commercial and non commercial activities

1.1 MEANING OF HUMAN ACTIVITIES:

Human activities mean all those activities which human being undertake.Human activities are undertaken to satisfy human wants.These activities continue throughout life because wants are unending,unlimited and recurring. Some of human activities(example:working in an office or factory or shop) produce direct economic benefits. Other human activities (example: praying,playing,sleeping)produce no direct economic benefits.   

The main characteristics of human activities are as follows:

Human activities are activities which can be undertaken only by human beings i.e., men,women and children.These activities involve human efforts.

1. Human activities are undertaken to satisfy human wants which are unlimited.
2. Human continue throughout life.
3. Human activities have a very wide range.
4. Human activities are performed both for earning money as well as for obtaining personal satisfaction.

1.2 TYPES OF HUMAN ACTIVITIES

All human activities may broadly be classified into two categories:

Economic or Commercial activities, and

Economic activities are undertaken with the object of earning money and acquiring wealth. These activities result in the production of economic goods and services. Business is an economic activity but it differs from other economic activities such as those of an employee and of self-employed persons like doctors,lawyers,chartered accountants,etc.

Non-Economic or Non Commercial activities.

Non-economic activities are inspired by sentiments and emotions such as love for the family,desire to help the poor and love for the country.These activities are not undertaken for monetary gain but for one's satisfaction and happiness.

1.3 ECONOMIC OR COMMERCIAL ACTIVITIES

Economic activities refer to all those human activities which are undertaken to earn a living and thereby satisfy human wants. The main object of these activities is to earn income and wealth. The money earned through work is used to satisfy wants. For example, a teacher teaches in a school or college, a doctor attends to patients in his clinic and a shopkeeper sells goods to his customers. Economic activities are concerned with the production, distribution and exchange of goods and services. This activities create utilities and result in the production of wealth. Economic activities are also called occupations.

1.3.1 CHARACTERISTIC OF ECONOMIC OR COMMERCIAL ACTIVITIES 

The main characteristic of economic or commercial activities are as follows:

1. Economic motive: Economic activities are undertaken to earn money and acquire wealth. The main motive behind these activities is to make an economic gain. These activities are performed for earning livelihood.
2. Productive: Economic activities involve production,distribution and exchange of goods and services for satisfying human wants. These activities are directly related to creation of wealth.
3. Economic resources: Economic activities make use of economic resources such as land, labour, capital, etc
4. Rational use: Economic activities require proper allocation of scarce resources so as to obtain maximum output from them. These activities involve optimum utilisation of land, labour, capital and other factors of production. Welfare of society can be maximized when the best possible use of resources is made.
5. Economic growth: Economic activities determine the level of economic development of a country and the standard of living of its citizens.
6. Legal and valid: Human activities performed for economic gain are called economic activities only when they are lawful. Unlawful activities such as gambling, black marketing, theft, dacoity, smuggling etc., are opposed to public interest.Therefore, these activities cannot be called economic activities.
7. Socially desirable: Economic activities are desirable for society. They must be in accordance with the expectations and norms of the society.

1.3.2 Example of economic or Commercial activities

1. Production of goods by a manufacturer in a factory.
2. Distribution of goods by a wholesaler to retailer.
3. Selling of goods by a retailer to customers.
4. Transportation of goods and passengers by railways / roadways / airlines / ships.
5. Storage of goods by a warehouse keeper.
6. Acceptance of deposits and lending of money by a banker.
7. Insurance of risks by an insurance company.
8. Audit services provided by a chartered accountant.
9. Legal service provided by a lawyer in a court.

   in his office.
10. Working of an government officer.
11. Services of an teacher in a school/college.
12. Working of a farmer in his fields to produce grains.
13. Working of a nurse in a hospital.

1.4 Non-ECONOMIC OR NON-COMMERCIAL ACTIVITIES

Activities which are undertaken to satisfy social, religious, cultural and sentimental requirements are called non-economic activities. The object of these activities is not to make monetary gain or earn a reward. People engage in non-economic activities for reasons of love, sympathy, religion, patriotism, etc. For example, a mother looks after her children, a student donates blood, an old man goes to temple daily, a rich man donates money to the prime Minister's Relief Fund, a young man helps a blind girl to cross the road, etc.

It is object of any activity that distinguishes between economic and non-economic activities. The primary objective of economic activities is to earn livelihood and create wealth. On the other hand, the main objective of non-economic activities is to get some sort of social, cultural, religious or recreational satisfaction. The output of economic activities can be measured in terms of money, e.g. the salary of a teacher, the fee of a doctor and the profits of a businessmen. But the result of non-economic activities cannot be measured in terms of money.

The same activity may be economic as well as non-economic. For example, a nurse works for a salary. But when the same nurse attends to her sick mother  at home, it is a non-economic activity because the object is not to earn money. Thus, the activity of the same person may be economic at one time or place and non-economic at another time or place. The dividing line is not the activity or the person who is doing it but the objective for which it is undertaken.

Thus, non-economic activities are undertaken due to the following considerations:  

1. 
   

   Love and affection - for example, taking dinner with the family.
2. 
   

   Personal satisfaction - for example, meditating in a park.
3. Physical needs - for example, morning walk by a person.
4. Religious obligations - for example, praying in a temple. 
5. Social obligations - for example, helping victims of an accidents, flood or earthquake.
6. Patriotism - for example, donating blood for injured army men.

 1.6 TYPES OF COMMERCIAL ACTIVITIES

Economic activities are also known as 'occupations'. Economic activities or occupations may be classified into three broad categories as follows:

1. 
   

   Business  
2. Profession
3. Employment

1.   Business: Business includes all those economic activities which are concerned with producton and exchange of goods of services with the object of earning profits. Business is an economic activity because it is undertaken for earning money and producing wealth. All organisations which carry on business activities are called business enterprieses or 'buiness firms'. Similarly, the persons who are engaged in a business are known as 'businessmen'. Business creates various types of utilities by making goods and services more valuable and useful to consumers. When raw materials are converted into finished products, it creates various types of utilities by making goods and services more valuable and useful to consumers. When  materials are converted into finished products, it creates form utility. Place utility is created by transporting  goods from the place of production to the place of consumption.Goods are stored for future use which results in creation of time utility. A factory, a shop, a transport company, a warehouse, an insurance company, a bank, are all examples of business activities. Firms providing direct services, e.g., tailor, dry cleaner, beauty parlour, etc., are also business enterprises.

Business is regarded as an economic activity due to the following reasons :

1. The objective of business activities is to sell goods and services for profit.
2. Business activities require use of scarce resources like capital, labour, raw materials, etc.
3. Business activities satisfy the needs of businessmen and their families by generating income. Business activities also satisfy various needs of the general public by making goods and services available to people.

2. PROFESSION: The term profession means an occupation which involves application of specialised knowledge and skills to earn a living. The persons who are engaged in profession are called professionals. They render services of a specialised nature to their  clients. The service is based on professional education, training and experience. Professionals receive fee for their services. Chartered accountants, medicine, law, tax consultancy are examples of professions.

The main features of a professions are as follows :  

1. Specialised body of knowledge: Every profession has a specialised and systematised body of knowledge. Members of the profession are  required to learn this knowledge.
2. Formal training: A profession  provides facilities for formal education and  training to those who wan to acquire professional qualification.
3. Restricated entry: Entry to a profession is allowed  only to those who have completed the prescribed education and have passed the specified examination.
4. Professional association: Every profession has its own association. A professional association is a statutory body and its membership is essentail. The association regulates entry in the profession, grants certificate of practice, formulates and enforces code of conduct.
5. Service motive: Professionals are expected to emphasise services to their clients rather than economic gain.
6. Code of Conduct: The activities  of a professional association of which he is a member.

3. Employment: Employment means an economic activity where people work for others in exchange for some remuneration. The persons who work for others are called 'employees'. The persons or organisations which engage others to work for them are called 'employers'. The remuneration given by an employer to an employee is known as wage or salary. The employee performs the work assigned to him by his employer as per  the terms and condition of the employment. There is an oral or written agreement the employer and the employee. The employee acts under the guidance and control of his employer. The employer may be a government  department/undertaking or a private firm. Employment  thus include all types of jobs in government offices and private  enterprises. When a professionally qualified person works as an employee he is also said to  be in employment. For example a doctor may be employed in working hospital, a chartered accountant may be working as an accountant in a company and a lawyer may serve as a law officer in a bank.

Various examples of employment are as follows :

1. A teacher teaching in a school or college.
2. 
   

   An engineer employed in Municipal Corporation of Delhi. 
3. An acountant working in the accounts department of a company.
4. A person working as the plant manager of a factory.
5. A nurse  or doctor working in a hospital.

THE            END