University of Mumbai

GNVS Institute of Management

GTB Nagar, Sion-Koliwada (E), Mumbai-400037

Final Year Project Report

A.Y. 2017-18

Submitted in Partial Fulfillment of

Masters in Management Studies
(Specialization: Finance)
Topic I: General Management : Plastic Industry
Topic II: Functional Analysis : Digital Payment Sector
Topic III: Social relevance : NGO Visit

Submitted by:
Name: Diana Dharamsi
Roll No: 201645

Under the Guidance of

Professor Name: Dr. Latha Sreeram

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 DECLARATION

I hereby declare that the Final Year Project Report submitted for the MMS Degree
programme at GNVS Institute of Management (Affiliated to University of Mumbai) is my
original work and is conducted in under the guidance of Prof. Dr. Latha Sreeram

Place: Mumbai

Date:

(XXXXXXXXXXX)

Signature of the Student

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 CERTIFICATE

This is to certify that the Final Year Report is the bonafide work, which carried out by
Ms. Diana Dharamsi, student of MMS programme, at GNVS Institute of Management
(Affiliated to University of Mumbai) during the period of December 2017 to March 2018,
in partial fulfillment of the requirements for the award of the Degree of Master in
Management Studies.

Place: Mumbai
Signature of Student
Date:

Signature of Internal Guide Signature of External Examiner

College seal Signature of Director

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 ACKNOWLEDGEMENTS

I wish to express my gratitude to Sister Maria Joseph from the NGO - Missionaries of
Charity for providing me valuable information and guidance for the NGO Project.

I am grateful to GNVS Institute of Management for giving me an opportunity to pursue

MMS programme. I wish to thank Dr. R. K. Singh, Director, GNVS Institute of
Management who has been a perpetual source of inspiration and offered valuable
suggestions.

I am indebted to my Guide Dr. Latha Sreeram, GNVS Institute of Management, for

providing guidance, support, and encouragement throughout my internship Study.

I would like to express my thanks to all people from the Missionaries of Charity for their
support and guidance from time to time during my internship programme.

Place: Mumbai
Date:

Signature of the student

( Name : Diana Dharamsi )

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5
 TABLE OF CONTENTS
PROJECT I : GENERAL MANAGEMENT : PLASTIC INDUSTRY
SR.NO. TITLE PAGE NO.
1 INTRODUCTION 9

2 LITERATURE REVIEW 41

3 RESEARCH METHODOLOGY 46

4 CONSOLIDATED RESULTS 79

5 CONCLUSION 80

PROJECT II : FUNCTIONAL ANALYSIS : DIGITAL PAYMENT SECTOR

SR.NO. TITLE PAGE NO.
1 INTRODUCTION 82

2 LITERATURE REVIEW 105

3 RESEARCH METHODOLOGY 115

4 CONSOLIDATED RESULTS 150

5 CONCLUSION 156

PROJECT III : SOCIAL RELEVANCE : NGO VISIT

SR.NO. TITLE PAGE NO.

1 INTRODUCTION TO THE NGO 160

2 FEATURES OF THE NGO 168

3 STUDENT PROJECT ACTIVITY-OBJECTIVES 174

5 ACTIVITIES CARRIED OUT AT THE NGO 175

6 CONCLUSION 186

BIBLOGRAPHY 187

ANNEXURE 190

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PROJECT I : GENERAL MANAGEMENT : PLASTIC INDUSTRY

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 EXECUTIVE SUMMARY

The Indian plastic industry is making significant contribution to the economic

development and growth of various key sectors in the country which includes
Automotive, Construction, Electronics, Healthcare, Textiles, and FMCG. Today, the
plastic processing sector comprises over 30,000 units involved in producing a variety of
items, gaining notable importance in different spheres of activity with per capita
consumption increasing. The plastic processing industry has the potential to contribute
in bringing foreign investments and thus India’s vision of becoming a manufacturing
hub.

Moreover, in the last decade, several new applications of plastic products have
emerged in several sectors boosting the industry further. For example, long fiber
reinforced thermoplastic for automotive industry, fibers that can trap infra-red radiations,
packaging that can increase the shelf life of products etc. have created demand for
plastics which were in their nascent stage in India.

However, despite having a good growth potential, the plastic processing industry faces
many challenges in terms of environmental myths, lack of advanced technology, limited
infrastructure, & high volatility in feedstock prices. To overcome these challenges,
significant efforts will have to be made by all the stakeholders to realize the real
potential of this industry.

This project carries out the ratio analysis of 5 companies from the Plastic Sector namely
Supreme Industries, VIP Industries, Nilkamal Ltd., Cello Wimplast and Plastiblends Ltd.
On comparing the ratios, a final conclusion is to be drawn as to which company is better
amongst the five. Also this project highlights the overall position of plastic industry, the
current challenges faced by the industry and the opportunities available.

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 1. INTRODUCTION

1.1 OVERVIEW OF INDIAN PLASTIC SECTOR

The Indian plastics industry made a promising beginning in 1957 with the production of
polystyrene. Thereafter, significant progress has been made, and the industry has
grown and diversified rapidly. The Plastics Industry in India has made significant
development since its inception in1957 by producing Polystyrene .The chronology
polymer manufacture in India is as under :-

 1957~~Polystyrene
 1959~~Low Density Poly ethylene (LDPE)
 1961~~Poly Vinyl Chloride(PVC)
 1968~~High Density Poly Ethylene(HDPE)
 1978~~Polypropylene

The Indian plastics industry produces and exports a wide range of raw materials,
plastic-molded extruded goods, polyester films, molded / soft luggage items, writing
instruments, plastic woven sacks and bags, polyvinyl chloride (PVC), leather cloth and
sheeting, packaging, consumer goods, sanitary fittings, electrical accessories,
laboratory / medical surgical ware, tarpaulins, laminates, fishnets, travel ware, and
others.

The Indian plastics industry offers excellent potential in terms of capacity, infrastructure
and skilled manpower. It is supported by a large number of polymer producers, and
plastic process machinery and mould manufacturers in the country.

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Among the industry’s major strengths is the availability of raw materials in the country.
Thus, plastic processors do not have to depend on imports. These raw materials,
including polypropylene, high-density polyethylene, low-density polyethylene and PVC,
are manufactured domestically.

The industry spans the country and hosts more than 2,000 exporters. It employs about
4 million people and comprises more than 30,000 processing units, 85-90 percent of
which are small and medium-sized enterprises.

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1.2 STRUCTURE OF INDIAN PLASTIC SECTOR

The entire chain in the Plastic industry can be classified into:

(A) Upstream sector: Manufacturing of polymers and
(B) Downstream sector: Conversion of polymers into plastic articles

The upstream polymer manufacturers have commissioned globally competitive size

plants with imported state-of-art technology from the world leaders. The upstream
petrochemical industries have also witnessed consolidation to remain globally
competitive.

The downstream plastic processing industry is highly fragmented and consists of micro,
small and medium units. There are over 30,000 registered plastic processing units of
which about 75% are in the small-scale sector. The small-scale sector, however,
accounts for only about 25% of polymer consumption. The industry also consumes
recycled plastic, which constitutes about 30% of total consumption.

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1.3 PROCESS FOLLOWED BY PLASTIC SECTOR

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1.4 ECONOMIC ANALYSIS OF PLASTIC SECTOR

India is well recognized Plastic hub in the world because of its low cost production.
Cheap labor, easy availability and low cost of raw materials and weak currency are the
factors that are driving Plastic Industry. India is one of the largest producers of Plastic in
the world and is expected to become 3rd largest plastic manufacturer by 2020. Plastic
production began in 1957 with production of polystyrene. As of now, there are more than
2000 exporters of plastic in the country and more than 30,000 manufacturing plants are
available, most of which are small or medium sized enterprises. Plastic industry gave
job to 4 million people in India.

India is currently ranked among the top five global consumers of polymers and has over
30,000 plastic processing units employing more than 4 million people across the
country.

India exports both plastic raw materials and finished products to over 200 countries
across the globe. India’s plastics exports for April-December 2017 stood at $5.46bn, up
14.4% year on year, due to increased exports to the US, Europe and also to emerging
markets in Latin America, Africa and ASEAN, according to data from PLEXCONCIL.

The plastics processing industry has grown at a CAGR of 10% in volume terms from 8.3
MMTPA in FY10 to 13.4 MMTPA in FY15 and is expected to grow at a CAGR of
approximately 10.5% from FY15 to FY20 to reach 22 MMTPA. In value terms, the
plastic processing industry has grown at a CAGR of 11% from INR 35,000 Cr. in FY05
to INR 100,000 Cr. in FY15. 8.3 22 FY10 FY15 FY20 10%.

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Plastic sector expected to deploy 180,000 machines in 2020 from the currently 120,000
machines. India’s plastics industry is targeting at least a 3% share of the global polymer
export market by 2025, to be achieved by a combination of capacity expansion and
technology upgrades. The target represents a tripling of the current share of 1% of the
global market, which is currently estimated at more than $850bn.Export of plastic goods
from India expected to double from 7.9 Billion US$ currently to about 15 Billion US$ in 5
years

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The Indian plastics industry is expected to grow at an annual rate of 8-10%, with
domestic polymer consumption expected to double by 2028.Because of this, the
government is pushing for plastic parks to expand production capacity to meet domestic
demand, as well as increase India's exports. PLEXCONCIL and other industry bodies,
in collaboration with the Indian government are reaching out to the SMEs to encourage
them to expand production. Domestic consumption of plastic is expected to touch 20
million Metric Tons by 2020.

Plastic processing is the pillar of economy in most of the advanced economies. Per
capita consumption of the world is 28 kg whereas India’s 11 kg and China 38 kg, Brazil
32 kgs. USA, Germany, UK, Italy, Spain, Australia, Japan, Korea, Taiwan it is more
than 100 kg. This means India has big potential to grow and many opportunities.
India’s per capita consumption one of the lowest in Asia.

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1.5 KEY GROWTH DRIVERS

The growth rate of the Indian plastics industry is among the highest in the world, with
plastics consumption growing at 16% per year (compared to 10% p.a. in China and
around 2.5% p.a. in the UK). Considering a growing middle class (currently around 50
million) with low per capita consumption of plastics (currently 9.7kg per head), this high
growing rate is likely to continue, as the per capita consumption of plastics will inevitably
increase. The Plastindia Foundation estimated that plastics consumption in India is
likely to reach 16kg.

Although India’s plastics industry has been hit by the country’s general economic crisis
over the last two years, including the weakening rupee, underlying economic activity
remains strong as the usage of plastic is growing in more and more sectors, opening
new markets and replacing traditional materials.

As domestic plastics demand and consumption in India continue to grow at about twice
the rate of India’s overall economy, polymers is one of the highest segments with an
expected growth rate of between 8-12% a year through 2020. India’s plastics industry

16
believes the market will see more than double its polymer consumption by 2020,
reaching 20 million metric tons. Indian Plastics Exports According to the Plastics
Export Promotion Council, known as PLEXCONCIL, the exports of the Indian plastic
industry have reached over USD 7.6 billion in 2014-2015, and aim to reach USD 10
billion by 2015-2016, from only $16.5 million worth of exports in 1955-56.

The Indian plastic and petrochemical sector has a huge potential for growth and there is
a need for free trade agreement (FTA) and duty inversion to make cost of manufacture
in the country cheaper. The plastic sector has a huge potential for development and
there is a great scope for consumption in sector of housing, public infrastructure and
agriculture.

Technical Upgradation fund is applicable at present in pharmaceutical and textile sector,

which may also be considered and discussed for plastic and polymer sector. The basic
problem with plastic is its management. We invite the industry to participate pro- actively
in plastic waste management.

A favorable cost benefit ratio and a versatile range of applications encourages the
growth of plastics. The properties of these materials can be customized to meet specific
demands by varying the chemical properties like molecular weight & side chain
branching or by making copolymers and polymer blends. Major reasons for the growth
of the plastic processing industry are growth in the end use segments and higher
penetration of plastics in various industry segments. The following figure illustrates
major growth drivers for various industries

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The government policy to push investment in infrastructure is expected to lead to rise in
consumption of plastic products in the country, according to a knowledge paper -
‘Sustainable infrastructure with plastics’ – jointly prepared by FICCI and Tata Strategic
Management Group (TSMG).

With Government's current campaign on 'Make in India' which has a special focus on
the chemical industry and aims to turn the country into a global manufacturing hub, a
tremendous growth in the plastic processing sector is expected especially in
downstream industries. The government should not hesitate to provide better
infrastructure and favorable policies. With a step already being taken in that
direction, plastics are bound to find tremendous use in the infrastructure space,” said
the paper.

The Government of India is taking every possible initiative to boost the infrastructure
sector with investments of INR 25 lakh crore over the next 3 years in roads, railways
and shipping infrastructure. Investments in water and sanitation management, irrigation,
building & construction, power, transport and retail have been encouraged. Plastics play
an important role in these sectors through various products like pipes, wires & cables,
water proofing membranes, wood PVC composites and other sectors. Consequently,
higher investments in these sectors will drive the demand for plastics.

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The knowledge paper stated that plastics processing industry has grown at a CAGR of
10 percent in volume terms from 8.3 MMTPA in FY10 to 13.4 MMTPA in FY15 and is
expected to grow at a CAGR of 10.5 percent from FY15 to FY20 to reach 22 MMTPA. In
value terms, the plastic processing industry has grown at a CAGR of 11 percent from
Rs 35,000 crore in FY ’05 to Rs 100,000 crore in FY15.

The current low levels of per capita consumption (11 Kg), increased growth in end use
industries, higher penetration of plastics in various existing applications and ever
growing range of new applications could further propel the growth of plastics in India.

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1.6 CHALLENGES FACED BY PLASTIC PROCESSING INDUSTRY

1. Highly fragmented plastic processing industry

The Indian plastics processing industry is highly fragmented and small and micro
players constitute majority of the units. Indian Petrochemical Industry is facing intense
competition from the Middle East countries where price of feedstock ranges between
one-fifth to one-tenth which is the prices prevailing in international markets.

India's plastics market depends on labor intensive equipment which has adversely
impacted the productivity. Unreliable power and high energy costs in India as compared
with other countries are also constraints which hamper capacity utilization.

2. Environmental hazards

While the usage and benefits of plastics are manifold, it invariably gets branded as a
polluting material. Plastics, being a polymer derived from crude, are made up of long
chains of carbon. It takes years for them to decompose completely. Improper disposal
of plastics leads to ground water pollution, disturbance in soil microbial activity along
with releasing of carcinogenic chemicals in the atmosphere leading to health issues
among people. The other life forms also get affected due to this imbalance in value
chain, with stray cattle feeding on thrown-away plastics. These adverse impacts are
alarming the society and industry to ensure proper disposal of plastics. Both
government as well as industry needs to come forward to cater to this issue and
sensitize the general mass to follow the ritual of recycling waste plastic products. If
plastics can be collected and disposed off or recycled as per laid down guidelines/rules
then the issue of plastic waste can be suitably addressed. There is wide scope for
industries based on re-cycling of plastics waste.

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3. Want of newer technologies

The Indian Plastic processing industry has seen a shift from low output/low technology
machines to high output, high technology machines. There has been some major
technological advancement of global standards leading to achievements. Focus to
develop a state-of-the-art R&D is dying down with more focus on increasing the
capacity utilization. Domestic machinery is manufactured as per the current technology
to improve productivity and energy efficiency, in order to enable the processors to
compete globally. Key machineries are imported from Europe, the U.S. and Japan
which invite a 7.5%customs duty resulting in huge losses. India's technical needs are
acute in areas like high production and automatic blow molding machines, multilayer
blow molding, stretch/blow molding machines, specific projects involving high capital
expenditure like PVC calendaring; multilayer film plants for barrier films, multilayer cast
lines, BOPP and non-woven depend exclusively on imported technology/machinery.

4. Price and Currency Volatility

Cost of plastic processing is largely correlated to crude oil price which is a major
determining factor for polymer raw materials. It is worthy of note that crude oil prices
have experienced a heightened degree of volatility in the recent past, wherein prices
have plummeted to around USD 50/bbl in 2016 from USD100/ bbl in 2014. Further, with
a large number of raw materials being imported into India, currency volatility also poses
as a significant challenge to plastic processors.

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1.7 KEY OPPORTUNITIES FOR PLASTIC INDUSTRY

1. Plasticulture

Plasticulture can play a key role in energy conservation. It essentially stresses on the
use of plastics in agriculture, horticulture, water management, food grains storage and
related areas. A multitude of plastic materials may be employed in Plasticulture
applications such as water conservation, irrigation efficiency, crop protection, including
farm output practices like crop storage and transportation. Growing population and
decreasing size of arable lands has necessitated the need to employ clean, green and
sustainable practices to save resources and enhance productivity. Usage of plastics in
agriculture can lead to:

• Yield improvement up to 50-60%

• Water savings up to 60-70%
• Prevention of weeds growth
• Soil conservation
• Protection against adverse climatic conditions
• Fertilizer savings up to 30-40%
• Reduction in post-harvest losses
• Conversion – cold desert/wasteland for productive use

2. Growth in key end-use industries

The industries which plastics cater to heavily are FMCG, Construction and Infrastructure
and Agriculture. Increasing population, growing urbanization and shift in lifestyle has
pushed these sectors to gain a high growth in past decade. This has prompted a
double-digit growth for plastics in India. With sectors like pharmaceuticals, personal and
home care, etc. emerging in the rural areas and reinforced efforts in bringing out
innovative plastic products, the industry is expecting further uplift in near future.

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3. Growing interest in Bio-Plastics

Growing interest in green products, healthier lifestyles and growing concern to protect
environment is leading to a shift towards bio-plastics. Bio-plastics are plastics that
contain bio based content, are biodegradable or both. Many polymers like PLA (Poly
Lactic Acid), PHA (Poly Hydroxyalkanoates), Bio PTT (Poly Trim ethyl Terephthalate),
Bio PDO (Propanediol) etc. are the part of this upcoming trend.

These plastics are significantly made of renewable materials like bio mass and save up
to 40% energy in production as compared to their petrochemical counterparts.

The market for this product is still in its infancy. High cost of bio-plastics, lack of clear
understanding and infrastructure, limited amount of funding available are acting as
constraint to the evolution of this segment. However, increasing stress on green
chemistry is expected to bring down the cost, also increasing environmental awareness,
positive attitude from government, continuous R&D efforts and shift in consumer
preference towards environmental friendly option will lead to the evolution in demand of
this industry.

4. Effective Waste Management

Plastic has low energy requirements during production, hence considered to be energy
efficient. It consumes ~25% less energy in production compared to other alternatives. It
results in lower emission of CO. Thus when compared to glass or aluminum plastics
results in lighter environmental footprint. However, plastic is a sustainable choice only if
recycled and disposed of properly. This can be achieved mainly through segregation of
waste at source, promotion of waste management infrastructure and the increased the
use of bio-based plastics.

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1.8 IMPACT OF GST ON PLASTIC INDUSTRY

Plastic might prove to be the next bottleneck when it comes to GST as, from rakhis to
furniture; manufacturers are finding it difficult to understand the taxation. “Will my tax be
28% as I make furniture or can I mark it down to 18% as it's a plastic item?“ is the
common question arising in the minds of plastic makers.

The same confusion prevails for SMEs producing bindis, bangles and puja threads.
While they are exempt from tax, some fear the use of plastic, glitters and faux flowers
can add to the price and the tax element. Same is the case with bangles -while plain
bangles are exempt, shellac bangle makers have been asked to pay tax of 3%. So does
one have to pay tax for silk or glass or plastic bangles is a question that small
manufacturers have.

With bindi or bangle, there would be 0% tax. Manufacturing a product using two or three
items like glue, plastic does not change what the end product is. The manufacturer
would have paid the GST for purchasing glue as a raw material and plastic as a raw
material. So the end product -bindi -will not be taxed and there can be input tax credit,
because of earlier taxes on the same.

But for a product like plastic flower pots, swings or ham mocks, it might be more difficult.
The item is made 100% from plastic and usually no other ingredient is added. So it is
possible that makers can just list them as plastic items for the purposes of tax and not
furniture. It will be take a year before such issues are properly addressed. They are
highly technical and the government has constantly been posting updates. For instance,
this issue on shellac bangles at 3% was clarified in a recent FAQ. So we can expect
more such clarifications.

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Among other reasons MSME manufacturers of small plastic items might get hit is the
rate of taxation and the size of industries.

The plastics industry has raised objection to high GST rates fixed for some plastics
items of day-to-day use.Pointing to serious anomalies in GST rates, Plastindia
Foundation said though the GST rate has been kept below 12 per cent on some of the
plastic products, a large number of plastics items were placed in the 18 per cent and 28
per cent tax brackets.

However, the GST Council had decided that items of day-to-day use at 5 per cent or
lower standard GST rate of 12 per cent, it added.

The overall increase in tax will not only hit thousands of small and medium plastics
industries but also the poor and middle class who have to face the increase in plastic
product prices, it added.

Under 28% tax bracket

A few items such as plastics furniture, tarpaulin woven and non-woven raffia fabric,
plastics for office and school supplies, PVC floorings, PE interlocking mats, vacuum
flasks and other miscellaneous articles of plastics which are mainly used by common
man have been kept under highest GST tax bracket of 28 per cent.

Though light weight and low in cost plastics furniture is voluminous article incurring
huge transportation, storage and distribution costs. The GST rate of 28 per cent on
these items will be very prohibitive.

Further, under the present indirect tax regime, the Central Excise is to be paid only up
to manufacturing stage but under GST tax regime the CGST impact will be on sale to
consumer.

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In fact, the Ministry of Chemicals and Fertilizers, the parent ministry, had recommended
GST rate of 12 per cent on all plastics raw materials, machineries and plastics finished
products.

Given the tax burden on plastic products, higher taxes on plastics industry will impact
the industry and create inflationary pressure on economy.

While whole heartedly welcoming introduction of GST, the plastics industry urged the
government to remove the anomalies in prescribed GST on various plastics items of
day to day use and common man’s use. As per decision of GST council, items of day
to day use were supposed to attract merit GST rate of 5% or lower standard GST rate
of 12%. Some of the items were supposed to be under higher standard GST rate of
18%. Only luxury goods were supposed to attract 28% GST rate.

But, it seems while fixing GST rate on many plastics products may have escaped
attention of GST council. Pointing at the dangers of hurting the poor and middle-class
of India, industry leaders made a plea that plastic products are mostly used by
common man, poor and middle class and hence should be considered as merit item
in everyone’s daily life.

While some of the plastics products have been kept below 12% tax bracket, a large
number of plastics items have been placed in 18% tax brackets while some are even
being placed at highest tax bracket of 28%. The industry leaders feel that overall
increase in tax will not only hit thousands of small & medium plastics industries but
will also hurt the poor and middle class and lead to increase in prices of plastics
products used by economically lower sections of society.

It was further justified for reduction of GST rate on a few items from 28% to 12% and
on all other plastics items also should be kept under uniform GST rate of 12%. These

26
include furniture, Tarpaulin, woven & non-woven raffia fabric, plastics articles for
office & school supplies, PVC floorings, plastics interlocking mats, vacuum flasks and
other miscellaneous articles of plastics not specified elsewhere.

Overall a large cross-section of plastics industry leaders believe that the tax burden
would increase, something that goes against the government’s promise of GST
reducing the overall tax rate. Higher taxes on plastics industry will impact not entire
plastics industry but will also create an inflationary pressure on economy.

Plastics industry in recent past is growing at an annual average growth of more than
10 % and is contributing significantly to the GDP growth. The industry exported
plastics worth $7.9 billion in FY 2016 – 17. As an industry’s apex body, Plastindia
Foundation believes that SMEs are likely to be impacted most. Out of about more
than 50,000 plastics units, over 95 % are in medium & small scale industries.

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1.9 IMPACT OF PLASTIC BAGS BAN

EFFECT OF PLASTIC BAN ON INDIAN PLASTIC INDUSTRY

According to Toxics Link, an environmental NGO, the Indian capital generates almost
250,000 tons of plastic waste every year. By the Indian government's own estimates,
over 10 million plastic bags are used and discarded daily by 16 million residents in New
Delhi and its suburbs.

And at times, it seems, the entire city is covered in them. Not only do they litter up the
streets and parks, they also pose a great health risk to animals, particularly cows and
bulls, which roam the streets freely and forage for food in the city's open garbage
dumps.

Plastic bags not only clutter up the city, but also pose a threat to animals which eat
them while foraging for food. Now, Delhi wants to put a ban on them, again. But over
20,000 people risk losing jobs due to this ban.

Not only do the bags contain harmful chemicals used in the production of plastic,
studies have also found the inks and colorants used on some bags to contain toxic lead.
The need for a cleaner and greener Delhi finally forced the city's Chief Minister Sheila
Dixit to crack the whip and ban the use of all plastic bags after a previous law to use
thinner plastic was disregarded.

Violation of the ban is punishable with fine of up to 100,000 rupees (US$ 1,800) and/or
up to five years of imprisonment. Only plastic bags required for medical waste will be
exempt.

In 2009, plastic bags were banned in Delhi. But the order was never implemented
properly because many of the stakeholders and enforcing agencies, including the Delhi

28
Pollution Control Committee, the Municipal Corporation, and environment and labor
departments, worked at cross-purposes.
Currently, around 400 plastic bag manufacturing units are operating in the city and the
total yearly turnover of these units is in the range of 115 to 130 million euros. An
industry expert claimed that over 20,000 people would be left jobless if the units are
closed down.

The threat posed to the environment by the use of plastic items has been blown out of
proportion. Where is the rehabilitation policy for such people who will lose their
livelihoods?

But environmentalists feel these production facilities could instead be used to

manufacture a number of other plastic products, thus saving jobs.

There is a lot of environmental damage these bags cause. While the government has
demonstrated political will, it will need better coordination to monitor the ban closely.

Alternatives

A big worry for shopkeepers is the alternatives that will come in place.
Introducing cheap alternatives to the market is as important as banning plastic bags.
Cloth and jute packaging would be too expensive and paper is not a good option as that
would expose the groceries to moisture and lead to fungus and insects.

The capital will shortly join a clutch of a few other cities in the country that will have a
ban on the bag. The big question is how successful the law will be and whether or
not it will actually be enforced.

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MAHARASHTRA’S BAN ON PLASTIC BAGS SHOULD NOT BE AN END IN ITSELF

Maharashtra’s proposed ban is more a reaction to reports that carelessly thrown plastic
trash clogs drains and causes flooding, rather than to any serious thought about the
environment

Maharashtra will ban a variety of plastic products from March 18, the state’s New Year.
It had earlier announced a ban on plastic bags, but has now decided to extend the
prohibition to one-use food containers made of plastic foam, locally called thermocol.
There will also be a ban, in government offices and hotels, on PET — polyethylene
terephthalate, a polymer resin — bottles used for packing drinking water.

But, nothing has been said about the other types of plastics that plague the
environment. Experts have said multi-layer packaging — which comprises a metal film
sandwiched between recyclable plastic — is a growing environment threat. This
material, which is used to pack crisps, tea and other foods, is not recycled, according to
Almitra Patel, a member of the Supreme Court Committee for Solid Waste Management
that was set up to help cities work out ways to deal with their trash disposal problems.
The Plastic Waste Management Rules 2016 Rule 9 (3) says the manufacture and use of
non-recyclable multilayered plastic shall be phased out by March 2018.

Maharashtra’s proposed ban is more a reaction to reports that carelessly thrown plastic
trash clogs drains and causes flooding, rather than to any serious thought about the
environment.

Plastic is a scourge that is devastating the earth. An estimated 12m tones of plastic
enters the oceans each year. A study by Orb Media this year said fibres, produced by
plastic waste breaking down, were found in 83% of tap water samples tested from
across the world. In India, 82.4% of the samples had plastic fibres. The contamination
rate was 94.4% in the United States and 72.2% in Europe. While there have been no
findings on the health impact of the fibres on human health, plastic residues have found
in fish, sea birds, marine mammals.
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Marine life and birds are eating microplastics — particles less than 5mm in diameter
created by the breaking down of larger pieces of plastic and discarded polymer-derived
textiles — mistaking them for food. Even seemingly-innocuous items such as plastic
drinking straws are disastrous for our ecosystem. The straws, which are made of
polymer, dyes and plasticisers — to make them pliable — do not biodegrade naturally
and can remain in the environment for centuries, leaching chemicals into soil and water.
Online shopping companies use plastic for packing merchandise.

Environmentalists said the bans have to extend beyond bags and water bottles. If the
ban is on single-use plastic, it will have an impact. But, banning single-use plastic is the
first step, and not an end in itself.

Apart from bans, taxes and surcharges on plastic use are another way to reduce its use.
Britain’s Chancellor of the Exchequer, equivalent to our Minister of Finance, recently
suggested a tax on single-use plastics used in takeaway cartons and packaging. The
ministry said more than a million birds and 100,000 sea mammals and turtles die each
year after eating or getting trapped in plastic waste. The government is also trying to
reduce the dumping of unrecyclable takeaway drinks containers such as coffee cups.

Plastic manufacturers agreed that plastic is a problem for the environment, but think that
Maharashtra’s ban is ill-conceived. The ban on PET bottles is the worst thing they can
do [to reduce plastic waste]. They are targeting a product that has a 90% recycling rate.
Alternative choices, such as glass bottles, will have a great carbon footprint [in the form
of energy and materials needed to make the bottles and recycle them].

Bhargava said plastic manufacturers are ready to work with the government and experts
to find ways to recycle materials like multi-layer packaging. When we use multi-layer
packing, we are looking at food security and increase in food shelf life. Scrap collectors
do not pick it up because it is scattered, but it can be recycled — to create fuel — and
we can have facilities to collect the bags

31
BANNING PLASTIC PACKAGING TO HAVE ADVERSE IMPACT ON SEVERAL
INDUSTRIES

Banning plastic packaging would adversely impact the growth of several industries such
as FMCG, food processing, etc, and is likely to raise the cost of products (especially
low-cost) by manifold, according to a new study - titled ‘Why Banning Plastics
Packaging is Not a Viable Option’ – released by The Federation of Indian Chambers of
Commerce and Industry (FICCI) and Strategy& (the management consulting arm of
PricewaterhouseCoopers) on May 6, 2015.

While appreciating the concerns related to environment it needs to be noted that

restrictions or ban on plastics packaging would impact the growth of several industries
like FMCG, food processing, plastics packaging and allied industries. It could further
adversely impact consumers in terms of cost, health and safety.

FICCI has conducted a study to analyse the impact of a possible ban and the findings
show that this could lead to unwarranted consequences particularly on low priced
products (Rs 5) as the cost to manufacture and distribute these products could rise multi
fold. Further this study revealed that plastics industry sales & employment, agriculture
sector and farmers could also be impacted.

Plastics are the material of choice in packaging products across categories globally. In
India, an overwhelming majority of the FMCG products are packaged in plastic – in fact,
90 percent of biscuits, dried processed food items, hair care products, dairy products,
laundry products and baked goods sold in India in 2014 were packaged in plastic.

Plastic has been the preferred material for packaging (relative to alternatives such as
glass, paper, metals etc) globally as well as in India due to three critical benefits -
superior food safety, quality and shelf life; lower environmental impact across the

32
product lifecycle; and better versatility to create more innovative and consumer friendly
packaging options.

A ban on plastic packaging will directly impact plastic industry sales of Rs 53,000
crores. Additionally, about 13 lakh personnel across 10,000 firms (mostly SMEs)
engaged in plastic packaging for FMCG will need to find alternative employment. The
indirect impact based on multiplier effect will be ever larger - 2 to 2.5x the direct impact
on sales and 3-5x on employment levels.

Further, it is deduced the ban might forfeit the purpose of intention behind it. As
alternatives, in general, have lower product to package ratio, resulting in the use of
higher quantities of raw materials. They also require higher energy and water during
manufacturing.

It is recommended that the prudent way forward is not an outright ban on plastic
packaging but rather finding solutions to the problem of plastic waste management.

The reuse rates in India are about 70% for PET-plastic, and lower for non-PET plastic.
The low rate of reuse is despite the existence of technologies that have been tested in
India – such as polymer blending in bitumen roads and co-processing in cement kilns -
that can help India solve its plastic conundrum in its entirety.

The root causes for the low rates of re-use, and recommends a four-pronged approach
that various stakeholders including the government and industry should undertake to
improve the segregation, collection, recycling and re-use of plastic waste.

33
Risks

Here are some of the risks plastic bags pose:

 Animals - birds, marine life, cattle, and more - often mistake plastic bags for food
or nest-building materials, which leads to poisoning, choking, entanglement, and
blocked intestines - all of which can result in death.
 Since plastic bags can't biodegrade, they last virtually forever (some estimates
say 500+ years). Instead, they break down into smaller pieces (called
microplastics) that leach toxicants that pollute the earth and even the human food
supply.
 Due to their light weight, plastic bags can easily blow out of trash receptacles or
even landfills. They then clog up waterways, damage agricultural land, and
provide ideal breeding grounds for mosquitoes.
 Plastic bags are manufactured using petroleum, a nonrenewable resource that
can be used for several more important things.

34
PLASTIC BAN: WHAT INDIA CAN LEARN FROM OTHER COUNTRIES

Experts have estimated that annual waste generation in India will increase to 165 million
tonnes by 2030. This means that around 66,000 hectares of land is needed to set up a
landfill site which is 10 metres high and can hold up to 20 years’ waste. That is almost
90% of Bengaluru’s area. If we do not change our waste practices now then we will
soon be buried in our own muck

Every product has a shelf life, but sadly that is not the case with plastics. The fact is that
our planet cannot digest plastic. Plastics take around 500 to 1000 years to completely
degrade due to the presence of complex polymers. As a result, till now whatever bit of
plastic has ever been manufactured or used by us can be found in some form or the
other on the planet. And now it has reached a crisis point. Currently, India generates
around 56 lakh tonnes of plastic waste annually, where Delhi alone accounts for 9,600
metric tonnes per day. Plastic menace is also one of the major causes that is
making waste management an Herculean task for the country.

Scientists estimate that every square mile of oceans contains about 46,000 pieces of
floating plastic. According to The World Economic Forum study done on plastic pollution
around the world, Oceans will have more plastics than fish by 2050, if plastic pollution
continues to rise. India’s contribution to plastic waste that is dumped into the world’s
oceans every year is a massive 60%.

35
WHY BAN OF PLASTIC IS INEFFECTIVE IN INDIA

Currently in India, there is only one law that is in place – No manufacturer or vendor can
use a plastic bag which is below 50 microns as thinner bags pose a major threat to the
environment due to its non-disposability. The usage of plastic bags is still high as the
ban is not implemented on all plastic bags.

Many big brands and vendors have started charging the customers for the polybags in
order to commercially discourage them, but it is so far not been effective as there is no
law or guidelines that says shopkeepers should charge money from the customers for
the polybag.

National Green Tribunal in Delhi NCR introduced a ban on disposable plastic like
cutlery, bags and other plastic items amid concern over India’s growing waste. The ban
came into effect on January 1, but, till now nothing has been done by the government.
As a result, the production and usage of plastic persist in large amounts and India
continues to be the top four producers of plastic waste in the world.

Currently, cities including Delhi, Mumbai, Karwar, Tirumala, Vasco, Rajasthan, Kerala,
Punjab and now Madhya Pradesh to name a few have the ban on the plastic bags in
place. But, its enforcement and effective implementation is an issue.

36
AROUND THE WORLD: HOW ARE COUNTRIES DEALING WITH PLASTIC

France:

The country passed a ‘Plastic Ban’ law in 2016 to fight the growing problem of plastic
pollution in the world which states all plastic plates, cups, and utensils will be banned by
2020. France is the first country to ban all the daily-usable products that are made of
plastic. The added benefit of this law is that it also specifies that the replacements of
these items will need to be made from biologically sourced materials that can be
composted. The law also follows a total ban on plastic shopping bags. The law aims at
cutting the usage of plastic bags in the country by half by 2025.

Rwanda:

The country too suffered from plastic pollution like any other developing country, there
were billions of plastic bags choking waterways and destroying entire ecosystems of
Rwanda. To fight this scourge, the government launched a radical policy to ban all non-
biodegradable plastic from the country. This developing country in Africa is plastic bag
free since 2008. The country implemented a complete ban on plastic bags while other
countries around the world were just starting to impose taxes on plastic bags. The ban
is not effective just because of strict enforcement but also because of hefty penalties.
According to the law, the offenders smuggling plastic bags can face jail time.

Sweden:

Known as one of the world’s best recycling nations, Sweden is following the policy of
‘No Plastic Ban, Instead More Plastic Recycling.’ There is one simple reason behind this
– Sweden has world’s best recycling system. Mostly all the trash in Sweden’s system
gets burned in incinerators. The system is so strong and in place that less than one
percent of Sweden’s household waste goes into the landfill dump. Recently, they also

37
run out of trash. Now they are actually asking other countries for their garbage so that it
can keep its recycling plants running.

Ireland:

Ireland is the perfect example that shows how one can get rid of the ubiquitous symbol
of urban life – Plastics. The country passed a plastic bag tax in 2002 – that means that
consumers would have to actually purchase bags. It was so high that within weeks of its
implementation there was a reduction of 94 percent in plastic bag use. And, now plastic
bags are widely unacceptable there.

China:

The country instated a law in 2008 to deal with its growing plastic woes. China made it
illegal for stores (small or big vendors) to give out plastic bags for free. It also said that
owners should start charging the consumers for the plastic bags and allowed them to
keep any profit they made for themselves. End result, after two years of the law
implementation, usage of plastic bags dropped by a whopping 50%. That means around
100 billion plastic bags were kept out of the landfills.
A simple piece of policy can achieve big results, these countries show that perfectly.
The need of the hour in India is strict laws and its enforcement.

38
1.8 OBJECTIVES OF THE STUDY

The objective of the study clearly defines the purpose for which the study has been
carried out. This project has been carried out with the following objectives
 To get an overall overview of Indian Plastic Industry

 To understand the effects of GST implementation and ban on plastic bags on the

Indian Plastic industry

 To review the overall position through financial ratio analysis of selected

companies of the Indian Plastic Industry

 To analyze and interpret the specific financial ratios in order to conduct a

comparative study.

39
1.9 SCOPE OF THE STUDY

The Indian plastics industry has huge unrealized potential of growth given the presently
very low usage levels compared to the global standards. At the same time, this industry
in the coming decades has to promote sustainable development by investing in
technologies that protects environment and stimulates growth while balancing economic
needs and financial constraints. Plastics wastes challenge has to be managed better.

This study will help to comprehend the financial ratios and their analysis of five different
companies from the Indian Plastic Sector. The selected companies are Supreme
Industries, VIP Industries, Cello Wimplast, Nilkamal Ltd and Plastiblends. It will help us
to know the actual position of the company and its performance in the market. The
research will help us gain some insightful knowledge about the Indian Plastic Sector.

40
 2. LITERATURE REVIEW

 ‘Recycling in plastic industries in India: an analysis of its barriers through fuzzy-ahp

approach', written by Mr. Soham Chakraborty and Mr. S Satapathy and published in
the year March 2015.

The goal of this paper is to contribute to the already available literature on plastic
recycling and Plastic Recycling practice by means of a Plastic Recycling case study
in Indian Plastic Industries. By drawing on the Plastic Recycling literature and the
insights obtained from the case study, the present paper aims to identify the most
important drivers and barriers that enable or impede Plastic Recycling development
in India through an appropriate Fuzzy-AHP model for evaluation.

The findings of the study were that the developments in the field of plastic recycling
are very much crucial for the growth of plastic industries in India. There is a large
variety of challenges involved during the recycling of plastics in the country. From the
analysis of Barriers for Plastic Recycling processes using Fuzzy- AHP methodology
it is seen that the technical capability and knowhow is the most important barrier to
the recycling of plastics in Indian Plastic industries followed by energy consumption,
political and economic factors and so on. The advantage of the analysis presented in
this study will help the plastic industries in the country to identify the barriers as a
result of realistic representation of the problem and make efforts to combat the
negative effects of the barriers during plastic recycling processes. Although plastic
recycling is being practiced in the country since long but the industries in India
should more often entertain the application of recycled plastic products.

41
 ‘An analysis of barriers for plastic recycling in the indian plastic industry', written by
Ms. Suchismita Satapathy, published in the year March, 2016

This paper aims to develop a new model in which the interrelationship between the
barriers can be determined that hinder the implementation of effective recycling
processes in the plastic sectors of India.

The results divided the barriers into four clusters and identified the weak and strong
barriers and implemented relationships between them. She concluded that globally
plastic waste has been steadily increasing. Recycling plastic has received much
attention because many companies are using it as a strategic tool to serve their
customers and to generate good revenue, but there is a lack of effective recycling
units in India. The work of this paper and its results will be helpful in the
implementation of an effective and efficient recycling unit for the plastic sector.

42
 'Porter’s five forces analysis of the Indian plastic industry', written by Mr. Santana
Mandal and published in the year November 2011.

This paper aims to

 Identify the key suppliers-their bargaining powers, factors affecting this power
 Identify the key buyers-their negotiating & bargaining powers
 Identify the new players in plastic industry and probable threat from them.
 Identify the substitutes of plastics and possible threats from them
 Identify rivalry/competition nature between existing firms in this industry.
 Identify strengths, weaknesses, opportunities and threats for the above
industry

The paper concludes that the plastic industry in India is highly heterogeneous in
nature due to the diverse nature and size of firms playing in the field. So far as the
porter’s five forces analysis of this industry is concerned, bargaining powers of
suppliers is low while that of buyers is high. Entry is difficult and it entails the
incumbent to have significant capital to invest if it wants to enter this industry. On the
substitute front, there are lot of researches going on and recent anti plastic
campaigns have already given way to many new replacements for plastic as seen
above, thereby indicating high threat from substitutes. On the internal rivalry context,
the rivalry is high and firms often engage in price wars. Its easy for small firms to
change prices and increase market share but the large ones finds difficult to switch
quickly. On the whole plastics are essential for today’s standard of living and they
help in improving the quality of life. It is expected that plastics will continue to grow
dynamically.

43
• 'SWOT analysis of Indian plastic industry' written by Mr. Shahid Iqbal and published
in the year November 2016

This paper aims to evaluate the strengths, weaknesses, opportunities and threats
which can be helpful for putting into perspective what the future can bring for those
in the plastic industry.

It was concluded that the plastic Industry has emerged as a leading industrial sector
in India. In the history of India's industrial revolution, no industry has taken such
great strides as the plastics industry. The plastic sector in India has expanded at 9%
CAGR (Compound Annual Growth Rate) over the last five years and is the biggest
contributor to India's GDP growth. It is estimated that the sector will grow at a rate of
15% per annum in next few years. The Indian industry has the potential to increase
considerably. Industry currently provides employment to 3 million people. However,
with per capita consumption increasing rapidly, which is likely to reach 12.3 million
tons, the sector has potential to generate more employment. High growth in retail
packaging, pipes, bulk packaging and agricultural use has triggered the polymer
demand. Also, with the huge investments in infrastructure development happening in
the recent times, the plastic industry will emerge as a giant in the industrial scenario
of India.

44
• 'Challenges and future prospects of plastic money', written by Mr. P. Sathiya Bama
and Dr. K.Gunasundari and published in the year July 2016.

The paper focuses on the challenges and future prospects of plastic money in India.
It concludes that in the modern day, Indian customers find it easier to make physical
payment (credit card or debit card payments) rather than carrying too much cash
contributing to the growth of plastic money in the country.

The prevalence of intensifying competition has further fuelled the usage of plastic
cards in the country like never-before. Due to major social and technological
advancements, the banking landscape is undergoing massive change. The market is
seeing increased availability of sophisticated technologies that can enable cashless
transactions; however the perceived disadvantages such as the need for high IT
investment by various service providers, security concerns, lack of technological
awareness and the traditional mindset of Indians who prefer to use physical money
seem to outweigh the potential benefits. With the change in technology and the
improvement in the payment system has lead to further development in plastic
money.

45
 3. RESEARCH METHODOLOGY

3.1 RESEARCH PROBLEM

To get an overview of the Indian Plastic Sector. To study and analyze the financial
ratios of the companies from plastic sector, compare them and analyze the market
position of the companies.

3.1.1 SAMPLE SIZE

Sample size determination is the act of choosing the number of observations or

replicates to include in a statistical sample. The sample size is an important feature of
any empirical study in which the goal is to make inferences about a population from
a sample. In this project five plastic sector companies have been considered for the
study.

3.1.2 QUANTITATIVE RESEARCH DESIGN

Quantitative Research Design is a formal, objective, systematic process for obtaining

quantifiable information about the world, presented in numerical form, and analyzed
through the use of statistics. Quantitative research is concerned with numbers,
statistics, and the relationships between events/numbers. The previous three year's
financial statement and annual reports have been collected analyzed to derive at the
key financial ratios of the Company.

46
3.1.3 DATA COLLECTION

Data collection is the process of gathering and measuring information on variables of

interest, in an established systematic way that enables one to answer stated research
questions, test hypotheses, and evaluate outcomes. The following the data collection
methods have been used in this project

1. Primary data

2. Secondary data

Primary data: The data collected through various methods like surveys, observations,
physical testing, mailed questionnaires, questionnaire filled and sent by enumerators,
personal interviews, telephonic interviews, focus groups, case studies, etc.

Secondary data: Secondary data implies second-hand information which is already

collected and recorded by any person other than the user for a purpose, not relating to
the current research problem. It is the readily available form of data collected from
various sources like censuses, government publications, internal records of the
organization, reports, books, journal articles and websites and so on.

For this project, secondary data has been collected from the following sources in order
to study financial position of the company in the Indian Plastic sector -

1. Annual reports, financial statements of the company

2. Published research reports, charts, research papers, journal and articles.

47
3.2 ANALYSIS OF DATA

The data analysis of Indian Plastic Sector will be carried out by taking a sample of five
companies from the sector, calculating their financial ratios, analyzing and comparing
them and arriving at a conclusion.

The companies selected from Plastic sector for the analysis are as follows-

 Supreme Industries Ltd.

 Cello Wim Plast Ltd.
 Nilkamal Ltd.
 VIP Industries Ltd.
 Plastiblends India Ltd.

In order to carry out the analysis, we will first study the introduction of each company
followed by calculation of financial ratios and further interpretation of the ratios.

48
3.2.1 INTRODUCTION TO COMPANIES

1. SUPREME INDUSTRIES LTD.

Founded in 1942, Supreme is an acknowledged leader of India's plastics industry.

Handling volumes of over 3,20,000 tones of polymers annually effectively makes the
country's largest plastics processors.

Not surprisingly, they also offer the widest and most comprehensive range of plastic
products in India.25 advanced plants are powered by technology from world leaders,
and complement our extensive facilities for R & D and new product development. In
fact, Supreme is credited with pioneering several products in India. These include
Cross- Laminated Films, HMHD Films, Multilayer Films, SWR Piping Systems and
more.

Supreme Industries Limited is India's leading plastic processing company with seven
business divisions. The company has forayed into different types of plastic processing
in Injection Molding, Rotational Molding (ROTO), Extrusion, Compression Molding, Blow
Molding etc.

Supreme Industries limited offers wide range of plastic products with a variety of
applications in Molded Furniture, Storage & Material Handling Products, XF Films &
Products, Performance Films, Industrial Molded Products, Protective Packaging
Products, Composite Plastic Products, and Plastic Piping System & Petrochemicals.

2018-19 will see The Supreme Group turnover cross a projected Rs.125 billion (USD
2billion).

49
2. CELLO WIMPLAST LTD

Cello Wim Plast Limited was incorporated as a private limited company on October 7,
1988 with Registrar of Companies Maharashtra at Bombay and was converted into a
public limited company on July 14, 1993.

Wim Plast is a sister concern of Cello having stakes in thermo ware, molded furniture,
writing pens etc. It is a well known name in thermo ware and writing instrument in India,
a medium sized professional organization committed to customer satisfaction in
individual areas of interests. The company's manufacturing facility is located in Daman
and Baddi at Himachal Pradesh.

Cello Thermoware ltd., founded by G.D. Rathod, Chairman, in May 10, 1986, at a small
factory in Goregaon, Bombay, with just 60 workers and 7 machines engaged in the
manufacture of the finest range of Casserole, or HotPots, as they were later positioned,
that the Indian market had ever seen. It is the first & largest manufacturer of branded
household products in India, having wide range of plastic molded products

In the year 2004, the Company innovated idea of producing Plastic Extrusion Sheets
called Cello Bubble Guard sheets and set up a plant at Baddi, Himachal Pradesh which
is the first innovation in the field in India. The other products of the Company has
manufacturing units at Daman and Baddi with total installed capacity of 19000 tons and
have sound distribution network in the country.

Product range of the company includes:

Wim Plast is currently engaged into manufacturing of plastic molded and extruded
articles. The product includes water jugs, house hold trolley, house hold glasses, house
hold containers and hot pots.

50
3. NILKAMAL LTD

Nilkamal Limited is a plastic products manufacturer based in Mumbai, India. It is the

world's largest manufacturer of molded furniture and Asia's largest processor of plastic
molded products. Their product range consists mainly of custom plastic moldings,
plastic furniture, crates and containers. The company also has a chain of retail stores
under the @home brand.

Nilkamal was incorporated on 5 December 1985 as Creamer Plastic. The company

changed its name to Nilkamal Plastic on 23 August 1990. The company has
manufacturing facilities in Samba, , Pondicherry, Barjora, Sinnar, Nashik and Silvassa.
The company also has joint manufacturing ventures in Bangladesh (Nilkamal Padma
Plastics) and Sri Lanka (Nilkamal Eswaran Plastics). In 2011, the company also began
production of mattresses with manufacturing units in Hosur and Dankuni.

Nilkamal’s Core Businesses

 Material Handling Solutions

 Moulded Furniture

 @home, the Mega Home Store Retail Chain

 Nilkamal Mattrezzz

 Nilkamal Home Ideas, the Home Furnishing Store

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Manufacturing and Selling Strengths

The Company has 8 large manufacturing plants in India:

 North – Samba (Jammu & Kashmir) and Greater Noida (Uttar Pradesh)

 East - Barjora (West Bengal)

 West - Sinnar, Nashik (Maharashtra) and Silvassa (Union Territory of Dadra &
Nagar Haveli) (2 plants)

 South – Pondicherry (Union Territory) and Hosur (Tamilnadu)

The Company has advanced machinery in Injection Molding, Rotational Molding,

Vacuum Forming, Polyurethane Injection (of insulation) and capabilities for Blow
Molding. Each of these plants has dedicated Tool Rooms. Occupying a massive total
constructed area of 1 million sqft; all of Nilkamal’s manufacturing plants are ISO
9001/2008 Certified and practice 6 Sigma manufacturing process. This extensive
manufacturing infrastructure is ably supported by our wide and strong sales network of
400 techno-commercial experts, operating through 39 Regional Offices and 41
Warehouses spread across India.

52
4. VIP INDUSTRIES LTD

VIP Industries (VIPIL), incorporated in 1968, is engaged in the business of

manufacturing of luggage bags. The company's manufacturing facilities are located at
Nashik, Nagpur, Jalgaon, Satara, and Sinnar in Maharashtra and Haridwar in
Uttaranchal. The company is also engaged in manufacturing of molded furniture.

The company is engaged in manufacturing of molded luggage (from high–density

polyethylene), soft luggage (from nylon, polyester, jupolene, printed polyester) and ABS
luggage (from acrylonitrile butadiene styrene plastic) including briefcases, suitcases,
handbags, carry bags and vanity cases.

VIP has been promoted by the $200 million DG Piramal Group. The company has a
design team, which is constantly focusing on innovating, constantly innovates, exploring
new technologies and materials to create luggage of high quality.

VIP owns subsidiaries namely Carlton Travel Goods and Carlton and Blow Plast Retail.
Globally the company has a presence in Indonesia, Hong Kong, Russia, Canada,
Iceland, Ghana, Malta, Spain, France, Belgium, Ireland, Sweden, Poland, Finland,
Greece and Lebanon among others.

VIP Industries Ltd is world's second largest and Asia’s largest luggage maker based
in Mumbai, Maharashtra, India. The company manufactures plastic molded suitcases,
handbags, briefcases, vanity cases and luggage. It has acquired UK luggage brand
Carlton in 2004.

53
It provides travel products, hard and soft-sided luggage, bags, backpacks, duffels,
shoulder bags, waist pouches, sling bags, duffel trolleys, vanity cases, office bags and
satchels, suitcases, and briefcases. The company offers its products primarily under
the VIP, Carlton, Footloose, Alfa, Aristocrat, Sky bags, and Buddy brands. It also
manufactures molded furniture under the Modern brand.

VIP Industries Ltd. has more than 8000 retail outlets across India and with a network of
over 1300 retailers across 27 countries. With a product range which includes Injection
Moulded PP Cases and Furniture, Vacuum formed PC and ABS cases and Soft sided
luggage in Nylon, Polyester and EVA material, VIP Industries Ltd has several
innovations in product design and technology.

54
5. PLASTIBELNDS INDIA LTD

Plastiblends India Limited, promoted by the 'Kolsite Group' is located in the union
territory of Daman, to manufacture various types of Master Batches, Compounds,
Blends, Alloys, etc. for the Plastics Industry. Plastiblends India Limited is the first
Master batch Manufacturing Company in India who has been awarded ISO 9001
Quality Assurance Certification by TUV Bayern, Germany.

Manufacturing unit is based on state-of-the-art technology currently used in the

developed countries. All master batches are rigorously subjected to various tests in our
quality assurance laboratory equipped with modern test equipments. All production
batches are also subjected to process ability tests on standard processing equipments.
Technically qualified Plastics Engineers located at convenient centers in different
regions of East, West, North & South of India are available to provide prompt technical
service to our customers

Plastiblends India Limited produces a large range of standard colors suitable for all
major processing methods and compatible with Polyolefin’s like PE, PP, EVA. They also
supply universal master batches compatible with various plastics like HIPS, ABS, and
Filled PP.

55
REVENUE & PROFIT AFTER TAX OF THE 5 COMPANIES

(Rs. in crore)
COMPANY REVENUE PROFIT AFTER TAX
SUPREME INDUSTRIES
2017 4,978.09 379.30
2016 3,326.26 213.10
2015 4,691.38 315.71

CELLO WIMPLAST
2017 427.74 48.57
2016 426.74 45.15
2015 422.63 38.36

NILKAMAL LTD
2017 2,094.85 118.45
2016 2,003.76 103.89
2015 1,905.04 42.46

VIP INDUSTRIES
2017 1,303.76 75.98
2016 1,231.98 63.41
2015 1,060.09 47.86

PLASTIBLENDS
2017 609.77 33.03
2016 559.00 37.67
2015 529.93 30.05

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 3.2.2. CALCULATION OF FINANCIAL RATIOS OF 5 COMPANIES

SUPREME CELLO NILKAMAL VIP

RATIOS INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
PRICE TO BOOK RATIO
2017 8.17 6.93 4.18 6.97 2.81
2016 7.13 4.58 2.82 4.41 2.77
2015 7.07 4.76 1.28 4.29 1.84

PRICE TO EARNINGS RATIO

2017 32.19 36.60 22.40 33.18 18.49
2016 42.37 21.70 16.60 22.32 13.53
2015 26.57 22.00 37.00 28.27 9.65

DEBT TO EQUITY RATIO

2017 0.16 0.00 0.12 0.00 0.42
2016 0.31 0.00 0.14 0.04 0.45
2015 0.32 0.00 0.34 0.10 0.13

OPERATING PROFIT MARGIN

2017 17.06 12.70 11.10 10.95 11.44
2016 15.49 12.60 11.47 9.25 11.86
2015 15.65 11.80 7.83 7.80 10.65

ENTERPRISE VALUE TO EBITDA

2017 18.20 21.33 13.01 21.77 10.70
2016 21.00 12.51 7.69 14.15 9.56
2015 13.10 13.25 5.41 16.97 5.84

57
 SUPREME CELLO NILKAMAL VIP
RATIOS INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS

RETURN ON EQUITY
2017 24.41 18.49 16.99 19.03 15.19
2016 17.44 21.09 17.75 18.85 20.44
2015 28.09 21.60 8.62 15.58 19.06
RETURN ON CAPITAL
EMPLOYED
2017 34.47 17.92 15.64 18.58 11.40
2016 25.24 20.48 16.03 18.55 15.13
2015 36.74 20.94 7.12 15.36 16.64
INTEREST COVERAGE
2017 20.35 31.40 15.58 33.41 5.90
2016 13.28 31.80 9.59 20.58 14.61
2015 9.21 30.33 2.89 15.23 11.89

ASSEST TURNOVER
2017 2.86 1.17 1.89 2.10 1.45
2016 2.10 1.44 1.99 2.09 1.43
2015 3.04 1.71 1.94 2.09 1.91

DIVIDEND YIELD
2017 1.38 0.88 0.63 1.22 0.53
2016 1.02 0.59 1.07 1.90 1.78
2015 1.33 0.73 2.03 1.61 2.47

58
3.2.3 INTERPRETATION OF FINANCIAL RATIOS

1. PRICE TO BOOK RATIO

The price-to-book ratio (P/B Ratio) is used to compare a stock's market value to its book
value. It is calculated by dividing the current closing price of the stock by the latest
quarter's book value per share. A lower P/B ratio could mean that the stock
is undervalued. Investors find the P/B ratio useful because the book value of equity
provides a relatively stable and intuitive metric that can be easily compared to
the market price.

PRICE TO BOOK SUPREME CELLO NILKAMAL VIP

RATIO INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 8.17 6.93 4.18 6.97 2.81
2016 7.13 4.58 2.82 4.41 2.77
2015 7.07 4.76 1.28 4.29 1.84

10

6
2017
4 2016
2015
2

0
PRICE TO SUPREME CELLO NILKAMAL LTD VIP INDUSTRIES PLASTIBLENDS
EARNINGS INDUSTRIES WIMPLAST
RATIO

59
 Supreme Industries has the highest Price to book ratio at 8.17 which has
remained more or less constant from last two years which means that the stock
of the company is overvalued and the investors will have high expectations from
the company.

 Followed by Supreme Industries, Cello Wimplast and VIP industry take the
second and third position respectively by having a P/B ratio of 6.93 and 6.97
which again is a good sign.

 Nilkamal Ltd. stands at fourth and Plastiblends at fifth position with least P/B ratio
among the five companies. Which indicates that the stocks of Plastiblends are
undervalued when compared to the other four companies, which can be a major
cause of concern.

60
2. PRICE TO EARNINGS RATIO

The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its
current share price relative to its per-share earnings. The price-earnings ratio is also
sometimes known as the price multiple or the earnings multiple. In essence, the price-
earnings ratio indicates the dollar amount an investor can expect to invest in a company
in order to receive one dollar of that company’s earnings. In general, a high P/E
suggests that investors are expecting higher earnings growth in the future compared to
companies with a lower P/E.

PRICE TO EARNINGS SUPREME CELLO NILKAMAL VIP

RATIO INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 32.19 36.60 22.40 33.18 18.49
2016 42.37 21.70 16.60 22.32 13.53
2015 26.57 22.00 37.00 28.27 9.65

50
45
40
35
30
25 2017
20 2016
15 2015
10
5
0
PRICE TO SUPREME CELLO NILKAMAL LTD VIP PLASTIBLENDS
EARNINGS INDUSTRIES WIMPLAST INDUSTRIES
RATIO

61
 With a Price earnings ratio of 26.57 in 2015 to 42.37 in 2016 and 32.19 in 2017,
Supreme Industries first fell by 10 points in 2017 but still it is ahead of it
competitors except Cello Wimplast and VIP Industries which have P/E of 36.60
and 33.18. But still the P/E ratio of 32.19 is a good sign indicating that the
investors will expect higher returns.

 Nilkamal Ltd. stands fourth here with a P/E of 22.40 in the year 2017 from P/E of
37 in the year 2015 which indicates that company might be facing some
problems.

 At last position is Plastiblends. Though its P/E has increased from 9.65 in 2015 to
18.49 in 2017, but still it is much far from its competitors. Hence investors will not
prefer to invest in the company.

62
3. DEBT TO EQUITY RATIO

Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage,

calculated by dividing a company's total liabilities by its stockholders' equity. The D/E
ratio indicates how much debt a company is using to finance its assets relative to the
amount of value represented in shareholders' equity. A high debt-to-equity ratio
indicates that a company may not be able to generate enough cash to satisfy
its debt obligations. However, low debt-to-equity ratios may also indicate that a
company is not taking advantage of the increased profits that financial leverage may
bring.

DEBT TO SUPREME CELLO NILKAMAL VIP

EQUITY RATIO INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 0.16 0.00 0.12 0.00 0.42
2016 0.31 0.00 0.14 0.04 0.45
2015 0.32 0.00 0.34 0.10 0.13

0.5

0.4

0.3
2017
2016
0.2
2015

0.1

0
DEBT TO SUPREME CELLO NILKAMAL LTD VIP PLASTIBLENDS
EQUITY RATIO INDUSTRIES WIMPLAST INDUSTRIES

63
 As the debt equity ratio of Cello Wimplast is zero. We can say that the company
is not using debt to finance its assests and not taking advantage of its increased
profit.

 As seen from the above table, VIP Industries and Nilkamal Ltd have acceptable
debt equity ratio which means they are managing their funds efficiently. In case
of Supreme Industries the ratio is higher which is not a good sign.

 Plastiblends has the highest debt equity ratio which means that company may
not be able to generate enough cash to satisfy its debt obligations.

64
4. OPERATING PROFIT MARGIN

Operating margin should only be used to compare different companies when they
operate in the same industry. Operating margin is a measurement of what proportion of
a company's revenue is left over after paying for variable costs of production such as
wages, raw materials, etc. It can be calculated by dividing a company’s operating
income (also known as "operating profit") during a given period by its net sales during
the same period. A savvy investor may often track a company’s operating margin over
time (perhaps over the past four, eight or twelve quarters) to determine if the company’s
margin has historically been consistent or if growth in its operating margin is stable.

OPERATING PROFIT SUPREME CELLO NILKAMAL VIP

MARGIN INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 17.06 12.70 11.10 10.95 11.44
2016 15.49 12.60 11.47 9.25 11.86
2015 15.65 11.80 7.83 7.80 10.65

20

15

10 2017
2016
2015
5

0
OPERATING SUPREME CELLO NILKAMAL LTD VIP INDUSTRIES PLASTIBLENDS
PROFIT INDUSTRIES WIMPLAST
MARGIN

65
 Supreme Industries has the highest operating profit margin ratio among the five
companies for all the three years. Which indicates that the company faces less
financial risk? Cello Wim plast stands second in this category.

 Plastiblends and Nilkamal Ltd have slightly lesser operating profit margin ratios
which mean that these companies may face some financial risk.

 The ratio of VIP Industries is the lowest which suggests that the Company may
pose severe financial risk and it will be difficult to pay the fixed costs as well.

66
5. ENTERPRISE VALUE TO EBITDA

This popular metric is widely used as a valuation tool, allowing investors to compare the
value of a company, debt included, to the company’s cash earnings less noncash
expenses. It is ideal for analysts and potential investors looking to compare companies
within the same industry. Comparison of relative values among firms operating in the
same industry is a good way for investors to determine companies with the healthiest
EV/EBITDA within a specific sector. A high (low) EV/EBITDA mean the company is
potentially overvalued (undervalued).

ENTERPRISE VALUE SUPREME CELLO NILKAMAL VIP

TO EBITDA INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 18.20 21.33 13.01 21.77 10.70
2016 21.00 12.51 7.69 14.15 9.56
2015 13.10 13.25 5.41 16.97 5.84

25

20

ENTERPRISE VALUE TO EBITDA

15
2017
2016
10
2015

67
 From the above table, in 2015 VIP Industries was the most overvalued company
as its EV/EBITDA ratio was the highest. In 2016, Supreme Industries took over
VIP. But again in 2017, VIP Industries retained its position.

 Cello Wimplast has slightly lesser values than the first two companies. And
hence it stands third. Plastiblends also is an undervalued company standing at
fourth position here.

 Nilakamal Ltd has the lowest EV/EBITDA values for all the years which mean
that the investors will consider this company as undervalued.

68
6. RETURN ON EQUITY

Return on equity (ROE) is the amount of net income returned as a percentage

of shareholders equity. Return on equity measures a corporation's profitability by
revealing how much profit a company generates with the money shareholders have
invested. Net income is for the full fiscal year (before dividends paid to common stock
holders but after dividends to preferred stock.) Shareholder's equity does not include
preferred shares. The higher the return on equity, the more efficient the company's
operations are making use of those funds.

SUPREME CELLO NILKAMAL VIP

RETURN ON EQUITY INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 24.41 18.49 16.99 19.03 15.19
2016 17.44 21.09 17.75 18.85 20.44
2015 28.09 21.60 8.62 15.58 19.06

30

25

20

2017
15
2016
10 2015

0
RETURN ON SUPREME CELLO NILKAMAL LTD VIP PLASTIBLENDS
EQUITY INDUSTRIES WIMPLAST INDUSTRIES

69
 Supreme Industries has the highest ROE among all the five companies in the
year 2015 and 2017. In 2016, Plastiblends had the highest ROE which suggests
that these are efficiently managing their funds.

 On an average, Supreme Industries has maintained higher ROE, followed by

Cello Wimplast, VIP Industries and Plastiblends respectively.

 Nilkamal Ltd has the lowest ROE among all the companies. Though it had
increased from 8.62 in 2015 to 17.75 in 2016 and the fell to 16.99 in 2017, but
still it is left behind by the other four companies, which indicates that the
Company is not using its funds efficiently.

70
7. RETURN ON CAPTIAL EMPLOYED

The return on capital employed (ROCE) ratio, expressed as a percentage, complements

the return on equity (ROE) ratio by adding a company's debt liabilities, or funded debt,
to equity to reflect a company's total "capital employed". This measure narrows the
focus to gain a better understanding of a company's ability to generate returns from its
available capital base.A lower value of ROCE indicates lower profitability. A company
having less assets but same profit as its competitors will have higher value of return on
capital employed and thus higher profitability.

RETURN ON CAPTIAL SUPREME CELLO NILKAMAL VIP

EMPLOYED INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 34.47 17.92 15.64 18.58 11.40
2016 25.24 20.48 16.03 18.55 15.13
2015 36.74 20.94 7.12 15.36 16.64

35

30

25

20
2017
15
2016

10 2015

0
RETURN ON SUPREME CELLO NILKAMAL LTD VIP PLASTIBLENDS
CAPTIAL INDUSTRIES WIMPLAST INDUSTRIES
EMPLOYED

71
 Supreme Industries has succeeded in maintaining higher return on all capital
employed among the five companies for all the years. Thus the company’s ability
to generate fund through its capital is higher.

 Cello Wimplast and VIP Industries stand at second and third position here. These
companies also have the ability to generate better funds as compared to
Nilkamal Ltd which takes fourth position and has comparatively lesser
profitability.

 Again Plastiblends has the lowest return on capital employed which means it is
difficult for the company to generate funds from its available capital base.

72
8. INTEREST COVERAGE

The interest coverage ratio is used to determine how easily a company can pay their
interest expenses on outstanding debt. The ratio is calculated by dividing a company's
earnings before interest and taxes (EBIT) by the company's interest expenses for the
same period. The lower the ratio, the more the company is burdened by debt expense.

INTEREST SUPREME CELLO NILKAMAL VIP

COVERAGE INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 20.35 31.40 15.58 33.41 5.90
2016 13.28 31.80 9.59 20.58 14.61
2015 9.21 30.33 2.89 15.23 11.89

35

30

25

20
2017
2016
15
2015
10

0
INTEREST COVERAGE
SUPREME INDUSTRIES
CELLO WIMPLAST
NILKAMAL LTDVIP INDUSTRIESPLASTIBLENDS

73
 Cello Wimplast has maintained highest interest coverage ratio. That means it can
easily pay the interest expenses on its outstanding debts.

 VIP Industries and Supreme Industries have comparatively lesser ratio but still is
in a position to pay off its interest expenses.

 Nilkamal Ltd and Plastiblends have lower interest coverage ratio which indicates
that they may face difficulty in paying off its interest expense on its outstanding
debts.

74
9. ASSEST TURNOVER RATIO

Asset turnover ratio measures the value of a company's sales or revenues generated
relative to the value of its assets. The Asset Turnover ratio can often be used as an
indicator of the efficiency with which a company is deploying its assets in
generating revenue. If a company has a higher fixed asset turnover ratio than its
competitors, it shows the company is effectively using its fixed assets to generate
sales better than its competitors.

SUPREME CELLO NILKAMAL VIP

ASSEST TURNOVER INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 2.86 1.17 1.89 2.10 1.45
2016 2.10 1.44 1.99 2.09 1.43
2015 3.04 1.71 1.94 2.09 1.91

2.5

1.5

1
2017
0.5 2016
0 2015

75
 The highest asset turnover ratio is of Supreme Industries for all the years,
suggesting that the company is generating higher revenues by deploying its
assets efficiently.

 Followed by Supreme Industries, VIP Industries is also efficiently deploying its

assets by maintaining a constant asset turnover ratio of 2.1. Nilkamal Ltd also
has succeeded similarly.

 Plastiblends stands fourth and Cello Wimplast at fifth suggesting that these
companies are not generating revenue relative to the value of their assets when
compared to its competitors.

76
10. DIVIDEND YIELD

A financial ratio that indicates how much a company pays out in dividends each year
relative to its share price. Dividend yield is represented as a percentage and can be
calculated by dividing the dollar value of dividends paid in a given year per share of
stock held by the dollar value of one share of stock. A company with a
high dividend yield pays its investors a large dividend compared to the fair market value
of the stock. This means the investors are getting highly compensated for their
investments compared with lower dividend yielding stocks.

SUPREME CELLO NILKAMAL VIP

DIVIDEND YIELD INDUSTRIES WIMPLAST LTD INDUSTRIES PLASTIBLENDS
2017 1.38 0.88 0.63 1.22 0.53
2016 1.02 0.59 1.07 1.90 1.78
2015 1.33 0.73 2.03 1.61 2.47

2.5

2017
1.5
2016
2015
1

0.5

0
DIVIDEND SUPREME CELLO NILKAMAL LTD VIP PLASTIBLENDS
YIELD INDUSTRIES WIMPLAST INDUSTRIES

77
 VIP Industries and Supreme Industries pay their investors a large dividend
compared to other companies as their dividend yield ratio is highest.

 Nilkamal Ltd and Plastiblends also pay fair dividends to their investors but lesser
than the above two companies.

 Cello Wimplast has the lowest dividend yield ratio as compared to other
companies which indicates that its pays lesser dividends to its investors.

78
 4. CONSOLIDATED RESULTS

With the help of financial ratio analysis of the five companies, we can understand the
market position of these companies and their stand in the Indian Plastic Sector.

Supreme Industries Ltd has higher ratios as compared to the other four companies.
Supreme Industry’s Price to book, Price to earnings ratio, Return on euity, return on
capital employed, dividend yield, asset turnover ratio, all of these are better when
compared to the other four companies. And thus we can state that Supreme Industries
Ltd tops the list when it comes to profitability and performance of the company.

When compared with respect to the financial ratios, VIP Industries and Cello Wim Plast
Ltd are more or less on the same profitability and performance level. We can give VIP
Industries second and Cello Wim Plast third position respectively in the list of five.

On the last i.e. the fifth position is Plastiblends India Ltd which has low interest coverage
ratio, low return on equity and return on capital employed when compared to the to its
four competitors. Hence Plastiblends India Ltd has to seriously look do something to
boost its current position and uphold a strong position in the plastic industry.

79
 5. CONCLUSION

The Plastic Industry contributes directly or indirectly to many other industries in the
country. The various key sectors in India such as FMCG, Construction, Automation,
Electronics Textiles, Healthcare, etc have observed growth and economic development
due to the momentous contribution made by Plastic Industry to these sectors. The
plastic processing sector is supported by the plastic machinery sector and the
petrochemical sector, developments of both of which are coupled together. The plastic
processors are building capacities for the service of the domestic market as well as the
overseas market.

The plastic industry, inspite of having a great potential growth faces many challenges in
case of unadvanced technology, environmental myths, high instability in feedstock
prices and inadequate infrastructure. Noteworthy efforts will have to be done to realize
the real potential of this industry and to conquer all the challenges.

Indian Government in order to enhance the infrastructure sector is taking every possible
initiative with investments of Rs. 25 lakhs over the next three years in railways, roads
and infrastructure shipping. Plastics plays an essential role in the sectors like irrigation,
sanitation management, water, building and construction, transport, power and retail
have been encouraged through the various products like cables, wires, pipes, water
proof membranes, wood PVS composites and other sectors. Consequently, higher
investments in these sectors will force the demand for plastics.

80
PROJECT II : FUNCTIONAL ANALYSIS :
DIGITAL PAYMENT SECTOR

81
 1. INTRODUCTION

1. 1 INTRODUCTION TO DIGITAL PAYMENT-

Digital payments refer to electronic consumer transactions, which include payments for
goods and services that are made over the internet, mobile payments at point-of-sale
(PoS) via smart phone applications (apps), and peer-to-peer transfers between private
users.

Digital payment is a way of payment which is made through digital modes. In digital
payments, payer and payee both use digital modes to send and receive money. It is
also called electronic payment. No hard cash is involved in the digital payments. All the
transactions in digital payments are completed online. It is an instant and convenient
way to make payments.

If we talk about cash payments, you have to first withdraw cash from your account.
Then you use this cash to pay at shops. Shopkeeper goes to the bank to deposit the
cash which he got from you. This process is time-consuming for you and also for the
shopkeeper. But in digital payments, the money transfers from your account to the
shopkeeper’s account immediately. This process is automatic and neither you nor the
shopkeeper is required to visit the bank.

Digital payment methods are often easy to make, more convenient and provide
customers the flexibility to make payments from anywhere and at anytime. These are a
good alternative to traditional methods of payment and speeden up transaction cycles.
Post demonetization, people slowly started embracing digital payments and even small
time merchants and shop owners started accepting payments through the digital mode.

82
ADVANTAGES OF ONLINE PAYMENTS

In the Age of High Technology cash strives to endure the competition with electronic money,

because more and more people prefer to have virtual wallets. It is clear, electronic payment

systems have a range of pros in comparison to traditional banking services:

1. Time savings

Money transfer between virtual accounts usually takes a few minutes, while a wire transfer or a

postal one may take several days. Also, you will not waste your time waiting in lines at a bank or

post office.

2. Expenses control

Even if someone is eager to bring his disbursements under control, it is necessary to be patient

enough to write down all the petty expenses, which often takes a large part of the total amount

of disbursements. The virtual account contains the history of all transactions indicating the store

and the amount you spent. And you can check it anytime you want. This advantage of electronic

payment system is pretty important in this case.

3. Reduced risk of loss and theft

You cannot forget your virtual wallet somewhere and it cannot be taken away by robbers.

Although in cyberspace there are many scammers, in one of the previous articles we described

in detail how to make your e-currency account secure.

83
4. Low commissions

If you pay for internet service provider or a mobile account replenishment through the UPT

(unattended payment terminal), you will encounter high fees. As for the electronic payment

system: a fee of this kind of operations consists of 1% of the total amount, and this is a

considerable advantage.

5. User-friendly

Usually every service is designed to reach the widest possible audience, so it has the
intuitively understandable user interface. In addition, there is always the opportunity to
submit a question to a support team, which often works 24/7. Anyway you can always
get an answer using the forums on the subject.

84
DISADVANTAGES OF ONLINE PAYMENTS

1. Restrictions

Each payment system has its limits regarding the maximum amount in the account, the
number of transactions per day and the amount of output.

2. The risk of being hacked

If you follow the security rules the threat is minimal, it can be compared to the risk of
something like a robbery. The worse situation when the system of processing company
has been broken, because it leads to the leak of personal data on cards and its owners.
Even if the electronic payment system does not launch plastic cards, it can be involved
in scandals regarding the Identity theft.

3. The problem of transferring money between different payment systems

Usually the majority of electronic payment systems do not cooperate with each other. In
this case, you have to use the services of e-currency exchange, and it can be time-
consuming if you still do not have a trusted service for this purpose. Our article on how
to choose the best e-currency exchanger greatly facilitates the search process.

4. The lack of anonymity. The information about all the transactions, including the
amount, time and recipient are stored in the database of the payment system. And it
means the intelligence agency has an access to this information. You should decide
whether it's bad or good.

In general, the advantages of electronic payment system outweigh its disadvantages

and they have bigger opportunities comparing with ones of traditional wire transfers.

85
1.2 INTRODUCTION TO INDIAN DIGITAL PAYMENT SECTOR

Payment and settlement systems in India are covered by the Payment and Settlement
Systems Act, 2007 (PSS Act), legislated in December 2007 and regulated by
the Reserve Bank of India and the Board for Regulation and Supervision of Payment
and Settlement Systems,

India has multiple payments and settlement systems, both gross and net settlement
systems. For gross settlement India has a Real Time Gross Settlement (RTGS) system
called by the same name and net settlement systems include Electronic Clearing
Services (ECS Credit), Electronic Clearing Services (ECS Debit), credit cards, debit
cards, the National Electronic Fund Transfer (NEFT) system and Immediate Payment
Service. The Reserve Bank of India is doing its best to encourage alternative methods
of payments which will bring security and efficiency to the payments system and make
the whole process easier for banks.

In the case of India, the RBI has played a pivotal role in facilitating e-payments by
making it compulsory for banks to route high value transactions through Real Time
Gross Settlement (RTGS) and also by introducing NEFT (National Electronic Funds
Transfer) and NECS (National Electronic Clearing Services). Behavioral patterns of
Indian customers are also likely to be influenced by their internet accessibility and
usage, which currently is about 32 million PC users, 68% of whom have access to the
net. However these statistical indications are far from the reality where customers still
prefer to pay "in line" rather than online, with 63% payments still being made in cash. E-
payments have to be continuously promoted showing consumers the various routes
through which they can make these payments like ATM’s, the internet, mobile phones
and drop boxes.

86
Due to the efforts of the RBI and the (BPSS) now over 75% of all transaction volume
are in the electronic mode, including both large-value and retail payments. Out of this
75%, 98% come from the RTGS (large-value payments) whereas a meager 2% come
from retail payments.

In line with government reforms, Prime Minister Narendra Modi has pushed Indians to
adopt cashless transactions, giving the digital payments sector a significant boost. The
Digital India programme is a flagship programme of the Government of India with a
vision to transform India into a digitally empowered society and knowledge economy.
“Faceless, Paperless, Cashless” is one of professed role of Digital India.

87
The sector is experiencing an unprecedented jump in growth since November last year,
when the government demonetized high currency bills (Rs 500 and 1000) – which
represented 86 percent of India’s cash in circulation. By February this year, digital wallet
companies had shown a growth of 271 percent for a total value of US$2.8 billion (Rs
191 crore).

Prior to the sudden developments in 2016 enabling the massive disruption in India’s
payments landscape, a Google-BCG Report estimated that India’s digital payments
industry would grow to US$500 billion by 2020, contributing to 15 percent of the
country’s GDP. An important driver of this growth is India’s vast smart phone user
base – the second largest in the world.

88
DIGITAL PAYMENT DIVISION

The Digital India programme is a flagship programme of the Government of India with a
vision to transform India into a digitally empowered society and knowledge economy.
“Faceless, Paperless, Cashless” is one of professed role of Digital India. Promotion of
digital payments has been accorded highest priority by the Government of India to bring
each and every segment of our country under the formal fold of digital payment
services. The Vision is to provide facility of seamless digital payment to all citizens of
India in a convenient, easy, affordable, quick and secured manner.

Hon’ble Finance Minister, in his budget speech announced several activities for the
promotion of digital payments including setting a target of 2,500 crore digital payment
transactions in FY 2017-18, through Unified Payments Interface (UPI), Unstructured
Supplementary Service Data (USSD), Aadhaar Pay, Immediate Payment Service
(IMPS) and Debit Cards.

Ministry of Electronics & Information Technology (MeitY) has been entrusted with the
responsibility of leading this initiative on “Promotion of Digital Transactions including
Digital Payments”. MeitY is working on various strategies, ideation with multiple
stakeholders including Banks, Central Ministries/Departments and States, to create an
ecosystem to enable digital payments across the country.

MeitY is working on strengthening of Digital Payment infrastructure and creating

awareness through promotions of digital payments with all the stakeholders to achieve
Government’s vision of making citizens of this country digitally empowered. Citizens
have been provided multiple options to make digital transactions.

89
MAJOR NEW DIGITAL PAYMENT MODES IN INDIA

Online or mobile wallets

• Online wallets are used via the internet and through smart phone applications.

• Money can be stored on the app via recharge by debit or credit cards or net
banking.

• Consumer wallet limit is US$ 311 (Rs 20,000) per month or US$1,554 (Rs
100,000) per month after KYC. The merchant wallet limit is US$777 (Rs 50,000)
per month after self-declaration and US$1,554 (Rs 100,000) after KYC
verification.

• Facilitates P2P fund transfers.

Prepaid credit cards

• Pre-loaded to individual’s bank account. It is similar to a gift card; customers can

make purchases using funds available on the card – and not on borrowed credit
from the bank.

• Can be recharged like a mobile phone recharge, up to a prescribed limit.

90
Debit/RuPay cards

• These are linked to an individual’s bank account.

• Can be used at shops, ATMs, online wallets, micro-ATMs, and for e-commerce
purchases.

• Debit cards have overtaken credit cards in India. In December 2015, there were
more than 630 million debit cards as compared to 22.75 million credit cards.

AEPS

• The Aadhaar Enabled Payment System uses the 12-digit unique Aadhaar
identification number to allow bank-to-bank transactions at PoS

• AEPS services include balance enquiry, cash withdrawal, cash deposit, and
Aadhaar to Aadhaar fund transfers.

USSD

• Stands for Unstructured Supplementary Service Data based mobile banking.

• Linked to merchant’s bank account and used via mobile phone on GSM network
for payments up to US$77.68 (Rs 5,000) per day per customer.

UPI

• The United Payments Interface (UPI) envisages being a system that powers
multiple bank accounts onto a single mobile application platform (of any
participating bank).

• Merges multiple banking features, ensures seamless fund routing, and merchant
payments.

• Facilitates P2P fund transfers.

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1.3 ECONOMIC ANALYSIS

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Entry of global players into India's digital payment space is expected to grow the
segment by about five-fold to USD 1 trillion by 2023, investment banking firm Credit
Suisse said in a report.

Digital payments (in India) currently aggregate less than USD 200 billion, of which
mobile is still at just USD 10 billion in financial year (FY) 2018 E (estimated) . We
estimate that the total digital payment market in India will grow to USD 1 trillion by
FY23E led by the growth in mobile payments.

It said that in just four months of launching its payments app, Google is already
processing the same number of digital transactions as Axis Bank (4th highest among
banks in India) and has resulted in unified payment interface (UPI) transactions
increasing about eight times.

The digital payments will further explode when the most popular application in India,
WhatsApp, integrates a payments button, the report said. Share of cash transactions in
India are estimated to account for 70 per cent of total transactions in value terms and 90
per cent in volume.

Payment integration in to popular apps in India will drive the digital payment market in
India to USD 1 trillion over the next five years. Digital payments in India are soaring on
the back of the entry of global tech giants that are acting as aggregators for retail
transactions.

The report by research analysts Ashish Gupta, Sunil Tirumalai, Kush Shah, Anurag
Mantry and Viral Shah cited trend of digital payments in China as example.
Digital payments in China leapfrogged to over USD 5 trillion in the past four years on
the back of rising mobile and data penetration.

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Data usage for 300 million Indian smart phone users has jumped to 5-10 GB per month
from 1GB in the last year. The surge in digital payments in China was triggered by its
integration into e-commerce and social platforms, which now have a 95 per cent market
share the report said.

It said that unlike China, mobile payments in India are being built on public infrastructure
like UPI and Aadhaar that allow open-architecture and an inter-operable payment
system to evolve.

With 800 million bank accounts now linked to mobile, existing bank accounts should be
mobile-transaction ready. We believe that the top four banks (SBI, HDFC Bank, ICICI,
Axis) are better placed as the aggregators are expected to look to tie up with these
franchises, given they account for about 50-70 per cent of non-cash transactions. The
Credit Suisse report said that there is also no loss of customers for the banks even as
they transact on the platforms of these aggregators, and the banks would gain access
to customer data.

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CHALLENGES FACED BY THE DIGITAL PAYMENTS SECTOR IN INDIA

RBI Governor Raghuram Rajan has said that PBs will “revolutionize” in India, without
posing a competitive threat to existing banks. And the decision to grant licenses to one
in four applicants represents a pretty unusual degree of latitude from the central bank.
Further, the RBI has stated that the entities that didn’t receive approval this time (along
with many others) could be accepted in future licensing rounds, as it intends to grant
more licenses "virtually on tap." So the government clearly views PBs as a powerful
weapon in its financial inclusion arsenal.

But the impact of these banks is not guaranteed, and they will face the same hurdles as
any financial services provider that aims to serve the country’s low-income, rural
communities. If it were simple to serve these customers, India’s previous Business
Correspondent efforts – not to mention its experience with private services like M-
PESA, which captures almost every payment in countries like Kenya and Tanzania –
would have met with more resounding success. Let’s take a look at 10 challenges PBs
will face – and how they can live up to the government’s ambitious goals.

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FINDING THE RIGHT LEADERSHIP

The Payments Bank concept is perhaps the first of its kind anywhere in the world – a
hybrid of banking and distribution with a running thread of technology. Thus far,
business leaders from the fast-moving consumer goods and technology sectors have
led teams in the payments space in India. But with payments now married to banking –
a granular business of managing distribution points prudentially – it will be critical to
have the right set of skills steering PBs’ efforts. Without the right mix of people, they
may become a juggernaut hurtling towards failure.

DESIGNING THE RIGHT PRODUCTS

Remittances generate profits – indeed, India’s Business Correspondent initiative

survived largely because banks outsourced remittance services to them. But because of
these competing services, PBs will need to explore a “remittance plus” model, creating
a differentiation between themselves and existing Business Correspondents. This
essentially means investing heavily in customer-centric product design, thus capturing
face-to-face and remote transactions by offering innovative products delivered via
mobile phone.

MOVING BEYOND CASH IN/CASH OUT

How well a PB is positioned with its network of cash-in/out points or low-cost and tech-
heavy branches will undoubtedly determine its initial footprint in the hinterlands. But
cash-in/out alone will not be enough, as these banks’ sustainability and scale will
ultimately depend on customers’ adoption of digital cash for making transactions. Just
cash-in/out services and no (or negligible) transactions would result in inactive digital

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accounts, whereas PBs’ whole value proposition is based on developing a revenue
model around actual payment transactions. Critical drivers, therefore, lie in PBs’ ability
to leverage the e-commerce ecosystem in India, which is slated to cross the USD $16
billion mark by the end of 2015.

PULLING CUSTOMERS OUT OF ‘CASH IN KING’ MENTALITY

The challenge of moving toward e-payments isn’t limited to infrastructure: For PBs to
succeed, cash-obsessed Indians will need to migrate to digital alternatives, which will
require behavioral changes above and beyond technological hurdles. Though a few e-
wallet players and online marketplace providers like Paytm, Foodpanda, Shopclues,
etc., have been experimenting in this space in recent years – albeit mainly in urban
centers’ – for PBs, the task will be herculean. Ultimately, they will need a concerted
ecosystem effort and additional policy support to spur the growth of interlinkages and
missing markets.

SHIFTING INTERACTIONS TO ATMS AND MOBILE

According to the World Bank, just 39 percent of all account holders in India own a debit
or ATM card, and as mentioned, mobile banking has struggled to take off – especially in
rural areas. Yet compared to branch banking, ATM and especially mobile banking are
far less expensive per transaction, not to mention more convenient for customers. PBs
have a great potential to change the patterns of interactions between customers and
banks by making banking transactions via ATMs and mobile phones self-assisted,
seamless, convenient and foolproof over the payments-based architecture in India.

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ENABLING PAYMENTS ECOSYSTEM PARTNERSHIPS

Effective partnerships will be crucial for running a digital payments system – particularly
at cash-in/out points and merchant/retail points. Facilitating these relationships is often
the role of special intermediary services providers like Pep Intermediacy in Kenya and
Uganda, which manages float and distribution points for major supermarkets and
players like Airtel, M-PESA and KCB Mattani Bank, and Kopo-Kopo, which helps to
manage the merchant ecosystem in Kenya. India will need to put similar service
providers in place to make PBs’ partnerships successful.

AVOIDING THE GOVERNMENT BUSINESS TRAP

Government business, in the form of government to person (G2P) payments, may seem
like low-hanging fruit to many PBs. But they should resist the temptation to make G2P
services a core part of their business case, or else they’ll run the risk of encountering
the same sustainability challenges that Business Correspondents have faced in the past
in India. With government commissions for G2P services subject to frequent and
unpredictable decreases, depending on government business could bring the
sustainability of PBs into question.

WORKING WITH REGULATORS

PBs will have to comply with RBI regulations and prudential banking norms, maintaining
prescribed bank ratios like statutory liquidity, cash reserve and capital adequacy, and
following rules involving financial fraud, Anti Money Laundering & Combating Financial
Terrorism (AML-CFT), etc. And the need to comply with these regulations is one of the
factors that many analysts blame for mobile money’s struggles in India, which has

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required mobile money players like Vodafone and Airtel to work through partner banks
to offer payment services. With the important role PBs play in the government’s financial
inclusion drive, and the degree to which the RBI is clearly invested in their success,
hopefully it will ensure that these requirements won’t deccelerate PBs’ momentum.

EMBRACING THE RISK AND INNOVATION

PBs’ success in India will largely depend upon how well they are able to break the
traditional banking mentality and innovate. For instance, India’s banks – particularly
those in the public sector – have often heavily invested in government securities and
bonds, as these instruments are perceived to be safer than credit-market investments.
But with Prime Minister Modi calling upon Indian bankers to take a more proactive
approach to banking, it’s clear that PBs must avoid this lazy and risk-averse mindset
and embrace new thinking and innovation. Even though they may not have the option,
right now, of offering credit products, PBs should embrace a forward-looking mindset in
exploring payments innovations – and even eventually offering credit services directly or
in partnerships.

LOCATING PATIENT CAPITAL

Even though they are allowed to raise deposits, this may not be sufficient for PBs to
fund their expansion. And with cutthroat competition, acquiring customers will be a
substantial challenge – as will maximizing revenue per customer. So the PB industry will
need deep-pocketed, risk-taking investors – and they must be in it for the long term. The
mere fact that the RBI issued so many initial licenses clearly indicates that not all are
expected to stay alive. So investors must be willing to remain patient, at least for three
years (or until they attain a net worth of USD $80 million), at which point PBs will be
allowed to have an IPO and get listed on the Indian Stock Exchange.

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SECURITY ISSUES IN DIGITAL PAYMENT

Concerns around the security of transactions and identity theft still prevent thousands
from moving over to the digital payment platforms. Some 66% of the respondents in our
survey said that security concerns remain their biggest worry. A cultural and mindset
change is required to bring people on board and make them feel comfortable with digital
payments.Experts insist digital payments platforms are fully secure provided the
necessary precautions are taken by the user. Cash can get stolen and you will have to
bear the loss.

However, if there is a fraud related to your debit/credit card then you have a recourse.
As per regulatory guidelines, the banks will investigate the case when you report a fraud
and you will get compensated in case it's not because of lapses on your part. Most
popular e-wallet platforms also comply with the latest security specifications and have
added further layers of security, say experts.

However, the existing machinery for protection of consumers requires a huge revamp
before consumers become comfortable with digital payments. As more and more digital
transactions move into the yet unregulated fintech space, proper fraud prevention,
including device fingerprinting and consumer protection mechanisms, needs to be put in
place. There is a definite need to improve the quality of the safeguards.

However, service providers are taking steps for added protection. Freecharge, for
instance, recently launched an e-wallet protection plan (at no added cost) for all its
users, where the underlying wallet balance of all the customers will be insured up to a
limit of Rs 20,000, as long as the user is transacting at least once a month. Other e-
wallet platforms are also expected to follow suit.

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ROLE OF THE RBI IN ENCOURAGING E-PAYMENTS

As the apex financial and regulatory institution in the country it is compulsory for the RBI
to ensure that the payments system in the country is as technologically advanced as
possible and in view of this aim, the RBI has taken several initiatives to strengthen the
e-payments system in India and encourage people to adopt it.

The interface has been developed by National Payments Corporation of India (NPCI),
the umbrella organization for all retail payments in the country. The UPI seeks to make
money transfers easy, quick and hassle free.

 The Payment and Settlement Systems Act, 2007 was a major step in this
direction. It enables the RBI to "regulate, supervise and lay down policies
involving payment and settlement space in India." Apart from some basic
instructions to banks as to the personal and confidential nature of customer
payments, supervising the timely payment and settlement of all transactions, the
RBI has actively encouraged all banks and consumers to embrace e-payments.
 In pursuit of the above-mentioned goal the RBI has granted NBFC’s (Non-
Banking Financial Companies) the permission to issue co branded credit cards
forming partnerships with commercial banks.
 The Kisan Credit Card Scheme was launched by NABARD in order to meet the
credit needs of farmers, so that they can be free of paper money hassles and use
only plastic money.
 A domestic card scheme known as RuPay has recently been started by the
National Payments Corporation of India (NPCI),promoted by RBI and Indian
Banks Association (IBA), inspired by Unionpay in China, which will be promoting
the use of cards ie. "Plastic money". Initially functioning as an NPO, RuPay will
focus on potential customers from rural and semi-urban areas of India. RuPay

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 will have a much wider coverage than Visa, MasterCard or American Express
cards which have always been used for card-based settlements.
 The NREGA (National Rural Employment Guarantee Scheme) introduced by the
Government will ensure rural employment in turn ensuring that the employees
get wages. Each employee will have a smart card functioning as his personal
identification card, driver’s license, credit card which will also function as an
electronic pass book, thus familiarizing the rural populations with e-payments.[2]
 However, the Indian banking system suffers from some defects due to certain
socio-cultural factors which hampers the spread of the e-payments culture even
though there are many effective electronic payment channels and systems in
place. Despite the infrastructure being there nearly 63% of all payments are still
made in cash. A relatively small percentage of the population pays their bills
electronically and most of that population is from urban India-the metropolitans.

Ministry of Electronics & Information Technology (MeitY) has been entrusted with the
responsibility of leading this initiative on “Promotion of Digital Transactions including
Digital Payments”. MeitY is working on various strategies, ideation with multiple
stakeholders including Banks, Central Ministries/Departments and States, to create an
ecosystem to enable digital payments across the country.

MeitY is working on strengthening of Digital Payment infrastructure and creating

awareness through promotions of digital payments with all the stakeholders to achieve
Government’s vision of making citizens of this country digitally empowered. Citizens
have been provided multiple options to make digital transactions. A dedicated ‘Digidhan
Mission’ has been setup in MeitY for building strategies and approaches in collaboration
with all stakeholders to promote digital payments and create awareness.

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Meity has taken several initiatives to promote digital payments and achieve the targets
in a mission mode. Few of them are outlined below.

(a) Digital payment transactions target have been assigned to Central Ministries with
high citizen touch points, Public Sector and Private Sector Banks to achieve the target
as announced in the Budget speech for FY 2017-18.

(b) Training and workshops on digital payments awareness with several Ministries have
been conducted and planned ; MoRTH, MoHFW, Ministry of Agriculture, MSME,
Department of Post, Ministry of Power, Panchayti Raj, Ministry of Defense
(c) Promotional materials on publicity of digital payments including IEC materials is
being shared with stakeholders to create awareness and sensitization

(d) Digital Payment dash board has been created to track and monitor the progress of
digital transactions achieved by Banks

(e) Promotion and awareness approach framework on digital payments has been
shared with Banks

(f) BHIM cash back schemes for merchants

(g) BHIM Aadhaar merchant incentive schemes

(h) BHIM referral bonus schemes for Individuals

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1.4 OBJECTIVES OF THE STUDY

 To get an overall overview of digital payment system in India especially in rural

areas
 To study the consumer perception of digital payment modes.
 To study about the changes in payment methods from cash to online banking
post demonetization.
 To study the impact of demonetization on digital payment companies.

1.5 SCOPE OF THE STUDY

The project on digital payment sector is carried out to gain in-depth knowledge of the
digital payments modes and methods prevailing in India. This project will give us an
insight on how the traditional payment method of cash is gradually transforming into
online payment methods through e-wallets and net banking. It will help us to study
about the impact of demonetization on digital payment companies. Also it will help us to
know the status of digital payment in rural India. Through this project, we can
understand the digital payment platforms currently prevailing in India and their position
in the market, which will further help to choose the better payment option. Also we can
learn the drawbacks and the challenges faced by the Indian digital payment sector.

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 2. LITERATURE REVIEW

• 'Demonetization and its impact on adoption of digital payment: opportunities,

issues and challenges’ written by Dr. Dhani. Shanker Chaubey and Mr. Piyush
Kumar and published in the year June-17

This paper intended to know the importance of digital payment after

Demonetization as perceived by the people of India, to assess the people trust
and confidence in digital payment system after Demonetization, to assess the
uses pattern and nature of transaction done by the people after Demonetization
and to identify the factors of digital payment after Demonetization.

From this paper, the authors concluded that the digital payment had given relief
and force to learn digital transaction after demonetization. People adopted
technology slowly, but don’t wanted to pay extra for digital transaction. However,
people of India faces money problems during demonetization they suffer with no
cash. In addition, for this medium like paytm helps them.

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• ‘Impact of demonetisation on cashless transaction’ written by Ananya Mitra,
Sonali Rath and Jayant Kumar Nayak and published in the year July-17

The paper aimed to study the usage of various mode of electronic payment, to
study the effect of demonetization on cashless transaction in India and to suggest
measures to successfully promote cashless India.

The findings of the study were that the decline in digital transactions in two
successive months goes against the government’s objective of a “less cash”
economy. During the scarcity of funds people preferred to use debit and credit
cards at point of sale terminals and mobile banking but these are also the two to
be disposed of quickly. RTGS and Paper Vouchers usage fell drastically after
demonetization when compared against pre demonetization period. The value of
digital transactions in January and February taken together dropped below that of
combined figure of September and October, before demonetization was
announced. To counter the negative effect and encourage digital transactions,
many private banks in the month of March, reintroduced charges on transactions
of cash deposits and withdrawals beyond the stipulated number of free
transactions. The step yielded positive result.

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• 'Demonetization: impact on cashless payemnt system ' written by Mr. Manpreet
Kaur, Assistant Professor: SGTB Khalsa College, Anandpur Sahib and published
in the year January-17

The paper intended to study Role of Demonetization and to Examine Status

of Electronic Payment System.

The study concludes that the cashless transaction system is reaching its growth
day by day , as soon as the market become globalised and the growth of banking
sector more and more the people moves from cash to cashless system. The
cashless system is not only requirement but also a need of today society. All the
online market basically depends on cashless transaction system. The cashless
transition is not only safer than the cash transaction but is less time consuming
and not a trouble of carrying and trouble of wear and tear like paper money. It
also helps in record of the all the transaction done. So, it is without doubt said
that future transaction system is cashless transaction system.

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• ‘Study of consumer' perception of digital payment mode', written by Mr.
Shamsher Singh and Mr. Ravish Rana and published in the year December 2017

The objective of the study was to find out the customer perception and impact of
demographic factors on adoption of digital mode of payment. This study has
made an attempt to understand customer perception regarding digital payment.

It was found that demographic factor except education does not have much
impact on the adoption of the digital payment. Anova computation supported this
finding as there was no signification difference is perceived by the respondents
on the basis of gender age, profession and annual income. It was only education
level of the respondents where signification difference is perceived by the
respondents. It indicates that adoption of digital payment is influenced by the
education level of the customer. If a person has studied beyond matriculation and
internet savvy, he or she will be inclined to use the digital payment mode. It was
also found that in the areas/region where education level is high such as Delhi
NCR and other metropolitan area, the possibility of acceptance of digital payment
is much higher. The growth of users of Smartphone and internet penetration in
such area also facilitated the adoption of digital payment.

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 ‘Digital payments for rural india - challenges and opportunities', written by Shakir
Ali, Wasim Akhtar, and S. K. Safiuddin and published in the year June,2017

The paper aims to study the challenges and opportunities of digital payments in
rural India.

The findings of the study were to reduce the digital divide and increasing the
awareness in the rural public, to ease the complexities and enable end-of-day
settlement process for the merchants (As small retailers and merchants need
rotation of cashflow in quick turnaround time for their business operations), to
reduce the transaction charges over the digital payments and discourage cash
transactions. ICT infrastructure plays a vital role in successful adaptation of
digital payments and hence there is intrinsic need to improve and offer requisite
infrastructure for digital payments.

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 'Black swan effect of demonetisation on digital mode of payment in india ' written
by Professor Manisha Rajdhyaksha and Satyendra Jaiswal and published in the
year April 2017

The main purpose of this qualitative study is to study and position the concept of
black swan event like demonetization on the Indian digital mode of payment
sector. This study showed how a black swan event like the recent demonetization
has far-reaching repercussions and implications for an emerging sunrise sector
like the Digital Payment.

The Indian Digital Payment sector has shown agility and dynamism in their
innovativeness and adaptability to survive and thrive in this black swan event.
Moreover, the Indian Digital payment sector adopted novel approaches on
multiple parameters like business processes, product and or service
development, reaching hitherto untouched markets, creating market niches,
technological excellence, and creating world-class services in this payment
arena. The proactive approach of Government of India to instigate this
demonetization and create enabling environment through positive policies will
jump-start this sector exponentially and boost their competitiveness. With India
ready to take its place in world order as an economic superpower, Digital
Payment sector will bring in new business models with disruptive technologies.
And black swan event of demonetization can unexpectedly become a catalyst for
the growth and sustainability of this sector.

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 A study on demonetization and its impact on cashless transactions, written by
Mr. K. C. Balaji and published in the year March 2017.

The Objectives of the Study were-

 To study the history of demonetization across the world and in

India.
 To study the impact of demonetization on cash less transactions.

It was concluded that the growth of the cashless transaction system is reaching
new heights. People tend to move to cashless transactions. It is right to say that
the cashless system is not only a requirement but also a need for the society. But
on the other hand, the risk of cyber-crime is very much higher as almost all the
cashless transactions are done over internet. So proper and complete awareness
must be made to the people to keep their debit and credit cards safe and to use
the internet banking and the digital wallet in a most secure way. In order to
punish the cyber criminals, the properly structured cyber police force with high
end forensic labs and technology must be created.

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 'Impact and importance of cashless transaction in india', written by Ms.Pranjali A.
Shendge, Mr. Bhushan G. Shelar and Asst.Prof. Smitaraja S. Kapase and
published in the year April 2017.

The aim behind this Research was

· To know what a Cashless Transaction means.
· Impact and importance of Cashless Transaction System.
· Analyze the future trend of Cashless Transaction.

It was concluded that the benefits of this move have now started trickling in with
more and more people switching to digital modes of receiving and making
payment. India is gradually transitioning from a cash-centric to cashless
economy. Digital transactions are traceable, therefore easily taxable, leaving no
room for the circulation of black money. The whole country is undergoing the
process of modernization in money transactions, with e-payment services gaining
unprecedented momentum. A large number of businesses, even street vendors,
are now accepting electronic payments, prompting the people to learn to transact
the cashless way at a faster pace than ever before.

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 'Opportunities and challenges of e- payment system in india', written by Mr. Sujith
T S, Julie C D and published in the year 2017.

The Objectives of the study were:

· To know the different modes of e-payment.
· To know the opportunities and challenges of e- payment system in India.
· To identify the future of digital payment system in India.

It was concluded that Electronic payment refers to the mode of payment which
does not include physical cash or cheques. It includes debit card, credit card,
smart card, ewallet etc. E-commerce has its main link in its development on –line
in the use of payment methods, some of which we have analyzed in this work
.The risk to the online payments are theft of payments data, personal data and
fraudulent rejection on the part of customers. Therefore, and until the use of
electronic signatures is wide spread, we must use the technology available for
the moment to guarantee a reasonable minimum level of security on the network.

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 'Emerging digital economy – a cashless perceptive in india', written by Mr.
Parikshit Agarwal and published in the year 2017.

It aims to study the initiative taken by the government towards Digital Economy in
India, challenges that will affect the implementation of Digital Economy and the
Impact of Digital Economy on India’s GDP.

It was concluded that the Government initiative to promote digital economy has
provided the use of latest digital infrastructure for quick delivery of financial
service thereby reducing time span for consumption of goods and services which
ultimately adds towards GDP of the country. The mainstream of Indian economy
lies in rural areas, where 70% population is largely depended on agriculture. If
they are digitally connected their socio-economic conditions will improve through
development of non-agricultural economic activities which will be possible only by
providing them digital infrastructure and financial literacy. The government move
towards digital economy is a dynamic move which require working all factors
simultaneously like literacy, infrastructure, overall business environment,
regulatory framework, etc

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 3. RESEARCH METHODOLOGY

3.1 RESEARCH PROBLEM

To understand and learn about the different digital payment platforms currently
prevailing in India and their position in the market. To study about the status of digital
payment in rural India. To study about the impact of demonetization on digital payment
companies. To learn the drawbacks and the challenges faced by the Indian digital
payment sector.

3.1.1 SAMPLE SIZE:

Sample size determination is the act of choosing the number of observations or

replicates to include in a statistical sample. The sample size is an important feature of
any empirical study in which the goal is to make inferences about a population from
a sample. In this project five digital payment companies have been considered for the
study. And hence the sample size is one.

3.1.2 QUANTITATIVE RESEARCH DESIGN

Quantitative Research Design is a formal, objective, systematic process for obtaining

quantifiable information about the world, presented in numerical form, and analyzed
through the use of statistics. Quantitative research is concerned with numbers,
statistics, and the relationships between events/numbers.

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3.1.3 DATA COLLECTION:

Data collection is the process of gathering and measuring information on variables of

interest, in an established systematic way that enables one to answer stated research
questions, test hypotheses, and evaluate outcomes. The following data collection
methods have been used in this project

1. Primary data

2. Secondary data

Primary data: The data collected through various methods like surveys, observations,
physical testing, mailed questionnaires, questionnaire filled and sent by enumerators,
personal interviews, telephonic interviews, focus groups, case studies, etc.

Secondary data: Secondary data implies second-hand information which is already

collected and recorded by any person other than the user for a purpose, not relating to
the current research problem. It is the readily available form of data collected from
various sources like censuses, government publications, and internal records of the
organization, reports, books, journal articles, and websites and so on.

For this project, primary data as well as secondary data has been collected from the
following sources in order to study the current trends, opportunities, challenges in the
Digital payment sector -

1. Questionnaires

2. Published research reports, charts, research papers, journal and articles.

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3.2 ANALYSIS OF DATA

The central government’s decision to demonetize Rs500 and Rs1000 notes has given a
major push to e-wallets and the recently launched unified payment interface (UPI), an
interoperable system launched by the Reserve Bank of India (RBI) and the National
Payments Corporation of India (NPCI), which will allow peer-to-peer and peer-to-entity
payments. E-wallets like Paytm, Freecharge have been quick to capitalize on this and
have been aggressively advertising to promote the usage of digital wallets as a way of
moving towards a cashless economy.

Ola sent out notifications to its passengers saying – ‘Recharge Ola Money now and you
don’t have to worry about carrying any notes, whether 500 or 1000. Ride cashless’.

Mobikwik also is providing cash pick up facility to its customers for some days. A person
can click on ‘cash pick up’ on the Mobikwik app, a representative of the wallet will come
to them to exchange Rs500 and Rs1000 notes and will directly load it in their e-wallet.
This means, one doesn’t have to go to bank or automated teller machines (ATM’S) at
all.

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Big Bazaar kept all its stores open on Tuesday up to 11:50 pm and popular cafe Social
too was accepting Rs500 and Rs1000 notes until midnight. The fact that the trend has
always been low value-high volume transactions in the online space is likely to change
in future.

For the study of this project, analysis has been made on the following five companies/e-
wallets-

1. PAYTM

Paytm is an Indian e-payment and e-commerce brand based out of Delhi NCR, India.
Launched in August 2010, it is a consumer brand of parent company One97
Communications. The name is an acronym for "Payment through Mobile". The company
employs over 13,000 employees as of January 2017 and has 3 million offline merchants
across India. It also operates the Paytm payment gateway and the Paytm Wallet. In a
short span of time, it has scaled to over 250 Mn registered users. One of the biggest
beneficiaries of demonetization has been Paytm as people have moved to cashless
payments owing to cash crunch.

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Within 12 days, Paytm has witnessed over 7 million transactions worth Rs 120 crore a
day. The mobile wallet is now four months ahead of its target and crossed $5
billion GMV sales. Now wherever we go, whether it’s small shops or a big store, we see
a Scanning code on wall with “Paytm logo” which says PAYTM KARO. Gross
Merchandise Value (GMV), which is an industry term for estimating the total worth of
goods sold through a digital platform, for Paytm was $3 billion last year.

Paytm is registering over 7 million transactions worth Rs 120 crore in a day as millions
of consumers and merchants across the country try mobile payments on the Paytm
payment platform for the first time. Offline transactions now contribute to over 65 per
cent of the overall business from 15 per cent about six months ago. They are also
working on expanding our merchant network by 150,000 additional merchants.

Mobile payment transaction value in India is also likely to register over 150 per cent
CAGR and cross Rs 2,000 trillion by FY 2021-22 from just over Rs 8 trillion as of FY
2015-16. Taglines like “Ab ATM nahi, Paytm karo” “cash is so yesterday” are doing the
rounds.

119
2. MOBIKWIK

MobiKwik is an Indian company founded in 2009 that provides a mobile phone

based payment system and digital wallet. Customers add money to an online wallet that
can be used for payments. In 2013 the Reserve Bank of India authorized the company's
use of the MobiKwik wallet, and in May 2016 the company began providing small loans
to consumers as part of its service. In November 2016, the company reported having
1.5 million merchants using its service and a user base of 55 million customers.

In April 2015, MobiKwik was used by 15 million users and claimed to be adding one
million new customers every month. In a partnership with Cash Care, MobiKwik began
providing small loans between 500–2,500 Indian rupees to customers in May 2016.In

November 2016,

120
MobiKwik had over 1.5 million merchants using its service and 55 million users.

Mobile wallet company MobiKwik witnessed an over 40 percent increase in app downloads in

less than 18 hours of the demonetization of the Rs 500 and Rs 1000 notes. Following the 2016

Indian banknote demonetization in November 2016, MobiKwik realized a 400% increase in

financial transactions using the service by late December, 2016.

Additionally, user traffic and merchant queries went up by 200 per cent among its over
35 million users. This has prompted the mobile wallet company to revise its business
targets to now achieving a gross merchandise value of $ 10 billion by 2017. As part of
the demonetization offering, MobiKwik has introduced a new feature where e-commerce
players can ask for payment via “MobiKwik on delivery” since cash on delivery has
become a non-option for many.

121
 3. UPI & BHIM

Unified Payments Interface (UPI) is an instant real-time payment system developed

by National Payments Corporation of India facilitating inter-bank transactions. The
interface is regulated by the Reserve Bank of India and works by instantly transferring
funds between two bank accounts on a mobile platform.

Pre-demonetisation
It remained a slow-starter. According to NPCI, the number of UPI transactions touched
1.22 lakh in September 2016.Some banks launched their own UPI apps, too. Though
many banks have made a mention about UPI in their annual reports, only a few have
given numbers on UPI (see info graphics).

122
Post-demonetization

Then came demonetization, and the number of UPI-based transactions shot up. The
launch of the UPI-based BHIM (Bharat Interface for Money) app on December 30, 2016,
by NPCI gave a further thrust to the payment platform.

RBI data put the volume of UPI transactions at three lakh, 20 lakh and 42 lakh during
November, December and January, respectively.

UPI usage seems to have gained further traction with the number of transactions
crossing the one-crore mark in the last two months. UPI is currently being offered by 52
banks.

Recently, NPCI stated that the number of BHIM app downloads had crossed 1.6 crore.
BHIM had an active customer base of 40 lakh as of June-end.

With the UPI completing a year in operation in about a fortnight, it is to be seen how the
common user and merchant establishments, including private and government
agencies, take it forward.

123
4. PHONEPE

PhonePe is a Fin-Tech company headquartered in Bangalore, India. Founded in

December 2015, it provides online payment system based on Unified Payments
Interface (UPI), which is a new process in electronic funds transfer launched by National
Payments Corporation of India (NPCI).

It is licensed by the Reserve Bank of India for issuance and operation of a Semi Closed
Prepaid Payment system with Authorization Number: 75/2014 dated 22 August 201

PhonePe is one of the best applications for the shopping. Offers like, refer and earn
program, 100% cash back on first UPI transaction, on fifth UPI transaction 50%, for first
bill payment 100% cash back in the wallet. There are so many other offers as well.
Everyone should have this application, as it is friendly and it is having so many good
features that we all expect in current time like one of the best is Split Bills. Lastly, we
can keep track in the mailbox as well as in the application for our expenses with full
detailed information.

124
The service which was acquired by Flipkart in April 2016 has also extended its offline
merchant network, especially in the last nine months, riding on the ‘cashless economy’
wave sweeping the nation. At present, over 25,000 offline merchants accept PhonePe
payments. While peer-to-peer payments and bill recharges generate maximum volumes
on PhonePe, the service also intends to get into the selling of financial products, and
wealth management in the near future. PhonePe rival Paytm ventured into the NBFC
space with Paytm Payments Bank earlier this year.

125
5. FREECHARGE

FreeCharge is an e-commerce website headquartered in Gurgaon. It

provides online facility to recharge any prepaid mobile phone, postpaid
mobile, DTH & Data Cards in India. On 8 April 2015, Snapdeal acquired Freecharge in
what is being referred to as the second biggest takeover in the Indian e-commerce
sector so far, after the buyout of Ibibo by rival MakeMyTrip, and the biggest Venture
Capital exit in India to date. According to The Economic Times, the deal is expected to
be anything around US$400 to US$450 million. On 27 July 2017 Axis Bank acquired
FreeCharge for $60 million.

Within the first 24 hours of the announcement of demonetization, the wallet loads of
Snapdeal-owned mobile transactions platform Freecharge grew 12 times and has been
increasing by the same average since then.

Within the first 24 hours, wallet loads grew by 12x versus the 30 days average before.
The number of people downloading the Freecharge app, registrations for mobile wallet,
transactions on third party merchants -- are all growing by 10-15 times on a per day
average basis. Demonetisation has given a boost to the cashless society and people
are finally seeing the value of commerce, logistics and payments being integrated.
Freecharge is also going to offer digital utility payments on your doorstep soon.

126
Apart from above, below are the names of some more digital payments companies/e-
wallets-

1. Airtel money

2. Citrus Pay

3. HDFC PayZapp

4. ICICI pockets

5. JioMoney

6. Ola Money

7. Citi Master Pass

127
3.2.1 DIGITAL PAYMENTS IN RURAL INDIA

In both urban and rural areas, online financial transactions, e-commerce activities as
well as digital payments still lag considerably, despite demonetization and the drive to
promote digital payments over the last one year.

Rural India lags behind urban areas in not just Internet penetration but also in Internet
access for online financial transactions due to lack of electricity and poor network
quality, a study by Internet and Mobile Association of India (IAMAI) and market research
firm Kantar IMRB said.

In both urban and rural areas, online financial transactions, e-commerce activities as
well as digital payments still lag considerably, despite demonetization and the drive to
promote digital payments over the last one year, the report said, adding that the
situation was worse in rural areas.

Only 16% of rural users access the Internet for financial transactions, while in urban
areas 44% users access the Internet for this purpose, according to the report.

A lot of these payments are peer to peer, and therefore there is a multiplier effect. So
this has picked up in urban areas but the required critical mass has not been built in
rural areas. Moreover, rural users are not continuously online in real time but switch off
the Internet for long periods.

Lack of electricity to charge devices, poor network quality and affordability of Internet
service packs are the reasons for such behavior and unless this trend is reversed,
usage purposes will remain skewed and off take of digital payments will remain

128
restricted, the report said. “Connectivity, and more importantly quality, of connectivity is
a question mark in rural areas.

As of December 2017, India had 481 million Internet users, an increase of 11.34% from
a year earlier. Of this, urban India has 295 million Internet users and rural 186 million.
While rural India saw Internet usage grow at 14.11% year-on-year, compared to urban
India which grew at 9.66%, this was mainly due to a low base effect as the total number
of Internet users in rural India is still critically low, the report points out. It expects the
Internet user base in the country to grow to 500 million by June 2018.

As far as frequency of Internet usage is concerned, 182.9 million urban users access
the Internet every day, as against 98 million users in rural areas. This usage pattern is
closely related to connectivity, quality of service and affordability.

Among the urban population, online communication is the top activity with 86% of users
accessing the Internet for this purpose, followed by entertainment (85%) and social
networking (70%). In rural India, however, entertainment stood out as the most popular
Internet activity for 58% of the population surveyed, followed by online communication
(56%) and social networking (49%).

CSC e-Governance Services India Ltd is a special purpose vehicle set up by the
ministry of electronics & IT to oversee implementation of the CSC scheme and ensure
delivery of essential public utility services, social welfare schemes, and healthcare to
citizens through these centers.

Infrastructure needs to be made a lot better and services need to be more affordable to
achieve the desired growth in Internet usage in rural areas. For the purpose of the
study, Kantar IMRB collected data from 60,000 individuals from different demographic
segments across 170 cities and from 15,000 individuals across 750 villages.

129
CONSUMER PERCERPTION TOWARDS DIGITAL PAYMENTS IN RURAL AREAS

The survey carried out by me on consumer perception towards digital payment received
85 respondents. While answering to the question on digital payment in rural areas,
many of them gave similar reasons for the failure of digital payments in rural areas.
Some of the reasons put forth by the respondents are as mentioned below-

 Absence of proper infrastructure and illiteracy

 Poor network connectivity in rural areas

 Lack of awareness about digital payments in rural areas

 Security is the major concern of these people

 Adoptability and convenience issues

 Sudden changes take time to be implemented completely

130
3.2.2 CONSUMER PERCEPTION TOWARDS DIGITAL PAYMENT
MODES

I had carried out an online survey on ‘Consumer Perception towards Digital payment
Modes’ through Google questionnaire forms, which received 87 respondents. Here is
the list of the questions asked in the questionnaire

1. Name
2. Age
3. Gender
4. Occupation
5. Which mode of payment do you frequently use?
6. If online banking, then why?
7. How often do you use digital payment modes to make online payment of bills
and purchases?
8. For which of the transactions mentioned below, do you prefer to use digital
payment modes.
9. How will you rate the convenience in the use of digital payment modes?
10. How much do you think are digital payment modes secured?
11. Do you think security is a major concern as some people are still using
traditional methods?
12. Has your usage of digital payment modes increased post-demonetization?
13. Do you think demonetization has helped in the promotion & acceptance of
digital payment modes?
14. Digital payment modes are still not preferred much in rural areas. Please
comment on this.
15. Comment on 'India taking a step on the road to cashless economy'.

131
All the above question were answered by the 87 respondents, results of the same are
discussed below-

As seen from the above graph, the most of the population makes use of cash.
Debit/credit card, online banking combinable. Only a 10% of the population makes use
of online payment.

132
If you prefer online banking, then please state the reason.

Majority of the people use online banking to save their time, followed by faster transfer
of funds. Avoid standing in the queue is also one of the reasons. Half of the population
is attracted towards the discounts offered by the digital payment companies. Very use
the same for recording their transactions.

133
Only 27 % of the population always uses digital payment modes, and it mostly younger
age group between 15 to 30 years, followed by 44% who uses it frequently. 24 % of the
population uses it only when they are in a hurry or fall short of money.

134
As we can see most frequently it is used for recharge, fund transfer and online
shopping. Comparatively lesser people use it for payment of electricity and other bills.

135
As we can see that 83% of the population feel s that digital payment modes are secured
but there are still 4% who feel that they are still not at all secured.

136
Thus we can say that demonetization has impact of digital payment modes as 67%
population claims that their use of digital payment modes has increased post
demonetization.

137
Digital payment has surely been benefited by demonetization as claimed by 85 % of the
population.

138
When asked to comment on ‘India taking a step ahead on the road of cashless
economy, many similas responds were received which are as follows-

 Cashless economy is not possible in India due to the dominance of traditional

methods
 Completely not using cash will also not be possible as the same is required while
making payments to small vendors
 Many feel that India should review its infrastructure policies and adopt strong and
secured network connections
 Some of them give it a definite support and claim that it will be a great start for
transparent economy.
 Some of them like the concept of cashless society and claim that 20 years down
the line, India can become a cashless economy

139
3.2.3 CHANGES IN PAYMENT METHODS FROM CASH TO ONLINE
BANKING POST DEMONETIZATION.

The adoption rate of online platforms was high during the demonetization period, but it
plateaued out as soon as cash became available in the system.

When the Modi government banned high denomination notes of Rs 500 and Rs 1,000
notes on November 8 last year, removing an overwhelming amount of cash from the
economy, people had to willy-nilly fall back on plastic or online transactions. The fact
that 86 per cent of the cash available in the system was sucked out. But once cash was
back in circulation, those who earlier dealt mostly in cash went back to doing so.

The PCI was formed under the aegis of Internet and Mobile Association of India in 2013
to cater to the needs of the digital payment industry. During November, December 2016
and January 2017, online transactions were at their peak. In October 2016, debit card
transactions stood at Rs 21,941 crore and those of credit cards at Rs 29,942 crore.
Post-demonetization, in December 2016, debit card transactions jumped to Rs 58,000
crore and those of credit card were at Rs 31,150 crore.

However, in August 2017, 10 months after the note ban, debit and credit card
transaction stood at Rs 36,000 crore each, having come down substantially from the
heights they achieved, but not falling back to the pre-demonetization lows.

140
After the cash flow in the system eased, small kirana shops stopped transacting through
online payment channels, because they did not want to take a tax number or a Goods
and Services Tax number. They do not have the wherewithal to pay taxes and the
government needs to incentivize merchants, otherwise small and medium enterprises
are going to go back to cash mode.

Security and trust in payment systems was something all stakeholders need to work on
together. Online transactions are bound to grow over a period of time, but in a country
which overwhelmingly ran on cash; it may be difficult to do a quick digitization.

141
3.2.4 IMPACT OF DEMONETIZATION ON DIGITAL PAYMENT
COMPANIES.

Over the past twelve months, demonetization has attracted mixed reviews, depending
on the analyst’s lens. While a few businesses may have been impacted in the short to
medium term, digital payments companies stand out as one of the most significant
beneficiaries of the move. Post demonetization, there has been a marked reduction in
the resistance towards digital payments, and this medium should continue to see
sustained adoption going forward.

One of the talking points of the digital payments story has been the phenomenal growth
witnessed by new age instruments such as Unified Payments Interface (UPI), prepaid
payment instruments (PPIs), Aadhaar Enabled Payment System (AEPS), along with
well-established ones such as National Electronic Fund Transfer (NEFT), Real Time
Gross Settlement (RTGS) and cards.

142
Digital payment companies have seen a substantial jump in their business as a result of
the government’s measures towards promoting cashless transactions post
demonetization last year. These firms are likely to further consolidate their business with
more incentives for digital transactions.

143
In the year after demonetization, digital transactions have grown considerably. Indeed,
disruptions in the digital space have not only revolutionized the way we manage our
finances, they have also made contactless and cashless transactions the preferred
choice of many among us. And, with digital wallets, quick response (QR) codes, near
field communication (NFC) technology, sound wave systems, virtual cards, unified
payment interface (UPI) and Aadhaar Pay offering top-notch secure payments options,
the smart phone has become the most sought after all-in-one device.

Official statistics indicate an 80% increase in the value of digital transactions in 2017-18,
with the total amount expected to touch Rs 1,800 crore in the wake of the impetus
provided by demonetization.

144
The value of digital transactions till October this year, at Rs 1,000 crore, was nearly
equal to that for the whole of 2016-17. It was a continuation of a trend, with June, July
and August registering Rs 136-138 crore transactions on an average, according to the
ministry of information technology.

Interestingly, the volume of digital transactions rose in March and April (Rs 156 crore in
both months) when the effects of demonetization in terms of lack of cash had begun to
wear off. Thereafter, the monthly average of Rs 136-138 crore indicates a steady
pattern even as the value is rising.

The report, shared with the finance standing committee of Parliament, shows significant
increases in average daily transactions across all platforms, such as UPI-BHIM, IMPS,
M-wallet and debit cards, since November last year, when PM Modi announced
demonetization.

There has been progress in establishing the 'Jan Dhan-Aadhaar-Mobile trinity', with 118
crore mobiles, a similar number of Aadhaar numbers and 31 crore Jan Dhan accounts.

145
146
Since November 2016, there has been a 221% increase in volume of transactions and
118% increase in value of transactions in the non-tax receipt portal," the government
said. In close proximation to Aadhaar architect Nandan Nilekani's recent statement that
the government had saved around $9 billion by eliminating frauds in benefit payments,
the government said direct benefit transfer had resulted in savings of Rs 57,029 crore
up to 2016-17.

There has been a big increase in e-toll payments from Rs 88 crore in January 2016 to
Rs 275 crore in August 2017 but the number of tags remains low at 6 lakh till September
2017. There has been a strong growth in volume and value of BHIM-UPI transactions.
The value rose from Rs 101 crore in November 2016 to Rs 7,057 crore in October 2017.

Mobikwik had 3-3.5 crore users in the pre-demonetisation days and a year after note ban it has

6.5 crore. The company also witnessed a sharp rise in transactions from one million to three

million within a year.

Digital transactions have grown. But the key thing is that a lot of stepping stones for future

adoption have been laid down -- like the BHIM (Bharat Interface for Money) app by the

government. Demonetisation was the shock that forced people to move to online channels.

147
FACTORS THAT HAVE DRIVEN THE RISE IN DIGITAL PAYMENTS
OVER THE LAST 12 MONTHS:

1. Embedding of offline space in the business growth strategy

Offline space has evolved into the most recent battlefield for payment service
providers. Acquiring banks have deployed almost 29 lakh POS terminals across the
country, up by almost 95% from last year. 3 This space has also attracted the attention
of UPI and PPI players, and many of them have developed innovative solutions to
assist large merchant outlets, micro-merchants, cash on delivery payment facilitators of
ecommerce firms, etc., in accepting payments seamlessly over mobile phones.
Customers facing issues with cash availability post the note ban began to experiment
with these digital payment modes.

2. Building of ecosystem around digital payments

Quite a few players rolled out multiple solutions allied with digital payments, which
further helped in their adoption. A notable few were:

 Integration of enterprise resource planning (ERP) of corporates with the UPI solution for

real-time management information system (MIS) updates

 Disbursement of instant loans based on the footprint generated by digital payments

3. Boost to interoperability

One of the most significant changes in the payments landscape is the push towards
interoperability, with instruments such as UPI allowing transfers between 55 banks,
independent of the acquirer payment service provider mobile app.The increasing

148
adoption of the Bharat Bill Payment System (BBPS), Bharat QR and interoperability
guidelines for PPI players will lend a further push to seamless, secure and
interoperable payments.

4. Promotional efforts by players

Several payment processing firms and FinTech companies leveraged demonetisation

to penetrate the market. In an effort to expand their market share, quite a few of them
offered loyalty points, instant cashbacks and referral rewards to users. While some
may have doubts about the long-term sustainability of such offers, the promotional
efforts definitely provided an impetus to users considering a switch to digital payments.

The way forward

The growth streak of digital payments is likely to continue in the future. The next push
to the adoption of digital payments could come from relatively slow adopters such as
the rural economy and the small and medium-sized enterprises (SME) sector.
Government incentives such as discounts on digital GST payments and set-up of
accelerator programmes will provide an added boost. A few specific use cases may
emerge in the space of business to business (B2B) payments, Electronic Clearance
Service (ECS) mandates, equated monthly instalments (EMIs), person to government
payments (P2G) in smart cities, etc. These are likely to have a positive impact on
transaction volume size going forward.

149
 4. CONSOLIDATED RESULTS

An upshot of demonetization was that the digital modes of payments picked up sharply.
After demonetization, there has been a significant emphasis on digital modes of
payment. The Government of India and the Reserve Bank have initiated a series of
measures, some of which are temporary, to promote movement from cash to non-cash
modes of transactions. They include,

(i) Reduction in the merchant discount rate (MDR) and point of sale (POS) fees;

(ii) Monetary incentives in the form of discounts and prizes;

(iii) Service tax relief on MDR for small transactions;

(iv) Waiver of charges for small value transactions under Immediate Payment Service
(IMPS), Unified Payment Interface (UPI) and Unstructured Supplementary Service Data
(USSD) based *99# platform;

(v) Broadening Prepaid Payment Instrument (PPI) reach by enhancement of limits;

(vi) Introduction of a new category of ppis;

(vii) Permitting banks to issue ppis to a larger set of entities; and

(viii) Permitting National Payments Corporation of India (NPCI) to launch

(a) the common app for UPI; and

(b) National Electronic Toll Collection (NETC) system.

150
The government also announced that it would ensure that transactions fee/MDR
charges associated with payment through digital means shall not be passed on to
consumers. These measures are encouraging migration of consumers from cash to
digital modes of payments.

After the announcement of demonetisation, digital activity levels were low in the initial
weeks as people were busy depositing/exchanging SBNs. However, in December 2016,
digital payment activity increased alongside progressive remonetisation. The usage
statistics show that the y-o-y growth for major modes of electronic payments was good
in October 2016, mainly on account of festive season.

The continuance of that high growth with a further pick up in some components from
November to January 2017 was a positive fallout of demonetisation. However, the pace
of growth moderated somewhat in February 2017.

151
 GROWTH IN SELECT ELECTRONIC MODES OF PAYMENTS

(y-o-y growth in per cent)

Oct- Nov- Dec- Jan- Feb-

Category
2016 2016 2016 2017 2017

Volume 16.2 23.3 39.0 38.0 34.5

NEFT
Value 37.6 38.3 40.8 60.2 49.5

Volume -1.1 23.0 58.4 52.7 20.2

CTS
Value 2.9 8.6 13.0 19.3 0.8

Volume 116.7 89.6 157.2 177.7 150.4

IMPS
Value 150.7 135.9 186.6 196.7 184.2

Volume 53.0 30.8 58.3 19.8 -0.9

NACH
Value 89.8 76.3 116.7 22.8 54.2

Source: RBI Bulletins and Press Releases on Electronic Payment Systems -

Representative Data

152
The recent pick-up in digital payment activity is better reflected in the sequential growth
in the months following demonetisation. The pattern of digital transactions in February
2017 over November 2016 shows that the growth rates surged in both value and
volume terms compared with the corresponding period of last year for most electronic
modes of payment, even as there was some decline in the use of digital payments after
December 2016.

RECENT GROWTH IN DIGITAL MODES OF PAYMENTS

(Volume in million, Value in ₹ billion) Change (%)

Feb-17 Feb-16
CATEGORY
Nov-16 Dec-16 Jan-17 Feb-17 over over

Nov-16 Nov-15

Volume 123 166 164 148 20.4 10.4

Value 8808 11538 11355 10878 23.5 14.3

NEFT
Average ticket size
71583 69376 69159 73397 2.5 3.5
(₹ )

Volume 87 130 118 100 15.3 18.0

Value 5419 6812 6618 5994 10.6 19.2

CTS
Average ticket size
62236 52395 55873 59677 -4.1 1.1
(₹ )

Volume 36 53 62 60 65.2 25.1

IMPS
Value 325 432 491 482 48.5 23.2

153
 Average ticket size
8982 8183 7870 8071 -10.1 -1.4
(₹ )

Volume 0.3 2.0 4.2 4.2 1346.1 -

Value 0.9 7.0 16.6 19.0 2001.2 -

UPI
Average ticket size
3150 3565 3995 4577 45.3 -
(₹ )

-
Volume 0.007 0.102 0.314 0.225 3091.9

Value 0.007 0.104 0.382 0.357 4789.4 -

USSD
Average ticket size
1037 1015 1215 1589 53.2 -
(₹ )

Volume 206 311 266 212 3.3 3.9

Debit and
Value 352 522 481 391 11.1 -5.6
Credit Cards at

POS & Average ticket size

1714 1679 1812 1844 7.5 -9.2
(₹ )

Volume 59 88 87 78 32.8 4.3

Value 13 21 21 19 41.9 15.2

PPI #
Average ticket size
224 242 241 239 6.8 10.4
(₹ )

154
While it is important that efforts be made for increasing acceptance of digital payments,
it is equally vital to ensure that the digital payments are safe and secure. It has been the
constant endeavour of the Reserve Bank to enhance security features of currency notes
to maintain confidence in India’s paper currency. Similarly, there is a need to constantly
review and ramp up security features of digital payments to maintain and enhance trust
of its users, especially, given the low levels of literacy in India. In this context, the
Report of the Committee on Digital Payments (Chairman: Shri Ratan Watal) submitted
in December 2016 has also underlined, inter alia, the need for enhancing the resilience
of the Indian payments and settlement systems; and strengthening the consumer
protection framework in digital payments.

155
 5. CONCLUSION

Digital payment is extremely useful for the people who belong to the class where cash is
considered the most suitable medium. If this technology grows to the point that every
store accepts exchange of money through wallets, then it would remove the need to
carry cash or cards. The three most popular digital Wallets available in Indian market
are MobiKwik, Paytm and PayU.

Besides private actors like Paytm, Mobikwik, and FreeCharge, the Indian government
has been aggressively pushing several digital payment applications, including
the Aadhaar Payment app, the UPI app, and the Bharat Interface for Money (BHIM)
app developed by the National Payments Corporation of India (NPCI).

The new apps aim to ease the transfer of funds across India, especially in rural
communities, and more importantly, seek to facilitate a behavioral change towards the
greater adoption of cashless services. As such, the digital payments industry is fast
becoming a highly attractive destination for foreign investors keen to establish a
foothold in India.

Multiple factors and parallel institutional and behavioral trends seem to be powering
India’s transition towards a less-cash economy. The rapid penetration of smartphones
and spread of internet connectivity on mobiles, digital payment services provided
by non-banking institutions and the rise of the fintech sector, consumer expectations of
one-touch payments, and progress in regulatory governance and tax breaks, have
altogether shaped India’s payments landscape in favor of digital solutions.

156
The Indian banking sector has been growing successfully, innovating and trying to adopt
and implement electronic payments to enhance the banking system. Though the Indian
payment systems have always been dominated by paper-based transactions, e-
payments are not far behind. Ever since the introduction of e-payments in India, the
banking sector has witnessed growth like never before.

157
PROJECT III : SOCIAL RELEVANCE : NGO VISIT

158
 EXECUTIVE SUMMARY

A non-profit organization or an NGO is an organization that operates independently of

any government, typically one whose purpose is to address a social or political issue.
NGO are homes to the elderly, children and the ones with some kind of disability. There
are 728 Old Age Homes in India today. Detailed information of 547 homes is available.
Out of these, 325 homes are free of cost while 95 old age homes are on pay & stay
basis, 116 homes have both free as well as pay & stay facilities and 11 homes have no
information. A total of 278 old age homes all over the country are available for the sick
and 101 homes are exclusively for women. Kerala has 124 old age homes which is the
maximum in any state.

We the students of GNVS Institute of Management had the privilege to visit one of the
NGO’s in Mumbai and experience the joy of giving. On 10 th March’18, we visited
Missionaries of Charity in Airoli, Mumbai. This NGO is home to 130 elderly ladies and
30 staff members. We got an insight into what exactly happens at an NGO. We carried
out some activities, interacted with the ladies over there, also interacted with the sisters
and the caretakers of the NGO.

This project highlights the background and history of the ladies being admitted in the
NGO, health and other issues faced by these ladies, medical treatment provided to
them, extra activities done by them. It also briefs about the project activities carried out
by us at the NGO. Helping them in any possible way and bringing smiles on their faces
were our only objective

159
1. INTRODUCTION TO NON-GOVERNMENTAL ORGANIZATION (NGO)

A Non-Governmental Organization (NGO) is a legally established organization, which

works independently from any government. NGOs work for the good causes like
eradicating poverty, providing education etc. They are Non Profit Organizations that
means they do not get profits out of their organizations. Govt gives grants worth crores
to Non-Governmental Organizations. They receive funds from people and from foreign
countries too.

ROLE AND FUNCTIONS OF NGOS IN INDIA

Non Governmental Organizations, or NGOs, as they are called in common parlance,

are organizations which are involved in carrying out a wide range of activities for the
benefit of underprivileged people and the society at large. As the name suggests, NGOs
work independently, without any financial aid of the government although they may work
in close coordination with the government agencies for executing their projects.

NGOs take up and execute projects to promote welfare of the community they work
with. They work to address various concerns and issues prevailing within the society.
NGOs are not-for-profit bodies which means they do not have any commercial interest.
NGOs are run on donations made by individuals, corporate and institutions. They
engage in fundraising activities to raise money for carrying out the work they do. Ever
since independence, NGOs have played a crucial role in helping the needy in India,
providing aid to the distressed and elevating the socio-economic status of millions in the
country.

NGOs are composed of experts with years of experience in executing social welfare
activities. Before rolling out a project, detailed analysis of the situation is done and
possible solutions are contemplated. Collaboration with civic agencies and other
government agencies (at district, state and even national level at times) is done to carry
out the work.

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NGOs not only go on the ground to address these issues, they also undertake massive
campaigning activities to generate awareness on these issues. In today’s time, NGOs
are efficiently leveraging the power of social media to disseminate information about
their work and reach more and more people.

IMPORTANCE OF NGOs

The Importance of NGOs in India India has made rapid progress in the socio-economic
sphere in the last seven decades. Millions have been brought out of poverty, life
expectancy has shot up, literacy rate has almost tripled and people have better access
to healthcare services. However, given the vastness of India, both in terms of
demography and area, and its socio-cultural diversity, millions are still bereft of a decent
life. Even today, numerous people struggle to get basics such as health, shelter,
education and nutritious food.

The benefits of India’s economic progress have not been uniform in nature. There is
rampant economic inequality. This is where NGOs come into the picture. Their job is to
plug the gaps left by the government by improving the lives of the most marginalised
communities.

In India, NGOs undertake a variety of activities, most of which are aimed at improving
the socio-economic status of communities with limited means. From providing direct
benefit (like distributing nutrition feed to malnourished children) to enabling and
empowering people (like making a community realise the importance of sending their
children to school), the work of NGOs has a far-reaching impact in helping
underprivileged and deprived people march ahead in life.

The work done by NGOs goes a long way in nation building. With the Corporate Social
Responsibility (CSR) Act mandating 2% spend by large corporate on social issues,
NGOs have the potential to touch millions of more lives through their work.

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Over the years, NGOs have streamlined their operations and enhanced their scales.
Functioning of established NGOs is akin to big corporate organizations – there are well-
defined KPIs and targets to meet. NGOs need to be transparent in their work and
ensure that the funds raised benefit those for whom they are intended.

This is a good trend, larger and more accountable NGOs will be able to deliver more
effectively and efficiently, making best use of resources. NGOs are already proving to
be agents of change. In times to come, they will continue to play a significant role in
helping large sections of the Indian society come out from the quagmire of poverty and
distress.

NGOs in India work for a wide range of causes. Some such causes include:

1. Child rights

2. Poverty

3. Social Injustice

4. Environment Conservation

5. Human Rights

6. Care for elderly people

7. Women Empowerment

8. Wildlife Conservation

9. Animal Rights

10. Sanitation and Hygiene

11. Humanitarian Relief

12. Health and Nutrition

13. Literacy and Education

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POSITIVE SIDE :-

 A lot of NGOs are working on the areas where government is not doing much.
For example Goonj NGO is providing clothes and other basic amenities to
millions of poor. Many such kind of organizations are giving quality education to
street children, providing water facility in the remotest areas along with many
other good causes.

 With the help of these organizations, development programs can happen

fasterand efficiently. And this will help the government a lot.

 In many cases, government is working with NGOs to solve local problems.

NEGATIVE SIDE :-

 Though India has more than 30 lakh NGOs as of 2017, only approx 3 lakh
organizations are submitting the financial accounts. Govt’s funds to NGOs are
not accounted and audited. This is resulting in misuse of funds and fake Non-
Governmental Organizations.

 If NGOs really working well, all the social challenges in India would have
eliminated by now. Forget eliminating problems, there is no satisfactory
development in India according to HDI (Human Development Index) report.

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FACTS :-

 Supreme court ordered Central Government to audit Non-Governmental

Organizations and to terminate the licenses of organizations that are not
submitting their financial accounts.

 India has vast no. of NGO compared to other countries.

 The no. of NGOs increased in the time of 1960s as people felt that the
government projects are not contributing in developing of deprived sections of
India.

 International NGOs started around the year 1839. After the establishment of
‘United Nations Organization’ in the year 1945, the phrase ‘Non
Government Organizations’ became popular.

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1.1 INTRODUCTION TO THE MISSIONARIES OF CHARITY

The Missionaries of Charity is a Roman Catholic(Latin Church) religious

congregation established in 1950 by Mother Teresa, now known in the Catholic Church
as Saint Teresa of Calcutta. In 2012 it consisted of over 4,500 religious sisters.
Members of the order designate their affiliation using the order's initials, "M.C." A
member of the congregation must adhere to the vows of chastity, poverty, obedience,
and the fourth vow, to give "wholehearted free service to the poorest of the
poor." Today, the order consists of both contemplative and active branches in several
countries.

Missionaries care for those who include refugees, former prostitutes, the mentally ill,
sick children, abandoned children, lepers, people with AIDS, the aged,
and convalescent. They have schools run by volunteers to educate street children and
run soup kitchens as well as other services according to the community needs. These
services are provided, without charge, to people regardless of their religion or social
status.

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1.1 MISSIONARIES OF CHARITY, AIROLI, MUMBAI

One of the branches of Missionaries of charity is in Airoli city situated in Mumbai. This
branch specially takes care of the elderly ladies who are physically or mentally unfit or
don’t have their families to look after them. This branch has around 130 of such females
as their patients. There are many groups which often give a visit to this NGO and
donate their time, money and the material things required. The finances of the NGO are
looked after by the trustees and the donations coming in by the society members.

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1.1.2 FEATURES OF THE NGO

Some of the other features of the NGO are as below-

a) Huge accommodation facility :

The NGO has a very huge space to properly accommodate the increasing number of
ladies. It also has huge bedrooms comprising of many beds, a huge canteen and a
garden. The premises of the NGO are covered by many trees making the place more
serene and peaceful.

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b) Large number of staff :

In order to look after 130 ladies with different disorders, a great manpower is required.
This NGO has around 3o staff members who constantly look after the needs of the
patients and help them in their day to day activities.

c) Strict time table/schedule to be followed at the NGO :

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The above chart has a list of all activities which needs to be carried out from time to
time by the ladies, some of them are as below
 Morning prayer
 Breakfast
 Washing & cleaning
 Counseling, meditation, physiotherapy
 Lunch
 Rest
 Gardening & walking
 Extra activities (Handmade crafts/playing games)
 Dinner
 Night prayer
 Sleep

d) Medical facilities :

The medical facilities provided to the ladies are extremely good. A well-known doctor
from Thane visits the NGO regularly for the check-ups. Their diet plan is also fixed. It is
said that many of the ladies have returned to their homes after getting proper treatment
from the NGO.

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e) Clean and beautiful premises :

The most important thing is that the premises outside and inside the NGO are kept
extremely clean keeping in mind the health of the patients. Extremely ill patients are
made to stay in separate rooms and their special care is taken. One can feel peaceful
just watching the statue of Mother Mary at the entrance.

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f) Activities carried out for the patients :

The NGO carries out some or other activities for the ladies. The ladies are taught to
prepare small crafts items so that they can spend their time wisely and also learn
something new. The below pictures are of the ear-rings and lanterns made the patients
themselves.

There are many such small hand-made items prepared by the ladies which the entire
place is decorated.

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2. STUDENT PROJECT ACTIVITY

The student project activity includes three sub-sections as below-

1. Objective of the project

2. Activities carried out at the NGO
3. Results/Conclusion

2.1. OBJECTIVES OF THE PROJECT

The project activity was carried out with the following objectives –

 To get an insight about the life inside an NGO

 To learn about the background and history of the patients getting admitted in the
NGO
 To study about the problems and difficulties faced by them and the medical
facilities being provided.
 To learn about their requirements and try to fulfill the same.

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2.2 ACTIVITIES CARRIED OUT AT THE NGO

Our visit to the NGO comprised of the below mentioned activities wherein the above
objectives had been achieved-

A) INTRODUCTION WITH THE SISTER & THE CARETAKERS :

Sister Maria Joseph is the lady looking after the NGO. She granted us the permission to
visit the NGO and carry out our activities. Our first interaction was with the Sister and
then with the caretakers. The caretakers gave us information regarding the NGO.

We learnt that there are around 130 elderly ladies residing over here and almost 30 staff
members to look after them.

On asking about the behavior of the patients, the caretakers said that the ladies are
often quite but sometimes they turn violent and start fighting and it is the most difficult
time to calm them down.

According to the caretakers, few ladies have been brought to the NGO, treated in here
properly and once they are fit, they are sent back to their families. And the once who
don’t have any families or are unfit have stayed here for long years.

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B) INTRODUCTION WITH PATIENTS :

As soon as we entered the premises of the NGO, there were some smiling faces,
waving us hello, while some faces were surprised and just stared at us, some faces
looked at us with a hope that we will take them back to their homes. It was their time of
having tea, we helped the caretakers in serving them tea and tried to make some
interaction with the ladies.

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C) SERVING REFRESHMENTS :

It is said there is no sincere love than the love of food. Feeding someone gives you the
joy of fulfillment. We served them some refreshments and the happiness on their faces
was visible, giving us blessings in return.

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D) INTERACTION WITH PATIENTS :

Interaction with the ladies taught us many lessons as how we should respect and value
the small things we have, rather we creep over the small problems we have and then
there are these ladies who cannot even get the joy of staying with their families.

Few ladies were willing and excitedly taking to us while few choose to remain silent.
Few of them told us their stories as how they reached this NGO and their life past
entering here. Some were left here by their families, few were found ill lying on the
streets dropped in the NGO by the police officials. One of them, the only young lady
named Pooja didn’t remember anything about her past and kept on repeating some
same statements again and again. Another mid-aged lady was kept tied to a chair.
When asked about her, the caretaker said if she is not tied she beats herself as well as
others. We were just shocked to see her in that state. One of the lady constantly kept on
holding our hand and telling us to drop her to her home. Few ladies were physically as
well mentally fit but they didn’t have their families to stay with. Thus we got to hear
many different life stories which made us feel how lucky we are.

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E) ENTERTAINMENT ACTIVITIES :

The best part of our entire schedule was the time when we carried out some
entertainment activities for the patients. The activities included singing and dancing. We
sang some old songs as majority of the crowd included senior ladies. As soon as we
started singing, more number of voices started joining us and the smiles on their faces
started increasing by miles. Few ladies came in front to sing with us while few enjoyed
the songs sitting quietly.

As it is said one should dance as it will make you feel younger, many ladies willingly
came forward to shake a leg with us, when we started dancing. One of them requested
us to sing a particular song and danced on the same and the glow on her face was
worth watching. All of them enjoyed the short program but it was us who experienced
the true joy by watching their smiling faces.

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F) VOTE OF THANKS :

At the end of the entertainment program, we asked the ladies whether they enjoyed our
company or not. And all we got is positive responses, few ladies could not speak but
their face said it all. We told them about the happiness we got by being with them and
assuring them that we will visit them again. And in return we got so many blessings.
Bidding adieu was the most difficult part as the time spent with them not only gave us
joy but taught us many lessons as well.

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 3. CONCLUSION

The project was carried out with an objective of getting an insight of the life inside an
NGO. The time we spent in the NGO helped us to achieve this objective as we were
able to study an entire day’s schedule of the patients over there and the activities done
by them.

We also learnt the life stories and experiences and the way these ladies got admitted
into the NGO by which our second objective was also been achieved. Hearing such
difficult life stories has motivated us to respect and value our life, to cope up with
smaller problems we face as compared to the problems which these ladies have faced.

With respect to the facilities being provided by the NGO, we can say that this NGO has
been successful in providing the best of the facilities to the needy ladies. Proper
medication, proper diet, clean premises, other activities, all these is helping the ladies to
recover faster and providing shelter for the homeless. Few ladies have been sent back
to their homes, after getting proper treatment and this can be said to be the biggest
achievement of the NGO.

As far the requirements are concerned, the financial requirements are fulfilled by the
trustees and from the donations received. Upon enquiry, we learnt that the NGO is in
need of some medicines and we also tried to fulfill this requirement of theirs.

The student project activity at the NGO has not only helped us to achieve all our
objectives but it also gave us the joy of giving, accomplishment and fulfillment.

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