question_answer 16)

Kishora is a farm labourer. Like other such labourers, Kishora found it difficult to meet his family's needs from the wages he received. A few years back Kishora took a loan from the bank. This was under a government programme which was giving cheap loans to the poor landless households. Kishora bought a buffalo with this money. He now sells the buffalo's milk. Further he has attached a wooden cart to his buffalo and uses it to transport various items. Once a week he goes to the river Ganga to bring back clay for the potter. Or sometimes he goes to Shahpur with a load of jaggery or other commodities. Every month he gets some work in transport. As a result, Kishora is able to earn more than what he used to do some years back.     (i) What is Kishora's fixed capital?   (ii) What do you think would be his working capital?   (iii) In how many production activities is Kishora involved?   (iv) Would you say that Kishora has benefited from better roads in Palampur?

Answer:

(i)Kishora's fixed capital is the buffalo and wooden-cart which he has purchased with the bank loan.  (ii)The money that he earns from selling the milk and transporting goods on his bullock-cart minus his own living expenses are his working capital. (iii)Kishora is involved in the following production activities.    (a) Selling of buffalo's milk.   (b) Transporting of various items.   (c) Bringing clay from the river Ganga for the potter.   (d) Transporting jaggery etc to Shahpur. (iv)Kishora has certainly benefited from better roads in Palampur because he is involved in the transport business; better roads enable him to easily transport goods from one place to another, run his business successfully and earn profits, which would have been very difficult in the absence of proper roads.