A STUDY ON DIFFERENT TYPES OF INVESTMENT

PLANS PROVIDED BY GOVERNMENT

A Project Submitted to

University of Mumbai for partial completion of degree of

Bachelor of Management Studies

Under the facility of Commerce

By

Mandar Kandale

Under the Guidance of

Hemant Solanki

Ramniranjan Anandilal Podar College of Commerce and

Economics

March 2021
INDEX

1. INTRODUCTION

2. RESEARCH METHODOLOGY

3. LITERATURE REVIEW

4. DATA ANALYSIS AND INTERPRETATION

5. CONCULSION AND SUGGESTIONS

6. FINDINGS

LIST OF TABLES AND FIGURES:

1. Age 2. Gender 3. Where do you get investment information 4. What is the

proportion of savings and expenditure in your earnings? Savings:
Expenditure. 5.What is your objective behind investment 6. Are you
aware about different government schemes? 7.Do you investment in
any of the schemes. 8.How many of the following schemes are you
aware of. 9.What type of investment plans do you prefer in future. 10.
Which of these special provisions to you need to boost up your
investment. 11.What suggestion would you like to offer for
popularizing investment schemes.
INTRODUCTION

In general, to invest is to distribute money in the expectation of some benefit in the

future. For example, investment in durable goods, in real estate by the service
industry, in factories for manufacturing, in product development, and in research
development. However, this report focuses specially on investment in financial assets.
In finance, the benefit from investment is called a return. The return may consist of
profit form the sale of property or an investment, or investment income including
dividends, interest, rental income etc., or a combination of the two. The projected
economic return is the appropriately discounted value of the future returns. Investors
generally expect higher returns from the riskier investments. When we make a low
risk investment, the return is also generally low. Investors, particularly novices, are
often advise to adopt a particular investment strategy and diversity their portfolio.
Diversification has the statistical effect of reducing overall risk.

There are two types of investments :

a) Traditional Investment

b) Alternative investment.

Traditional Investment: In finance, the notion of traditional investments refers to

putting money into well-known assets (such as bonds, cash real estate, and equity
shares) with the expectation of capital appreciation, dividends, and interest earnings.
Traditional investments are to be contrasted with alternative investments.

Alternative Investments: An alternative investment or alternative investment fund

(AIF) is an investment or fund that invest in asset classes other than stocks, bonds,
and cash. The term is a relatively loose one and includes tangible assets such as
precious metals, art, antiques, coins, or stamps and some financial assets such as real
estate, commodities, private equity, distressed securities, hedge funds, carbon credits
etc.
There are Six main investment types, or assets classes, each with distinct
characteristics, risk and benefits.

 Growth investments
 Shares
 Property
 Defensive investments
 Cash investments include everyday bank accounts, high interest saving
accounts and term deposits
 Fixed interest

Depending on the life stage and risk appetite of the investor, there are three main
objectives of investment: Safety, growth and income. Every investor invests with a
specific objective in mind, and each investment has its own unique set of benefits and
risks. Investment objective, in regard to personal financial planning, is the purpose a
particular portfolio serves for the individual’s or the investment advisory clients
financial needs.
There are various consultant agencies who advice their clients for investing in best
place for high returns and lowering the risk of losses during investment.
The most popular 7 investment plans provided by government are as follows:

1. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

This is an ideal life insurance scheme for those seeking an affordable life coverage.
By paying a premium of Rs 330 every year, you get a life cover of Rs. 2 lakh. Thus,
in case of policyholder’s death, the nominee is entitled to get the insurance amount.
You can avail this scheme if you are in the age group of 18 to 50 years. Under
PMJJBY, your life will be covered until the age of 55. All you need is a savings bank
account with an auto-debit facility.

2. National Pension Scheme (NPS)

Once available to government employees only, this pension scheme is now open to
all. You can plan your retirement by investing annually or monthly. Indian citizens
and NRIs in the age group of 18 to 60 can subscribe to NPS. Under this scheme, you
can allocate your funds in equity, corporate bonds and government securities.
Additionally, you would also get a tax exemption of Rs 50,000 under Section 80CCD.

3. Public Provident Fund (PPF)

PPF is one of the oldest retirement-planning schemes launched by the government.

The amount invested, interest earned and the amount withdrawn are all exempt from
tax. Therefore, PPF is not only safe but can help you save taxes at the same time. The
current interest rate is fixed at 7.8% compounded annually. You can invest up to Rs.
1.5 lakh every year under PPF.  

4. National Savings Certificate (NSC)

NSC is a bond issued by the government for five to 10 years. It provides fixed returns.
The interest earned is compounded and reinvested every year. You receive the final
amount at the time of maturity. It also serves as a tax-saving instrument as
investments up to Rs. 1.5 lakh is exempt under Section 80C of the Income Tax Act.
Only residents of India are eligible to invest in NSC.

5. Atal Pension Yojana (APY)

This is a social security scheme for workers in the unorganized sector. An Indian
citizen with a valid bank account and in the age group of 18 to 40 years can apply for
APY. You can enrol for APY with your bank or post office. However, the only
condition is that the contribution must be made until the age of 60.

6. Pradhan Mantri Jan Dhan Yojana (PMJDY)

PMJDY was launched with an aim to uplift the impoverished of the country. This
scheme aims to provide people with bank accounts, insurance covers, credit, and
pension. It also offers basic banking services like savings and deposit account,
insurance and so on.
7. Sukanya Samriddhi Yojana (SSY)

This is a scheme to secure your daughter’s future. You can open this account at a
post-office or a bank before your daughter’s 10th birthday. You can start by investing
Rs 1,000. A maximum of Rs.1.5 lakh investment is allowed. The account remains
operational until your daughter’s marriage or before she turns 21. The interest rate is
fixed every quarter.

There are many more investment plans/ schemes provided by our government, this
investment schemes mainly helps poor/middle class people to invest in various
schemes and get returns on it. The objective of the main focus of the government is to
focus on poor/middle class people, because they are not aware about various
investment types, so these schemes helps to investment and get best returns for there
future. This schemes/plans directly or indirectly helps our government to get funds to
run our country.
 RESEARCH METHODOLOGY

Methodology is an essential part of research to find answer to the research objective

that initiate the same. Therefore, it figures as the important part of the study. This
chapter focuses on the designs and research method utilized in the study. In addition,
the procedure followed to collect, capture, process and analyse data is presented. The
research approach used in the study in presented below.

In Order to Conduct this study, The Survey Method was adopted. In this method, the data is
collected from a predefined group of respondents in order to gain insight into various topics
of interest. The Group was made to respond to a Standardized Survey in order to avoid any
biased opinions that could affect the outcome of the research.

OBJECTIVES

1. To understand the concept of investment.

2. To describe the need and importance of investment.
3. To determine the main motive of investment.
4. To collect information about various investment plans provided by
government.
5. To determine the popular investment plans among the people.

HYPOTHESIS

People are less aware about various investment schemes provided by the
government.

1. To analyse lack of awareness about investment amongst individuals

2. To analyse the functioning and awareness government investment
programmes
SOURSE OF DATA

In Order to Conduct this study, The Survey Method was adopted. In this method, the data is
collected from a predefined group of respondents in order to gain insight into various topics
of interest. The Group was made to respond to a Standardized Survey in order to avoid any
biased opinions that could affect the outcome of the research.

In Order to complete the research, The Analysis of Secondary literature was also carried out
to fully understand about Benefits of Investments and government plans.

 Advantages
1. Advance portfolio management
2. Risk reduction.
3. Ahead of the personal finance game.
4. Odds of good returns in a short time.
 Disadvantages
1. Time consuming.
2. Brokerage commission kills profit margin.
3. Poor trade execution.
4. Tax inefficiency.
5. High expenses ratio and sales charges.

Sample Size

Using convenient sampling technique a sample size of 30 people were taken

into consideration.

Data Collection

The data was collected using Survey. The questions included the most popular
reason investment plans provided by the government. Closed ended questions
were included in the questionnaire to get answer of the objectives laid down in
the study.
LITERATURE REVIEW

This literature review aims at better understanding of Investment plans and

also gives perspective of how to improve personal finance by investing.
Investment is the sacrifice of certain present value for the uncertain future
reward. It entails arriving at numerous decisions such as type, mix, amount,
timing, grade etc. of investment and disinvestments. Further such decisions
making has not only to be continuous but rational too. Instead of keeping the
savings idle you may like to use savings in order to get return on it in the
future, which is known as ‘investment’. There are various investment avenues
such as Equity, Bonds, Insurance, and Bank Deposit etc. A Portfolio is a
combination of different investment assets mixed and matched for the purpose
of achieving an investor's goal. There are various factors which affects
investors’ portfolio such as annual income, government policy, natural
calamities, economical changes etc. An empirical study of “Indian Individual
Investors Behaviour” by Syed Tabassum Sultana (2010) was an attempt to
know the profile of the investors and also to know their characteristics so as to
know their preference with respect to their investments. The study also tried to
unravel the influence of demographic factors like gender and age on risk
tolerance level of the investors. Bhardwaj Rajesh, Raheja Rekh and Priyanka
(2011), propounded in their study that saving and investment pattern of
salaried class school teachers of govt. and private schools has depended upon
income and they both get salary but the scale of the salaries are different and
saving patterns that’s why is so different. Govt. teachers prefer to invest the
money for emergency purposes and private teacher’s emphasis on children
marriage and education. Dr. S. Mathivannan and Dr. M. Selvakumar (2011)
examined the saving and investment patterns of salaried teachers of Sivakasi
Taluk, Tamilnadu and they found that there is great importance of money and
money‟s worth for them and They are regularly preparing budgets for
Expenditures and compare it with the actual expenditure and take necessary
actions if there are any deviations has arrived so far and they are influenced by
fashionable and costly items.
DATA ANALYSIS AND INTERPRETATION

1) Gender

Percentage Respondents
Male 30% 9
Female 70% 21

2) Age

Percentage Respondents
20-30 77.3% 22
30-40 13.3% 4
40-50 10% 3
Above 50 nil 1
3) Where do you get investment information?

Percentage Respondents
Friends/ family 56.7% 17
Newspaper nil 1
Consultant 20% 6
Internet/ TV 20% 6

4) What is4) What is the proportion of savings and expenditure in

your earnings?

Percentage Respondents
20:80 50% 15
30:70 13.3% 4
40:60 nil 1
50:50 33.3% 10
5) What is your objective behind investments?

Percentage Respondent
Safety 56.7% 17
liquidity 10% 3
Return 33.3% 10
Other factor nil 0

6) What ty6) What type of investment do you prefer?

Percentage Respondents
Long term 53.3% 16
Medium term 30% 9
Short term 16.7% 5
 7) Where do you prefer investing?

Percentage Respondent
Bank deposits 56.7% 17
Shares nil 0
Insurance policy 13.3% 4
Govt securities 13.3% 4
Mutual funds 16.7% 5

8) Do you invest in any of the schemes?

Percentage Respondents
Pradhan mantri Jeevan Jyoti 24% 6
bima yojana
National pension schemes 8% 2
Public provident fund 60% 15
National savings certificate 16% 4
Pradhan mantri jan dhan yojana 8% 2
 9) How many
9) How many of the followings schemes are you aware of?

Percentage Respondents
Infrastructure bonds 6.7% 2
Mutual funds 60% 18
HDFC(housing plans) 33.3% 10
S.B.I life 43.3% 13
Met life 13.3% 4
IDBI bonds 20% 6
Future India(relief bonds) 23.3% 7
Bajaj alliance schemes 40% 12
 10) What type of investment plans do you prefer in future?

Percentage Respondents
Regular return plan 30% 9
Medical plan 30% 9
Pension plans 30% 9
Multiple option plans 10% 3

11) Which of these special provisions do you need to boost your

investments?

Percentage Respondents
Additional bonus 20% 6
High rate of interest 66.7% 20
Tax concessions 30% 9
High retirement benefits 26.7% 8
 12) What suggestions would you like to offer for popularizing schemes?

Percentage Respondents
Special schemes for working 60% 18
women
Offering additional bonus 20% 6
Additional tax incentives 30% 9
Offering specific schemes for 36.7% 11
children’s education/marriage etc
Additional pension schemes 20% 6
CONCULSION AND SUGGESTIONS

The study was done with the population of 30 sample which were randomly given
questionnaires. There are various schemes launched by the Government of India that
helps in strengthening the financial stability of the people, All these schemes are
known for their long-term benefits attractive interest rates and tax exemptions. People
should know all the plans that government has launched for them for their financial
wellbeing. People should know the importance and motive behind investments and
should look forward to invest other than spend their money. Iinvestment is a need of
all the classes of the society. It is clearly found out that if you want to secure your
future whatever the future needs you had, all these needs can be fulfil by best
investment made. Saving and investment cannot be neglected in present days as it
provides surety about strong financial stability in future. To cope up with the
increasing needs of all the sections of the society saving and investment are the best
options to secure and fulfil all the present and future needs.

It is also noted that most of the people don’t know about various investment plans,
may be some or the other reason. It can be said that majority of the people invest
today for better tomorrow. Some invest for better pension, some invest for betterment
of their children’s or some just for the sack of getting better returns. Also, it can be
said that tax concession can boost the investment plans.

FINDINGS

1. The first objective of this research work broadly on the concept and
importance of investments.
2. Based on the analysis done above we conclude that the people in our society
are mainly obsessed with their future. They invest for the better tomorrow.
3. The second objective was to conclude the reason for investment and the most
popular investment plans amongst the people.
4. In future, people look up to high rate of interest and additional bonus to boost
their investments.
BIBLIOGRAPHY
https://timesofindia.indiatimes.com/business/faqs/investment/top-7-government-
schemes-to-invest-in/articleshow/73133416.cms
https://www.youtube.com/results?
search_query=government+investment+schemes+2021
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2325407
https://www.iepfportal.in/overview-of-investor-awareness-program-iap.html
https://cleartax.in/s/investments
https://www.fincash.com/l/best-government-investment-schemes