Beruflich Dokumente
Kultur Dokumente
Having taken over as Editor from Dr Parveen Ahmed Alam, I feel honoured to
address the body of researchers who form the audience of our Journal, Kindler.
The year 2016 has seen a myriad of events affecting global business panorama.
Earlier in June, 51.9% votes ensured the departure of United Kingdom from the
European Union, coining the portmanteau of British and exit: Brexit.
The first week of November saw two events affecting the Indian economy. On
November 8, 2016, Prime Minister Narendra Modi announced Demonetization,
wherein, that existing INR 500 and INR 1000 banknotes were no longer accepted
as legal tender. Demonetization was expected to curb counterfeiting, tax evasion
and the parallel economy. Offshore and across countries away, the 58th
quadrennial American presidential election saw the Republican ticket of
businessman Donald Trump and Indiana Governor Mike Pence defeating
the Democratic ticket of former Secretary of State Hillary Clinton and U.S. Senator
from Virginia Tim Kaine. The new US global leadership demonstrates altered
views on free trade, globalisation, and open markets, as the Trump administration
works on immigration reforms affecting very many skilled workers such as
research analysts, financial advisors, web developers, teachers, artists, medicos,
paramedics and above all, IT workers.
Zora Neale Hurston has quoted Research is formalized curiosity. It is poking
and prying with a purpose. As, we, at the Army Institute of Management, Kolkata,
continue with our search for the wealth of knowledge in the arena of Business
Management, we present to you Volume XVI of our journal.
Volume XVI has two ensconced issues: 1 & 2, covering a diverse variety of
research topics related to dilemmas in Business Management. I wish you all
an informative reading of the same.
Best wishes,
ABSTRACT
The major threat that the banking sector is facing today is the problem of NPA which is increasing
day by day and here we are trying to find out the impact of NPA on profitability. For this
purpose we have selected the two most important banks SBI from the nationalised/public sector
banks and ICICI from the private sector banks. Here we have confined our study to find the
relationship between Total Advances, Net Profit, Gross and Net NPA. Our study uses the annual
reports of SBI and ICICI for the period of 5 years from 2010-11 to 2014-15. Financial performance
of the bank is largely dependent on how the management is managing their NPAs, how they
are monitoring on their advances because the liquidity of the bank is largely dependent upon
proper management. The data has been analysed using various tables, grouped bar diagram
and correlation coefficient. As it is known that reduction of NPA will add to the profitability of the
banks, our objective is to establish a relationship between NPA and profitability of these two
major banks from different sectors.
Key Words : Non Performing Assets, Profitability, Liquidity
INTRODUCTION
Bank plays an important role in the economic development of every country. After the
economic liberalisation in 1991 the banking industry has undergone a drastic change
and so credit management came into surface. As financial intermediaries banks are
exposed to certain specific types of risks credit risk, interest rate risk, foreign
exchange rate risk, liquidity risk, price risk, operating risk and solvency risk. Thus it
becomes a matter of immense importance to identify measure, monitor and control
different types of risks. Internationally the banks approach to risk management is
based on committee approach. On the one hand the asset- liability management
committee (ALCO) deals with different types of market risk, while on the other hand
the credit policy committee (CPC), and oversees the credit or counter party risk and
country risk. Thus the market risk and the credit risks are managed in the parallel
two-track approach. As a matter of principle the policies and procedures for market
risk are addressed in asset-liability management policies and credit risk is taken care
of in loan policies and procedures as NPA is becoming the largest cause of concern
of the banking sector of India today. The Basel Committee on Bank Supervision
(BCBS) with its objective to prevent the bank crisis evolved a set of core principles
* Assistant Professor, Pailan College of Management & Technology, Kolkata -104; Ph: 9883241136; Email:
abhijit_pal03@yahoo.co.in
** Assistant Professor, Pailan College of Management & Technology, Kolkata -104; Ph: 9903655971; Email:
nabomaity06@gmail.com
REVIEW OF LITERATURE
Rajaraman and Vasistha (Indira Rajaraman, February 2, 2002) carried out an empirical
study which shows an evidence of significant bivariate relationships between the
operating inefficiency indicator and the problematic loans provided by the public sector
banks.
Das & Ghosh (Das, November 2003)studied empirically and tried to find out the
various indicators such as asset-size, credit growth and macro-economic condition,
and operating inefficiency indicator which causes non-performing loans of public sector
banks of India.
Kavitha. N (N.Kavitha, 2012) examined NPAs of public sector banks and their impact
and magnitude on profitability. Credit of total advances was in the form of doubtful
assets which has an adverse impact on profitability of all public sector banks. The
study observed that there is increase in advances over the period of study. However
the decline in the ratio of NPA indicates the improvement in the asset quality of SBI
group, Nationalised Banks and Private Sector Banks.
Dr. Pravin Choudhury and Apoorva Bhatnagar (Bhatnagar, 2014) made a comparative
study of NPA of HDFC and PNB. The study made an analysis of impact on profitability
by rise in NPAs and also about the model of the management of NPA in public and
private sector banks. The study has suggested measures to control NPAs like
i) there must be an effective regular follow up with the customers and need to watch
if there is any diversion of funds at regular intervals ii) a number of personal visits
after sanction and disbursal of credit and close monitoring of the operations of the
accounts of borrowed units iii) frequent discussions with the staff in the branch and
taking their suggestions for recovery of NPAs iv) RBI need to take necessary actions
against defaulters like publishing names of defaulters in newspapers, broadcasting
media which is helpful to other banks and financial institutions.
Dr. Sonia Narula and Monika Singh (Singla, 2014) carried out an empirical study on
NPAs of banks. When PNB Gross & Net NPA compared with Total Advances, they
got the result that there is mismanagement on the side of PNB. While analysing the
impact of NPA level on PNB they derived the conclusion that there is a positive
relation between Net Profit and NPA of PNB. They found that as profit increases NPA
also increases and stated that this is due to the mismanagement on the side of the
Bank.
OBJECTIVES OF STUDY
1. To study the impact of NPA on profitability of SBI and ICIC
2. To compare the Total Advances, Net Profit, Gross NPA and Net NPA of SBI and
ICICI
3. To study the statistical correlation between Net Profit and Net NPA of SBI and
ICICI
8 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
RESEARCH METHODOLOGY
Our study is fully based upon secondary data which were collected from the published
annual reports of SBI and ICICI from internet. Compilation of the data critically analyzes
the Total Advances, Net Profit, Gross NPA and Net NPA. Our study is confined for
the period of 5 years from 2010-11 to 2014-15. The data has been analysed by using
tables, grouped bar diagrams and correlation coefficient. The tables and diagrams
are used to compare Total Advances, Net Profit, Gross NPA and Net NPA of SBI and
ICICI. By using the correlation coefficient we want to determine if any relationship
between Net Profit and Net NPA of SBI and ICICI exists or not.
Figure 7 : The graphical representation of Table 6 is presented below for comparative study
YEAR SBI T.A ICICI T.A SBI T.A/ SBI NET ICICI NET SBI NET NPA/
ICICI T.A NPA NPA ICICI NET NPA
2011 7,56,719.45 2,16,365.90 3.50 12,346.89 2,407.36 5.128809152
2012 8,67,578.89 2,53,727.66 3.42 15,818.85 1,860.84 8.50091894
2013 10,45,616.55 2,90,249.44 3.60 21,956.48 2,230.56 9.843483251
2014 12,09,828.72 3,38,702.65 3.57 31,096.07 3,297.96 9.428880278
2015 13,00,026.39 3,87,522.07 3.35 27,590.58 6,255.53 4.41059031
REFERENCES
In Measures to Control NPA MENACE. shodhganga.inflibnet.ac.in/bitstream/10603/32314/14/14
chapter%207.pdf.
(25.05.2016). ANNUAL FINANCIAL RESULT FOR THE PERIOD 2011-15. www.moneycontrol.com/
finacials/statebankindia/balance-sheetVI/SBI#SBI.
(25.05.2016). ANNUAL FINANCIAL RESULTS FOR THE PERIOD 2011-15. money.rediff.com/
companies/State-Bank-of-India/14030001/ratio?src=comp research.
(26.05.2016). ANNUAL FINANCIAL RESULTS FOR THE PERIOD 2011-15.
www.moneycontrol.com/financials/icicibank/balance-sheetVI/ICI02#ICI02.
(26.05.2016). ANNUAL FINANCIAL RESULTS FOR THE PERIOD 2011-2015. money.rediff.com/
companies/ICICI-Bank-Ltd/14030056/ratio?src=comp research.
Bhatnagar, P. C. (2014). A Comparative study of Non Performing Asset Management of Selected
Units(HDFC & PNB). IRCs International Journal of Multidisciplinary Research In Social
Management , 118-122 Volume2(4).
Das, A. &. (November 2003). Determinants of Credit Risk. Conference on Money, Risk and
Investment. Nottingham: Nottingham Trent University.
Indira Rajaraman, G. V. (February 2, 2002). Non Performing Loans of PSU Banks - some Panel
results. Economic and Political Weekly .
20 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Koundal, V. (2012). Performance of Indian Banks In Indian Financial System. International Journal
Of Social Science and Interdisciplinary Research , 204-213 Volume 1(9).
L, R. M. (2013). An Empirical study on NPA management strategies between Public and Private
Banks - with special reference to banks In Bangalore City. Vidya Niketan Journal of
Management & Research , 57-77 Volume 1(2).
Maity, A. P. (JanJun16). A COMPARATIVE ANALYSIS: THE IMPACT OF NPA ON PROFITABILITY
OF SBI & ICICI. KindlerVOL XVINO1JanJun16 .
N.Kavitha, M. a. (2012). Financial Performance of Selected Public Sector Banks in India.
International journal of multidisciplinary research, Volume 2(1) , 255-269.
Pachorkar, N. N. (2012). Correlation study of Financial Performance Indicators in Public Sector
Banks and Private Sector Banks. Innovation in Banking and Finance IBMRD, 76-79
(Volume 1).
Singla, S. N. (2014). Empirical Study on Non Performing Assets of Bank. International Journal ,
194-199 Volume 2(1).
ABSTRACT
There has been considerable discourse regarding increase of diversity in the boardrooms in
Companies all around the world. Quotas have been opted. Norway was the first country to go
for quota for women. Several other countries have gone the quota way, including France, Australia
etc. India has gone for Company Law, 2013 so that there is one woman director in the
boardrooms in India. This step has brought in changes in some Indian corporate environment.
However, some Companies have failed to follow the rule. Here, some Public Sector Undertakings
have failed. The government has been criticized for this slow stance in the step to implement
the rules. The reasons behind the low representation in the boards are analyzed. There is a
need for changing mindset in the society about capability of women in boardrooms. Women
also need to upgrade their capabilities and capacities, all along the career route, when called
up for a job; they can do it very efficiently. This can become a model for the future workforce in
the corporate world.
Key Words : Women, Glass Ceiling, Corporate
OBJECTIVES OF PAPER
1. To understand the position of women in boardrooms, worldwide
2. To analyze the changes taking place after the implementation of the Companies
Act, 2013
3. To analyze some of the ways which will help in increasing representation of
women in boardrooms
METHODOLOGY OF RESEARCH
The study is based on secondary resources, including reports, books, journals,
newspaper articles, internet sources etc.
SCOPE OF PAPER
The scope of the paper broadly, includes the changing representation of women in
the boardrooms of Companies, the world over, the reasons behind low representation
of women in the top level management, including the board, the issue of quota for
women in boardrooms in some countries of the world; the legislation of the Companies
Act, 2013 and the changing scenario of representation of women in the Indian boards
and some of the deficiencies of the system, that needs to be overcome.
* Assistant Professor, Department of Political Science, Department of Political Science Diamond Harbour
Womens University; Email: bhattacharyya.arundhati4@gmail.com
GLASS CEILING
The glass ceiling is a metaphor for a barrier preventing women from rising above a
certain organizational level. Glass ceiling has been the reality in boardrooms in India
and other parts of the world. Women in corporate world are also affected by expatriate
glass ceiling, which implies restrictions for foreign management assignments and
experience needed for better eligibility of upper management. This impacts the
motivation level and career prospects among young management trainees. (Gary S.
Insch, Nancy McIntyre, Nancy K. Napier, 2008).
There is need for shattering the glass ceiling for the sake of justice and market
needs. A company that mirrors the general population will be able to make proper
decisions regarding consumer needs. As women, today, are playing an important role
as buyers, their psyche and preferences will be better understood by women directors.
Both men and women approach management differently and both the aspects are
fruitful for better results. (Alison Eyring, 1998) Even after several legislations put
forward by several countries, today 90 per cent of the boardroom comprises of
men.(Women in the Boardroom: A Global Perspective, 2013)
INDIAN LAW
The Companies Act, 2013 passed by the Indian Parliament has received the assent
of the President of India on 29th August, 2013. This law has supported mandatory
ANALYSIS
There are loopholes within the system. Implementation of laws is much more difficult
than its legislation. Concerns are there in the corporate corridors, whether capable
women will be included as women directors or not. One of the woman directors of an
esteemed IT company stated that in many cases, these woman directors fail to voice
their honest opinion. They continue as puppets. So, their presence does not make a
difference in decision making. Another woman director, on the other hand, stated that
it is a beginning of a new revolution in the offing. The woman directors must come to
the meeting with their homework on the subject matters through. Another woman
director of a manufacturing company reported that she is allotted very little room to
speak out her feelings and suggestions.
The provision is not clear regarding independence of the women director. If the women
director is independent, it will benefit the companies as by appointing independent
women director they will be complying two provisions of section 149 i.e. by appointing
the women director and Independent Director.(Tiwari, 2014)Many business families
are including their women family member in their boardrooms, in order to follow the
Indian law. For example, Reliance Industries has added Nita Ambani, wife of chairman
Mukesh Ambani as a director. Vijay Mallya brought in his stepmother onto the board.
Other major companies like the Raymond Group, Aditya Birla Group, TVS, Apollo
Hospitals, and Asian Paints etc have added family members as women directors of
their respective companies.(Ghosh, 2015)The law does not prescribe any eligibility
criteria for women directors. It also does not prescribe that women should be
independent.(Haldea, 2015)
Lord Davies has stated that board appointments must always be based on merit.
Even after women being in the fray of corporate competition, very few women make
it to the boards, and then it needs to be questioned whether board recruitment is
FINDINGS
There are many companies, including public sector undertakings, who have failed to
have a woman director in the Boards of the Indian Companies. Table 1 provides a
picture of the representation of women in boardrooms, around the world. Those
Companies who have put up woman member have mainly done through appointing
relatives from the business families. Glass ceiling, however, is slowly getting cracked,
through quota, not only in India, but also, throughout the world.
COUNTRIES % OF SEATS
Norway 35.5
Finland 29.9
France 29.7
Sweden 28.8
Belgium 23.4
UK 22.8
Denmark 21.9
Netherlands 21
Canada 20.8
USA 19.2
Australia 19.2
Germany 18.5
Spain 18.2
CONCLUSIONS
The corporate world has been traditionally dominated by men. Gender ratio is skewed
critically in favour of them. Even at the senior management level, women are still
fewer when it comes to board-level positions in Indian companies. It is estimated that
out of 1,112 directorships of 100 companies listed on the Bombay Stock Exchange,
only 59 positions, or 5.3 per cent, are held by women. This compares with 15 per
cent in Canada, 14.5 per cent in the US, 12.2 per cent in Britain, 8.9 per cent in
Hong Kong and 8.3 per cent in Australia. (Sundar, 2013) According to the recent
Deloitte study, women are slowly joining boardrooms, but they are not leading them.
Women have to not only learn the language of the boardroom, but also develop
unique capabilities, to deal with issues. It is a revolutionary and empowering step for
women in the corporate field. When needed, change may not come from below, so,
the State had to take a decision in order to improve representation of women in the
boardrooms.
The Companies Act of 2013 is a step in the right roadmap. There have been many
women in key posts in the corporate world, like Chhanda Koachar, Kalpana Morparia,
RECOMMENDATIONS
It is very necessary that the active work experience needs to be added as requirement
for women directors. Then, only, the legislation can help in the improvement of
efficiency of the board. Women have to remain tactful in dealing with people. Being
emotional in the professional decisions may make life difficult. Having quotas can be
small time options. It is necessary to focus on diversity at the recruitment stage and
more and more flexible options for women at middle level, so that they do not drop-
out from their career. It is a loss for the Company as they lose the talent and skills of
a sizeable portion of women employees.
There are around 1530 firms on National Stock Exchange. If every Company has one
woman Director, women will compose 10 per cent of the board directors. The present
statistics reveal that there are 13 per cent women directors. The reason is that 205
firms have more than one woman director. In order to reach Norway standards, firms
need to be pro-active in including more capable women in their boardrooms.
Companies need to strengthen and widen the talent pool of women in leadership
roles. More and more women from the lower and middle-level management need to
be mentored, suitably, so that they become tailored for the role of directors and
CEOs, in the long run. Women in the Companies also need to engage in active
networking, so that they remain visible, when the posts of directors become
vacant.(Ramanathan, 2016)
Until one is put on the job, the success or the failure of the person cannot be assessed.
Just like after the 73rd and 74th Amendments of the Constitution, 30 per cent reservation
in Panchayats and Municipalities, have brought in a huge number of women in the
public domain. From them, there have risen many women leaders who have proved
their mettle in the job. Similarly, women in the boards have to be assessed on their
merit. They are getting an opportunity through the legislation and time will provide an
answer towards the critics of more women in boardrooms. The different perspective
of women directors should be given full play in Corporate Governance. Companies
with high female representation on their boards tend to have stronger corporate
governance than those with few or no women on the board of directors. (Rosener,
2003) The presence of female board members also signals potential to current female
employees about their chances for advancement within the company.
ABSTRACT
Depreciation is the normal wear & tear of Fixed Asset which is usually charged to Profit & loss
Account. Depreciation is generally charged annually. The sixty years old legislation has been
replaced by The Companies Act, 2013. There a lot many amendments in the new companies
act as compared to old act. One of such key changes is related to regulations governing
depreciation provisions. The Companies Act 2013 does not prescribe the Rate of Depreciation
as stipulated under Income Tax Act 1956. The Useful lives of the Fixed Assets are specified in
Schedule II of Companies Act, 2013. The enterprises have to calculate the depreciation as the
rate mentioned in the Schedule II. In this paper I have discussed about the new rules and
regulation for calculating depreciation. I have also focused on the significant changes relating
to depreciation in Companies Act 2013 in comparison to the earlier act. Numerical calculations
have been done to show the effect of changes in the treatment of depreciation.
Key Words : Residual value, Shift, Useful life
INTRODUCTION
Every business acquires some non-trading fixed assets. These fixed assets are used
in the business for facilitating its trading activities and enhancing its revenue earning
capacity. These assets are basically purchased for the business with the intention of
permanent use and not for resale. All fixed assets except the value of land decreases
with the passage of time. The value of these assets decreases each year. Such
gradual reduction or decrease in the value of fixed assets for the purpose of earning
revenue is called depreciation. Depreciation is closely related with the determination
of profit or loss for the period. Unless depreciation is charged to the revenues, the
true income of the business cannot be ascertained properly. As such, depreciation is
a revenue expense. Fixed assets are also called depreciable assets. The characteristics
of depreciable assets are as follows.
The expected life of the asset is more than one accounting period.
Those assets have a limited useful life.
Those assets are held by the business for use in production of goods and services.
Those assets are not for the purpose of sale in the ordinary course of business.
The cost of fixed asset indicates the price for the future service of the assets. It is
necessary to spread its cost over a number of years during which benefit of the
asset is received. This process of allocating the cost of fixed assets is termed as
* Asst. Prof. Department of Commerce (Morning) St. Xaviers College, Kolkata; Email: sohelighose@gmail.com;
Ph: 9230424836
LITERATURE REVIEW
In his address delivered before the convention of central water works association,
Detroit, Walford Erikson basically emphasized the need of providing depreciation in
the books of accounts to present a true and fair view of the financial books of accounts.
(Erikson, 1912)Also the idea was to show case how the value of an asset should be
rationally depreciated so as to replace such asset in the long run .This also emphasized
on numerous factors that were responsible for depreciating the value of assets, to
name a few, reasons like efflux of time, obsolescence, change in technology etc.
Hercules Bantas, in his book looks at the various types of fixed assets and the role
they play in financial reporting. (Bantas, 2013) Topics covered include depreciation,
disposal of assets, and gain/loss on disposal. Subrata Kar in his book deals with the
depreciation methods and procedures to be followed as per the Companies Act 2013.
(Kar, 2013) The book has been specially designed keeping in mind the various
amendments as per the new Companies Act 2013, attempts has been made to
incorporate all possible changes of the new act and its impact on various sectors.
Samuelson has worked on how income should be defined if present discounted
valuations of all assets, and therefore all optimization decisions. (Samuelson, 1964)
Darr, Argote and Epplein their paper examined the acquisition, depreciation and transfer
of knowledge acquired through learning by doing in service organizations. (Darer,
Argote, & Epple). They also highlighted the accurate ways of computing depreciations
in the Service organisations.
Also, (Francis & Taylor, 1925), (Bare Act, 2013)
Notes :
1. Factory buildings does not include offices, godowns, and staff quarters.
2. Where, during any financial year, any addition has been made to any asset, or
where any asset has been sold, discarded, demolished or destroyed, the
Year of Orginal No of year Depreciation Net Residual Useful life Remaining Amount to Depreciation
Acquisition Cost used as on Charged as Carrying Value as per Useful life be changed on to be
of asset 31/03/2014 on Amount 5% of CA as on to provided
31/03/2014 As Cost 2013 31/03/2-014 Opening for
@6.33% on retain 2014-15
(Sch-XIV 31/03/2014 earnings/
CA-1956) Statement
of Profit
and Loss on
01/04/2014
(1) (2) (3) (4) (5)=2-4 (6)=2* (7) (8) (9)=5-6 (10)=
5% (5-6)/8
2002-03 10,000 11 6,963.00 3,037.00 500 10 0 2,537
2003-04 10,000 10 6,330.00 3,670.00 500 10 0 3,170
2004-05 10,000 9 5,697.00 4,303.00 500 10 1 3,803
2005-06 10,000 8 5,064.00 4,936.00 500 10 2 2,218
CONCLUSION
Thus the significant changes can be described as follows.
1. The useful life of an asset can be the number of production or similar units expected
to be obtained from the asset. This indicates that a company may be able to use
UOP Method for depreciation, which is currently prohibited for assets covered
under Schedule XIV.
2. Companies, covered under class (i) above, will be able to use different useful lives
or residual values, if they have justification for the same. Although it appears that
this provision is aimed at ensuring compliance with Ind-AS 16 for such companies,
if the MCA does not prescribe class (i) companies immediately, these companies
would fall under class (iii) and may be forced to strictly apply useful lives as per
the schedule.
3. Companies will need to identify and depreciate significant components with different
useful lives separately. The component approach is already allowed under current
AS 10, paragraph 8.3. Under AS 10, there seems to be a choice in this matter;
however, the Companies Act, 2013 requires application of component accounting
mandatorily when relevant and material.
4. Overall, many companies may need to charge higher depreciation in the P&L
because of pruning of useful lives as compared to the earlier specified rates.
However, in some cases, the impact will be lower depreciation, i.e., when the
useful lives are much longer compared to the earlier specified rates, such as
metal pot line, bauxite crushing and grinding section used in manufacture of non-
ferrous metals.
REFERENCES
(2013). Companies Act.
http://scn.sap.com/docs/DOC-57392. (2016, Feb 17). Retrieved from http://scn.sap.com.
http://taxguru.in/company-law/application-scheduleii-companies-act-2013-contradiction-as6.html.
(2016, Feb 12). Retrieved from http://taxguru.in.
http://taxguru.in/company-law/depreciation-schedule-ii-companies-act-2013.html. (2016, Feb 27).
Retrieved from http://taxguru.in.
http://www.charteredclub.com/depreciation-as-per-companies-act/. (2016, Mar 4). Retrieved from
http://www.charteredclub.com.
http://www.ey.com/Publication/vwLUAssets/EY-depreciation-of-fixed-assets/%24FILE/EY-
depreciation-of-fixed-assets. (2016, Mar 4). Retrieved from http://www.ey.com.
http://www.icai.org/new_post.html?post_id=11504&c_id=240. (2016, Jan 27). Retrieved from http:/
/www.icai.org.
http://www.mca.gov.in/SearchableActs/Schedule2.htm. (2016, Feb 16). Retrieved from http://
www.mca.gov.in.
ABSTRACT
Uniform accounting standard for reporting financial statement is required when any company
establishes its businesses outside the country of origin for accessing the global markets. Based
on this need, an International Financial Reporting Standard was developed. When a company
switches over from local GAAP to IFRS, they have to modify their accounting system and
prepare comparative financial information between their previous GAAP and new IFRS. In India,
after globalization, a number of companies listed their securities on the stock exchanges outside
India. At that point, there was a requirement to prepare a financial statement as per the global
language. On the basis of this requirement, in 2010, Ministry of Corporate Affairs officially
announced the date of IFRS adoption in India for the first time. The motivation behind this
paper is to make a parallel comparison and evaluate the impact of IFRS quantitative factors of
financial report prepared by Indian companies under IFRS and Indian GAAP simultaneously.
Key Words : IFRS IGAAP, Financial Statement, Comparison
INTRODUCTION
Since the advent of internet, the world has shrunk, distances have lost their importance
and information has no more remained the differentiating factor. In this global arena
one of the foremost requirements to operate a business successfully, is to have a
good financial reporting system. If we believe in the old saying, Accounting is the
language of business, then the business enterprises around the globe should be
speaking in same languages to each other while exchanging and sharing financial
results of their international Business activities.
With the growing economy and increasing integration among the global economies,
Indian companies are also raising their capital globally due to diversification, cross-
border mergers, investments or divestments. At this point, it is the need of the hour
to have globally set standards in all domains to avoid discrepancies and conflicts
across boundaries and have a well defined, structured policy framework throughout.
International Financial Reporting Standards (IFRS) are designed as a common global
language for business affairs so that company accounts are understandable and
comparable across international boundaries.
BACKGROUND
When a company adopts any new accounting standard to prepare their financial
statement it may be positively or negatively impact on financial indicators. Sometimes
* Asst. Professor of Institute of Management Study; Email: surajitdas.d@rediffmail.com;
** Director, Professor of Institute of Management Study; Email: tapashsaha@hotmail.com;
METHODOLOGY
Research Methodology comprises of varies steps to solve the problem which are
obtained from the research question.
Sample Design : In this study the sample design used for selecting the Companies
is considered those Companies who are reporting their consolidated financial
statements as per Indian GAAP as well as in IFRS in their annual report.
Sample Size : For attaining the different objectives based on secondary data, the
researcher focused on MCA announcement regarding IFRS convergence in India early
2010.In this announcement, MCA proposed a phase approach regarding this matter. In
the first phase they have considered the conversion of opening balance sheet as at 1st
April 2011 by grouping the Indian companies in to three broad heads. These are :
Group A : Companies that are part of NSE 50 (Nifty 50).
Group B : Companies that are part of BSE Sensex (BSE 30).
Group C : Companies whose shares or other securities are listed on a stock exchange
outside India.
Hypotheses 2
Ho: Discloser of Profitability position did not improve after the adoption of IFRS
voluntarily.
H1: Discloser of Profitability position improved after adoption of IFRS voluntarily.
Hypotheses 3
H0: Discloser of Assets position did not improve after the adoption of IFRS voluntarily.
H1: Discloser of Assets valuation improved after adoption of IFRS voluntarily.
Hypotheses 4
H0: Discloser of Cash flow position did not improve after the adoption of IFRS
voluntarily.
H1: Discloser of Cash flow position improved after adoption of IFRS voluntarily.
TESTING OF HYPOTHESES
Hypothesis I
Hypothesis I aim to test the impact on Liquidity position after voluntary IFRS adoption
by Indian companies. Liquidity refers to a companys ability to meet its continuing
obligations as they arise. To evaluate liquidity of the company, Current ratio and
quick ratio are considered.
PROFITABILITY POSITION
Return on Return on Capital
Assets Return on Equity Net Profit Margin Employed EPS
Year Company IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP
WIPRO 0.15 0.15 0.213 0.234 0.185 0.186 0.1997 0.224 35.25 35.28
ROLTA 0.03 0.03 0.127 0.107 0.069 0.067 0.0363 0.034 15.67 15.2
NTBL 0.2 0.12 0.222 0.159 0.964 0.647 0.2184 0.136 4.45 3.92
2014-15
INFOSYS 0.19 0.19 0.23 0.244 0.231 0.232 0.2289 0.244 109.3 108.3
Dr.REDDY 0.11 0.13 0.199 0.237 0.15 0.159 0.1696 0.198 130.2 137.2
MINDTREE 0.2 0.2 0.25 0.266 0.15 0.151 0.246 0.262 63.65 63.85
Mean 0.15 0.14 0.207 0.208 0.292 0.24 0.1831 0.183 59.75 60.62
Stnd Deviation 0.07 0.06 0.043 0.061 0.334 0.206 0.0765 0.085 51.06 53.03
Median 0.17 0.14 0.217 0.236 0.168 0.172 0.209 0.211 49.45 49.57
ACKNOWLEDGEMENT
The authors wise to express their deep gratitude to Prof.A.Roy, Dean, IMS Business
School ,Prof.MeghdootGhosh and the entire family of IMS for their enormous support
and encouragement.
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ABSTRACT
Micro insurance is the protection of low-income people against perils in exchange of regular
premium payments proportionate to the likelihood and cost of risk undertaken. This section also
throws light on the literature review on the factors affecting micro insurance take up. Then the
paper goes on to identifying the research problem and consequently analyzing the same.
Poor women have traditionally managed and coped with risk by such means as selling assets,
relying on their husbands, pulling children out of school to earn income, or utilizing informal
mechanisms such as helping groups for support. They also practice risk-averse behavior, such
as prioritizing savings over investing and spreading what little investment they have made across
several low risk/low return businesses. While these approaches offer some protection to poor
women, they are frequently limited, inefficient, unreliable, or even harmful. For example, in poor
households, high savings rates mean that women have few remaining resources to invest in
their businesses. Allocating resources in this way stunts their businesses ability to grow and
alleviate poverty.
Micro insurance offers a promising new way for poor women to manage risk. In India successful
micro insurance programs have emerged in recent years as powerful tools to help poor families
cope with risk and alleviate poverty. Women form a significant segment of this market because
they seek micro insurance both for themselves and for their families, serving as risk managers
for entire households. Nonetheless, millions of poor women are uninsured.
The second part of the paper deals with the performance of micro insurance products in Burdwan
district of West Bengal. A sample of 390 respondents from informal sector worker has been
collected from both the districts. With this sample size the paper seeks to explain how the
determinants of micro insurance demand affects insurance take up and its subsequent renewal.
Key Words : Micro insurance, Risk Coping Strategy, Impact
INTRODUCTION
Need for managing financial risks has given birth to the insurance industry which has
become an integral part of global finance system as well as financial system of a
nation: Insurance. Thus provides security for unforeseen future risk, which is required
for both rich and poor. But till few years back insurance facility was not available to
the low-income people.However, the spread of insurance has been uneven. Certain
unprivileged sections of society have not been benefited by insurance products. But
it is well accepted in present that for development of any economy, inclusion of
marginalized and under privileged sections of society is highly necessary, and that is
why micro insurance has become an important insurance mechanism in all emerging
markets including India.
* Assistant Professor, Accounting and Finance, St. Xaviers (Autonomous) College, Kolkata;
Email: sreemoyeeguharoy@gmail.com; Phone: 9830953340
LITERATURE REVIEW
Welfare costs due to shocks and foregone profitable opportunities have been found
to be substantial, contributing to persistent poverty ((Dercon), (Murdoch, 2004)). Micro
insurance has the potential to reduce these welfare costs. By offering a payout when
an insured loss occurs, it avoids other costly ways of coping with the shock leaving
future income earning opportunities intact. Furthermore, the security linked to being
insured can be expected to allow the avoidance of costly risk-management strategies
with positive impacts on poverty reduction. Micro insurance, in conjunction with micro
savings and micro credit, can therefore go a long way in keeping this segment away
from the poverty trap and would truly be an integral component of financial inclusion.
Micro insurance should, therefore, provide greater economic and psychological security
to the poor as it reduces exposure to multiple risks and cushions the impact of a
disaster. Thus, insurance is fast emerging as a prepaid financing option for the risks
facing the poor.
Micro insurance is defined in line with (Churchill, 2006) as an insurance that
1. Operates by risk-pooling
2. Is financed through regular premiums
3. Is tailored to the poor who would otherwise not be able to take out insurance
To understand the impact of insurance initiatives, it is instructive to put it in the
context of how risk shapes the behaviour and decision outcomes of the poor.
According to (Dercon), it is necessary to link risk to its consequences in terms of
outcomes in various dimensions of welfare in the short - and long-run. Households,
communities, firms or societies as a whole, face a multitude of risks. Given their
options and characteristics, they will make risk management decisions, or at least
decisions with implications for risk management. Peoples responses or inability to
respond will again have implications for outcomes, both in the short - run and in the
long - run.
It is worth emphasizing that two distinct decision moments are considered: one when
there is still risk (i.e., a potentially large number of different possible events or
circumstances), and one when a shock (i.e., a realization of one of these possible
events or circumstances) has occurred. The decisions that need to be taken in the
face of risk (risk management or ex-ante strategies) are potentially very different
from those taken in the face of a shock (risk coping or ex-post strategies).
Nevertheless, they cannot be viewed independently, as risk management decisions
will have implications for the possible set of risk coping strategies, while risk coping
will have implications for the type of risk management decisions that can be taken in
the next period. These strategies have been widely acknowledged as a central part
of peoples livelihoods. Households have strategies to cope with ex-post risk, i.e.,
shocks, to smooth consumption and nutrition when shocks happen, even if formal
FOCUS ON WOMEN
Seventy percent of the worlds poor are women. Yet traditionally women have been
disadvantaged in access to credit and other financial services. Commercial banks
often focus on men and formal businesses, neglecting the women who make up a
large and growing segment of the informal economy. Microfinance on the other hand
often targets women, in some cases exclusively. Female clients represent eighty-five
percent of the poorest microfinance clients reached. Therefore, targeting women
borrowers makes sense from a public policy standpoint. The business case for focusing
on female clients is substantial, as women clients register higher repayment rates.
They also contribute larger portions of their income to household consumption than
their male counterparts. There is thus a strong business and public policy case for
targeting female borrowers.
OBJECTIVES
l To study the awareness level of micro insurance among the rural people in both
the districts
l To assess the need of micro insurance product among the low-income people in
both the districts
l To identify the hindrances in the micro insurance policies as suggested by the
low-income people in both the districts
l To study the socio-economic profile of rural women
l To study the perception and understanding of micro insurance by the respondents
l To analyze the factors determining the demand for micro insurance
l To estimate the demand for different micro insurance products
l To explore the other risk mitigating mechanisms undertaken by the respondents
RESEARCH METHODOLOGY
The present paper is empirical in nature. This study is empirical and exploratory in
nature. The study is based on primary data.
Table 12 : Reasons for not purchasing Micro insurance Policies; Field Survey
CONCLUSION
It is evident that the micro insurance sector will soon cease to be influenced by the
rural and social sector obligations. It is fortunate that the insurers have innovated
products and distribution beyond the regulatory requirement to conduct business in
the low income segment. However the regulator needs to respond to the new realities
of the sector. Group based policies, alternative micro insurance products and
distribution innovations have to be brought under the regulation of micro insurance to
protect and accelerate the growth of micro insurance in India.
It is observed that till today the penetration of micro insurance for both life or non-life
is at very low level in India inspire of tremendous efforts from the LICI. Some insurers
are even dumping poorly serviced micro insurance products on clients solely to meet
their targets. As soon as their targets were met, they immediately stopped selling
micro insurance.
Although micro insurance sector has huge potential of growth, but till today insurance
REFERENCES
Churchill, C. (2006). What is insurance for the poor? Protecting the poor, A microinsurance
compendium. International Labor Organisation, Geneva.
Dercon, S. (. (n.d.). Risk, Crop Choice and Savings: Evidence from Tanzania. Economic
Development and Cultural Change, 44(3): 385-514.
Murdoch, J. (2004). Microinsurance - The Next Revolution? In What Have We Learned About
Poverty? (Vols. in A. Banerjee, R. Benabou and D. Mookherjee (Eds.)). New York: Oxford
University Press.
Sen, A. K. (1981). Poverty and famines: An Essay on Entitlement and Deprivation. New York:
Clarendon Press.
ABSTRACT
As far as India is concerned, in spite of a lot of developmental endeavor and optimistic projections,
growth and development of the country has really not been very inclusive. It has been found
out that government reforms have to be complemented with private sector through their Corporate
Social Responsibility (CSR) activities and hence, corporates have to play a proactive part to
achieve this inclusive growth by ensuring the prosperity of the poorer section of the population.
Bandhan (meaning togetherness) believes that Microfinance is not the last word for development
of the poor. Aspiring to holistic transformation in the lives of the deprived communities, Bandhan
offers development programmes in crucial fields of education, health, unemployment, livelihood,
renewable energy, market linkage, skill development and the like through its not-for profit entity.
Besides, Bandhan also has a program exclusively for the hard core poor. Bandhan started their
venture with social projects through Bandhan Konnagar and then spread its wings in the
commercial venture and created Bandhan Bank. This research can be helpful for the overall
economy of the country as encouragement of investment in CSR activities in the rural unorganized
sector would ultimately lead to an equitable development thereby reducing the disparity of wealth
distribution among the various strata of the society, leading to inclusive development.
Key Words : Corporate Social Responsibility, Inclusive Development, Unorganized Sector
INTRODUCTION
Concept and meaning
In a modern, democratic society, business must realize its wider social responsibility.
The time has come for the better off sections of our society-not just in the organized
industry but also in the unorganized sector and all walks in life-to understand the
need to make our growth processes more inclusive; to avoid conspicuous consumption;
to save more and waste less; to care for those who are less privileged and less well
off; to be role models of probity, moderation and charity. As far as India is concerned,
in spite of a lot of developmental endeavor and optimistic projections, growth and
development of the country has really not been very inclusive. To cater to an inclusive
growth of the country, it has been found out that government reforms have to be
complemented with private sector through their Corporate Social Responsibility activities
and hence, corporates have to play a proactive part to achieve this inclusive growth
by ensuring the prosperity of the poorer section of the population. (Athreya, 2009)
* Assistant Professor, The Heritage Academy, Maulana Abul Kalam Azad University of Technology, Kolkata;
Email: sreyasi.ray@gmail.com
** Assistant Professor, The Heritage Academy, Maulana Abul Kalam Azad University of Technology, Kolkata;
Email: arpita.sil@gmail.com
LITERATURE REVIEW
History of CSR in India
The history of CSR can be traced back to the description of the aim of the state
found in ancient Indian literature. Religion played a major role in encouraging charity.
Hindu scriptures highlighted the concept of using wealth for granting charity, performing
sacrifices, and discharging debts (Chatterji, 2014). Merchants donated wealth for social
causes like setting up educational institutions, hospitals, garden, charity homes,
orphanages, etc. Charitable activities were still on traditional lines, like donating to
educational and religious institutions (Chatterji, 2014). The political awakening in India,
on the lines of democratic and secular understanding of freedom, helped in creating
an atmosphere of social justice, equality, individual freedom, and universal brotherhood
(Chatterji, 2014). Mahatma Gandhis call for trusteeship, which promoted the idea of
voluntary renouncement of part of the wealth by the business community for the
good of the community, and also acting as trustee of that wealth to ensure proper
and fair implementation, appealed to the business community. Gandhi clearly
emphasized that trusteeship was neither charity nor philanthropy-it was to be a way
of life. The combined effects of political and socio-economic factors led to the
development of large-scale philanthropy, and famous families like Tata, Birla, Shri
Ram, Godrej, Dalpatbhai Lalbhai, Singhania, Modi, Murugappa Chettiar, Kuppuswamy
Naidu, Mafatlal, Mahindras, and others became the backbone of Indias economic
strength.
METHODOLOGY
In this paper Exploratory research and Descriptive research design have been used.
Exploratory research is a type of research conducted for a problem that has not been
clearly defined. Exploratory research helps determine the best research design, data
collection method and selection of subjects. It should draw definitive conclusions only
REFERENCES
(n.d.). Retrieved April 20, 2016, from www.bandhan.org: http://www.bandhan.org/
Athreya, M. (2009). Corporate Social Responsibility for Inclusive Growth. Indian Journal of
Industrial Relations , 44 (No.3), 347-354.
Chatterjee, D. (2010). Corporate Governance and Corporate Social Responsibility: The Case of
Three Indian Companies. International Journal of Innovation, Management and Technology,
1 (5), 507-510.
Chatterji, M. (2014). Corporate Social Responsibility. 5-94.
Gupta, N. (2014). Corporate Social Responsibility & Inclusive Growth. Global Journal of
Multidisciplinary Studies , 3 (4), 2348-0459.
https://www.pwc.in/assets/pdfs/publications/2013/handbook-on-corporate-social-responsibility-in-
india.pdf. (n.d.). Retrieved October 30, 2015, from www.pwc.in.
Mandal, B. (2012). Corporate Social Responsibility in India. New Delhi: Global Vision Publishing
House.
Shetty, J. Corporate Social Responsibility:A Means for Inclusive Growth. International Journal in
Multidisciplinary and Academic Research (SSIJMAR) , 1 (4).
www.bandhan.org. (n.d.). Retrieved April 20, 2016, from http://www.bandhan.org/report/
bk_mr_2012.pdf
www.bandhancreations.org. (n.d.). Retrieved April 20, 2016, from www.bandhancreations.org.
www.bandhanmf.com. (n.d.).
www.bandhanmf.com/report/coca_2012.pdf. (n.d.). Retrieved April 27, 2016, from
www.bandhanmf.com.
ABSTRACT
Customer Relationship Management is a management system which uses various tools,
technologies, means, methods, strategies, plans which can be both manual or software based
in nature, that helps a business organization to nurture customer relationship and understand
what the customer wants and gives an insight to the expectations of the customers. This
strengthens the position of the organization in the business.
Customer is the key to success for every business. Thus it is very important that customers be
given utmost importance in the business. This idea lays the foundation stone for the development
of CRM system in an organization.
Education sector is identified as an industry as well as a service sector. Students are the key
feature of education sector that paves the way for the success of the education sector.
The students get admitted to a college due to reputation of the college, but it is not assured
that the number of students who took admission would complete the course. There is a possibility
of losing student customers within the course tenure, which is a cause for the organization to
lose money. Thus the process of retention process of the students should be given equal
importance as the admission process.
This paper is a study to find what reasons might be possible for a student to leave a course mid
way and how manual CRM can help the education sector to retain students. What manual CRM
system can be used by the education sector? Further the study considers the students point of
view to find out whether the retention process used by the college would actually help them.
Key Words : Customer Relationship Management, Intervention, Education
INTRODUCTION
Customer Relationship Management has grabbed the spot light in the recent years,
especially in the retail sector contributing to a boost in the sales figures. Customer is
the key to survival for every business. In this cut throat competitive world of business,
the companies need to ensure and stabilize their customer base to establish their
power and existence in the market. John Keith in his work (2005) has sited that
Kotler and Fox in an electronic resource from Oracle Corporation, 2001 highly stated
The best organization in the world will be ineffective if the focus on customers is
lost. (Keith, 2005). Maintaining and nurturing customer relationship is a way to generate
loyal and devoted customers in turn ensuring strong roots in the market.
* Assistant Professor, The Heritage Academy, Kolkata; Ph: 9163861817; Email: bratin.maiti@heritageit.edu
** Assistant Professor, The Heritage Academy, Kolkata; Ph: 9230571998; Email: madhurima.banerjee@
heritageit.edu
*** Assistant Professor, The Heritage Academy, Kolkata; Ph: 9831592063; Email: dipankar.das@heritageit.edu
DATA ANALYSIS
In our study, we have used simple tabulations and pie charts for the data analysis
which are given below:
We have analyzed the respondents feedback on the question: Do you think this
intervention will help you to improve your performance in college?
100 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Figure 3 : Pie Chart Showing Stream wise Frequency-Technical
Interpretation: 87% of the technical respondents agree that intervention system helps
them to improve their performance in college, whereas 13% of the technical
respondents feel that intervention system does not have any effect on their performance
in college.
Do you think this intervention will help you to improve your performance in college?
Gender Number of Agree Number of Percentage of
Students Students Students
Gender-wise
Female 113 Yes 107 95
No 6 5
Male 177 Yes 148 84
No 29 16
Table 3 : Gender wise Frequency Table
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 101
Interpretation: 95% of the female respondents agree that intervention system helps
them to improve their performance in college, whereas 5% of the female respondents
feel that intervention system does not have any effect on their performance in college.
FINDINGS
From the above study we found that out of the 290 students who have given their
views regarding the intervention process of CRM system in college, 107 students
belong to management discipline while 183 students belong to technical discipline.
Out of these 107 management students, 91 students that is 85% of students agree
that the intervention system is helping them to improve their performance in the
college, while rest of the 16 students feel that the intervention system in the college
is not effecting their performance. Considering the 183 technical students, 159 students
that is 87% feel that the intervention system is affecting their performance in effectively
in the college, while 27 students, i.e., 13% feel that the intervention system has no
effect on their performance.
Thus, taking the whole sample into consideration, we derive that 85% of the mangemtn
students and 87% of the technical students agree that the intervention system is
affecting their performance in a positive manner.
Again, analysing the data from another angle, we find that, out of 290 respondents,
177 are boys and rest of the respondents are girls. Out of 177 boys, 148 boys i,e.,
83% of the boys agree that the intervention system is helping them to improve their
performance in college, which leads to the fact that only 17% of the boys feel that
the intervention system has no effect on their performance in college. Considering
the 113 girl students, 107 of the girl student i.e., 95% of the girls feel that the
intervention system is helping them to improve their performance in college, when
remaining 5% feel otherwise.
102 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Thus 95% of the girl students think that intervention system has a positive impact on
their performance in college whereas a lesser percentage, 85%of male students feel
alike.
CONCLUSIONS
From our study, we can therefore conclude that the intervention process of the CRM
system is of utmost importance and it plays a vital role in affecting the performance
of both male and female students, belonging to either management or technical
discipline.
Again, the CRM system is affecting the girl students more than the boy students.
Thus it can be concluded that the second I of Kristopher Krosts success mantra
helps the college in helping the jeopardized students, that is, the students who
have low performance and those that college has a chance of losing.
Thus the colleges should sincerely develop and enhance their intervention system
and implement the system effectively so that the college can extend the effectiveness
of the intervention process of the CRM to the entire batch of students.
REFERENCES
Drea, C. (2004). Student Attrition And Retention In Ontarios Colleges. College Quaterly.
Grant, G. B., & Anderson, G. (2002). Customer Relationship Management:. In R. N. Katz, Web
Portals and Higher Education: Technologies to Make IT Personal (pp. 23-32). Jossey-Bass,
A Wiley Company.
Hussain, M., & Khader, P. S. (2014). ANALYZING STUDENT ATTRITION AND RETENTION IN
ENGINEERING. Singaporean Journal of Scientific Research , 213-218.
Keith, J. (2005). Customer Service in Ontarios Colleges. College Quarterly vol. 8 no. 4 .
Krost, K. (n.d.). Summary of Customer Relationship Management CRM. Retrieved from 12 Manage
The Executive Fast Track: http://www.12manage.com/forum.asp?TB=customer_relationship_
management&S=50
Nair, C., Chan, S., & Fang, X. (2007). A Case Study of CRM Adoption in Higher Education.
Managing Worldwide Operations and Communications with Information Technology (pp.
221 - 224). Vancouver, British Columbia, Canada: 2007 Information Resources Management
Association International Conference.
(2015). Over 50% seats in Bengal engineering colleges vacant. The Hindu.
Renuka S Savant, & Mallaya, R. S. (2013). Education - A Service Industry Thriving on CRM!!
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 103
National Conference on New Horizons in IT NCNHIT (pp. 108 - 111). Mumbai: MET
Institute of Computer Science.
Seeman, E. D., & OHara, M. (2006). Customer relationship management in higher education:
Using information systems to improve the student school relationship. International Journal
of Information and Learning Technology , 24 - 34.
Turner, M. L. (2013, June 25). Colleges customizing campus admissions tours for students.
Retrieved from www.universitybusiness.com: https://www.universitybusiness.com/article/
colleges-customizing-campus-admissions-tours-students
VakilNo1. (n.d.). Colleges and Universities covered under Consumer Protection Law. Retrieved
from VakilNo1.com: http://www.vakilno1.com/consumer-protection/colleges-and-universities-
covered-under-consumer-protection-law.html
104 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Year Wise Impact of Rights Issue
Announcements on the Stock Prices
Dr Swati Mittal*
ABSTRACT
Rights issues takes place, when a company offers existing shareholders a right to purchase
additional shares of the company at a given price, which is at a discount to the prevailing
market price of the stock. There is need to study the significance of this emerging trend, its
signaling effect on share price and its impact on the wealth of the shareholders. The study aims
to check whether efficient market hypothesis holds for Indian stock market or not i.e., whether
there is any movement in share prices before or after the rights issue announcements. The
study includes Top 100 companies rated by Chartered Financial Analyst Survey 2008 and
informational efficiency for last ten calendar periods- January. 2006 to December 2015 has
been investigated. The results show that the Indian Capital Market is semi strong efficient as it
is using the information relevant for security valuation and for investment decision making. The
role of SEBI can be instrumental in preventing insider trading so that the confidence of the
investors is maintained and the stock market can become more vibrant and dynamic.
Key Words : Right Issue, Sensex, Market Efficiency
INTRODUCTION
The basic premise of carrying out rights offer is to raise additional capital. The company
raises money from its existing shareholders, who have seemingly posed their faith in
the company by virtue of being its shareholders, to invest in expanding capacities or
to explore other investment opportunities. This, in turn, provides the company better
leveraging opportunities. A higher equity capital base would assist the company to
raise higher debt. This is because a companys debt-to-equity ratio would stand
reduced, putting the company in a comfortable position to raise further debt from the
market. A rights issue can offer a quick fix for a troubled balance-sheet, but that
does not necessarily mean management will address the underlying problems that
weakened the balance-sheet in the first place.
* *Assistant Professor, S.D College For Women, Moga, Pin 142001; Email Id: swati_goyal08@rediffmail.com
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 105
(i) The offer shall be made by a notice specifying the number of shares offered
and limiting a time not being less than 15 days and not exceeding 30 days
from the date of the offer, with in which the offer, if not accepted, will be
deemed to have been declined.
(ii) Unless the Articles of Association of the company otherwise specify, the offer
shall be deemed to include a right exercisable by the person concerned to
renounce the shares offered to him or any of them in favor of any other
person; and the notice referred to in clause (i) shall contain a statement of
this right.
(iii) After the expiry of the time specify in the notice referred to the above, or on
receipt of earlier intimation from the person to whom such notice is given
that he declines to accept the shares offered, the Board of Directors may
proceed to dispose of such shares offered in such manner as they consider
most beneficial to the company.
2. To employees under a scheme of employees stock option, subject to special
resolution placed by a company and subject to such conditions as may be
prescribed; or
3. To any persons, if it is authorized by a special resolution, whether or not those
persons include the persons referred to in clause (a) or clause (b), either for cash
or for a consideration other than cash, if the price of such shares is determined
by the valuation report of a registered value subject to such conditions as may be
prescribed.
REVIEW OF LITERATURE
By employing market model to investigate the rights issues on the NYSE between
1926 and 1966, (Scholes) documented excess returns prior to the issues and a little
price drop in the month of issues, but no abnormal gains or losses thereafter.
(He, et al.)) evaluated the semi-strong form efficiency of Shenzhen Stock Market by
examining the stock price reactions to releases of restructuring information, financial
information and rights issues. Year-wise empirical results on restructuring information,
financial information and rights issues could not provide support for the semi-strong
form efficiency.
(Marisetty & Veeraraghavan, 2007) examined the securities price reaction to
announcements of rights issues by listed Indian firms during the period 1997
2005.They had documented a positive but statistically insignificant price reaction to
such announcements. The price reaction was significantly more negative for firms
with a family group affiliation compared to firms with no family group affiliation. They
had also found that a higher level of individual shareholding in the firm was associated
with a more positive price reaction to the announcement.
(Khan & Baker, 2007) examined the short-term stock price reactions to announcements
of equity rights offerings in Singapore between 1983 and 2003. They had investigated
whether economic factors lead to different price reactions. The results showed that
the cumulative abnormal returns (CARs) associated with rights issues differ significantly
across economic conditions at the time of issuance. The CARs vary positively with
106 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Tobins q-ratios, which indicate the availability of positive net present value investment
opportunities of the firms issuing the rights.
(Thirumalvalavan & Sunitha, 2007) examined that the abnormal returns result from
the announcement of a rights issue of equity in Australia and it was the first study
outside the U.S. The determinants of the announcement effect were analyzed using
a two-stage approach to control for the end of heterogeneity of the price discount.
The discount was positively related to the offer size and negatively related to
underwriter quality, supporting underwriter certification models. Finally they had found
that announcements made by resource firms generate larger negative reactions than
other issuers.
RESEARCH DESIGN
The study includes Top 100 companies rated by Chartered Financial Analyst Survey
2008 and informational efficiency for last ten calendar periods- January. 2006 to
December 2015 has been investigated. The Analyst 500 companies have been ranked
on the basis of their Net Sales alone. Besides, Net Sales, other parameters, such as
like Profit after tax (PAT), Operating profit or Profit before depreciation and tax (PBDIT),
Operating Profit Margin and Market Capitalization have also been considered.
For the present study, secondary data has been used. For exploring the objectives of
this study, the information disclosure concerning the rights issue announcements have
been collected from BSE (Bombay Stock Exchange) website. Data regarding share
prices and Sensex has been taken from BSE (Bombay Stock Exchange) and NSE
(National Stock Exchange) websites. The data on daily closing values of market proxy
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 107
is obtained from Capitaline Database. Capitaline Database is maintained by Capital
Market Publishers India Private Limited.
Event Study methodology has been used for the purpose of analyzing the corporate
announcements effect. The event study methodology has been extensively used to
assess the impact of an announcement of a particular strategy on the firms stock
prices. This analytical approach is well accepted and has been widely used in various
disciplines such as Finance, Accounting, Marketing, Strategy, E-Commerce and Law.
(Lane & Jacobson, 1995).
The event study methodology has been used to estimate Cumulative Abnormal Returns
(CAR) for a 15 day window period. Market Model Method (Single factor Model) has
been used. The study endeavors to find the Cumulative Abnormal Return (CAR).
Market Model assumes that all inter-relationships among the returns on individuals
assets arise from a common market factor that affects the return on all assets, i.e.,
the expected return on individual assets. The event study methodology has been
extensively used to assess the impact of an announcement of a particular strategy of
the firms stock prices.
108 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
announcement is 7.0778 in 2010 on day 6. The lowest average abnormal returns
(AARs) prior to the date of an announcement is -6.3160 in 2011 on day 4, whereas
the lowest average abnormal returns (AARs) after the date of an announcement is -
3.0860 in 2012 on day 12.
An analysis of movement in Cumulative Average abnormal returns (CAARs) over the
years indicates significant variation. On the announcement day a Cumulative Average
abnormal return (CAARs) of 3.5810 percent in 2010 was highest.
2006 2007
2008 2009
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 109
2010 2011
2012 2013
110 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
2014 2015
Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Days AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%)
-15 -0.1200 -0.3200 -0.0230 -0.6960 -0.8230 -0.0240 -2.3700 0.0924 -0.3450 -0.9920
-14 -0.2950 -0.4350 0.1005 -0.6110 -0.2510 0.0320 -0.3330 -0.2180 -0.5830 -0.8570
-13 -0.1490 -0.4440 -0.0480 -0.1550 -0.5240 -0.3560 -0.4700 0.0353 -0.6980 0.7010
-12 0.1842 -0.0920 -0.1650 -0.1960 -0.4840 -0.1530 0.0830 -0.1330 0.0730 -0.2340
-11 0.1854 -0.1820 0.4060 0.1850 -0.1450 -0.1250 -0.0840 -1.1760 0.1030 -1.3490
-10 -0.1834 -0.2690 0.4080 -0.1820 -0.4360 -0.1790 0.0800 -1.2840 0.0940 -0.3430
-9 0.1830 -0.2660 -0.7410 0.0990 -0.3930 -0.2370 1.0790 -0.3270 0.0390 0.3350
-8 0.1125 -0.2310 -0.7360 0.1240 -0.7070 0.2760 2.0790 -0.2990 0.0110 -2.3530
-7 0.1831 -0.2520 -0.5560 0.1200 -0.8910 -0.3150 0.7790 -0.3110 0.1330 -0.4160
-6 -0.1823 -0.4170 -0.7850 0.1490 -0.7220 -0.3610 0.0780 -3.2810 0.1340 -0.4660
-5 0.1816 -0.4570 -1.0200 0.0710 -0.6000 0.4030 0.0770 -0.2750 0.1070 0.5780
-4 0.2814 -0.5330 -1.2590 -0.0500 -0.8540 -0.4630 2.2780 -6.3160 -0.1100 -0.6580
-3 -0.1808 -0.6600 1.3010 -0.1400 -0.8160 -0.4610 0.0780 -0.3520 0.1880 -2.6350
-2 0.1901 -0.4720 1.1630 -0.2700 -0.8150 -0.3920 0.0760 -0.3870 0.2840 -0.5190
-1 0.1813 -0.3920 -1.1740 -0.0210 -0.9520 -0.3340 0.0750 -2.4170 0.3570 -0.4150
0 -0.1805 -0.3520 -1.2690 -0.1010 -0.8930 -0.3240 0.0760 -0.4160 0.4260 -0.3440
1 -0.3805 -0.2920 -1.2780 0.1470 -0.9770 -0.2990 4.0760 -0.4180 -0.2280 -0.3690
2 -0.1803 -0.3510 -1.4170 -0.1700 -1.0040 -0.3260 0.7500 -1.4110 -0.1290 -0.3470
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 111
Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Days AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%)
3 -0.1798 -0.3340 -1.7680 0.1530 -0.9750 -0.3120 0.0750 -0.4350 -0.0690 -0.3240
4 -0.1587 -0.3170 -1.9200 0.1560 -1.0850 -0.2680 1.0750 -1.4450 -0.0360 -2.3090
5 0.2785 -0.3100 -1.6040 -0.1620 -0.9630 -0.2310 0.0750 -0.3980 -0.0790 -0.3130
6 -0.1789 -0.2950 -1.5320 -0.1640 -0.8080 -0.2110 7.0770 -0.3470 -2.0740 -0.3240
7 0.1790 -0.2780 -1.6180 0.1600 -0.6580 -0.1820 0.0790 -1.3740 -0.0540 -0.3332
8 0.1793 -0.2940 -1.5690 0.1560 -0.6250 -0.1980 3.0800 -0.3910 -0.0530 -0.3510
9 0.1790 -0.3110 -1.4970 0.1520 -0.6870 -0.1980 0.0800 -0.4000 -0.0590 -2.3240
10 0.1287 -0.3050 -1.5690 0.1440 -0.6660 -0.1850 0.0800 -0.4270 -0.0640 -0.3020
11 0.1787 -0.3010 -1.7800 0.1500 -0.6500 -0.1710 6.0800 -0.4180 -0.0710 -0.3190
12 0.1793 -0.3000 -1.9960 0.1550 -0.6330 -0.1690 0.0810 -0.4030 -3.0860 -0.3370
13 -0.1180 0.0567 -0.0690 0.0435 0.1214 -0.3020 -0.0080 -0.0150 0.0580 0.0235
14 -0.2330 -0.5220 -0.0710 0.1589 -0.3090 -0.1630 -0.0790 0.0831 -0.6320 0.0351
15 -0.2280 -0.2710 -0.0790 0.1539 -0.4250 -0.0230 -0.0110 0.0906 -1.0470 -0.0180
Table 1 : Average abnormal returns (AARs) and cumulative average abnormal returns
(CAARs) of Right Issue announcements.
CONCLUSION
The stock market efficiency is one of the most important areas in finance that is
often researched. As no stock market can be efficient in the absolute sense,
researchers have categorized the stock market efficiency into weak, semi-strong and
strong forms. There is strong evidence in favor of Indian stock market being efficient
in the weak form. The limited number of studies on the strong form makes it difficult
to conclude either in favour or against the strong form. Numerous studies have
examined the semi-strong form of Efficient Market Hypothesis and come to conflicting
conclusions. In the light of this fact, this study investigates the semi-strong form of
Efficient Market Hypothesis. The results show that investors perceive the right issue
by the negatively, as the firm is distributing the shares to the existing shareholders
as against floating a new issue in the market. As signaling theory postulates, firms
actions convey some meaningful information to the investors. The values of Average
Abnormal Returns and Cumulative Average Abnormal Returns of all the samples are
equally significant at 95% degree of freedom which means that the share price reflects
the Rights Issue announcements.
112 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
more visible a company, the more perfect its market is likely to be Perfect implies
that most of the likely factors affecting the price of its securities are presumably
known to the market and vice versa. The existence of insider trading or information
leakage can erode the confidence of investors in the instrument and may be viewed
by them more as a tool to deceive than to benefit them. SEBI should mull over the
listing rules, and suitable amendments are the need of the hour to prevent such
practices.
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114 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
REPORT
Demonetization in Emerging Markets :
Boon or Bane
Surajit Malakar* and Dr Ravi Chatterjee**
INTRODUCTION
The Indian economy is one of the worlds fastest growing economies which is
consistently maintaining a growth rate of around 7%. However the shadow economy
i.e. the black money economy is also growing at an alarming pace. Indian economy
is having this tall shadow economy for decades now. This has led to enormous
concentration of unaccounted money in hands of few which is leading to economic
disparity. The Government of India (GOI) is trying to increase penalties for tax evaders
and incentivize honest tax payers. The Government of India therefore introduced an
income declaration scheme whereby it gave tax evaders an opportunity to pay tax on
their unaccounted wealth and fall in line with the honest tax payers. Simultaneously
the Indian government under the leadership of Prime Minister Shri Narendra Modi
took a bold step of demonetizing currency notes of Rs. 500 and Rs. 1000 so as to
pull the noose around the neck of tax evaders. Demonetization is the act of stripping
a currency unit of its status as legal tender (Kumar Prakash, 2016). When any
Government withdraws the legal tender rights of any denomination of currency, it is
known as demonetization. Same was followed when the European Monetary Union
nations decided to adopt Euro as their currency. However, the old currencies were
allowed to convert into Euros for a period of time in order to ensure a smooth transition
through demonetization. Zimbabwe, Fiji, Singapore and Philippines were other countries
to have opted for currency demonetization.
The main intention of demonetization was to curb black money, crack the terror funding
and sever the supply of counterfeit currency notes. The declaration was made by the
Prime Minister himself and the nation immediately welcomed the move. The Prime
Minister asked for 50 days to set things right and the nation was more than willing to
give him that. But then every single person was asking only one question Will it be
good for the nation? Its a simple question with a complex answer. GOI firmly took a
step of demonetization to cut the supply of counterfeit currency notes. There ongoing
debate that terrorist mainly support the infrastructure that pumped fake currency notes
into the country in order to destabilize the Indian economy. Demonetization can render
the entire counterfeit money infrastructure useless in minutes. The question arises
that whether it is right time to force such cash less transaction when a country like
India is struggling to fight against cyber crime.
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 117
Present report argues that demonetization is an initiative to fight against corruption.
This report tries to build upon the fundamentals that emerging country like India
should work upon technology front first and then should implement demonetization in
practice. Demonetization is seen as a long-term gain than short term pain. It has
been very clear that short term outcome of demonetization is shortage of cash for
purchasing necessitates but in long term it can lead to boosting the economy.
118 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
stopped receiving Rs 500 notes for fuel below Rs 300 as they were unable to find
change (Times-City, 2016). There have been instances where parents were left with
dead infant as they could not pay medical bills, father of prospective bride died of a
heart attack brought on by a desperate lack of cash and senior citizens have died
standing in line of ATMs. When politicians fail the people become the opposition and
can cause worry for the government (Ghose, 2016).
Students studying outside their hometowns feel the cash heat as they receive pocket
money from their parents for their daily expenses, which has been disrupted due to
the cash crunch (Times-News-Network, 2016). November month end became Mayday
for many banks in the metro cities of India as anxious customers waited outside the
banks as the salaries got credited (Times-News-Network, 2016). The pensioners were
also in dire state as they were unable to withdraw money from the banks, ATMs and
post office has disrupted their daily lives (Chakroborty & Konar, 2016). On the other
hand E-wallets gain from shift to cashless economy, the digital payments industry
rejoiced but banks are staring at the nightmare of handling the currency system
reshuffle (Economic Times, 2016). Housing prices in 42 major cities across India
could drop by up to 30% over 6-12 months after the demonetisation of high-value
notes, wiping out over Rs 8 lakh crore worth market value of residential properties
sold and unsold by developers since 2008. Housing prices in 42 major cities across
India could drop by up to 30% over 6-12 months after the demonetisation of high-
value notes, wiping out over Rs 8 lakh crore worth market value of residential
properties sold and unsold by developers since 2008.
EFFECTS OF DEMONETISATION
Demonetization has made people insane as Rs 2k notes were being sold over eBay
for 1.5 lakh it was having religious number 786 and the smaller denomination notes
like Rs 20 and Rs 50 were being sold for Rs 900 and Rs 5000 respectively (Sarkar,
2016). The currency crunch has disrupted the entire supply chain. More than 45 lakh
trucks got stranded on highways from Nagaland to Maharashtra, Punjab to UP.
Transportation association from across the country reported that the business has
gone down by 40-50% across all regions which have adversely affected the supply
chain (Rai, 2016). In the state of Kolkata where fish is being eaten almost every day
and in almost all the households, vanished from the market due to the confusion
caused by demonetization. As money started trickling in, the prices for the perishable
products dipped drastically overnight. Overall the retailers and the shoppers both got
distressed in the process. This has specifically affected the wholesale market as the
daily transaction happens in cash and reaches in lakh. The wholesales rates have
come down but at the retailers level the rates are high and is really not helping the
end customers (Times-News-Network, 2016). The newspaper vendors need to by
newspapers from the supplier daily in cash on the other hand 60% of the customers
pay in cash on monthly basis. Due to cash crunch and shortage of lower denomination
notes, it is not only bringing difficulty making payments but also the daily purchase
from the newspapers vendors have come down by more than 50% (Sen, 2016).
The month of November has been the worst ever for the automobile industry, the
sale for the luxury cars has dipped drastically (Times-News-Network, 2016). The used
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 119
car market also sees a drop of 40% as stated by auto financers and organized used
car sellers as more than 70% of used vehicles sell on cash. The used car business
is largely unorganized and only 15-20% vehicles are financed. As a result, the currency
crunch has impacted it more than the new car market (Sengupta, 2016). At the time
of peak seasons the airfares goes up but due to demonetization the airlines are
forced to offer special discounts to fill up planes. In general the airlines are facing a
10% fall in the bookings but are very hopeful that the bookings for holidays in winters
will spike up (Sinha S. , 2016). The real estate sector will be severely hit by the
demonetization decision as the secondary market transactions where 60:40 ratio of
black money had become common (Sinha P. , 2016). The cash squeeze will wipe out
over Rs 8 lakh crore worth market value of residential properties sold and unsold by
developers since 2008 across 42 Indian cities (Times-News-Network, 2016).
Deaths have been reported across the country, after the process of Demonetization
many have lost their balance of mind as they are not able to withdraw cash from
ATMs and are not able to pay for the basic necessities (Times-News-Network, 2016).
Several clinical establishments in Kolkata, India have hiked various charges and
doctors fees after demonetization hit the country. Some of the clinics also plan to
discontinue taking fees in cash and would share their account details in which the
consultation charges can be paid at the end of the month. As this amount gets
accountable the income tax amount will have to be borne by the patients. In all this
new system will bring a hike of 15% in the existing rates (Mitra, 2016). The drug
stockiest see sales drop by 20% in the month of November and consumption at the
retail level was affected by 10%. Diagnostic and health care services experienced a
drop of 15 to 20% as many patients have deferred health checkups and wellness
test due to cash crunch (Mukherjee, 2016).
METHODS
To get view on adverse effect of demonetization and merits of demonetization, several
interviews were conducted. Interview method is particularly useful for drawing out the
outcome based on participants personal experience from some reference phenomena.
Open ended interview was conducted with 13 people. Out of 13 samples, 8 were
working professionals and the rest of the participants were students doing their post
graduation. Each interview was based on the central theme of merits and demerits of
demonetization. The interviews lasted for 50 minutes.
120 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
huge problem in India, many people have lost their jobs and few of them have also
lost their lives.
Additionally a practicing chartered accountant shared his opinion on merits of
demonetization as under:
Demonetization coupled with implementation of GST and simultaneous reduction in
Income-tax rates can have a terrific impact on Indian economy. It would not only curb
the shadow economy but also prevent it from growing back. As there would not be
cascading effect of indirect taxes and income tax rates would be lower, businessmen
will lose incentive to do black marketing. However it should be backed by simple tax
processes and strict laws for tax evasion. Demonetization will cause a great surge in
deposits with banks. This will create a lending pressure on banks thereby reducing
lending rates. Lower lending rates will provide impetus to manufacturing sector and
thereby providing better employment opportunities to the youths of the nation. This
will improve purchasing power and in-turn fuel demand for goods and services. The
Government should however be cautious so that imported goods do not replace local
products thereby increase trade deficits.
Demonetization if implemented in the right spirit will result in higher tax collections
with lower rates of taxes. Higher tax collections will provide the financial might to the
Government to pursue its investment goals in basic infrastructure. With improved
infrastructure the people of the nation will get better public facilities, education and
medical facilities. This will improve the standard of living of the people and prosperity
of the nation.
DISCUSSION
The effect of demonetization on economy depends greatly on the manner in which it
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 121
is implemented and on related rules and policies issued by the Government. Keeping
in view the demonetization policy of Indian Government, the probable adverse effects
are discussed below:
Because of restrictions on withdrawals from banks and limited supply of new currency
notes across the country, there would be liquidity crises. This would induce people to
spend only for the necessities and that also in small quantities. This would lead to
immediate fall in demand of food items and large scale wastage of perishable items
like vegetables. Reduced prices of food items would reduce the rates of commodities
thereby reducing the incomes of farmers. This will adversely affect the purchasing
power of farming community which still forms a major part of Indian economy. This
would result in overall fall in demand of goods across all sectors pushing the economy
towards depression. However the Government can avert this by quickly pumping in
new cash and removing the withdrawal limits along with promoting the use of plastic
money.
The cost of demonetization is unascertainable. Cost of demonetization does not mean
only cost of printing new notes and supplying it into the economy. It also takes in to
consideration the millions of productive man hours wasted in the process of
demonetization. This cost can be controlled only by finishing the demonetization
process in the shortest possible time span. Demonetization will cause a great surge
in deposits with banks. This will cause the banks to lower the deposit rates. Low
deposit rates mean lower interest income for pensioners and retired peoples thereby
forcing them to take jobs even after retirement. The Government should come out
with some kind of pension scheme for retired peoples to support them. Apart from
above it is resulting into inconvenience to general public till the process of
demonetization is completed.
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Times .
Mitra, P. (2016, November 27). As black goes out, docs fees and clinic charges shoot up.
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of India , p. 01.
122 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Sen, S. (2016, December 05). Pay day blues for newspaper vendors. Times of India , p. 04.
Sengupta, N. (2016, November 30). Used car market sees 40% drop in demand. Times of India
, p. 19.
Sinha, P. (2016, November 09). Cash no longer king, reality prices may drop. Times of India ,
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Times of India , p. 02.
Times-News-Network. (2016, November 09). Black out? 500,1000 Notes No longer valid. Times
of India , p. 1.
Times-News-Network. (2016, November 24). Demonetisation: Housing prices to drop up to 30%,
wiping Rs 8 lakh crore in value. Times of India .
Times-News-Network. (2016, November 17). Its economic anarchy, claims oppn; bold mpve,
insists govt. Times of India , p. 01.
Times-News-Network. (2016, November 17). Not a penny to spare, student faces cash heat.
Times of India , p. 02.
Times-News-Network. (2016, November 30). Payday becomes mayday as banks battle shortage
of cash. Times of India , p. 01.
Times-News-Network. (2016, December 04). Rs 9.9L crore old notes back in system, may upset
govt plan. Times of India , p. 15.
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 123
STUDENT CONTRIBUTION
Study of Various Initiatives Taken by District
Panchayat, Ahmedabad
Saurav*
INTRODUCTION
126 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
l Execute plans for the development of the scheduled castes and tribes. Run
ashramshalas for adivasi children. Set up free hostels for scheduled caste students
l Encourage entrepreneurs to start small-scale industries like cottage industries,
handicraft, agriculture produce processing mills, dairy farms, etc. Implement rural
employment schemes
l Set up and run schools in villages. Execute programmes for adult literacy. Run
libraries
l Start Primary Health Centers and hospitals in villages. Start vaccination drives
against epidemics and family welfare campaigns
l Construct bridges and roads
l They even supply work for the poor people.(tribes, scheduled caste, lower caste)
LITERATURE REVIEW
India current population as per the latest estimate is 1.25 Billion which is equivalent
to 17.84% of the total world population making India number second in the list of
countries (and dependencies) by population. (Countries by Population) In the past
decade, the Indian healthcare system has achieved several changes. (Countries by
Population) In 2014, India was declared polio free nation. This is a monumental
achievement, for a nation which accounted for more than 50% of the worlds polio
cases in the year 2009. India has one of the largest private health sectors in the
world but still even today the public health services are very inadequate and lagging
behind. India is experiencing a resurgence of various communicable diseases including
Diarrhoeal Diseases, Cholera, Malaria, Encephalitis, Kala azar, Dengue and
Leptospirosis and there is a need to improve the existing health care facilities to
tackle this insurgency. In the year 1990, maternal mortality rate and infant mortality
rates were 47% and 40% above the international average. In 2012 the life expectancy
in India rose to 65 years from 32 years at the time of independence. Even then,
Indias infant mortality rate (50 deaths every 1000 births) remains among one of the
highest in the world, taking away the life of 2.2 million children every year. More than
half of the countrys children under the age of five are malnourished, and more than
a third of Indians aged between 15 to 49 are undernourished, as to Indias National
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 127
Family Health Survey. Diarrhoeal diseases kill 100,000 children under the age of 11
months in India each year, making water and food-borne infection the second-largest
killer of children after pneumonia. The Wall Street Journal investigation, 2011 into
Indias government-run healthcare system described public hospitals as out of date,
short-staffed and filthy. (Sanjana Govindan Jayadev) India healthcare essentially
comprises of three segments:
l Government sponsored public health system- government hospitals, Primary and
Secondary Health Centers, Nutrition related Centers such as Mid-Day Meal Centers
like Anganwadis etc
l High cost private sector healthcare
l The third are bridges between first and second. They are private in ownership but
are affordable, often at the cost of quality
For a society to be productive it must be healthy. Good healthcare, measured in Life
Expectancy, Maternal Infant and Mortality Rates, Malnourishment Percentage,
Vaccination Coverage and Health Awareness Schemes is critical parameter of a
nations well-being and its economic growth. Healthcare challenges are more at the
rural sectors or for the barefoot man representing the bas of the pyramid as the
chances for diseases to affect them is far higher. Hence, affordable and quality
healthcare is a major milestone to be achieved by the government.
Country/Region Share of Healthcare Healthcare expense Times the healthcare
expense (% of GDP) per capita (2012) expense per capita
PPP USD compared to India
India 4.05% 61 1
South Asia 3.97% 56 0.9
China 5.41% 321 5.3
Brazil 9.31% 1056 17.3
Russia 6.26% 886 14.5
USA 17.91% 8895 145.8
High Income Countries 12.22% 4635 76.0
Sub-Sahara 6.46% 96 1.6
World 10.19% 1030 16.9
Table 1 : Expenditure on Healthcare country wise (Singh, 2015)
From the statistics, mentioned in Table 1 above, India spend around 4% of the total
GDP for healthcare for both private and public, which is comparatively low. Also there
is a large gap in the healthcare systems in urban and rural areas. This inequity is
due to a lack of healthcare resources and infrastructure in the rural sector of the
economy. A major part of the Indian population lives in Rural areas(more than 70%)
which clearly indicates that only about a quarter of the countrys population has access
to quality healthcare services. Majority of the hospitals are privately owned and located
in cities making the healthcare services outreach difficult to the rural people. To meet
this challenge the Indian government has launched the National Urban Health Mission.
128 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
The principal objective of NUHM is to ensure adequate resources and to reduce
health issues for the urban poor. Under this mission, the government pays the
insurance premium for select individuals and works in conjunction with the private
sector. Also to provide rural healthcare amenities, National Rural Health Mission
(NRHM) was launched. NRHM also aims to help remove some of the burden on
healthcare facilities on healthcare systems in the cities. (Healthcare in India)
To meet Health related issues at both urban and rural levels, many initiatives and
schemes have been initiated by central government and state governments. Many
other schemes are designed and Implemented by local governing bodies at district
levels independently or by the help of some social organizations or CSR funds. Some
basic healthcare related schemes started by the Government are Rashtriya Bal
Swasthya Karyakram (RBSK),Janani Shishu Suraksha Karyakram (JSSK),Rashtriya
Bal Swasthya Karyakram (RBSK),Rashtriya Swasthya Bima Yojana and many more.
There are many schemes categorized by age groups like for the Infant, Child,
Adolescent Girls, Pregnant Women, TB etc. (Rashtriya Bal Swasthya Karyakram
(RBSK)) (MoH&FW, 2005)
RESEARCH METHODOLOGY
Data collection for this study is done in context to schemes by the District Panchayat,
Ahmedabad and its impact on the rural masses. There is a data mix of primary and
secondary data. The data collected for various initiatives under the study shows the
development activities taken by District Panchayat Ahmedabad towards civil health
especially towards the young. Research design is descriptive in nature with survey
method being used to complete the study. The primary data collected was as per the
questionnaire set by the District Authorities and the data was provided form various
legal government sources. The sampling technique is convenience in style. The
secondary data is the exact figures observed and recorded with the concerned facilities.
FINDINGS
There are about twenty-three schemes of Central Government and State Government
which is delivered to the rural mass by District Panchayat, Ahmedabad along with
some of its local schemes. The data is collected at various levels for the schemes
and analyzed. Before discussing about the schemes, some data specific to Health
Department of State is collected such as Population, Economic classes, Health Centers
(CHC, PHC & SHC), Total number of doctors across various health centers and total
number of patients addressed across these health centers.
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 129
Total Revenue Villages in District Health Centres
461 CHC-10
PHC-37
SC-214
DH-1
Table 3 : Table 3- Health Center details of Ahmedabad District (District, 2015)
130 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
2013-2014
Number of Total Institutional Deliveries Proportions of CY
Name of Taluka doctors enrolled deliveries under CY deliveries of total
institutional deliveries
Dascroi 3 10040 453 5
Viramgam
Mandal
Detroj 4 9109 672 7
Sanand 2 5654 17 0
Dholka 3 6786 613 9
Bavla 5 3825 38 1
Dhandhuka 1 4095 115 3
Barwala
Ranpur 3 3809 210 6
Total 21 43318 2118 5
132 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
Proportion (%) of children aged 6 months to 6 years who were weighed
at AWCs in Ahmedabad district and found to be underweight (2010-2015)
Region 2010 2011 2012 2013 2014 2015
Ahmedabad district 48.21 35.14 31.15 26.13 17.48 8.74
including AMC
Daskroi 54.33 40.19 38.84 16.83 13.34 3.57
Viramgam 55.77 39.78 30.04 28.44 10.55 4.03
Mandal 57.35 37.62 36.46 38.57 11.54 6.46
Detroj 60.25 48.26 38.37 41.65 19.32 9.76
Sanand 54.2 37.57 28.55 18.85 11.03 5.39
Bavla 48.97 36.64 28.87 21.44 10.57 4.47
Dholka 47.91 28.71 26.45 20.27 10.73 3.86
Dhandhuka 52.72 35.92 32.14 18.52 7.74 2.75
Barwala 54.24 31.75 21.48 20.86 6.21 1.86
Ranpur 53.98 17.37 24.97 23.27 14.45 2.04
Ahmedabad Municipal 43.52 35.5 31.78 29.21 23.25 13.19
Area (AMC)
Ahmedabad district 52.94 34.77 30.44 22.77 11.22 4.22
excluding AMC
Table 9 : Underweight Children data (data, 2010-2015)
The data collected for various initiatives were recorded as mentioned in the findings
and compared with the previous year data. The performance of the organization was
realized using the comparison method and this helped the team to develop new
strategies for better outreach making inferences form the data.
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 133
system faithfully serves. The existing strengths of the public health system can be
leveraged to gather more data that are helpful in accurately assessing performance,
revising existing programs and introducing new ones. Partnership with the private
sector can be extended to NGOs and research institutions to design ways to monitor
health care provision in real-time and help to make data driven decisions. The presence
of several reputable NGOs and academic institutions working on health can be
leveraged to fill the gap in service provision (such as lack of specialists at CHCs) as
well as explore ways to strengthen the public health system in general.
(The suggestions considered confidential as per concerned authorities have not been
mentioned in the report as per government policies.)
GLOSSARY
l PHC : Primary Health Centre
l CHC : Community Health Centre
l NGO : Non Government Organization
REFERENCES
CHDO, A. ( 2010-2014). Chiranjivi Yojna Data. Ahmedabad.
Commissionerate of Health, M. S. Child healthcare data-Source: Health Statistics. Gandhinagar.
Commissionerate of Health, M. S. Number of Public Healthcare facilities in Ahmedabad District.
Gandhinagar.
Commissionerate of Health, M. S. Taluka wise average population served by various healthcare
centers. Gandinagar.
Commissionerate of Health, M. S. (2013-14). Vitamin A first dose coverage in Ahmedabad district.
Gandhinagar.
Countries by Population, 2. (n.d.). Worldometers.info. Retrieved from http://www.worldometers.info/
world-population/population-by-country/.
data, I. p. (2010-2015). Underweight Children data. Ahmedabad.
District, H. C. (2015). Compiled from the data of CDHO, Commissionerate of Health, Medical
Services, Medical Education and Research. Gandhinagar.
India, C. (2011). Retrieved from http://censusindia.gov.in/
MoH&FW. (2005).
Sanjana Govindan Jayadev, C. H. (n.d.). 3 ways to crack healthcare challenges in India. Retrieved
from World Economic Forum.
Singh, D. A. (2015). Advantage India. Harper Collins.
134 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
BOOK REVIEW
Book Review
Profile of Author
Dr. J. K. Sharma, M.Sc., Ph.D., had been teaching at the Faculty of Management
Studies, University of Delhi, since 1985. He has had over 25 years of teaching
experience in Operations Research, Business Statistics, mathematics and Logistics
Management. He was awarded the Gold Medal for securing First-Class-First rank
in his M.Sc. (Mathematics) examination. He has taught as a Visiting Professor at
Group ESSEC (a Graduate School of Management) in France. He has authored
16 books and over 100 research papers and/or case studies and is actively
involved in guiding students for their doctoral work. (http://www.pearsoned.co.in/
web/authors/1396/J-K_Sharma.aspx)
Review
This book is meant for the study of Operations Research Techniques applicable
to Business Decision Making. It is apt for students of MBA, PGDM and M Com.
Spread over 26 chapters, it covers the conceptual applications of Linear
Programming methods, including the Simplex Method, Revised Simplex Method,
Dual Simplex Method, Duality, Integer Programming, Sensitivity Analysis, Parametric
Linear Programming, and Transportation Problem. It also covers Decision Theory,
Game Theory, Queuing Theory, Inventory Control, Simulation and Markov Chains.
Each chapter initially explains the algorithms in utmost simplistic terms and follows
up the same with very many Worked-Out Examples and Solved Case lets. The
Case lets are quite realistic and can relate to pragmatic real-life Business
Management issues. Chapters end with Self-Practice problems and Review
Questions that are further sub divided based on the application area of Business
Management. However, the mathematical derivations of results and formulae are
ignored. This book, thus it is an excellent supporter tool for the student studying
the subject on his own and for the faculty trying to get the mathematical subject
of Operations Research to an academically diverse section of students.
In a vastly digital era, it would be wishful to have a PowerPoint accompaniment to
such a renowned text book. In spite of the same it continues to be a delight for
the teaching fraternity of Operations Research.
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 137
Book Review
Review
Social media marketing has come long way ahead of being only a marketing
buzzword. We, as consumers, as social animals, are interacting online more
socially. This has forced marketers to leverage the social through the media
tools. Thus, how to effectively use the social networking platforms to the best
advantage of the marketer has become the most crucial issue. With this book, it
will be easier to traverse through the vast ocean of how social web technologies
work, and how to reach its frequent users more efficiently.
The author, Tamar Weinberg is one of those few experts who can cut through the
clutter of jargons and hypes to show how to use the social web as a voice. A
marketer has to listen to the voice, how and on what people are conversing about
and is bound to respond.
The book is divided into twelve chapters, starting with an introduction to social
media marketing and ending with putting all the pieces together. It covers all major
social networking platforms in between, like Twitter, Facebook, LinkedIn,
bookmarking sites, and podcasts, and explains how to use them for marketing
gain. There are a large number of case studies and examples that reinforce the
concepts better and endnotes that supplement the study. There is also a list of
recommended reading for the eager learner. Overall, the book is an educating
yet interesting read.
138 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
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