Q.What are the various Auxiliaries (Aids) to Trade? Explain how each of them removes a particular hindrance in trade.

(a) Commerce faces several hindrances — of person, place, time, risk, finance, knowledge and exchange — each of which is removed by an auxiliary/aid to trade. (b) Self Help Groups aim to promote savings, provide easy credit, generate self-employment and empower the weaker sections, especially women.

(a) Hindrances of Commerce (and the aids that remove them)

Commerce is the branch of business that removes the hindrances in the smooth flow of goods from producers to consumers. The main hindrances are:

1. Hindrance of Person — producers and consumers are separated; removed by trade (buying and selling through middlemen).
2. Hindrance of Place — goods are produced at one place and needed at another; removed by transportation.
3. Hindrance of Time — goods are produced in one season but consumed throughout the year; removed by warehousing/storage.
4. Hindrance of Risk — goods may be lost or damaged by fire, theft or accident; removed by insurance.
5. Hindrance of Finance — traders need money to carry on business; removed by banking.
6. Hindrance of Knowledge/Information — consumers may not know about available goods; removed by advertising and salesmanship.
7. Hindrance of Exchange (Payments) — difficulty in making and receiving payments; removed by banking (cheques, drafts, electronic transfers).

Thus, the auxiliaries or aids to trade — transport, warehousing, insurance, banking and advertising — together remove these hindrances and make commerce smooth.

(b) Objectives of Self Help Groups (SHGs)

A Self Help Group is a small voluntary association of poor people (usually 10–20 members) from the same socio-economic background who come together to solve their common problems through mutual help. Its objectives are:

1. To encourage thrift and savings — members save small amounts regularly and pool them into a common fund.
2. To provide easy micro-credit — loans are given to members from the group fund (and later through bank linkage) without collateral and at reasonable interest. …

(a) Commerce faces hindrances of place, time, risk, finance, knowledge and person, each removed by an aid to trade. (b) Social responsibility is needed for self-interest/survival, public expectation, a better business environment, avoiding government regulation, and balancing power with responsibility.

This is a Part-IV OR-choice; both alternatives are answered in full.

(a) Hindrances of Commerce

Commerce is the branch of business that brings goods from producers to consumers by removing various obstacles (hindrances). The main hindrances and the aids that remove them are:

1. Hindrance of place — producers and consumers are located far apart. This is removed by transport, which carries goods from the place of production to the place of consumption (creating place utility).
2. Hindrance of time — goods are often produced in advance of, or in a different season from, their consumption. This is removed by warehousing, which stores goods until they are needed (creating time utility).
3. Hindrance of risk — goods in transit and in storage face risks of fire, theft, damage, etc. This is removed by insurance, which compensates for such losses.
4. Hindrance of finance — trade needs money for buying, holding and selling stock. This is removed by banking and financial institutions, which provide credit and finance.
5. Hindrance of knowledge/information — consumers may not know about available goods. This is removed by advertising and salesmanship, which spread information.
6. Hindrance of person — producers and consumers cannot always meet directly. This is removed by trade and middlemen (wholesalers and retailers), who act as a link.

(b) Need for Social Responsibility (any 5)

Social responsibility means the obligation of business to act in ways that benefit society along with earning profit. It is needed because:

1. Self-interest and long-term survival — a business that ignores society loses customer goodwill; serving society ensures its own long-term survival and growth.
2. Fulfilling public expectations — society now expects business to contribute to public welfare, not merely to earn profit. …