7. Factors of Production

• Money: From personal savings, family and friends, and loans from banks or self-help groups.
• Hairdresser’s training: By working under an experienced barber or beautician, or at a training institute.
• Food vendors: Mostly from family members at home, or by working in other eateries.
• Motivation: To earn a living, to be one’s own boss, to use a skill or to meet a need of the people around.

Items from Nature can be labelled as ‘land’ — the space for the shop or stall, water, fresh vegetables and fruits, food grains and milk (from soil and animals), and gas (natural gas).

• They keep people healthy, so children can attend school regularly and learn better.
• Healthy workers can work harder and longer and do not lose workdays due to illness.
• Early diagnosis and treatment prevent serious diseases.
• Good health supports the mental (cognitive) development of children.

So health services increase the quality and productivity of human capital.

Factors behind excellence in Indian art and architecture:

• Skills passed down through generations of families of artisans.
• Guidelines from the śhilpa śhāstras on measurements and proportions.
• Work was treated as worship and done with devotion.
• Patronage by kings, temples and merchants.
• Regular practice and learning of new techniques.

Effect on Harsh: He will have less knowledge and fewer skills. He may get only low-paid jobs and earn less. He may find it hard to improve his life.

Problems for businesses: Work gets delayed, quality suffers and costs rise. Businesses may have to spend on training or hire workers from elsewhere. Production and growth slow down.

No. Every job is important, because each meets a need of society.

If streets were not cleaned and trash not collected, diseases would spread. If farmers stopped cultivating, there would be no food. If doctors were not available, sick people could not be treated. Society works only when everyone does their part, so all work deserves respect.

Reasons for decline:

• Cheap machine-made goods replaced handmade ones.
• Europeans brought new technology, such as iron-nailed ships, and controlled trade.
• Young people moved to other jobs that pay better.
• There was less demand and less support for artisans.

Examples from Maharashtra: Paithani saris of Paithan and Yeola, Kolhapuri chappals, Warli painting and Himroo weaving of Chhatrapati Sambhajinagar (Aurangabad).

Dream big, work hard, be honest, take care of your workers and use business to help society.

Existing knowledge helps, but it is not enough. They also need advice from experts, research, training and the skills of their team.

No. They are also motivated by solving a problem, serving society, creating jobs and the satisfaction of seeing their dream come true.

Courage to take risks, creativity, confidence, patience, leadership, good decision-making and the ability to learn from failure.

• Advancements: Mobile phones and UPI payments, online classes, weather updates for farmers, drip irrigation, tractors and GPS maps.

Sample invention — ‘Smart Water Alarm’: A small device fitted on the overhead tank. When the tank is full, it rings an alarm and switches off the motor. It saves water and electricity.

Polluted water and soil harm the health of local people. Farmland loses fertility and drinking water becomes unsafe. Fish, birds and plants die, so biodiversity is lost. Fishermen and farmers lose their livelihood.

• Land — natural resources like soil, water, forests and minerals.
• Labour — the physical and mental effort of people.
• Capital — money and human-made assets like machines, tools and buildings.
• Entrepreneurship — the ability to start a business, take risks and combine the other factors.

Difficulty: Some items are hard to classify. For example, vegetables come from land but are bought with money; skills are part of labour but are also human capital; a gas cylinder holds a natural resource but is itself capital.

Human capital is the knowledge, skills, abilities and expertise of people. It is built through education, training and good health.

Physical capital is human-made assets like machines, tools, vehicles and buildings used in production.

• Online platforms like SWAYAM offer free courses that can be learnt at one’s own pace.
• People can learn from anywhere, even while working.
• Videos and apps make learning easier.
• Portals like the National Career Service help people find jobs.
• Technology removes geographical barriers to learning.

I would learn computer coding. It would help me create apps and websites, solve problems and get good job opportunities in the future.

Yes. Land, labour and capital do not produce anything on their own. The entrepreneur gets an idea, takes the risk, brings these factors together and makes decisions. Without the entrepreneur, the other factors would remain unused. Entrepreneurs also bring new products and create jobs.

Yes, technology can replace some labour. For example, a combine harvester does the work of many farm labourers in a short time.

It is good because work becomes faster, cheaper and better. But it can also be bad because some workers may lose their jobs. So workers must be trained in new skills. Technology cannot fully replace labour, because people are needed to design, run and repair machines.

Education gives knowledge and understanding. Skill training gives practical ability to do a job. Both improve the quality and productivity of workers.

They complement each other. For example, a civil engineer learns principles of design in college but becomes good at work only after training at construction sites.

• Land: A shed or factory space — on rent or purchase. Water and electricity.
• Raw materials: Stainless steel sheets — from steel suppliers.
• Capital: Money for machines (cutting, pressing, welding, polishing), tools and packing — from savings and a bank loan.
• Labour: Skilled workers and helpers — hired locally.
• Entrepreneurship: My idea, planning and decisions.

If one factor is missing, production will slow down or stop. For example, without skilled workers the machines cannot be used; without raw material nothing can be made.

Sample questions:

1. What made you start this business?
2. How did you arrange the money to start?
3. What challenges did you face in the beginning?
4. How do you find skilled workers?
5. What opportunities do you see in the future?

I may raise prices slightly or look for a cheaper location nearby. Higher rent reduces profit, so I must cut other costs.

The others may manage for a short time, but they will be overloaded. I may have to offer a better salary to attract a new worker quickly.

Yes. Better equipment and online ordering can increase production, improve quality and help reach more customers.

I will keep my food tasty and of high quality, improve service and cleanliness, and offer new dishes or special combos. I would not depend only on lowering prices.

Simple and quick licences through a single window, fewer forms, easy loans for small businesses and simple tax rules.