww not www w ww ww ww w w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laa lia i .
s as laa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 4. Explain w w
the classification of w w
Contract on the basis ww of the Formation. ww
g i). Express
. O rgrgContract
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  A contract .made P . adaaby
P daword spoken or written. . P. adaada
P . P. adaada
P . P. adaada
P
www  According w
wwwto Section. 9, in so forwas www
thewproposal or acceptance w w promise is made inwwords,
wofwany w
www
ww ww w ww w
g . O rthe
O grgpromise is said to be express. .O rgrg
O .O rgrg
O .O rgrg
O
s a laa
ii).
s lia i .
Implied Contract s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adada a a
adada
ww.P.P  It is one, w w.P.P
which is not expressly w
written w P.P
.but understood by the w
conductw.P.P of parties. w w.P.P
ww
ww
 Where the proposal or acceptance of any promise is made otherwise than in words, the promise
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i is said to be implied.
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad iii). Quasi Contract .P.P adad .P.P adad .P.P adad .P.P adad
ww ww ww ww ww
 It is a contract created by law. Actually, there is no contract.
g . O rItgrisg based on the principle
O . O rgrg“a person shall not be
O . O rgrg to enrich himselfi.unjustly
O O rgrg at the
O
s as
a
lala i i .
s as
a
lalai i . that
s as
a
lalai i .
allowed
s as
a
lala i .
s aslaalia.
. P. adaada
P expense of.the P . P
daada
aother”. . P. adaada
P . P. adaada
P . P. adaada
P
ww iv). Tacit Contract ww ww ww ww
g . O rAgrcontract
O g is said to be tacit . O Ogrg it has to be inferred.O
rwhen fromrgrgthe conduct of the parties.
O . O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  For example .wP.P
daada cash through automatic
aobtaining .wP.P adaada teller machine, sale .wP.P abydaadfall
a of hammer of an adaada
.P.P
www auction
w
wsale.
w www ww w wwww
ww ww ww ww ww
g 5. Explain rgrgthe classification rof
grgContract on the.Obasis rgrg of the Performance. rgrg
l a lia.Oi . O l alia.Oi . O l alia i . O l alia.Oi . O laalia.
a s ai).aExecuted Contract asa
s s a a s as a a s as a a s as
.P.P adada .inP.Padada adada
.P.fulfilled
P .P.P adada .P.P adada
wwww  A contract
ww w w which both the parties have
www w their obligationsww w under
w the contract. www w
ww ww ww ww ww
 For example X contracts to buy a car from Y by paying cash, Y instantly delivers his car.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a
ii). l i
Executory
a Contract
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  A contract .in P.P dad both the parties are P
awhich .yet
. P
dadfulfill their obligations.Padad
ato . .P .P.P adad
ww  It isw w
said to be an executory contract. ww ww ww
g iii). . O rgrg Contract
O
Unilateral . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  A unilateral.P.contract
P adaada is a one sided contract
P . P. adainadawhich only one party
P . P. adaad
has
P
a
performed his promisePad
. . P aada
wwww ww ww ww
wperform
w ww ww wwww
ww ww
or obligation, the other party hasw tow his promise or obligation.ww ww
g rgrg Contract
iv). .Bilateral
O O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa ia i .
l  A contract in which s aslaa ia i .
l the parties commit stoasperform laalia i .
s aslaa ia i .
l is called a s aslaalia.
.wP.P adaada .wP.P adaada both
.wP.P adaada their
adaada
respective
.wP.P
promises
.wP.P adaada
www bilateral w
wwcontract. www ww w www
ww ww ww ww ww
g . O rgrg
O . O rgrg @*@*@*@*@*@*@
O .O rgrg
O .O rgrg
O
s aslaa lia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada adada a a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa a l a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaa lia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww ww ww
CHAPTER – 30 ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s
PERFORMANCE
aslaalia i . OF
s aCONTRACT
slaal i
a i .
s as laalia i .
s aslaalia.
.wP.P adaadI a .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal i
a i .
s as laalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a saasal al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal i
a i .
s as laalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaal i
a i .
s as laalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P II. VERY SHORT w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww ww ww ANSWER QUESTIONS: wwww wwww ww
ww
g 1. Staterthe grg ways of Performing rgrg a Contract. i.O.O rgrg rgrg
i . O . O i . O . O i .O . O .
a s
a
l al a i
asa  Actual performance a s
a
l
asa al a i
a s
a
l
asa al a i
a saasal al a i
a s
a aslaalia
wwww  Attempted
www wperformance www w www w ww w w
ww ww ww ww ww
2. Who isg a Legal Representative?
g . O r rg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lalaIf the Promisor dies s as
a i i .
lala legal representative
the s as
a i i .
laoflathe deceased promiser s as
a i i .
lala is bound to s aslaalia.
. P. adaada perform the.contract.
P P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
3. Who is an agent?
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa
lia i .The promisor may s aslaa
employlia i . a competent person
s a l a
such
s a l i
a i .
as agent to perform s a l
the
s aalia i .
promise, if the s aslaalia.
.wP.P adaada contract is .wP.P
not
daada
aformed on personal condition..wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
4. Define Reciprocal Promise.
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaali
a i . Promises which form
s asla lia i .
consideration
a or part of
s asla l i
consideration
a a i . for each other are
s as laali
called
a i . ‘Reciprocal
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
.P.P Promise’. .P.P .P.P .P.P .P.P
wwww w w w w w w w w
ww 5. By whom w
ww w
must contracts be performed?
wwww wwww ww
ww
g
i . i.Ogrg
OrPromisor himself
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a
asa  Agent a s
a
l
asa al a i
a s
a
l
asa al a i
a saasal al a i
a s
a aslaalia
wwww w
 Representations
ww w www w www w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaalia i .
s aslaal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
g 1. What . O O grga valid tender?.OO
ris rgrg . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada A valid tender of performance
.wP.P adaada is considered to .be P. P
daadperformance
athe a of a promise.
. P. adaada
P . P. adaada
P
www w
wwtwo ways of performing w w
ww w
www w
www
ww There are mainly ww wwcontracts: ww ww
g i. Actual
.O rgrPerformance
O g .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
a
adada  When the .party adadone what he had undertaken
adahas a
adada to do, it is called .actual a
adad a
performance. a
adada
ww.P.P w w P.P w w.P.P w w P.P ww.P.P
ww
ww  In actual
ww wwperformance, the partywisw wtowfulfill all his obligationswunder ww the contract.
w ww
ww
g ii. Attempted
i .O . rgrg Performance i.O.O
O rgrg i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa  When the party offers a s
a
l al a i
asato perform his obligation, a s
a
l al a i
asitais not accepted by the promisee.
a s
a
l
asa al a i
a s
a aslaalia
.P.orP .P.P adad .P.P adad
wwww  So, it is
ww w w
also called offer to w
performance
ww w tender. www w wwww
ww ww ww ww ww
g 2. Who can r grg execute and perform r grg a Contract? .OO rgrg rgrg
a
lalai . O
i . O a
lalai . Oi . O a
lalai i . a
lalai . O
i . O laalia.
s as  Promisor s a
himself
s s as s as s as
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww  ww
Agent
ww ww ww wwww wwww
ww ww ww ww ww
 Representations
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .  Third Person
s aslaalia i .
s as laalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Promise.wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
ww ww ww ww ww
3. Who can demand performance?
g .O O grg
rPromisee .O rgrcan
O g .O rgrg
O .O rgrg
O
s aslaali
a i . – Only a promisee
s aslaalia i . demand performance
s as laalia i . and not a stranger demand
s aslaalia i .performance
s aslaalia.
a
adada of the contract.
a
adada adada a a
adada a
adada
ww
ww ww ww ww ww ww
 Legal Representative – Legalwrepresentative w can demandwException w performance. Contrary ww
g .O O grg appears from the.Ocontract.
rintention rgrg Contract is of a personal
O .O rgrgnature.
O .O rgrg
O .
l
asa alia i . l
asa alia i . asa l alia i . l
a sa a s
a a s
a a s
a a s
a
.P.P adad  Third party –aException
.P.Pad
d d
to “stranger to a acontract”
.P.Pad .P.P adad .P.P adad
wwww w w
ww on the benefits w w w
wReciprocal
w www w wwww
ww 4. Write a note ww ofw Promise. ww ww
g . rgrg which form consideration
Promises
O O . O rgrgor part of consideration
O . O rgreach
for
O g other are called ‘reciprocal
. O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada promise’. .P.P
P . P. adaada
P . P. adaada
P
ww wwMutual and Independentww w ww ww
ww
ww ww ww ww w ww ww ww
ww
g . O rgrg  Mutual and Dependent
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
 Mutual a
and
s slaalia i .
Concurrent s as laalia i .
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www 5. Who is a Joint w
www Promisor? ww wwww w
www w
www
ww ww ww ww
Where
g . O rgrgtwo or more personsi.have
O O rgrmade
O g a joint promise ,.O a release
rgrg of one of such joint
O . O
promiser
rgrg by
O
s as
i i .
laalathe promisee does not sdischarge as
i .
laala the other joint promiser s as
i i .
laal,aneither does it free thesjointas
i i .
laalapromiser. s aslaalia.
a a
adadIV. a
dada
aQUESTIONS adada a a
adada a
adada
ww.P.P LONG ANSWER w w.P.P w w.P.P w w.P.P ww.P.P
ww
ww
1. Explain rules relating to place of performance of promise
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asaal a i
It is only the promisee
a s
a
for
l
asa al a
whom i the contract is performed.
a s
a asa l al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Only the promisee .P.P adacan
d demand the performance .P.P adadof the promise under a.Pcontract. . adad
P .P.P adad
wwww ww w w ww w w www w wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaalia i .
s aslaal a i .
s as laal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wisw
ww  Of course, ww there are certain special w w
cases, where a third party can ww enforce a promise though he ww not
g . Orgrg to the contract. i.O.O
ai.party
O rgrg . O rgrg
O . O rgrg
O
s as laalia s as laal a i
s as laalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  For example .inP.respect adaada of trust, marriage settlement
P . P. adaada etc.
P . P. adaada
P . P. adaada
P
www  In casewof
w
ww of promisee, the representative
wdeath w
www appointed by him wcan
w
ww ask for the performance w w w
ofwthe
ww w ww ww ww
g .O Orgrg under a contract. i.O.O
promise rgrg .O rgrg
O .O rgrg
O
s
2. as laalia
Elucidate
i.
the provision s as laal a i
regarding time s a
ass laalia
factor
i .
in performance. s as laalia i .
s aslaalia.
a
adada adadaa a
adada adadaa a
adada
ww
ww i). Under Section wwww46, performance within wwwawreasonable time: ww ww wwww
g  According
rgrg to Section 46, a promisor rgrg is to perform his ipromise rgrg within a reasonable itime. rgrg
i . O . O i . O . O . O . O .O . O .
a sa
l al a i
asa  On the other hand,asareasonable asal al a i
time will depend a s
a
l
aupon
s
al a i
a the circumstance ofathe s
a asacase, the usage of asaaslaalia
l al a i
.P.P adad P.P
.the adad .P.P adad .P.P adad .P.P adad
wwww trade or
ww w
on w intention of the parties
ww w w
entering into the contract. ww w w ww w w
ww ww ww ww ww
ii). Under grSection 47, specified timegand place for performance:
g . O r
O g . O r rg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala According to the Section s as
a i i .
lala47, In such a case thesaspromisor a i i .
lala may perform thesa a i i .
lala at any time
promise
s s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww during w thewusual hours of business w onwsuch day and at the placewatw wwhich the promise oughtwtow wbe
ww
ww wwww wwww ww w ww w
performed.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
l
3.sasHow
aa ia i .
l do you think appropriation s as laalia i . of payments s as laa ia i .
l takes place? sasal l a ia i .
s aslaalia.
.wP.P adaada i). Appropriation.of P. P
daada
aPayments . P. adaada
P . P. adaada
P . P. adaada
P
www wwww wwww www w wwww
ww ww ww ww ww
 Sometimes, a debtor owes several distinct debts to the same creditor and he makes a payment
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i . which is insufficient tolasatisfy
s as a lia i . all the debts.
s as laalia i .
s as laalia i .
s aslaalia.
a
adada  In such a case, a
da
aadaquestion ada
adaparticular a
aisdadtoabe appropriated. .P.P a
adada
.P.P .P.P arises as to which .P.P debt the payment .P.P
ww ii). Application ww of payment where debtwto w be discharge is not indicated ww [60] ww
g
i .O . rIfgrgsection 60 is attracted,
O i .O . rgrcreditor
the
O g O
shall have thei.discretion. rgrg to apply such payment
O i .O . rgrgfor any
O .
a saasal al a i
a s
a asal al a i
a s
a asal al a i
a s
a asal al a i
a s
a aslaalia
.P.P adad lawful debt which
.P.P adad is due to him from the .P.P
dad making the payment.
aperson .P.P adad .P.P adad
wwww w w
wwof payment where neither w w
wwparty appropriates [61] ww w w ww w w
ww iii). Application ww ww ww ww
g OrThe
. O grg payment shall be applied . O rgring discharge of the debts
O . O rgrorder
in
O g of time whether they . O rgare
O rg or are
s as laalia i .
not based by the s as la
limitation
alia i .
Act 1963. s as laalia i .
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww are of equal standingwthe w winwdischarge of each of these ww
ww
ww  If the wwwdebts
w wwwwpayment shall be applied ww ww wwww
g . O rdebts
O grg proportionately. .OO rgrg . O rgrg
O . O rgrg
O
s as laalia i .
s as laalia i .
@*@*@*@*@*@*@ s as laalia i .
s as laalia i .
s aslaalia.
www w w w
-------------------------------------------------------------------------------------------------------------------------------------------------
ww ww ww ww w
ww ww ww ww ww
g . O rgrg
O . O rgrgCHAPTER – 31i.O.O
O rgrg .O rgrg
O
s as laalia i .
DISCHARGE s as laalia i .
AND BREACH s as laal
OFa i
CONTRACT s as laalia i .
s aslaalia.
a
adada adadaa a
adada adadaa a
adada
ww
w ww ww ww wwww
g 1. On the valid rgrgperformance of the contractual rgrg obligation by the iparties, rgrgthe contract. rgrg
i . O . O i . O . O . O . O i .O . O .
a sa
l al a i
asa (a) is discharged asaa(b) s l al a i
a becomes enforceable asa(c)asabecomes void l al a i
a s
a
l
as(d)al a i
a none of these a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s as laal a i .
s as laal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww
wtow wwww wwww wwww
ww 2. An Agreement ww do an Act impossible inwitself w under Section 56 is. ww ww
g (a)
. O rgrg
Void
O (b) Valid . O rgrg
O (c) Voidable
. O rgrg
O O rgrg
(d)i.Unenforceable
O
s aslaalia i .
s aslaa lia i .
s aslaalia i .
s as laal a i .
s aslaalia.
.wP.P adaad3.aAny agreement which .wP.P
daada impossible to perform
abecomes .wP.P adaadunder
a various circumstances
www (a) Voidable ww w (b) Void www (c) Valid ww www (d) None ofwthese www
ww ww ww w
g 4. Discharge
.O rgrby
O g Mutual Agreement may .O rginvolve
O rg .O rgrg
O .O rgrg
O
s aslaalia
(a)
i .
Novation s a
(b)slaa lia i
Rescission
.
s asl
(c)aalia i .
Alteration s a
(d)s laa
Alllia i
of
.
the above s aslaalia.
a
adada a
adada adadaa a
adada a
adada
ww.P.P 5. The compensation w w. P. P w w. P. P w w. P. P w w. P. P
ww
ww wwwwgiven for breach of contract ww wwis ww
ww wwww
(a) Damage
g (b) Remuneration g (c) Moneyg (d) Cheque
g
i O
. i. r
O r g
i O
. i. r
O r g
i O
. i. r
O r g
i .O . rgrg
O .
a II.
sa
l al
asVERY
a a SHORT ANSWER a s
a
l a l a
asa QUESTIONS asaasa l al a
a saasal al a i
a s
a aslaalia
.P.P adad P.Padad
.kinds .P.P adad .P.P adad .P.P adad
wwww 1. What are the
ww w w of consent? www w www w www w
ww ww ww ww ww
 Express
grg :
g . O r
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala Express consent may s as
a i i .
labelagiven at the time of formation s as
a i i .
lala of the contract to itssformation as
a
lalai i .
s aslaalia.
. P. adaada  Implied :.P.P
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
 Novation, Alteration,
g . O r
O gr g . O rgrg and etc…
O . O rgrg
O . O rgrg
O
s aslaalia i .  Recession,
s aslaa lia i .
Remission,
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaad2.a What are the .types P. adaadaof Impossibility
P . P. aof
P
daadPerformance?
a
. P. adaada
P . P. adaada
P
www wwww w
www w
www w
www
ww ww
 Impossibility existing at the time
ww of agreement.
ww ww
g .O rgrgImpossibility arisingisubsequent
O .O rgrg to the formation iof
O .O rgrg
O
contract. .O rgrg
O
s aslaalia i .
s aslaa l a i .
s aslaal a i .
s as laalia i .
s aslaalia.
a
adad3.a What is Quantum a a
adadmerit? adadaa a
adada a
adada
ww
ww  Thewclaim
ww for quantum merit w
w w
may
wwarise if a contract performed ww by one party has w
ww ww
w
become
g .O O grg
rdischarged by breach of ithe .O rgrg party.
other
O .O rgrg
O .O rgrg
O .
l
asa alia i . l
asa a l a i . l
asa alia i . asal alia i . aslaalia
a sa  The meaning a a s
a
ofdthe phrase quantum merit a a sa
isd‘as much as earned’. a sa a s
a
.P.P adad .P.Pad .P.Pad .P.P adad .P.P adad
wwww ww w w www w www w www w
g 1. What . O O grg the different modes
rare . O rgrg of dischargedi.by
O O rgimplied
O rg consent? . O rgrg
O
s as
a
lalai i .
s as
a
lala i i .
s as
a
lala i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Agreement.P
P . adaadathe parties comes to.P.anP
between
P
adaby mutually agreeing for
adaend . P. adait.ada
P . P. adaada
P
wwww  Anywcontract ww ww is created by an agreement, wwww hence in the same w wwit can be discharged by
w wwwanw
ww w ww wwway; ww
g . O ragreement.
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s aslaa ia i .
l  The consent may besaof slaa ia i .
l following types sasal
the l a ia i .
s as laalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www w
www Express consent may
(i) Express: w
wwgiven at the time of formation
wbe w
www of the contract or ww w
www
ww ww ww ww
subsequent to its formation
g . O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i . (ii) Implied: The s l a lia
contracts
as a i . are also discharged s a l
by
s aalia i
implied. consent, different s as l al
modes
a
ia i . of s aslaalia.
a
adada ada
adadischarge a
adadare a a
adada a
adada
ww.P.P w w.P.P by impliedwconsent
w.P.P mentioned below w w.P.P w w.P.P
ww
ww wwww ww ww ww
ww wwww
(a) Novation, (b) Alteration, (c) Recession, (d) Remission,
g
i .O . rgrg
O i .O . rgAccord
O rg and Satisfaction,i.O . rgrWaiver
O g
i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa a l a i
(e)
a sa
l
asa al a i (f) and (g) Merger
a saasal al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr111
O g
s aslaalia i .
s aslaa l a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
TrbTnpsc
P P . P. adaada
P
ww 2. Define discharge ww by Performance. ww ww ww
g . O Ogrg
rAccording . O rofgrthe
O g Act, all acts to do impossible
. O rgrg acts are void. i.O.O
O rgrg
s a
s laalia i . to the Section
s a
s laalia 56
i .
s a
s laalia i .
s a
s laal a i
s a
s laalia.
.wP.P adaada  There are two .wP.P
daadaof impossibility of performance
atypes .wP.P adaada such as – .wP.Padaada .wP.P adaada
www w
ww Impossibility existing w w w w www
ww ww ww atw
the time of agreement. www ww
g .O rgrg  Impossibilityi.O
O rgrg subsequent to the formation
arising
O .O Orgrg of contract. .O rgrg
O
s a
s laalia i .
s a
s laal a i .
s a
s laalia i.
s a
s laalia i.
s a
s laalia.
a
adad3.a What are reasons a a impossibility arising
adadfor a
adada after the formation a
adada of contract?.P.P a
adada
ww.P.P w w.P.P w w.P.P w w.P.P ww
ww
ww A contract wwwmay
w be discharged if its performance ww ww becomes impossible. wwww ww
ww
g
i .O . rgrgThe law does not recognize
O i.O . rgrgwhat is impossible and
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a l a i
asa  What is impossible a s
a
l al a i
asadoes not create an obligation. a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww 4. What arewthe w w
ww various rules regarding www w damages? ww www w www w
ww w ww ww
g  rDamages
grg are a monetary compensation rgrg awarded by the court rgrg to the injured partyi.O forrg the
rg loss or
a i . O
i . O
lala injury suffered by him. a
lalai . O
i . O a
lalai . O
i . O a
lala i . O laalia.
. P.Padaada . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww w ww if other party breach wthe ww
ww
ww wwww one party can claim
 As perwcontract,
ww wwdamages
wwww w contract. wwww
 The main purpose of awarding the damages is to make good the loss suffered by him.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia
 i . It is known as doctrine
s as laa
of
lia i .
restitution.
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaadIV.
a
LONG ANSWER .wP.P
ada
adaQUESTIONS .wP.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww ww ww ww ww
1. Explain the ways of discharge of Contract?
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s asil a
).
a lia i .
Discharge by Performance s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Performance.P.implies a
adadacarrying out the obligation a
adadaof the contract. .P.P a
adada a
adada
ww.P.P w w P w w.P.P w w w w.P.P
ww
 Performance must be completed according to the real intentions of the agreement.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal a 
l a i Performance of contract
a s
a asal amay
l a i be of two types namely:
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  Actual .P.P
dad
aperformance .P.P adad .P.P adad .P.P adad
ww  ww Attempted performance ww ww ww
g ii). By . O rgrg
Agreement
O on Consent: i.O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lala i i .
s as
a
lala i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  The consent.P.may
P adaadbeaof the following types
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww wwww ww
wbe
w wwww wwww
ww (i)wExpress:
w Express consent may ww given at the time of formationww of the contract to itsww
formation
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i . (ii) Implied: The
s as laali
contractsa i . are also discharged
s aby
slaalia i
implied. consent, different
s aslaa i
modes
l of
a i .
s aslaalia.
.wP.P adaada .wP.P
ada
adadischarge .wP.P
by implied consent adaadare
a
mentioned below .P.P adaada . P. adaada
P
www www www w
www w
www
ww ww ww
(a) Novation, ww
(b) Alteration, (c) Recession, (d) Remission, ww
g .O rgrg
O .O(e) rgAccord
O rg and Satisfaction,i.O rgrWaiver
O
(f) g and (g) Merger .O rgrg
O
s as laa lia i .
s as laalia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
a
adadaiii). By Impossibility ada
aofdaperformance: a
adada a
adada a
adada
ww
ww A contract wwwmay
w be discharged if its performance ww ww becomes impossible. wwwwThe rule of impossibility www
ofw
g
i . rgrg is based on the ifollowing
performance
.O O .O . rgrg maxims
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l a l a i
asa  The law doesanot s
a
l al a
asrecognize
a i
what is a
impossibles
a
l al
asaand a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  What w w
wwis impossible does not w w w
ww an obligation.
create www w www w
ww ww w ww ww
g PREPARED . O rgBY
O g
s as laa lia i .
s as laal a i .
s aslaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iv). By Lapse ww of Time ww ww ww
g . O  rgrAccording
O g to the Limitation . O rgrAct,
O g 1963 a contract must . O rbegrgperformed within a specified
O . O rgrgtime.
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada .wP.P adaada within this specified
 If it is not performed
.wP.P
ada limit.
adatime .wP.P adaada .wP.P adaada
www v). By Operation
w
ww of Law: ww w ww w ww w
ww ww ww ww ww
g .O rgrgA contract can be discharged
O .O rgrg by the operation of law.
O .O rgrg
O .O rgrg
O
s as laalia i .
 The operation s
ofasla
law
alia i
by
.
which contract can s a
beslaalia i .
discharged are as follows: s aslaalia i .
s aslaalia.
a
adada adada a adada a a
adada a
adada
ww.P.P w w.P.P  By Death ww ww. P. P w w. P. P w w. P. P
ww
ww ww ww ww wwww wwww
g  By Merger
g
i O
. i. r
O r g
i O . rgrg
O
.Insolvency i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a
asa
l
By
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad .P.P adad Rights and liabilities .P.P
dad
avesting in the same person .P.P adad .P.P adad
wwww ww w w ww ww ww w w ww w w
ww ww ww ww ww
2. Write about the various remedies for breach of contract
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as(i)a
lalai i .
Recission of Contract
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P In case . P
of
. P
daada of contract by one P
abreach . . adaadthen
party,
P
a
the other parties . P
may
. P
ada
adarescind the contract and . P. adaada
P
ww thereby the
ww party is absolved from his w
wall obligations under the contract.
ww ww
g . O rgrgfor Specific Performance
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
(ii)
laaliClaim
a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  In some specific .wP.P adaadcases
a if the damages areanot da a
.wP.Padthe adequate remedy, adaathe
.wPthen
. P dacourt can direct the.PP
. adaada
www w w ww w w w wwww
ww ww
party inw breach for the specific performance ww of the contract. www ww
g .O O grgsuch case, the promise.O
rIn isO grg out as per terms and
rcarried .O grg
rconditions
O of the contract..OO rgrg
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada (iii) Claim for Injunction adada a adada a a
adada a
adada
ww
ww  Injunction ww ww is an order passed by awcompetent ww
w court restrainingwaw wperson
w from doing some act. wwww
g  rInjunction
grg can be defined asrg arg
mode of securing the specific rgrg performance of thei.negative rgrg terms
i . O . O i . O . O i . O . O O . O .
a s
a
i
aslaala of a contract. asaaslaala i
a s
a aslaala i
a s
a aslaala i
a s
a aslaalia
wwww (iv) Claim forww w w
Quantum Merit ww ww ww w w ww w w
ww ww ww ww ww
 The claim for quantum merit may arise if a contract performed by one party has become
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala discharged by breach s as
a i
lalthe
of i .
a other party. s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  The meaning
P . P. P
ada
aofdathe phrase quantum .
meritP. P
ada
aisda‘as much as earned’. . P. adaada
P . P. adaada
P
ww ww ww ww ww
(v). Claim for damages:
g . O O grg
rDamages . O rgrg
O . O rgrg to the injured partyi.O
O rgthe
O rg loss or
s as laali
a i . are a monetary
s aslaalia i .
compensation awarded by
s aslaali
the
a i . court
s aslaal a for
i .
s aslaalia.
.wP.P adaada injury suffered
.wP.P adbyaadhim.
a
www w
wwpurpose of awarding the w ww w
wloss
w suffered by him. ww ww w
ww  Thew w
main wwdamages is to make good the ww
g 3. Discuss .O rgrgthe different types
O .O rgrof
O g damages awarded .O rgrgto the injured party.
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Damages are .aP.monetary a
adada compensation awarded adadbya a the court to the injured a
adadaparty for the loss or.P.P a
adada
ww.P.P w w P ww.P.P w w.P.P w w
ww
ww ww
injury suffered ww by him. wwww wwww wwww
g  As
i .O . rgrgcontract, one party can
per
O i .O . rgrgdamages if other party
claim
O i .O . rgrg the contract.
breach
O i .O . rgrg
O .
a s
a
l al a i
asa The main purpose ofaawarding sa
l al a i
asa the damages is to make a s
a
l al a i
asagood the loss suffered by a s
a
l
asa
him.
al a i
a s
a aslaalia
wwww  It is known ww w w
as doctrine of restitution.ww ww ww ww w w ww w w
ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr113
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
wwww ww ww ww
wAct,
w ww ww wwww
ww  The Section ww 73 of the Indian Contract ww 1872 deals with thewcompensation
w for loss or damagesww
g caused
. O rgrgby a party for breachi.ofO.contract.
O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  There are mainly .wP.P
daadtypes
afour a of damages, such aasdaada
ww w w Ordinary damages ww ww ww
g .O rgrg Special damagesi.O.O
O rgrg .O rgrg
O .O rgrg
O
s aslaalia i .
 Exemplary s aslaal
damages
a i
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P w w. P. P w w. P. P ww. P. P ww. P. P
ww
ww w w
ww Nominal damages.
ww ww wwww ww
ww
g
i . O . rgrg
O i . O . rgrg @*@*@*@*@*@*@*@
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
---------------------------------------------------------------------------------------------------------------- a sa
l
asa al a i
a s
a aslaalia
wwww ww w w ww w w ww ww wwww
ww ww w
CHAPTER-
w 32 ww ww
g . O rgrg
O . O rgrg DIRECT TAX i.O.O
O rgrg . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaadII.a VERY SHORT.P.ANSWER
P adaada
P
QUESTIONSada
. P. P ada . P. adaada
P . P. adaada
P
wwww 1. What is Income ww ww tax? ww ww ww ww wwww
ww ww ww ww ww
g . Ogrg Tax is levied on the
OrIndirect
. O O grg and services.
rgoods . O rgrg
O . O rgrg
O
s aslaa ia i .
l  It is collected fromsthe aslaalia
buyers
i .
by the sellers and s asl
paidaa ia i .
l by the sellers to the Government.
s aslaalia i .
s aslaalia.
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Since w w
is w
it w indirectly imposed on w the w
ww it is called indirectwtax.
wbuyers wwww w
www
ww ww w w ww
g 2. What ris grgmeant by previous rgryear?
g rgrg rgrg
l a ia. O
i . O l a ia. O
s as a l  The year in which a a
income
s s l is earned is called a
previous
s s a l year. s as a l s as
a
adada a
adada a
adada a
adada a
adada
ww.P.P  It is also w w.P.P
normally consisting of a w w
period.P.P of 12 months commencingww.P.onP 1 st April every year and ww.P.P
ww
ww
ending on 31st March of the following year.
g
i . i. Itgrisgalso called as financial
O r
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l
asa al a

a s
a
l
asa al a i year immediately
a s
a
l
asa a
followingl a i the assessment year.
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 3. Define the ww term person? ww ww ww
g . O rgrgan individual,
O . O rgrg
O . O rgrg
O . O rgrg
O
s as laa lia i .
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaada  a HinduPUndivided
.w.P adaada Family (HUF), .P.P adaada . P. adaada
P . P. adaada
P
www ww w w
www w
www wwww
ww  awcompany,
w ww ww ww
g .O rgrga firm,
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia i .
s as laalia i .
s aslaalia i .
s as laalia i .
s aslaalia.
a
adada  a local a
authority,
adada and a
adada a
adada a
adada
ww
ww  every
ww wwartificial juridical person ww ww wwww wwww
g 4. Define rgrthe
g term assessee? rgrg rgrg rgrg
i . O . O i .O . O i .O . O i .O . O .
a sa
l a l a i
asa Assessee means a person a s
a
l
asby al a i
a whom any tax or anyaother s
a
l al a i
asasum of money is payable a sa
l al
asunder a i
a this Act. a s
a aslaalia
.P.P adad P.Padad
.person .P.P adad .P.P adad .P.P adad
wwww It includes every
ww w w in respect of whomwww wany proceeding has been ww
taken
ww for the assessment of
ww w w
his
ww ww ww ww ww
income.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
a i i .
lala is an assessment
5.sasWhat s as
a i
lalayear?i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww The term wwhas
ww been defined under section
wwww 2(9). The year in which
wwww tax is paid is called
ww the
ww
ww ww ww ww ww
assessment year. It normally consisting of a period of 12 months commencing on 1st April every year
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
and
laa lia i .
ending on 31 st March of
s athe
s laali i .
following
a year.
s aslaalia i .
s as laalia i .
s aslaalia.
.wP.P adaadIII.
a
SHORT ANSWER .wP.P adaadQUESTIONS
a
ww ww ww ww ww
1. What is Gross Total Income?
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa li
a i . Income from all the
s as
above
laalia i . five heads of income
s asla li
shall
a a i .
be computed separately
s as laalia i .
according to the
s aslaalia.
a
adada adad a a a
adada a
adada a
adada
.P.P provisions .given
P.P in the Act. .P.P .P.P .P.P
wwww ww w w www w wwww ww w w
ww  Income ww computed under these heads ww shall be aggregated after wwadjusting past and presentwlosses w
g .O O grgthe total so arrived at.O
rand is rgrg as ‘Gross Total Income’.
known
O .O rgrg
O .O rgrg
O .
asal a lia i . asal alia i . l
asa alia i . asal alia i . aslaalia
a sa a s
a a s
a a sa a s
a
.P.P adad (i) Income
.P.P adadfrom ‘Salaries’ .P.P adad *****
.P.P adad .P.P adad
wwww w
w(ii) w
wIncome from ‘House Property’ www w wwww ww w w
ww ww ww ww***** ww
g . O rgrg (iii) Income from i‘Business
O . O rgrg or Profession’ i.O.O
O rgrg ***** . O rgrg
O
s as
a
lala i i .
s as
a
lala i .
s as
a
lala i
s as
a
lalai i .
s aslaalia.
. P. adaada
P
(iv) Income
. P. adaadafrom ‘Capital Gains’.P.P
P adaada ***** da
. P. a ada
P . P. adaada
P
wwww wIncome
w(v)w w from ‘Other Sources’ wwww w ww
*****
w ww ww
ww ww ww ww ww
g rgrg Gross Total Income rgrg(GTI) rgrg ***** rgrg
l a ia. O
i . O l a ia. Oi . O l a ia. O
i . O l a ia. O
i . O laalia.
2.
s asList
a l out the five heads s as a l of income. s as a l s as a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  Income ww w w ‘Salaries’ [Sectionsw15-
from w w
ww17]; w
www wwww
ww ww w ww ww
 Income from ‘House Property’ [Sections 22-27];
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s as laa lia
 i . Income from ‘Profits
s as l
and
aalia i .
Gains of Business or l alia
Profession’
s as a i . [Sections 28- 44];
s as laalia i .
s aslaalia.
a
adada  Income from a a
dada a a
adadand a
adada a
adada
ww.P.P w w.P.P ‘Capital Gains’ [Sections w w P.P
.45-55]; w w.P.P w w.P.P
ww
 Income from ‘Other Sources’ [Sections 56-59].
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal a l a i
a s
a asal al a i
a s
a
l
asa al a i
a sa asal al a i
a s
a aslaalia
wwww ww w w www w w
ww w ww w w
ww ww ww ww ww
g PREPARED . O rgBY
O g
s as laa lia i .
s as laal a i .
s aslaal a i
s as laalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P . adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 3. Write a note ww on Agricultural w w
Income. ww ww
g . O O grg rent or revenue derived
rAny . O rgrfrom
O g land which is situated . O rgrgin India and is usedi.for
O O rg
O rg
agriculture
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaal a i .
s aslaalia.
.wP.P adaada purposes. Pad
.w.Pad
aa
www w
wwexempted from tax u/s w w
wwand as such does not form www www
ww  It isw w
fully w
10(1) ww part of total income. ww
g 4. What .O O grg you mean by Total
rdo .O rgrgIncome?
O .O rgrg
O .O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  Out of Gross Total
a a
dadaIncome, Income tax Act ada allows certain deductions
ada1961 a a section 80.
adadunder a
adada
ww
ww  After wwww these deductions w
allowing wfigure
thew w which we arrive atwisw wcalled
w ‘Total Income’ andwonw wthis
w
g
i . O . rfigure
O grg tax liability is computed
i . O . rgrg
O
at the prescribed rates. rgrg
i .O . O i .O . rgrg
O .
a saasal al a i
Gross Total Income a s
a
l
asa al a i
a s
a
l
asa
****
al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww Less: w
Deductions
ww w (Sec.80C to 80U) www w **** www w www w
ww ww ww ww ww
g . O r
O grTotal
g Income (T.I.)
. O r
O grg ****
. O rgrg
O . O rgrg
O
a i i .
lala short notes on:
5.sasWrite s as
a i i . a i
lalaa). Direct Tax. saslalab). Indirect Tax saslalai . a i i .
s aslaalia.
. P. adaada
P . P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P
wwww a). Direct Tax:ww ww wwww wwww wwww
ww ww ww ww ww
 Income tax is direct tax.
g . O r
O grg . O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .  It is because the
s aslaali
liability
a i . to deposit and ultimate
s aslaalia i
burden . are on same person.
s aslaalia i .
s aslaalia.
.wP.P adaada  The person .wP.P ada ada
earning income is liable.P to.P
daadincome
apay a
tax out of his.own P. P
ada
adapocket. . P. adaada
P
www ww w w
ww w
www w
www
ww  It w
wcannot pass on the burden ofw
ww tax to another person.
ww ww
g .O rgrg Tax
O .O rgrg
O .O rgrg
O .O rgrg
O
s as
b).aiIndirect
la l a i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada  IndirectP a a
adaisdlevied a
dada
aservices. a
adada a
adada
ww.P.P w w. Tax
. P on the goods and
w w.P.P w w.P.P w w.P.P
ww
ww  It wwww
is collected from the buyerswby
wwthe sellers and paid by the
w ww wsellers
w to the Government.ww ww
g
i .O . rgrgSince it is indirectly iimposed
O .O . rgrg on the buyers it is called
O i .O . rgindirect
O rg tax. i .O . rgrg
O .
a saasal al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
adad  Ex: GST a -dGoods and Services Tax, Excise adad duty. adad adad
ww.P.P w w.P.Pad w w.P.P w w.P.P w w.P.P
ww
ww IV. LONG ANSWER wwww QUESTIONSww ww ww ww wwww
g 1. Elucidate. O rgrg any five features
O . O rgrof
O g Income Tax. .O.O rgrg . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i
s as
a
lalai i .
s aslaalia.
. P. adaada i. Levied as Per the
P . P. adaada
Constitution
P . P . adaada
P . P. adaada
P . P. adaada
P
wwww ww ww wentry
wofw w No. 82 of list I (Union wwwwList) of Seventh Schedule wwwtow
ww Income w tax
w is levied in India by virtue ww ww ww
g . O grg 246 of the Constitution
the rArticle
O . O rgrof
O g India. . O rgrg
O . O rgrg
O
s as la
ii.
alia i
Levied
.
by Central s as
Government
laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
P . P . adaada
P . P. adaada
P . P. adaada
P
www  Income ww w
taxwis charged by the Central w w
wwGovernment on all incomes www w than agricultural income.
other w
www
ww ww ww ww ww
 However, the power to chargeg income tax on agriculturalgincome has been vested with
g . O rgrg
O . O r rg
O . O r rg
O . O rgrgthe State
O
s as
i i .
laala Government as persentry as
i i .
laala46 of list II, i.e., State sList. as
i
laala i .
s as
i
laala i .
s aslaalia.
a
adada iii. Direct Tax .P.P adadaa a
adada a
adada a
adada
ww.P.P w w w w .P.P w w.P.P w w.P.P
ww
 Income tax is direct tax.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al 
a i It is because the liability
a s
a
l
asa al atoi deposit and ultimate
a s
a
burden
l
asa al a i are on same person.
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad  It cannot pass .P.P aondadthe burden of tax to another .P.P adaperson.
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iv. Annual w w
Tax ww ww ww
g Income
. O rgrgtax is an annual tax because
O . O rgrgit is the income of a iparticular
O . O rgrg year which is chargeable
O . O rgrgto tax.
O
s as laalia i .
s as laa lia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
.wP.P adaada v. Tax on Person .P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www  It iswaw
w
ww
wtax on income earned by awperson. wwww wwww w
www
ww w ww ww
g
l alia
 rIt
.Oi . Ogrgincludes individual,laHindu lia.Oi . rgUndivided
O rg Family, Firm, Company,
l alia.Oi . rgrg
O local authority, Association
l alia.Oi . rgrg
O of
laalia.
a s as a person or body of
a s as a
Individual or any other s as
artificial
a ajuridical persons. a s as a a s as
wwww  Thewpersons w w
ww who are covered under ww w w
Income tax Act are called ww w w
‘assessees’ . www w
ww w ww ww ww
g 2. Define
i .O . rgrTax.
O g Explain the.O
i term
. rgrg direct tax andi.O
O . rgrg
indirect
O tax with an O
i . rgrg
. iexample.
O .
a s
a
l a
asTax:
a l a i
a s
a asal a l a i
a s
a
l
asa al a i
a s
a
l
asa al a
a s
a aslaalia
wwww  Tax ww w w
is a compulsory contribution w w
wwto state revenue by the Government. ww w w www w
ww ww ww ww ww
 It is levied on the income or profits from business of individuals and institutions.
g . O r
O grg . O rgrevenue
O rg . O rgrg
O . O rgrg
O
s as
a
lalai i .  Tax is the basic
s
source
as
a
lala i i .
of to the Government.
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada Types of Taxes .P.P
P . P. adaada
P . P. adaada
P
ww ww of taxes – direct taxeswand w ww ww
ww
ww There are two ww wtypes
w wwwwindirect taxes. wwww ww ww
g a). Direct rgrgTax: rgrg rgrg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia.
s as a l  Income tax is direct s as a ltax. s as a l s as a l s as
P . P. adaada
P . P. adaada
P . P. adaada
P
www  It isww w w the liability to deposit
because wwww and ultimate burden are w w w person.
onwsame w
www
ww ww ww ww ww
 The person earning income is liable to pay income tax out of his own pocket.
g O
. i.O r grg .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia  It cannot pass on
s as l
the
aa lia i .
burden of tax to anothers a l alia
person.
s a i .
s aslaalia i .
s aslaalia.
a
adada b). Indirect Tax .P.P a
adada a
adada a
adada a
adada
ww
ww ww ww ww ww wwww ww ww
 Indirect Tax is levied on the goods and services.
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i  It is collected
a
from
s
a asal athe
l a ibuyers by the sellers
a s
a
andl
asa apaid
l a i by the sellers to the
a s
a
Government.
l
asa al a i
a s
a aslaalia
.P.P adad  Sincewit.P is.P
dad
aindirectly imposed on the .P adadit is called indirect tax.
buyers
wwww ww w ww w w ww w w www w
ww ww
 Ex: GST - Goods and Services Tax, Excise duty.
ww ww ww
g . O rgrgany ten kinds iof
O . O rgrg
O . O rgrg the head income
O . O rgrgtax.
O
3. List
s as
a
lalai i out
.
s as
a
lala i . incomes chargeable
s as
a
lalai i . under
s as
a
lalai i .
s aslaalia.
. P. adaada  Profits and.P
P . adaadofabusiness or profession.
gains
P . P. adaada
P . P. adaada
P . P. adaada
P
ww  Dividend ww ww ww ww
g . O O grg
rVoluntary contribution i.O rgrg
O . O rgrg
O . O rgrg
O
s as laalia i .
s as laa l a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Export incentives, .wP.P adaadlike
a duty drawback, cashadacompensatory
.wP.P d
aa support, saleaof
.wP.Pad
dalicenses,
a etc.,
.wP.P adaada
www w
wwsalary, bonus, commission w
worwremuneration earned bywaw w
wpartner
w of a firm from such w w
w
ww  Interest, ww ww ww firm.
g
l alia. i.Ogrg gain chargeablelalu/s
OrCapital
ia.Oi . rgrg
45.
O l alia.Oi . rgrg
O l alia.Oi . rgrg
O laalia.
a s as a  Deemed income u/s
a s as
41 a or 59. a s as a a s as a a s as
wwww  Amount w w
wwreceived under key manwinsurance w w
ww policy including bonus w w
wwthereon. www w
ww ww w ww ww
 Gift
g
i . O . rgrg as defined u/s 56 (2)(vi),
O i . O . rgand
O rg others. i .O . rgrg
O i .O . rgrg
O .
a s
a asal al a i
a s
a asal a l a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr117
O g
s as laalia i .
s as laa l a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww 4. Discuss w thew various kinds of w w
assesses. ww ww
g O
aiAssessee
. rgrg means a person byi.whom
O O rgrgany tax or any other sum
O . O rofgrg
O money is payable under . O rgrgAct.
this
O
s as la l a i .
s as laal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  It includes every .wP.P
daada in respect of whomPany
aperson .w.P adaaproceeding
da has been taken
.wP.P
adathe assessment of his adaada
adafor .P.P
www w
wassessment
w ww w www wwww
ww income w orw of fringe benefits. ww ww ww
g  The
.O Ogrg ‘person’ includes the
rterm .O rgrg
following
O .O rgrg
O .O rgrg
O
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a  a a a a
.P.P adada an
adada
individual,
.P.P .P.P adada .P.P adada .P.P adada
wwww ww w w w
w Undivided Familyw(HUF),
a Hindu ww w w www w www w
ww w ww ww
g
i .O . rgrg a company,
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a saasal al a i
 a firm, a s
a asal al a i
a sa
l
asa al a i
a sa
l
asa al a i
a s
a aslaalia
wwww ww w w w
anwAssociation Of Personsw w w
wawBody
orw www w www w
ww ww ww
g . O rgrg a local authority, and
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a i i .
lala  every artificial s as
a i
juridical
i .
lala person e.g., an idol s asor
a ia i
laldeity. .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww ww ww
-------------------------------------------------------------------------------------------------------
ww ww wwww wwww
ww ww ww ww ww
g . O rgrg
O . O rgrgCHAPTER- 33i.O.O
O rgrg . O rgrg
O
s as laalia i .
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia.
adaada adaada INDIRECTaTAXATION da a adaada adaada
w.wP.P w .wP.P w .wP.Pad w .wP.P w .wP.P
ww
w ww ww ww ww ww
g 1. Who .isOthe rgrg
O chairman of the GST council? .O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada (a) RBI Governor
adadaa (b) Finance Minister a
adada (c) Prime Minister a
adada (d) President of India a
adada
ww
ww 2. GST stands for ww ww ww ww ww ww ww ww
g (a) Goods
rgrg and Supply Tax i.O.O rgrg (b)
rgrGovernment
g Sales tax rgrg
i . O . O i . O . O alia.Oi.O .
a saas la i
ala(c) Goods and ServicessTax
a a as laala i
a saasla i
ala (d) General Sales Tax
a saasla a s
a aslaalia
.P.P adad P.P
.GST adad .P.P adad .P.P adad .P.P adad
wwww 3. What kind of tax
ww w
isw is? ww w w www w www w
ww ww ww ww ww
(a) Direct Tax (b) Indirect Tax
g . O r
O grg . O r
O grg . O rgrg
O . O rgrg
O
s as
a
lalai(c)i . Dependence on the
stype
as
a
lalai
of i .
goods and services
s as
a
lalai i .(d) All business a
lalai
organizations
s as
i .
s aslaalia.
. P. adaad4.aWhat is IGST? .P.P
P . P. adaada
P . P. adaada
P
ww ww
(a) Integrated Goods and Services Tax
ww ww
(b) Indian Goods and Services Tax
ww
g . O rgrg Goods and Services
O . O rgrg
O . O rgrAbove
O g . O rgrg
O
s as laali(c)
a i . Initial
s as laalia Tax
i .
s
(d)laAll
as a lia i the
.
s aslaalia i .
s aslaalia.
.wP.P adaad5.aIn India GST became adaada from?
.wP.effective
www w
ww2017 (b) 1st Januaryw2017 ww w w
ww (d) 1st March 2017ww www
ww ww
(a) 1st April w (c) 1st July 2017 ww
g II. VERY .O rgSHORT
O rg ANSWERi.QUESTIONS O rgrg
O .O rgrg
O .O rgrg
O
s as laalia i .
s as laal a i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adad1.a Define Indirect a
dada
atax. a
adada a
adada a
adada
ww
ww It is leviedww won
w the goods and services. ww wItwis collected from the buyers ww wwby the sellers and paidwby ww
w the
g sellers
i .O . rgrthe
to
O g Government. Since.itO.isO
i rgindirectly
rg imposed on the
i .O . rgrg it is called indirecti.tax.
buyers
O O . rgrg
O .
a sa
l a
asE.g.l a i
a GST - Goods and Services a s
a
l al a i
asa Tax, Excise duty. asaasa l al a i
a sa
l
asa al a i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rgrg PAGE
. O rgr118
O g
s as laalia i .
s as laal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia. i. s a
s laalia.
. P. adaada
P . P. adaada
Padasalai
TrbTnpsc
P P . P. adaada
P
ww 2. List out w w
any four types of indirect ww taxes levied inwIndia. w ww
g .O rgCGST
O rg . O rgrg
O . O rgrg
O . O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia i .
s a
s laalia.
.wP.P adaada  SGST
.wP.P adaada .wP.P adaada .wP.Padaada .wP.P adaada
www www www www www
ww  UGST ww ww ww ww
g .O rgIGST
O rg .O rgrg
O .O Orgrg .O Orgrg
s a
s laalia i .
s a
s laalia i .
s a
s laalia i.
s a
s laalia i.
s a
s laalia.
a3.
adada What do you mean a
adada by Goods and Servicesa
adada Taxes? a
adada a
adada
ww
ww  Goods wwwand
w Services Tax (GST)wisw wthe
w tax imposed on the supply ww (consumption) of goods
ww wand
ww w
g
i . O . rservices.
O grg
i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a sa
l al a i
asa  GST Act was passed a s
a
l al a i
asona April 12, 2017. a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad P.P
.intoadad .P.P adad .P.P adad .P.P adad
wwww  GST w
came
ww w effect from 1 st July,ww w w
2017. ww w w www w
ww ww ww ww ww
4. Write g a gnote on SGST.
g . O r
O r . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
State
i i .
lala Goods and Services Tax s as
a ia i .
la-limposed and collected by
s as
a
lthe
a
i i .
laState Governments under s as
a i
laState i .
la GST Act. s aslaalia.
. P.Padaada . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww (Tamil Nadu GST
wwww Act 2017 passed by Tamil
ww Nadu
ww Govt.) ww ww wwww
ww ww ww ww ww
5. What is CGST?
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as l alia
Central
a i . Goods and Services s as laa ia i .
l - imposed and collected
Tax s aslaa ia i .
l the Central Government
by s aslaa ia i .
lon all supply of s aslaalia.
.wP.P adaada goods within a state .wP.P
daada
a(intra-state) under CGST .w P.P
Act
daada
a2017 .wP.P adaada .wP.P adaada
ww ww ww ww ww
III. SHORT ANSWER QUESTIONS
g
ia.O .Orgrg .O rgrg
O .O rgrg
O .O rgrg
O
1. aWrite
s s laal i any two differences
s as laalia i . between direct
s asla li
taxes
a a i . and indirect
s taxes.
aslaalia i .
s aslaalia.
a
adadaS.No Basis adadaa a
adada a
dada
aIndirect a
adada
ww.P.P w w.P.P Direct Taxw w.P.P w w.P.P Tax w w.P.P
ww
1 Burden Tax burden is progressive on people. Tax burden is regressive.
g .O . rgrg
O .O . rgrg
O .O . rgrg
O .O . rgrg
O .
2 lalia i i i
a saasa iEvasion Tax evasion
a saasal al a i is possible.
a sa
l
asa al a i Tax evasion is more
a s
a
l
asa al a i
difficult
a s
a aslaalia
.P.P adad 3 Shiftability .P.P adaCannot
d be shifted to others .P.P adad Can be.P adadto others
shifted
. P .P.P adad
ww 2. What are the
ww objectives of GST?
ww ww ww
g . O rgrforemost
O g . O rgisrgto create a common market
O . O rgrwith
O g uniform tax rate in.OIndia. rgrg
O
s as
a
lalai i .
The objective
s as
of a
lalai
GST i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  To eliminate.Pthe
P . P
ada
adacascading effect of taxes,. P. adaaGST
P da allows set-off of . P. P
daadataxes for the samePadaada
aprior . .P
wwww wwww w ww
w w ww
w w ww
w
ww ww as input tax credit.
transactions w w w w w w
g i.O To rgboost
O rg Indian exports, the . O rgrgalready collected oni.the
GST
O O rginputs
O rg will be refundedi.and O rgthus
O rg there
s as laal a i .
s as laalia i .
s aslaal a i .
s aslaal a i .
s aslaalia.
.wP.P adaada will be no tax onaall
.wP.Pad
daexports.
a
www 3. Briefly explain
w
ww the functionswof w
wwGST council. ww w www
ww ww w ww ww
g A. ToOthe
. i.O rgrgSociety and country i.O.O rgrg .O rgrg
O .O rgrg
O
s as laalia
 GST has integrated s as
the
laal a i
economy of all States s
andaslaal
Union
ia i .
Territories. s aslaalia i .
s aslaalia.
a
adada adadaa a
adada a
adada a
adada
ww.P.P  Creation w w. P.P w w. P.P w w. P.P ww . P.P
ww
ww wwwwof more employment opportunities wwww which will resultwinw wpoverty
w eradication. wwww
 rItgwill
g
i . O . O rg bring more tax compliance i . O . rgrg (more tax payers) and
O i . O .
increase
rgrg revenue to the Governments.
O i .O . rgrg
O .
a sa
l al a i
asB.aTo Business Community a saasal al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad adad
.P.System
P .P.P adad .Pand
. adad
P .P.P adad
wwww  SimplerwwTax
w w with fewer exemptions.
ww w w 17 taxes were abolished
ww w w one tax exists today.
wwww
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s as laal a i .
s aslaal a i
s asla
a lia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P . adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww  Input ww
tax credit will reduce cascading ww effect of taxes. ww ww
g . O Ogrg prices throughout.Othe
rUniform rgrcountry.
O g Expansion ofi.business O rgrg to all states is madei.easy.
O O rgrg
O
s as laalia i .
s aslaalia i .
s aslaal a i .
s aslaal a i .
s aslaalia.
.wP.P adaada C. To Consumers.P.P adaada . P. adaada
P . P. adaada
P . P. adaada
P
www  Input w w w allowed will lower
wcredit
tax
w
wwprices to the consumers.
wthe w
www w
www
ww ww ww ww ww
g
l alia.Oi . Ogrgsmall retailers willlaget
 rAll
lia.Oi . rgrg
exemption
O and purchases from
l alia.Oi . rgthem
O rg will cost less for the
l alia.Oi . rgrg
consumers.
O laalia.
a4.s as a
Explain IGST with a s
anas aexample. a s as a a s as a a s as
wwww www
IGST –wInter-State w Goods and Services w w
wwTax is imposed and collected w w
ww by the Central Government wwww
ww w ww ww ww
g andrthe grgrevenue is shared with.OStates rgrg under IGST Act 2017. rgrg rgrg
i . O . O i . O i .O . O i .O . O .
a
l al
5.saasWrite
a a i
any three demerits a s
a
l al a i
asa of UGST. asaasa l al a i
a s
a
l
asa al a i
a s
a aslaalia
.P.P adad . P.P adad . P.Padad . P.Padad . P.Padad
wwww  Several w w w
Economists
ww says that GST inwIndia w w
ww would impact negatively w
won w
w the real estate market.ww wwww
ww w w ww
g  It would rgrg add up to 8 percentito the
rgrcost
g of new homes and.O reduce
rgrg demand by about 12i.percent. rgrg
a i . O
i . O
lalaAnother criticism is that a . O
i . O
lala SGST are nothingsabut a i i . O
a names for CentralsExcise/Service
lalnew a
lala O
i . O laalia.
s as s asCGST, s as Tax, s as
. P. adaada
P . P . adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
wwww VAT and w ww
CST.
w wwww wwww wwww
ww ww ww ww ww
 Hence,
g . O rgrgthere is no major reduction
O . O rgrg
O
in the number of tax layers.g
. O r rg
O . O rgrg
O
s aslaa ia i .
l A number of retail products s aslaa ia i .
lcurrently have only foursaspercent laa ia i .
l tax on them. s aslaalia i .
s aslaalia.
www  After GST, www
garments and clothes could w
become
ww more expensive. www www
ww ww ww ww ww
IV. LONGgANSWER QUESTIONS
g .O r rg
O .O rgrg
O .O rgrg
O .O rgrg
O
laalia i
1.sasDistinguish
. between s aslaalia
direct i . taxes and indirect s aslaalia i . taxes. s aslaalia i .
s aslaalia.
a
adada a
adada adadaa a
adada a
adada
ww.P.P S.No Basis w w.P.P Direct Tax w w.P.P w w P.P
.Indirect Tax ww.P.P
ww
1 Burden Tax burden is progressive on people. Tax burden is regressive.
g O r
Og r g O r
O gr g O rgrg
O .O rgrg
O
2sala alia.Evasion
i. Tax evasion
s l
asa alia. i.possible.
is s l
asa alia. i. Tax evasion is mores l alia
difficult
asa i .
s aslaalia
.
a a s a a a a a a a a
.P.P adad3 Inflation ww . adadtax helps in reducing.Pthe
.PDirect
P . adainflation.
P d
Indirect tax.P . adad to inflation .P.P
P
contributes
adad
wwww ww www w www w wwww
ww ww ww ww ww
4 Shiftability Cannot be shifted to others Can be shifted to others
g .O .Orgrg . O rgrg
O . O rgrg
O . O rgrg
O
5 alalia
s s a i
Examples Income Tax,
s as
a
lalai i .
Wealth Tax, Capital
s
Gains
as
a
lalai i . GST. Excise Duty
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P . adaadaSecurities Transaction
Tax,
P . P. adaada Tax,
P . P. adaada
P . P. adaada
P
ww ww Perquisites Tax. ww ww ww
g 2. Discuss . O rgrgthe different kinds
O . O rgrof
O g GST. . O rgrg
O . O rgrg
O
s as laalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada GST is of three kinds: .wP.P
daada SGST/UGST, andPIGST.
aCGST, .w.P adaada .wP.P adaada .wP.P adaada
www www www www www
ww i). CGST ww ww ww ww
g .O rgrgCentral Goods and Services
O .O rgrgTax - imposed and icollected
O .O rgrg by the Central Government
O .O rgrg on all
O
s as laalia i .
s aslaalia i .
s aslaal a i .
s aslaalia i .
s aslaalia.
a
adada supply of goods within a a (intra-state) under CGST
adaadstate a
adadaAct 2017 a
adada a
adada
ww
ww ii). SGST ww ww ww ww wwww wwww
g
i . O . rgrgState Goods and Services
O i . O . rgTax
O rg - imposed and collected i . O . rgrby
O g the State Governments
i . O . runder
Ogrg State .
a saasGST i
laalaAct. (Tamil Nadu GST
a s
a
i
laala2017 passed by TamilsNadu
asAct a a
i
aslaalaGovt.) a s
a aslaala i
a s
a aslaalia
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s as laalia i .
s aslaal a i .
s a slaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P . adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww iii). UGST ww ww ww ww
g . O rgrgUnion Territory Goods
O . O rgrgServices Tax - imposed
and
O . O rgrgcollected by the five Union
and
O . O rgrTerritory
O g
s as laalia i .
Administrations in India a
under
s slaalia
UGST
i .
Act 2017. s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada iv). IGST .wP.P adaada .wP.P adaada .wP.P adaada .wP.P adaada
www ww w w w w
ww ww
Inter-State
www
Goods and ServiceswTax - imposed and collected
ww ww
by the Central Government
wwww
and
g the revenue r g g shared with States under r g g
IGST Act 2017. r g g r g g
a laalia.Oi.Or a laalia.Oi.Or a laalia.O i.Or a laalia.Oi.Or a laalia.
a s sv). IGST on exports a s s a s s a s s a s s
.P.P adada .P.P adada adada
.Psupply
. P .P.P adada .P.P adada
wwww Allwwexports
w w are treated as Inter-State
www w under GST. Since
www exports
w are zero rated, GST
wwwis
w
ww not imposed on
ww all goods and services exported
ww from India.
ww ww
g 3. Elucidate
i .O . rgrg the merits ofi.GST.
O O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l al a i
asA.a To the Society and country a s
a
l
asa al a i
a sa
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
wwww  GSTwhas w w
wwintegrated the economywofw w
wall w
w States and Union Territories. www w www w
ww w ww ww
 It will boost manufacturing, export, GDP leading to economic growth through increase in
g . O O grg
reconomic activity. . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada  Creation of.Pmore
P . adaademployment
P
a
. P. a aada will result in poverty
opportunitiesdwhich
P . P. P
ada
adaeradication. . P. adaada
P
wwww  It is ww ww
transparent and will improve wwww
India’s ranking in the ‘Ease of ww
Doing
ww Business’ in the world.
wwww
ww ww ww
 Uniform rates of tax will reduce tax evasion and rate arbitrage between States.
ww ww
g B. To . O rgrg Community i.O.O
Business
O rgrg . O rgrg
O . O rgrg
O
s as laalia i .
s aslaal a i
s aslaalia i .
s aslaalia i .
s aslaalia.
.wP.P adaada  Simpler Tax .wP.P adaada with fewer exemptions.
System
.wP.P
adataxes were abolished and
ada17 .wP.P
ada tax exists today. adaada
adaone .P.P
www  Input tax
ww w credit will reduce cascadingwwweffect of taxes. www wwww
ww w w w w
 Common procedures, common classification of goods and services and timelines will lend
w w w w
g .O O grg certainty to taxation
rgreater .O rgrg
system.
O .O rgrg
O .O rgrg
O
s as laalia

i .
Uniform prices s asla
throughout
alia i .
the country. Expansion s aslaal
of
ia i .
business to all states iss a l
made
s aalia i .
easy. s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww.P.P C. To Consumers w w.P.P w w.P.P w w.P.P w w.P.P
ww
 Input tax credit allowed will lower the prices to the consumers.
g .O O grgsmall retailers will get
rAll .O rgrg
exemption
O and purchases ifrom .O rgthem
O rg will cost less for the .O rgrg
consumers.
O .
l alia
asCompare i . l alia i
asaand IGST.. l
asa al a i . l
a4.s
a a CGST, SGST
a s
a a sa a s
a a s
a
wwww S.No Basis ww ww w w CGST www w SGST www w IGST www w
ww ww ww ww
g 1 rgrg
Meaning CGST meansrgrgCentral SGST means State rgrg goods IGST refers to
rgrgit is a
a
lalai . O
i . O a i . O
i . O
lalaservice tax to and service a i . Oi . O
lala tax, replace combined a i . O
i . O
a of CGST
lalform laalia.
s as goodssa and
s s as s as s as
. P. adaada
P . P. adaada the existing tax.P.the
replace
P adaaexisting
P da tax like sales.P.and adaadIGST
P
a and it is levied adaada
.P.P
ww ww like service tax, excise, ww tax, luxury tax, entrywtax, w ww
ww
ww ww ww ww ww wwww by central government. wwww
etc. etc.
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
2 ala
s s
alia i .
Collection of Central
s aslaalia i
government . State
s aslaali
government
a i . Central
s aslaalia i
government .
s aslaalia.
.wP.P adaada tax . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
www 3 Applicability w
www Intra-state supply ww w
www Intra-state supply ww w
www Inter-state supply ww w
www
ww ww
No registration till
g 4
.
Registration
O rgrg
O . O rgrgthe
O
No registrationg till the Registration is mandatory
.O r rg
O .O rgrg
O
s as laalia i . turnover
s asla li
crosses
a a i . 20 lakhs turnover
s asla li
crosses
a a i . 20 Lakhs
s aslaalia i .
s aslaalia.
a
adad5 a Composition .P.The a a
adaddealer a a
adaddealer a a
adadcomposition scheme Pad a a
ww.P.P w w P can use the PThe
w w. .P can use the PThe
w w. .P w w. .Pad
ww
ww ww ww benefit up to 75wlakhs ww benefit up to 75wlakhs
w www is not applicable wwwwin
under the composition under the composition interstate supply
g O
. i. r
O g r g scheme laia .O rgrg
O scheme laia .O rgrg
O .O rgrg
O .
asal alia asa l i . asa l i . l
a s
a a s
a @*@*@*@*@ a sa a s
a a s
a
wwww w w
ww “Failure is the opportunity w w
ww to begin again morewintelligently” www w www w
ww ww ww w ww
g PREPARED . O rgBY
O g
s as laalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww
. P. adaada
P . P. adaada
Padasalai
P . P. adaada
P
TrbTnpsc
. P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
ww w
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s as
a
lalai i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P . P. adaada
P
ww
ww ww ww ww ww
g . O rgrg
O . O rgrg
O . O rgrg
O . O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
www www www www w
ww
ww ww ww ww ww
g .O rgrg
O .O rgrg
O .O rgrg
O .O rgrg
O
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia i .
s aslaalia.
a
adada a
adada a
adada a
adada a
adada
ww
ww wwww wwww ww
ww wwww
g
i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O i .O . rgrg
O .
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a
l
asa al a i
a s
a aslaalia
www
ww ww ww ww ww
g PREPARED . O rgBY
O rg
s aslaalia i .
s aslaal a i .
s aslaal a i
s aslaalia i .
s aslaalia.
. P. adaada
P . P. adaada
P . P. adaada
P
ww ww ww ww ww

11th Commerce Full Study Material English Medium

Uploaded by

Copyright:

Available Formats

You might also like

11th Commerce Full Study Material English Medium

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

11th Commerce Full Study Material English Medium

Uploaded by

Copyright:

Available Formats

s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia. i. s aslaalia.

s a laal a s a laal a s a laal a s a laa l a s a

You might also like