Category: Commerce Notes PPT

In today’s changing world, the way of doing business has also changed positively. With maximizing the shareholder’s value, the company is taking major concerns about the society at large and thus acting in its best interest in the same. The modern view is that a company must not only be profitable but should also contribute to the welfare of society and the environment. 

We see social responsibility as an important factor in the company thus we included the study of the same in this content. In this article we will discuss ‘What is Social Responsibility?’, and ethics that come under social responsibility. 

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Social Responsibility means that a business takes social responsibility of the society with the act of maximizing the interest of the shareholders.  The companies that perform social responsibility are known as socially responsible companies. These companies adopt policies that will promote the well-being of the society and the environment by eradicating all the negativities like pollution, using toxic raw- materials while engaging in helpful activities like planting trees, contributing to charitable organizations. 

On the other hand, the critics justify their motion of standing against social responsibility by saying that social responsibility is the opposite of doing business. Business and social responsibility are two polars that never can align together. Thus, social responsibility can never be a part of a company’s concern. 

But, nowadays, who does not love the tag of – ‘environment friendly’ on the products of the various brands. The smart generation is more inclined in investing in these brands. So, we see in today’s market scenario, the consumers are relying on the companies who do business with an element of social ethics.  

Example of Social Responsibility 

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Social responsibility is also known as Corporate Social Responsibility or CSR. CSR has become a focal point within businesses due to the effect of modernization.  

The context of this theory is to enact the policies which will promote an ethical balance between both the mandates – working for profitability and also benefiting the society as a whole. These policies can be donations of money, time, or resources, initiating the “go green” policies like reducing the emittance of greenhouse gases, or abiding by the EPA regulations to limit the pollution.

Ethics and Social Responsibility

Social ethics can be defined as the systematic reflection on the moral spheres of the social structures, systems, issues, and the community at large. Social ethics is analyzed as a branch that is studied under ‘applied ethics’, this is analyzed and studied as the application of ethical reasoning to all social problems.

Social ethics that highlights the ethical responsibility of a business include:

The principal tasks that are performed by the social ethicists are to: examine the social conditions existing in the society.

1. determining which of that social responsibility is problematic in regard to the societal norms that concerns what is good or right or fair.

2. Then analyze if it is possible to take actions that could alter these problematic conditions. 

3. Then prescribing solutions which are based on the examination of the problem and the analyzing the options for action which are involved in it. 

Each of these steps is a thorough value-laden activity that helps in the social responsibility in business ethics.

Business Ethics and Social Responsibility 

While performing business ethics, social responsibility gets fulfilled by the business automatically. It is a business’s duty to make ethical decisions that will positively reflect an impact on society at large. Organizations must note how their actions lead to affect the communities. By performing social responsibility, a long-lasting and trusting relationship is created. To become socially responsible, the companies must strictly follow the code of ethnicity.

Being socially responsible pays off the company with the benefits of:

• Gaining more customers: Consumers are very much likely to continue their support of the businesses that care to make an impact in the society. Casting a positive influence on the communities and thus maintaining ethical standards allows the businesses to grow and gain newer customers and thereby maintain the existing ones as well. The existing customers are also likely to promote the reputation of the company by word of mouth.

• Creating a positive work culture in their business framework: When the employees agree with the company’s code of ethics and social responsibility, they feel even more motivated and accordingly they support the organization. Employers who encourage their employees to take the act of representation of their community also gain more approval and commitment in the work process.

Individual Social Responsibility 

Individual Social Responsibility is abbreviated as ISR which refers to our own awareness of how we display our actions which will affect the community as a whole. ISR includes volunteering time, giving money, and standing up for the issues which are in conflict with the environment or betterment of society. 

Responsibility towards Society

The responsibilities of business as a society are as follows:

1. Adopt socially desirable behavior with a healthy standard of living, avoiding wasteful expenditure.

2. To have an active role in civic affairs.

3. To provide and also promote the general type amenities which will help in creating a better living condition for the general mass.

4. To preserve and promote the social and cultural values that exist in the region.

5. To undertake socially effective projects which are relevant for the betterment of the community as a whole.

6. Taking steps for developing the backward areas.

Did You Know?

Important skills required for a successful CSR Professional are: 

1. Skill in business (including building insight, decision making, communication skills, IT, innovation, commercial awareness, strategic awareness, handling complexity and problem solving and leadership)

2. People skills (including ability to adapt, developing those around, impacting without power, open-mindedness, integrity, political knowledge, self-development and acquiring knowledge, partnership building, collaboration, and questioning “business as usual”)

3. Technical abilities ( technical expertise, understanding & analyzing impacts, internal consultancy, understanding human rights & understanding sustainability).

In this content after studying social responsibility, we understand that the new phase of modernizing is being aligned with the concerns of society, environment. A business being socially responsible is a big contribution to society. As consumers, we must encourage these types of businesses and promote social awareness in the same regard.

The stock of knowledge, habits, personality, and social attributes epitomizes the abilities to execute various functions to produce an output of economic value- all combine to summarize the human capital meaning. Enterprises, at any point in time, strive to develop and achieve their goals and remain ingenious simultaneously. To make that happen, they invest in human capital through training and development and enable them for an upgraded level of production and quality. The theory of human capital also means the study of human resource management as per the practice of macroeconomics and business administrations. This article elucidates the significance of human capital and its related concepts.

Types of Human Capital

It is a kind of intangible quality or asset that cannot be presented as a balance sheet for the company. According to human capital, no labour is equal and the quality of the capital can be upgraded by investing in the abilities, education, and experiences of the employees.

Health – Productivity of an individual is influenced by health. An environment with a good quality of life, a better healthcare system, and a healthy lifestyle can result in more productivity.

Tacit Knowledge – knowledge that cannot be gained from books can be obtained if practiced practically.

System Thinking – The ability to analyze and identify difficult impacts associated with a situation is called system thinking.

Creativity – The ability to understand beyond the possible and think about innovative ideas that evade others.

Relational Capital – It is the relationship between people and the organization. For example, an executive manager is known by everyone in the company.

Leadership – It includes the capability of motivating and influencing the group to achieve a determined and common goal.

 

Human Capital Management

The set of practices an organization follows to recruit, develop, and manage its employees and increase their appraisal of the company is called human capital management. Good human capital management results in hiring the right talent, managing employees in a better way, increase in productivity and having all the required skills in the company’s workforce.

 

Human Capital Management Practices Include

• Workforce planning.

• Compensational planning.

• Onboarding.

• Training.

• Payroll.

• Performance management.

• Retirement services.

• Workflow management.

Human Capital Development

The process by which an organization’s resources and capabilities are improved is known as human capital development. It can range from tuition assistance to on-the-job training and team-building with a given spectrum. The manager must see to the development of the employees. The employees should be allowed to utilize and be aware of the development processes. Human capital development is very important for the productivity and development of an organization.

 

Human Capital Development Rotates Around

• Talent management.

• Performance management.

• HR management.

• Succession planning.

• Workforce planning.

• Knowledge planning.

The tools for generating these opportunities include facilitation, coaching, training, and consulting. Learning management systems are used by some companies to develop human capital development.

 

Human Capital Strategy

The systematic process used to identify the resource and their capabilities for meeting the organization’s goal and develop strategies and plans for fulfilling the goals is called human capital strategy.

A human capital strategy must ensure that the firm gives the correct human capital in the right job at the right time for the right cost.

 

Strategy Planning Includes

1. Identifying the purpose.

2. Select the necessary goals for accomplishing a mission.

3. Update and monitor the plan.

4. Identify specific strategies and approaches.

State of Human Capital in India

The importance of human capital in the development of the financial sector has been realized in India in the early stage. A specific plan is been followed by the country and the reason for such an action plan is because of:

1. Innovative Skills – Human capital involves the invention of innovative techniques for production and it results in an increase in economic development as an increase in GDP. This boosts economic growth. 

2. High Productivity of Capital – It boosts productivity in the capital as professional operatives and skilful measures. It functions the guidelines effectively to train operatives. As a result of this, the human capital in India is affected.

3. Bring a Positive Viewpoint – The process of human capital brings a positive outlook for the public which is not similar to traditional mindsets. Thus, it raises the level of manufacturing production and cooperation.

Problems of Human Capital Formation in India

Did you Know?

• The intensified productivity of every individual in a company commits substantially to the increasing labor and creating abilities for absorbing innovative technologies. 

• Benefits of human capital include:

• Preserving and enhancing the dignity, worth, and freedom of the labor force.

• Improvement of the production of important services and goods.

• Human capital is an important factor in the modernization and development of skills and technology.

• The social aspect of human capital is to improve health, increase the literacy rate, and present a better standard of living.

Economic aspects of human capital include improved infrastructure, modern technology, industrial performance, effective planning, and the existence of capital. 

Factors Helpful in Increasing the Human Capital in India 

Hiring additional employees is an apparent approach to boost human capital. Human capital, on the other hand, isn’t stagnant. Within the current workforce, few steps can be taken to strengthen it. Some of the ways which help in increasing the human capital in India are stated below:

1. Improving Education– A workforce with a higher level of education will be able to accomplish more. You can provide industry-specific training. You can also help your staff earn college degrees or extra certifications by sponsoring them.

2. Providing an Encouraging Work Culture– People that think creatively are more likely to innovate. It may also result in increased staff engagement. They have the ability to think outside the box and solve issues in novel ways.

3. Specialized Niches– The more specialized someone is, the more they can concentrate on their area of genius. Rather than wasting time and money learning multiple jobs, they can focus on one area of expertise and maximize their potential.

4. Recruiting a Diverse Workforce– When more people have a variety of life experiences, they bring a variety of skills and perspectives to the table.

Accounting is indeed a tedious task. For this the companies who have an abundant financial transaction in a year to journalize them all is really bothersome. Hence, the companies prepare the subsidiary books, where the recording of the transactions of a similar nature is done in a chronological manner. 

The Subsidiary books are known as the books of original entry. In daily business transactions, a majority of the transactions are either related to sales, or to purchases or to cash. Thus, we record the transactions of the same or similar nature in one place, that place is a subsidiary book. We record the transactions chronologically to facilitate the accountant.

Types of Subsidiary Books 

The subsidiary books are of various types which suit the needs of an organization. The types are as follows:

Subsidiary Books of Accounts 

The Subsidiary Books are the books of Original Entry. These books are also called Day Books or special journals. We record the transactions in this book which are of similar nature, the recordings are done in chronological manner in Subsidiary Books. Subsidiary books actually are helpful in overcoming the limitations of journal books or journal entries.

Subsidiary Books Format 

Format of Purchase Book

Format of Sales Book

Format of Purchase Return Book

Format of Sales Return Book

Format of Bills Receivable Book

Format of Bills Payable Book

Advantages of Subsidiary Books 

The advantages of the subsidiary book are as follows:

1. Proper With Systematic Record of the Business Transactions

The business transactions are classified and grouped properly in cash and non-cash transactions, these are further classified as credit purchases, credit sales, and returns, etc. The books facilitate individual transactions, as they can be properly and systematically recorded in the subsidiary books.

2. Convenience While Posting

The transactions of a nature are recorded at a single place, in one of the subsidiary books. Example, all the credit purchases of the goods are recorded in the purchases book while all the credit sales of goods are recorded in the sales book.

3. Efficiency

The work is being divided here which gives the advantage of specialization. When the same work is done by a person repeatedly and continuously the person becomes efficient in handling it.

4. Helpful in Decision Making

Subsidiary books provide accurate and complete details about each type of transaction separately. Thus, the management can use the information as the basis for deciding the future actions. 

5. Errors and Frauds are Prevented

The Internal check becomes more effective as now the work can be divided in such a manner, where the work of one person is automatically checked by another person. With this internal check, the possibility of occurrence of the errors or fraud may be avoided and to the least minimized.

6. Availability of Requisite Information at a Glance

The transactions are entered in only one journal thus, it becomes difficult to locate the information about a particular item. When the subsidiary books are maintained, the details about a particular type of transaction can be easily obtained from the subsidiary books. The maintenance of these subsidiary books helps in obtaining the necessary information at a single glance.

Scientific Management is another special sense of an approach to management in which it undertakes the responsibility for deciding the proper standards and all the methods of work which gives close supervision on the workers.

In simpler words, Scientific Management is the art of knowing accurately ‘what is to be done’ and ‘how this will be done’. Under this approach, the scientific techniques are applied in the recruitment, at the time of selection, and in training the workers and are also used in tackling various industrial problems. Also, we will know about the man behind these techniques in our next section and will be introduced to his scientific techniques.

FW Taylor

F.W. Taylor led to the emergence of the concept of ‘Scientific Management’. Frederick Winslow Taylor’s philosophy of scientific approach was developed and was popularized by his associates like Frank Gilbreth, H.C. Gantt, H. Emerson, and H.S. Person.

Taylor’s thinking on management is the subject-matter of the two books – Shop Management and the Principles of Scientific Management that were published in 1903 and 1911 respectively. For the efforts of Taylor, Scientific Management became popular in the U.S.A. at the beginning of the twentieth century.

“Scientific Management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way”. —F.W. Taylor.

Techniques of Scientific Management by FW Taylor

Taylor has led down various techniques of Scientific Management which were as follows:

1. Work-Study 

2. Standardization of Tools and Equipments

3. Scientific Task Setting 

4. Scientific Setting of Wage Rates 

5. Scientific Selection and Training 

6. Functional Foremanship 

7. Differential Piece-Rate Plan.

We will discuss all seven techniques in good detail. 

1. Work-Study:

Work-study implies an organized based study. This objectifies, systematizes, the efficiency of various operations in an enterprise. All around, this technique analyses the whole system.

These techniques are also used in the examination of human work in all its context and which lead systematically to the investigation of all the factors.

2. Standardization of Tools and Equipment:

Taylor standardized tools and couplings, the cost system, and several other items. Thus, efforts are made to provide a standardized working environment with methods of production to the workers. Standardization techniques help to reduce the spoilage and wastage of the materials, improve the quality of work and thereby reduce the cost of production. This technique is also effective for improving fatigue among the workers.

3. Scientific Task Setting:

This is essential to set a standard task which an average worker will do during a working day. Taylor called it a fair day’s work. He put together the need for fixing a fair day’s work as this will prevent the workers from doing work that is much below their capacity. 

4. Scientific Setting of Wage Rates:

Wage rates should be fixed in such a way that the average worker is induced to attain a standard output that is leveled up more than his level. Taylor thus suggested that the differential piece – wage system should be introduced. 

5. Scientific Selection and Training:

The management is required to design the scientific selection procedure so that the right men are selected for the right jobs. The first step in this scientific selection is determining the jobs for which the workers are required. After this, the employees are appropriately qualified, trained, experienced and the level of efficiency for the post is then determined. The employees are selected according to the predetermined standards in an impartial way.

6. Functional Foremanship:

Taylor specified in this technique that specialization is to be introduced in a factory. He advocated ‘functional foremanship’ for this purpose. A functional foremanship is a form of an organization that involves supervision of a worker by several specialist foramen. Example – matters relating to the speed of work and repairs of machinery are to be supervised by the speed boss and the repair boss respectively in this case.

7. Differential Piece-Rate Plan:

This plan as suggested by Taylor is to attract highly efficient workers. In this plan, there are two-piece work rates, the one which is lower and the other is higher.

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Foremanship with a Purpose:

A factory administration system that allows for the presence of many foremen in independent, functional roles is known as functional foremanship. Traditionally, factories had only one manager to oversee operations. For manufacturing workers, this manager or foreman was their only point of contact. Frederick Winslow Taylor, the eminent engineer who revolutionized Scientific Management at the turn of the century, uncovered a major flaw in this method. When he compiled a list of all the qualities that a good supervisor must possess, he realized that no one individual could possibly possess all of them. As a result, the concept of working foremanship was conceived.

Workplace Standardization and Simplicity:

What is the Definition of Standardization?

Standardization refers to the process of setting standards for any industrial activity, such as the way things are done, the amount of time they take, the raw materials they use, the machinery they use, the products they make, the processes they go through, and the situations they go through. These examples serve as guidelines that must be followed throughout the process.

What Are Management Principles? Related Reading: What Are Management Principles?

What is the Definition of Simplification?

Simplification refers to the removal of non-essential kinds, sizes, and measurements, whereas standardization refers to the creation of new types rather than existing ones. The goal of simplification is to eliminate a variety of products that are redundant. Machines, tools, and labor costs are reduced as a result. It entails keeping inventory under control, making full use of commodities, and increasing turnover.

Study Method:

The goal of the research is to discover one vigorous method of accomplishing the job. The job can be done in a variety of ways. There are a number of variables to consider when determining the optimum path. Every endeavor, from obtaining raw materials to presenting the final product to the user, is part of method research. Using the technique research, Taylor came up with the concept of the assembly line.

Motion Analysis:

Motion analysis is the study of actions such as placing objects, lifting, changing positions and sitting that occur when doing a routine task. Random motions are encouraged to be reduced so that the job can be completed in less time.

Study of Time:

It reduces the amount of time it takes to execute a specific task. For each step of the task, time-keeping devices are used. Various readings are used to determine the standard time for the full task. The duration of the time study will be determined by the task’s frequency and volume, as well as the process’s cycle time and time measurement costs.

Fatigue Research:

If a person does not relax while working, he or she will get emotionally and physically exhausted. Rest periods will aid in the recovery of vitality and the ability to work at the same level again. As a result, the potency will be increased. The goal of fatigue research is to determine the amount and frequency of rest intervals required to complete a task.

The determination of the price for a product or service is not easy. Several other factors govern it. The theory of cost definition states that the costs of a business highly determine its supply and spendings. The modern theory of cost in Economics looks into the concepts of cost, short-run total and average cost, long-run cost along with economy scales. 

 

The cost function varies concerning factors such as operation scale, output size, price of production, and more. The theory of cost production needs to be understood in detail by economists to run their company and increase its profit and productivity. This article covers all you need to know about cost concepts.

 

Types of Costs

• Accounting Costs / Explicit Costs: The cost of production including employee salaries, raw material cost, fuel costs, rent expenses and all the payments made to the suppliers from the accounting costs.

• Economic Costs / Implicit Costs: According to the modern theory of cost in economics, the investment return amount of a businessman, the amount that could have been earned but not paid to an entrepreneur and monetary rewards for all estates owned by the businessman form the economic costs. These costs include accounting costs and the money also returned which the owner could have earned from elsewhere apart from the business.

• Outlay Costs: These are the recorded account costs or actual expenditure spent on wages, rent, raw materials and more.

• Opportunity Costs: These are the missed opportunity costs. They are not recorded in the account books but show the cost of sacrificed or rejected policies.

• Direct / Traceable Costs: These costs are easily pointed out or identified expenditures such as manufacturing costs. Such costs cater to specific operations or goods.

• Indirect / Non-Traceable Costs: These costs are not related directly or identifiable to any operation or service. Costs such as electric power or water supply are some examples because these expenses vary with output. They generally have a functional relationship with production.

• Fixed Costs: Such costs do not vary with output and are fixed expenditure of the company. For example, taxes, rent, interests are all fixed costs as they do not vary within a constant capacity. Any company cannot avoid these costs.

• Variable Costs: These costs vary with output and are known as a variable cost. For example, salaries of the employee, raw material costs all fall under variable costs. These directly depend on the fixed amount of resources.

 

Theory of Cost in Economics

The modern theory of cost in Economics also specifies economies of scale where an increased production decreases the cost per unit of production. The returns to scale first increase, then stabilize for some time and then decrease. Let’s take a look at the different types of economies—

• Technical: Technical economies include investment in machinery and more efficient capital equipment to increase production efficiency.

• Effective Management: When an organization increases operation, they need a better division of labor into various sub-departments for efficient management.

• Commercial: A large amount of components and raw materials is needed with increased production. Hence raw material costs decrease. The advertisement cost for a unit of production also falls, which increases.

• Finance: With a raised Finance, any company becomes popular. Their banking securities increase and Finance is raised at a much lower cost.

• Risk Management: As the firm becomes more diverse, risk-taking factors also increase.

 

Comparing Short Run and Long Run Costs

As per the theory of cost analysis, during the short run period, a company tries to increase its output by changing only the variable factors such as raw materials or labor. The fixed variables remain untouched. The long-run period is where the company can change any factor to obtain desirable outputs as per their interests. Ultimately all these factors result in cost.

 

Solved Examples

1. Draw a relationship between Total Cost, Total Fixed Cost and Total Variable Cost of a Business.

For any business, 

 

Total Costs (TC) = Total Fixed Cost (TFC) + Total Variable Cost (TVC).

 

2. What is the average fixed cost?

Average fixed cost is defined as the total fixed cost per unit of production. The total fixed cost divided by the number of units gives the average fixed cost.

 

Fun Facts

• The average total cost is the sum of the average variable cost and average fixed cost.

• Marginal cost can be calculated as the total change in cost upon a total change in output.

• Electricity charges are neither fixed nor variable costs. Instead, they are semi-variable costs.

• Stair Step variable cost remains constant for a fixed output. But when the output suddenly exceeds its limit, the cost immediately jumps to a new higher level. The graph of total variable cost v/s output looks exactly like a staircase for such cases.

• According to the modern theory of cost in Economics, the positive slope in the long-run total cost average curve is due to diseconomies of scale.

When you are defining a transport system, you can define it as a set of relationships that occurs between sets, networks and demand. All the components of transport are designed in such a way so that the movement of passengers, freight and information can be facilitated either as a separate component or as joint components.

First let’s get information about what the basics of this transport system is, then we will move towards its relationship with economic growth.

Firstly the Transport System Includes the:

• Nodes: These are the points where the movements are basically generated, transmitted or ended, that is it is the exit or entering point in a transport system. There is variation in them according to the geographical systems

• Locations: These are the nodes where demands are expressed as origin, destination or they are expressed as a point of transit. In simple language, it defines demands and where it is taking place

Here we get to know about the transport system in brief and the details will show up further in this article. Now let’s look at its role in economic development. 

Transport System and Economic Development 

The Transport System and Economic Development are tightly coupled with each other. A well-knit transport system that is well-coordinated contributes to the sustained growth of any country. One can say that it is the transport routes that govern the basic arteries of the economic system of a country. It is the link between production and consumption; hence a transport system can also be deemed as the controller of the national economy. A country is progressing if there is transport moving in and out of it. This article will look closely into the elements of a transport system and see how the Transport System and Economic Development in India are interrelated.

If a product is produced at a  place it is necessary for the producer to make that product to reach its consumer. For that this transport system will work. Let’s take an example: if you have ordered anything online from an app, your producer will produce the product and this app will have its own delivery people who will transport your product to your doorstep. This provides them with the money and you with the thing of your necessity, it is as simple as that. Thus, it will only play a role in increasing the economic growth of the country also.

Role of the Transport System in Daily Life

A transport system plays a vital role in providing and improving access to different parts of a geographical region which is important for businesses as well as individuals. A transport system supports both freight and personal movements. In the business sector, the business and supplier or the business and the market need an efficient transport system to work smoothly. In the household sector transport is used as the means to go to offices, schools, shops, etc. The transport system is used widely by individuals for personal and leisure activities as it connects them to recreational, social, and medical facilities. 

Even for the people who are required to travel or for normal people who are going to their work daily, they use the method of transport to travel to their workplace and this transport can be anything: a bike, a car, a bus or anything that will make the person reach their destination.

The transport system is the main thing that connects people all around the world. If you want to meet someone, then also you are going to take help from the transport system. All the things in this world now seem to be impossible without a transport system. Thus, it is the basic necessity of all people across the world.

Core Components of a Transport System

Although you get a brief overview of these components, let’s have a look at what are the basic core or necessary components that are going to make a transport system.

Transportation can take place if the below described 4 essential components of the transport system are in place:

1. Modes 

These mostly take the form of vehicles that are used for conveyances. They support the mobility of freight and passengers. There are modes which carry only freight or only passengers, and then there are the mixed kinds which carry both.

2. Infrastructure 

The transport system needs physical support in the form of routes (rail tracks, highways, canals, etc.), and terminals (bus depot, airports, etc.). Superstructures or moveable assets also form part of the infrastructure, for example, the runway of an airport. The moveable assets have a shorter life span.

3. A System of Linked Locations Denotes Networks 

The spatial and functional organization of a transport system. This system defines which are the connected locations and how they are serviced. There could be locations that are more accessible with more connections while others could be poorly accessible with a lesser number of connections.

4. Flows

This describes the movement of freights, people, and information over their networks. A flow is characterized by an origin, intermediate locations, and a final destination.

Forms of Transport

There is not just a single mode of transport for people to travel; there are many. Let’s have a look at different forms.

The transport system has many forms like roads, railways, air, and water.

Road Transport

Road transport is the oldest form of transport and comprises cars, hand-pulled rickshaws, bullock carts, auto, tempo, buses, etc. This is the transport where you need to use the roads. Short distances can be easily covered by using road transport, but only for long traveling, you will require other modes of transport like that of rail or air or water. Like if you want to travel overseas it is a fact that for the whole journey, you can not use road transport, you need to change your mode of transport.

Rail Transport

In India, the central government owns and manages the railway system. This system has numerous benefits, as outlined below:

It can be used for transporting bulky goods. Often the bulky goods can not be traveled through roads and for that, you are required to use this mode of transport only.

Rail transport is less polluted. As compared to other modes of transport, trains cause very less pollution.

It is economical for traveling longer distances. If you want to travel long distances then the road or air mode of transport is going to cost you a lot so you can say this is the cheapest means of transportation.

Water Transport

India has a long coastline as it is surrounded by water with the Bay of Bengal, the Indian Ocean, and the Arabian sea bordering the country. Water transport in the form of the movement of goods and people on waterways is common in India. Water transport carries people and goods within, as well as outside of the country. Although it doesn’t sound that interesting, traveling through water is the kind of experience that you should go for.

Air Transport 

Air transport is the fastest means of transportation and in India is a relatively recent development. Air transport is also the costliest means of transportation in general. The Indian air transport now ranks amongst the fastest growing aviation sectors in the entire world. If you want to reach a place a bit early or even if you are looking for an adventurous ride you should go for air transport. It provides you with a safe journey over long distances.

The Economic Importance of the Transport System in India

In a country like India, which is the size of a continent, the importance of efficient, dependable, affordable, and safe transport facilities is very high. The commercial markets in India and the economic resources are dotted across the length and breadth of the nation. Below are mentioned some of the important roles that the transport system plays in the economic development of India:

The entire production system of India depends on the seamless movement of inputs like raw materials, machinery, fuels, etc. In a similar manner, the output from various sectors needs the transport system to bring them to the market. Thus, the transport system in India is key in raising the volume of production of different sectors of this country.

Labor can move smoothly between different regions of the country, which helps in the expansion of industries. It also provides jobs to workers and opens up gainful employment opportunities for the unemployed laborers of India.

Concerning production, the transport system is clearly promoting geographical specialization. By developing the market for a variety of products in distant parts of the country, transport increases the extent of the market, thereby facilitating specializations.

The vast and unexplored resources of our country (forest, mineral, agricultural wealth) lie in many remote regions. Roads and railways are making it possible to venture into these areas and tap into their potential.

The cultural, political, and social outlook of people is getting widened by the transport system. It helps in removing superstitions, conservative attitudes, and ignorance amongst various sections of society.