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Balbharti Maharashtra State Board Organisation of Commerce and Management 11th Textbook Solutions Chapter 7 Business Environment Textbook Exercise Questions and Answers.

Maharashtra State Board 11th Organisation of Commerce and Management Solutions Chapter 7 Business Environment

1. (A) Select the correct option and rewrite the sentence

Question 1.
The business environment has a tremendous impact on ………………..
(a) business
(b) government
(c) society
Answer:
(a) business

Question 2.
The new Industrial policy was formulated in ………………..
(a) 1947
(b) 1951
(c) 1991
Answer:
(c) 1991

Question 3.
Changes in ruling government is an aspect of ……………….. environment.
(a) political
(b) technological
(c) economic
Answer:
(a) political

Question 4.
Literacy level is an aspect of ……………….. environment.
(a) social
(b) legal
(c) political
Answer:
(a) social

Question 5.
Privatization implies reduction in the role of ……………….. sector.
(a) public
(b) private
(c) foreign
Answer:
(a) public

Question 6.
Globalization is concerned with ……………….. market.
(a) global
(b) local
(c) rural
Answer:
(a) global

Question 7.
……………….. means linking national economy to the world economy.
(a) Globalization
(b) Privatization
(c) Liberalization
Answer:
(a) Globalization

Question 8.
Environment awareness provides ……………….. signal.
(a) warning
(b) alarming
(c) soft
Answer:
(a) warning

1. (B) Match the pairs

Question 1.

Part A	Part B
(a) Globalization	(1) Profit motive
(b) Privatization	(2) 2006
(c) Liberalization	(3) Borderless economy
(d) New economic policy	(4) Service Motive
(e) Social Environment	(5) Internal factor
	(6) Disinvestment
	(7) Social Values
	(8) 1991
	(9) Abolishing license policy
	(10) GATT

Answer:

Part A	Part B
(a) Globalization	(3) Borderless economy
(b) Privatization	(6) Disinvestment
(c) Liberalization	(9) Abolishing license policy
(d) New economic policy	(8) 1991
(e) Social Environment	(7) Social Values

Question 2.

Part A	Part B
(a) Internal environment	(1) Knowledge of law
(b) Political environment	(2) Taxation policy
(c) Legal environment	(3) Technology
(d) Economic environment	(4) Traditions
	(5) WTO
	(6) Controlled by business
	(7) High cost
	(8) Ideology of political party

Answer:

Part A	Part B
(a) Internal environment	(7) High cost
(b) Political environment	(8) Ideology of political party
(c) Legal environment	(2) Taxation policy
(d) Economic environment	(3) Technology

1. (C) Write a word or a term or a phrase which can substitute each of the following statements

Question 1.
Uncontrollable factors of the business environment.
Answer:
External business environment

Question 2.
The environmental of business that includes customs and traditions, values, social trends.
Answer:
Social environment

Question 3.
The process of transferring ownership of business enterprise, agency or public service from the public service to private sector.
Answer:
Privatization

Question 4.
A boundary less worlds where there would be flow of goods, services, information, capital and people across nation.
Answer:
Globalization.

1. (D) State whether the following statements are True or False

Question 1.
External factors of business environment are controllable factors.
Answer:
False

Question 2.
Business is the product of different environmental factors.
Answer:
True

Question 3.
Business and environment are inseparable parts.
Answer:
True

Question 4.
There is no benefit of globalization on Indian economy.
Answer:
False

Question 5.
New economic policy promoted the liberal economic policy.
Answer:
True

Question 6.
There is no benefit of privatization to Indian economy.
Answer:
False

Question 7.
There is no need of consideration of the business environment factors in business.
Answer:
False

1. (E) Complete the sentence

Question 1.
The term of business environment generally refers to …………………
Answer:
External Environment

Question 2.
……………….. helps the business enterprise for overcoming challenge successfully.
Answer:
Business Environment

Question 3.
Geographical and Ecological factors are included in ………………… Environment.
Answer:
Natural

Question 4.
Literacy is the important part of ………………… Environment.
Answer:
Social

Question 5.
Stability and peace in the country includes in ………………… Environment.
Answer:
Political

Question 6.
Indian political system comprises ………………… vital institutions.
Answer:
three

Question 7.
Limited involvement of government in public sector refer to …………………
Answer:
Privatization

Question 8.
Integration of economy and society through cross country is called as …………………
Answer:
Globalization

1. (F) Select the correct option

Question 1.
In how many type environmental factors can be classified?
(Two / Three / Four)
Answer:
Two

Question 2.
Which factors of Business Environment regard as controllable?
(Internal / External)
Answer:
Internal

Question 3.
Who frames the economic policy of the business?
(Government / Business / Citizen)
Answer:
Government

Question 4.
Which economic system in known as free market economy?
(Socialist / Mixed / Capitalist)
Answer:
Capitalist

1. (G) Correct the underline word and rewrite the following sentence

Question 1.
External factors of business environment are controllable.
Answer:
Internal factors of business environment are controllable.

Question 2.
Internal factors of business are beyond control.
Answer:
External factors of business are beyond control.

Question 3.
Natural resources are related to political environment.
Answer:
Natural resources are related to natural environment.

Question 4.
Privatization helps for global village.
Answer:
Globalization helps for global village.

1. (H) Answer in one sentences

Question 1.
Which factors are included in internal environment?
Answer:
Value system, vision, mission and objective management structure, Internal power relationship, Human resources, Physical facilities, Marketing resources, etc. are the factors included in internal environment.

Question 2.
What are the powers of legislature?
Answer:
Policy making, law making, budget approving, executing control, etc. are the powers of legislature.

Question 3.
Which factor influence the economic condition of the Nation?
Answer:
Economic condition of the nation is based on the gross domestic product, per capital income, availability of capital, growth of foreign trade and strength of capital market.

Question 4.
Who possess the factors of production in socialist economy?
Answer:
In socialist economy Government possess the factors of production.

Question 5.
In which environment are the methods and techniques of production included?
Answer:
Technological environment consist of the method and technical of production.

Question 6.
When did Indian government launch New Economic Policy?
Answer:
Indian government launched New Economic Policy on 24th July, 1991.

Question 7.
What is useful to reduced political interference in industry?
Answer:
Privatisation is useful to reduce political interference in Industry.

Question 8.
How is the boundary less world possible?
Answer:
Boundary less world is possible through Globalisation.

2. Explain the following terms /concept.

Question 1.
Business environment.
Answer:
Business environment refers to the external environment which includes factor outside the business leading to opportunities or threats of the business.

According to Bayard O. Wheeler
“The total of all things external to firm and industries which affect their organization and operations is called as “Business Environment”.

Question 2.
Liberalization.
Answer:

1. Liberalization refers to the process of eliminating unnecessary controls and restrictions for smooth functioning of business.
2. Liberalization helps in achieving a high growth rate, easy availability of goods at competitive rates, high foreign exchange reserve, strong rupee and good industrial relation, etc.

Question 3.
Privatization.
Answer:

1. Privatization refers to reduce the involvement of state or public sectors by involving of private sector in economic activities.
2. It implies government Sectors to be sold or given to private individuals to run them.

Question 4.
Globalisation.
Answer:

1. Globalisation means integration of national economy and societies through cross country flows of information, ideas, technologies, good services, capital, finance and people.
2. It also means “boundary less world”.

Question 5.
Social environment.
Answer:

1. Modern business is a social system in itself and forms a part of the larger social system represented by society in general.
2. The class structure of the society affects the business. Such as occupation of the people, their education, income level, social status, attitude towards living, work and social relationship.

Question 6.
Economic environment.
Answer:
Economic environment comprises of economic condition, economic policies and economic system, basic economic philosophy, infrastructure, national income, money supply, saving stages in economic development and trade cycles.

Question 7.
Political environment.
Answer:

1. Government and its policies affects business firms.
2. It includes stability and peace in the country, specific attitudes of elected representative. Ideology of the political parties influences the business organization and attitudes of government officials towards business has an impact on business.
3. It comprises three vital institutions like Legislature, Government and Judiciary.

Question 8.
Internal environment.
Answer:
Internal environment compromises of policies decided by by shareholders, managers, labour unions and employees which can be controlled which helps to make specific, proper understanding in strengthening the business.

3. Study the following case/situation and express your opinion.

(1) The court passes an order to ban polythene bags as the bags are creating many environmental problems which affects the life of people in general.
(2) Society in general is more concerned about quality of life. The government decided to give subsidy to jute industry to promote this business.

Question 1.
Identify the different dimensions of business environment.
Answer:
The different dimensions of business environment are:

1. Legal environment
2. Natural environment
3. Social environment
4. Political environment
5. Economic environment

Question 2.
Comment on it.
Answer:
The different dimensions of business environment are

1. Legal Environment : Court passes order to ban polythene bags.
2. Natural Environment : The Court order will solve environmental problems which affects the life of people in general.
3. Social Environment : Society is concerned about quality of life and better standard of living
4. Political Environment : Government framed a policy to give subsidy to jute industry.
5. Economic Environment : Subsidy to Jute industry will promote business of Jute industry and this will help in economic development.

2. Anchor company manufacturing light tubes increased expenditure on Scientific Research and Development and discovered a technology that made it possible to produce an energy efficient light tubes that lasts at least twenty times as long as standard tubes. It resulted in growth and profitability of the company.

Question 1.
Identify the dimension of business environment.
Answer:
Technological Environment:
Scientific research for innovation in product increased its production and it resulted in growth and profitability of the company. Internal environment of company led to growth and profitability.

Question 2.
State importance of business environment.
Answer:
Business environment helps in determining opportunities and threats, identify firms strengths and weaknesses, continuous learning, image building meeting competition and give direction for growth.

3. Make in India is an initiative launched by the government of India. It focuses on job creation and skill development and it is in twenty five sectors of the economy. Under the initiative, brochures on these sectors and web portal were released. The initiative aims at high quality standards and minimizing the impact on environment .It also seeks to attract foreign capital investment in India.

Question 1.
Identify the dimension of business environment.
Answer:
The various dimensions of business environment referred in the above case are:

1. Political environment
2. Technological environment
3. Economic-environment

Question 2.
Comment on it.
Answer:
Make in India is the policy of government as per its ideology. As it focusing on job creation and skill development in 25 sectors of economy, it convey two values through this initiative. High quality standards and concern for environment. It also aims to attract foreign capital investment in India.

4. Distinguish between the following

Question 1.
Social Environment and Economic Environment.
Answer:

	Social Environment	Economic Environment
(1) Meaning	Social environment includes customs, traditions, values, buying habits, tastes, etc.	Economic environment comprises of economic condition, economic policies and and economic system.
(2) Factors	It includes factors such as social aspects, social trends, social values and traditions.	It includes factors like economic condition, economic policies and economic system.
(3) Supplement to	It is supplemented by cultural environment like cultural factors, values, beliefs, etc.	It is supplemented by political environment as it is influenced by political decisions or events taken by Government.
(4) Impact on business	It helps to analyze the changing social trends, taste of different social groups which helps businessmen to know the opportunities and threats.	Changes in economic policies like agricultural policy, monetary policy, etc. lead to changes in economic system and planning which helps businessmen to make changes on timely basis.
(5) Purpose	It helps to know the-needs of customer and satisfy the demand. E.g. Today health and fitness trend has created demand for products like gym, organic foods etc.	It helps in forecasting market situations and thereby making suitable business plans E.g. Stock market fluctuations affects management practices in a business Enterprise.
(6) Nature	It is dynamic in nature. Changes in trends, values, growing awareness among different social groups affects the social environment.	It is multi dimensional in character. Agriculture, infrastructure, national, per capita income, price level etc. affects the economic environment of in a country.

Question 2.
Political Environment and Legal Environment.
Answer:

	Political Environment	Legal Environment
(1) Meaning	In a country, the political system, constitutional provision, party system, events taking place time to time determines the political environment.	In a country, business can be started, regulated, controlled, expanded within legal framework of a country determines legal environment.
(2) Factors	Political stability, peace in the country, specific attitudes of elected representative, etc are the factors which affects political environment.	Various laws are implemented from time to time with amendments in order to control and direct the business.
(3) Inter relation between environment	Political environment and economic environment are closely connected with each other.	Legal environment and regulatory environment goes together hand-in-hand in modern business environment.
(4) Impact on business	Ideology of the political parties influences the business organization.	Provides control, direction, expansion to the business organization.
(5) Purpose	Political stability creates strength, confidence to various interest groups and investors in long term projects.	Separate laws implemented time to time to safeguard and protect the interest of various groups such as busines’s organization, workers, consumers, etc.
(6) Effect of changes in environment	Political instability effects the business organisation adversely. Business policies are amended due to political issues, events etc. prevailing in country.	Excessive controls, implementation of laws, rules and regulations may create problem in overall development of business organizations.

Question 3.
Liberalization and Privatisation.
Answer:

	Liberalisation	Privatisation
(1) Meaning	It refers to the process of eliminating unnecessary controls and restrictions for smooth functioning of business.	It refers to reduce the involvement of state or public sectors by involving of private sector in economic activities.
(2) Aim	It aims to bring flexibility in business operations by creating environment for growth and expansion.	It aims at promoting efficiency, increase productivity, profitability.
(3) Need	To reduce taxation, controls on foreign exchange, attracting foreign investment, etc. thereby to compete with other companies at international level.	To achieve quick and logical business decisions aimed at commercial success of organisation.
(4) Measures adopted	Reduction in tariffs, reformation of financial system, abolishing industrial licensing system, etc.	Reduction in number of industries reserved for public sector, disinvestment of shares, improvement in performance through MOU.
(5) Benefits to Host Company	It results in, high growth rate, easy availability of goods at competitive rates, good industrial relation, etc.	It results in profitability, production of superior quality products and services, self motivation, etc.
(6) Benefits to Consumers / Traders	Optimum use of resources available at global level, easy availability of goods at competitive rates.	Entry of private sector results to competition thereby providing high quality goods and services at lower prices.
(7) Positive Effect	Removing restriction on taxations, abolishing industrial licensing system leads to expansion and growth of new business opportunities.	Improved performance, high quality goods and services in market. Timely prompt decision with more efficiency.
(8) Adverse Effect	It leads to social problems like urbanization and industrialisation, closure of domestic firms due to liberalised imported products, etc.	Growth of monopoly, inequality of income, lack of social responsibility, etc will hamper the social order of the economy.
(9) Inter Relationship	Liberalisation leads to privatisation and globalization.	Privatisation is a part of the process of globalization.

Question 4.
Globalization and Liberalization.
Answer:

	Globalization	Liberalization
(1) Meaning	It refers to integration of national economy and societies through cross country flows of information, ideas technologies, goods, services capital, finance and people.	It refers to the process of eliminating unnecessary controls and restrictions for smooth functioning of business.
(2) Aim	It aims at promoting world trade and economic growth by integrating technologies, goods, services, people, etc.	It aims to bring flexibility in business operations by creating environment for growth and expansion.
(3) Need	To overcome the problem of declining domestic demand and to ensure free trade.	To reduce taxation, controls on foreign exchange, attracting foreign investment, etc. thereby to compete with other companies at international level.
(4) Measures adopted	Allowing Foreign Direct investment, approving foreign technology, amendment of patent laws, etc.	Reduction in tariffs, reformation of financial system, abolishing industrial licensing system, etc.
(5) Benefits to Host Company	It results is expansion of investment. It promotes foreign trade and brings foreign exchange	It results in high growth rate, easy availability of goods at competitive rates, good industrial relation, etc.
(6) Benefits to Consumers / Traders	Consumers gets variety of goods as option to be purchased foreign technology is adopted by traders thereby increasing growth of production.	Optimum utilisation of resources at global level easy availability of goods at competitive rates.
(7) Positive Effect	It results in increase in foreign trade, inflow of foreign trade, inflow of foreign technology and capital, which increases employment opportunities, business growth, etc.	It results in removing restriction on taxations, abolishing industrial licensing system leading to expansion and growth of new business opportunities.
(8) Adverse Effect	It leads to exploitation of home market by foreign companies. Capital intensive techniques leads to reduction in job opportunities.	It leads to social problems like urbanization and industrialisation. Closure of domestic firms due to liberalised imported products.
(9) Inter Relationship	Globalisation includes liberalisation and privatisation.	Liberalisation leads to privatisation and globalisation.

Question 5.
Privatization and Globalization.
Answer:

	Privatization	Globalization
(1) Meaning	It refers to reduce the involvement of state or public sectors by involving of private sector in economic activities.	It refers to integration of national economy and societies through cross country flows of information, ideas technologies, goods, services capital, finance and people.
(2) Aim	It aims at promoting efficiency, increase productivity, profitability.	It aims at promoting world trade and economic growth by integrating technologies, goods, services, people, etc.
(3) Need	To achieve quick and logical business decisions aimed at commercial success of organisation.	To overcome the problem of declining domestic demand and to ensure free trade.
(4) Measures adopted	Reduction in number of industries reserved for public sector, disinvestment of shares, improvement in performance through MoU.	Allowing Foreign Direct investment, approving foreign technology, amendment of patent laws, etc.
(5) Benefits to Host Company	It results in profitability, production of superior quality products and services, self motivation etc.	It results is expansion of investment. It promotes foreign trade and brings foreign exchange
(6) Benefits to Consumers / Traders	Entry of private sector results to competition thereby providing high quality goods and services at lower prices.	Consumers gets variety of goods as option to be purchased foreign technology is adopted by traders thereby increasing growth of production.
(7) Positive Effect	Improved performance, high quality goods and services in market. Timely prompt decision with more efficiency.	It results in increase in foreign trade, inflow of foreign trade, inflow of foreign technology and capital, which increases employment opportunities, business growth, etc.
(8) Adverse Effect	Growth of monopoly, inequality of income, lack of social responsibility, etc will hamper the social order of the economy.	It leads to exploitation of home market by foreign companies. Capital intensive techniques leads to reduction in job opportunities.
(9) Inter Relationship	Privatisation is a part of the process of globalization.	Globalisation includes liberalisation and privatisation.

5. Answer in brief.

Question 1.
State any four features of Social environment.
Answer:
The four features of social environment are as follows:

1. Customs and Traditions : This decides the celebration of various festivals like Diwali, Id, Christmas and its effect on business.
2. Social Institutions and Groups or Social Aspects: Literacy level, educational system, cultural heritage standard of living of the various groups of people affect the social environment of business.
3. Social Values : Cultural and social justice, national integration affect the business. Beliefs also help the business to meet the customer needs.
4. Social Trends : Now a days people have become health conscious and therefore there is a sale of various types of goods like organic food, sugar free products etc.

Question 2.
Describe any two factors of economic environment.
Answer:
Economic environment has direct influence on business.

1. The Economic System : Economic activities depend upon the nature of economic system which are:
   (a) Capitalist economy : e.g. U.S.A. (b) Socialist economy : e.g. China (c) Mixed economy : e.g. India
2. Economic Policies : The various economic policies of the government has a direct influence on economic environment. For e.g. import and export policy, educational policy, agricultural policy, industrial policy, foreign investment policy, etc.
3. Economic Condition : The stage at which the growth stands, employment rate, rate of interest, etc. All those determine development of the country.

Question 3.
State any four features of globalization.
Answer:
Features of globalization are as follows:

1. Purchase and sale of goods and services from one country to another.
2. Opportunity to start and do business in any part of the world.
3. Reduction in gap between domestic and international market.
4. Possibility of quick and rapid economic development.
5. Enhances the opportunity to exchange new ideas and technology across the nations.

Question 4.
State any four reasons of the need for privatisation.
Answer:
There is need for privatisation because of the following reasons:

1. To bring more efficiency in the working of business firms.
2. To reduce political interference in the working of the firms and companies.
3. To improve the quality of products
4. To bring efficiency in management of the organization.
5. To create discipline in capital market.

6. Justify the following statements.

Question 1.
External factors of business environment are beyond control.
Answer:

1. Factors which influences the business policy of an organization can be divided into internal and external factors.
2. Business has no control over external forces.
3. These are those factors which provide opportunities or pose threats to the organization.
4. Factor such as social customs, values, economic policies, technological development, political ups and down, legislation together constitute political, social, economic, legal and technological diversions of business, hence, they are not in the hands of business organizations.
5. Internal factors are controllable and business unit can modify their plans, policies, etc.
   (Students can give example of social, political, legal environment to justify further)

Question 2.
Business firm should be aware of the changes in society.
Answer:

1. The success of every business depends on adopting itself to the environment in which it functions. Modern business is rightly termed as socio-economic activity.
2. There is reciprocal relationship between business and society.
3. Business is affected by class structure of the society which depends upon factors such as occupation its own culture, income, etc.
4. Every society depends its own culture, customs, tradition, values, ethics, etc. social trends are also changing fast. For e.g. large number of people are eating fast food and go to gyms. So many fast food outlets and gyms are coming up in towns and cities.
5. Social values and traditions such as celebration of Diwali, Eid, Christmas also affect business.

Question 3.
Political stability builds up confidence among business people.
Answer:

1. Business firms are affected by the government and its policies.
2. Political force decide the nature of business, device performance and projects for development.
3. Political environment includes stability and peace in the country. Political stability builds confidence among different interest groups and investors because long term policies and projects will be started by the government and if the government keep on changing every six months or in a year.
4. This will impact long term decisions of development for the country, because political parties identify forms their decision making, hence if a government gets its full tenure of 5 years, it can complete its projects and plans and win the confidence of the people.

Question 4.
Economic environment has direct influence on business.
Answer:

1. Economic environment consists of economic condition, economic policies and economic system along with basic economic philosophy, infrastructure, national income, money supply etc.
2. Economic condition is based on GDP, per capital income, availability of capital, growth of foreign trade and capital market.
3. Where as economic polices framed by the government from time to time changes with changes in the government.
4. Every business has to function within the policy framework and responds to changes accordingly.
5. This relates to Industrial Policy, monetary policy, foreign investment, EXIM policy education policy etc. Also the scope of private business and government regulation depends on the economic system such as capitalist economy, Socialist or mixed economy which impacts business decisions.

Question 5.
Social trends provide business opportunities.
Answer:

1. Society and business are inter-dependent.
2. Class structure such as occupation,education,income level social status, attributes etc impact business decisions.
3. Social trends are any type of activity that is practised in the society as a whole.
4. Trends can be for short period or long lasting. As technology progresses the changes in social trends do changes.
5. Companies use their ability to anticipate the social change as part of their business marketing policy, to grab the business opportunities.

Question 6.
An adequate knowledge of rules and regulations is essential for better business performance.
Answer:

1. Any business in a country can be started, regulated and controlled within the legal framework of a country.
2. Separate set of laws are framed by all countries to control and direct the business affairs.
3. Knowledge of law, rules and relegations helps the business managers to take prompt decision in making business policies.
4. Various laws are implemented for influencing the business, protect and safeguard the business, as well as the consumers.

7. Attempt the following

Question 1.
Importance of business environment.
Answer:
Importance of Business Environment:
(i) Flexible and Dynamic : Changing environmental factors should be appraised from time to time. So as to keep the business flexible and dynamic. The new opportunities and threats created by the environment can be appraised by the corporate planners to make the most of it. Turbulent market conditions, less brand loyalty, more demanding customers and intense global competition are some of the images of todays business environment. In order to cope with these significant changes, organization must understand and examine the environment and develop suitable course of activity.

(ii) Opportunities and Threats : Study of business environment enables a business enterprise to visualise future problems that can arises as also future business prospects in advance. Deriving benefit from honourable business opportunities is possible as also it can face the problems boldly. Awareness of environment help an organisation to take advantage of such opportunities instead of loosing them to competition. It helps organisation to identify various threats on time and serves as an early signal.

(iii) Competition : Understanding the business environment helps to obtain qualitative information which in turn is useful in formulating business plans, policies and strategies for the future course of action.

(iv) Utilization of Resources Optimally : Optimum use of available resources for the business enterprise is possible by studying the business environment. It enables the enterprise to take full advantage of the policies implemented by the government.

(v) Strength and Weakness Identification : With the change of technology and global development it helps to analyze individual strength and weakness of the business understanding the challenges, appropriate decisions are taken on timely basis.

(vi) Knowledge : Study of environment is necessary to discover and exploit new opportunities for business expansion broad strategies and long term planning enable the development of a formidable business wait.

(vii) Image Building: Environment study makes it possible for the business to expand and to make it acceptable and agreeable to different social groups. By fulfilling its social obligations towards different groups of society, business can create goodwill and reputation for itself.

(viii) Adaptability to Socio-Economic Changes : A business organization needs to show its keen intentions towards adapting to the socio-economic changes.

Question 2.
Social Environment.
Answer:
Business is a economic and social activity. It has to produce goods according to the requirement of the customers. Satisfying customer is the basic need of business. Therefore, while manufacturing or producing goods, business has to take into consideration social factors like traditions, customs, education, habits, values, life styles, thinking and earnings of the people of country. Changes in social environment are a must and management has to take into consideration these factors which determines the following aspects.
1. Social Aspect : Literacy level, educational system, tradition and customs, transition of labour, etc. are the important aspect of social environment. It helps to analyze the needs of the people and accordingly the business opportunities are identified.

2. Social Trends : Business practices and procedures must be in tune with the social beliefs. Growing number of working women and changing life style have increased the demand for household appliances in India.

3. Social Values : Cultural and social values, (social justice, national integration, etc.), family organization and caste structure, social institutions and groups, are taken to consideration while making practices and procedures of business.

4. Traditions : Customs and traditions. (Diwali, Id, Christmas, etc.) also has an effect on the business. The businessmen have to be more responsible towards the demand of the people accordingly.

Question 3.
Economic environment.
Answer:
1. Economic environment comprises of economic condition economic policies and economic system which are the important factors influencing development and trade cycles, national income, etc.

2. Economic Condition : If refers to present state of economy of a country or region based on gross domestic product, per capita income, availability of capital, etc.

3. Economic Policies: Government frames economic policies time to time influencing the business activities. In order to controls the business in the interest of the politics, e.g. – Industrial policy, monetary policy, foreign investment policy etc.

4. Economic System: It refers to the scope of private business and extent of government regulation on economic activities determines the nature of economic system i.e. – capitalist social or mixed economic.

Question 4.
Political Environment.
Answer:
Political dimensions or environment includes the country’s political system or its ideologies or condition i.e. dictatorship or democracy or communist government or socialistic government. It indicates the general stability and peace in the country and attitude of the elected government representatives towards business.

Political stability builds up confidence among business people to invest in long-term projects for the growth of the economy. In India we have adopted mixed economy and growth rate often remains moderate. Indian political system comprises three vital institutions like Legislature, Government and Judiciary.

1. Legislature : legislature is very powerful force that decides the nature of business, programmes, project, for the development of the country through policy making, law making, budget approving, etc.
2. Government : The framework of policies are implemented by government which effects the business organization to under take the responsibilities of the society.
3. Judiciary : It determines the work of executives to carry out the policies in a systematic manner, in order to settle relationship between citizens and the government.

Question 5.
Impact of new economic policy on business and industry.
Answer:
(A) Introduction : On July, 1991, the Government of India announced its New Industrial Policy. It brought about radical changes in the Economic Policy. The three main pillars of Economic reforms are L – P – G (Liberalisation, Privatisation and Globalisation). The main purpose was to modernise India’s Industrial system, implement new techniques, remove unproductive control, encourage private investment and integrate our economy with the global economy.

(B) Impact of changes in Government Policy on Business and Industry:
1. Budgetary Support: The Central Government’s budgetary support for financing the public sector outlays has declined over the years. In order to survive and grow, PSUs have to be more efficient and self sufficient so as to compete with private sector.

2. Increase in Competition : Competition for Indian firms has increased due to the changes in the rules of industrial licensing and entry of foreign firms, for e.g. Service Industries like Insurance, Banking, Telecommunications, Hotel and Airlines, etc. which were earlier in the public sector are now facing competition from private players such as Bajaj Alliance, Max Life, Star Life, Insurance, low cost airlines like Indigo, etc.

3. New Trade Policy : The new trade policy has helped the Indian Firms to enter into foreign markets and earn the foreign exchange required for importing raw materials, spare parts and components they needed for keeping their production lines going.

4. Demanding Customers : Today’s market is customer oriented as customers are well informed and there is growing awareness among them about the malpractices adopted by traders, consumer rights, consumer education and so on. Moreover, competition in the market gives the customer wider choice in purchasing good quality product and makes customer more demanding.

5. Need for Human Resource Development : New technologies require expert knowledge and skill in various fields. Moreover, newer markets made it compulsory for companies to acquire trained personnel with high degree of competence and commitment. Hence, there is a need for well trained staff and thereby develop human resources.

6. Change in Technological Environment : Increased competition and advancements in the field of technology have forced the business units to develop new ways to survive and grow in the market and keep pace with latest technological developments.

7. Change in the Concept of Marketing : Earlier business organisations were production oriented but due to fast changing business world it has now become market oriented. This changed to societal concept where needs of society are kept in mind by the producers. The latest is relationship marketing whereby it is not only producing goods for consumers but maintaining long term relationship with them so as to sustain them.

8. Answer the following

Question 1.
What is business environment? Explain the important of business environment.
Answer:
(A) Business Environment:
A business is defined as buying and selling activity to generate income. Business consists of several interrelated and interacting elements. Business is an economic and social activity of the society. Society is an integral part of the business and its interest cannot be ignored.

Business environment consists of economic, social, legal, technological and political situation. Business obtains money, material, machinery and manpower and other resources from environment.
According to B. O. Wheeler – Business environment is “the total of all things external to firms and individuals which effect their organisation and operations”.
According to Oxford English Dictionary – “Business Environment refers to those aspects of the surroundings of a business enterprise which influence or effect its operations and determine its effectiveness.”
Basically business environment consists of all internal and external factors that influence the nature and scope of business activity.

(B) Importance of Business Environment:
(i) Flexible and Dynamic : Changing environmental factors should be appraised from time to time. So as to keep the business flexible and dynamic. The new opportunities and threats created by the environment can be appraised by the corporate planners to make the most of it. Turbulent market conditions, less brand loyalty, more demanding customers and intense global competition are some of the images of todays business environment. In order to cope with these significant changes, organization must understand and examine the environment and develop suitable course of activity.

(ii) Opportunities and Threats : Study of business environment enables a business enterprise to visualise future problems that can arises as also future business prospects in advance. Deriving benefit from honourable business opportunities is possible as also it can face the problems boldly. Awareness of environment help an organisation to take advantage of such opportunities instead of loosing them to competition. It helps organisation to identify various threats on time and serves as an early signal.

(iii) Competition : Understanding the business environment helps to obtain qualitative information which in turn is useful in formulating business plans, policies and strategies for the future course of action.

(iv) Utilization of Resources Optimally : Optimum use of available resources for the business enterprise is possible by studying the business environment. It enables the enterprise to take full advantage of the policies implemented by the government.

(v) Strength and Weakness Identification : With the change of technology and global development it helps to analyze individual strength and weakness of the business understanding the challenges, appropriate decisions are taken on timely basis.

(vi) Knowledge : Study of environment is necessary to discover and exploit new opportunities for business expansion broad strategies and long term planning enable the development of a formidable business wait.

(vii) Image Building: Environment study makes it possible for the business to expand and to make it acceptable and agreeable to different social groups. By fulfilling its social obligations towards different groups of society, business can create goodwill and reputation for itself.

(viii) Adaptability to Socio-Economic Changes : A business organization needs to show its keen intentions towards adapting to the socio-economic changes.

Question 2.
Explain the new economic policy in details.
Answer:
The new economic policy was introduced by the Government on 24th July, 1991, on the failure of the earlier Industrial policy prevailing in India.
The new policy was known as LPG i.e. Liberalisation, Privatisation and Globalisation. This was the brain child of the Prime Minister P. V. Narasimha Rao and the finance minister Dr. Manmohan Singh.

(i) Liberalisation:
It means to liberate the industry, trade and commerce from the unnecessary restrictions and regulations that curtailed the freedom of enterprise.
Liberalisation has helped the Indian economy to open up and allowed the entry of foreign business in India. The interaction with the world has happened after the 1991 policy.

Liberalisation policy has brought about the following measures:

1. Encouraging Direct Foreign Investment.
2. Wide Choice of products and services enjoyed by the customers.
3. Reduction in control of Foreign Exchange.
4. Cost of products, price and quality in tune to the global markets.
5. Changing the approach towards industrial sickness.
6. Production of quality products to meet the competitive markets.
7. Freedom to choose the Scale of business.
8. Reduction in tax rates, tax holidays, etc.
9. Encouraging new technology, technological upgradation and foreign collaboration.
10. I mport of machinery, goods and other services on easy terms.
11. Abolishing licensing system for most of the industries.
12. Opening telecommunication sector.

Liberalisation has thus made the country achieve high growth rate, made the rupee stronger and helped good industrial relations.

(ii) Privatisation:
Privatisation is a process of transferring ownership of business, enterprise agency or public service from the public sector (government) to the private sector.
Features of Privatisation are:

1. To provide variety of business units to consumers.
2. To ensure less political interference in running the business.
3. To bring about more accountability.
4. To reduce labour problem.
5. To bring about a market oriented approach.
6. To make competition more intense.
7. To bring about more efficiency.
8. To maintain capital market discipline.

The government of the country has followed a disinvestment policy.

Disinvestment means:

1. When there is a sale of a public undertaking in full or part of private sector without transferring the ownership to private sector.
2. The management and control is transfered to public undertaking e.g. Maruti Udyog Ltd., SAIL, ONGC, etc.
3. Improvement in the performance of the industries through Memorandum of Understanding (MoU). Privatisation helps the private sector to be efficient result oriented, productive and active. Capitalist countries like America and Japan have followed privatisation.

(iii) Globalisation:
When the operation and organization of business activities are on a global scale, it is called as Globalisation. It is integration of business activities by considering the entire world is one market.

In short globalisation means a boundary less world, where there would be a free flow of goods, services, information, capital and people across nations. Globalisation has effect on socio-economic and political sphere of life.

Features of Globalisation:

1. Buying and selling goods from/to any country is possible due to globalisation.
2. Establishing manufacturing, production and distribution facilities in any part of the world.
3. Freedom to set up’ and operate business in any part of the world.
4. Render faster economic development of any country.
5. Exchange of new ideas and technology across nations.
6. Narrowing differences between domestic and international market.
7. Direct Foreign private participation in the industrial development of any country.

Thus it could be seen that globalisation is an evolutionary concept. Through the policy of 1991 the government moved the country to this globalisation pattern.

Balbharti Maharashtra State Board Organisation of Commerce and Management 11th Textbook Solutions Chapter 6 Institutes Supporting Business Textbook Exercise Questions and Answers.

Maharashtra State Board 11th Organisation of Commerce and Management Solutions Chapter 6 Institutes Supporting Business

1. (A) Select the correct option and rewrite the sentence

Question 1.
Small Industrial Development Bank of India (SIDBI) was established in …………………
(a) 1989
(b) 1990
(c) 1991
Answer:
(b) 1990

Question 2.
SIDBI was established under the Small Industrial Development Bank of India Act, …………………
(a) 1988
(b) 1992
(c) 1996
Answer:
(a) 1988

Question 3.
………………… is Principal Financial Institution for Promotion, the Micro, Small and Medium Enterprise (MSME) sector in India.
(a) NABARD
(b) KVIC
(c) SIDBI
Answer:
(c) SIDBI

Question 4.
………………… came into existence on July 12, 1982
(a) NABARD
(b) KVIC
(c) SIDBI
Answer:
(a) NABARD

Question 5.
A Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) was constituted under the Chairmanship of …………………
(a) Kothari
(b) Shivaraman
(c) Rangrajan
Answer:
(b) Shivaraman

Question 6.
All India Khadi and Village Industries Board was set up in the year …………………
(a) 1953
(b) 1949
(c) 1948
Answer:
(a) 1953

Question 7.
In April ………………… KVIC was established.
(a) 1955
(b) 1953
(c) 1957
Answer:
(c) 1957

1. (B) Match the pairs

Question 1.

Part A	Part B
(i) SIDBI	(a) 1944
(ii) NABARD	(b) 1990
(iii) World Bank	(c) 1988
(iv) Grameen Bank	(d) 1983
(v) KVIC	(e) 1982
	(f) 1957
	(g) 1932
	(h) 1956
	(i) 1912
	(j) 1960

Answer:

Part A	Part B
(i) SIDBI	(b) 1990
(ii) NABARD	(e) 1982
(iii) World Bank	(a) 1944
(iv) Grameen Bank	(d) 1983
(v) KVIC	(f) 1957

1. (C) Give one word/phrase/term

Question 1.
Life blood of business.
Answer:
Finance

Question 2.
Principal financial institution of promotion of the Micro, Small and Medium Enterprise (MSME) sector in India.
Answer:
SIDBI

Question 3.
Advisor and mentor for MSMEs
Answer:
SIDBI

Question 4.
Wholly owned subsidiary of IDBI was set up in July 1999, is providing venture capital.
Answer:
SIDBI Venture Capital Ltd. (SVCL)

Question 5.
Digital initiative by SIDBI launched on March, 17th, 2016
Answer:
SIDBI Startup Mitra,

Question 6.
The apex institution for agricultural finance.
Answer:
NABARD

Question 7.
The Bangladeshi economist, known as the Father of Micro-finance.
Answer:
Dr. Muhammad Yunus

Question 8.
An international organization dedicated to providing finance, advice and research to developing nations.
Answer:
World Bank

1. (D) State True or False

Question 1.
Small Industrial Development Bank was established on 2nd April, 1990.
Answer:
True

Question 2.
SIDBI has its head office at Mumbai.
Answer:
False

Question 3.
SIDBI is not working towards sustainable development of MSME’s in India.
Answer:
False

Question 4.
SIDBI, Startup Mitra scheme is launched on March 17th, 2016.
Answer:
True

Question 5.
NABARD came into existence on July 12, 1982.
Answer:
True

Question 6.
The NABARD has been recognised as the apex institution for financing large scale industries.
Answer:
False

Question 7.
KVIC is actively working for planning, promotion and production of Khadi as well as in setting up of village and rural industries of India.
Answer:
True

Question 8.
Dr. Muhammad Yunus is known as the ‘Father of Rural Banking’.
Answer:
False

Question 9.
Self Help Group is a large group of homogeneous individuals.
Answer:
False

1. (E) Complete the sentences

Question 1.
The lifeblood of a business is …………………
Answer:
Finance

Question 2.
Micro, Small and Medium Enterprises (MSME’s) are focused domains for …………………
Answer:
SIDBI

Question 3.
SIDBI takes structural initiatives to resolve the financial and non-financial hurdles of …………………
Answer:
MSMEs

Question 4.
SIDBI is established to provide short-term and long-term finance to
Answer:
MSME’s

Question 5.
‘SIDBI Startup Mitra’ launched on …………………
Answer:
March 17th, 2016

Question 6.
To improve accessibility of credit and handholing services to MSME’s, SIDBI has launched the …………………
Answer:
Udyami Mitra

Question 7.
NABARD came into existence on …………………
Answer:
July 12th, 1982

Question 8.
Khadi and Village Industries Commision was set up in …………………
Answer:
1953

Question 9.
A statutory body of Khadi and Village Industries Commission (KVIC) was created with a special Act of …………………
Answer:
Parliament

Question 10.
The Grameen Bank in Bangladesh was set up in …………………
Answer:
October 1983

Question 11.
The father of Micro finance is …………………
Answer:
Dr. Muhammad Yunus

Question 12.
The World Bank came into existence on …………………
Answer:
1944 Bretton Woods Conference

Question 13.
The headquarter of World Bank is in …………………
Answer:
Washington D.C.

Question 14.
Dr. Muhammad Yunus jointly won the Noble Prize in …………………
Answer:
2006.

1. (F) Select the correct option

Question 1.
(1953, 1944, 2nd April 1990, Oct. 1983, 12 July 1982)

Part A	Part B
(i) SIDBI	—————
(ii) ————-	NABARD
(iii) KVIC	—————
(iv) —————	World Bank
(v) Grameen Bank	—————

Answer:

Part A	Part B
(i) SIDBI	2nd April 1990
(ii) 12 July, 1982	NABARD
(iii) KVIC	1953
(iv) 1944	World Bank
(v) Grameen Bank	Oct. 1983 Grameen Bank

1. (G) Answer in one sentence

Question 1.
What is SIDBI?
Answer:
SIDBI is Small Industrial Development Bank of India, which takes initiative to resolve the financial and non-financial hurdles of MSMEs.

Question 2.
What do you mean by NABARD?
Answer:
NABARD is a National Bank for Agriculture and Rural Development, which was formed with an objective to provide and regulate credit and other facilities for the development of agriculture, small scale industries, cottage village industries, handicraft and other rural crafts and allied economic activities.

Question 3.
What is meant by Grameen Bank?
Answer:
Bank which gives small loans to landless poor women to promote self employment is called Grameen Bank.

Question 4.
What is SHG?
Answer:
SHG is a small group of homogeneous individuals who come together with the objective creating common fund through savings and meet members emergency needs by providing collateral free loan.

Question 5.
What do you mean by World Bank?
Answer:
The World Bank is an international organization dedicated to provide finance, advice and research to developing nations.

Question 6.
WhatisMSME’s
Answer:
MSME’s are Micro, Small and Medium Enterprises, which play an important role in promoting entrepreneurship among women and economically weaker section in the country.

Question 7.
What is Udyami Mitra?
Answer:
‘Udyami Mitra’ is the digital portal launched by SIDBI, to improve accessibility of credit and handholding services to MSMEs.

1. (H) Correct the Underlined word and rewrite the following sentences

Question 1.
SIDBI is established to provide only long-term finance to the MSME’s.
Answer:
SIDBI is established to provide short-term and long term finance to the MSME’s.

Question 2.
The NABARD has been recognised as the apex institution for industrial finance.
Answer:
The NABARD has been recognised as the apex institution for Agricultural finance.

Question 3.
Khadi was symbol and the spirit of self reliance in post independence India.
Answer:
Khadi was symbol and the spirit of self reliance in pre independence India.

Question 4.
Self help group are based on the fundamental principle of to earn profit.
Answer:
Self help group are based on the fundamental principle of ‘helping each other’ and “unity is strength”.

Question 5.
World Bank provides high interest loan.
Answer:
World Bank provides low interest loan.

2. Explain the following terms/concepts

Question 1.
Udyami Mitra.
Answer:

1. This is the portal launched by SIDBI to improve accessibility of credit and handholding services to MSME’s.
2. Under this portal entrepreneurs can apply for loan without physically visiting any bank branches.
3. The entrepreneurs can select and apply for preferred banks.
4. They can select suitable branch, track their application status and avail multiple loan benefits.

Question 2.
KVIC.
Answer:

1. KVIC was established to take over the work from All India Khadi and Village Industries Board.
2. KVIC is working for planning, promotion and production of Khadi and setting up of village and rural industries in India.
3. It gives emphasis on utilizing the locally available raw materials and human skills to generate non-farm employment opportunities in the rural areas.

Question 3.
World Bank.
Answer:

1. The World Bank is an international organization formed to provide finance, advice and research to developing nations.
2. It was created at the 1944 Bretton Woods Conference along with the International Monetary Fund (IMF)
3. The head quarter of World Bank is in Washington D.C.
4. It provides financial as well as technical assistance to the member countries of the world.
5. It comprises of two institutions namely – the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Question 4.
Self Help-Groups
Answer:

1. Self Help Group (SHG) is a voluntary association.
2. It is a small homogeneous group of people who come together with the objective of creating common fund through small savings and meet members emergency needs by providing collateral free loan at reasonable rate.
3. Many SHG are linked to banking institutions for getting micro-credit.
4. All decisions are taken collectively by SHG members.

Question 5.
Collateral Free Loan
Answer:

1. Collateral free loan are SHGs small loans provided to the poor individuals for undertaking self-employment projects.
2. Loans are given on the principle of mutual trust and either minimum or no documentation.
3. The rate of interest generally charged are higher than the interest charged by banks.
4. It saves the poor individuals from the clutches of local money lenders.

3. Study the following case/situation and express your opinion

Anand completed his MBA and wants to start a Small Scale Industry. He is good at using technology. He has very good business idea in mind and looking for a lender or investor.

Question 1.
Who is promoter or businessman in this case?
Answer:
A person who gets the idea of starting the business enterprise is called as promoter or businessman. In the above case Anand is promoter or businessman.

Question 2.
What is full form SSI?
Answer:
The full form of SSI is Small Scale Industry.

Question 3.
Suggest digital ways to find lender or investor for this initiative
Answer:
SIDBI has started Digital initiatives / Digital ways to find lender or investor. For this initiative I can suggest the following ways:
(a) SIDBI Startup Mitra:
It brings together all stakeholders, start-up entrepreneurs, incubators, investors, industry bodies, mentors and advisors and banks on one platform. It helps in financing and development of new entrepreneurs.

(b) Udyami Mitra:
This is a portal launched by SIDBI to improve accessibility of credit and handholding services to MSME’s. Under this portal entrepreneurs can apply for loan without physically visiting any bank branches. The entrepreneurs can select and apply for preferred banks, they can select suitable branch, track their application status and avail multiple loan benefits.

4. Answer in brief

Question 1.
State any four features of NABARD.
Answer:
Features of NABARD:
(i) Apex Bank : NABARD acts as an apex bank for meeting the credit needs of all type of financial institutions working in the field of agricultural and rural development. It works to frame policies and guidelines for rural financial institutions in India. It provides credit facilities to institutes working in agricultural finance.

(ii) Refinancing Facilities : It provides refinancing facilities to State Co-operative Banks (SCBs), Land Development Banks (LDBs), Regional Rural Banks (RRBs) and other approved financial institutions for financing rural economic activities. It also provides short-term, medium term and long term credit to these institutes.

(iii) Provides Credit for Rural Development : It takes initiatives in the development and promotion of different activities in rural area by providing funds to State governments. It also provides refinancing for upliftment of weaker section of the society. It also works on improvement of small and minor irrigation by way of promoting agricultural activities.

(iv) Financing Rural Industries : It provides refinancing facility to small scale industries and other village and cottage industries. It provides loans to commercial and co-operative banks to promote rural employment. It organizes skill and entrepreneurship development programs to promote an entrepreneurial culture among the rural youth and encourage them to start enterprises in the rural areas.

Question 2.
State four objectives of KVIC.
Answer:
Objectives of KVIC :
(i) Development of Khadi and Other Village Industries : KVIC is actively working for planning, promotion and production of khadi as well as in setting up of village and rural industries in India. It identifies the potential for the development of rural industries and undertakes the valuable task of promoting and developing locally operating village enterprises.

(ii) Special Objective : KVIC has a special objective of providing employment. It gives emphasis on utilizing the locally available raw materials and human skills to generate non-farm employment opportunities in the rural areas. It plays a role of co-ordinator with other agencies engaged in rural development.

(iii) Economic Objective : KVIC is actively working for planning, promotion and production of khadi as well as in setting up of village and rural industries in India. KVIC receives fund from the Ministry of MSMEs for effective implementation of various programs and schemes. It helps in producing saleable articles which helps the economic development of the country.

(iv) Wider Objective : It has a wider objective of creating self-reliance amongst the poor and building up of a strong rural community spirit.

Question 3.
Write any four features of World Bank.
Answer:
Features of World Bank:
(i) Organization and Structure : The organization of bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee and the President and other staff members. All the powers of the bank are vested in the Board of Governors which is the supreme policy making body of the bank. The board consists of one Governor and an Alternative Governor appointed for five years by each member country. The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan and India. The rest of the 15 members are elected by the remaining countries.

(ii) Goals : The World Bank Group has two goals to be achieved by 2030.

• To end extreme poverty by decreasing the percentage of people living on less than 1.90 dollars a day to no more than 3%.
• To promote shared prosperity by fostering the income growth of the bottom 40% for every country.

(iii) Innovative Knowledge Sharing : World Bank offers support to developing countries through policy, advice, research and analysis and technical assistance. Analytical works of World Bank often helps developing countries. It also helps in capacity development of the developing countries. World Bank also sponsors, host or participates in many conferences and forums on issues of development.

(iv) Social Development : Social Development focuses on the need to “put people first” in development process. The World Bank work with governments, communities, civil societies, the private sector and the marginalized for the cause of social development. Social Development promotes economic growth and leads to higher quality of life.

Question 4.
Describe any two features of Self Help Groups.
Answer:
Features of Self Help Groups:
(i) Democratic Set up : SHG is group of the members, for the members and by the members. Every member of the group actively participates in the functioning of SHGs. Members are responsible for their own future by organizing themselves into SHGs. They elect or select leader for proper functioning of the group. Leader is responsible for holding regular meetings and maintaining records and accounts of the group.

(ii) Collateral Free Loan : SHGs provide small loans to the poor individuals for undertaking self-employment projects. Loans are given on the principle of mutual trust and either minimum or no documentation. Generally the rate of interest are higher than the interest charged by banks. It saves the poor individuals from the clutches of local money lenders. The repayment of loans is ensured timely as all members of group are responsible for collecting repayment amount from the members who borrowed the loan.

Question 5.
Describe any two features of SIDBI.
Answer:
Features of SIDBI:
(i) Financial Institute for Promotion of MSMEs : SIDBI is established to provide short term and long term finance to the MSMEs. It is principal financial institution for micro, small and medium sector units. It also co-ordinate the functions of institutions engaged in financing MSME’s. It provides refinance to Banking and Non-Banking Financial Companies to increase supply of credit to MSMEs.

(ii) Advisory Function : SIDBI also works as advisor and mentor of MSMEs. It helps MSMEs in expanding marketing channels for the products both in domestic as well as international markets. It also initiates steps for modernization and technological upgradation of current units.

5. Justify the following statements

Question 1.
SIDBI acts as an institute for promotion of MSMEs
Answer:

1. There are many efforts taken by SIDBI to emerge as a brand which is customer friendly towards MSME’s.
2. It facilitates and strengthens credit flow to MSME’s.
3. It identifies financial and developmental gaps in the MSME’s and take efforts to resolve the same.
4. SIDBI has dedicated its resources towards evolution of a vibrant ecosystem.
5. SIDBI has taken steps for technological upgradation and modernization of existing MSME’s
6. Thus, we can say that SIDBI acts as an institute for promotion of MSME’s.

Question 2.
SIDBI provides different types of financial and non-financial services through its subsidiaries.
Answer:
The following are the subsidiaries of SIDBI that provides financial and non-financial services:
(i) SIDBI Venture Capital Ltd. provides venture capital to emerging sectors, such as life sciences, biotechnology, pharmaceuticals, engineering and information technology.

(ii) Credit Guarantee Fund Trust for Micro and Small Enterprises is a trust to implement the Credit Guarantee Scheme through which credit facilities are extended without third party guarantee on collateral security by eligible lending banks/financial institutions.

(iii) SME Rating Agency of India Ltd. was set up by SIDBI, Dum & Brandstreet Information Services India Pvt. Ltd. and several public, private and foreign sector banks as an MSME. It is dedicated third-party rating agency and provide comprehensive, transparent and reliable ratings and risk profiling.

(iv) India SME Technology Services Limited is a platform where MSME’s can tap global opportunities for acquiring new emerging technologies and establish business collaborations.

(v) India SME Asset Reconstruction Company Ltd. is an asset reconstruction company. It acquires non-performing assets and try to resolve them through its innovative mechanisms. It specially focus on the non-performing assets of MSME sector.

(vi) Micro Units Development and Refinance Agency is established for ‘funding the unfunded’ micro enterprises in the country.

(vii) Thus, SIDBI provides different types of financial and non-financial services through its subsidiaries.

Question 3.
The NABARD has been recognized as the apex institution for agricultural finance.
Answer:

1. India is an agricultural country.
2. Agriculture and its allied activities act as main source of livelihood for most of the rural population of India.
3. Government of India is aware about the need of boosting institutional credit in rural economy.
4. The RBI constituted a Committee to review the arrangements for Institutional Credit for Agricultural and Rural Development under the Chairmanship of Shri B. Sivaram, to take review of agricultural credit in India.
5. The recommendation of the Committee was accepted and National Bank for Agriculture and Rural Development came into existence on July, 12 1982 under the special Act of the Parliament, with an objective of providing credit and other facilities for the development of agriculture.
6. Thus, we can say the NABARD has been recognized as an apex institution for agricultural finance.

Question 4.
KVIC plays an important role in development of entrepreneurship.
Answer:

1. Entrepreneurship Development is one of the major functions of KVIC.
2. KVIC helps to provide additional livelihood avenues to the village communities.
3. KVIC generate self-employment opportunities through establishment of micro enterprises by organizing traditional artisans and unemployed youth. It increases the earning capacity as well as prevents migration.
4. KVIC actively participates in many international trade exhibitions for popularising its products in international markets.
5. Thus, we can say that KVIC plays an important role in development of entrepreneurship.

Question 5.
Mutual Trust is the soul of SHG.
Answer:

1. Most of the Indian villagers are facing challenges such as poverty, illiteracy, lack of skills, health care, etc.
2. There is a need of group efforts to solve these problems.
3. The basic philosophy of forming SHGs is to overcome individual shortcomings and weaknesses with collective efforts.
4. Through mutual trust thousands of poor and the marginalized individuals are building their lives, their families and their society.
5. Thus, we can say mutual trust is the soul of SHG.

Question 6.
SHGs play an important role in empowerment of women.
Answer:

1. The empowerment of women through SHG’s would lead to benefits not only to the individual women but also for the family and community as a whole.
2. The SHGs empower women and trains them to take active part in socio-economic progress of the nation.
3. SHG develops saving habits among the women.
4. It enhances status of women as they participate, lead, take decisions and get benefited through collective efforts,
5. Thus, we can say that SHG’s play an important role in empowerment of women.

Question 7.
World Bank plays vital role in social development.
Answer:

1. The World Bank work with governments, communities, civil societies, private sectors and the marginalized for the cause of social development.
2. Social development promotes economic growth and leads to higher quality of life.
3. The World Bank work on social development, brings voices of the poor and vulnerable into development process.
4. World Bank is also undertaking timely social risk analysis, including poverty and social impact analysis,
5. Thus, World Bank plays a vital role in social development.

6. Attempt the following

Question 1.
State the different forms of finance provided by SIDBI.
Answer:
SIDBI offers the following finance facilities to its customers:

1. Direct Finance : SIDBI offers direct financing to the MSMEs through financing Working Capital, Term Loan, Foreign Currency Loan, Equity Support, Energy Saving Schemes etc.
2. Indirect Finance : SIDBI offers indirect assistance by providing refinance to banks, State Level Financial Institutions, etc. with an extensive branch network across the country.
3. Micro Finance : SIDBI offers micro-finance to small businessmen and entrepreneurs for establishing their business.

Question 2.
State the role of SIDBI in sustainable development.
Answer:
Role of SIDBI in sustainable development:

1. SIDBI helps MSMEs in creation of economic wealth while preventing ecological wealth of the country.
2. It promotes the culture of energy efficient and sustainable finance.
3. It takes initiative to enhance awareness of benefits of climate control amongst MSMEs.
4. It focuses on lending schemes, promoting investments in clean production and energy efficient technologies.
5. It helps to reduce the emission of greenhouse gases to contribute towards reduction in pollution.

Question 3.
Explain the role of NABARD in financing rural industries.
Answer:
Role of NABARD in financing rural industries:

1. It plays an important role in providing refinance to small scale industries and other village and cottage industries.
2. It provides loans to commercial and co-operative banks to promote rural employment.
3. It organizes skill and entrepreneurship development programmes to promote an entrepreneurial culture among the rural youth and encourage them to start enterprises in the rural areas.

Question 4.
Explain the objectives of KVIC.
Answer:
Objectives of KVIC are:

1. The objectives of KVIC are broadly classified into three, i.e. social objective, economic objectives and wider objective.
2. Through social objective, KVIC aims at providing employment to the rural unemployed.
3. Through economic objective, it tries to produce saleable articles which will give promotion to KVIC products.
4. Through wider objective, it attempts to create self refinance amongst the poor and building a strong rural community spirit.

Question 5.
Explain the role of KVIC in employment generation.
Answer:
Role of KVIC in employment generation:

1. Due to massive population growth agricultural sector is losing its ability to generate additional employment in rural areas.
2. It is necessary to create employment opportunities for the fast increasing workforce in rural areas.
3. Khadi and village industries are labour intensive in nature.
4. The KVIC is established with the broader objective to promote non-farm employment opportunities in rural areas.
5. It also concentrates on the betterment of rural artisans and socio-economic weaker section of the society.

Question 6.
Explain in detail democratic setup in SHGs.
Answer:
Democratic set up in SHGs:

1. SHG is group of the members, for the members and by the members.
2. It is the group which reflects the people’s real participation in the process of development.
3. Every member of the group actively participates in the functioning of SHGs.
4. Members are responsible for their own future by organizing themselves into SHGs.
5. They elect or select leader for proper functioning of the group.
6. Leader is responsible for holding regular meetings and maintaining records and accounts of the group.

Question 7.
Explain organizational structure of World Bank.
Answer:
Organizational Structure of World Bank:

1. The organization of the bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee and the President and other staff members.
2. Board of Governors is the supreme policy making body of the bank.
3. The board consists of one Governor and one Alternative Governor appointed for 5 years by each member country.
4. The Board of Executive Directors consists of 21 member, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan and India. The rest 15 members are elected by the remaining countries.

7. Answer the following

Question 1.
Write important features of SIDBI.
Answer:
Important features of SIDBI are as follows:
(i) Sustainable Development : SIDBI is working towards sustainable development of MSMEs in India. It helps MSMEs in creation of economic wealth while preventing ecological wealth of the country. It promotes culture of energy efficient and sustainable finance. It helps to reduce the emission of greenhouse gases to contribute towards reduction in pollution.

(ii) Nodal/Implementing Agency : SIDBI has been assigned the role of nodal agency by the Government of India. It helps in implementing various subsidy schemes for MSMEs. These schemes help in upgradation, modernization and expansion of business.

(iii) Financial Institute for Promotion of MSMEs : SIDBI is established to provide short term and long term finance to the MSMEs. It provides refinance to Banking and Non-Banking Financial Companies to increase supply of credit to MSMEs. SIDBI cater to the specific needs of Indian MSMEs that are not fulfilled through traditional sources of finance.

(iv) Advisory Function: SIDBI also works as an advisor and mentor for MSMEs. It helps MSMEs in expanding marketing channels for the products both in the domestic as well as international markets. It also initiates steps for modernization and technological upgradation of current units.

(v) Forms of Finance : SIDBI offers the following facilities to its customers:

• Direct Finance
• Indirect Finance
• Micro Finance

(vi) Digital Initiatives:
(a) SIDBI Startup Mitra:
It brings together all stakeholders, start-up entrepreneurs, incubators, investors, industry bodies, mentors and advisors and banks at one platform. It helps in financing and development of new entrepreneurs. It also works as knowledge partner for State and Central Government.

(b) Udyami Mitra:
This is the portal launched by SIDBI to improve accessibility of credit and handholding services to MSME’s. Under this portal entrepreneurs can apply for loan without physically visiting any bank branches. The entrepreneurs can select and apply for preferred banks, they can select suitable branch, track their application status an avail multiple loan benefits.

(vii) Achievement of National Goals : SIDBI helps in poverty alleviation and employment generation by financing MSMEs. It promotes entrepreneurship and fosters competitiveness in MSME sector. It promotes entrepreneurship among women and economically weaker section of the society.

(viii) Services of MSMEs : SIDBI provides different types of financial and non financial services through its associates and subsidiaries. These associates and subsidiaries are as follows:

• SIDBI Ventures Capital Ltd.
• Credit Guarantee Fund Trust for Micro and Small Enterprises
• SME Rating Agency of India Ltd.
• India SME Technology Services Limited
• India SME Asset Reconstruction Company Ltd.
• Micro Units Development & Refinance Agency

Question 2.
Write important features of NABARD.
Answer:
Important features of NABARD are as follows:
(i) Financing Rural Industries : It plays an important role in providing refinance for small scale industries and other village and cottage industries. It provides loans to commercial and co-operative banks to promote rural employment. It organizes skill and entrepreneurship development programs to promote an entrepreneurial culture among the rural youth and encourage them to start enterprises in the rural areas.

(ii) Assistance to Financial Institutes : It plays an important role in preparing and developing action plans for Co-operative Banks and Regional Rural Banks. It also monitors implementation of developmental action plans of these banks. It provides financial assistance to co-operative banks for building improved Management Information System, computerization of operations and development of human resources.

(iii) Refinancing Facilities : It provides refinancing facilities to State Co-operative Banks (SCBs), Land Development Banks (LDBs), Regional Rural Banks (RRBs) and other approved financial institutions for financing rural economic activities. It also provides short-term, medium term and long term credit to these institutes.

(iv) Credit for Rural Development: It takes initiative in development and promotion of different activities in rural area by providing funds to State government. It also works on improvement of small and minor irrigation by way of promoting agricultural activities.

(v) Apex Bank : NABARD acts as an apex bank for meeting the credit needs of all type of financial institutions working in the field of agricultural and rural development. It works to frame policies and guidelines for rural financial institutions in India. It provides credit facilities to institutes working in agricultural finance.

(vi) Recommendations to Reserve Bank of India : It provides recommendations to Reserve Bank of India on issue of licenses to Co-operative Banks, opening of new branches by State Co-operative Banks and Regional Rural Banks.

(vii) Development of Nation: It plays an important role in the improvement of storage facilities for agricultural commodities by promoting development of warehousing facilities. It also promotes the export of agricultural commodities. It plays a key role in sustainable development of the country through Green, Blue and White revolution.

(viii) Supervision of Financial Institutes Engaged in Agricultural Finance :It undertakes inspection of Regional Rural Banks and Co-operative Banks as per the guidelines of Banking Regulation Act, 1949. It can also undertake inspection of State Co-operative Agriculture and Rural Development Banks and apex non-credit co-operative societies on a voluntary basis.

Question 3.
Write important features of KVIC.
Answer:
Important features of KVIC are as follows:
(i) Research and Development: To face the challenge of globalisation, KVIC has introduced a number of new products range like khadi denim jeans to cater the need of the market. The KVIC undertake trainings of sales staff for effective marketing of the products. KVIC is taking several steps to set standards of quality to ensure genuineness of the khadi products. KVIC signed Memorandum of Understanding with National Institute of Design to provide design support, services in packaging, marketing, communication, publicity, disseminating materials and other design-related activities.

(ii) Other Functions : The KVIC is charged with the planning, promotion, organization and implementation of programs for the development of Khadi and other village industries in the rural area. It organizes training programme for artisans engaged in Khadi and Village Industries.

(iii) Marketing Promotion : In order to attract younger generation, the KVIC is holding exhibitions, seminars, lectures in universities and colleges to disseminate knowledge of KVIC products. KVIC has also launched a massive marketing development plan to generate interest, awareness and attraction amongst masses.

(iv) Financial Assistance : It finances the projects for rural industrialization and also provides for margin money by way of subsidy. There are provisions for higher rate of subsidies in case of beneficiaries of the weaker section, tribal areas and backward regions. KVIC also provides financial assistance to institutions and individuals for development and operation of Khadi and Village industries.

(v) Rural Development : The Khadi and Village Industries plays an important role in the development of Indian economy, particularly in the development of the rural areas. KVIC facilitates proper utilization of natural resources in rural India for generating income for the rural masses.

(vi) Employment Generation: Due to increasing workforce, it is necessary to create employment opportunities. KVIC are labour intensive in nature. The broader objective of KVIC is to promote non-farm employment opportunities in rural areas.

(vii) Entrepreneurship Development : KVIC helps to provide additional livelihood avenues to the village communities. KVIC generate self-employment opportunities through establishment of micro enterprises by organizing traditional artisans and unemployed youth.

Question 4.
Write important features of SHGs.
Answer:
Important features of SHGs are as follows:
(i) Formation : It is generally formed by NGO’s or team of the government. It is an informal group. It is recognized by the government and does not require any formal registration. SHGs have well-defined rules and by-laws, hold regular meetings and maintain records.

(ii) Membership : As per the National Urban Livelihood Mission at least 5 members are required. It is difficult to manage bigger group and members cannot actively participate. From one family only one person can become a member so that more families can participate. Mixed groups are generally not preferred.

(iii) Entrepreneurship Development : The poor individuals in rural area face scarcity of capital and managerial skills. SHGs provide them capital at low interest rate which give them opportunity to start micro enterprise. These micro enterprises use untapped manpower in the area which generates employment opportunities in rural area.

(iv) Collateral Free L oan: SHGs provide small loans to the poor individuals for undertaking self-employment projects. Loans are given on the principle of mutual trust and either minimum or no documentation is required to get loan. The rate of interest differs from group to group and it is little higher than the interest charged by banks. It ensures timely repayment of loans as all members of the group are responsible for collecting repayment amount from the members who borrowed the loan.

(v) Democratic Setup : SHG is group of members, for the members and by the members. It is the group which reflects the people’s real participation in the process of development. Members elect or select leader for proper functioning of the group. Leader is responsible for holding regular meetings and maintaining records and accounts of the group.

(vi) Empowerment of Women : SHG is an emerging tool for socio-economic development of women all over the world. SHGs are working effectively in promoting women entrepreneurship. SHGs empower women by providing her knowledge, finance and opportunities.

(vii) Saving Habits : The SHG encourages small saving habits at regular interval among its members. The Self Help Group inculcates the thrift and savings habit among the members of each group.

(viii) Mutual Trust : Most of the Indian villages are facing challenges such as poverty, illiteracy, lack of skills, health care, etc. The basic philosophy of forming SHGs is to overcome individual shortcomings and weaknesses with collective efforts. Through mutual trust thousands of the poor and marginalized individuals are building their lives, their families and their society.

Question 5.
Write important features of World Bank.
Answer:
Important features of World Bank are as follows:
(i) Organisation and Structure : The organization of the bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the loan Committee and the President and other staff members. Board of Governors is the supreme policy making body of the bank. The board consists of one Governor and one Alternative Governor appointed for 5 years by each member country. The Board of Executive Directors consists of 21 member, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan and India. The rest 15 members are elected by the remaining countries.

(ii) Innovation and Entrepreneurship : Innovation and Entrepreneurship helps in higher productivity which leads to increased economic growth. It helps in creation of employment to eradicate poverty. Young and growth oriented companies contribute in employment growth. They help in enhancing competitiveness and productivity by introducing new products, developing novel business models and opening new markets. The World Bank brings global experience, knowledge, research and investments to help client countries develop effective innovation and entrepreneurship ecosystems, such as policies, strategies, regulations and institutions that foster investments and jobs.

(iii) Financial Products and Services : World Bank provides low-interest loans, zero to low interest credits, and grants to developing countries. It supports in areas such as education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management.

(iv) Innovative Knowledge Sharing : World bank sponsors, host or participates in many conferences and forums on issues of development. It also collaborates with partners on many developing issues. It also takes effort to provide access to the best global expertise to the developing countries.

(v) Goals :
The world bank group has set 2 goals to be achieved by 2030.

• End extreme poverty by decreasing the percentage of people living on less than 1.90 dollars a day to no more than 3%.
• Promote shared prosperity by fostering the income growth of the bottom 40% of every country.

(vi) Social Development : Social Development focuses on the need to ‘put people first’ in development process. The World Bank’s work on social development, brings voices of the poor and vulnerable into development.

Balbharti Maharashtra State Board Organisation of Commerce and Management 11th Textbook Solutions Chapter 5 Forms of Business Organisation – II Textbook Exercise Questions and Answers.

Maharashtra State Board 11th Organisation of Commerce and Management Solutions Chapter 5 Forms of Business Organisation – II

1. (A) Select the correct option and rewrite the sentence

Question 1.
Departmental Organisation is financed through …………………… appropriations made by the legislature.
(a) annual budget
(b) monthly budget
(c) quarterly budget
Answer:
(a) annual budget

Question 2.
A ………………. is an autonomous corporate body created by the special Act of the parliament or State legislature.
(a) Statutory corporation
(b) government company
(c) MNC
Answer:
(a) Statutory corporation

Question 3.
A statutory corporation is answerable to ……………… or state assembly whosoever creates it.
(a) Parliament
(b) public
(c) employees
Answer:
(a) Parliament

Question 4.
In government company minimum …………………. % paid up capital is held by government.
(a) 51
(b) 41
(c) 31
Answer:
(a) 51

Question 5.
The shares of government company are purchased in the name of ………………
(a) President of India
(b) Chief Minister
(c) Defence Minister
Answer:
(a) President of India

Question 6.
Government on the advice of ………………… appoints auditor of government company.
(a) Comptroller and Auditor General of India
(b) auditor
(c) chartered accountant
Answer:
(a) Comptroller and Auditor General of India

Question 7.
A government company is a ………………… entity separate from the government.
(a) natural
(b) legal
(c) human
Answer:
(b) legal

Question 8.
……………… company has public accountability.
(a) MNC
(b) Private
(c) Government
Answer:
(c) Government

Question 9.
MNCs are powerful ……………….. entities.
(a) economical
(b) political
(c) social
Answer:
(a) economical

1. (B) Match the pairs

Question 1.

Group A	Group B
(a) BHEL	(1) Special Legislature
(b) Statutory Corporation	(2) 49% paid up capital by Government
(c) Departmental Organisation	(3) Service Motive
(d) Private Sector	(4) Railway
(e) Public Sector	(5) Profit motive
	(6) 51% paid up capital by Government

Answer:

Group A	Group B
(a) BHEL	(6) 51% paid up capital by Government
(b) Statutory Corporation	(1) Special Legislature
(c) Departmental Organisation	(4) Railway
(d) Private Sector	(5) Profit motive
(e) Public Sector	(3) Service Motive

1. (C) Give one word / phrase / term

Question 1.
Organisations which are owned by individual or group of individuals.
Answer:
Private Sector Organisations

Question 2.
Organisations which are owned by government.
Answer:
Public Sector Organisations

Question 3.
The sector which aims at profit maximization.
Answer:
Private sector

Question 4.
The sector which aims at providing reliable services to customers.
Answer:
Public sector Organisation

Question 5.
Organisations which are owned, financed, managed and controlled by government or combination of governments.
Answer:
Public sector Organisation

Question 6.
The organisation which is owned, managed, controlled and financed by government.
Answer:
Departmental Organisation

Question 7.
The oldest form of business organisation under public sector.
Answer:
Departmental Organisation

Question 8.
The organisation which performs it’s all activities as an integral part for government only.
Answer:
Departmental Organisation

Question 9.
The organisation which is financed through annual budget appropriations made by the legislature.
Answer:
Departmental Organisation

Question 10.
The organisation in which there is direct and absolute control of government over the enterprise.
Answer:
Departmental Organisation

Question 11.
An autonomous corporate body created by the Special Act of the parliament or state legislature with defined powers, functions and duties.
Answer:
Statutory Corporation

Question 12.
An organisation which is answerable to parliament or state assembly whosoever creates it.
Answer:
Statutory Corporation

Question 13.
An organisation which is not subject to the budget, accounting and audit controls by the government.
Answer:
Statutory Corporation

1. (D) State True or False

Question 1.
Private sector organisations are owned by individual or group of individuals.
Answer:
True

Question 2.
Public sector organisations are owned by government.
Answer:
True

Question 3.
Private sector aims at providing reliable services to customers.
Answer:
False

Question 4.
Public sector was undertaken as a part of industrial policy, 1956.
Answer:
True

Question 5.
Departmental organisation is the oldest form of business organisation under public sector.
Answer:
True

Question 6.
Departmental organisation performs its all activities separately from government.
Answer:
False

Question 7.
The Minister-in-charge of ministry is the head of departmental organisation.
Answer:
True

Question 8.
There is always problem of red tapism and bureaucracy in departmental organisation.
Answer:
True

Question 9.
There is large scope for the initiative and skill in departmental organisation.
Answer:
False

Question 10.
In departmental organisation there is flexibility in operations.
Answer:
False

1. (E) Find the odd word out

Question 1.
Indian Post, Indian Railway, Bank of India, Air India.
Answer:
Bank of India

Question 2.
Life Insurance Corporation, Reserve Bank of India, Bharat Heavy Electricals Limited, ONGC.
Answer:
Bharat Heavy Electricals Limited

Question 3.
Pepsi, Coca Cola, Dabur, Proctor & Gamble.
Answer:
Dabur

Question 4.
Tata Motors, Hindustan Aeronautics Limited, Steel Authority of India Limited, Gas Authority of India Limited.
Answer:
Tata Motors

1. (F) Complete the sentences

Question 1.
A Government company is a ………………… entity separate from the government.
Answer:
Legal

Question 2.
………………… is owned, managed, controlled and financed by government.
Answer:
Departmental Organisation

Question 3.
A ………………… has defined powers, functions and duties.
Answer:
Statutory corporation

Question 4.
All government companies are registered under ………………… Act, 2013.
Answer:
Companies

Question 5.
MNCs are powerful ………………… entities.
Answer:
economical

1. (G) Answer in one sentence

Question 1.
What is Government Company?
Answer:
The Company which is registered under Companies Act, 2013 having minimum 51% of paid up share capital held by central government or any state government or partly by central government and partly by one or more state governments is known as Government company.

Question 2.
What is Departmental Organisation?
Answer:
It is the oldest form of business organisation. Departmental Organisation performs its all activities as an integral part for government only.

Question 3.
What is Statutory Corporation?
Answer:
Statutory Corporation is an autonomous corporate body created by the special act of the parliament or state legislature with defined powers, functions and duties.

Question 4.
What is Multinational Corporation?
Answer:
A multinational corporation is a business organisation that operates in many different countries at the same time.

Question 5.
What is Public Sector?
Answer:
Public sector organisations are those organisations which are setup by the government with the main object of providing essential services to the general public.

Question 6.
What is Private Sector?
Answer:
Private sector business which are owned by private individuals or group of individuals are termed as private sector organisation.

1. (H) Correct the underlined word and rewrite the following sentences

Question 1.
Statutory Corporation is a natural person created by Special Act.
Answer:
Statutory Corporation is an artificial person created by special act.

Question 2.
A Statutory Corporation is not answerable to parliament or state assembly.
Answer:
A statutory corporation is answerable to parliament or state assembly.

Question 3.
MNC have existence only in single country.
Answer:
MNC have existence in many countries.

Question 4.
Departmental Organisation has separate existence from government.
Answer:
Departmental Organisation has no separate existence from government.

Question 5.
Private sector aims at providing essential services to customers.
Answer:
Public sector aims at providing essential services to customers.

2. Explain the following terms/concepts

Question 1.
Public Sector Organisation.
Answer:

1. It is owned, managed, controlled and financed by government.
2. It includes – Departmental Organisation, Statutory Corporation and Government Companies.
3. Its main objective is to provide services to society.
4. It is managed by government officials or Board of Director.
5. It is large in size and operates on large scale.

Question 2.
Private Sector Organisation.
Answer:

1. It is owned, managed, controlled and financed by individuals or group of individuals.
2. It includes – Sole Trading Concern, Joint Hindu Family Firm, Partnership Firm, Joint Stock Company and Co-operative Society.
3. Its main objective is to maximise profit.
4. It is managed by the owner himself or by their elected representatives.
5. It generally operate in industrial and commercial areas only.

Question 3.
Departmental Organisation.
Answer:

1. It is owned, managed, controlled and financed by government.
2. It is managed by government officials of concerned ministry.
3. They do not have autonomy in decision making.
4. They do not have separate legal entity distinct from government.
5. It is funded through annual budget of the government.

Question 4.
Statutory Corporation.
Answer:

1. It is formed under a Special Act of Parliament or State Legislature.
2. It is managed by Board of Director who are appointed by the government.
3. They enjoy autonomy in decision making.
4. They have separate legal entity distinct from government.
5. It is funded by the government initially and also in need of additional capital.

Question 5.
Government Company.
Answer:

1. It is a company where 51% of the paid up capital is held by Central Government or State Government jointly or individually.
2. It is managed by Board of Directors appointed by Government and Shareholders.
3. It is formed and registered under Companies Act, 2013.
4. They can borrow funds by issuing shares to the public or through debentures, deposits, etc.

Question 6.
Multinational Corporation.
Answer:

1. It is a business organisation that operates in many different countries.
2. It conducts business activities in more then one country.
3. It is controlled through centrally located head office.
4. They are also called as transnational or international corporations.
5. Example : Bata India, Infosys, Tata Motors, etc.

3. Study the following case/situation and express your opinion

1. There is X company in which capital contribution by different entities are as follows : Madhya Pradesh Government 35%, Maharashtra Government 35% and Government of India 30% of company.

Question 1.
Find out type of this company.
Answer:
‘X’ company is a Government Company.

Question 2.
Tell any two features of this company.
Answer:
Separate legal entity and Registration under the Companies Act, 2013 are the features of “X Government Company.

Question 3.
Give an example of this type of company.
Answer:
Hindustan Machine Tools (HMT), State Trading Corporation (STC), are the examples of the Government Company.

2. There is a company which is having a registered office in Singapore and such company is having branch offices in Varanasi (India) and Hambantota (Sri Lanka). This company provides cellular services to host countries through their respective branch offices.

Question 1.
Find out type of organisation.
Answer:
This type of organisation is called as Multinational Corporation.

Question 2.
Comment on it.
Answer:
Multinational Corporation means the companies which undertake business activities in more than one country. So this company is registered in Singapore and having branches in India and Sri Lanka.

Question 3.
Name the business organisation, which is self-financed, delegates authority and run by government as an integral part of it.
Answer:
It is a Departmental Organisation.

Question 4.
State any two merits of this organisation.
Answer:
No separate legal entity and Government employees are the merits of Departmental Organisation.

3. A central government passes a statute in the parliament and forms a business organisation which is having autonomy in administration and this organisation is answerable to legislature.

Question 1.
Which type of organisation is this?
Answer:
It is a Statutory Corporation.

Question 2.
Give any three Features of this organisation.
Answer:
Corporate body, No political interference, Own staffing system are the features of Statutory Corporation.

Question 3.
Give any one example of this type of organisation.
Answer:
“Life Insurance Corporation of India” is the example of Statutory Corporation.

4. Distinguish between the following

Question 1.
Private Sector Organisation and Public Sector Organisation.
Answer:

	Private Sector Organisation	Public Sector Organisation
(1) Meaning	Private enterprises are owned managed, controlled and financed by individuals or groups of individuals. Thus, ownership and management is with private organisations.	Public enterprises are owned, managed and controlled by the state on behalf of the people.
(2) Management	It is managed by industrialists through board of directors and other specialized executives.	It is managed by government officials or board of directors.
(3) Size of Entity	They are usually of small or medium size depending on volume of operation.	They are usually large in sized and they operate on large scale.
(4) Capital provider	Capital is contributed by owner from their own resources and borrowings from financial institutions.	The capital of public sector organisation is contributed by government.
(5) Decision making	Decision making is quick as very few officials are involved in decision making process.	Decision making is delayed due to bureaucratic hurdles.
(6) Business area	It generally operates in industrial and commercial areas only.	It operates in utility services areas like – railways, post, etc. and also in industrial and commercial areas.
(7) Main motive	Main motive of private sector organisation is to earn a profit.	Main motive of public sector organisation is to provide services to society.
(8) Flexibility	They are more flexible in nature as their policies can be modified as and when the need arises.	There is no flexibility in their operations as any change or modification requires the approval of thp Government.
(9) Political Interference	In private enterprises, there is no political interference and therefore executive enjoys complete autonomy and freedom of operations.	Public enterprises working is always affected by political interference. There is constant danger of undue interference by political parties and their leaders.
(10) Competition	Private enterprises operate in cut throat competition.	Public enterprises are generally monopolies or oligopolies (only two sellers in market.)
(11) Economic Equalities	Private sector increases economic inequalities.	Public Enterprises reduce economic inequalities.
(12) Regional Balance	Private enterprise increase regional imbalance because it wants to enjoy the advantages of location of industries.	Public enterprises tries to reduce the regional imbalance as it intends to bring about balanced regional development.
(13) Efficiency	Private Enterprises are more efficient due to profit maximisation, division of labour and specialisation.	Public enterprises lack initiative, flexibility and efficiency because profit motive is absent.
(14) Constituents	Sole Trading Concern, Joint Hindu Family Firm, Partnership Firm, Joint Stock Companies, Co-operative Society are different forms private sector.	Departmental Organisation, Statutory Corporations and Government companies are types of public sector.

Question 2.
Departmental Organisation and Statutory Corporation.
Answer:

	Departmental Organisatio	Statutory Corporation
Meaning	The organisation which is owned, managed, controlled, financed and operated by government is known as Departmental Organisation.	The company which is formed under a special Act of Parliament or State Legislature is known as Statutory Corporation.
Management	It is managed by government officials of the concerned ministry.	It is managed by board of directors nominated by government.
Legal Status	There is no separate legal status distinct from the government.	Statutory company has a separate legal status distinct from the government.
Borrowing Power	Departmental undertaking cannot borrow from public. It has to depend on budget allocated by the government.	Statutory Company can borrow from public by issue of shares and debentures.
Control	It is controlled by the concerned ministry.	It is controlled by government by the Act of Parliament or State Legislature.
Capital	Capital of departmental organisation comes from annual budget appropriations of the government.	Capital for statutory company comes from Central or State Government.
Formation	It is formed through Executive decision taken by the concerned ministry.	It is formed by passing a Special Act in the Parliament or in the State Legislature.
Suitability	It is suitable for defence and public utility undertakings such as infrastructure projects, e.g. Railways, Post & Telegraph, Defence, etc.	It is suitable for public utilities, development projects, service industry like banking and finance and other industrial and commercial undertakings e.g. UTI, LIC, RBI, ONGC, Air India etc.
Staff	Employees appointed are Government servants. They are subject to the same discipline and enjoy the same privileges as meant for civil servants.	Employees can be recruited independently. They are not civil servants. The corporation can have its own rule of recruitment and scale of remuneration.
Flexibility	It has low flexibility in its operation.	It has moderate flexibility in its operation.
Autonomy	It does not have autonomy in decision making.	It has autonomy in decision making.

Question 3.
Government Company and Multinational Corporation.
Answer:

	Government Company	Multinational Corporation
Meaning	Government Company means company where minimum 51% of the paid up capital is held by the Central or State Government jointly or individually.	Multinational Corporation is a company which is incorporated in one country and has business units in several countries.
Capital	The capital is contributed by the Central Government or State Government or even by general public.	The capital is contributed by the shareholders or financial institutions in several countries.
Management and Control	Government Company is managed by Board of Directors appointed by government and shareholders.	Multinational corporation is managed by a parent company. It manages affairs of the subsidiary from the respective home country.
Establishment	Government companies are formed and registered under provisions of Companies Act, 2013.	Multinational corporations have to seek permission from the government and host countries.
Borrowing power	Government companies can borrow funds by the way of debt or issuing shares to the public.	Multinational corporation use resources of different countries.
Area of Operations	Government company operates within the local boundaries of a nation.	MNC operates in several countries, having headquarters in one country.
Motive	Government companies are service oriented and hence take interest in the social welfare activities of the country.	MNCs are profit motivated rather than service oriented.
Accountability	Government Company has to take its annual reports in the Parliament where its working is discussed and debated. Though it has autonomy in financial matters, it is indirectly accountable to the publics.	MNC is accountable to the taxation authorities in host countries and have to follow procedures such as Income Tax law procedure, FEMA, EXIM Policy etc. and as such will have to obey the laws of the host countries.
Currency	They have to deal with single currency.	They have to deal with multiple currencies and exchange rates.
Resource availability	Government company uses resources of government and its employees are government employees and are permanent.	MNCS use resources of different countries and their employees are on contract basis.
Trust and Public Confidence	Government company enjoy more public confidence as they have government backing and support.	MNCS do not have government backing and support in host countries.
Example	Steel Authority of India Ltd., State Trading Corporation, Indian Oil Corporation, BHEL, HMT, etc.	Hindustan Lever Ltd., Colgate Palmolive India Ltd; Coca Cola, IBM Computers, Sony, etc.

Question 4.
Departmental Organisation and Multinational Corporation.
Answer:

	Departmental Organisation	Multinational Corporation
Meaning	The organisation which is owned, managed, controlled, financed and operated by government is known as Departmental Organisation.	Multinational Corporation is a company which is incorporated in one country and has business units in several countries.
Management	Departmental Organisation is managed by government officials of the concerned ministry.	Multinational Corporation is managed by parent company. It manages affairs of the subsidiary from the respective home country.
Legal status	There is no separate legal status distinct from the government.	It has separate legal status.
Borrowing power	Departmental undertaking cannot borrow from public. It has to depend on budget allocated by the government.	Multinational corporation use resources of different countries.
Control	Departmental Organisations are controlled by the concerned ministry.	Multinational corporations are controlled by respective parent companies and mostly home strategic.
Capital	Capital of the Departmental Organisation comes from annual budget appropriations of the government.	The capital is contributed by the shareholders or financial institutions in several countries.
Ownership	Departmental undertaking is fully owned by the Government.	Ownership of MNC is in hands of shareholder’s of the company.
Privileges & Concessions	It receives highest government concessions and privileges.	MNC do not have any concessions. They have to pay duties and taxes.

Question 5.
Government Company and Statutory Corporation.
Answer:

	Government Company	Statutory Corporation
Meaning	Government Company means company where minimum 51% of the paid up capital is held by the Central or State Government jointly or individually.	The company which is formed under a special Act of Parliament or State Legislature is known as Statutory Corporation.
Capital	The capital is contributed by the Central Government or State Government or even by general public and financial institutions.	Capital for the statutory corporation comes from Central or State government.
Managemen	Government Company is managed by Board of Directors appointed by government and shareholders.	Statutory Corporation is managed by Board of Directors nominated by government.
Control	These companies are controlled by government or shareholders.	Statutory corporation is controlled by government by the Act of Parliament or State Legislature.
Establishment	Government companies are formed and registered under provisions of Companies Act, 2013.	The statutory corporation is established by special Act of the Parliament or State Legislature.
Borrowing power	Government companies can borrow funds by the way of debt or issuing shares to the public.	tatutory corporation can borrow from public by issue of bonds.
Privileges & Concessions	It has no privileges and concessions by government.	It enjoys moderate privileges and concessions.
Suitability	It is suitable for industrial and commercial undertakings, e.g. BHEL, SAIL, HMT, Indian Oil Corporation, Indian Refineries, Madras Refineries, Gujarat Refineries, etc.	It is suitable for public utilities, development projects, service industry like banking and finance and other industrial and commercial undertakings e.g. UTI, LIC, RBI, ONGC, Air India etc.
Political Interference	It has less political interference in management of company as it has its own Board of Director.	It has more political interference as it is controlled by State and Central Government.
Flexibility	Government companies are more flexible in operations of business. They can change line of business as per market trend.	Statutory company are rigid in operations they are formed for the particular purpose.
Accountability	It is accountable to public.	It is accountable to State and Central Government.
Autonomy	It has full autonomy as its incorporated under Companies Act, 2013.	It has theoretical autonomy as its established with certain purpose by Central or State Government.

Question 6.
Departmental Organisation and Government Company.
Answer:

	Departmental Organisation	Government Company
Meaning	The organisation which is owned, managed, controlled, financed and operated by Government is known as Departmental Organisation.	Government Company means company where minimum 51% of the paid up capital is held by the Central or State Government jointly or individually.
Management	Departmental Organisation is managed by government officials of the concerned ministry.	Government Company is managed by Board of Directors appointed by government and shareholders.
Legal Status	There is no separate legal status distinct from the government.	A Government company has legal status separate from the Government.
Borrowing power	Departmental undertaking cannot borrow from public. It has to depend on budget allocated by the government.	Government companies can borrow funds by the way of debt or issuing shares to the public.
Control	Departmental Organisations is controlled by the concerned ministry.	These companies are controlled by government or shareholders.
Capital	Capital of the departmental Organisation comes from annual budget appropriations of the government.	The capital is contributed by the Central Government or State Government or even by general public and financial institution.
Formation	It is formed through Executive decision taken by the concerned ministry.	It is formed through registration under Companies Act, 2013.
Privileges & Concessions	It receives highest government concessions and privileges.	It has no privileges and concessions by government.
Suitability	It is suitable for defence and public utility undertakings such as infrastructure projects, e.g. Railways, Post & Telegraph, Defence, etc.	It is suitable for industrial and commercial undertakings, e.g. BHEL, SAIL, HMT, Indian Oil Corporation, Indian Refineries, Madras Refineries, Gujarat Refineries, etc.
Staff	Employees appointed are Government servants. They are subject to the same discipline and enjoy the same privileges as meant for civil servants.	Employees can be recruited independently and it does not have to necessarily follow civil service rules.
Political Interference	It has high political interference with regards to the management.	As compared to departmental organisation it has less political interference.
Flexibility	It is rigid in operations as its managed through officers of the government.	It is more flexible in operations as managed by Board of Directors.
Motive	It is majorly concern with providing service to the people.	It is concern with giving with profit making and service to the people.
Accountability	Highly accountability to the respective the Minister in charge as they render their service.	Low accountability to the people as they render their service.
Autonomy	There is no autonomy as its owned, managed controlled, financed by government.	It has full autonomy as per provisions to Companies Act, 2013.

Question 7.
Statutory Corporation and Multinational Corporation.
Answer:

	Statutory Corporation	Multinational Corporation
Meaning	The company which is formed under a Special Act of Parliament or State Legislature is known as Statutory Corporation.	Multinational corporation is a company which is incorporated in one country and has business units in several countries.
Capital	Capital for the statutory corporation comes from Central or State government.	The capital is contributed by the shareholders or financial institutions in several countries.
Management	Statutory Corporation is managed by Board of Directors nominated by government.	Multinational Corporation is managed by parent company and it manages affairs of the subsidiary from the respective home country.
Control	Statutory Corporations are controlled by government by the Act of Parliament or State Legislature.	Multinational Corporations are controlled by respective parent companies.
Establishment	The Statutory Corporation is established by Special Act of the parliament or State Legislature.	Multinational Corporations have to seek permission from the Government and host countries.
Borrowing power	Statutory company can borrow from public by issue of shares and debentures.	Multinational Corporation use resources of different countries.
Area of Operations	Statutory corporation operates within the local boundaries of a nation. Hence, the area of operations is not large.	MNC operates in several countries, having headquarters in one country. Hence, the area of operations is large.
Motive	Statutory Corporation are service oriented and hence take interest in the social welfare activities of the country.	MNCs are profit motivated rather than service oriented. They render service in those areas where the opportunities for profit maximisation are more.
Accountability	Statutory corporation has to take its annual reports in the Parliament where its working is discussed and debated.	MNC is accountable to the taxation authorities in host countries and have to follow procedures such as Income Tax law procedure, FEMA, EXIM Policy etc. and as such will have to obey the laws of the host countries.
Currency	They have to deal with single currency.	They have to deal with multiple currencies and exchange rates.
Resource availability	Employees can be recruited independently. They are not civil servants. The corporation can have its own rule of recruitment and scale of remuneration.	MNC’s use resources of different countries and their employees are on contract basis.
Trust and Public Confidence	Statutory corporation enjoy more public confidence as they have government backing and support.	MNC’s do not have government backing and support in host countries.
Example	UTI, LIC, RBI, ONGC, Air India, etc.	Hindustan Lever Ltd., Colgate Palmolive India Ltd; Coca Cola, IBM Computers, Sony, etc.

5. Answer in brief

Question 1.
State any four features of Departmental Organisation.
Answer:
Features of Departmental Organizations:
(i) Delegation of Authority : All major policy decisions are taken by the ministry. The day-to-day working is looked after by the staff consisting of civil servants of IAS, IPS cadres.

(ii) Organizational Structure : The internal organizational structure is of line type. The department is headed by minister who is responsible for the working of the department. Then there is Board of Directors or Managing Committee who are assisted by Chief Executive, Executive Assistant, Supervisory and General Staff. This is termed as bureaucracy style or military style of organisation.

(iii) Government Employees : The employees of departmental organization are civil servants and they are selected through Union Public Service Commission. Staff selection Board, Railway Recruitment Board etc. and as such they are treated as Government employees.

(iv) Financed by the Government: The funds are arranged for their operation from Government treasury. This enterprise cannot borrow money from the public without Government consent.

Question 2.
State any four features of Statutory Corporation.
Answer:
Features of Statutory Corporation:
(i) No political Interference : It enjoys freedom from political, parliamentary and government interference in day-to-day management.

(ii) Own Staffing System: They recruit their own employees and they are not government servant. Employees terms and services are not governed by civil services rules.

(iii) No Political Interference : It enjoys freedom from political, parliamentary and government interference in day to day management of its affairs.

(iv) Financial Autonomy : Statutory Corporations are financially autonomous. After getting the prior permission from the Government, it can even borrow money within and outside the country.

(v) Independent Identity : They have an independent identity different from the government. Though, the overall business policies are formulated by the government, they have administrative autonomy and hence operational flexibility.

Question 3.
State any two demerits of Multinational Corporation.
Answer:
Demerits of Multinational Corporation:
(i) Danger for Domestic Industries : Multinational Corporations have vast economic power so they are danger to domestic industries which are still in process of development. Domestic industries not so powerful to face the challenges of Multinational Corporation.

(ii) C reate Problem for Environment: Profit is sole objective of multinational corporation. Such companies damage environment of developing countries. To lower the price of goods they dump lower standard quality product which harms local soil, water and air.

(iii) O utsourcing of Job: Normally MNCs outsource the job work due to lower cost, due to this their liabilities towards employees are reduced.

(iv) Misuse of Mighty Status : Multinational Corporations have powerful financial strength because of huge capital. They can afford to bear losses for a long while in the hope of earning huge profits. They have ended local competition and achieved monopoly. This may be unfair.

Question 4.
State any four merits of Government Company.
Answer:
Merits of Government Company:
(i) Profitability and Accountability : It works on business principles and follows commercial approach. Though not profit oriented like private sector, it does make reasonable profit which is used for public welfare, modernisation, renovation and development. Moreover, its performance can be evaluated by the Parliament as it has public accountability.

(ii) Internal Autonomy: Government Company enjoys financial and administrative autonomy. Its dependence on Government authority is minimum. It has its own capital structure, financial plan, borrowing powers and so on.

(iii) Government Ownership ; The ownership of the government company rests with Central or State Government who owns major capital of the company and as such looks after its management and control. Government always promotes public welfare.

(iv) Foreign Capital and Technical Know how : As the government provides 51% of the capital, the rest 49% can be raised through foreign investment. By seeking foreign capital, Government companies bring advanced technology and technical know how.

6. Justify the following statements

Question 1.
Departmental Organisations are run for providing public services.
Answer:

1. Departmental Organisations are the oldest forms of public enterprises.
2. Indian railways, post office, defence, All India Radio are the Departmental Organisations.
3. Indian Railways give services to public.
4. Main objective of Departmental Organisations is to provide services to public.
5. Private sector aims at profit maximization while public sector aims to providing reliable services to customers.
6. Thus, Departmental Organisations are run for providing public services.

Question 2.
There is direct control of Government on departmental organisation.
Answer:

1. Departmental organisations are run by the Government.
2. Departmental organisations are financed through annual budget of Government.
3. Revenues of departmental organisation is directly paid to Government treasury.
4. Departmental organisation has no separate existence from Government.
5. The staff of enterprises is treated equally with other civil servants.
6. Thus, there is direct control of Government on departmental organisation.

Question 3.
There is no political interference in statutory corporation.
Answer:

1. A Statutory corporation is an autonomous corporate body.
2. Statutory corporation is an artificial person created by law and it has an independent legal entity.
3. Employees are not government servants.
4. A statutory corporation enjoys financial autonomy or independence.
5. A statutory corporation comes into existence by following particular act, therefore, there is no political interference in formation.
6. Thus, all statutory corporations are free from political interference.

Question 4.
There is professional management in statutory corporation.
Answer:

1. A statutory corporation is able to manage its affairs with independence and flexibility.
2. Management of statutory corporation is done without any government interference.
3. The statutory corporation is relatively free from red tapism.
4. There is less file work and less formality to be completed before taking decisions.
5. Board of directors of statutory corporation consists of business experts and the representatives of various groups such as labour, consumers, etc. who are nominated by the government.
6. Thus, there is professional management in statutory corporation.

Question 5.
MNC helps to end local monopolies.
Answer:
Multinational corporation helps to end local monopolies.

1. Multinational corporations lead to competition in the host countries.
2. Local monopolies of host countries either start improving their products or reduces their prices.
3. Multinational corporation put an end to exploitative practices of local monopolists.
4. As a matter of fact, MNCs compel domestic companies to improve their efficiency and quality.
5. Thus, MNC helps to end local monopolies.

Question 6.
MNC has worldwide existence.
Answer:

1. As multinational corporation is operating on a global basis.
2. Multinational corporation have marketing operations in several countries operating through a network and branches.
3. They have production facilities in several countries.
4. Advanced Technology and international business operations are done by MNC.
5. It brings in much needed foreign capital for the rapid development.
6. Multinational corporation integrate economies of various nations with the world economy.
7. Thus, MNC has worldwide existence.

Question 7.
MNC has mighty economic powers.
Answer:

1. As MNC is operating on a global basis, they have huge physical and financial assets.
2. In terms of assets and turnover, many MNCs are bigger than national economies of several countries.
3. Multinational corporations are powerful economic entities.
4. Multinational corporation keep on adding to their economic power through constant mergers and acquisitions of companies in host countries.
5. Thus, MNC has mighty economic powers.

7. Attempt the following

Question 1.
Merits of Departmental Organisation.
Answer:
Merits of Departmental Organization:
1. Qualified Staff : Departmental organizations are properly managed and supervised by the qualified government staff.

2. Proper Use of Funds : The Departmental organizations provide public utilities or basic necessities. Government Department works under the control and supervision of the concern ministry. Charges for misuse of funds are less in departmental organization.

3. Social Welfare : Government undertakes socio-economic activities to promote social welfare. Providing essential comlhodities to people at reasonable price is top priority of the state. Thus, socio-economic objectives are achieved with Government control.

4. Public Accountability : The concerned minister incharge of the government organisation is answerable to the Parliament or Assembly. The elected representatives of people can raise the question about the working of this enterprises on behalf of public at large.

Question 2.
Demerits of Departmental Organisation.
Answer:
Demerits of Departmental Organisation:
(i) Delay in Action : In Departmental organisation there is always centralization of authorities. Such excessive centralization of authority leads to delay in action.

(ii) Inefficiency and Corruption : There is lot of inefficiency and corruption in departmental organisation.

(iii) Less Scope for Initiative : The working of this organization suffers from lack of continuity and stability because the policies of the department are decided by the ministers.

(iv) Instability : The working of this organisation suffers from lack of continuity and stability, because the policies of the department are decided by the Ministers.

(v) Delayed : The executives at the lower level have to depend on higher authority for all the decisions. They can’t take, their own decisions.

Question 3.
Merits of Statutory Corporation.
Answer:
Merits of Statutory Corporation:
(i) Professional Management: Statutory Corporations are managed professionally. The directors and other executives are highly trained and specialize in their respective fields. This leads to efficiency in working.

(ii) Rapid Decisions : Statutory Corporations enjoy autonomy. They can take quick decisions. There is less file work and less formalities to be completed before taking decisions.

(iii) Efficient Staff : In Statutory Corporation, employees are given fair wages, better working conditions and proper training and development programs are initiated for the employees. As a result, employer-employee relations are very cordial and staff is highly motivated to perform better.

(iv) Motivated Staff: In Statutory Corporations, employees are given fair wages, better working conditions and proper training and development programmes are initiated for the employees. As a result, employer- employee relations are very cordial and staff is highly motivated to perform better.

Question 4.
Demerits of Statutory Corporation.
Answer:
Demerits of Statutory Corporation:
Though statutory corporations are autonomous bodies and enjoy flexibility in their working, they have certain limitations which are as follows:
(i) Clashes Amongst Interests : All or majority directors of Statutory Corporations are appointed by the Government from different fields. As there are many members it is quite possible that their interests may clash. The smooth functioning of the corporation may be hampered.

(ii) Autonomy on Paper Only : Ministers, government officials and political parties often interfere with the working and decision making policies which affects the autonomy and flexibility of it.

(iii) Rigid Structure : Though statutory corporation have operational flexibility, they are subject to many rules and regulations. Any changes in the constitution, objects, powers, duties, etc., require amendments to be passed in the parliament which is difficult task. This reduces its flexibility.

(iv) Lack of Initiative : The statutory corporation have no profit motive. There is no competition among them. So employees do not take initiative to increase the profit.

Question 5.
Features of Government Company.
Answer:
Features of Government Company:
The Government Company may be registered as public or private limited companies. These companies are established for purely business purpose and to compete with the private sector.
Following are the features of Government Company:
(i) Free from Procedural Controls: The Government companies have a right to formulate their independent policies and even make necessary changes in them. It enjoys freedom from budgetary, accounting and audit controls which are applicable to Government undertakings.

(ii) Majority of Government Directors : All or majority of directors of such companies are appointed by the Government from different fields. They may be experts from banking sector, insurance sector, who manage the day to day business affairs.

(iii) Public Accountability : The annual accounts of the company are tabled before Parliament or State Legislature for review and discussion. Thus, Government Company is accountable and answerable to the Parliament or State Legislature through the concerned Minister.

(iv) Registration under the Companies Act: The Government Company is registered under the Companies Act, 2013 and its formation, working, management and winding up a business is governed by provisions of- the Act. Government has power to modify or change certain provisions laid down in the Act.

Question 6.
Demerits of Government Company.
Answer:
Demerits of Government Company:
Though Government Company enjoys various benefits due to Government ownership and autonomy, it has following limitations:
(i) Inefficiency and Corruption : The Directors have no financial stake in the company and as a result they are indifferent towards working of the company. Due to limited autonomy and petty politics, the efficiency of the enterprise is affected. It results in corruption.

(ii) Lack of Professional view : There is lack of devotion, dedication and systematic approach. In fact, there is no professional approach in various operations and working of the company.

Thus, from the above points it could be seen that there is lot of government and political interference in the Government company which brings about its inefficiency and ineffectiveness.

(iii) Domination of Ministers and Politicians : The ministers of the concerned departments are in charge of the Government Company. In view of Government ownership, political interference is quite common. The Directors try to serve and achieve their political motives rather than realisation of business goals as they are nominated for political gains and not on merits.

(iv) Red Tapism and Delay : The bureaucratic management delays in taking decision and implementing. There is no time frame and the employees are not devoted. There is often delay in preparing various documents and forwarding the same for taking action. Thus, delay, red tape, corruption, avoidance of work and shirking from the responsibility is common sight in Government Company.

Question 7.
Features of Multinational Corporation.
Answer:
Features of Multinational Corporation:
Following are the features of Multinational Corporation:
(i) Advanced and Sophisticated Technology : Multinational company has large capital and sophisticated technology and infrastructure. As a result it undertakes diversified and multifarious activities including manufacturing, marketing, financial, research and development.

(ii) Legal Existence : MNCs are registered in their home country as per their laws and as such they enjoy separate legal status. It can sue and be sued, enter into contracts and own property in their own name.

(iii) Government: MNCs have to bring about the necessary changes in their functioning based upon the laws prevailing in the countries of their operations. For e.g. advertisement about various products on TV is given in local languages in India and in national language Hindi, to cover maximum target audience. In some cases they have to change the menu to suit local demands for e.g. McDonalds had to change its menu for its business in India.

(iv) Origin: The MNCs have origin in one country and the country to which they belong is called home country. The country in which they operate their business activities is called host country. These companies are registered in their home country and have a place of business in different countries of the world. The head office controls the operations of different branches through a network of internet. They also appoint their representatives in host countries for smooth business operations.

Question 8.
Merits of Multinational Corporation.
Answer:
Merits of Multinational Corporation:
Following are the merits of Multinational Corporation.
(i) Proper use of Idle Resources : The national income of host country increases as MNCs use idle physical and human resources with latest technologies.

(ii) Inflow of Foreign Capital: Multinational corporations bring much needed foreign capital for the rapid development of developing countries. This capital is useful for growth of domestic country.

(iii) Promotion of International Brotherhood and Culture: MNCs integrate economies of various nations with the world economy and promote international brotherhood and culture with peace and prosperity in the world.

(iv) End of Local Monopolies : In global market, Multinational Corporations end local monopolies of host . countries improving their products and reduces prices.

(v) Technical Development: Multinational corporations gives lot of importance to research and development activities. They are also fully equipped and have necessary infrastructure. The research and development is undertaken for finding out new product, new system, and new technology of doing business in an economical way.

8. Answer the following in details

Question 1.
Explain Departmental Organization and its features.
Answer:
(A) Meaning:
Departmental organizations are oldest form of public enterprises. These are run by Government departments headed by a minister who guides and controls the activities of the undertaking e.g. Indian Railways, all India Radio, Indian Post, Defence etc. A Departmental organization is organized, financed and controlled by Government like any other Government department. Under this type of organization, no distinction is made between public sector and traditional Government functions.

(B) Features of Departmental Organizations:
(i) Delegation of Authority : All major policy decisions are taken by the ministry. The day-to-day working is looked after by the staff consisting of civil servants of IAS, IPS cadres.

(ii) Organizational Structure : The internal organizational structure is of line type. The department is headed by minister who is responsible for the working of the department. Then there is Board of Directors or Managing Committee who are assisted by Chief Executive, Executive Assistant, Supervisory and General Staff. This is termed as bureaucracy style or military style of organisation.

(iii) Government Employees : The employees of departmental organization are civil servants and they are selected through Union Public Service Commission. Staff selection Board, Railway Recruitment Board etc. and as such they are treated as Government employees.

(iv) Financed by the Government: The funds are arranged for their operation from Government treasury. This enterprise cannot borrow money from the public without Government consent.

(v) Useful for Secret: matters like defence, atomic energy, etc.

(vi) No Legal Status : A government department does not enjoy an independent legal status. It is dependent on the Government. It cannot be taken to court without the consent of the Government. Thus, the above are the features of Departmental Organization.

(vii) Government Sanction for Expansion : Public Enterprises need to take the sanction of the Government for expansion and diversification of business or for changing the policies, etc.

(viii) Examples of Departmental Organisation : Ordinance factories, Railways, Broadcasting, Post and Telegraph, BHEL, Indian Drug and Pharmaceuticals Ltd. Hindustan Aeronautics Ltd. Army Clothing Factory, Gun Factory and so on.

(ix) Run by Government : Different procedures like accounting, auditing and budgeting are at par with Government department.

(x) Managed by Government : The Departmental organization is managed by Government officials of the concern ministry.

(xi) Accounting Control : The organisation is subject to accounting and audit procedures and controls as applicable to government departments or to the concerned ministry.

(xii) Accountability : The enterprise is funded by the government and hence the government controls its affairs. In other words, it is answerable to the Parliament.

(xiii) No Separate Legal Entity : A Government department does not enjoy an independent legal status. It is dependent on the Government. It cannot be taken to court without the consent of the Government.

Question 2.
Explain merits and demerits of Departmental Organization.
Answer:
(A) Meaning:
Departmental organizations are run by the Government departments headed by a minister who guides and controls the activities of the undertaking.

(B) Merits of Departmental Organization:
1. Qualified Staff : Departmental organizations are properly managed and supervised by the qualified government staff.

2. Proper Use of Funds : The Departmental organizations provide public utilities or basic necessities. Government Department works under the control and supervision of the concern ministry. Charges for misuse of funds are less in departmental organization.

3. Social Welfare : Government undertakes socio-economic activities to promote social welfare. Providing essential comlhodities to people at reasonable price is top priority of the state. Thus, socio-economic objectives are achieved with Government control.

4. Public Accountability : The concerned minister incharge of the government organisation is answerable to the Parliament or Assembly. The elected representatives of people can raise the question about the working of this enterprises on behalf of public at large.

5. Maintain Secrecy: In matters of strategic, national importance, secrecy is essential and confidentiality can be maintained in certain business activities such as defence deals, atomic plants, drugs and pharmaceuticals etc.

6. Easy Formation : These organisations are very easy to form. They do not require any special statute or registration.

7. Direct Control: These organizations are properly managed and supervised by the qualified Government Staff Minister at the top is responsible to the Parliament for its operations.

8. Direct Revenue to Government : The revenue of departmental organizations directly goes to the jr Government treasury.

9. Less Overheads : The administrative expenses are less as government only operate it.

10. Easy Finance : These organisation get the required finance by the government through direct allocation of funds from the concerned ministry.

11. Development of Public Utilities : The departmental organisation provides public utilities or basic r necessities. People require essential services and products such as Railways, Transport and Communications, Telephone services, etc. Thus, essential services are made available by the Government department at a very reasonable rate.

(C) Demerits of Departmental Organisation:
(i) Delay in Action : In Departmental organisation there is always centralization of authorities. Such excessive centralization of authority leads to delay in action.

(ii) Inefficiency and Corruption : There is lot of inefficiency and corruption in departmental organisation.

(iii) Less Scope for Initiative : The working of this organization suffers from lack of continuity and stability because the policies of the department are decided by the ministers.

(iv) Instability : The working of this organisation suffers from lack of continuity and stability, because the policies of the department are decided by the Ministers.

(v) Delayed : The executives at the lower level have to depend on higher authority for all the decisions. They can’t take, their own decisions.

(vi) Lack of Flexibility : The Departmental organization lacks flexibility in decision making. This is because there is centralization of authority.

(vii) Incurring Losses/Huge Losses : Most of the government undertakings incur heavy losses due to lack of business skills and approach as they are not professional.

(viii) Absence of Professionalism : There is lack of professionalism in the management of departmental organization. Often the decisions are taken unsystematically, moreover the data collected is often out dated and there is no proper analysis of such data. Hence, the decisions are taken hastily.

(ix) Political Interference : The Ministers, bureaucrats, Government officials interfere in the day to day working of the undertaking.

(x) Red Tapism and Bureaucracy : The Departmental organisations are controlled by government. Departmental organisations are facing delays, red tapism, corruption, lack of initiative, bureaucracy, etc.

(xi) Insensitive to Consumer Needs : The officials of this organisation are insensitive to the needs of consumers. The officials are not bothered about consumer needs and consumer satisfaction as they are more worried about their security of service in view of monopolistic position.

(xii) Lack of Autonomy : Departmental organisation lack autonomy and freedom in working and decision making.

Question 3.
Explain Statutory Corporation and its features.
Answer:
(A) Meaning:
Statutory Corporations are autonomous bodies established under special legislative Acts. A statutory corporation is formed under a Special Act of Parliament or State Legislature. The powers, duties, functions and scope of operations are laid down in the Act.
LIC, IFCI, SBI, UTI, Air India are the examples of public corporation.
Statutory Corporation is a body with a separate existence, which can sue and be sued and is responsible for its own finance. It is administered by a board appointed by public authority to which it is answerable.

(B) Features of Statutory Corporation:
(i) No political Interference : It enjoys freedom from political, parliamentary and government interference in day-to-day management.

(ii) Own Staffing System: They recruit their own employees and they are not government servant. Employees terms and services are not governed by civil services rules.

(iii) No Political Interference : It enjoys freedom from political, parliamentary and government interference in day to day management of its affairs.

(iv) Financial Autonomy : Statutory Corporations are financially autonomous. After getting the prior permission from the Government, it can even borrow money within and outside the country.

(v) Independent Identity : They have an independent identity different from the government. Though, the overall business policies are formulated by the government, they have administrative autonomy and hence operational flexibility.

(vi) Special Act : They are established under a special Act passed by the Parliament. Its objectives, powers 98and functions are regulated by the Act.

(vii) Corporate Body : Statutory Corporation is a corporate body. It has a separate legal entity distinct from its members and thereby can enter into contracts and acquire property on its own name.

(viii) Answerable to the Legislature : A statutory corporation is answerable to Parliament or State Assembly whomsoever creates it. Parliament has no right to interfere. Though the overall business policies are formulated by the government, they have administrative autonomy and hence operational flexibility.

(ix) Legal Status : As a body corporate, it has a separate legal entity, distinct from its members and thereby can enter into contracts and acquire property in its own name.

(x) Independent Accounting System : They are not subject to budget accounting and audit laws and procedures applicable to government departments. But financial reports are placed in the Parliament for discussion.

(xi) Public Accountability : It’s accounts are audited by the Comptroller and Auditor General of India. Its annual reports and results are placed in Parliament or Legislative Assembly for discussion and hence answerable for their working and results to the Parliament.

(xii) Objective : It is service oriented and not profit oriented. It works efficiently to earn profit which is used for its day to day functioning.

Question 4.
Explain merits and demerits of statutory corporation.
Answer:
(A) Introduction
Statutory Corporations are autonomous bodies established under special legislative Acts. A statutory corporation is formed under a Special Act of Parliament or State Legislature. The powers, duties, functions and scope of operations are laid down in the Act.
LIC, IFCI, SBI, UTI, Air India are the examples of public corporation.

Statutory Corporation is a body with a separate existence, which can sue and be sued and is responsible for its own finance. It is administered by a board appointed by public authority to which it is answerable.

(B) Merits of Statutory Corporation:
(i) Professional Management: Statutory Corporations are managed professionally. The directors and other executives are highly trained and specialize in their respective fields. This leads to efficiency in working.

(ii) Rapid Decisions : Statutory Corporations enjoy autonomy. They can take quick decisions. There is less file work and less formalities to be completed before taking decisions.

(iii) Efficient Staff : In Statutory Corporation, employees are given fair wages, better working conditions and proper training and development programs are initiated for the employees. As a result, employer-employee relations are very cordial and staff is highly motivated to perform better.

(iv) Motivated Staff: In Statutory Corporations, employees are given fair wages, better working conditions and proper training and development programmes are initiated for the employees. As a result, employer- employee relations are very cordial and staff is highly motivated to perform better.

(v) Service Motive : They are formed to provide public utility services and promote consumer satisfaction. It provides essential commodities to people at reasonable rates.

(vi) Easy to Raise Capital : Being owned by government, these corporations can raise required funds by floating bonds at low rate of interest.

(vii) Administrative Autonomy : Due to administrative and financial autonomy, statutory corporation take quick decisions and are flexible in its policy framing and working as per the changing business needs.

(viii) Public Accountability : These organisations enjoy public accountability, flexibility and autonomy in its working. The accounts are audited by Comptroller and Auditor General of India and final accounts are tabled before Parliament or Legislature.

(ix) Initiative and Flexibility : Statutory Corporation have an independent identity different from the government. Though, the overall business policies are formulated by the government, they have administrative autonomy and hence operational flexibility.

(x) Enjoys Economies of Scale : As these organisations are large scale undertakings which promote social welfare, it enjoys economies of large scale business operations.

(xi) Creates Employment Opportunities : Statutory organisations generate employment opportunities for the people at large. LIC, ONGC, Air India and others employ lakhs of people in the country. This reduces government burden of providing jobs to teeming millions and as such they help government.

(xii) Enjoy Monopoly : Most of statutory organisations are monopolistic or semi-monopolistic in their areas of functioning.

(C) Demerits of Statutory Corporation:
Though statutory corporations are autonomous bodies and enjoy flexibility in their working, they have certain limitations which are as follows:
(i) Clashes Amongst Interests : All or majority directors of Statutory Corporations are appointed by the Government from different fields. As there are many members it is quite possible that their interests may clash. The smooth functioning of the corporation may be hampered.

(ii) Autonomy on Paper Only : Ministers, government officials and political parties often interfere with the working and decision making policies which affects the autonomy and flexibility of it.

(iii) Rigid Structure : Though statutory corporation have operational flexibility, they are subject to many rules and regulations. Any changes in the constitution, objects, powers, duties, etc., require amendments to be passed in the parliament which is difficult task. This reduces its flexibility.

(iv) Lack of Initiative : The statutory corporation have no profit motive. There is no competition among them. So employees do not take initiative to increase the profit.

(v) Unfair Practices : Before 1991, these corporations enjoyed monopolistic and semi monopolistic position. They were charging high prices from the consumers to cover up their inefficiencies. After 1991, due to liberalization, most of them lost their monopolistic position but skill, in practice the lack competition as they are not aware of consumer needs.

Question 5.
Explain Government Company and its features.
Answer:
(A) Meaning:

1. A Government Company is one in which atleast 51% of its paid up capital is held by the Central Government and / or the State Government.
2. State Trading Corporation (STC), Steel Authority of India (SAIL), Bharat Heavy Electricals Ltd (BHEL) etc. are some of the examples of Government Companies.
3. These companies are registered under the Indian Companies Act, 2013 and its working is governed by the rules and regulations of the act.
4. Government Companies are established for purely business purpose and to complete with the private sector. The shares of the company are purchased in the name of the President of India.
5. Government Companies may be registered as public or private limited companies.

(B) Features of Government Company:
The Government Company may be registered as public or private limited companies. These companies are established for purely business purpose and to compete with the private sector.
Following are the features of Government Company:
(i) Free from Procedural Controls: The Government companies have a right to formulate their independent policies and even make necessary changes in them. It enjoys freedom from budgetary, accounting and audit controls which are applicable to Government undertakings.

(ii) Majority of Government Directors : All or majority of directors of such companies are appointed by the Government from different fields. They may be experts from banking sector, insurance sector, who manage the day to day business affairs.

(iii) Public Accountability : The annual accounts of the company are tabled before Parliament or State Legislature for review and discussion. Thus, Government Company is accountable and answerable to the Parliament or State Legislature through the concerned Minister.

(iv) Registration under the Companies Act: The Government Company is registered under the Companies Act, 2013 and its formation, working, management and winding up a business is governed by provisions of- the Act. Government has power to modify or change certain provisions laid down in the Act.

(v) Own Staff: The employees are appointed as per the rules and regulations set by the company. Its employees are not governed by respective Government.

(vi) Promotes Social Welfare : Government Companies aims to optimise national and natural resources such as land, water, electricity, etc. It produces arms, ammunition and other defence equipments. It also brings about balanced regional development and leads to equality of income.

(vii) Objective : It operates on commercial principles and as such its aim is to make profit.

(viii) Separate Legal Entity : A Government Company is a corporate body created under the Companies Act. It has all features of a company such as legal entity, common seal, limited liability, etc. It can enter into contracts and acquire property in its own name.

(ix) Exemptions : Government Company is exempted from budget, accounting and audit laws applicable to government departments. Its accounts are audited by the Government Auditor. The Government has a right to exempt the company from any provisions of Companies Act which may come in its way of providing welfare services to the public at large.

(ix) Suitability : Government Companies are suitable for conducting manufacturing and marketing activities.

Question 6.
Explain Merits and Demerits of Government Company.
Answer:
(A) Merits of Government Company:
(i) Profitability and Accountability : It works on business principles and follows commercial approach. Though not profit oriented like private sector, it does make reasonable profit which is used for public welfare, modernisation, renovation and development. Moreover, its performance can be evaluated by the Parliament as it has public accountability.

(ii) Internal Autonomy: Government Company enjoys financial and administrative autonomy. Its dependence on Government authority is minimum. It has its own capital structure, financial plan, borrowing powers and so on.

(iii) Government Ownership ; The ownership of the government company rests with Central or State Government who owns major capital of the company and as such looks after its management and control. Government always promotes public welfare.

(iv) Foreign Capital and Technical Know how : As the government provides 51% of the capital, the rest 49% can be raised through foreign investment. By seeking foreign capital, Government companies bring advanced technology and technical know how.

(v) Acquisition of Sick Units : A government company can acquire a sick unit in the private sector without rationalisation. It can be acquired by purchasing 51% of the share capital of a private company.

(vi) Concessions and Privileges : As government owns Government Company, it enjoys various concessions, privileges, subsidies, etc. It may also get orders for the products or services from various government departments and agencies. It also has access to use financial resources of the Government.

(vii) Efficiency : Government company has to compete with the private sector companies. Hence, it tries to promote efficiency at all levels and avoids wastages wherever possible. It tries to improve its services to consumers and promotes consumer satisfaction by providing quality goods at reasonable prices.
From the above points, it could be seen that the Government Company enjoys various benefits as it is owned by the Government and blends the objectives of privately owned companies with State owned control and maximise public welfare.

(viii) Professional Management: The management of Government Company is in the hands of the Board of Directors appointed by the Government. Government exercises control on various matters through Board of Directors. They are highly qualified.

(ix) Easy Formation : The formation of Government Company is easy as there is no procedural delay and legal constraints. It does not require special Act or Parliament approval. It comes into existence through executive decision of the Government.

(x) Flexibility : The objects, powers and organisational set up of a Government Company can be altered easily. The company can take prompt decisions regarding management, finance and other related matters due to flexibility in their operations.

(xi) Easy to Alter : The objects, powers and organisational set up of a Government Company can be altered easily. The company can take prompt decisions regarding management, finance and other related matters due to flexibility in their operations.

(xii) Enjoys Private and Public Objective : In a Government Company, attempt is made to combine the operating flexibility of privately owned companies with the advantage of state regulation and control in public interest.

(B) Demerits of Government Company:
Though Government Company enjoys various benefits due to Government ownership and autonomy, it has following limitations:
(i) Inefficiency and Corruption : The Directors have no financial stake in the company and as a result they are indifferent towards working of the company. Due to limited autonomy and petty politics, the efficiency of the enterprise is affected. It results in corruption.

(ii) Lack of Professional view : There is lack of devotion, dedication and systematic approach. In fact, there is no professional approach in various operations and working of the company.

Thus, from the above points it could be seen that there is lot of government and political interference in the Government company which brings about its inefficiency and ineffectiveness.

(iii) Domination of Ministers and Politicians : The ministers of the concerned departments are in charge of the Government Company. In view of Government ownership, political interference is quite common. The Directors try to serve and achieve their political motives rather than realisation of business goals as they are nominated for political gains and not on merits.

(iv) Red Tapism and Delay : The bureaucratic management delays in taking decision and implementing. There is no time frame and the employees are not devoted. There is often delay in preparing various documents and forwarding the same for taking action. Thus, delay, red tape, corruption, avoidance of work and shirking from the responsibility is common sight in Government Company.

(v) Autonomy only in Name : Though there is administrative autonomy, these companies face a lot of interference from the government in all the matters. Appointment of Directors, employees and its working, there is no autonomy. Autonomy is only on paper and not in practice.

(vi) Weak Public Accountability : Absence of Government audit is a major draw back in case of Government company which does not assure proper utilisation of funds. There is no control on misappropriation of funds which leads to weak public accountability.

(vii) Fear of Exposure : The working of Government Company like annual report is placed before the parliament or State Legislature. It is exposed to press and public criticism. Therefore, management of the government company often gets demoralized.

(viii) Lack of Expertise: The managerial key personnel of a Government Company are deputed from government departments. Such person, generally, lack expertise and commitment leading to lower operational efficiency of the Government Company.

(ix) Ineffective Control of Parliament : There is lack of control of the Parliament in the working of the Government company. Parliament is not having direct control, due to which the officers shirk from responsibility and postpone decision making. It affects efficiency of Government company.

(x) Poor Labour Management Relations : The employer-employee relations in the Government companies are poor. This is the result of corrupt and inefficient management of selfish trade unions. Proper work culture is found absent in Government companies.

Question 7.
Explain Multinational Corporation and its features.
Answer:
(A) Meaning:
(i) Global enterprises or Multinational Corporations are the Corporations which under take business activities in more than one country. Any company having its head office in one country and place of business in other countries is called a Multinational Corporation.

(ii) Multinational Corporation played an important role in the Indian Economy since 1991. They have become a common feature of developing economies in the world.
A Multinational Corporation is a corporation which operates, in addition to the country in which it is incorporated, in one or more other countries.

(B) Features of Multinational Corporation:
Following are the features of Multinational Corporation:
(i) Advanced and Sophisticated Technology : Multinational company has large capital and sophisticated technology and infrastructure. As a result it undertakes diversified and multifarious activities including manufacturing, marketing, financial, research and development.

(ii) Legal Existence : MNCs are registered in their home country as per their laws and as such they enjoy separate legal status. It can sue and be sued, enter into contracts and own property in their own name.

(iii) Government: MNCs have to bring about the necessary changes in their functioning based upon the laws prevailing in the countries of their operations. For e.g. advertisement about various products on TV is given in local languages in India and in national language Hindi, to cover maximum target audience. In some cases they have to change the menu to suit local demands for e.g. McDonalds had to change its menu for its business in India.

(iv) Origin: The MNCs have origin in one country and the country to which they belong is called home country. The country in which they operate their business activities is called host country. These companies are registered in their home country and have a place of business in different countries of the world. The head office controls the operations of different branches through a network of internet. They also appoint their representatives in host countries for smooth business operations.

(v) Research & Development: MNCs give lot of importance to research and development activities. They are also fully equipped and have necessary infrastructure. The R&D is undertaken for finding out new product, new system, new technology, new methods of doing business in an economical way.

(vi) International Operations : Multinational Corporation play a significant role in world trade. Nearly 40% of the world is contributed by the multinational companies.

(vii) Target Profit Oriented : Earning profit is the main motive of MNCs. For this purpose they introduce new and novel products, launch new marketing schemes, organize trade fairs and exhibitions, does lots of publicity and adopts professional approach in all its dealings.

(viii) Huge Assets and Turnover : Multinational Corporation have huge financial strength because of huge capital and assets. This enables it to develop its business potential in developing and under developing nations where they can earn handsome profits.

(ix) Mighty Economic Power: Multinational Corporation has a huge capital and assets so they have a mighty economic power. They keep on adding to their economic power through constant mergers and acquisitions of companies in host countries.

(x) Centralized Control: Multinational Corporation is managed by parent company. It manages affairs of the subsidiary company from the respective home country. Multinational corporations are controlled by parent companies and mostly home strategic.

(xi) Area of Operation : MNCs operate in different countries of the world and deal in multiple products on a large scale. They operate in those countries where chance of maximizing profit is more. MNCs of developed nations dominate the global market and they undertake production or marketing activities and so on. For . e.g. Coca Cola, Tata Tea and so on have global presence.

(xii) Professional Management: A MNC employs professionally qualified personnel to handle huge funds, advanced technology and international operations.

Question 8.
Explain Merits and Demerits of Multinational Corporation
Answer:
(A) Introduction:
(i) Global enterprises or Multinational Corporations are the Corporations which under take business activities in more than one country. Any company having its head office in one country and place of business in other countries is called a Multinational Corporation.

(ii) Multinational Corporation played an important role in the Indian Economy since 1991. They have become a common feature of developing economies in the world.
A Multinational Corporation is a corporation which operates, in addition to the country in which it is incorporated, in one or more other countries.

(B) Merits of Multinational Corporation:
Following are the merits of Multinational Corporation.
(i) Proper use of Idle Resources : The national income of host country increases as MNCs use idle physical and human resources with latest technologies.

(ii) Inflow of Foreign Capital: Multinational corporations bring much needed foreign capital for the rapid development of developing countries. This capital is useful for growth of domestic country.

(iii) Promotion of International Brotherhood and Culture: MNCs integrate economies of various nations with the world economy and promote international brotherhood and culture with peace and prosperity in the world.

(iv) End of Local Monopolies : In global market, Multinational Corporations end local monopolies of host . countries improving their products and reduces prices.

(v) Technical Development: Multinational corporations gives lot of importance to research and development activities. They are also fully equipped and have necessary infrastructure. The research and development is undertaken for finding out new product, new system, and new technology of doing business in an economical way.

(vi) Improvement of Standard of Living : Multinational Corporations supply their product at very reasonable prices in the global market. E.g. the price of wrist watches, cell phones, etc. This helps to improve the standard of living of people of host countries.

(vii) Managerial Development : Multinational corporations have highly specialized and expert team of management. These experts are hired from different countries of the world. Also their functioning is highly professional. They adopt new technology and use huge resources.

(viii) Employment Generation : MNCs create large scale employment opportunities in host countries and . helps in reducing unemployment.

(C) Demerits of Multinational Corporation:
(i) Danger for Domestic Industries : Multinational Corporations have vast economic power so they are danger to domestic industries which are still in process of development. Domestic industries not so powerful to face the challenges of Multinational Corporation.

(ii) Create Problem for Environment: Profit is sole objective of multinational corporation. Such companies damage environment of developing countries. To lower the price of goods they dump lower standard quality product which harms local soil, water and air.

(iii) Outsourcing of Job: Normally MNCs outsource the job work due to lower cost, due to this their liabilities towards employees are reduced.

(iv) Misuse of Mighty Status : Multinational Corporations have powerful financial strength because of huge capital. They can afford to bear losses for a long while in the hope of earning huge profits. They have ended local competition and achieved monopoly. This may be unfair.

(v) Multinational Corporations Import Skilled Labour : Most companies in this position imports the skilled labour they require from other economic to meet their needs. That means the best jobs, especially in the developing world, are given to people who don’t even live in the local economy. Those wages do not offer the same economic benefits because spending occurs internationally instead of at the local level.

(vi) Interference : Multinational Corporations are gigantic organizations with huge finance and efficient management. They try to bring about expansion of business through mergers, acquisitions and amalgamations. As they are huge corporations they exert influence on political parties and try to spread political ideology of their home country.

(vii) Take away Profits to Home Country : Profits made by multinational corporations are not used in the same country from where they are earned. They are not interested in development of other countries. They do not use their profits on infrastructural development of other countries.

(viii) E ncourage Political Corruption : To get favourable terms and conditions in host country multinational corporations bribe to political parties.

(ix) Repatriation of Profiles : Multinational Corporations get huge profit. Repatriation of profit by Multinational Corporation adversely affects the foreign exchange reserves of the host country. If means that a large amount of foreign exchange goes out of host country.

Balbharti Maharashtra State Board Class 12 Geography Solutions Chapter 6 Tertiary Economic Activities Textbook Exercise Questions and Answers.

Maharashtra State Board Class 12 Geography Solutions Chapter 6 Tertiary Economic Activities

1. Complete the Chain

Question 1.

A	B	C
(1) Matheran	(1) Tea	(1) Communication
(2) GPS	(2) the Atlantic Ocean	(2) Tertiary Activity
(3) Sri Lanka	(3) Satellite	(3) Export
(4) Panama Canal	(4) Tourism	(4) the Pacific Ocean

Answer:

A	B	C
(1) Matheran	(1) Tourism	(1) Tertiary Activity
(2) GPS	(2) Satellite	(2) Communication
(3) Sri Lanka	(3) Tea	(3) Export
(4) Panama Canal	(4) Atlantic Ocean	(4) Pacific Ocean

2. Choose the correct option.

Question 1.
Tertiary activities include
(a) Use of natural resources
(b) Finished product
(c) Raw material
(d) Transportation
Answer:
(d) Transportation

Question 2.
Natural ports
(a) Kochi
(b) JNPT
(c) Delhi International Terminal
(d) Nagpur Cargo Hub (MIHAN)
Answer:
(a) Kochi

Question 3.
Trans-Australian Railway connects
(a) Perth – Sydney
(b) Perth – Vladivostok
(c) Sydney – Vancouver
(d) Vancouver – Vladivostok
Answer:
(b) Perth – Vladivostok

3. Give geographical reasons.

Question 1.
Tertiary activities include both services and exchapge.
Answer:

• Transportation, communication, trade and commerce are the main tertiary activities.
• Road, rail and airways are the important modes of transportation, which help in exchange of goods and services. Therefore, it is a service activity.
• Transportation provides facilities for the movement of goods from areas of surplus to areas of scarcity produced in primary and secondary activities.
• Credit facilities, banking facilities, marketing are also tertiary activities, they provide services to people.
• Postal services, shopkeepers, vegetable sellers, fruit sellers, etc., are also included in service activities.

Question 2.
The proportion of airways as means of transportation is increasing.
Answer:

• Air transport is an important enabler to achieve economic growth and development.
• In the global world, there is exchange of goods between countries. Therefore, there is more use of air transport to carry perishable, valuable and light goods from surplus areas to scarcity areas.
• It facilitates integration into global economy and provides vital connectivity on a national, regional and international scale.
• Nowadays tourism is the fastest growing industry; air transport is more used for international tourism.
• Therefore, the proportion of airways as means of transportation is increasing.

Question 3.
Geographical diversity is responsible for trade to occur.
Answer:

• The geographical diversity is the set of physical, human and cultural elements differentiated from each other that converge in the relatively small geographic space that is part of the same zone, region or country.
• If you take into consideration natural regions of the world, each region is different from another.
• The natural resource available in one country will be different from the ones available in different regions.
• There is variation in climate, soil, minerals, forest, relief, water supply etc.
• Depending upon the availability of geographical factors, there is specialisation of certain economic activities in certain areas and there is trade from surplus areas to scarcity areas. For example, in one region, plenty of oil is available while in another region no oil reserves are available.
• This variation in distribution of oil will be responsible for the development of trade between oil rich and oil poor countries.
• Thus, geographical diversity is responsible for trade to occur.

4. Write short notes on.

Question 1.
Importance of satellite as means of communication.
Answer:

• A communications satellite is an artificial satellite that relays and amplifies radio telecommunication signals via. transponder.
• Communications satellites are used for television, telephone, radio, internet and military applications.
• The information about physical and human factors is obtained from satellite communication.
• Satellite communication is used in remote islands, in some countries and continents where landline telecommunication is rare or not available.
• As television becomes the main market, its demand for satellite communication becomes very important.
• Satellites are also used for internet communication, military communications, etc.
• Thus, importance of satellite as means of communication is increasing.

Question 2.
Role of transportation in trade.
Answer:

• Transport support trade and industry in carrying raw material to the place of production and distribution of finished products for consumption.
• Transport means to make goods available to consumers.
• Transport makes possible movement of goods from one place to another with great ease and speed.
• Trade means exchange of goods and services. In trade there is movement of goods from surplus areas to scarcity areas. The movement of goods is possible only because of transport.
• In other words, without the help of transport development of trade is not possible.
• Thus, transport plays an important role in economic development and globalisation of trade.

Question 3.
Tourism and GDP.
Answer:

• Tourism is vital for the success of many economies around the world.
• Tourism boosts the revenue of the economy, creates thousands of jobs and develops the infrastructures of the country.
• It also creates jobs in agriculture, communication, health and educational sectors.
• The government that depends on tourism, invests a lot in the infrastructure of the country. They construct new roads and highways, develop parks, improve public places, and set up airports, etc.
• With augmenting facilities, more and more tourists are attracted in such countries, thus, there is boosting of the GDP.

5. Differentiate between.

Question 1.
Secondary Economic Activities and Tertiary Economic Activities
Answer:

Secondary Economic Activities	Tertiary Economic Activities
(i) Secondary activities are concerned with activities adding value to already existing products from primary activities.	(i) Tertiary activities are concerned with providing services rather than providing material goods.
(ii) Development of secondary activities depends upon the production of resources in primary activities.	(ii) Development of tertiary activities depends upon the development of secondary activities.
(iii) Manufacturing and construction are important secondary activities.	(iii) Trade, transport communication, banking, insurance, etc., are tertiary activities.
(iv) Secondary activities produce goods and commodities.	(iv) Tertiary activities help reach these goods and commodities to the consumers.
(v) Secondary activities may be away from the market and settlement.	(v) Tertiary activities are always near the market and settlement.

Question 2.
Quaternary Activities and Quinary Activities
Answer:

Quaternary Activities	Quinary Activities
(i) Quaternary activities refer to those activities where the task is to think, research and develop ideas.	(i) Quinary activities involve work related to administration.
(ii) Confined to research, training and education.	(ii) Confined to the highest-level decision taking and policy making.
(iii) Software developers, statisticians, hospital  staff, teachers, financial planners tax consultants, people working in theatres, etc., comes under quaternary activities.	(iii) Senior business executives, government officials, scientists, judges, etc., comes under quinary activities.

Question 3.
Waterways and Airways
Answer:

Waterways	Airways
(i) Development of water transport needs courted area with broken coastlines.	(i) Development of airways needs favourable climate, advance technology and plain land for airports.
(ii) This is the cheapest mode of transport.	(ii) This is an expensive mode of transport.
(iii) Heavy and bulky goods are transported, e.g., minerals, oil, coal, machinery, etc.	(iii) Light, perishable and expensive goods are transported, e.g., electronic goods, gold, silver, fish, dairy products, etc.
(iv) Slow mode of transportation.	(iv) Fast mode of transportation.
(v) More used for goods transport than passengers’ transport	(v) More used for passengers’ transport than for goods transport.

6. Answer in Detail

Question 1.
Explain the factors affecting trade between two countries.
Answer:
Trade refers to transfer of goods or services from one person to another or from one country to another. Factors which affect the trade are natural resources, climate, population, culture, economic cost, specialization, etc.

Natural resources : Distribution of natural resources is uneven. The natural resources available in one country differs from another. Because of this uneven distribution of resource, there is trade between resources surplus and resource deficit.

Climate : Climate mainly affects the plants and animals in a region. In the areas of different climate, there are different types of plants and animals. Example, in the tropical countries like Sri Lanka whose major export is tea or Malaysia and Indonesia, whose major export is rubber. This occurs naturally because of favourable climate for growing tea and rubber plants in these countries.

Population : Population size, distribution and density are different in different countries. This leads to difference in production and consumption and hence trade occurs.

Standard of living can also determine the demand for various goods and services. The country with less population depends more on trade because fewer human resources is engaged in production of goods.

Culture : Some countries are known for their specific art and craft, based on their culture, specific production of goods which have worldwide market, for e.g., Kashmiri shawls or Iranian carpets.

Economic Cost : Cost of production is the major factor in the process of production. It is cheaper to import certain goods than producing it in the country itself. For example, it is cheaper to import tea from India and Sri Lanka than producing it in England.

Specialisation : Due extremely favourable factors of production, some countries have specialisation for certain goods and they have name and fame in the world market, so they develop export trade. For example, watches of Switzerland or electronic goods of Japan or tender beef of Argentina.

Government Policy: Government policy about export or import affects trade. For example, Government may increase import duties of some goods, to encourage people to buy domestic goods. Thus, import trade of those goods goes down.

Question 2.
Development of transportation is dependent on geographical factors. Explain.
Answer:

• Various geographical factors affect the development of transport.
• Relief, climate and location are the three most important factors that affect the development of transportation.
• It is easier to build roadways and railways in plain areas.
• Dense forests, hilly and mountainous regions affect the construction of roads and railways, in Africa and South America.
• Coastal location with broken coast lines is favourable for development of ports and harbours.
• For the development of airways; favourable climate and plain region for construction of airports are essential.
• Foggy and smoggy weather and high peaks will be obstacles for the development of air transport.

Question 3.
Why is transportation system important in the development of any nation?
Answer:

• Transportation plays important role in rapid economic growth of a nation.
• The introduction of railways has been historically the most important and powerful single factor in the process of economic development of industrial nations of the world like USA, France, Germany, Japan, etc.
• The significance of transportation in economic activity is found in its effects on both human wants and satisfaction of wants through production and distribution of goods.
• Transportation increases the quality and variety of consumer goods, thereby stimulating the demand and development of trade and economy of the nation.
• Transport provides various employment opportunities and boosts up the economy of the country. For example, many people got employment in construction work of Metro rail track.

Question 4.
Tertiary activities are expanding day-by-day. Explain the statement.
Answer:

• Tertiary activities act as the link between primary and secondary activities.
• These activities are mostly in the form of services.
• Tertiary activities include transport and communication, trade, loading and unloading of goods, banking, insurance, marketing, export, etc.
• Providing public services like hospital, education, research and development, administration, etc., are also included in tertiary activities.
• With increasing industrialisation population growth and trade, number of people working in banking, insurance, tax consultants, software developers, teachers, etc., went on expanding day by day.

7. On an outline map of the world, show the following with the help of suitable index

(1) A canal bringing radical changes in sea transport.
(2) Railway connecting two continents.
(3) An international airport in India.
(4) An important port in India.
Answer:

8. Read the given passage and answer the following questions

Careful planning and implementation is necessary for economic development of any country. In the tourism sector the need for planned development is of great importance. It involves many industries working together in a complex way and needs special attention. Planning basically tries to allot limited resources between various competitors with a view to maximize output, income and employment and to make sure different sectors have fair growth. Tourism planning is a process through which the set goals can be achieved and the various choices linked to tourism development can be addressed. It is a long term and constant process of preparing, upgrading and improving a destination for tourist.

Communities are the basic elements of tourism. It mainly depends upon the level of acceptance shown by local communities. In the process of planning their involvement is essential. The development of tourism creates impact on mainly environment, socio-culture and economy of the host community at any destination. These impacts produce both negative as well as positive impacts. Planning is necessary to reduce the negative impact and boost the positive impact for sustainable development of a destination.

Question 1.
Why does the tourism sector need planning?
Answer:
Plan development in the tourist sector is of great importance, since it involves many industries working together in a complex and hence special attention.

Planning will help to allot limited resources between various competitors with view to maximise output, income and-employment.

Question 2.
What is the importance of communities in planning?
Answer:

• In the process of planning communities are basic elements of tourism.
• It mainly depends upon level of acceptance shown by local communities.
• In the process of planning their involvement is necessary and therefore, community planning is necessary.

Question 3.
Explain any two benefits of planning.
Answer:
Planning reduces the negative impact and boosts the positive impact for sustainable development of a destination.

Question 4.
What factors affect the economy of the host community?
Answer:
The development of tourism creates impact on mainly environment socio-culture and economy and economy of host community at any destination.

Question 5.
Why planning is a long-term task?
Answer:
Planning is a long-term task because planning is a constant process of preparing, upgrading and improving a destination for tourists.

Class 12 Geography Chapter 6 Tertiary Economic Activities Intext Questions and Answers

Think about it.

Read the following comprehension and answer the questions that follow:

There are three friends from different back-grounds. They decided to become entrepreneurs after graduating from the same college. Rohit is a farmer’s son. He pursued his bachelor degree in the Arts faculty. He was thinking of continuing his father’s profession but at a different level. He wanted to grow export-quality agricultural products in his two acres of farmland.

Sejal is the daughter of a businessman. They produce and sell bakery products on a wholesale basis. She has passed her degree in Science. She wants to become an entrepreneur in Fast Moving Consumer Goods (FMCG) products. Asif is a son of a small hotel owner. He has passed his graduation in Event Management. He wants to start his own company of Event Management.

After graduating with good grades, they decided to help each other and begin their careers. Rohit, Sejal and Asif tried to find out information about haw to start their businesses. They tried to get maximum information regarding their businesses. They wanted to plan, organise and then establish their start¬ups. During this period, they found information regarding their businesses.

Rohit found out that he will have to do major changes in his farmland to grow export-quality products like lily, orchid flowers and fruits like kiwis, dragon fruits, etc. He will have to maintain moisture and temperature in the air. He will also need to use special fertilizers to maintain the soil’s pH value.

He also came to know that he has to take help of the Agricultural officer from the same Taluka. More importantly, he has to take out a licence to establish a business. He also got to know that he will need an account which can be used for foreign transactions. He also got information from where, he would get saplings for the export-quality products. He came to know that, these flowers are in great demand in Gulf countries and they give high returns too. As these countries are within the reach of an hour or two by air, the flowers can remain fresh and retain their quality. He also decided to visit few vendors from these countries to directly setup his business.

Sejal realised that toothpaste is a product which is required daily by the people. Since her background was from Science, she decided to derive an advanced formula which will be good for dental health. She also took help from a cousin brother from the Pharmaceutical industry.

She came to know that she needed the following things to set up the industrial unit:

• Machinery and labour force to work in the plant.
• Land for setting up the plant.
• NOC from competent authorities before taking the product to the market.
• Other licenses like NOC from fire service department.
• Industries that will give tubes to fill ready toothpaste and cartons to wrap the product.
• Appoint an advertising agency to promote the product.

She was reluctant for this start-up since it required land and a large capital investment. But she felt relieved that due to the Government’s Start-up schemes, she can get subsidised loan. Her father helped her solve her land problem. He had a small piece of land near her town which was sufficient for this purpose. He arranged for other basic amenities like water, electricity, etc. which are required for an industry. He leased out that plot to Sejal.

Asif realised that he mainly needed services and labour for his start-up, which he can arrange by hiring them from various agencies like caterers, florists, hall owners, band players, sound systems, etc. He also understood how to take permission from various competent authorities to arrange various events. He realised that it will be good if he opens up an office to start his business in the market. To advertise his start up, he got a brochure designed and printed visiting cards for marketing his services.

After planning for a year, all the friends started their entrepreneurship in their respective businesses. As their businesses have been established as per their likings; they are enjoying their work. Their businesses are now their passions.

Question 1.
What do you understand by the term competent authorities?
Answer:
A competent authority is a person or organization that has the legally delegated or invested authority, capacity or power to perform a designated function.

Question 2.
In which types of economic activities are the children in the story engaged?
Answer:
Children in the story are engaged in the following economic activities:

• Rohit – primary activity
• Sejal – tertiary activity
• Asif – tertiary activity

Question 3.
While being occupied in their type of economic activity, which other activities they interact with?
Answer:
Rohit, Sejal and Asif interacted with the following activities for the development of their activities. Agriculture officer, vendors, pharmacist, competent authorities, service department, advertising agency, caterers, florists, hall owners, band players, sound system provider, brochure designer, etc.

Question 4.
Classify all the economic activities you come across in the passage.
Answer:
All economic activities we came across are basically tertiary economic activities. However, we can divide these tertiary economic activities in two groups
(i) Quaternary economic activities : Advertising agency, caterers, florists, hall owners, band players, sound system provider and brochure designer, etc.

(ii) Quinary economic activities : Agriculture officer, pharmacists, competent authority, fire service department, etc.

Use your brain power!

Question 1.
Do tertiary activities involve only services? (Textbook Page No. 56)
Answer:
Yes, tertiary activities involve only services to businessmen and people.

Question 2.
Can there be products in tertiary activities? (Textbook Page No. 56)
Answer:
There cannot be products in tertiary activities; they only provide services for distribution of primary and secondary products to consumers.

Question 3.
Given below are the countries which are least dependent on tourism. Locate these countries on a map. Explain the geographical factors which are responsible for non¬development of tourism in these countries. (Textbook Page No. 62)

Country	Contribution of Tourism to GDP (%) (2018)
Democratic Republic of the Congo	0.66
Papua New Guinea	0.66
Uzbekistan	0.93
Moldova	0.96
Gabon	1.02

Tourism is not developed in these countries because of unfavourable physical factors such as climate, relief, location, dense forest, etc.

In Gabon, Papua New Guinea and in Democratic Republic of the Congo, there is equatorial type of climate, dense forest growth, wet land areas, so there are problems in development of transport facilities and infrastructure. Most of the areas in the country are inaccessible.

The countries of Moldova and Uzbekistan are landlocked countries, there is extreme climate, rainfall is very limited. Due to extreme climate tourists are not interested to visit these countries.

Question 4.
Are maps a means of communication? (Textbook Page No. 63)
Answer:
Yes, maps are means of communication because they provide a lot of information.

Can you tell?

Question 1.
In many economic activities included in tertiary occupations are enlisted. Classify the following economic activities in the following two categories:

1. Activities dependent on geographical factors.
2. Activities not dependent on geographical factors. (Textbook Page No. 56)

Answer:

Question 2.
Make a list of things you use in your daily life. (Textbook Page No. 57)
Answer:
(i) Divide the activities through which they have been obtained into primary, secondary and tertiary. For example, salt is obtained from primary activity.
(ii) Does your list contain any products which have been derived by using either of the activities?
Answer:

Primary Activities	Secondary Activities	Tertiary Activities
Rice	Idli	Newspaper
Wheat	Bread	TV program
Potato	Potato chips	Internet
Tomato	Tomato ketchup	Landline
Sugarcane	Jaggery	Banking services
Chili	Chili powder	Mobile services
Onion	Mixer	Hospitals
Pulses	Washing machine	Theatres
	Fans

(ii) All above products are received from primary, secondary and tertiary activities.

Question 3.
Can intelligence or physical efforts be imported or exported? (Textbook Page No. 61)
Answer:
Yes, intelligence or physical efforts can be imported or exported in the form of intelligent people or skilled people. For example, Saudi Arabia invited many engineers to construct the roads, bridges, flyovers, etc., in their country, therefore there was development of infrastructure in their country.

Question 4.
(i) What are the lists of items mentioned in timeline related to?
(ii) Which means you are aware of?
(iii) Which means do you actually use?
(iv) Which of these are now outdated?
(v) What could be reasons for them getting outdated?
(vi) Can you add more to the list? (Textbook Page No. 62)

Answer:
(i) In the list means of communication are mentioned.
(ii) We are aware of a postman, telegram, telephone, fax, radio, pager, email, mobile, satellite phones.
(iii) We use telephone, radio, mobile, email, satellite phones.
(iv) Coloured smoke, messenger, horsemen/camel man are outdated means of communication
(v) Coloured smoke, messenger, horsemen/camel man are outdated means of communication because of limited speed. They can be operated in limited area and difficult to use as against modern communication system.
(vi) The Internet banking, email, WhatsApp, NEFT, RTGS, etc., are the other means of communication.

Question 5.
Which practicals of geography for Class 11 and Class 12 have you carried out with the help of satellites? (Textbook Page No. 63)
Answer:
Topographical maps of survey of India.

Make friends with maps!

Look at the map in Fig. 6.2 and answer the following questions : (Textbook Page No. 57)

Question 1.
Which means of transportation are shown in the map?
Answer:
Waterways, airways and railways are shown in the map.

Question 2.
Between which continents do you see an overall higher flow of transportation?
Answer:
High flow of transportation is seen between North America and Europe.

Question 3.
Which canals can you see in their waterways? What can be the purpose?
Answer:
We see two canals in waterways: Suez Canal and Panama Canal.
The purpose of construction of Suez Canal is to avoid the long route along Cape of Good Hope in Africa. This canal reduced the distance of travel by thousands of kilometres between Europe and Asia.

The purpose of construction of Panama Canal is to avoid the long distance route between Eastern coastline and Western coastline of North America. This canal provided a short cut to connect two coastlines.

Question 4.
Which two major cities in India are connected internationally through airways?
Answer:
The two major cities in India connected internationally through airways are Delhi and Mumbai.

Question 5.
Which two continents show lesser use of air routes?
Answer:
Africa and South America show lesser use of air routes.

Question 6.
Which two continents show lesser use of rail routes? Why?
Answer:
The continents of Africa and South America have lesser use of rail route because in both the continents physical factors like climate and relief are not favourable for development of rail route. Due to the mountains, hills, dense forest and desert in these areas, the construction and maintenance of the railway line is difficult and expensive.

Question 7.
Which rail route connects two continents?
Answer:
The Trans-Siberian Railway connects two continents i.e., Asia and Europe.

Question 8.
Why do you see a concentration of transportation routes in the southern part of Australia as opposed to northern parts in all the continents?
Answer:
Compared to the northern part of Australia, southern part is having levelled land, equable climate, urbanisation and industrialisation. Therefore, concentration of transport routes is more in the southern part of Australia.

Question 9.
Which continents do not have continuous internal rail routes? Why?
Answer:
South America and Africa do not have continuous internal rail routes because some areas in these continents are densely forested and extensive areas are covered by deserts and mountains.

Try this

Question 1.
Consider the following conditions a, b, and c and answer the questions that follow
(a) There are two countries ‘A’ and ‘B’. ‘A’ produces 500 tonnes of wheat by employing 200 labourers. ‘B’ produces 1,000 tonnes of wheat by employing 300 labourers.
(b) Country ‘C’ produces 300 kg of tea and ‘D’ produces 500 kg of coffee. ‘C’ does not produce coffee and ‘D’ does not produce tea.
(c) Country ‘E’ has expertise in water engineering and agriculture. Country ‘F’ has expertise in metro-making. (Textbook Page No. 59)
(i) Will the trade take place between A and B in condition (a)?
Answer:
No, trade of wheat will not take place in between A and B because both are producing wheat.

Question 2.
Will trade take place between C and D in condition (b)?
Answer:
Yes, trade will take place between C and D in condition (b) because C country produces tea and D country produces coffee. Since they produce different products – tea and coffee, they will exchange their products through trade.

Question 3.
If trade occurs between A and B in condition (a), what does it tell you about the conditions of countries in term of their economy?
Answer:
Firstly, both countries are producing wheat and therefore, if their production of wheat is sufficient for their population, trade will not take place.
Secondly, per capita production of wheat in country A is less than country B. As a result, the cost of production of wheat in country A is more than B country.

Under the above conditions if country B is ready to export wheat to country A, country A will get wheat from B at the lower cost than the production cost in their country and trade in wheat will take place and both countries will be economically benefited and can improve their economy.

Question 4.
If trade occurs between C and D in (b), what does it tell you about the climate of the countries?
Answer:
Country C produces tea and country D produces coffee. So country C can export tea to country D and country D can export coffee to country C and trade will take place between C and D depending upon market for tea and coffee in respective countries.

As far as climate is concerned in both countries there must be tropical climate because cultivation of tea as well as coffee needs same type of climate conditions. Since both crops requires same climate, both can produce tea and coffee too and avoid trade or one can specialize in tea cultivation and another in coffee cultivation and develop trade.

Question 5.
Considering that trade occurs between two countries in condition (c), what does it tell you about the human resources of the countries?
Answer:
Country E has developed technology in water engineering and agriculture. While F has developed technology in construction of the metro. This shows that both countries are technologically advanced and hence their human resources are very rich.

Question 6.
Make a list of factors which affect the trade between any two countries.
Answer:
The various factors which affect the trade area are as follows:

• Difference in natural resources
• Climate
• Population
• Culture
• Economic cost
• Specialisation
• Government policy

Question 7.
The graph shows trade carried from 1980 to 2010 through sea transport. Interpret the graph in your own words. (Textbook Page No. 61)

Answer:
Between 1980 and 2010 transportation in the Atlantic Ocean declined by almost 50%, whereas sea transport in the Pacific Ocean has increased considerably. There is slight growth in the sea transport in Indian Ocean. There is no change in sea transport in Mediterranean Sea during the same period.

Question 8.
See the following two tables and answer the questions given below:
What do the tables shows?
Are the countries in the table same?
Locate them on the world map.
Can you tell, why contribution of tourism is high in these countries in terms of GDP and employment?
Write a concluding paragraph on factors affecting tourism as an occupation in a country. (Textbook Page No. 61)

TABLE 1: Direct Contribution of Travel and Tourism to GDP of some regions (%) (2018)
Maldives	38.92
British Virgin Islands	32.96
Macao	28.01
Aruba	27.64
Seychelles	25.73

TABLE 2 : People engaged in tourism in some regions (%) (2018)
Aruba	29.91
St. Lucia	27.29
The Bahamas	26.49
Macao	26.48
Seychelles	25.35

Answer:
(i) Table 1 shows direct contribution of travel and tourism to GDP of some regions in (%) 2018. Table 2 shows people engaged in tourism in some regions in (%) in 2018.

(ii) Countries shown in the table are island countries.

(iii)

(iv) These are island countries having beautiful beaches and scenery. They provide coastal water sports as well as sea adventure sports facilities to tourists. Naturally large numbers of tourists are attracted and therefore, the contribution of tourists in these countries in terms of GDP and employment is very high.

(v) Today, tourism is one of the fastest growing economic activities in the world. Beautiful natural scenery attracts a large number of tourists. Waterfalls, glaciers, beautiful beaches attract large number of tourists.

Apart from good climate and beautiful scenery, the development of tourism also depends upon the availability of certain amenities for tourists. The tourist centres must be easily accessible. Air transports have revolutionized travel. Roads and railways are other modes of transportation which make tourist places accessible.

Places of tourist interest must provide good accommodation facilities. Five star hotels, ordinary hotels, guest houses, holiday camps, etc., are essential for the overnight stay of tourists.

Question 9.
In Fig. 6.6, five hypothetical countries and some information about their conditions are given. Study them carefully and answer the following questions:

(i) Considering the natural resources available in these countries, which activities will flourish here? (Textbook Page No. 63)
(ii) Between which countries will export-import of goods occur? (Textbook Page No. 63)
(iii) Which tertiary activities will take place here? (Textbook Page No. 64)
(iv) Considering the location of E country, how will it carry out trade with other countries? (Textbook Page No. 64)
(v) Write in your own words the effect of geographical factors on human economic activities in these countries. (Textbook Page No. 64)
Answer:
(i) Agriculture, fishing, trade, lumbering activities will flourish.

(ii) The export-import trade will occur between all countries because all countries have developed different economic activities and have specialisation of different products. They can exchange the goods.

(iii) Transportation, trade, wholesaling, retailing, banking, financial institutes, etc., will develop.

(iv) ‘E’ country is an island country, therefore it can carry trade with other countries by water transport.

(v) Due to availability of natural resources all primary activities are developed in these countries.

• Due to fertile soil, and water supply by river, agriculture is developed. Rice, tea, coffee and fruit crops are grown in most of the countries.
• Due to coastal location, trade & fishing activities are developed in all countries.
• In ‘D’ and ‘E’ countries, due to forest growth lumbering can be developed.
• For transport of primary goods and to carry export-import, tertiary activities like transportation, wholesaling, retailing, banking, etc., will develop.

Find out

Question 1.
Find out, what are these places famous for (Textbook Page No. 61)
(i) Coorg, Yusmarg, Saputara, Ladghar, Milan, Marina beach, Istanbul.
(ii) What is the main economic activity carried here?
(iii) Is there any relationship between their location (geographical) and their economic activities?
Answer:
(i) All places mentioned are places of tourist interest. Coorg, Yusmarg, Saputara are hill stations, Ladghar and Marina are beaches, Milan is world famous fashion centre and Istanbul is a major city and cultural centre in Turkey.
(ii) Main economic activity is tourism at all places.
(iii) Yes, there is relationship between their location and their economic activities. For e.g., Marina and Ladghar are beaches, Coorg and Saputara are hill stations.

Give it a try

Question 1.
Draw a suitable graph for the information given in table 6.1. and write a paragraph interpreting the data. (Textbook Page No. 63)

Answer:

Interpretation of the data and graph.
The data and graph shows contribution of primary, secondary and tertiary sectors in the national income in the year 2018.

We can divide these ten countries, on the basis of persons engaged in primary activities, as less than 5% workers engaged in primary activity and more than 50% workers engaged in tertiary activities.

There are four countries – Denmark, Russia, United Kingdom and USA, where less than 5% workers are engaged in primary activities and there are six countries – Denmark, Russia, United Kingdom, USA and India, where more than 50% workers are engaged in tertiary activities.

In all ten countries, number of workers engaged in secondary activities are in the range of 20% to 30%, except Russia where 43% workers are engaged in secondary activities.

From the above discussion we can draw the conclusion that Kenya, Uganda, Tajikistan, Tanzania are developing countries and Denmark, Russia, USA, United Kingdom, New Zealand are the developed countries.

Balbharti Maharashtra State Board Class 12 Political Science Solutions Chapter 6 India and the World Textbook Exercise Questions and Answers.

Maharashtra State Board Class 12 Political Science Solutions Chapter 6 India and the World

1. (A) Complete the following statements by selecting the appropriate option.

Question 1.
Sheikh Mujibur Rahman was the first Prime Minister of
(a) Bangladesh
(b) Pakistan
(c) Iran
(d) Afghanistan
Answer:
(a) Bangladesh

Question 2.
In 1987, India sent a Peacekeeping Force (IPKF) to
(a) Bangladesh
(b) Sri Lanka
(c) Somalia
(d) Vietnam
Answer:
(b) Sri Lanka

(B) Identify the incorrect pair in every set and correct it.

Question 1.
(a) NATO – Europe
(b) ANZUS Africa
(c) SEATO – South East Asia
(d) CENTO – West Asia
Answer:
(c) Sri Lanka – Jayewardene

2. State whether the following statements are true or false with reason.

Question 1.
Myanmar has been a traditional friend of India.
Answer:
This statement is True.

1. India and Myanmar (formerly Burma) have a long historical and cultural relations. In fact, Burma a part of British India from 1824 to 1937.
2. India established diplomatic relations after Myanmar’s independence in 1948. However, Indo- Myanmar ties got strained since India supported pro-democracy movements in Myanmar against the ruling military Junta. Both countries are members of BIMSTEC and cooperate to counteract drug trafficking and insurgent groups like Arakan Army operating in the border areas.

Question 2.
In changing world order of 1990s, the issue of terrorism has been dominant.
Answer:
This statement is True.
1. Terrorism refers to the use of or the threat to use violence with the intention to destabilise the political system, cause economic harm and panic in society towards the attainment of some religious or ideological goals.

2. Post 1900s, terrorism has become a global phenomenon with forms like cross-border terrorism, international terrorism etc., causing widespread destruction e.g., 2001 attack in the USA by Al-Qaeda, attacks in Bali, Kabul, Mumbai, Madrid, etc. Each Country in the world is involved in trying to secure its territory and deal with terrorism e.g., US led ‘War on Terror’.

Question 3.
The Sagarmala project is a more comprehensive road connectivity plan.
Answer:
This statement is False.

1. India has sought to harness it’s 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes through two compatible programmes viz. Sagarmala and Bharatmala.
2. Sagarmala programme aims to promote port and river transport systems and Bharatmala programme is a comprehensive road connectivity plan.

3. Express your opinion of the following.

Question 1.
India’s role in the Indian Ocean
Answer:
The Indian Ocean is one of the most busy and critical maritime transportation links in the world. The economies of littoral countries depend heavily on ports, shipping and vast natural resources. India’s vast coastline of about 7500 km presents both opportunity and challenge to India in terms of security and foreign perspectives. India’s exclusive economic zone is 2.4 million sq. kms. 90% of our trade by volume and almost all oil imports come through the sea. India is a co-founder of the Indian Ocean Rim Association for Regional Cooperation in 1997 (IORA).

The main objective of IORA is to promote sustained, balanced development of the Indian Ocean region. India has initiated the Sagarmala and Bharatmala programmes to harness India’s coastline.

4. Answer the following

Question 1.
Write a note on India’s relations with Africa.
Answer:
In the first few decades after independence, India supported the fight against apartheid and provided financial and material aid to liberation struggles in Africa for eg., the AFRICA Fund created at the NAM Summit (Harare)
There are several issues in the context of India-African relations-

1. The India-Africa summit was held in 2015
2. About 24 percent of Indian crude oil imports are sourced from the African continent e.g., ONGC Videsh has invested in Sudan and Egypt
3. About two million people in Eastern and Southern Africa constitute the India diaspora which is considered as an asset by the Indian government
4. Indian industries are interested in offering technological and material services to developing African nations
5. India continues to be one of the military training destination e.g., National Defence Academy, Pune has the ‘Sudan Block’ as a symbol of cooperation between India and Sudan
6. Countries from Somalia to South Africa fall under the India maritime strategic perspective. Hence, cases of terrorism and piracy in Somalian waters have made this region sensitive to Indian concerns.

Question 2.
Briefly Discuss India-China relations.
Answer:
In 1949, the Communist revolution took place in China. India was among the first nations to recognize the People’s Republic of China. In 1954, India and China signed the Panchsheel Agreement and India also recognised Chinese suzerainty on Tibet. The main hindrances in Sino- Indian relations are-

1. 1962 Indo-China war and 2017 Dokhlam skirmish.
2. Border disputes in Aksai Chin and NEFA region.
3. China has been critical of India offering political asylum to the Dalai Lama.
4. Chinese support to Pakistan.
5. India’s apprehensions about China’s Belt and Road Initiative.

On the positive side India-China relationship has improved

1. Agreement on maintenance of peace and tranquility along the LOC.
2. China has become among the largest trading partners of India.
3. India and China are part of BRICS and SCO.
4. In the late 1990s, Russia mooted the idea of a Trilateral Summit of Russia, China, India which was a recognition of India’s status as a major regional power.

5. Answer the following question with reference to the given points.

Question 1.
Explain the factors influencing Indian foreign policy.
(a) Geography
(b) History
(c) International System Economy
(d) Policy
Answer:
Factors Influencing India’s Foreign Policy-
1. Geography – The extensive coastline of the India peninsula and the Himalayan mountain ranges have shaped India’s security and foreign policy. India shares a border with all neighbouring countries of South Asia. It also holds a dominant position in the India Ocean.

2. History – It includes the influence of traditional cultural values, cultural ties as well as values like anti-colonialism which were imbibed during the freedom struggle.

3. Economy – The strong urge to come out of the poverty and economic backwardness created by the colonial period as well as the policy of Non-Alignment shaped India’s foreign policy. India followed democratic socialism through the policy of import-substitution and importance to the public sector Post-1991, after adopting the policy of Liberalisation, Privatisation, and Globalisation many changes have occurred in the Indian foreign policy.

4. Polity – Political leadership has a significant impact on India’s foreign policy for e.g., Prime Ministers Jawaharlal Nehru, Lai Bahadur Shastri, Indira Gandhi, Atal Bihari Vajpayee, Narendra Modi have played a decisive role in determining India’s foreign policy. Ministry of External Affairs and National Security Advisor plays an important role in formulating foreign policy.

Activity

Read the speech on Indian Foreign Policy given by Pandit Jawaharlal Nehru on All India Radio on 7th September 1946 and discuss it in class.

Class 12 Political Science Chapter 6 India and the World Intext Questions and Answers

Activity (Text Book Page No. 60)

The First Summit Meeting of the Nonaligned countries at Belgrade (1961) finalized the criterion for nonalignment. Find out these criteria.
Answer:
Non-Aligned Movement:
The first summit of Non-Aligned countries was held in September 1961 at Belgrade and attended by representatives of 25 countries. The purpose of the Non-Aligned Movement (NAM) was to help countries keep “national sovereignty, territorial integrity and security in their struggle against imperialism, colonialism, racism and all forms of foreign aggression, occupation, domination or interference as well as against great power and bloc politics”.

The objectives of the Non-Aligned Movement are-

1. To keep the newly independent nations of Asia and Africa away from the rivalry of the two viz. USA and Soviet Union
2. To oppose colonialism, imperialism, and racial discrimination.
3. To eliminate all those factors and tendencies in the international arena that could lead to war.
4. To advocate the sovereign equality of all States.
5. To oppose the use of force and nuclear weapons in international disputes.

Balbharti Maharashtra State Board Class 12 Geography Solutions Chapter 4 Primary Economic Activities Textbook Exercise Questions and Answers.

Maharashtra State Board Class 12 Geography Solutions Chapter 4 Primary Economic Activities

1. Choose the correct option and complete the sentence.

Question 1.
The gathering of various products from the forests for livelihood is mainly carried in
(a) Temperate coniferous forests.
(b) Temperate deciduous forests.
(c) Tropical deciduous forests.
(d) Equatorial evergreen forests.
Answer:
(d) Equatorial evergreen forests.

Question 2.
Ideal location for fishing
(a) rugged coasts, shallow seas, hot climate, growth of planktons.
(b) shallow seas, confluence of warm and cold ocean currents, growth of planktons, cold climate.
(c) continental shelf, growth of planktons, good fishing skills, cold climate.
(d) continental shelf, rugged coasts, growth of planktons, cold climate.
Answer:
(b) shallow seas, confluence of warm and cold ocean currents, growth of planktons, cold climate.

Question 3.
Primary economic activities not related directly to latitudinal locations
(a) lumbering
(b) fishing
(c) mining
(d) agriculture
Answer:
(c) mining

Question 4.
Characteristics of extensive commercial agriculture
(a) monoculture, use of water, tropical, cereal production.
(b) monoculture, use of machinery, tropical cereal production.
(c) monoculture, use of manual labour, equator, Thailand, horticulture.
(d) monoculture, use of scientific know how, sub-tropical, production of pulses.
Answer:
(b) monoculture, use of machinery, tropical cereal production.

2. Complete the chain.

Question 1.

A	B	C
(1) Intensive subsistence agriculture	(1) Dogger bank	(1) Small size of farm
(2) Pampas grassland region	(2) Off shore oil and gas production	(2) Unfavourable Climate
(3) Fishing	(3) Rice	(3) Bombay high
(4) Gathering	(4) Dense forest	(4) NE Atlantic Ocean
(5) Mining	(5) Commercial animal husbandry	(5) South America

Answer:

A	B	C
(1) Intensive subsistence agriculture	(1) Rice	(1) Small size of farm
(2) Pampas grassland region	(2) Commercial animal husbandry	(2) South America
(3) Fishing	(3) Dogger bank	(3) NE Atlantic Ocean
(4) Gathering	(4) Dense forest	(4) Unfavourable Climate
(5) Mining	(5) Off shore oil and gas production	(5) Bombay high

3. Write short notes on.

Question 1.
Plantation agriculture
Answer:

• Plantation agriculture is an extensive type of agriculture having large farm size on which one crop is cultivated. This is known as monoculture.
• Care has been taken to maintain the quality of the crop using scientific methods. This type of agriculture is modern as well as capital intensive agriculture.
• Since most of the work is done by human labour this type of agriculture is also referred to as labour intensive agriculture.
• The plantation crops once grown provides production for 10 to 15 years.
• Tea, coffee, rubber, cocoa, cashew nut, spices, etc., are the most important crops. For example, Rubber plantations in Kerala or tea plantations in Assam.
• Malaysia, Indonesia, Sri Lanka, India, Thailand, Vietnam, Caribbean islands are the important countries where plantation agriculture is practiced.

Question 2.
Physical factors and fishing
Answer:
Development of fishing requires specific physical factors.
Therefore, it is developed on a commercial scale where physical factors are favourable for fishing.

The following are the important physical factors, which can be responsible for the development of fishing.

• Broad continental shelf, with shallow water is favourable. For example, continental shelf along the eastern coastline of Japan is broad and water is shallow.
• Warm and cold ocean currents should meet near the coastline, so that plankton (favourite fish food) is available in plenty.
• Broken coast line which provides natural ports and harbours.
• Cold climate is favourable for natural preservation of fish.
• Since above all physical factors are present on the north-east coast of USA, north western coastline of Europe as well as in Japan, commercial fishing is well developed.

Question 3.
Lumbering on a commercial scale
Answer:
Commercial lumbering is well developed in coniferous forest region of Canada, North Western Europe and Soviet Union.

The important factors responsible for the development of commercial lumbering in the above areas are as follows.

• In coniferous forest one species of trees are found over an extensive area.
• Coniferous trees are tall and away from each other so lumbering is easy.
• Wood is soft and durable. Coniferous forests provide good raw material for paper and pulp industry and furniture making industry.
• Due to good quality of wood (softwood) it has great demand in the world market.
• Cool and pleasant climate is favourable for labour to work throughout the year.

Question 4.
Hunting and loss of ecosystem
Answer:

• Before the development of agriculture hunting was the important activity of man to obtain food.
• Many animal species were becoming extinct because of large scale hunting.
• Therefore, to protect the ecosystem, in many countries commercial hunting is banned.
• Presently, many laws are being passed to conserve and protect the animals and ecosystem.
• Yet, many tribal people such as Eskimos in Tundra region, Pygmies of Equatorial Selvas, Bushmen of Kalahari, Sentinels in Andaman etc., are still doing hunting.

4. Give geographical reasons.

Question 1.
Agriculture is done on a large scale in India.
Answer:

• More than 46 percent of the total population of India is engaged in Agricultural Activities.
• In northern India, we have extensive fertile alluvial soil in Gangetic plains most suitable for the development of agriculture.
• In south peninsular India, there is very fertile black cotton soil suitable for a variety of crops.
• Along the coastal lines fertile soil is found in the deltas of river Krishna, Godavari, Mahanadi, Tapi, Narmada, etc.
• Many rivers like Ganga, Yamuna, Godavari, Tapi, Narmada and their thousands of tributaries and canals provide water for irrigation.
• The economic and social factors, including labour, market, capital, transportation facilities, storage facilities and government policies, etc., are all favourable for the development of agriculture.

Question 2.
Mining is developed in Chhota Nagpur plateau of India.
Answer:

• The distribution of minerals is highly uneven in India.
• The geology of Chhota Nagpur region is very rich in minerals.
• There is concentration of minerals like iron-ore, manganese, mica, copper, limestone, and lead in Chhota Nagpur region.
• The government policy, capital investment in mining activities, technological development, availability of skilled labour, transport facilities, etc., are favourable for the development of mining activity in Chhota Nagpur region.
• Development of many industries related to minerals are located in this area, which gave boost to the development of mining activities.

Question 3.
Lumbering is developed on a large scale in Canada.
Answer:

• Lumbering is one of the most important economic activity in the areas covered by coniferous forest in Canada.
• In Canada coniferous forest grow in large belt, since the climate is suitable for the growth of coniferous trees.
• In these forests only one species of trees grows in one area which is favourable for the lumbering.
• The development of lumbering depends upon the type of wood, climate, market and transport facilities.
• Commercial lumbering is developed in Canada because there is coniferous forest region, which provides soft wood, which is easy to cut, carry and durable.

Cool climate of Canada, well developed transport facilities for the movement of logs, use of machinery for logging, large demand in local and international market for paper and pulp industries, limited development of other economic activities due to extreme cold climate are the other factors responsible for lumbering in Canada.

Question 4.
Extensive agriculture is a commercial type of agriculture.
Answer:

• Extensive commercial agriculture was developed in temperate grassland region in Steppes, Prairies, Downs, Pampas and Veld grasslands.
• In these grassland areas population density is low and size of farms is very large from few hundred to thousand acres.
• There is extensive use of machinery from sowing to harvesting.
• Modern and scientific methods of agriculture are used, so production is large.
• The per hectare production is low whereas per capita production is high.
• Since population in those grasslands is very low and there is surplus production,
• Therefore, large quantities of food grains are available for export, so this agriculture is known as commercial type of agriculture.

Question 5.
Lumbering is practiced more in coniferous region than in tropical region.
Answer:

• Lumbering activity depends upon nature of wood – hard or soft, density of forest, number of species in the forest, transportation facilities, use of machinery and market.
• In coniferous forest region trees provide softwood, which is easy to cut and durable.
• In coniferous forest region one type of species are found in extensive area, so lumbering is easy.
• In coniferous forest region there is use of machinery for lumbering and transport facilities are also well developed.
• There is lot of demand for softwood in local and international market, hence commercial lumbering is more developed.
• On the other hand, in tropical region, density of trees is very high, different types trees grow in close proximity, so lumbering is difficult.
• In tropical region surface movement is difficult and transport facilities are not developed because of marshy land.
• In tropical region there is no local market since trees provide hardwood and therefore commercial lumbering is not developed.

Question 6.
Hunting has been banned.
Answer:

• In the older days hunting was the most important primitive activity of man to obtain food.
• Since agriculture was not developed, it was the only source of food for man.
• As a result, large number of animals were killed to such an extent, that some of the species
  of animal have become extinct or at the verge of extinction.
• In order to conserve and protect animals, hunting is banned all over the world.

5. Differentiate between.

Question 1.
Lumbering in Equatorial forests and Temperate forests.
Answer:

Equatorial Forests	Temperate Forests
(i) It is a tropical evergreen forest.	(i) It is a temperate coniferous forest.
(ii) It is mixed forest.	(ii) One species of trees are found over an extensive area.
(iii) Wood is hard.	(iii) Wood is soft.
(iv) Hot and humid climate, suitable for labour.	(iv) Cool and pleasant climate is suitable for labour.
(v) Surface movement difficult.	(v) Surface movement not difficult.
(vi) Mechanisation not possible for cutting trees.	(vi) Mechanisation is used for cutting trees.
(vii) No demand in local market.	(vii) Local market well developed.

Question 2.
Plantation Agriculture and Extensive Commercial Agriculture
Answer:

Plantation Agriculture	Extensive Commercial Agriculture
(i) Developed in tropical region.	(i) Developed in temperate region.
(ii) Labour intensive farming.	(ii) Machinery is more used.
(iii) Only crops are grown.	(iii) Commercial animal rearing is also done along with farming.
(iv) Tea coffee, cocoa spices are important crops.	(iv) Wheat and maize are important crops.
(v) This type of agriculture is practiced in Malaysia, India, Sri Lanka, Indonesia, etc.	(v) This type of agriculture is practiced in temperate grasslands of North America, South America, Europe and Asia.
(vi) Crops for export purpose.	(vi) Crops for export purposes.

Question 3.
Mining and Fishing
Answer:

Mining	Fishing
(i) Since ancient times man is using minerals as raw material.	(i) Since ancient time man is using fish as a food.
(ii) Found naturally in crust of the earth.	(ii) Found naturally but in rivers, lakes, seas and oceans.
(iii) Used as industrial raw materials.	(iii) Used as a food.
(iv) Highly uneven distribution.	(iv) Found everywhere in waterbodies.
(v) Availability of minerals depends upon geological structure.	(v) Availability of fish depends on nature of coast line, cool climate, cold and warm ocean water currents etc.

6. Answer the following questions in detail.

Question 1.
What are the factors affecting commercial fishing?
Answer:
Following factors affect commercial fishing.

• Extensive continental shelf with shallow water. For example, Dogger bank fishing area.
• Confluence of warm and cold ocean water currents, which is favourable for the growth of plankton. For example, Gulf warm pcean current and Labrador cold current meet together near Dogger bank on North Eastern coast of North America.
• Broken coastline for the development of ports and -.
• Traditional skills of some local people who are expert in fishing.
• Large size of population to provide demand for fish.
• Limited land to grow protein rich food, so that fish becomes staple food of people.
• Use of advanced fishing boats and fishing nets.
• Cool climate for natural preservation of fish.
• Forest resources to provide wood for ship building industry.

Question 2.
Write a note on Intensive Subsistence agriculture.
Answer:

• Intensive subsistence farming is practiced in densely populated countries like China, India. Japan, Sri Lanka and east Asian countries.
• Since there is large population and limited fertile agricultural land, there is small land holding.
• Farmers work intensively to get maximum yield from available small land.
• Rice is the dominant food crop produced in this region.
• Mostly manual labour and animals are used for all agricultural activities.
• Most of the production is consumed locally and hence no surplus is available for export.
• Yield per hectare is high but yield per capita is low.

Question 3.
Give characteristics of Market Gardening.
Answer:
The following are the characteristics of market gardening.

• It is a modern type of agriculture developed mainly on the fringe of highly industrialised and densely populated urban areas.
• Vegetables, fruits, milk, eggs, meat etc., are the important products produced.
• Size of the farm is very small like garden.
• Scientific and technological knowledge as well as manual labour to some extent is used in production.
• Use of capital is very high.
• Natural organic manures and chemical fertilizers are used.
• Developed in areas lying at the distance of overnight journey by trucks, so that perishable products can be carried to nearby city market as early as possible. For example, vegetables and fruits grown at Vasai and Virar are carried to Mumbai.

Question 4.
Write a note on the areas in the world practicing commercial animal husbandry.
Answer:

• Commercial animal husbandry is practiced in 30°N to 60°N latitude, and 30°S to 55°S latitudes.
• Commercial animal husbandry is practiced in temperate grassland regions of steppes in Russia, prairies in North America, downs in Australia and velds in South Africa and Pampas plains of Argentina.
• In these areas there is cultivation of crops as well as grass for animals.
• In these areas agriculture and animal husbandry is done together.
• This type of farming needs huge capital investment and more use of modern machinery, advanced technology, market and large land.
• In North and South America, it is carried with the help of advanced technology on a commercial scale.

Question 5.
Mining is dependent on the extraction of naturally occurring minerals. Explain.
Answer:

• Mining is one of the oldest economic activity of man.
• Man cannot produce minerals that are naturally found in the crust of the earth.
• This activity solely depends on the presence of minerals.
• It also depends on geology of the region, value of minerals, quality of minerals, capital investments, technology and availability of skilled labour, etc.

Question 6.
Write in detail about the characteristics of primary economic activities.
Answer:

• Hunting, gathering, fishing, rearing animals, mining and agriculture, etc., are the important primary economic activities of man.
• These activities are solely dependent on nature.
• Primary activities mean extraction of natural resources.
• These activities mainly produce raw materials required in different types of industries.
• Natural calamities affect most of the primary activities.
• In developing countries very large proportion of working population is engaged in primary activities, since there is less use of machinery.
• In developed countries there is less proportion of working population engaged in primary activities, since there is more use of machinery.

7. On an outline map of the world, show the following with appropriate symbols and prepare-an index.

Question 1.
(a) Dogger Bank fishing area.
(b) Area of lumbering in Asia.
(c) Area of animal husbandry in Australia.
(d) An area of agriculture in Europe.
(e) Mining area in Arabian Sea.
(f) Fishing area in South-West Atlantic Ocean.
Answer:

8. Given below is the data about the continent wise employment engaged in primary economic activities in the year 2018. Draw a suitable diagram to represent the data and answer the questions that follow

Question 1.

Continent	% of population engaged in primary economic activities
Europe	7.91
Asia	24.49
North America	14.93
South America	14.94
Africa	47.28
Australia	27.79

(1) In which continents is less than 10% of the population engaged in agriculture?
(2) In which continent is more than 40% population engaged in agriculture?
(3) Looking at the given data, can you arrange these continents in ascending order on the basis of level of economic development?
Answer:

(1) In Europe less than 10% population is engaged in agriculture.
(2) In Africa more than 40% population is engaged in agriculture.
(3) Ascending order is as follows:
Africa, Asia, Australia, South America, North America, Europe

Class 12 Geography Chapter 4 Primary Economic Activities Intext Questions and Answers

Try this.

Question 1.
Complete the table. (Textbook Page No. 33)

Answer:

Question 2.
Complete the chain by observing columns A to C. Write the number of the relevant characteristics and type of agriculture in column A. (Textbook Page Nos. 37-39)
Answer:

Question 3.
On the basis of the information given and pictures shown in textbook fig. classify the factors affecting agriculture into physical and human factors. (Textbook Page No. 39)
Answer:

Give it a try.

Question 1.
Complete table. (Textbook Page No. 34)

Answer:
Lumbering practiced in different parts of the world.

Make friends with maps!

Question 1.
Observe the map (Textbook Page No. 32) and answer the following questions (Textbook Page No. 33)

(i) Which economic activities are shown in the following map?
(ii) In which region do you don’t find any activity? what could be the reason?
(iii) In which latitudes do you primarily find the distribution of lumbering activity?
(iv) Why is fishing occupation only found in certain areas in the oceans?
(v) Which primary economic activities are mostly found in Europe?
(vi) What production does the symbol of mining shown in seas and oceans depict?
(vii) In which continent mining is not found?
(viii) In which ocean is the world’s fishing mostly carried out?
(ix) Which primary economic activities are found to the south of Tropic of Capricorn?
(x) Which primary activity is found in the islands of South East Asia?
(xi) Considering all four continents, in which continent do you find less agriculture being practiced?
(xii) Write a paragraph on relationship between latitudinal extent of agriculture and climate in your own words.
Answer:
(i) Agriculture, animal husbandry, fishing, mining and lumbering are the economic activities shown in the map.
(ii) In Antarctica region we do not find any activity because of permafrost and uninhabited continent.
(iii) Lumbering activity is primarily found in 50° to 70° North latitudinal region.

(iv) Fishing can develop only in those areas in the oceans where continental shelf is broad and shallow, meeting of cold and warm ocean water currents and availability plankton food for fish, cool climate etc. Since these physical factors are found only certain areas, so fishing occupation is developed in certain areas only. For example, Dogger banks in Europe or Grand Banks in north eastern part of USA etc.

(v) Agriculture, lumbering, mining and animal husbandry are the primary economic activities found in Europe.
(vi) A star (★) symbol for mining is shown for the production of mining in seas and oceans.
(vii) Mining is not found in the continent of Antarctica.
(viii)The world’s fishing is mostly carried out in the Atlantic Ocean.
(ix) Agriculture, mining, fishing, lumbering and animal husbandry are the primary economic activities found to the south of Tropic of Capricorn.
(x) Agriculture, fishing, and lumbering are the economic activities found in the islands of South East Asia.
(xi) Out of the four continents less agriculture is practiced in the continent of Australia.

(xii) Considering latitudinal extent except North Africa agricultural activities are important economic activities in latitudinal belt 8° to 50° North parallel of latitudes in the northern hemisphere and 20° to 45° latitudes in the southern hemisphere.

• Climate is the most important deciding factors in the development of agriculture.
• With the exception of a few areas, no country in this latitudinal belt experiences snowfall or frost. These weather phenomenon are harmful for the development of agriculture.
• Rainfall in this latitudinal belt is also sufficient and fairly distributed except deserts in continents of Asia and Africa.
• These are all generalised statements. However, agriculture in these latitudinal belts is affected as per the local variations in local weather conditions and physiography of the region.

Can you tell?

Question 1.

(i) Identify the images given in fig. (Textbook Page No. 34)
(ii) What are these products made from?
(iii) What do you find the raw material that are required to make these products.
(iv) What is the occupation of obtaining these products called?
Answer:
(i) Honey, brush, chewing gum, tendu leaves, rope, broom, ornament and wild fruits images are given in photograph.
(ii) These products are made from nature.
(iii) The raw material required is coconut coir, rubber, tendu trees, honeybee and wood.
(iv) The occupation is called food gathering.

Question 2.
List out the effects of deforestation on the environment, animals, birds and humans. (Textbook Page No. 35)
Answer:

• For thousands of years man has been using forests for his shelter, food and clothing and therefore, world’s forest resources are gradually diminishing.
• If, too many trees are cut, forest is not capable of re-establishing itself. This may lead to many environmental problems.

Some of the important problems are as follows.

• After deforesting in many areas, a decrease in rainfall could be noticed.
• As a result of rapid deforestation environmental problems like floods, cyclones, soil erosion, tsunami etc., are increasing.
• Due to large scale deforestation in India, 79 species of mammals, 44 species of birds, 15 species of reptiles and 3 species of amphibians are threatened.
• Nearly 1,500 plant species are considered endangered.

Find out.

Question 1.
With the help of internet, find out about Wild Life (Conservation) Act. (Textbook Page No. 33)
Answer:
Wildlife Protection Act, 1972 and Amendment in 1991.
(i) Objective of the Act is to protect the wild animals, birds and plants particularly the endangered or threatened species.
(ii) The Act prohibits the capturing, killing, poisoning or trapping of wild animals.
(iii) A national wildlife action plan has been made under it.
(iv) The Act envisages the creation and management of sanctuaries and national parks.
(v) A section has also been incorporated for creation of Biosphere Reserves.

The objectives and components of the Act are as follows:

• Control the rapid decline of wildlife. Therefore, specified endangered species are to be protected as a matter of priority.
• In general, protect all species.
• Prohibit regulate hunting (prohibit unlicensed poaching) of wild animals and birds.
• Prohibit regular trade in wild animals, their body parts and articles made by using their body parts.
• Set up protected areas like wildlife sanctuaries and national parks.
• Set up central 200 authorities to regulate zoos and encourage captive breeding of endangered species in the zoos.
• Constitute a wildlife Advisory Board in each state to advice the respective state Governments.

In 1991, the Act was amended to include plants in its definition of wildlife. Until then, for almost two decades, protection of plant life was not on agenda.

Question 2.
Find out how over exploitation of all kinds of animal resources affect human lives and environment. (Textbook Page No. 36)
Answer:

• Due to over exploitation of animal resources there is over grazing and heavy soil erosion.
• Many times, heavy soil erosion results into desertification of land.
• Many times, trees, shrubs and even their roots are used by rural people to feed the animals, it results into deforestation and desertification becomes intense.
• All disadvantages of soil erosion and desertification are faced by human beings.

Question 3.
Mining causes air, water, land and noise pollution on large scale. Look for one example each. (Textbook Page No. 37)
Answer:

• Environment impact of mining can occur at local, regional and global scales through direct and indirect mining practices.
• Impact can result in erosion, sinkholes, loss of biodiversity or the contamination soil. Example of land erosion due to mining is Tedi mines in Papua New Guinea.
• There is pollution of ground water and surface water by the chemicals emitted from mines.
• These processes also have impact on the atmosphere from the emissions of carbon, which have effect on the quality of human health and also biodiversity.

Think about it.

Question 1.
What is the difference between fishing and pisciculture? (Textbook Page No. 36)
Answer:

• The term ‘fishing’ includes all human efforts to obtain the aquatic animals in the sea, inland water and rivers.
• Breeding, rearing and transplantation of fish by artificial means is called pisciculture.
• In other words, pisciculture is fish farming. It involves raising of fish commercially in tanks or enclosures.

Question 1.
Observe the given map in fig. (Textbook Page No. 32) and answer the following questions. (Textbook Page No. 34)

(i) Which countries in the monsoon region practice lumbering on large scale.
(ii) In which part of Australia is lumbering carried on?
(iii) Why do you think lumbering is not carried out in the Northern part of Africa?
(iv) Write a note on relationship between latitudes and lumbering.
(v) Why lumbering is not developed on commercial level in Equatorial region?
Answer:
(i) India, Myanmar, Nepal, Cambodia, Vietnam and Philippines.
(ii) In south western and south eastern part of Australia lumbering is carried on.
(iii) Lumbering is not carried in Northern part of Africa because it is covered by Sahara Desert.

(iv) Lumbering is practiced in the areas where forest grows.

• Different types of forest need different rainfall and temperature conditions for growth of trees.
• The temperature and rainfall are related to latitude.
• Monsoon forests grow in areas of moderate temperature and rainfall; thus, they grow in 30°N to 40°N latitude.
• Coniferous forests grow in cool climate so they grow in 50°N to 70°N latitude

(v) Commercial lumbering is not developed in Equatorial region due to following reasons.

• In Equatorial region there dense and mixed forest growth. Land is covered with marshes.
• The trees provide hardwood which is hard to cut and heavy to carry.
• Due to hardwood it has less demand in the world market.
• Hot and humid climate of this region is not suitable for labour.
• Transport facilities are not well developed.
• Traditional methods of lumbering are used.

Question 2.
Observe the map in figure. (Textbook Page No. 32) and answer the questions given below. (Textbook Page No. 35)

(i) Along which bank of North America is Grand bank located?
(ii) Along which coast of South America is the fishing mostly practiced?
(iii) In which part of Australian continent fishing activity developed?
(iv) Fishing is carried on large scale on the western coast of Africa than on the eastern coast of Africa. Give reasons.
(v) Commercial fishing is practiced on the southern coastline of Greenland. Give reasons.
Answer:
(i) Along North-Eastern bank of North America Grand bank is located.
(ii) Along the Western coast of South America fishing is mostly practiced.
(iii) Along South Eastern part of Australian continent fishing activity is developed.

(iv) Along the western coast of Africa, the continental shelf is broad and water is shallow.

• The Guinea and Benguela warm current and Canary cold current meet together near the Western coastline of Africa, so lot of plankton is available.
• The Western coastline is broken so it is suitable for fishing.
• There is more demand for fish along the western coastline because supply of agricultural goods and meat is limited.
• On the eastern coast of Africa, the continental shelf is narrow, water near the coastline is shallow coastline is smooth, limited plankton etc so fishing is not carried on large scale.
• Therefore, fishing is not carried on large scale on the eastern coast of Africa.

(v) The southern coastline is the traditional area of fishing in Greenland.

• The continental shelf of southern coastline is broad and water near the coastline is shallow.
• The southern coastline of Greenland is broken so it is suitable for fishing.
• The West Greenland current flows along the south coastline of Greenland which brings plenty for plankton near southern coastline.
• It is traditional occupation so skilled people are available for fishing.
• The cold climate of Greenland is suitable for fishing.
• The important species of fish caught near southern coastline of Greenland are Greenland Halibut, Atlantic cod, Snow crab, Atlantic Herring etc.

Question 3.
Look at the map in fig. (Textbook Page No. 32) and answer the following questions. (Textbook Page No. 36)

(i) Do you think there is correlation between animal husbandry and grassland?
(ii) In which continent animal husbandry not practiced on large scale?
(iii) In which regions of the world do animal husbandry and agriculture coincide?
(iv) Animal husbandry is found in between which latitude of the world?
(v) In which zone between 30°North to 30°South latitudes, is animal husbandry not found on large scale? What could be the reason behind.
(vi) What could be the reason of concentration of animal husbandry in the eastern part of Australia?
(vii) Why is animal husbandry developed more in the arid regions of the interior of the continents?
Answer:
(i) Yes, there is correlation between animal husbandry and grassland because animals are grazed on grassland.
(ii) In Africa continent animal husbandry not practiced on large scale.
(iii) In North America, Europe and Asia animal husbandry and agriculture coincide.
(iv) Animal husbandry is found between 30° North to 60° North and 30° South to 55° South.

(v) In a zone between 5° North to 5° South latitudes, animal husbandry is not found on large scale. This zone has equatorial climate, so dense forest growth and inhospitable climate and lack of good quality grass are the reasons for no development of animal husbandry in above mentioned zone.

(vi) For the development of animal husbandry, climate is more important factor. In eastern part of Australia, the climate is suitable for the growth of good quality grass, therefore, animal husbandry is more developed.

(vii) The arid regions of interior of the continents receive very low rainfall.

• Only grass grows in low rainfall areas.
• Due to limited water supply, other economic activities cannot be developed.
• Therefore, only animal husbandry can be developed with the help of grass.

Question 4.
Look at the Fig. (Textbook Page No. 32) and answer the following questions (Textbook Page No. 36 and 37)

(i) In which part of North American continent is mining mainly found?
(ii) Mining activity is located along which coastal side of South America?
(iii) Comparing other primary economic activities, do you think the extent of mining is related to latitude.
(iv) Looking at the concentration of mining in the world, can you relate it with the economic development of the country?
Answer:
(i) Along North Eastern and Western coastline of USA and South Western part of Canada.
(ii) Northern, Western and Southern coastline of South America.
(iii) No, the extent of mining is not related to latitude.

(iv) Yes, we can relate mining with economic development of the country because minerals provide raw material to many industries, especially heavy industries. Therefore, countries rich in minerals have more economic development. For example, USA, Developed countries of Europe.