History Of Finance And Its Purpose

History Of Finance And Its Purpose

Finance is an industry which is the most vital part of business as without finance it's not easy to run a business. So, every business man and individual manages the finances for their better future.

History of Finance :- 

In early times there was no system of money or currency. People used to believe in a barter system for fulfilling their needs. Barter system is an exchange system in which people give one thing of theirs in exchange of another but this means have not been adequate as through this it was difficult for people to value the things as some things are expensive and some are cheap and everything has different value so this system failed in some time. 

Further, the invention of money came into existence and this led to the end of the barter system.

Although the financial system was invented much before the invention of money, it started working in a proper manner with the invention of money. 

Financial system was developed in India with the start of Bombay stock exchange in 1875 and Calcutta stock exchange in 1863.

After the Independence in 1947 various acts with respect to finance have been launched in our country as from that time onwards The Government of India started focusing on managing the economy of the country and for the purpose of growing Economy of the country it was very much necessary to make regulations and laws for the finance sector.

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Purpose of Finance :-

Purpose of finance is very important for the benefits of an individual, Business and country. Everyone is concerned about finances. 

Finance is a term which is related to borrowing, lending, investing, raising capital, selling and trading in securities; everything is a part of finance. The basic purpose of finance are as follows:-

  • It is required for the economy of the country: Government of India is always concerned with the finance in the country as it grows the overall economy of the country and every country wants its economy to be at higher end in comparison with other country as higher the economy the higher will be the currency value, GDP and other economic factors of the country.
  • It is required for funding the projects: Every organization or business needs funds for projects and growth of business. Finance is the core of it as without finance management there can be no arrangement of funds for projects and growth of business as everything needs funds to grow.
  • Budget lookouts: Every business needs proper finance teams to check out budget requirements, how to fulfill it and how to control their expenses in order to achieve.

Therefore, finance is quite an important term for business, individuals and government and one needs to take special care of it for long term goals as without it life becomes difficult in every manner and sector.