Category: Commerce Notes PPT

A joint venture abbreviated as JV is a type of business arrangement in which more than two or two parties agree to pool their resources for the purpose of fulfilling a specific task which can be a new project or any business activity.

All the participants in this venture are responsible for the profits and losses. Joint ventures, which actually run on a partnership basis can take the form of any legal structure. Henceforth, in this section, we shall talk about the JV business, its types, characteristics, and further move on to its advantages and disadvantages.

Types of Joint Venture

In this section we are going to talk about a few, most common types of joint ventures:

1. Limited Co-Operation Type JV

Collaboration is done with another business in a specific way like when a small business with a new product wants to sell it through a larger company’s distribution network this leads to the merging of business. The two partners agree on a contract of setting out the terms and conditions of how these function.

2. Separate Joint Venture Business

When a separate joint venture business is set up by a new company by handling a contract, a separate joint venture business is formed. The partners each own shares individually in the company and agree on how they should manage it.

3. Business Partnerships

Joining a business partnership or a limited liability partnership is a type of merger of two businesses.

Corporations, Partnerships, and Limited Liability Companies and also other business entities can survive as a JV.

Characteristics of a Joint Venture

The characteristics of a Joint Venture are as follows – 

A joint venture is entered between two or more parties to merge each other’s qualitative features. The company possesses a special characteristic which another company might lack.

Joint venture agreement between two or more organizations which might be of the same country or two different countries who diversifies in culture and ethics, different technology, have a chance to endure the possibility of inheriting one another’s characteristic need for each one’s requirement thus developing the target audience in their own hemisphere.

For a joint venture, there is no separate governing body that regulates or refines the activities of the venture. While they are into a corporate structure, the Ministry of Corporate Affairs like any other corporate check also keeps a check on this structure as well.

Advantages of Joint Venture

The most important joint venture advantages can help businesses to grow faster, increase their productivity and generate profits. Benefits of joint ventures include:

• Access to new markets and enlarge their audience.

• Increased the capacity.

• Sharing of risks and costs on a wide surface basis.

• Access to new knowledge and expertise in business which includes specialized staffing necessity. 

• Access to higher resources, for example, the technology and the finance.

• Joint venture partners help in providing a huge pool of resources together.

Disadvantages of Joint Venture

Joint ventures can pose significant risks, the disadvantages are like the follows:

• The communication between partners is not great as they belong to different societal classes.

• The partners expect different things from the joint venture, their interests may clash.

• The expertise and investment level may not match well.

• Work and Resources are not distributed equally.

• Different cultures and management styles may create barriers to the organization.

• The contractual limitations may pose risk to a partner’s core business operations.

India under the British Raj had witnessed a lot of such atrocious regulations that exploited the poor and helpless in many aspects. Among them, land ownership contributed significantly to preventing the socio-economic growth of the backward population.

 

The government of independent India came up with acts and laws to establish equal rights and ownership of land, which now constitutes a crucial episode of India’s economy. In the following lesson, you will come across a detailed discourse on land reforms in India after independence and their importance.

 

The instruments that are visualized for social justice are known as Land Reforms. It is because the Land Reforms that are divided as the sharp class division which is between the rich Landowning classes and the impoverished peasants who have no security of tenure seek to do away with the exploitative relationships. It is a step that is taken against the concentration of Landholdings in the hands of non-cultivating owners or few absentees, who on the size of holdings impose the ceilings and those Landholdings can be owned by families. Mainly, the concept of redistribution of Land is studied under Land Reforms but their scope is much wider. 

In simpler terms, Land Reforms refer to the redistribution of Lands from the rich class to the poor class. It includes operations, leasing, regulations of ownership, sales, and the inheritance of Land since Land redistribution requires legal changes.

Why Were the Land Reforms Introduced?

Almost all agricultural lands of India before independence were owned by intermediaries, like jagirdars and zamindars, among others, and not by the farmers who worked in these lands to produce crops. These farmers naturally suffered from exploitation when the landowners paid no heed in agricultural requirements and were solely concerned about the rent they collected from these labourers.

 

After independence in 1947, an inadequate agricultural output was apparent. In order to fix this situation, the Indian government took measures to alter existing regulations for a better outcome. These acts formed agrarian reforms in India after independence.

 

Objectives of Land Reforms

The Indian government aimed at speeding up the socio-economic advancement of rural India and its agricultural industries with this land reform system. Some of the main objectives of Land Reforms are listed below-

• The primary objective concerned an overall renewal of law structure for agricultural lands in India.

• These acts aimed at an equal and uniform distribution of agricultural lands so that concentration of ownership was not in few hands.

• Abolition of intermediaries of the medieval land-ownership system in India.

• Facilitating optimum agricultural produce with healthy and economic practices.

• Ensuring social and economic justice for previous violations of the tiller’s rights.

• Uniform ownership of land would prevent exploitation of tenant farmers and will help in reducing rural poverty.

• Elimination of the exploitation in the Land relations.

• To increase agricultural production and infuse equality in society.

• To restructure the agrarian relations in order to achieve an egalitarian social structure.

• To realize the age-old goal of Land to the tiller.

Land Reform- Types

Pre-Independence:

• The farmers did not have ownership of the Lands in which they used during the British Raj.

• The Landlords of those Lands were Jagirdars, zamindars, etc.

• Many issues were confronted in front of the government and it became a challenge in front of independent India. 

Post-Independence:

Read on to get detailed descriptions on some of the most notable acts from the long list of land reforms in India since independence.

The Land Reforms in post-independent India had various components:

• Abolition of Intermediaries- The first step taken by the Indian government under land reforms post-independence was passing the Zamindari Abolition Act. The abolition of the zamindari system was done that removed the layer of intermediaries who used to stand between the state and the cultivators. In many areas, superior rights were taken away from the zamindars and weakened their economic and political power.

The primary reason of a backward agrarian economy was the presence of intermediate entities like, jagirdars and zamindar who primarily focussed on collecting sky-rocketing rents catering to their personal benefits, without paying attention to the disposition of farms and farmers. Abolition of such intermediaries not only improved conditions of farmers by establishing their direct connection with the government but also improved agricultural production.

This was in direct response to the unimaginably high rents which were charged by intermediaries during British rule, which resulted in a never-ending cycle of poverty and misery for tenants. Indian government implemented these regulations to protect farmers and labourers from exploitation by placing a maximum limit on the rent that could be charged for land. 

• Tenancy Reform- The tenancy Reform led to the introduction of regulation of rent, providing security tenure, and conferring ownership to the tenants. In the pre-independence period, the rent which was paid by the tenants was exorbitant producing 35% to 75% of gross throughout the country. The primary attempt of the Reform was either to regulate rents and give some security to the tenants or outlaw tenancy altogether.

Legislations were passed in all states of the country to grant tenants with permanent ownership of lands and protection from unlawful evictions on expiry of the lease. This law protects tenants from having to vacate a property immediately after their tenure is over unless ordered by law. Even in that case, ownership can be regained by tenants with the excuse of personal cultivation. 

• Ceilings on Landholdings- This Reform referred to the legal stipulation of maximum size after which no farm household or farmer can hold any Land. By the year 1961-62 the government of all states passed the Land ceiling acts and in order to bring uniformity across states, a totally new ceiling policy was evolved in 1971.

This law was enacted to prevent the concentration of land ownership in a few hands. It placed an optimum limit on the total measure of land which an individual or a family can hold. Along with fixation of land ceilings, this rule enables the government to take ownership of the additional or extra amount of land, which in turn, is given to minor tillers or farmers with no land. 

With the help of these Reforms, the states were able to identify and take possession of Lands exceeding the ceiling limits from the households and redistribute them to the Landless families.

• Consolidation on Land Holdings- The term consolidation referred to the redistribution or reorganization of the fragmented Lands into one single plot. The trend of the fragmentation of Land increased because of the growing population and fewer work opportunities and this fragmentation made the personal supervision and the irrigation management tasks very difficult. Therefore, the act of Landholdings consolidation was introduced which states that if there are few plots of Lands of a farmer then those Lands were consolidated in one bigger piece which was done by the process of exchanging or purchasing.

            

A major problem of the agrarian structure of India is land fragmentation, which hinders large-scale farming and production. This problem was solved with this regulation which permitted farmers to consolidate minor fragments of land owned by them into a singular piece of land. This enabled tenants to carry out agricultural operations in a larger field, which could be done by exchanging land or purchasing additional pieces.

Lands reforms constitute an important part of CBSE Class 12 Commerce syllabus and might contribute to long-answer-type questions in final exams like writing a short note on land reforms in India. If you are looking for more information on the topic, land reforms in India after independence pdf from can help with detailed explanation on crucial concepts. You can avail these study materials from our website, or you can install the app from PlayStore.

The time when the world economy started growing, trade among various nations became strong, this increased the wealth as well as talent potentiality among the citizens. In this scenario, sitting back for the Indians would be absurd thus, we too started to implement liberalization in our economy. 

Although after failed attempts in 1966 and 1980, finally in 1991 the liberalization process bloomed in India. Liberalization is one of the important facets for the development of a country. This must be implemented by every nation’s government at any cost. So, what is liberalization? More importantly, does this liberalization literally have any impact on our Indian economy? In this context, we are going to understand the same.

 

The Term Liberalization – Introduction and Explanation

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The term liberalisation denotes removing restrictions from certain private individual activity, typically pertaining to the economic system. Commonly, liberalisation is used in the context of a government relaxing its previously imposed restrictions on economic or social policies. 

An Introduction to the Concept of Economic Liberalisation

Economic liberalisation refers to a situation where inessential restrictions and controls are removed from a country’s economy to ensure that businesses and enterprises can maximise their contribution. It is, however, important to note that liberalisation does not mean an uncontrolled economy.

 

Economic Liberalisation in India

The Indian economy was liberalized in the year 1991. In India, the concept of economic liberalization was introduced to attain several objectives – industrialization, expansion in the role of private and foreign investment, and introducing a free market system. Restrictions were relaxed for private companies to enter several core industries, which were previously reserved for the public sector.

 

Why was Liberalisation initiated in India?

Economic liberalization in India was bolstered by its balance of payments crisis in 1985. This crisis rendered the country incapable of paying for its essential imports and servicing its debt payments. India was pushed to the brink of bankruptcy therein.   

As a response to it, the then finance minister of India, Dr. Manmohan Singh, introduced economic liberalization in India. 

 

Features of Liberalization in India

Following are some of the features of liberalization that was initiated as a part of economic reforms of 1991 – 

• Abolition of the previously existing License Raj in the country. License or Permit Raj is a complicated system of regulations, licenses, and restrictions that were imposed to run and set up businesses between 1947 and 1990.

• Reduction of interest rates and tariffs.

• Curbing monopoly of the public sector from various areas of our economy.

• Approval of foreign direct investment in various sectors. 

• Economic liberalization in India integrated the above features and in general waived off several restrictions to become more private sector-friendly.

 

What were the Objectives of Liberalisation in India?

The primary objectives of initiating liberalization in India can be summed up as follows – 

1. To solve India’s impending balance of payment crisis.

2. To boost the private sector’s participation in the development of India’s economy.

3. To increase the volume of foreign direct investment in India’s businesses.

4. To introduce competition between India’s domestic businesses.

5. To maximize India’s economic potential by encouraging multinational and private companies to expand.

6. To usher in globalization for the Indian economy.

7. To regulate export and import and promote foreign trade.

8. Impact of Liberalisation on Indian Economy

 

Liberalization in India – Is it Double-Edged? 

Advantages and Disadvantages 

When it comes to discussing the impacts of liberalization, it is crucial to look at both the positive and negative ramifications on our country’s economy.

Advantages:

1. Free Capital Flow in The Economy – Liberalisation has enabled free movement of capital in our country, allowing companies to access the same easily from investors. In the pre-liberalization period, undertaking lucrative projects was taboo due to the dearth of capital, which was rectified in 1991, initiating higher growth rates.

2. Diversification of Investor Portfolio – post-liberalization, investors have the liberty to invest a percentage of their portfolio into a diversified asset class, thus generating more profit.

3. Improvement of Stock Market Performance – Relaxation of economic laws also leads to a rise in the stock market’s value, thus encouraging more trading among investors.

4. Impact on The Agricultural Sector – Even though the impact of liberalization on the agricultural sector cannot be measured accurately, in the period post-1991, there was a significant modification in cropping patterns throughout the country.

Disadvantages:

1. Economic Destabilization – Such a severe economic reform led to the redistribution of political and economic power that destabilized the Indian economy to quite an extent.

2. Increased Competition from MNCs – In the period of pre-liberalization, multinational companies had no role to play in the Indian economy. However, soon after, Indian companies faced increased competition from MNCs, which threatened the existence of several smaller firms.

3. FDI impact on The Banking Sector – Lifting restrictions from foreign direct investment in the banking and insurance sectors led to a downfall in the government’s stakes in both these sectors.

4. Increase of Acquisitions and Mergers – The increased scope of mergers and acquisitions in the post-liberalization period has posed a threat to the employees of smaller firms. In the event of a merger with bigger companies, employees of the smaller firms had to undergo rigorous re-skilling that led to a stagnation of productivity.

Did You know?

• Ministers like – Atal Bihari Vajpayee, Manmohan Singh, P.V. Narasimha Rao initiated liberalization in India. 

• In India, after the implementation of liberalization following improvements were noticed:

1. All restrictive barriers to International Investing were removed. This permitted the Indian companies to bank huge funds from foreign investors. 

2. There was an unrestricted flow of capital in India and among other big nations. This allowed the country inefficient allocation of resources and also to gain a competitive advantage.

3. The Indian stock market has appreciated ever since liberalization.

4. Political risks got reduced.

5. The investors diversified. 

Liberalization encompasses an extensive part of India’s economic history. You can learn more about this topic by referring to the notes and solutions available on ’s website.

Mobile commerce or M-commerce refers to the business platform where you can buy and sell products and services with the help of your smartphones (wireless handheld devices). With the advances in technology, smartphones and tablets are equipped with various new features, and shopping software applications are among the most popular features of them all. In this article, you will read about the core concepts of M-commerce, its advantages, and the limitations that you might face when trying to build your own M-commerce platform. 

You might be surprised, but different M-commerce categories serve different purposes. You have mobile shopping, mobile banking, and mobile payments. The M-commerce applications that use mobile shopping functionality allow customers to view and purchase products from their mobile devices. On the other hand, mobile banking allows you to make financial transactions using handheld devices, such as smartphones. This type of M-commerce transaction is carried out over a secure network, and the banks provide dedicated apps for these transfers.

(A man purchasing a product using mobile commerce platform on his phone)

Lastly, we have mobile payments, such as Google Pay, Paypal, and other digital wallets that allow customers to purchase a product without asking them to swipe the card. Samsung has integrated Samsung Pay in its mobile phones where you once scan your credit or debit card, and then you only need to put your phone on the payment terminal, and the transaction will be done successfully.

Advantages of M-commerce

• One of the most significant advantages of mobile commerce is retaining the customer with increased accessibility. According to one survey done in 2017, M-commerce is accountable for 34.5% of sales in all E-commerce. You can open an M-commerce app on your mobile phone whenever you want and browse through different products. 

• It is easier to compare the different prices of products on the same platform. Customer reviews have never been accessible before. At the same time, you can purchase products straight from your mobile phone while you are on a commute or in your bed. 

• Other benefits of m-commerce include a wide variety of product options and services for the customers. Also, the whole process becomes automated when you are trying to sell products on an M-commerce platform. 

• Likewise, mobile commerce gives a sense of safety to newcomers. As a result, customers are likely to come back again after making their first purchase. M-commerce has made online purchases more accessible to people living in rural areas where laptops and desktops are not common in sight. 

(Women purchasing stocks using M-commerce platform)

• In addition to this, some companies are bringing in cutting edge technology like augmented reality with M-commerce platforms to give better user experience to their customers. One of the great examples of this technique is IKEA, which is using AR to showcase its product’s real-time dimension and looks, to a potential customer in their own space without leaving their homes.

• If you have purchased products via an M-commerce store, you know they provide several payment options to make purchases easier for you. You can go with EMI, credit, debit, E-wallets, and cash on delivery payment methods. 

• M-commerce gives sellers a better way to measure their stats, finding out the best and worst products. Not only this, but you can also find out the products which interest the particular customers, and you can start remarketing campaigns and send them notification for special offers to increase your sales. 

• Lastly, M-commerce is a whole new platform for marketing products. Many big companies like Samsung, Sony, and Motorola are launching their new products on specific M-commerce platforms to give customers certain advantages.

Disadvantages of M-commerce

M-commerce has both advantages and disadvantages. We have discussed the advantages earlier. Now it’s time to highlight some of its issues. 

• When it comes to making an M-commerce platform from scratch, you end up investing a lot of money in the development process. The app development is not something you can do overnight. It takes both time, money, and research. 

• Besides, one needs to have a smartphone if they want to purchase products using an M-commerce platform. If you don’t have a smartphone, you can’t download the applications in the first place. 

• Keeping data safe and preventing data leaks is one of the main concerns of the M-commerce platforms. Even multi-billionaire companies like Amazon are putting lots of effort into making their M-commerce platform safe for transactions.

The word market originates from the Latin word ‘maracatus’. It is a market where diverse commodities are bought and sold at specific retail prices. Marketing is a sub-concept that is directly related to the activities of the players present within a market environment. In Economics, marketing is referred to as a strategy which is implemented to boost the sales of a product that is listed in a defined market. However, with the introduction of the internet, the entire marketing meaning has changed significantly. The modern-day meaning of marketing is directly correlated to the concept of digital marketing. Advertisement and research are the two most fundamental pillars of marketing and must be considered by sellers to boost their overall sales potential.

Classification of Market Structure

Classification of market structure is made into four types:

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Perfect Competition: It describes a market structure, where a large number of small firms compete against each other. Here, a single firm doesn’t have any significant market power. Due to this, the industry as a whole produces an optimal level of output because none of the firms can influence the market pieces.

Monopolistic Competition: In this market structure, a large number of small firms compete against each other but unlike the module in perfect competition, here the firms in monopolistic competition sell similar but slightly different products. It is based on the assumptions given below:

1. There is a free entry or exit in the market

2. Firms selling differentiated products

3. Consumers might prefer one product over the other

Oligopoly: It describes a market structure that is dominated by a small number of firms. The firms may compete or collaborate in this way they can drive up prices and earn more profit. This market structure builds on the following:

1. Oligopolies can set prices

2. All the firms can maximize the profits

3. Only a few firms can dominate the market

Monopoly: It refers to a market structure where a single firm has control of the entire market. It is formed based on the assumptions like the monopolies can set the market price, there are high barriers to entry and exit, they can maximize the profits and only one firm can dominate the entire market.

Classification of the Market in Economics

Classification of market structure in Economics is done on a different basis. Let’s see a traditional approach. 

Traditional Approach

Traditionally, a market is a physical place where the buyers and sellers are gathered to buy and sell the respective goods.

Based on the Area: An area can generally mean local, national and international markets. They generally include goods like fish, milk, vegetables and so on.

Based on Time: Here time is the main criteria. It is divided into a short period and a long period. In a short period, perishable goods of all sold and in the long period markets, durable goods of different varieties are produced. 

Based on Transactions: Here the markets are divided into spot markets and futures markets. In spot markets, if the transaction takes place, the delivery takes place. In future markets, the transactions are finalized and the payments dues for the future.

Based on the volume of business: Here, the markets are divided into two main retail and wholesale. In retail, the quantities are sold on a small scale, whereas in wholesales, the markets are featured in large volumes of business.

Based on the Nature of Goods: Based on the nature of goods, they can be commodity markets and capital markets.

Modern Approach

In modern markets, classification is based on consumer orientation as they are the king-pin of the modern market classification.

Business Markets: It is a market of business buyers and sellers. Here the companies which sell business goods and services often face well informed professional buyers who have skills in evaluating competitive offerings.

Global Markets: This type of market involves sellers and buyers from all over the world. The companies involved in selling and buying in the global marketplace face global decisions and challenges.

Consumer Markets: These types of markets specialized in selling mass consumer durable and nondurable products.

Nonprofit and Government Markets: Companies usually sell their products to non-profit institutions like the church, orphanage to governmental departments at the local state and central level. 

Did You Know?

Istanbul’s Grand Bazaar is known as the oldest marketplace in the world having been established in 1455.

With the help of new and modern marketing tools, businesses can now expand their sales and move beyond geographical boundaries. Firms use consignment transactions for the delivery of their products and accounting for such transactions is done in a standard manner. Let’s first understand the meaning of consignment.

Consignment Definition

The act of consignment is to hand over goods belonging to one person to another person without transferring the ownership of the goods. Consignment sale meaning in the context of goods relates to sending of goods for sale. This term is used in the shipping or transport of goods.

In the act of consignment, a person/firm sends goods to another person/firm for selling them on behalf of the former. The owner of the goods transfers only the possession of the goods in a consignment and retains the ownership over them.

The purpose of a consignment is to facilitate the delivery or transport of goods. The person who is responsible for keeping and transporting the goods of a party receives a commission for his services. He assumes the responsibilities and risks associated with the control and possession of goods.

Parties to a Consignment

There are two parties to a consignment transaction:

• Consignor or Principal

• Consignee or Agent 

Let’s understand the consignor and consignee meaning in detail. 

• Meaning of Consignor or Principal- As per the consignor definition, the consignor is a party that sends the goods. He holds the ownership of the goods.

• Meaning of Consignee or Agent: Consignee is the party that receives the goods. He does not have the ownership of the goods but has control and possession of goods. 

The relationship between the consignor and consignee is that of a principal and agent. The consignor acts as the principal for the consignee, who becomes his agent.

Consignment Process

Let’s understand the step by step procedure of consignment:

• The first step in a consignment involves the consignor and consignee entering into an agreement of consignment. 

• The consignee agrees to accept the possession of goods from the consignor

• Both consignor and consignee agree upon the terms of their agreement and the commission payable to the consignee.

• The consignor hands over the possession of goods to the consignee along with a proforma invoice. 

• The proforma invoice is a document that contains details about the goods transferred. 

• In the process of consignment, the consignor transfers only the possession of goods and not the ownership over them.

• The consignee undertakes the transport and sale of these goods under his possession

• The consignor pays the commission at agreed rates to the consignee for his services

The consignee sends a statement called Account Sales to the consignor. It contains:

• Details of the sales made by the consignee

• Details of the expenses incurred by him 

• Commission payable to him

Important Terms Related to Consignment:

The consignee bears all the sales expenses and later recovers them from the consignor. The terms of agreement regarding the expenses can be changed by the parties if they want.

• Consignment Number Meaning

Every consignment is allotted a unique consignment number that helps to track the consignment and to keep a record of all the consignment transactions.

• Consignment Account Meaning

A consignment account is an account for goods that are sent to a person or company. This person or company are not the owners of the goods consigned to them but are responsible for selling them or returning the unsold goods to the owner. The value of the goods that are sent on consignment is charged to the consignment account. This account is prepared to ascertain the profit or loss of the consignor on a specific consignment.

• Consignment Store Meaning

A consignment store definition states that it is a shop selling second-hand items on behalf of the original owner, who receives a percentage of the selling price.