Category: Commerce Notes PPT

The book of original entry is called a subsidiary book or a daybook. A subsidiary book is used to record transactions of a similar nature. There are six kinds of subsidiary books maintained by most organizations; Cashbook, Purchase book, Purchase Returns book, Sales book, Sales return book, and Journal proper. In case an organization does not maintain subsidiary books, it maintains Journal for all the transactions. A Journal is a record of all entries irrespective of their nature and does not bifurcate the entries according to their nature.

Let’s understand the Purchase book and Purchase Return Book in detail.

 

Purchase Book

A purchase book or a purchase day book is a subsidiary book. It contains the record of all credit purchases made. The cash goods purchases are recorded in the cash book. A Purchase book holds the record for the purchase of goods only and not purchases of assets. Asset purchase entries are recorded in the Journal proper.

 

The entries recorded in the Purchase book are done based on source documents like invoices or bills received from the suppliers of goods. The entries in the purchase book are done for the net amount of the invoice and do not include trade discounts and other details on the invoice.

 

The total of the Purchase book is entered monthly on the Debit side of the Purchases A/c but the individual accounts of the suppliers may be entered daily. When the volume of transactions in an organization is large, the entries for the purchase a/c in the ledger may be posted weekly or fortnightly.

 

Performa of the Purchase Book

 

Purchase Return Book

When the goods purchased on credit are returned to the supplier, the entries for such transactions are recorded in the Purchase return book or the purchase returns day book. Goods purchased are sometimes returned by the buyer on account of a defect or low quality. A separate subsidiary book is maintained for these purchase returns since these returns are not deducted from the purchases in the Purchase book. The entry for a purchase return transaction is done for the net amount on the invoice.

 

A debit note in duplicate is prepared for every return of goods. The original one is sent to the supplier while the duplicate copy is kept by the organization for its records. The Debit note includes the date, serial number, name of the supplier, details of goods returned, and the reason for the return of the goods. 

 

The supplier can also prepare a Credit note and send it to the customer when the goods are received from the customer.

 

Performa of the Purchase Return Book

 

Solved Example 

Q. Record the following transactions in the books of M/s. X and Co. and in the Purchase Account

 

 

Solution:

In the books of M/s. X and Co.

Purchase Book

 

According to Section 18 of the Indian Partnership Act (1932), a partner is an agent in the business for the purpose of growth of the firm. He is given the right to act on behalf of the firm and take necessary actions when required. He is granted permission to make moves, conduct business as usual with certain limitations being put in some situations.

When an individual enters into a partnership, he binds a relation not only with the co-partners but also with the third-party individuals or entities. Relation of partners to third parties is subject to various rules and regulations.

A partner shares the profit in a business. Similarly, he also holds a number of liabilities. One of them is being an agent to all the others who co-own a business.

Partner as an Agent of the Firm

Section 18 of the Indian Partnership Act specifies the role of a partner as an agent. Since a partner is an agent of the firm, he also holds some responsibilities towards the parties involved in the business. A partner thus needs to play the role of a principal as well as the agent of a business firm.

When a partner acts in his interest in the common goal of a firm, he is playing the role of a principal. On the other hand, when he is acting as per the interest of the co-partners, he is an agent.

Relation of partners to third parties requires them to play an agent in the firm. However, a partner is never solely responsible for the transactions and dealing between the company and the third parties.

Implied Authority of a Partner

When a partner takes some action or makes a decision in accordance with the usual course of the business, he binds that firm. This authority is better known as an implied authority in partnership. But this authority ceases to exist if there is a contrary agreement present. The details of this provision are given under Section 19(2) of the Indian Partnership Act (1932).

The doctrine of implied authority in partnership as specified in the Act restricts a partner from taking certain actions. They are as follows:

1. Submit a business-related dispute to arbitration.

2. Open a bank account in his name on behalf of that business firm.

3. Compromise or dissolve any part of a claim by that firm.

4. Withdraw a case filed on behalf of that firm.

5. Admit any sort of liability in a suit or proceeding against that firm.

6. Buy an immovable property on behalf of that firm.

7. Make any partnership on behalf of that firm.

8. Transfer any immovable property which belongs to that partnership firm.

Section 22 of the Partnership Act also mentions that any act was done by a partner with an intention to bind the firm must be done in the name of that firm. A partner’s role as an implied agency in partnership depends on the nature, extent, and intent of a business firm.

As per Section 20 of the Partnership Act, partners in a business undertaking can make a contract to extend or dissolve the implied authority of any partner. This would affect the relation of partners to third parties only when that party is aware of the restrictions.

An express authority of the partner means the authority that is given by spoken words or written.

Extension and Restriction of Partners Implied Authority

The extension and restriction of the authority of a partner depends on the clauses of the existing contract between the respective parties in the firm. However, a partner is allowed to perform actions on his own authority if he has an express authority of a partner which is either by an agreement or if the customs of the trade permit him to.

Partner’s Authority in an Emergency

Section 21 of the Indian Partnership Act (1932) states that in case of any emergency, every partner has the authority of taking necessary actions to prevent the firm from bearing losses. It might include making payments or incurring liabilities. Any such act has to meet the following requirements:

• It was a situation of absolute emergency.

• The particular partner acted according to the need of the situation.

• The intention behind that partner’s action was only to protect the business from loss.

• That act was reasonable and just under those circumstances.

In an emergency act, relations of a partner to third parties and his dealings with them is also under scrutiny. If the action has been taken without prior notice or permission, it will be considered only if ratified by other partners.

Admissions Made by a Partner

In the Indian Partnership Act, Section 23 talks about the admission or representation made by an existing partner. If it concerns the affairs of that firm and has been made in the normal course of business, it can be taken as evidence against the firm. This is because a partner is an agent of the firm as well as works for its business goals.

Liability of a Partner for acts of the Firm

The liability of all partners of a firm together is mentioned under section 25 of the Indian Partnership act. It states the fact that every partner of the firm can be held liable jointly or individually for all the acts done by the firm while he or she is a partner of the firm.

Partners can also be held liable individually or jointly depending on the act and the decision made by the third party. This means that even if a partner had no role to play while deciding the act on behalf of the firm, he or she can be held liable to the third party in case such an act causes damage to them.

Rules to be followed when a Partner misuses or misapplies Money or Property

Section 27 recognizes the liability of the firm for a particular kind of wrong act done by a partner. The provisions are stated below.

When a partner misapplies money or property received within the apparent authority.

A firm in its course of business receives money or property that is misapplied or misused by any of its partners while it is in the custody of the firm, the firm is liable to make good of the loss suffered.

Solved Examples of the Relation of Partners to Third Parties

1. Alex is a partner in a firm of solicitors. He chose to borrow Rs. 50,000 from Vinay and executed a promissory note in the name of the firm without any authority. Are other partners liable on the note?

Ans: No. A solicitor is not allowed to draw, accept and endorse any sort of negotiable instrument, under the normal circumstances and operations of a business. Hence, According to Sections 19 and 22, Alex is solely liable for the note.

This act is considered to be done in the normal way of conducting business, in case of a banking firm. 

2. Alex is a partner of a firm. He borrowed Rs. 50,000 from Vinay in excess of his authority. Alex spends this money to pay off his debts. Is the firm liable to repay the money to Vinay?

Ans: It is a trading firm because it has debts. Hence, borrowing money for the business of the firm is within the authority of Alex. An implied authority can be restricted with the help of an agreement between the partners.

Since Alex borrows the money in excess of his authority, it is assumed that his implied authority has been restricted by such an agreement.

This brings us to the question of whether Vinay is aware of this restriction imposed on Alex by the firm. If Vinay is aware of the restriction, then the firm is not liable to repay him. However, if he is unaware of the restrictions, then the liability of repayment lies with the firm.

In a contract of agency, the principal appoints an associate agent to perform some specific task or business on his behalf. The principal is sure by the acts of his agent and is, therefore, liable for his acts to the third parties, allow us to currently perceive the Rights and Duties of Agents. An associate agent may be a person utilized to try and do any act for one more or to represent another in addressing third persons. The person, for whom such act is completed or thus depicted, is termed the “principal”. The contract between Principal and Agent is termed Contract of Agency as Rights and duties of the Agent area are unit reminiscent of the duties.

The agents are distinguished in respect of authority as general or special agents. the previous expression includes brokers, factors, partners, and every one person utilized in an exceedingly business of filling a foothold of a typically recognized character, the extent of authority being apparent from the character of employment or position; the latter denotes associate agent appointed for a selected occasion or purpose, restricted by the utilization, the agent has authority to try and do some explicit act for a few big day or purpose that isn’t at intervals the standard course of his business or profession. This distinction is formed to see the authority of that agent.

Rights of Agents

1. Right to Remuneration

As per section 219, the associate agent incorporates a right to receive the in agreement remuneration or absence of agreement, an affordable remuneration for rendering the services to the principal that aren’t voluntary or gratuitous. He becomes eligible to receive the remuneration as shortly as he completes the work that he undertook.

2. Lien on Goods

Some agents who have the possession of products, securities, or properties of their principal even have a lien on this merchandise, securities, or properties relating to their remuneration and conjointly for any expenses or liabilities that they once associate unpaid merchant, he incorporates a right to prevent the products in transit.

3. Right to be Indemnified

An agent represents his principal to third parties. As per sections 222 and 223, the associate agent incorporates a right to be indemnified by his principal for all charges, expenses, and liabilities that he incurs throughout the agency.

4. Right to Compensation

In line with section 225 of the aforementioned Act, the associate agent is entitled to say compensation for the injuries suffered as a consequence or wish of the ability of the principal. The principal should create compensation to his agent in respect of injury caused to such agent by the principal’s neglect or wish of ability.

Duties of Agents

A principal incorporates a right to sue his agent for damages just in case of breach of duty by the agent. The duties of agents are:

1. As per section 211, an associate agent shall act at intervals the scope of authority that his principal confers upon him. Also, he shall strictly follow the directions of his principal. However, within the absence of specific directions from his principal, he shall follow the custom prevailing at the place wherever he carries out his business, in an exceedingly similar form of business.

2. Section 212 states that he shall work with ability and diligence. Also, wherever the character of the agent’s profession needs him to possess a special ability, he shall exercise the ability that a member of that profession can exercise.

3. Associate agent shall disclose properly any material data to his information to the principal which will influence the creating of the contract.

4. As per section 213, an associate agent shall is beneath the duty to not disclose any guidance of his principal.

5. Section 215 states that the associate agent shall not vie together with his principal. In different words, his interest shall not conflict together with his duty.

6. The agent has to stay true and truthful accounts and prepare them on affordable notice to render them.

7. Associate agent shall not create any secret profit and shall disclose any additional profit he makes to the principal. Wherever the principal finds that the agent is creating secret profits, he could dismiss the agent rapidly, recover the quantity of profit, and conjointly refuse to pay him his remuneration. He may additionally repudiate a contract wherever a 3rd party is additionally concerned within the fraud and recover the damages.

8. He shall not appoint a sub-agent.

The Formation of the Agency Relationship

An agency relationship is created by the mutual, manifested agreement (often by a contract1) between 2 parties that establishes that one party shall perform one or additional acts on behalf of the opposite. The term “manifested” is employed as a result of associate objective take a look at is used to see the existence of a place of a working relationship. That is, if the behaviour of the parties and also the specific circumstances indicate that the parties have in agreement that one in all of them can act for the opposite, then the place of the working relationship is going to be found by the court. Consequently, it’s immaterial whether or not the parties have expressly fashioned such a relationship, grasp that exists, or perhaps want that it exists. Further, the parties even could have explicit expressly that such a relationship doesn’t exist.

However, once the court has established the existence of a place of the working relationship, agency law is introduced to see the rights and obligations of the parties. Some agency relationships arise as a result of different agreements, like associate contract and a partnership agreement, marriage, by itself, typically doesn’t produce a place of the working relationship, though husband or partner will act because of the agent for the opposite. Not all duties, obligations, or actions may be delegated through an associate agency; as an example, the associate agent cannot substitute for a principal once ballot in an exceedingly public election, language a can, or creating an announcement beneath oath. As noted in Chapter thirteen (Contracts), a private services contract cannot be delegated once the performance by the first (contracting) communicator is crucial to the particular performance of the duty.

Exceptions to the Principle of Delegates Non-Potest Delegate

The higher than principle means a delegate cannot additional delegate. Therefore, an associate agent cannot appoint a sub-agent. However, the subsequent exceptions to the current principle:

1. Once the principal permits delegation.

2. Wherever it’s the custom or usage of trade to delegate.

3. Once delegation is important for correct and economic performance.

4. Wherever it becomes essential because of some emergency

5. Once the principal is aware of that the agent intends to delegate.

6. Wherever the work is ministerial.

In the growth of the small and medium enterprises of the States, State Financial Corporation, also known as SFC in short-form, plays a vital role. What the SFC or State Financial Corporation does is provide Financial assistance to small and medium enterprises. SFC provides this Financial assistance in various forms, such as a direct subscription to the debentures or the equity, direct subscriptions to the term loan, guarantees, discounting of the bills of exchange and seed or the special capital. From all this, we can conclude that State Financial Capital is an important aspect of commerce and hence it is important for the students to study it.

Hence, provides the students with a complete explanation of the State Financial Capital (SFC) in detail.

The State Financial Corporations Act was passed in 1951 which empowered all states and union territories to set up State Financial Corporations to meet the need for financial assistance of micro, small and medium scale industries. These State Financial Corporations provide loans to individual trading concerns, partnership firms as well as private and public limited companies.

There are 18 State Financial Corporations in India at present, from which 17 are established in accordance with the State Financial Corporation Act 1951 and the eighteenth TamilNadu Industrial Investment Corporation Ltd was formed according to Companies Act 1949. The State Financial Corporation of Punjab was the first Financial Corporation to be set up in the country in 1953.

The Micro, Small, and Medium Enterprises are of increased importance in India. They form a large part of Rural and Semi-Urban industries and provide employment opportunities to a large number of people. The number of people employed in Small and Medium industries is more as the technique of production is labour-intensive than capital intensive. Due to the high number of employees needed, the SMEs have a huge need for working capital and also fixed capital for installing machinery and such. The State Financial Corporations are set up to meet these requirements of Small and Medium Industries and to provide thrust to the rural economy.

Functions of State Financial Corporations

The State Financial Corporations are established by the respective state governments aimed at assisting Small and Medium industries. The major functions of State Financial Corporations are- 

1. Long Term Financial Assistance: 

Providing long term financial assistance to finance small and medium industries is the prominent function for which the State Financial Corporations are set up. These enterprises may be in the form of individual proprietorships, partnership firms, private or public companies and the maximum tenure of the loan is twenty years.

2. Guarantee for Loans: 

The State Financial Corporations also stand guarantee for loans taken by small and medium business concerns from cooperative banks, commercial banks, or any other banking financial institution for a tenure of up to 20 years.

3. Acts as Agents of Government: 

The State Financial corporation also acts as an agent of the state as well as the central government when it comes to implementing government schemes related to small and medium industries financing. The SFCs also disburse loans as per different schemes of the governments. 

4. Underwriting and Subscription: 

The State Financial Corporation also functions as an underwriter by underwriting the shares of small and medium public companies. The SFCs also subscribe to debentures of these small and medium firms which are of tenure of fewer than 20 years.

 

5. Credit and Guarantee for Purchases: 

The State Financial Corporation also provides loans and guarantees deferred payment for purchases for the industry like machinery, plant, or any other fixed expenditure.

 

Working of (SFC) State Financial Corporations

Each State Financial Corporation is run and led by a board of directors. The board of directors will have 10 members. The board itself is headed by a managing director who is appointed by the state government in consultation with the RBI. The state government also appoints three more directors. All insurance companies, scheduled banks, investment banks, and other quasi-government institutions elect the other three members. Therefore, the majority of director appointments come from the government’s side. 

The maximum paid-up capital of any State Financial Corporation is rupees five crores. The minimum capital is fixed at rupees fifty lakhs. The total capital of the State Financial Corporations is divided into shares and is acquired by the state government, Reserve Bank of India, cooperative banks, other insurance, and financial institutions, and even private parties. 

SFCs can also add to its capacity of funds by issuing debentures and bonds. These instruments will carry a fixed return and can be subscribed to by the public. The issue of such borrowed capital should not exceed five times the paid-up capital and reserve taken together. The maximum amount of reserve that any State Financial corporation can hold is rupees ten lakhs. 

Problems of State Financial Corporations

• Bad loans are prevalent in State Financial Corporations and are quite common as in commercial banks and other financial institutions. The loans are taken by small and medium industries who find it tough to repay the loans which put the State Financial Corporations in a fix.

• The excessive focus on granting loans is also a problem of State Financial Corporations. The small and medium firms are also in need of other financial services that the corporations do not focus on. 

• The leniency of the financial corporations to the larger firms is also very common. This will lead to the lack of financial services for smaller firms, which are actually in more need of funds. 

• As the employees of the financial corporations are appointed by the government via a general eligibility criterion, there is a dearth of specialized technical staff. This leads to a lack of efficiency in the implementation of policies and programs. 

• One of the most important drawbacks of borrowing funds from the SFCs is the high rate of interest charged by it. This high rate of interest generally puts the small and medium entrepreneurs in a tough position. 

• The rigorous procedures and formalities to gain a loan from an SFC is also a huge hurdle for businessmen. People find it easier to borrow from commercial banks and other financial institutions. 

• The limited amount of resources that the SFCs possess is also a menace when it comes to providing the necessary financial services. The SFCs are constrained due to stringent laws curtailing them from acquiring extra capital or even borrowings.

An Overview of the State Financial Corporations (SFC)

As said earlier State Financial Corporations, provides Financial support to the small and medium enterprises of the States. The act of SFC, that is to say, State Financial Corporations was first passed in the year 1951, and it gave the power to all the States and union territories for setting up Financial Corporations in the States, in order to help the small scale and medium scale industries of the State. This SFC helps small businesses by providing loans to small businesses. The term “Small Business” here includes various entities, such as an individual trading concern, or a partnership firm, and also private limited companies.

The purpose behind the State Functional Corporations is to accelerate higher investment, generate more employment, and broaden the industries’ ownership base. Also, with changing types SFC’s have changed their assistance as well, that is to say, it now also provides help to the new forms of businesses like that of poultry farming and floriculture. There are currently a total of 18 State Financial Corporations in India, out of these 18 SFCs, 17 are formed with the regulations prescribed in the State Financial Corporations Act 1951, while the one SFC, which is of the Tamil Nadu State was formed by the following the regulations of Companies act 1949.

Functions of the State Financial Corporations

There are many functions that the State Financial Corporations (SFC) plays in a State, some of which are given below.

• Providing Financial Support: As it is pretty clear, and also obvious that the State Financial Corporation, provides Financial support to the small and medium scale industries of the State since it is one of the most important reasons behind the establishment of the SFC.

• Guaranteed loans: State Financial Corporations Guarantee the loan to the business, which are operating in the State, and these loans are to be repayable within 20 years.

• Acts as an Agent: State Financial Corporations act as an agent of the State government as well as of the central government when there arises a need of implementing schemes related to the small and medium industries.

What is Self Employment and Talent Utilisation (SETU) Scheme? 

The SETU full form is Self Employment and Talent Utilization. This scheme was started as a mechanism to support startup business concerns and self-employment ventures in the arena of technology. It ensures the availability of adequate technology solutions for individuals. It encourages the proper use of one’s talent for achieving the goals of productivity and efficiency.

Aimed at increasing self-employment and talent utilization, the Indian Government defined the SETU meaning as a techno-financial, incubation as well as a facilitation program. An amount of INR 1000 crore has been set up in the Niti Aayog for SETU for skill enhancement through incubation centers. The ultimate aim of the scheme is employment generation. 

Benefits of the SETU Scheme

SETU meaning, as understood from SETU full form, is encouraging self-employment and talent utilization. Therefore, startups applying for SETU Yojana can expect to reap of a host of benefits such as:

• Work from Home: Self-employment means increased working from home. This has proven to be beneficial for time management and maintaining a work-personal life balance. Working as well as taking care of children at the same time is possible in a better way in this case.

• Own Boss: Unemployment increases from the will against working under a superior. This leads to self-employment measures.

• Reduced Expenditure: One of the major expenditures in business comes in the form of salaries to be paid. In self-employment, the requirement for paying salaries is easily eradicated. Besides, it saves expenses incurred while travelling to and from work. 

• More Employment Opportunities: Lack of funds for starting new businesses often leads to unemployment on a major scale. The SETU Yojana provides funds for the starting of new businesses. This way it is reducing unemployment as well as poverty.

• Balance in Work-life: Self-employment allows more flexibility in managing one’s routine along with work performance. It certainly creates a balance between work life and personal life.

• Desired Place and Time for Work: One of the most important benefits of self-employment is the flexibility of workplace and time. One can easily choose the preferred place and time for working.

• No Uniform: Uniforms have their own disadvantages. Employees often find uniforms demotivating in their already regular environment of work. Self-employment, precisely, work-from-home eradicates the need for wearing uniforms. 

Disadvantages of the SETU Scheme 

Self-employment although the keyword to achieving self-reliance may not be the best option for everyone. Plus, the scheme itself has a few cons. These can be summarized as below.

• High Risk: Self-employment brings in the burden of responsibility for constantly ensuring one’s availability of work. Chances might lead to a lack of work and thus a lack of income. Under the SETU scheme, a loan is available at a cheaper rate, which, however, would increase to a huge burden with the recession coming as a hindrance.

• Fewer Benefits for Employees: Self-employment is certainly not an option for people desiring direct monetary and non-monetary benefits. Employee benefits are at the least under this scheme.

• Scratch Base for a Start: Self-employment requires huge determination and persistence as it requires immense effort in creating a base of clients for the business. Thus, opting for self-employment requires a start from the grassroots levels, which might become tiring at times.

• Lack of Finance in Rural Areas: The unemployment range in the rural areas of India is significantly high. SETU Yojana, though beneficial with the funds involved, has a major con of being confined in the urban areas. The scheme is yet to reach the rural areas properly, thus keeping a major percentage of the unemployed intact. 

• Non-stop Running Costs: Running costs of the business have got no relation to the profits and losses. Whatever be the output, one can never deny paying the costs of running the business. In a self-employed business, initially, this is a major problem. Running costs such as rent, internet costs, insurance, and other necessary expenditure can never be stopped during the running of a business. This further increases the Government’s NPA.

Therefore, this is what the Self Employment and Talent Utilization (SETU) Scheme is all about along with its various advantages and disadvantages. SETU Yojana encourages self-employment by providing funds for new ventures. Self-employment, though advantageous, comes with a whole lot of risks.

Statistical data can be categorized into two types – primary and secondary data. Primary data refers to information that is gathered, scrutinized, and used by the same person or source. Some instances of primary data sources include surveys, interviews, questionnaires, case studies, and the like.

On the other hand, when a researcher uses data that has been collected and analyzed by some other sources, it is referred to as secondary data. For instance, if the department of health publishes a report regarding the number of child fatality cases in India due to malnutrition, then the department of child welfare can use the statistics in the report to ascertain how many children in India do not have access to a proper meal.

Secondary data can be collected from various resources. Let’s take a look at some of the most common sources of such information. Secondary data are second-hand pieces of information. These are not gathered from the source as the primary data. To put it in other words, the secondary data are those that are already collected. So, these are comparatively less reliable than the primary data. These are usually used at the time for the inquiry is compact and the exactness of the inquiry can be settled to an extent.

 

Explanation about Secondary Data

Secondary data refers to data that is collected by someone other than the primary user. Common sources of secondary data for social science include censuses, information collected by government departments, organizational records, and data that was originally collected for other research purposes. Primary data, by contrast, are collected by the investigator conducting the research.

Secondary data analysis can save time that would otherwise be spent collecting data and, particularly in the case of quantitative data, can provide larger and higher-quality databases that would be unfeasible for any individual researcher to collect on their own. In addition, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments. However, secondary data analysis can be less useful in marketing research, as data may be outdated or inaccurate.

 

Types of Sources of Secondary Data

Secondary data can be obtained from different sources:

1. Published sources

Secondary data is usually gathered from published (printed) sources. A few major sources of published information are as follows:

• Published articles of local bodies, and central and state governments

• Statistical synopses, census records, and other reports issued by the different departments of the government

• Official statements and publications of the foreign governments

• Publications and reports of chambers of commerce, financial institutions, trade associations, etc.

• Magazines, journals, and periodicals

• Publications of government organizations like the Central Statistical Organization (CSO), National Sample Survey Organization (NSSO)

• Reports presented by research scholars, bureaus, economists, etc.

 2. Unpublished sources

Statistical data can be obtained from several unpublished references. Some of the major unpublished sources from which secondary data can be gathered are as follows:

• The research works conducted by teachers, professors, and professionals

• The records that are maintained by private and business enterprises

• Statistics are maintained by different departments and agencies of the central and the state government, undertakings, corporations, etc.

 

What do Secondary Data Sources include?

There are various secondary sources of data collection. Some of these include – 

• Books, Magazines, and Newspapers – Newspapers, and magazines also carry out surveys and interviews of their own on various aspects like socio-economic conditions, crimes in the country, etc.

• Reports – Industries and trade associations also publish reports periodically which contain data regarding trade, production, exports, imports, and the like. The information in these reports will facilitate different types of secondary research.

• Publications by Renowned Organisations – Organisations like WHO, ICMR, and other renowned national and international bodies carry out timely surveys and case studies of their own which they then publish on their websites. The data and statistics in these surveys can be accessed by almost everyone by visiting their official website.

• Research Articles – Several websites publish research papers by scholars and scientists from respective fields like medicine, finance, economics, etc., which act as secondary data information. 

• Government Data – Data released by the government of any country is one of the largest sources of secondary data. Sometimes, the central or state government sets up committees to look into some issues. These committees publish reports based on their investigation, which function as a valuable source of secondary data.

Think and Answer: are public records and historical documents primary or secondary sources of data?

 

Analysis of Secondary Data can be Broadly Classified into

While collecting data from a secondary source, researchers should exercise caution to ascertain whether the data is accurate and suitable for their study. They should check for the following points-

• Identifying Data – A person should first identify the set of data that may come in handy for their research. It is crucial considering the vast number of secondary data collection sources that are available. 

• Assess Credibility – After narrowing down the data to several options, one should go through them carefully to judge whether they are reliable enough for use. For this, try to find out who collected and put together the data; whether the data was collected by a professional organization, and what tools were employed to collect the materials. If the data is not accurate and out of date, then it should not be used, and researchers should look for another source of data.

• Evaluate Relevance – If the data is accurate, then he or she should go through them diligently to check if it contains relevant materials for their research. Even if the data is not precisely directed explicitly towards their research topic, they should check if the data can be reused in any way possible.

Therefore, all data that has already been published and is readily available can be considered secondary data. However, unlike primary data, secondary data are not always customized to a researcher’s needs. In that case, they have to rely on data that bear some relevance to their research topics. 

 

Five Key Steps to Conducting Secondary Research Effectively and Efficiently

1. Identify and define the Research Topic

First, understand what you will be researching and define the topic by thinking about the research questions you want to be answered.

2.   Find Research and Existing Data Sources

If secondary research is needed, think about where you might find the information. This helps you narrow down your secondary sources to those that help you answer your questions. What keywords do you need to use? Which organizations are closely working on this topic already? Are there any competitors that you need to be aware of? Create a list of the data sources, information, and people that could help you with your work.

3.  Begin Searching and Collecting the Existing Data

Now that you have the list of data sources, start accessing the data and collecting the information into an organized system. This may mean you start setting up research journal accounts or making telephone calls to book meetings with third-party research teams to verify the details around data results.

4.  Combine the Data and Compare the Results

When you have your data in one place, you need to understand, filter, order, and combine it intelligently. Data may come in different formats where some data could be unusable, while other information may need to be deleted.

5.  Analyze your Data and Explore Further

In this last stage of the process, look at the information you have and ask yourself if this answers your original questions for your research. Are there any gaps? Do you understand the information you’ve found? If you feel there is more to cover, repeat the steps and delve deeper into the topic so that you can get all the information you need.

 

Differences between Primary and Secondary Sources of Data Include

• Easily Accessible – Secondary data can be procured by almost everybody since most of the sources are open to the general public. Moreover, with the introduction of the internet, it has become even easier to collect secondary data since most of them are uploaded and can be found on various digital archives.

• Cost-Efficient – Collecting primary data requires a lot of resources and tools which can be expensive. It means that researchers who have a limited budget cannot afford it. On the other hand, secondary data is more economical since it is easily accessible by almost everyone and requires little to no cost.

• Less Time-Consuming – Collecting first-hand data and then evaluating them carefully to draw suitable conclusions requires a significant amount of time and effort. Therefore, individuals who cannot afford to spend a lot of time on data collection can take the aid of secondary data that can be availed quickly. Secondary data is already arranged and evaluated; therefore, researchers or organizations do not have to waste time sorting through it.

• Authenticity – Since primary sources of data are collected directly by interacting with target subjects, they are usually accurate and appropriate for a given period. However, secondary data sometimes run the risk of being incorrect and out of date if procured from unverified sources.

• Availability of a Large Amount of Data – Compared to primary data which can be limited due to geography, time and resources, researchers can take advantage of the considerable amount of secondary data that is available through a variety of sources. 

Do it yourself: Can you figure out any more significant differences between primary and secondary sources of data?

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