NCERT Solutions Entrepreneurship Class 12 Chapter 14 Notes PDF

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Entrepreneurship Class 12 Chapter 14 Notes PDF, NCERT Solutions Entrepreneurship Class 12 Chapter 14 Notes PDF

Entrepreneurship Class 12 Chapter 14 Notes PDF

Chapter number14
Medium English
Study MaterialsImportant questions answers
Download PDFEntrepreneurship Class 12 Chapter 14 Notes PDF


To keep the country’s economy balanced, it is necessary to maintain the pace of sustainable development in the country. Sustainable development leads to progress in the economy which has a positive impact. In general, development means maintaining progress in the concerned field. Sustainable development is very important for the progress of commerce, business and industry. 

In a broad sense, development means maintaining a proper arrangement of resources. Also, sustainable development means continuously maintaining the pace of progress and development. Proper use of resources is very important for proper development of the economy. This increases the rate of development in the country and increases the national income. As a result the country’s economy becomes developed and balanced. 

NCERT Solutions Entrepreneurship Class 12 Chapter 14 Notes PDF

Different types of banks are found in India. Among these, Reserve Bank of India and commercial banks have an important place. India being an agricultural country and having large number of rural areas, regional rural banks also have an important place. For the development of economically backward areas, developed industries in the banking sector can be developed. According to the new banking policy of the Reserve Bank of India, arrangements have been made to open new bank branches only in rural areas. 

Development of backward industrial areas is possible through regional rural banks. Also the financial system of rural areas improves. Industries develop due to availability of industrial finance. Proper development of rural areas takes place through regional rural banks. Various elements affect the speed of development. 

In fact, there are various components or elements of development, such as direct and indirect competition, change in technology, nature of consumer and power to produce goods and innovation, etc. All these elements have an impact on development.

Despite many efforts in India, regional development still remains uneven, which reveals the failure of regional planning. There are some areas in our country even in some developing areas where there is a lot of poverty. There are various reasons for this, such as restriction on transfer of resources, lack of spirit of self-effort and areas for specific development etc. 

Due to all these reasons there is inequality in development. As a result, the pace of development continues in some areas while some areas remain poor. This has an adverse effect on the economy. Also expansion means that. A particular product has to be made in additional quantities at other locations as well.

Today is the era of modernization. Modern technology is being used in business and industries. Nowadays there is talk of liberalization, privatization and globalization. According to liberalisation, under the new Industrial Policy 1991, any courageous person can establish an industry and do production work and earn profit. Under privatization, the government has given freedom to establish industries in the private sector. Through the policy of globalization, an effort has also been made to bring about a radical change in the Indian economy and bring it to the world level. 

The Indian rupee was devalued for the third time in 1991. Besides, the rupee has also been made convertible. Due to this, the balance of payments remains correct and foreign investment gets direct entry. Also, WTO member countries do not face any difficulty in purchasing Indian goods. India’s foreign trade has increased on the basis of globalization. Due to which our country earns foreign currency. Import-export trade is also conducted efficiently. 

Under the policy of diversification, the policy of making different types of goods has been adopted. These are new products that are not related to the old product. Diversification is based on new technology. It has had less positive impact in our country whereas Indian companies have suffered more losses due to it. Some Indian companies have failed in the name of diversification. Therefore, effective steps should be taken to avoid this failure.


1. What do you understand by development?

Ans. Bringing progress in industries and commerce by making proper use of resources is called development. Under development, all resources are used optimally.

2 . What do you understand by sustainable development?

Ans. Continuous development of businesses, enterprises and industries is called sustainable development. By making full use of the resources, the pace of sustainable development is maintained, which leads to proper development of the country’s economy. 

3. Write the names of various elements affecting development.

Ans. The names of various elements affecting development are as follows – (i) Direct and indirect competition (ii) Change in technology (iii) Consumer tendency (iv) Power to produce and innovation.

4. What is new innovation?

Ans. This is a process that keeps a new idea going and this idea itself gives form to the original idea. The country’s economy develops through the process of innovation.

. What is liberalization?

Ans. Liberalization is a policy according to which any courageous person can set up any industry. One can make a product and make a profit. The government remains liberal in this regard and does not interfere.

6. What is privatization?

Ans. When enterprises and industries are set up and production work is done in the private sector, it is called privatization. Any entrepreneur or industrialist can set up his personal industry in this. Such industries are not in the public sector but in the private sector.

7. What is globalization?

Ans. Globalization is a process according to which trade and industrial relations are maintained among different countries at the world level. In this, different countries remain close to each other globally. There is more foreign trade in this. International trade relations are established between different countries. 

8. What is the meaning of diversification?

Ans. Diversification means creating different types of new products. For example, the Tata community was mainly famous for the iron and steel industry, chemicals, tea, fertilizers, power, textiles and trucks, etc., but the community has now ventured into new sectors such as motor cars, computers, home-making, etc. Construction, Finance and Insurance etc.


1. Discuss the development strategy.

Ans. The word array is commonly used in daily language. This is easy to understand but difficult to explain. In simple words, a strategy is a planned methodology that is prepared to achieve a specific objective. Accordingly, growth strategy means thoughtful strategy and expansion of business activities. 

In other words, growth strategy means a systematically prepared plan to expand the enterprise over a period of time. The objective of the strategy is to adopt development mechanisms to achieve higher development. 

Such mechanisms include entering new markets, capturing more market share, developing new products through improved products, acquiring latest technology, acquiring better resources and implementing professions and preferences in management, etc.

2. What is the meaning of development?

Ans. The main reason for slow pace of industrial development in backward areas is lack of resources. Development centers were established in the industrial areas of backward areas in 1988, as a result industrial development got a boost. The main function of these development centers is to improve the arrangement of resources. 

Resources include water, electricity, transport, raw products, supply of trained labor and development of banking facilities. In the 8th plan, the number of such development centers was 70, these have been divided into different provinces. A provision of Rs 25 to 30 crore has been made for each centre, at present there are 64 such centers in the country. 

After 6 years of construction, the financial condition of the centers is bad, land has been purchased for some centers and buildings have also started being constructed but due to lack of funds the work is incomplete.

Meanwhile, a new integrated development plan was made which will also work on the location of technical services, industries and coordination between agriculture and industries.

3. Explain the banking policy.

Ans. For the development of economically backward areas, businesses developed in the banking sector can be developed. According to the new banking policy of RBI, there is a provision to open new bank branches only in rural areas. Development of backward industrial areas is possible only by improving the financial system. This priority has been given to Regional Rural Banks. As a result, the financial system of rural areas will improve and due to availability of industrial finance, industries will develop.

The flow of finance through Regional Rural Development Banks boosted the development of economically backward areas like Orissa, Uttar Pradesh and Bihar.

4. Explain the meaning of expansion.

Ans. Development and expansion both have the same meaning. In case of expansion, only this product should be made in additional quantity at some other place. For example, if one cement plant is located in Kota and the other in Alwar, then it will be called cement plant.

5. How to avoid failure? Please clarify.

Ans. To avoid failure, orders like 10 (Army Chief) are quite beneficial. By following which losses can be avoided which are as follows-

(i) If you are not big then do not diversify.

(ii) Avoid diversification if you do not want to become powerful.

(iii) Look before proceeding

(iv) Take initiative if possible

(v) If possible, create a new company.

(vi) Also decide whether you have marketing aptitude? 

(vii) Be ready to accept your limitations and compromises.

(viii) If you are a small player (businessman) then have only small ambitions.

(ix) It is not necessary to save taxes, foray into new areas.

(x) Is it not a curse that diversification has not been done?


1.Describe the factors affecting development. (Discuss the Factors that influence Growth.)

Ans. Sometimes even good products go out of circulation due to lack of market. Companies and corporations keep coming into existence and the old ones face many problems. That is why it is necessary to pay attention to those factors which are necessary for development, they are as follows-

(i) Direct and Indirect Competition – Today there will be no single firm in competition later. A company that makes similar products.

So you may have to face competition from other companies. For example, there are many types of bath soaps in the market, the manufacturer of each brand should keep trying to get hold over its competitor to increase its hold in the market. Indirect competition involves substituting various types of cheap soaps and replacing cloth bags with plastic bags. Competition has a great impact on development.

(ii) Change in Technology – In the last few decades, Indian farmers used to produce agriculture using old-fashioned equipment, but now Indian farmers are using modern equipment in agriculture. After the Green Revolution, agricultural production has been increased by using tractors in place of the old plough.

There was considerable progress in the industrial sector as a result of changes in various types of equipment and technology. Is. If an organization does not adopt modern technological changes then the organization will become out of use (obsolescence) and cannot reduce the cost of production.

(iii) Consumer Trend – Making profit by an enterprise depends on sales and this is possible only when the product satisfies the customer. There are many elements of consumer choice such as price, quality, style, fashion etc. An active organization gives great priority to consumer choice.

For example, ever since rural soldiers have started wearing jeans and T-shirts, their demand has increased significantly. Also, every organization has started making them. Also, it is necessary to pay attention to the needs of the elderly in medical facilities. 

Contact with consumers is essential for continued growth. Another major factor that influences the consumer’s power of choice is the effectiveness, certified quality and after-sales services of that product. This applies especially to the car industry and long-term consumer goods.

(iv) Power to generate and new innovations (Creativity and Innovation): Creativity means some newness, only then a brand can be a product, it can be a process of making a new product and it can also be a new market.

Creativity also involves changes in the existing product. Innovation is a process which keeps a new idea going and also gives the original form to this idea. The process of creating new ideas and creating new ones is the name of development. Only such organizations are successful which actively pay attention to both these ideas.

2. Examine the failure of regional planning. (Examine the Failure of Regional Planning.)

Ans. Despite many efforts by the government, disparity in regional development persists. Even in some developing provinces, there are some areas where there is a lot of poverty, the reasons for this are not difficult to find.

Some important reasons are as follows – (i) Check on transfer of resources: A major reason for economic inequality is the transfer of resources by the rich provinces to the poor provinces from the central government.

There is a ban on aid. For example, per capita development expenditure in Punjab and Haryana is higher than that in Bihar.

2.5 times as compared to. This is the reason why industrial development in Punjab and Haryana is much higher than other provinces. (ii) Lack of spirit of self-effort – poor provinces

They become accustomed to depend on the help of the central government or the provincial government and do not use their own resources. Backward provinces tend to be lax and keep demanding special packages from the Central Government for their development. Apart from this, backward provinces keep wasting their limited resources and remain indifferent towards development.

(iii) Special Areas of Development – ​​Most of the areas where more development is done are some areas like flood affected areas, hilly areas, scheduled and tribal areas. There is always a possibility of development in backward areas, only in the first five year plan no attention was paid to such development. only | An attempt has been made to remove economic inequality in the 6th Plan.

3. What do you understand by modernization? How is it useful in economic development? (What do you mean by modernisation. How it is useful to boost economic growth?) 

Ans. The purpose of modernization and quality development of a technology weak organization is to- 

(i) Improving Productivity – Increasing productivity reduces the per unit cost of production. There is no difficulty in marketing low cost goods.

(ii) Efficiency in the Working – Modernization means working like a machine. All the tiring work is done by machines. The work done by machines takes less time and the quality of work is also good. There is no difficulty in marketing a good product. 

(iii) Reduction in Cost – Machines reduce the cost of production. Customers like cheap items very much. Low priced goods are liked a lot by the middle income group. of products on

(iv) High Standard of living – Low cost products and quality can make the living of consumers good.

(v) Other areas – Modernization is needed for the following – (1) Liberalization (2) Privatization (3) Globalization and stabilization. These are explained in detail below.

(1) Liberalisation: New industrial policy which was started in 1991 according to which any adventurous person can start any industry. One can make a product, and make any amount of profit. Liberalization measures are for-

(i) Product licensing was abolished from all types of industries except 13 industries.

(ii) The limit of foreign capital has been increased to 51%.

(iii) Telecommunication system was opened to private sector (foreign investment can also be given).

(iv) The minimum lending limit of Rs 2 lakh has also been abolished. 

(v) SLR in commercial sector has been reduced to 3.5%.

(vi) Duty on capital imports reduced to 15%. Capital imports for projects have been reduced to 25%.

(vii) Modvat was increased to capital products and petroleum products.

(viii) Exemption in company taxes.

(ix) Tax free for 5 years on those industries which will be set up in backward areas.

(x) Major reforms in production taxes

(xi) Reforming import duties

(xii) Rupee made fully convertible

(xiii) CCI abolished and FERA simplified

(xiv) Private bank was established

(xv) Allowing private investment in power sector

(xvi) Export approval to 100% exporting units (xvii) Making efforts to increase exports to correct the balance of payments.

By freeing the above mentioned and some other issues from the bondage of big officials, enough time will be left to consider the questions like how to expand the business area, where to sell the new product, etc.

(2) Privatisation – The second step of liberalization is the expansion of the private sector, till now the private sector was working under various administrative controls. The private sector was given a free share in the market. Owning and managing business operations in privatization. That leaves a lot of time to do it. To reconstruct the public sector, privatization will have to be liberalized. Only 6 areas have been given to the public sector, earlier there were 17 areas, gradually the authority and area of ​​this area has been reduced considerably. 

The government is gradually selling off government sector industries. By doing this, the same public sector undertakings which were incurring losses of crores of rupees are earning profits. In the final phase of privatization the investment has been increased to 51%. By doing this, export opportunities will increase and foreign investment will also increase.

3. Globalization – Another step of liberalization is globalization. An effort has also been made to bring about a radical change in the Indian economy and bring it to the world level. In 1991, the Indian rupee was devalued for the third time. Besides, the rupee was also made fully convertible, this would improve the balance of payments. Foreign investments get direct entry. Also, WTO member countries will not face any problem in buying Indian products.

4. Stabilization – Stabilization means only the fall in prices which brings it down to below 10% from 14% at the moment. To do this the fiscal deficit will have to be brought down to 4% of GNP.

(ii) To make the supply of the product simple and easy, the help of PDS (Public Distribution System) can be taken.

(iii) Liberalizing imports

(iv) Unnecessary expenses should be stopped.

(v) To promote profitability.

The economy in general was in a very scary shape. Capital industries were also in no position to be afraid of multinational corporations. The economy, which had been stuck for 40 years, had gained considerable strength due to progress in productivity, ability to withstand competition in products and services, and did not feel any pressure from the new economic policy. It also endured many dangers. Made all the adjustments very well, never looked back from the path of progress. Political parties also never talked about opposing or changing economic policies. 5. Diversification- The specialty of today’s business is diversification.

For any medium and big business houses, information about who and where is required. For example Tata community which is the most prominent business house is known for iron and steel, fertilizers, commercial trucks, power, chemicals, tea, textiles etc. This community has now also ventured into new sectors such as motor cars, computers, home construction, finance, and insurance. Ditto J. Of. The condition of the community. Its investments also include textile industry, metals, engineering, computers, paper, plastics, chemicals, tires and tubes, beauty products, dry cells, finance and import-export etc. If there is customer demand for a new product, it will soon be launched by Tata and J. Of. community market

Let’s try to bring it in. Diversification means making different types of products, in which the products are new and not related to the old ones.

Diversification and product proliferation are ways to withstand competition. Thanks to Indian liberalisation, many Indian companies have spread their wings and the consequences are quite dire. The wings of many big companies have been burnt. Like DCM, Brooke Bond, ITC, L&T, Indian Organic Chemicals, Nelco Ranboxy are examples which have failed in the name of diversification.

NCERT Solutions for Class 12 Commerce Stream

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