Untitled

INTERNATIONAL JOURNAL OF TRADE & COMMERCE-IIARTC
CHIEF PATRONS:
 Prof. N. K. TANEJA, Vice Chancellor C.C.S. University, Meerut, U.P., India.
 Prof. RAJENDRA PRASAD YADAV, Vice Chancellor Allahabad State University, Allahabad, India
 Sri VIKRAM CHANDRA GOEL IPS (Retd.), (Ex Director General of Police), Ex. V.C.,, C.C.S. University, Meerut
 Prof. S. K. KAK, Former Vice Chancellor of C.C.S. University, U.P.T.U. Meerut, U.P. India
 Prof. R.D. SHARMA, Vice Chancellor, University of Jammu, Jammu, India
 Dr (Mrs.) B. Kumar Mittal , Principal, Meerut College, Meerut, U.P. India
EDITOR-IN-CHIEF:
 Dr. S.K.S. YADAV, Associate Professor, Faculty of Commerce & Business Administration, Meerut College, Meerut, U.P., India.
 Dr. N.L. SHARMA, MJP, Rohilkhand University,
REFEREED PANEL:
Bareilly, India
 Prof. RADHEY SHYAM, (Retd.) Lucknow University,  Prof. D.N. YADAV, PDD Gorakhpur University,
India Gorakhpur, India
 DR. PULKIT AGARWAL, Mohd. Ali Jauhar  Prof R.C. DANGWAL, HNB University, Srinagar ,
University , Rampur, U.P. India Gharwal, Uttrakhand, India
 Prof. NAWAB ALI KHAN, Dean, Aligarh Muslim  Prof P.K. SAXENA, Dayalbag Demeed University,
University, Aligarh, U.P. , India Agra,U.P., India
 Prof. K. M. PANDEY, (Rtd.) Banaras Hindu  Prof. D.P.S. VERMA, (Rtd.) Delhi School of
University, Varanasi, India. Economics, University of Delhi, India
 Prof AJEY GUPTA, PDD Gorakhpur University,
Gorakhpur, India
 Prof. M.B. SHUKLA, Kashi Vidyapeeth, Varanasi, India
 Prof. Y.P. SINGH, Delhi School of Economics, Delhi
ADVISORY BOARD
University, Delhi, India
 Prof. ABBAS J. ALI, Indiana, USA.  Dr. D.R. DANDAPAT, University of Calcutta,
 Prof. KAMAL NAYAN AGARWAL, School of Secretary, Indian Accounting Association, Best Bengal,
Business, Howard University, Washington- DC, U.S.A. India
 Ms. VASSILIKI BAMIATZI, Leeds University  Mr. RAJESH KUMAR YADAV,I.A.S., Vice-Chairman,
Business School, Leeds, United Kingdom Meerut Development Authority, Meerut, U.P., India
 Ms. JULIETTE OVERLAND, The University of Sydney  Prof. VIJAYA LAXMI CHARI SETH, Damoderdas
Business School, Sydney, Australia School of Commerce, Gujarat University, Ahmedabad,
 Prof. RAJENDRA PRASAD YADAV, Vice Chancellor Gujrat, India
Allahabad State University, Allahabad, India  Dr. PATTHIRA PHON-NGARM, Loei Rajabhat
 Prof. RAM GOPAL YADAV, M. P., National General University ,Thailand
Secretary, Samajwadi Party, India.  Prof. P. N. MISHRA, Management Development
 Mr. ASHOK MISHRA, BASF, Singapore Institute, Gurgaon and Fellow University of Liverpool,
 Dr. NGBOAWAJI DANIEL NTE, Novena University, Liverpool, UK.
Ogume, Nigeria  Prof. KULWANT PATHANIA, Deptt. of Commerce &
 Dr. NASSER S. AL-KAHTANI, Salman Bin Management Studies, H.P. University, Shimla, H.P.,
Abdulaziz University, Al-Khraj, Kingdom of Saudi Arabia India
 Dr. S . SARANGAPANI, Ibra College of Technology,  Dr. KRIPA SHANKER GUPTA, KSG Center for
Ibra, Sultanate of Oman Learning and Development, Bangalore, India
 Mr.IVO KUZMANOV, Beogradska, Bitola,  Prof. PRAMOD KUMAR GUPTA , Devi Ahilya
Macedonia University, Indore, India,
 Prof. NAWAB ALI KHAN, Salman Bin Abdul Aziz  Dr. SAMEER PINGLE, Nirma University, Ahmedabad,
University, Al-Kharj, Kingdom of Saudi Arabia (Gujarat), India
 HON’ABLE JUSTICE RAVINDRA SINGH  ANUPAM MITRA, Symbiosis Institute of Business
YADAV, Ex Judge, Allahabad High Court, Allahabad Management, Bangalore, India
U.P. India  Prof. RAMESH CHANDRA MISHRA, Institute of
 Prof. MOHD. ALI, (Retd.) Aligarh Muslim University, Professional Studies, Nainital , U.K. India
Aligarh, India  Dr. MANAS PANDEY, VBS Purvanchal University,
 Prof. ANIRUDHA K. SINGH YADAV, UPPSC Jaunpur, U.P. India
Allahabad, U.P., India
ISSN-2277-5811(Print) & ISSN- 2278-9065(Online)
COSMOS JIF: 4.242, ISRA JIF 3.957, ISI JIF: 3.721, NAAS Rating 3.55
INTERNATIONAL JOURNAL OF TRADE &
COMMERCE-IIARTC
(Double Blind Reviewed and Refereed Research Journal of Social Science & Humanities)
Volume-VI | Number -I| January-June, 2017
Journal Impact Factor: 4.242 by COSMOS (Germany) and 3.957 by International Society for
Research Activity (ISRA), NAAS Rating 3.55, Indexed with: Cabells, U.S.A., Ulrich, U.S.A.,
Connect Journals, India, ISRA, Get CITED, Georgetown University Library, Washington DC,
Genamics JournalSeek, ZHdK Medien- und Informationszentrum, German National Library of
Science and Technology (TIB), Hannover, Cosmos Foundation (Germany), Electronic : Journals
Library:Social Science Research Center, Berlin, Leipzig University Library founded in the year
1543, Scribd, ZB MED is a pioneer in the field of open access publishing in Germany etc.
Dr. S.K.S. Yadav

Editor-in-Chief
Associate Professor,
Faculty of Commerce & Business Administration,
Meerut College, Meerut, U.P., India,
(C.C.S. University, Meerut, India)
INDIAN INSTITUTE OF ADVANCE RESEARCH IN TRADE

AND COMMERCE (IIARTC), MEERUT, U.P. INDIA
SOCIETY FOR GLOBAL STUDIES AND RESEARCH (SGSR)

Website; www.sgsrjournals.co.in
Email: sudhiryadavmeerut@gmail.com
 Dr. S.N. MITTAL, Former Dean Faculty of Com. &  Dr. A.B. LAL, Former Dean, Faculty of Commerce, CCS
Busi. Admn., C.C.S. University Meerut, India. University, Meerut, India
 Dr. RAKESH KUMAR YADAV, IFTM University,  Mr. SIVAJI YADAV, Consultant, McKinsey & Company
Moradabad U.P., India. U.S.A.
 Ex. Prof. M. MUSTAFA KHAN, Deptt. of Commerce,  Prof. R.K. AGARWAL, H.N.B. Garhwal University,
Jamia Millia Islamia University, Delhi. Tehri Garhwal, U.K., India.
 Prof. KAKASAHEB D. SHINDE, Secretary Shree  Dr. D.R. YADAV, Deptt. of Commerce, Meerut College,
Prakashan, Pune Meerut, U.P. India
 Dr. S.K. SHARMA, Deptt of Commerce, Hindu  Dr. G.K.Gupta, Principal, A.K. (P.G.) College,
College Amroha, U.P., India. Shikohabad, U.P., India.
INTERNATIONAL EDITORIAL BOARD
 Prof. NAWAB ALI KHAN, Former Prof. in Salman • Prof. P. N. MISHRA, Management Development
Bin Abdul Aziz University, Al-Khraj, Kingdom of Saudi Institute, Gurgaon and Fellow University of Liverpool,
Arabia, Dean in AMU, Aligah, U.P. India Liverpool, UK.
 Dr. NASSER S. AL-KAHTANI, Salman Bin  Md. ZAHIR UDDIN ARIF, Jagannath University,
Abdulaziz University, Al-Khraj, Kingdom of Saudi Arabia Dhaka, Bangladesh
 Dr. B.NIMALATHASAN, Faculty of Management  Dr. S . SARANGAPANI, Ibra College of Technology,
Studies & Commerce, University of Jaffna, Shri Lanka Ibra, Sultanate of Oman
 Prof. AZHAR KAZMI, Department of Management &  Mr. IVO KUZMANOV, Beogradska, Bitola,
Marketing, College of Industrial Management, King Fahd Macedonia
University of Petroleum & Minerals, Dhahran 31261, Saudi
 Prof. KAMAL NAYAN AGARWAL, School of
Arabia.
Business, Howard University, Washington- DC , U.S.A.
 Prof. MUHAMMAD MAHBOOB ALI, Daffodil
 Dr. KUSUM YADAV, Department of Information System,
University, Dhaka, Bangladesh.
Prince Sattam Bin Abdulaziz University, Alkharj,
 Dr. PATTHIRA PHON-NGARM, Loei Rajabhat Kingdom of Saudi Arabia
University ,Thailand
NATIONAL EDITORIAL BOARD, DEPUTY EDITOR-IN-CHIEFS

 Prof. CHALAM V. GORIPARTHI, Department of Commerce & Business Administration Acharya Nagarjuna University,
Nagarjuna Nagar , India
 Dr. DHARMENDRA YADAV, Department of Mathematics, Vardhaman P.G. College, Bijnore, U.P., India.
EDITORS
 Dr. S.K. RASTOGI , Faculty of Commerce, Hindu  Dr. SANJAY KUMAR, Dept. of Defense Study, Meerut
College, Moradabad, Affiliated to MJP Rohilkhand College, Meerut & Professorial Fellow India Studies
University, Bareilly, India Centre, Bangkok, Thailand.
 Dr. HIMANSHU AGARWAL, Department of  Dr. SATYA BANDHU GUPTA, Department of
Commerce, D.N. College, Meerut, India Commerce, Meerut College, Meerut, India.
 Dr. SUBHASH CHAND, Department of Chemistry,  Dr. RAJIV KUMAR, Deputy Registrar, Y.M.C.A.
Meerut College, Meerut, India University, Faridabad, India.
 Dr. ASHOK KUMAR, Mathematics Department,  Dr. SANT RAM, Department of Commerce, Meerut
Meerut College, Meerut, India College, Meerut, U.P., India
 Dr. RAKESH KUMAR, Department of Commerce,  Dr. RAJAN YADAV, Faculty of Delhi School of
Meerut College, Meerut, India Management, Delhi Technological University, Delhi.
 Dr. PULKIT AGARWAL, Department of Commerce, • Dr. A. KOTISHWAR, Deptt. of MBA, CMR College of
Mohammad Ali Jauhar University, Rampur,U.P.,India Engineering & Technology, Hyderabad, Telagana.
DEPUTY EDITORS
 Dr. M.P. VERMA, Law Department, Meerut College,  Dr. K.K. VERMA, H.N.B. Garhwal University, Tehri
Meerut, India Garhwal, U.K., India.
 Dr. VIPIN NEGI, Department of Commerce, Keshav  Dr. ANIL YADAV, Department of Commerce, D.D.U.
Mahavidyalaya, (University of Delhi) Delhi, India. University, Gorakhpur, U.P., India.
 Prof. R.S. MEENA, Department of Commerce, B.H.U.,  Dr. M.K. SIRAS, Department of Commerce, M.M.H.
Varanasi, U.P. India College, Ghaziabad, U.P., India
 Dr. IJRAIL MIYA, Psychology Department, Meerut  Dr. MANOJ KUMAR AGARWAL, Department of
College, Meerut U.P., India Commerce, Meerut College, Meerut, India.
 Dr. MRIDULA SHARMA, Psychology Department  Dr. PRAKASH CHAND GOPALAN, Department of
Meerut College, Meerut U.P., India Political Science, K.N. Govt. College, Gyanpur, Badhoi,
 Dr. A.K. AGARWAL, Department of Commerce, U.P. India
Meerut College, Meerut, U.P. India  AMIT GUPTA, Mangalmay Institute of Management,
 Dr. K.K.SHARMA, Department of Commerce, A.K.P.G. Greater NOIDA, U.P. India
College, Shikohabad, U.P. India  Dr AWADESH KUMAR, Department of English,
 Dr. HARI OM GUPTA, Department of Commerce, J.V. Meerut College, Meerut, U.P. India
Jain College, Saharanpur, U.P. India
 Dr. RAJEEV KUMAR AGARWAL, Department of
Commerce, S.R.K.(P.G.) College, Firozabad, U.P. INDIA
MANAGING EDITORS
 Dr. H.P. MALONIA, Dept. of Commerce, S.R.K. (P.G.)  Dr. PANKAJ KUMAR, Dept. of Commerce, Government
College, Firozabad, U.P., India P.G. College, Lansdown (Pauri Garhwal), U.K., India
 Dr. RAJIV SINGH, Department of Geography, Meerut  Dr. PRATIBHA SINGH YADAV, Meerut, U.P., India
College, Meerut, India  Dr. ANUJ KUMAR, Sree Ram Institute of Management
 Dr. ARVIND YADAV, Department of Commerce, K. & Technology, Dibai, Bulandshahr U.P., India
M. Govt. P.G. College, Badalpur, G. B. Nagar, U.P., India  Mrs. DEEPA SINGH YADAV, LLM, NET(UGC)
 Mr. SOM NATH KISAN KHATAL, Shivaji Department of Law, Meerut College, Meerut, U.P., India
University, Kolhapur, Maharashtra, India.
ASSISTANT EDITORS
 Dr. MEENAKSHI YADAV, Department of Chemistry,  Dr. ANIL KUMAR, I.B.S., C .C.S. University, Meerut,
Meerut College, Meerut, India U.P., INDIA
 Dr. GULAB CHNDRA LALIT, Political Science,  Miss ANUSHKA YADAV, Symbiosis Institute of
C.C.S. University, Meerut, India Technology, Symbiosis International University Pune,
 KUMKUM CHAUDHARY, Sir Chotu Ram Institute of India
Engineering &Technology, Meerut  Dr. YOGENDRA KUMAR, Deptt. of Legal Studies,
 Dr. MAMTA CHOUDHARY, Deptt. of Commerce, C.C.S. University Campus, Meerut, India
PGDAV College, Delhi University, Delhi, India  Dr. ANUPAM TYAGI, Deptt. of Political Science, Govt.
 Dr MEENAKSHI, Dept. of Commerce, Meerut College, Degree College, Vedi Khal, Distt. Pauri Garwal,
Meerut, India UttaraKhand, India.
 AMAN ROSHAN, Research Fellow, Deptt. of Commerce  Mr. SACHIN, Research Fellow, (UGC-NET),
H.N.B. Garhwal University, Sri Nagar, Garhwal, U.K.., Department of Education, Meerut International Institute
India of Teachers (MIIT), Meerut, (U.P.) India
ADMINISTRATION (HONORARY)
General Manager Mrs. SHEELA YADAV, Dehradun, U.K., India
Deputy G. M. Mrs. MIRA KUMARI YADAV, Meerut, U.P. India
Circulation Manager Mr. ANANT YADAV, Meerut, U.P. India
Legal Advisors Mr. R.D. RATHORE, Advocate, Supreme Court of India
Mr. HIMANSHU TYAGI, Associate Company Secretary, India
Mr. NAGENDRA YADAV, Advocate, Ex. Vice President, Meerut Bar Association, Meerut
Financial Advisor Ms. SHEETAL, Associate Chartered Accountant, Meerut, U.P., India
Mr. TULSI YADAV, Sr. Advocate, District Firozabad, U.P., India
Mr. RAM SAGAR YADAV, Block Development Officer, Sikandrabad, U.P., India
Dr. [Mrs.] ANUPAMA YADAV, M.Sc., BHMS, Lucknow, U.P. India
Mrs. POOJA YADAV, B.Tech. (DCOE, N. Delhi), P.G.D.M. (IIM)
COSMOS JIF: 4.242, ISRA JIF 3.957, ISI JIF 3.721, NAAS Rating 3.55
Double Blind Refereed Research Journal of Humanities & Social Science ISSN-2277-5811(Print) & ISSN- 2278-9065(Online)
INDIAN INSTITUTE OF ADVANCE RESEARCH IN TRADE AND COMMERCE (IIARTC),
121/1A, SCHOOL LANE, PRAGATI NAGAR, MEERUT, U.P. PIN: 250001
Faculty of Commerce & Business Administration, Meerut College, Meerut, U.P. INDIA
Website: www.sgsrjournals.co.in
SUBSCRIPTION/PUBLICATION FORM
Passport
Size
Photograph
Please accept the subscription for a period of ....................................................................................................Years.

From........................................................................................................to............... ............................................................
By Draft/Cheque No. ..............................Dated...........................For Rs. ....................... In favour o f “SOCIETY
FOR GLOBAL STUDIES & RESEARCH”, Payable at MEERUT, U.P., India.
The Journal should be sent to :
Name(subscriber) ............................................................................................................ ....................................................
Address ............................................................................................................................. ....................................................
................................................................................................................................................................................................
.....................................................................................................Pin..................... ................................................................
Phone No./ Mob. No. ........................................................................ EMAIL ID.............................................................
The payment can directly be transferred to us. The details of Account No is as follows:
Bank Account No. [Current A/c]: 4842005500000237

A/c Holder: M/S Society for Global Studies and Research
Banker: Punjab National Bank, Meerut College, Meerut, U.P. India Pin 250001
MICR CODE: 250024023; IFSC CODE: PUNB0484200
Subscription Charges
Period Institutional Individual Students
INDIA OVERSEAS INDIA OVERSEAS INDIA OVERSEAS
One Year Rs. 1100 US $ 150 Rs. 1000 US $ 135 Rs. 950 US $ 110
Two Years Rs. 2100 US $ 290 Rs. 1900 US $ 260 Rs. 1800 US $ 200
Five Years Rs. 5000 US $ 700 Rs. 4500 US $ 600 Rs. 4000 US $ 500
Send your Subscription and always make correspondence to:
Dr. S.K.S.YADAV, Editor-in-Chief

121/1A, SCHOOL LANE, PRAGATI NAGAR, MEERUT, U.P. INDIA, PIN: 250001
For Contact: Mobile no. 09411023524, Email: sudhiryadavmeerut@gmail.com
FROM EDITOR’S DESK
In a landmark reform, India today switches to a new indirect tax system, the Goods and
Services Tax. The GST subsumes the multiple Central, State and local taxes and cesses levied
on goods and services, unifying the country into a single market, thereby making it easier to
do business and ensure tax compliance. This will attract investors and more efficiently mop
up revenues for the exchequer. The reform has been years in the making, and having shown
the political will to finally pull it off, the Central government must work with the States to
chart a road map to simplify the tax regime. Currently there are multiple tax rates ranging
from 0% to 28%, plus a cess on some products, creating incentives for lobbying and rent-
seeking. The level of preparedness for the new tax system too is not optimal, with sections of
industry, trade as well as the bureaucracy visibly anxious about several aspects of the GST’s
operational and legal framework. In response, the date for businesses to file the first GST
returns has been deferred. The generation of e-way bills for moving goods worth over
Rs. 50,000 too has been put on hold, along with the requirement for e-commerce portals to
deduct tax at source from small sellers. The GST Network, which will digitally capture
billions of transactions daily, was not able to test its software in advance; and there is concern
about the preparedness of intermediaries mandated to help businesses transition to the
completely electronic compliance system. The coming days, therefore, could test the system
and the capacity of the authorities to think on their feet will be vital.
We are pleased to release first issue of volume six of the International Journal of Trade &
Commerce-IIARTC. The Journal establishes an effective communication channel between
decision and policy-makers in Industry, trade, business, government agencies, academic and
research institutions to recognize the implementation of important role effective systems in
organizations. IJTC-IIARTC aims to be an outlet for creative, innovative concepts, as well as
effective research methodologies and emerging technologies for effective business
management.
We would like to remind you that the success of our journal depends directly on the number
of quality articles submitted for review. Accordingly, we would like to request your
participation by submitting quality manuscripts for review and encouraging your colleagues
to submit quality manuscripts for review. IJTC-IIARTC provides authors with high quality,
helpful reviews that are shaped to assist authors in improving their manuscripts.
Dr. S.K.S. Yadav, Editor-in-Chief,

International Journal of Trade & Commerce-IIARTC.
Website: www.sgsrjournals.co.in,
Dated: 30 June, 2017
INTERNATION JOURNAL OF TRADE & COMMERCE-IIARTC

CONTENTS
S. Title Authors Page No.
No.
1. Factors Influencing Job Satisfaction of Md. Zahir Uddin Arif, Murad 1-12
Employees of Private Commercial Banks Hasan, Mohammad
in Bangladesh Maksudul Karim
2. PMJDY Status: Pre & Post Demonetization Faisal Bin Hamad, M. Shekar 13-22
3. Comparative Study of Stock and Bond Thota Haripriya, Y. Rama 23-29
Markets Volatility and Returns Krishna, Sindhu
Performance
4. Human Resource Management and T.S. Tomar 30-41
Innovative Practices :
Key Connections
5. An Empirical Study of Passengers Sunil Kumar, Arihant Jain 42-56
Perception of Service Quality of Selected
Indian Airlines
6. A Study on Consumer Adoption of Mobile Vikas Gupta 57-70
Wallet
7. Millennium (Sustainable) Development Ashok Kumar 71-81
Goals 4, 5 and 6: A Study of Maternal and
Infant Mortality in BIMARU States of
India on the Precise Course
8. India's Energy Security Challenges and Sanjay Kumar 82-96
Policy Options
9. Reforming the Military Institutions and Mohd. Rizwan 97-106
National Security Strategy
10. Liquidity Management in Hindustan Mukesh Kumar Jain 107-119
Unilever Limited: An Analytical Study
11. Identifying Factors Enabling Willingness S.K.S Yadav, Abhinav 120-128
to Adopt Mobile Learning Chaudhary
12. Export-Led-Growth: A Strategic Approach Himanshu Agarwal 129-144
to India’s Economic Development
13. A Study on Consumer Buying Behaviour Princi Gupta, Padma Misra 145-153
for Personal Care Products
14. Indian Capital Market: Issues and Preeti Singh 154-161
Challenges
15. Marketing of Paintings: A Case of Archana Rani 162-172
Thangka Paintings
16. New Era in Telecommunication- The B. Kumar 173-180
Study of Reliance Jio
17. A Comparative Study of Working Capital Yogesh Kumar 181-193
Management in Steel Authority of India
Limited and Tata Steel Limited
18. An Analytical Study of Telecom Infra Kanika Maheshwari 194-206
Industry of India
19. 360 Degree Evaluation Boon for Self Mani Arora, Deepti Kanojia 207-215
Development of Employees
20. Commodity Futures Trade – Dimensions Vinayaka Tripathi, 216-225
of Corporate Social Responsibility [Special Madhusoodan Tripathi,
reference to Hapur Commodity Exchange Patanjali Tripathi
Limited (HCEL)]
21. Life After 60s : In A Changing Scenario Sangeeta Gupta 226-229
22. Job Satisfaction among Female Faculty Ishan Jain, Somya Sharma, 230-243
Members in Higher Education: A Study of Shagun Bhardwaj
Dehradun Region
23. Demonetization: A Step towards Cashless Priyanka Saroha 244-250
Economy in India
24. Impact of Depreciation and Taxation Arvind Kumar Yadav 251-259
Policy on the Profitability of Public Sector
Enterprises
25. Impact of Training & Development Deepak Singh 260-264
Programmes on Employee’s Performance
under HRD Activities
26. Opportunities and Challenges of Pulkit Agarwal, Kamlesh 265-268
Demonetization Kumar
27. A Study on Paradigms of Quality of Work Aman Roshan, V.C. Sharma 269-275
Life and Its Dimensions
28. Human Resource Management : A Value P. K. Srivastava 276-281
Based Approach
29. Impact of Working Capital Management Ajay Maheshwari 282-300
on Liquidity, Profitability and Risk: A
Case Study of Hindustan Petroleum
Corporation Limited (HPCL)
30. Post Purchase Dissonance: A Focus on Princi Gupta, Padma Misra 301-306
Consumers
31. Socio-Economic Development of S.K.S. Yadav 307-311
Bangladesh: Sustainability of BNF’s
Partner Organizations and Beneficiaries
32. Service Marketing Integrating Customer Bharat Bhushan Sharma 312-316
Focus Across the Firm
33. Consumer Behavior Jitesh Singh 317-320
INDIAN INSTITUTE OF ADVANCE RESEARCH IN TRADE AND COMMERCE (IIARTC), 121/1A, SCHOOL LANE,
PRAGATI NAGAR, MEERUT PIN: 250001
Faculty of Commerce & Business Administration, Meerut College, Meerut, U.P. INDIA.
MEMBERSHIP FORM
The undersigned is interested in becoming a member of IIARTC and abide by its constitution and rules and regulations.
The category of membership for which the fee is enclosed is indicated below:
Membership of the Organization:
1. Life Member: Life Members receive the Institute’s Journal. They are the member of the General Body. Life Members
have the right to vote. They also have the privilege by attending the meetings and seminars. Life member
subscription fee is Rs 10000/ (one time). The foreign resident or NRI wants Life Membership they have to pay U.S.
$ 1000/-.
2. Associate Member/Fellow Member: Associate member also member of General Body. They have the right to vote
and receive the Journal for 5 years. They can attend the seminars and meeting of Institute. Subscription fee is Rs
5000/(one time). The foreign resident or NRI wants Associate Membership/Fellow Membership they have to pay
U.S. $ 500/-.
3. Annual Membership: Annual members are entitled to receive Institute’s Journal in addition to their Annual member
fee of Rs.1500/-
Kindly find enclosed a/c payee Bank Draft/ Cheque payable at Meerut drawn in favour of SOCIETY FOR GLOBAL
STUDIES AND RESEARCH, MEERUT. (For outstation cheques kindly add Rs. 50/- towards bank charges)
Bank Draft No:...............................................Bank Draft...........................................................................................................................

Date................................................................................................................................................................................................................
Bank Drawn on:...........................................................................................................................................................................................
Total Amount...............................................................................................................................................................................................
The undersigned’s full address and contact numbers and other professional data are given below:
Name:.............................................................................................................................................................................................................
Designation:..................................................................................................................................................................................................
Institution Address:.....................................................................................................................................................................................
Mailing Address:..........................................................................................................................................................................................
Phone No.(O).:..........................................................................(R)...............................................................................................................
Email:.............................................................................................................................................................................................................
Declaration
I pledge to promise to work for the betterment of the Indian Institute of Advance Research in Trade and Commerce
(IIARTC) unconditionally and devotedly. I may be disqualified if found acting against the interest at the IIARTC.
Date: Signature
For office use only: We have received the membership fee for IIARTC as per the rules mentioned above.
International Journal of Trade & Commerce-IIARTC
January-June 2017, Volume 6, No. 1 pp. 01-12
ISSN-2277-5811 (Print), 2278-9065 (Online)
© SGSR. (www.sgsrjournals.co.in) All rights reserved
UGC Approved Journal in Social Science Category; Journal No. 48636
COSMOS (Germany) JIF: 4.242; ISRA JIF: 3.957; NAAS Rating 3.55; ISI JIF: 3.721
Factors Influencing Job Satisfaction of Employees of Private

Commercial Banks in Bangladesh
Md. Zahir Uddin Arifa*, Murad Hasanb, Mohammad Maksudul Karimc

aDepartment of Marketing, Faculty of Business Studies, Jagannath University, Dhaka-1100, Bangladesh.
E-mail: mjarif2004@yahoo.com, arif@mkt.jnu.ac.bd
bDepartment of Business Administration, Green Business School, Green University of Bangladesh, Dhaka, Bangladesh.
E-mail: murad14bond@yahoo.com
cDepartment of Management Studies, Comilla University, Comilla, Bangladesh.
E-mail: maksudmba2003@yahoo.com
Abstract
PAPER/ARTICLE INFO
Bangladesh is an emerging country where a growing number of private RECEIVED ON: 05/03/2017
commercial banks have been established. As a result, presently contemporary ACCEPTED ON: 06/04/2017
banking business considers the job of satisfying their employees as the most
important for retaining their valuable skilled workforce. The aim of this paper is to
Reference to this paper
understand the importance and effects of positive employee job satisfaction by
should be made as follows:
identifying key factors which determine the highest degree of job satisfaction of
employees of the private commercial banks in Bangladesh. For the study, primary
data and information have been obtained from a survey of 390 full-time employees Md. Zahir Uddin Arif,
representing 39 private commercial banks in Dhaka city selected through Murad Hasan, Mohammad
convenience sampling and for secondary data information have been gathered from Maksudul Karim (2017).
research articles published in different journals and books of various scholars. This “Factors Influencing Job
paper shows that there are some factors in the job environment in the private Satisfaction of Employees of
commercial banks of Bangladesh that can lead to an increasing employee Private Commercial Banks in
productivity as well as can result job dissatisfaction which also responsible for Bangladesh”, Int. J. of Trade
lower productivity and higher turnover and even poor physical and mental health. and Commerce-IIARTC, Vol. 6
This study has focused on only the identification and examination of different No. 1, pp. 1-12
factors or variables that influence job satisfaction of the employees of private
commercial banks in Bangladesh. No cause and effect relationship has been
examined among the studied variables in this study. As a result, a future research
can be taken to investigate the cause and effect relationship among those variables
and to assess the applications of the findings to general population of employees of
private sector banks in Bangladesh for facilitating a more comprehensive
understanding. At present, many employers are not aware of the effects that
employee job satisfaction can have on private sector banking in Bangladesh.
However, the study will also originate the value to the employers, practitioners
and researchers of the concerned field of study and they will be able to learn about
the factors which determine positive job satisfaction in the workplace.
KeyWords: External rewards, Internal rewards, Job satisfaction, Personal
characteristics, Private commercial banks, Work environment.
*Corresponding Author
Factors Influencing Job Satisfaction of Employees of Private Commercial Banks in Bangladesh
Md. Zahir Uddin Arif, Murad Hasan, Mohammad Maksudul Karim
1. INTRODUCTION
One of the most notable changes in the banking sector in Bangladesh has been the increasing
number of young talents who have chosen the banking profession as their better career and have
entered the private sector banking profession in recent decade. But, the nature of work is
changing at whirlwind speed, and the factors that keep an employee satisfied with his or her job
are also being changed. Job satisfaction provides “tremendous amount of energy” for enhancing
better employee productivity. The present study has been designed to examine the factors which
keep the employees satisfied in the private commercial local banks in Bangladesh. Job satisfaction
is a heavily research area of inquiry. Locke (1976) has estimated that, as of 1976, about 3,350
articles or dissertations had been written on the topic. Cranny et al. (1992) showed that more than
5,000 studies on job satisfaction have been published. As a result of researchers efforts for many
decades, there seems, by all accounts, to be a high level of agreement among researchers on the
importance of job satisfaction. Commonly, as a general mentality toward an object, the job, job
satisfaction has been conceptualized. Locke (1976) has characterized job satisfaction as “a
pleasurable or positive emotional state, resulting from the appraisal of one’s job experiences.”
There are, obviously, a few but largely immaterial differences to the general idea. So, in general,
job satisfaction alludes to an individual’s positive emotional responses to a specific job. It is an
affective reaction to a job that results from the person’s comparison of actual outcomes with those
that are desired, anticipated, or deserved. So this study will contribute to understand the private
sector banks as workplace by comparing degree of satisfaction among various levels of work in
the organization.
2. SIGNIFICANCE OF THE STUDY
Scholars have long been interested in why some people report very satisfied with their jobs and
some others express much lower levels of satisfaction (Locke, 1976). The drive to comprehend and
clarify job satisfaction has been spurred by utilitarian reasons (e.g., to boost up productivity and
organizational commitment, lower absenteeism and turnover and eventually, maximize
organizational effectiveness) as well as humanitarian interests (e.g., the idea that employees
should be approached with respect and have their mental and physical prosperity boosted).
Satisfied employees additionally have a tendency to participate in organizational citizenship
practices; that is altruistic behaviors that surpass the formal necessities of a job (Schanake, 1991).
So the study on employee job satisfaction in private commercial banks of Bangladesh has a
positive and significant role for several reasons:
First, job satisfaction related research is needed in a rapidly developing non-western country like
Bangladesh, because of its relationship to cost reduction through increased individual
productivity, which in turn leads to economic and industrial growth. Smith (1992) stated that job
satisfaction can lead to cost reduction by reducing absences, task errors, and turnover. Both
management theorists and experts are concerned with methods for enhancing job satisfaction, on
the grounds that more prominent job satisfaction equates to a superior quality of life, better
health, and possibly more noteworthy performance and productivity (Cranny et al., 1992). Since
work is an imperative part of individuals' lives and the vast majority of employees spend a large
part of their working lives at work, understanding the elements required in job satisfaction is
urgent to enhancing the performance and productivity of employees.
-2-
UGC (Ministry of HRD, Govt. of India)
Approved Journal in Social Science Category; Journal No. 48636
Second, the study is important, because in a rapidly developing country such as Bangladesh there
is a need to understand the attitudes of workers towards their work: determining the job
satisfaction of bank employees could lead to improvements in the workplace that would help
them to remain satisfied with their jobs.
Third, the study is important, because organizational commitment, turnover intentions, and
absenteeism of employees are costly to an organization, as they could lead to low morale, poor
performance, lower productivity, and higher costs of hiring, retention, and training.
Fourth, from a theoretical perspective, it is important to increase understanding of the impact of
environmental and demographic factors differential on job satisfaction in a non-western
environment. This could stimulate further research in this area.
Finally, from a practical stand point, it is vital to provide practitioners with key information that
could enable them to make informed managerial decisions in a non-western work environment.
In this way, the study has dealt with issues that are conceivably important for learners,
academicians and practitioners alike.
3. LITERATURE REVIEW
Job satisfaction is commonly defined as the extent to which employees like their work (Agho et
al., 1993). Newstrom and Davis (2002) have defined job satisfaction as a set of favorable and
unfavorable feeling and emotions with which employees view their work. In their view, job
satisfaction is an affective attitude- a feeling of relative like or dislike toward something. Most
efforts to explain job satisfaction have been dominated by the person-environment fit paradigm
(Mottaz, 1985; Brief, 1998). Simply, the more a person’s work environment fulfills his or her
needs, values, or personal characteristics; the greater is the degree of job satisfaction. In terms of
job satisfaction, the person-environment fit approach has been applied to studies of need
fulfillment (Maslow, 1954), job characteristics (Hackman and Oldham, 1980), value attainment
(Locke, 1976; 1984; Mottaz, 1985), equity and organizational justice (Greenberg, 1990; McFarlin
and Sweeney, 1992; Trevino, 1992; Cropenzano and Folger, 1996), and personal traits (Ganzach,
1998).The impact of age, tenure, salary, job type, job level, and work environment on an
employee’s job satisfaction has been discussed extensively (Jayaratne, 1993).
There are numerous organizational phenomena identified with employment satisfaction, for
example, motivation, performance, leadership, attitude and so on. (Gupta and Sharma, 2009).
Employee job satisfaction can be affected by a variety of factors, for example, level of satisfaction
in their occupation, quality of workplace environment, quality of relationship with their
superiors, organizational commitment and so forth (Bajpai and Srivastava, 2004). Numerous
researchers examined that to distinguish the diverse parts of job satisfaction, to measure relative
performance of every element of job satisfaction and to study what effects of these elements on
the performance and output of the employees (Qasim et al., 2012).
There are positive relationships among job satisfaction, employee performance and employee
productivity. Job satisfaction is fundamental for employee performance since it has positive
impact on employee behavior. Much more dedication of employees to the organization depends
on employees’ high level of job satisfaction that accelerates their long-term stay in the current job.
As a result, the industry can achieve the highest level of productivity in their work (Robbins and
Cenzo, 2014). Kathawala et al. (1990) have identified motivation and job satisfaction of
-3-
compensated employees as a main consideration in their conducted study. Expansion in pay for
performance was considered as one of the important elements for job satisfaction of employees
with a high organizational commitment should have been more concerned in this study.
Friedlander & Margulies (1969) have demonstrated that the level of job satisfaction relies on
friendly relationship between management and employee, though Herzberg (1969) disagreed
with the outcome of the study of Friedlander & Margulies and affirmed that management is the
inconsequential to the level of job satisfaction. Various studies have also identified that
compensation, remuneration, job security & promotion, supervisor support & behavior, and other
work related factors influence job satisfaction (Kabir and Parvin, 2011).
The results of such studies support the idea that job satisfaction is a product of many different
variables influencing the employee. Previous examinations of this topic suggest that job
satisfaction is determined by the external and internal rewards of the job and by the personal
characteristics of the employee.
External rewards in the form of compensation or fringe benefits are important aspects of any
employment experience (Herzberg et al., 1957). The availability of fringe benefits, such as
vacation time, is another form of external reward. In a study, the results of a random sample of
federal government employees indicated that annual and sick leave benefits were the strongest
reasons for staying in government service (U.S. Merit Systems Protection Board, 1987). Employee
perceptions about job security and opportunity for promotion also influence job satisfaction.
Internal rewards include job attributes or the nature and characteristics of the work that a worker
performs. People generally need and like jobs that make use of their talents, knowledge and
abilities (National Commission on the State and Local Public Service, USA, 1993). Workers who
perform tasks that have a greater degree of skill variety, job significance, autonomy and feedback
are more satisfied than workers who perform jobs with fewer of these attributes (Hackman and
Lawler, 1971). In general, people who perceive the job environment positively and who relate
well with their fellow employees display greater job satisfaction than those workers with negative
perceptions.
Personal characteristics such as gender, age, race, and educational attainment, also affect job
satisfaction (Mottaz and Potts, 1986).
Regardless of the theoretical approach used to study job satisfaction, most studies have identified
at least two general categories of antecedent variables:
A. Environmental factors: Environmental antecedents of job satisfaction pertain to factors
associated with the work itself or work environment.
B. Personal factors: Personal factors focus on individual attributes and characteristics.
Now these antecedents are going to discuss with references and variables contributing job
satisfaction and to develop on the basis of literature review.
A. Environmental antecedents
Previous studies of job satisfaction have identified a number of important environmental
antecedents. An abundance of literature links extrinsic rewards such as promotional
opportunities (Blegan and Mueller, 1987; Ting, 1996) and pay to increased job satisfaction.
-4-
Extrinsic rewards can be defined as financial, material or social rewards from the environment
(Kreitner and Kinicki, 2004). Based on a review of the literature, it can be said that overall job
satisfaction is positively influenced by employee perception of adequate training or training
opportunities, satisfaction with pay, and satisfaction with fringe benefits.
Research by Peters et al. (1985) indicates that organizational obstacles or constraints such as
inadequate tools and equipments, in efficient training, cramped work spaces, unsafe work
environments and uneven work load distributions among coworkers may be important predictor
variables of employee attitudes, motivation and performance. Most studies in this area have
focused primarily on the adverse effect of constrains on organizational performance, but a few
have examined the influence of organizational constraints on employee job satisfaction (Eulberg
et al., 1984). Thus, it can be assumed that the perceived absence of organizational obstacles in the
work environment will have a positive effect on job satisfaction, In other words, the fewer the
obstacles, the higher the job satisfaction and overall job satisfaction is positively influenced by
employee perception of an evenly distributed workload among co-workers.
Hopkins (1983) has observed that the nature of supervision at workplace can be defined by the
relationship between an individual employee and his/her immediate supervisor. Numerous
studies have shown that positive relationship between supervisors and subordinates contribute to
higher levels of job satisfaction (Kahn, 1972; Locke, 1976; Daley, 1986; Emmert and Taher, 1992).
Ting (1997) has reported that government employees who enjoyed a supportive relationship with
their immediate supervisor experienced higher level of job satisfaction than those who did not.
For the purpose of this study, it can be anticipated that as the quality of supervision increases,
employee job satisfaction will also increase. So, it can be said that satisfaction with one’s
immediate supervisor is positively related to overall job satisfaction.
B. Personal characteristics
The second most usually researched wellspring of variety in occupation fulfillment relates to the
statistic qualities of the representatives themselves. Numerous analysts likewise trust that
individual credits serve to direct the connection between natural components and occupation
fulfillment and in this way it ought to be incorporated as control factors in any model of
employment fulfillment. Gender specifically, has gotten impressive consideration from
hierarchical researchers.
The another most usually researched wellspring of variety in job satisfaction relates to the
demographic characteristics of the employees themselves. Numerous researchers also believe that
individual attributes serve to direct the relationship between environmental factors and job
satisfaction, and in this way, ought to be included as control factors in any model of job
satisfaction. Gender, specifically, has received considerable attention from organizational
researchers. In fact, Tait, Padgett, and Baldwin (1989), using meta-analysis techniques, have
traced the absence of gender differences in job satisfaction to the mid-1970s where it is noted that
men and women began to approach parity in organizational positions held (e.g., administrative
and professional). So, it is assumed that there will be a no relationship between employee gender
and overall job satisfaction.
Employee age is another potential antecedent of job satisfaction that has been frequently analyzed
in the job satisfaction literature. However, taken as a whole, previous research is inconsistent
-5-
regarding the effects of age on job satisfaction (Blegen and Mueller, 1987). While various studies
have reported a positive relationship between age and job satisfaction, others have distinguished
either no relationship, (Ganzach, 1998) or a noteworthy negative relationship. Despite the fact that
research results about with respect to the relationship between employee age and job satisfaction
are conflicting, so it can be accepted that there will be a positive relationship between employee
age and overall job satisfaction.
4. OBJECTIVES OF THE STUDY
The objectives of the study are to investigate the factors or determinants that affect on the job
satisfaction of employees of private commercial banks in Bangladesh and to compare the views of
private commercial banking professionals toward their works in light of these factors of their
working environment. Moreover, the objective of the study is to provide key information to the
practitioners that can enable them to make effective managerial decisions in the working
environment of Bangladesh.
5. METHODOLOGY OF THE STUDY
The study is empirical in nature. This study employs the following research methodology to
investigate the factors which keep the employees satisfied in their job of the private commercial
banks in Bangladesh.
Sample
The population for this study comprised the employees of various levels of private sector banks.
To know how these factors are influencing variation in job satisfaction, the data have been
obtained from a survey of 390 full-time employees from 39 private commercial banks operated in
Dhaka city, the capital of Bangladesh. 10 full-time employees have been selected as respondents
from each of the 39 private commercial banks through convenience sampling due to not having
any proper sampling frame to identify the correct size or number of population for the study.
Table 1: Sample Characteristics
Characteristics Male Female Total
Age
20-29 Years 70 40 110
30-39 Years 140 80 220
40-49 Years 40 08 48
50 Years and over 10 02 12
Total 260 130 390
Education
Bachelor Degree 47 31 78
Master’s Degree 216 96 312
Total 263 127 390
Annual Income
Below BDT 2,49,000 62 28 90
BDT 2,50,000-3,49,000 80 50 130
BDT 3,50,000-4,49,000 70 40 110
BDT 4,50,000-5,49,000 30 08 38
BDT 5,50,000 and more 20 02 22
Total 262 128 390
-6-
Table-1 summarizes the sample statistics. Respondents ranged in age from their early 20s to over
50s, although the majority was in their 30s and 40s. Mostly 80% held a Master’s degree, while
about 20% also held a Bachelor’s degree. There were more men (66.67%) than women (33.33%) in
the sample.
Questionnaire and data collection
Data and information have been drawn mainly from the primary sources through administering
field survey for identifying and comparing the factors contributing to job satisfaction of
employees among private commercial banks in Bangladesh. A set of semi-structured
questionnaire has been used as research instrument in this study and has been designed to
measure job satisfaction of employees of private commercial banks in Bangladesh. A total of 390
questionnaires have been administered to selected and potential respondents chosen from 39
banks.
The dependent variable in this study is the respondent’s degree of job satisfaction. The study has
analyzed the effect of three categories of independent variables on job satisfaction among the
employees of private commercial banks. These categories are the internal rewards of the job, the
external rewards of the job and the personal characteristics of the employee.
The questionnaire has been designed to assess employee perceptions about 10 different aspects of
these external and internal variables of the workplace. In an additional question, respondents
have been asked to respond which two elements of their job are the most important to them in
determining their overall level of job satisfaction. This question has also included a space for
respondents to give open-ended reasons for their answer. The questionnaire has served the
purposes of forcing the respondents to think about the pros and cons of work in each aspect
including: i. Good working relationship and environment, ii. Interesting work provision, iii.
Opportunities to skills and career development & training, iv. Equally distributed workload, v.
Pay and benefits, vi. Promotional opportunities, vii. Regular feedback and recognition, viii. Good
communication and co-workers, ix. Employees recognition as individuals, and x. Supervising and
good relationship with immediate supervision. In addition, 3 demographic variables possibly
related to job satisfaction have been selected for analysis. Demographic variables are the
information regarding age, level of education, annual salary (before taxes) of employees based on
gender (male and female). Age is the respondent’s age measured in years. Education is
operational as the highest grade level completed by the respondent. Respondent’s annual income
is the annual salary (before taxes) measured in Bangladeshi currency (Taka termed as BDT), and
respondent’s gender is measured as male and female.
The instruments used to gather primary data have been hand delivered to the various levels of
employees identified for this study. Research assistants have been responsible for hand delivering
and collecting the instruments. This procedure has not been considered problematic or perceived
to constitute a bias, because the identity of respondents has been kept confidential.
6. FINDINGS AND ANALYSIS OF THE STUDY
The following table illustrates the findings of the study in which respondents shown their opinion
and support for the variables or factors which keep them satisfied in their jobs of the private
commercial banks in Bangladesh.
-7-
Table 2: Summary of the Variables or Factors that Influence Job Satisfaction of Employees of
the Private Commercial Banks in Bangladesh and Their Responses to the Variables
Level of Importance Level of Satisfaction
Sl. Very Somewhat Not Very Much Somewhat Not
Variables
No. Important Important Important Satisfied Satisfied Satisfied
No. % No. % No. % No. % No. % No. %
i. Good working 359 92.05% 28 7.18% 3 0.77 % 234 60% 143 36.67% 13 3.33%
relationship and
environment
ii. Interesting work 355 91.03% 30 7.69% 5 1.28% 172 44.10% 187 47.95% 31 7.95%
provision
iii. Opportunities to 248 63.59% 130 33.33% 12 3.08% 156 40% 195 50% 39 10%
skills and career
development &
training
iv. Equally distributed 240 61.54% 130 33.33% 20 5.13% 125 32.05% 197 50.51% 68 17.44%
Workload
v. Pay and benefits 372 95.38% 10 2.56% 8 2.05% 186 47.69% 109 27.95% 95 24.36%
vi. Promotional 340 87.18% 48 12.31% 2 0.51% 129 33.07% 199 51.03% 62 15.90%
opportunities
vii. Regular feedback 315 80.77% 64 16.41% 11 2.82% 165 42.31% 170 43.59% 55 14.10%
and recognition
viii. Good 320 82.05% 58 14.87% 12 3.08% 176 45.13% 167 42.82% 47 12.05%
communication
and coworkers
ix. Employer’s 345 88.46% 32 8.21% 13 3.33% 219 56.15% 29 7.44% 142 36.41%
attitude towards
Employee
recognition as
individual
x. Supervising and 340 87.18% 40 10.26% 10 2.56% 198 50.77% 111 28.47% 81 20.77%
good relationship
with immediate
supervisor
Average 82.92% 14.62% 2.46% 45.13% 38.64% 16.23%
percentage of
responses to all
variables
Source: Primary Data through Field Survey
From the above presentation in the Table-2, it is evident that 82.92% respondents (employees) of
various levels and various private commercial banks have supported these variables or factors as
very important for the determination of their level of job satisfaction and about all of these factors,
45.13% respondents have strongly expressed that they are very much satisfied. 14.62%
respondents have expressed that these factors are somewhat important for bringing their job
satisfaction where only 2.46% respondents have said that they do not think that none of these
factors are important for determining their level of job satisfaction. On the other hand, 38.64%
-8-
respondents have said that they are somewhat satisfied with these factors and only 16.23%
respondents have opined that they are not satisfied.
Among the variables more than 80% of total respondents have said that good working
environment, interesting work provision, pay and benefits, promotional opportunities, regular
feedback and recognition, good communication and co-workers, employee recognition as
individual, supervising and good relationship with immediate supervisor are the most important
factors of employee job satisfaction in the private commercial banking sector of Bangladesh and
their satisfaction level about these factors area among the total respondents, 60% respondents are
very satisfied with good working environment, where only 3.33% respondents have said that they
are not satisfied at all about it. 47.69% respondents have said that they are very satisfied with the
pay and benefits which they are getting from their job, where only 24.36% respondents are not
satisfied about their pay and benefits. 33.07% respondents have opinion that they are very much
satisfied with their promotional opportunities, where 15.90% respondents have opinion that they
are not satisfied with the provision of their promotional opportunities. 56.9% respondents are
very satisfied about the employer’s attitude towards employee recognition as individual, where
36.14% respondents have shown very negative opinion. 50.77% respondents have said that the
system of supervising and good relationship with immediate supervisor is very satisfactory and
only 20.77% respondents have said that they are not satisfied with the system of the relationship.
Therefore, it can be said that among the variables, these are the most crucial and they have shown
various degree of satisfaction which have important implications for employers of private
commercial bank in Bangladesh for further thinking. Overall result of this survey has been shown
in the last column of the Table-2 as average percentage of responses to all variables. Here the
result is reflecting the real picture of contributing factors which keep the employees satisfied in
the private commercial banking profession in Bangladesh.
To sum up, overall findings of the study are indicative of systematic contributions of factors
which keep the employees satisfied with their work environment of the private commercial banks
in Bangladesh. The results of this survey indicate that the respondents have shown their supports
to the variables or factors which have been supported by the previous studies discussed in the
literature review section and also suggested that the level of job satisfaction of employees of
private commercial banks in Bangladesh is determined by a combination of jobs, work, and
personal characteristics related variables.
7. LIMITATIONS OF THE STUDY AND FUTURE RESEARCH OPPORTUNITY
In this empirical study, only 390 respondents have been taken through convenience sampling
from 39 private commercial banks in Dhaka city of Bangladesh. If the study would concentrate on
the bank branches of all cities of Bangladesh for selecting sample size through probability
sampling technique, the result of the study might be different. However, this study has focused
on only the identification and examination of different factors or variables that affect on employee
satisfaction of private commercial banks in Bangladesh. However, no cause and effect
relationship has been examined among the studied variables in this study. So a future research
can be undertaken to investigate the cause and effect relationship among those variables in the
banking sector of Bangladesh.
-9-
8. CONCLUSION AND RECOMMENDATION

For the growth and development of the private commercial banks in Bangladesh, employee
productivity is very crucial. To enhance this productivity, the employee attitude has to be
understood and it needs to motivate the employees in better ways. Because employee job
satisfaction is the pre condition of highly-motivated workforces who are the most valuable
resources of the private commercial banking sector in the country. As a result, without thinking
twice, of course the employees should be retained for the long-run growth of the commercial
banks in Bangladesh.
So the major conclusions from this analysis are as follows:
First, individual respondent’s opinions regarding factors which determine employee job
satisfaction levels of the private commercial banks in Bangladesh have been tended to be fairly
uniformed.
Second, there is a strong support for the assumptions about the contributing factors of job
satisfaction which employers should take into account for taking actions regarding employee job
satisfaction of the private commercial banks in Bangladesh.
Finally, further research is required to assess the applicability of these findings to general
population of private commercial banking employees in Bangladesh for facilitating a more
comprehensive understanding. This present study provides a starting point for additional
research using more sophisticated methodology.
REFERENCES
[1]. Agho, A., Mueller, C. and Price, J. (1993). Determinants of Employee Job Satisfaction: An
Empirical Test of a Causal Model. Human Relations, 46, 1007–1027.
[2]. Bajpai, N., and Srivastava, D. (2004). Sectorial Comparison of Factors Influencing Job
Satisfaction in Indian Banking Sector. Singapore Management Review, 26(2) 89-99.
[3]. Blegen, M., and Mueller, C. (1987). Nurses’ Job Satisfaction: A Longitudinal Analysis.
Research in Nursing & Health, 10, 227–237.
[4]. Cranny, C. J., Smith, P. C., and Stone, E. F. (1992). Job Satisfaction: How People Feel about
Their Jobs and How It Affects Their Performance. Lexington Books, New York.
[5]. Cropanzano, R., and Folger, R. (1996). Procedural Justice and Worker Motivation, in Steers,
R. M., Porter, L. W. and Bigley, G. A. (eds.), Motivation and Leadership at Work (6th ed.).
McGraw-Hill, New York, 72–83.
[6]. Daley, D. (1986). Humanistic Management and Organizational Success: The Effect of Job
and Work Environment Characteristics on Organizational Effectiveness, Public
Responsiveness, and Job Satisfaction. Public Personnel Management, 15, 131–142.
[7]. Emmert, M., and Taher, W. (1992). Public Sector Professionals: The Effects of Public Sector
Jobs on Motivation, Job Satisfaction and Work Involvement. American Review of Public
Administration, 22, 37–48.
[8]. Eulberg, J., O’Connor, E., Peters, L., and Watson, T. (1984). Performance Constraints: A
Selective Review of Relevant Literature. Psychological Documents (microfiche).
[9]. Friedlander, F., and Margulies, N. (1969). Multiple Impacts of Organization Climate and
Individual Values System upon Job Satisfaction. Personnel Psychology, 177-183.
-10-
[10]. Ganzach, Y. (1998). Intelligence and Job Satisfaction. Academy of Management Journal, 41,
526–539.
[11]. Gupta, M., and Sharma, P. (2009). Job Satisfaction Level among Employees: A Case Study
of Jammu Region, J & K. ICFAI Journal of Management Research, 8, 17-25.
[12]. Greenberg, J. (1990). Organizational Justice: Yesterday, Today, and Tomorrow. Journal of
Management, 16, 399–432.
[13]. Hackman, J. R., and Oldham, G. R. (1980). Work Redesign. Addison-Wesley, Reading, MA.
[14]. Herzberg, F. (1969). Work and the Nature of Man. Thomas Y. Crowell Co., London.
[15]. Herzberg, F., Mausner, B., Peterson, O., and Capwell, D. P. (1957). Job Attitudes: Review
of the Research and Opinion. Psychological Service of Pittsburgh, Pittsburgh, Pa.
[16]. Hopkins, A. H. (1983). Work and Job Satisfaction in the Public Sector. Rowman &
Allanheld, Totowa, N.J.
[17]. Kabir, M., and Parvin, M. M. (2011). Factors Affecting Employee Job Satisfaction of
Pharmaceutical Sector. Australian Journal of Business and Management Research, 1(9) 113–
123.
[18]. Kahn, R. L. (1972). The Meaning of Work: Interpretation and Proposals for Measurement,
in Campbell, A. and Converse, P. E. (eds.), The Human Meaning of Social Change. Russell
Sage Foundation, New York, 159-203.
[19]. Kathawala, Y., Moore, K. J., and Elmuti, D. (1990). Preference between Salary or Job
Security Increase. International Journal of Manpower, 11(7) 25-31.
[20]. Kreitner, R. and Kinicki, A. (2004). Organizational Behavior (6th ed.). McGraw-Hill/Irwin,
Boston.
[21]. Locke, E. (1984). Job Satisfaction, in Gruneberg, M. and Wall, T. (eds.), Social Psychology
and Organizational Behavior. John Wiley & Sons, New York.
[22]. Locke, E. A. (1976). The Nature and Causes of Job Satisfaction, in Dunnette, M. D. (ed.),
Handbook of Industrial and Organizational Psychology (1 st ed.). Rand McNally, Chicago,
IL, 1297–1349.
[23]. Maslow, A. H. (1954). Motivation and Personality (3rd ed.). Harper & Row, New York.
[24]. McFarlin D., and Sweeney, P. (1992). Distributive and Procedural Justice as Predictors of
Satisfaction with Personal and Organizational Outcomes. Academy of Management
Journal, 35, 626-637.
[25]. Mottaz, C. (1985). The Relative Importance of Intrinsic and Extrinsic Rewards as
Determinants of Work Satisfaction. Sociological Quarterly, 26(3) 365-385.
[26]. Murray, M. A., and Atkinson, T. (1981). Gender Differences in Correlates of Job
Satisfaction. Canadian Journal of Behavior Science, 13, 44-52.
[27]. National Commission on the State and Local Public Service (Winter Commission), USA
(1993). Hard Truths/ Tough Choices: An Agenda for State and Local Reform. Nelson A.
Rockefeller Institute of Government, Albany, NY.
[28]. Newstrom, J. W. and Davis, K. (2002). Organizational Behavior: Human Behavior at Work.
Tata McGraw-Hill Publishing Company Ltd., New Delhi.
-11-
[29]. Peters, L., O’Connor, E., and Eulberg, J. (1985). Situational Constraints: Sources,
Consequences, and Future Considerations, in Rowland, K. M. and Ferris, G. R. (eds.),
Research in Personnel and Human Resources Management. JAI Press, Greenwich, CT., 79-
113.
[30]. Qasim, S., Cheema, F.-E.-A., and Syed, N. A. (2012). Exploring Factors Affecting
Employees' Job Satisfaction at Work. Journal of Management and Social Sciences, 8(1), 31-
39.
[31]. Robbins, S. P., and Cenzo, D. A. (2014). Fundamentals of Management: Essential Concepts
and Applications (5th ed.). Prentice Hall, New Jersey.
[32]. Schnake, M. (1991). Organizational Citizenship: A Review, Proposed Model, and Research
Agenda. Human Relations, 44, 735-759.
[33]. Steyn, G., and Wyk, J. V. (1999). Job Satisfaction: Perception of Principals and Teachers in
Urban Black Schools in South Africa. South African Journal of Education, 19(1), 37-44.
[34]. Tait, M., Padgett, M. Y., and Baldwin, T. T. (1989). Job and Life Satisfaction: A
Reevaluation of the Strength of the Relationship and Gender Effects as a Function of the
Date of the Study. Journal of Applied Psychology, 74, 502–507.
[35]. Ting, Y. (1997). Determinants of Job Satisfaction of Federal Government Employees. Public
Personnel Management, 26(3), 313-334.
[36]. Trevino, L. (1992). The Social Effects of Punishment in Organizations: A Justice Perspective.
Academy of Management Review, 17, 647-676.
[37]. U.S. Merit Systems Protection Board (1987). Study Report.
-12-
PMJDY Status: Pre & Post Demonetization
Faisal Bin Hamada*, M. Shekarb

aDepartment of Accounting, College of Business Administration, University of Hail, Kingdom of Saudi Arabia
Email Id: fdf3000@gmail.com / f.alfordy@uoh.edu.sa
bDepartment of Accounting College of Business Administration, University of Hail, Kingdom of Saudi Arabia
Email Id: mokshitfeb22@gmail.com / dr.shekar@uoh.edu.sa
Abstract
PAPER/ARTICLE INFO
In this electronic era, the banking sector has grown up tremendously but RECEIVED ON: 16/03/2017
even after 70 years of Independence, less-than 2/3rd of the house hold in ACCEPTED ON: 21/05/2017
the India have access to banking facilities. Exclusion of large no of
community from any access to financial services inhibits the growth of the Reference to this paper
country and there is evidence that financial Inclusion is crucial to should be made as follows:
eradicate poverty & financial untouchability. From the learning of past
schemes, the Hon’ble Prime Minister of India, Mr. Narendra Modi has Faisal Bin Hamad, M.
taken a forward step on Financial Inclusion as one of the top most priority Shekar (2017), “PMJDY
project of the govt. In this regard, he has taken two steps i.e, step 1. Status: Pre & Post
Launched PMJDY scheme on 28th August 2014, for weaker section of the Demonetization”, Int. J. of
community as integrated approach for the financial freedom & financial Trade and Commerce-IIARTC,
literacy and the step 2 measure Demonetization. Demonetization is the Vol. 6, No. 1, pp. 13-22
act of stripping a currency unit of its status as legal tender. The
Government of India declared that the five hundred and one thousand
rupee notes will no longer be legal tender from midnight, 8 th November
2016. It is an attempt to address and stop corruption & washout black
money (unaccounted currency) and counterfeit notes.
This research paper aims at briefly reviewing the status of PMJDY status
(Pradhan Mantri Jan Dhan Yojana) pre & post demonetization stage.
And the data gathered from secondary sources, descriptive & analytical
methodology have been adopted for the data presentation. For analysis, all
the condensed data being presented in two-way tabular form with cross-
sectional comparative analysis have been applied in order to draw the
inferences.
Key words: Demonetization, Financial Inclusion & PMJDY.
Faisal Bin Hamad, M. Shekar
1. INTRODUCTION
In India the year 2011, the UPA‟s government focused on expanding the banking networks in
rural and unbanked areas in order to achieve inclusive finance. The initiative called
“Swabhimaan”, with a target to ensure a bank branch in all the villages with population of 2,000
or more by March 2012. The banks in general were directed to open “no-frill” accounts. The “no-
frill” accounts are the basic savings accounts with no minimum balance and fewer paperwork
requirements. More than 80 per cent of accounts opened under financial inclusion programme of
UPA government have remained dormant. Out of the 5.92 lakh villages in the country, only
74,000 villages could be covered by this scheme. Besides, only 3.9 million account holders out of
18.2 million no-frills accounts availed overdraft facilities amounting to Rs 155 crore.
The concept of Financial Inclusion is not a new one. It has become a catchphrase now and has
attracted the global attention in the recent decades. Lack of accessible, affordable and appropriate
financial services has always been a global problem. It is estimated that about 2.9 billion people
around the world do not have access to formal sources of banking and financial services.
Therefore, in India, Financial inclusion is intended to connect people to banks with consequential
benefits, ensuring that the financial system plays its due role in promoting inclusive growth in
one of the biggest challenges facing the emerging economies. From the learning of past schemes
failureness, our Hon‟ble Prime Minister: Shri. Narendra Modi has taken a forward steps on
Financial Inclusion as one of the top most priority project of the government. In this regard, in his
1st Independence Day speech August 15, 2014 he announced a new scheme „PRADHAN MANTRI
JAN DHAN YOJANA (Prime Minister people money scheme) (PMJDY)‟ as a National Mission for
comprehensive financial inclusion. And PMJDY launched on 28 th August 2014, for weaker section
of the community as an integrated approach for the financial freedom and financial literacy.
PMJDY works on the principles of “SAB KA SATH SAB KA VIKAS” and “Mera Khata
Bhagyavidhata”, which means „my account is divine‟. Financial inclusion provides formal
identity, access to payments system and deposits to all the households in the country with
financial services, with particular focus to empower the weaker sections of society, including
women, small and marginal farmers and labourers, both rural and urban.
And as the 2nd step of financial inclusion, on 8th November 2016 demonetization policy has been
imposed for rupees 500 and 1000 currency notes. It is an attempt to corruption and washout black
money (unaccounted currency) and counterfeit notes, and cashless transaction system has been
encouraged.
2. REVIEW OF LITERATURE
In order to clearly understand the gravity of the financial inclusion topic, some research papers
have been reviewer, extensive review of various reports, working papers, dissertations and
academic journals were reviewed. Out of which, few of them have been listed here.
Shekar, M.(2017), this research paper aimed at briefly reviewing the status of financial inclusion
in India, the pre & post demonetization Progress of PMJDY (Pradhan Mantri Jan Dhan Yojana)
and its issues & challenges, and also offers suggestions for achieving Inclusive Growth. He
concluded that the financial inclusion showed positive and valuable changes because of change in
strength and technological changes.
-14-
Veeramani, S. (2017), the author made an attempt to study the impact of demonetization on
various sectors in India. The results of the study reveal that ordinary individuals were the most
adversely affected. The new type of deposits called benami deposits have also come up with
demonetization. And author concluded that the aim of achieving financial inclusion along with
making India a cashless and digital economy, efforts are required to make technology to reach the
bottom of the society.
Shanker Kumar, SJ, Aftab Ahmad, S & Shekar, M.(2017), the research paper attempt to address
the influencing factors of financial literacy, Financial Inclusion status through Financial Literacy
and Role of concerned Regulatory authorities for promoting financial literacy and authors
concluded that the financial literacy status is not satisfactory, especially in rural areas and the
people are not aware of financial services offered.
Banik, N. and Padalkar, M. (2016), concentrated on PMJDY accounts after demonetization,
demonetization has created a tremendous impetus toward greater financial inclusion. It has
operationalized the Jan-Dhan bank accounts, with around 210 billion rupees ($3 billion) in
deposits.
Iyer, S.S. (2016), the author pointed out regarding Benami Deposits in his paper. The Jan Dhan
bank accounts opened for the poorest of poor are now swelling with cash since demonetization.
This implies that these accounts have become holders of somebody‟s account i.e., the poor have
been used by those with hoardes of unaccounted money to park their funds.
Nigam, A. (2016), the author focused on the access to credit and savings facilities, financial
security and the standard of living improves and poverty falls, allowing people to contribute
more to the economy as well.
Partap Singh & Virender Singh (2016), this study is an attempt to understand the impact of
demonetization on Indian economy and the authors also highlighted the probable consequences
of the demonetization decision on various economic variables and entities.
Trevedi, Pratima & Trevedi Saumya (2016), in their research paper tries to find out level of
financial literacy in our country and steps initiated for making public financially literate.
Suresh, A., Narayana Srinivasa & Kumar Vijay (2016), the authors attempted to discuss the
overview of The Jan Dhan Yojana, an ambitious financial inclusion programe to eradicate
financial untouchability by opening bank accounts for poorer section. They also tried to provide
evidence on impact of Pradhan Mantri Jan Dhan Yojna in India, the various issues, challenges,
and present status of financial services in the country.
Veeramani, S. (2015), the author focused on Financial Inclusion and the Progress of PMJDY and
its issues & challenges. And suggested that the government should give due focus on
establishment of adequate number of Financial Literacy Centers (FLC), measures to improving
connectivity and infrastructure as an ongoing continuous endless process by expecting full
extendable support from all the stakeholders.
Gupta, Sonam Kumari (2015), the author paid attention on trend of accounts opened under
PMJDY Scheme and suggested strategies to conduct awareness on financial literacy activities.
Kaur Harpreet & Singh, Kawal Nain (2015), studied the recent trends in financial inclusion in
India with special reference to Pradhan Mantri Jan Dhan Yojana, highlighting its key areas and
-15-
suggested strategies to ensure maximum financial inclusion for the disadvantaged and unbanked
areas.
Mohan, Brij (2014), in his study, analyzed the performance, benefits, difficulties and future
prospects of PMJDY scheme in order to achieve the results of financial inclusion.
Kumar, Divyesh (2014), the author discussed the overview of financial inclusion using PMJDY
scheme in India. It is revealed that, it is the greatest step ever taken to eradicate poverty is
financial inclusion through PMJDY. The author also suggested, that the success of this scheme
constant review and regular check is very much essential.
Kumar, V. (2014), the author focused on Unique Solutions to attain the financial inclusion. It is
intended to connect people to financial markets & financial institutions (banks) with
consequential benefits, ensuring that the financial system plays its due role in promoting
inclusive growth.
Khuntia, Rajanikanta (2014), the author highlighted on the recent trends in financial inclusion in
India with special reference to PMJDY and presented measures to improve financial inclusion.
“World Economic Outlook”(2013), published a report by the International Monetary Fund (IMF),
reviews the economic developments world over and states possible future projections with regard
to the World Economy. The report feels that global economic recovery will continue to be
uncertain and global economic growth will decline further.
3. NEED FOR THE STUDY
In the recent decades, the banking sector has grown up tremendously but usurious money
lenders are continuing to exploit the poorer section of the society, economic and social
inequalities have increased along with high growth rates in India, because more than 1/3rd of the
households are excluded from banking activities. The importance of financial inclusion arises
from the problem of financial exclusion as a result. Inclusive growth is essential for sustainable
development and equitable distribution of wealth and prosperity. In order to achieving inclusive
growth, Hon‟ble Prime Minister of India has launched PMJDY with the motto of opening at least
one bank account for each household as a "national priority". Thus, the Mission not only brings
the excluded sections into the financial mainstream but also makes the transfer of benefits of
various subsidy schemes of the government more efficiently. And demonetization as the 2 nd step
imposed as an integrated approach for achieving financial freedom & financial literacy.
1. To address the historical back ground of demonetization in India
2. To address the eligibility & ineligible conditions of the PMJDY Scheme
3. To address the claim settlement procedure of the PMJDY Scheme
4. To review the status of PMJDY- pre & post demonetization
5. RESEARCH METHODOLOGY
The present study is descriptive in nature. Data has been gathered through secondary source,
such as RBI bulletin, reports on trend and progress of banking in India, statistical abstracts,
websites of RBI, PMJDY, NABARD, OECD and Ministry of Finance, Government of India (GoI),
and other useful sources reputed journals & newspapers. Descriptive and analytical Methodology
have been adopted for the data presentation. For analysis, all the condensed data being presented
-16-
in two-way tabular form with cross-sectional comparative analysis have been applied in order to
draw the inferences.
6. SCOPE OF THE STUDY
The scope of the present study is limited to the status of Pradhan Mantri Jan Dhan Yojana
(PMJDY) scheme pre and post demonetization.
7. DATA ANALYSIS
7.1 Historical Back ground of Demonetization in India: According to RBI Report sources,
demonetization measures have been taken three times in India.
 1st Time Demonetization In India: The first time in India In January 1946, currency notes of
1000 and 10,000 rupees (which was printed in 1938) were withdrawn and new notes of 1000,
5000 and 10,000 rupees were introduced in 1954.
 2nd Time Demonetization In India: The 2nd time, The Janata government had again
demonetized notes of 1000, 5000 and 10,000 rupees on 16 January 1978 as a means to curb
forgery and black money.
 3rd Time Demonetization In India: Currently on 8th November 2016 rupees 500 & 1000
currency notes were withdrawn with an expectation of more than Rs 5 lakh crore black
money to washout from the Indian economy and make India is a cashless digital economy.
7.2 Reasons for Demonetization in India: There are multiple reasons why a country demonetizes
it‟s currency, few of them are presented here.
 To achieve financial inclusion
 To check the inflation status
 To curb the corruption
 To flush out the black money
 To promote the cashless transactions.
 To reduce fiscal deficit of India
 To control criminal activates & stop terror financing.
7.3 Addressing the Eligibility & Ineligible Conditions of the Scheme
Benefits: The scheme provides for life cover of Rs. 30,000/- payable on death of the beneficiary
due to any cause, subject to fulfillment of the following eligibility conditions.
Basic Eligibility Conditions
 Person opening Bank account for the first time, with RuPay Card in addition, during the
period from 15-08-14 to 26-01-15, or any additional period as may be extended further by
Government of India.
 The person should normally be head of the family or an earning member of the family and
should be in the age group of 18 to 59 (i.e. person should be at least 18 years old, and should
not have turned 60). In case the head of family is 60 years or more of age, the second earning
person of the family in the above mentioned age group will be covered, subject to eligibility.
 Person must have a RuPay Card and Bio – Metric Card linked to bank account or in process
of being linked to bank account if not already there.
 The account can be any bank account including a saving account.
-17-
 For the coverage to be effective the above RuPay Card should be valid and in force.
 Only one person in the family will be covered in the Bima Scheme and in case of the person
having multiple cards / accounts the benefit will be allowed only under one card i.e. one
person per family will get a single cover of Rs. 30,000/-, subject to the eligibility conditions.
 The life cover of Rs 30,000/- under the scheme will be initially for a period of 5 years, i.e. till
the close of financial year 2019-20. Thereafter, the scheme will be reviewed and terms and
condition of its continuation, including the issue of future payment of premium by the
insured thereafter, would be suitably determined.
7.4 Ineligible Categories
 Central Government and State Government employees (in service or retired) and their
families.
 Employees (in service or retired) of Public Sector Undertakings, Public Sector Banks, any
entity owned by Central Government, any entity owned by a State Government or any entity
jointly owned by the Central Government and any State Government, and their families.
 Persons whose income is taxable under I.T. Act 1961 or are filing the yearly Income Tax
return or in whose case TDS is being deducted from the income, and their families.
 Persons who are included in the Aam Aadmi Bima Yojana covering 48 occupations defined
under the Scheme, and their families.
 Otherwise eligible account holders, who have life cover on account of any other scheme of the
Bank against the account, shall have to choose between the two schemes and derive benefit
from only one.
 All persons who do not fulfill the basic eligibility conditions of the scheme.
Death Benefit Eligibility: The nominee of the accountholder will be entitled to receive death
benefit of Rs. 30,000/- in case of the unfortunate death of the accountholder on account of any
cause.
Exit from Scheme: The person will exit the scheme on reaching age 60 i.e. on the day the person
turns 60.
7.4 Addressing the Claim Settlement Procedure of the PMJDY Scheme
Claim Settlement
 The Claim amount of Rs. 30,000/- is payable to the nominee(s) of the accountholder. The Risk
cover will be provided to the person from his age of 18 (Completed) till he attains the age of
60 years completed i.e. eligibility will cease on turning 60 years and he will exit the scheme on
the day the person turn 60.
 The claim settlement process will be decentralized to the Offices of LIC. The Process claim
settlement will be as follows:
 Claim papers will be collected by the District Branch / Nodal Branch of the concerned
Bank and submitted to the Pension and Group Scheme Units of LIC for processing of
Claims.
 The Claim will be paid to the nominee who is the nominee in the Bank Account.
 The Claim amount will be credited to Bank account of the nominee through APBS/NEFT.
-18-
7.5 Status of PMJDY and Predemonetization Stage

The scheme got a certificate from the „Guinness Book of World Records‟ for most bank accounts
opened in one week as part of the Financial Inclusion Campaign is 18096130 was achieved by
department of financial services, Government of India during August 23-29, 2014. And on the
inaugural day(28th August 2014) itself created a record of 1.5 crore bank accounts were opened
across the country, the largest such exercise on a single day so far not possible in the world. For
the any nation, inclusive growth is necessary for sustainable development and equitable
distribution of wealth and prosperity. Achieving inclusive growth is the biggest challenge of
India. In a democratic country like India, bringing 600 million people living in rural India into the
mainstream is the biggest concern. The challenge is to take the levels of growth to all section of
the society and to all parts of the country. The best way to achieve inclusive growth by
strengthening PMJDY. The current plan pursues digital financial inclusion with special emphasis
on monitoring by PMJDY Mission headed by the Finance Minister. According secondary sources
(PMJDY websites & news papers) it is found, that in Madhya Pradesh has reported 100%
saturation (in terms of coverage of all households with at least one bank account) on 30.11.2014.
There were 1.53 crore Households of which 1.03 Crore Households were having bank accounts.
49.96 Lac new Households were covered and 58.64 Lac accounts were opened. States of Goa,
Kerala and Tripura, Union Territories of Chandigarh, Pondicherry, Lakshadweep and Nineteen
districts of Gujarat had already covered all households under PMJDY with at least one bank
account. As on 01.12.2014, 8.39 crore accounts have been opened under PMJDY.
As per the below Table no 1, it is noted that the total 22.08 crores accounts have been opened out
of which 61% in rural and 39% in urban. Nearly 82% RuPay Cards have been issued as on
8/6/2016. Maintenance of accounts with zero balance is biggest issue for banks it is found from
the above Table no 1, the overall 26% these accounts are remained as zero balance under the
PMJDY as on 08.06.2016,
As per the banking norms these 26% accounts would be fallen under dormant of the banking
records. In these 26% accounts there is no possibility of a transaction till money flows into them.
Table 1: PMJDY Account Status with PSBs, RRBs and PBs : As on 08.06.2016
(All Figures in Crores)
No of accounts opened
Category Rural % Urban % Total % No of Balance % of Zero
Rupay in balance
Cards Accounts Accounts
1.PSBs 9.7 44 7.65 35 17.35 79 14.6 30462.05 25.89
2.RRBs 3.37 15 0.55 3 3.92 18 2.75 6639.51 21.81
3.PBs 0.5 2 0.31 1 0.81 3 0.77 1439.12 37.69
Total 13.57 61 8.51 39 22.08 100 18.12 38540.68 25.6
Source: PMJDY Progress Report -2016
The performance of Public Sector Banks (PSBs) is at the top with more than 79% contribution in
PMJDY followed by Regional Rural Banks (RRBs) and Private Banks (PBs) with 18% and 3%
respectively. About 44% in rural & 35% in urban bank accounts are opened by PSBs and rest of
the portion covered by RRBs & PBs accordingly.
-19-
7.6 STATUS OF PMJDY AND POST DEMONETIZATION STAGE

Table 2: PMJDY Account Status with PSBs, RRBs & PBs : As on 17.05.2017
(All Figures in Crores)
No of accounts opened (Beneficiaries)
Category Rural % Urban % Total % No of Balance in % of Zero
Rupay Accounts balance
Cards Accounts
(as on
25.1.2017)
1.PSBs 12.57 44 10.45 37 23.02 80 17.84 52455.97 24.80
2.RRBs 03.98 14 00.71 2 4.69 16 3.54 12458.89 20.85
3.PBs 00.56 2 00.38 1 0.94 4 0.86 2410.12 35.01
Total 17.10 60 11.53 40 28.65 100 22.24 67324.98 24.47
Source: https://www.pmjdy.gov.in/scheme / pmjdy progress report – May, 2017
As per the above Table no 2, it is observed that the 28.65 crores accounts have been opened out of
which 60% in rural and 40% in urban. About 78% RuPay Cards have been issued, 24.47% of the
accounts are remained as zero balance (as on 25.1.2017). The overall performance of Public Sector
Banks (PSBs), Regional Rural Banks (RRBs) and Private Banks (PBs) are 80%,16% and 4
respectively.
8. CROSS SECTIONAL COMPARATIVE ANALYSIS
As per the above Table no 1 and 2, it is noted that the post demonetization results 30% (28.65-
22.08/22.08*100) increased in opening of bank accounts under PMJDY. Pre and post
demonetization, there is a marginal change in opening of bank accounts in Rural and Urban but
4% change seen in issuance of Rupay cards and maintaining balance in accounts have been
improved to the extent of 80% by declining 10% in zero balance accounts.
The Overall rural and urban both the areas, PSBs are being performed well than others. It is also
found that the various issues and challenges in effective implementation of scheme include
several riders for life insurance cover, poor telecom connectivity, lack of infrastructure,
duplication and dormant accounts, poor performance of PBs, remuneration of Business
Correspondent (BC) and other operational costs associated with the scheme, and credit facility
without the assessment of credit worthiness.
9. CONCLUSION & SUGGESTIONS
Since independence, significant improvement in India‟s economic and social development made
the nation to grow strongly in the 21st century. As a result, Inclusive growth has become a
national policy objective of Indian Government, for achieving high degree of financial inclusion
and inclusive growth, there should be proper financial inclusion regulation and access to financial
services should be made through SHGs and MFIs. The PMJDY is an advanced integrated
approach for the financial inclusion program, financial freedom & financial literacy of the weaker
section of the community, because it focused on individual households.
Post demonetization high emphasis given on financial inclusion in rural, semi - urban and urban
areas. The provision of basic accounts with linked insurance coverage, debit card facilities,
-20-
overdraft facility, zero account facilities etc., to the poor households‟ benefit, economic activity,
stability and the ability to absorb shocks. The PMJDY scheme can meet the challenges, by
improving banking infrastructure such as e-banking, bank branches, ATMs, money valets with
good and reliable BCs and overall monitoring for effective final inclusion. For building customer
awareness E-banking and M-banking training and education programs should be conducted.
The PMJDY Mission would require to work as an ongoing continuous endless process by
expecting full extendable support from all the stakeholders.
REFERENCES
[1]. Banik. N and Padalkar. M (2016). India's Demonetization: Time for a Digital Economy, The
Diplomat, 01 December 2016. Retrieved from http://thediplomat.com/2016/12/indias-
demonetization-time-for-a-digital-economy/
[2]. Mohan, Brij (2014). "Pradhan Manti Jan Dhan Yojana (PMJDY): Features, Needs And
Challenges", International Journal of Marketing, Financial Services & Management
Research, ISSN 2277-3622 , 3(12), 111-117.
[3]. Kumar, Divyesh (2014). "Financial Inclusion Using Pradhan Mantri Jan-Dhan Yojana –A
Conceptual Study", Asia Pacific Journal of Research ISSN: 2320-5504, E-ISSN-2347-4793,
1(20), 37-42.
[4]. Kaur, Harpreet & Singh, Kawal Nain (2015). "Pradhan Mantri Jan Dhan Yojana (PMJDY):
A Leap towards Financial Inclusion in India", International Journal of Emerging Research in
Management &Technology, 4(1), 25-29.
[5]. Iyer S.S (2016). Pradhan Mantri Jan Dhan Yojana: Impact after Demonetization, Post Card,
21 November 2016. Retrieved from http://postcard.news/pradhan-mantri-jan-dhan-
yojana-impact-demonetization/
[6]. Kumar, V. (2014). Financial Inclusion in India: Unique Solutions, Indian Streams Research
Journal , 4(8) 1-3.
[7]. Nigam, A. (2016). Demonetization, 'Financial Inclusion' and the Great 'Unbanked', 10 Years
of Kafila- our common journey, 14 November 2016. Retrieved from
https://kafila.online/2016/11/14/demonetization-financial-inclusion-and-the-great-
unbanked/
[8]. Singh, Partap & Singh, Virender (2016). Impact of demonetization on Indian economy,
ICRISTME-16, ISBN: 978-93-86171-13-9, 290-299.
[9]. Trevedi, Pratima & Trevedi, Saumya (2016). Financial Literacy an Essential Prerequisite for
Financial Inclusion, Global Journal for Research Analysis, ISSN:2277-8160, 3, 28-30.
[10]. Khuntia, Rajanikanta (2014). "Pradhan Mantri Jan Dhan Yojana (PMJDY): A New Drive
towards Financial Inclusion in India", ZENITH International Journal of Business Economics
& Management Research, 4(11), 10-20.
[11]. Shanker Kumar, S.J., Aftab Ahmad, S. & Shekar, M. (2017). Financial Literacy as a Tool of
Financial Inclusion, Airo International Research Journal, ISSN:23203714, 9.
[12]. Shekar, M. (2017). Financial Inclusion through PMJDY: Pre & Post Demonetization, Airo
International Research Journal, ISSN:23203714, 9.
[13]. Gupta, Sonam Kumari (2015). "Performance Appraisal of the Pradhan Mantri Jan Dhan
Yojana", IOSR Journal of Business and Management (IOSR-JBM), 17(9), 35-39.
-21-
[14]. Suresh, A., Narayana, Srinivasa & Kumar, Vijay (2016). A Study on Financial Inclusion
Initiatives and Challenges in India With Reference to PMJDY, IRA-International Journal of
Management & Social Sciences, ISSN 2455-2267; 3(3) .
[15]. Veeramani, S. (2015). Pradhan Mantri Jan Dhan Yojana (PMJDY) As A National Mission for
Financial Inclusion, ELK Asia Pacific journal, special issue No: 978-81-930411-3-0.
[16]. Veeramani, S. (2017). Impact of Demonetization on Indian Economy, Airo International
Research Journal, ISSN:23203714, 9
[17]. World Economic Outlook (2013). International Monetary Fund
(2013),viewed29thDecember2013,http://www.imf.org/external/pubs/ft/weo/2011/02/p
df/text.pdf
WEB REFERENCES
[1]. Department of Financial Services, Ministry of Finance, GoI, PMJDY Mission document
https://financialservices.gov.in/Banking/PMJDY%20brochure% pdf.
[2]. financialservices.gov.in
[3]. https://www.oecd.org
[4]. Pradhan Mantri Jan Dhan Yojana (2016) Retrieved from
http://www/en.wikipedia.org/wikiPradhan_Mantri_Jan_Dhan_Yojana.
[5]. Pradhan_Mantri_Jan_Dhan_Yojana (2016)/ http://www.pmjdy.gov.in
[6]. www.finmin.nic.in
[7]. www.nabard.org
[8]. www.rbi.org.in
REPORTS
[1]. RBI Annual Report on Financial Inclusion - 2013-15.
[2]. RBI Annual Report on PMJDY- 2014-15 & 16.
-22-
Comparative Study of Stock and Bond Markets Volatility and

Returns Performance
Thota Haripriyaa*, Y. Rama Krishnab, Sindhuc

aResearch Scholar, JNTUH, Telangana State, India
bMalla Reddy College of Eng. Tech., Dhulapally, Hyderabad, Telangana State, India
cSchool of Management Studies, JNTUH, Telangana State, India
Email Id: priyaruthvik2006@gmail.com
Abstract
PAPER/ARTICLE INFO
The paper aims to compare the equity and bond market performance and RECEIVED ON: 17/02/2017
volatility based on the risk associated with them. The benchmarks were ACCEPTED ON: 29/05/2017
considered for equity (sensex) and bond market (composite bond index) for
the period of 3 years starting from April 2014 to March 2017. Modigliani Reference to this paper
risk adjusted method (MM) has been used to measure the returns should be made as follows:
performance of both the asset classes. The historical volatility has been
applied with the standard deviation for bonds and stocks calculated and Thota Haripriya, Y. Rama
the result has been compared to know which of the market indicator has Krishna, Sindhu (2017),
the greater volatility during the study period. The volatility of equity “Comparative Study of Stock
during the study period is more when compared to the bond market and Bond Markets Volatility
volatility. The MM approach reveals that the performance of the stock and Returns Performance”,
market was better and greater than the bond markets during the period of Int. J. of Trade and Commerce-
study. IIARTC, Vol. 6, No. 1, pp. 23-
Key words: Equity, Bond, Indices, Volatility, Risk free return. 29
Comparative Study of Stock and Bond Markets Volatility and Returns Performance
Thota Haripriya, Y. Rama Krishna, Sindhu
1. INTRODUCTION
Bonds and equities are the two securities which are used by investors for balancing their asset
class or portfolio. The purpose depending on the market conditions, the policy makers and
investors try to balance the return on the investments by trying to understand the relationship
between equity and bonds. Asset prices or volatility is influenced by many shocks in the market
which are generally unpredictable and in certain cases there can be sudden decline in the
liquidity of a particular asset class. There is a need to understand the relationship between the
return and risk values of a particular security. A security with high volatility will have greater
risk. There have been many studies in the past on various aspects such as risk and return
relationship, volatility and liquidity relationships of the stock and fixed income securities. The
volatility calculations also reveal the relationship of the security values and its changes with
respect to the time period. If the security changes its direction rapidly over a short period of time,
it can be classified as a risky asset. If the asset takes a longer period of time for changing or
reacting as per the market conditions it can be called a less risky security. The M2 risk adjusted
performance approach is based on the Sharpe ratio but it is more advantageous than Sharpe as it
can be expressed in terms of percentage returns when compared to a bench mark. The general
standard deviation of returns over a time period reveal the spread out from the mean value. A
low standard deviation of the returns reveals lesser deviation from the average.
Marshall E. Blume, Donald B.Keim and Sandeep A. Patel (March, 1991): The authors have
investigated about the long-term low grade bonds, their risk and returns aspects. The objective of
the paper was to compare the long-term low grade bonds with the long-term treasuries and long-
term high grade bonds and compare the risk and returns and their sensitivity to the volatility of
interest rates. The data was studied for 12 years form 1977-1989. Despite this complexity there
was no evidence that low-grade bonds are systematically over or under-priced.
Francis A. Longstaff and Eduardo S. Schwartz (1993), researched on the risks involved in fixed
income portfolios. The risk of the bond generally consists of the interest rate risk and interest rate
volatility. The objective of the paper was to show that interest rate volatility has consequential
influence on bond prices. The data has been studied from 1964-1989 for 25 years. Regression of
changes in short-term interest rates and change in interest rate volatility on changes in yields to
maturity. Longstaff and Schwartz model has been used for analyses of change in prices to
volatility of interest rates. The results showed that changes in the volatility of interest rates can
have large effects on the prices and yields of bonds. In case the volatility risk is not hedged the
portfolio managers will incur loss when interest rates change.
Michael H. Hopewell and George G. Kaufman (1973) the objective of the paper stated that for a
given basis point change in market yield percentage changes in bond prices vary proportionately
with duration and are greater, the greater the duration of the bond. That is price volatility of a
bond is related to duration of the bond rather than term to maturity of the bond. Method of
Differentiation has been used for proving that duration is a more accurate measure for price
volatility than maturity.
-24-
Murray R. Hutchings and John S. Mc Callum (Dec, 1975) explain the relationship between bond
price volatility and yield to maturity. The objective of the paper was to identify the specific
market conditions under which the generally accepted price to maturity relationship does not
hold good. The derivative formula has been applied, where change in price for a change in yield
is analyzed for various maturity levels. The implications of the research were that in specific
conditions where irrespective of any 'n' (maturity) the bond price volatility increases or decreases
with a change in coupon rate and yield. They suggest that bond investors in general should not
expect a decrease in volatility with maturity.
Richard L. Norgaard (Sep. 1974): They have compared the yields of stocks and bonds. The
objective of study stated that the higher mean yield of stocks was offset by the lower variance of
yields of bonds. The geometric mean was used to calculate holding period yields as the dividends
and interests were assumed to be reinvested. The research proves that the probability of receiving
a higher yield by investing in a portfolio of bonds or mixed portfolio of stocks and bonds is
relatively less when compared to the portfolio of only stocks and approaches to zero as the
holding period increases beyond one year. The research suggests that the portfolio managers
should purchase stocks rather than mixed portfolios. The limitations of study include sample size,
random selection of securities, annual holding periods.
Nianyun Cai (Feb, 2008) analyses the relationship between Corporate bond returns and volatility.
The literature survey had evidence on the importance between idiosyncratic equity risk and its
relationship to bond returns or its impact on bond yields. The current papers objective was to
prove that bond volatility has a higher correlation to contemporaneous bonds excess returns. The
data has been taken for 9 years from 1996 to 2005. The Lehman Brothers Corporate Index has been
used for the purpose of decomposition of the bonds. They conclude that corporate bond volatility
has both slow moving and time to maturity components and both idiosyncratic risk and bond
volatility forecast the bond excess returns for a period of three and six months.
X. Henry Wang and Bill Z. Yang (2010): The paper states that YTM precisely measures total rate
of return when the bond is valued at its amortized book value. There have been critics in the past
for such a kind of practice could not be applied in the bond market as the amortized book value
of the bond may not be the same as its market value. Despite the above criticism the author stated
that any assets rate of return could be valued based on amortized book value. Examples are used
to prove the above hypothesis. The author concludes that the YTM exactly equals this theoretic
rate of return based on amortized book value. The current market price of bond always fluctuates
around its amortized book value, when it is close to maturity.
 To measure and compare the volatility of the equity and bond bench marks
 To study and compare the equity and debt market benchmark returns performance measure.
The present study has emphasized on the equity market and debt market segment for three years
period i.e., April 2014 to March 2017. The study had considered equity market bench mark
indicator as sensex and debt market bench mark indicator as composite bond index (CBI).
-25-
 Repo rate-RBI,
 Sensex – BSE India,
 Composite bond Index (CBI) – NSE India.
The present study has been done on the secondary data by applying statistical methodologies.
The following are the tools which were considered for study.
Volatility: The volatility method has been applied on the equity market bench mark (sensex) and
debt market benchmark (CBI). This method will evaluate the volatility based on the historical
data.
Modigliani Risk Adjusted Method: The performance measure method of M square will measure
the returns performance based on the risk free rate of return. In this study sensex and composite
bond index indicators were considered.
M2 = S * σB + R f
Where
σ B = Excess returns of bench mark portfolio compared against σ D
D = Average of D
σ D = Standard deviation of D
D
S=
σD
D = R P - R f ( R P = Portfolio return and R f = Risk free rate)
6. LIMITATIONS OF THE STUDY
 In the study Repo rate has been considered as a risk free rate of return.
 In the study no economic factors were considered. There may be many economic factors
might be influenced the equity and debt market benchmarks during the study.
7. DATA ANALYSIS
Table 1: To measure and compare the volatility of the equity and bond bench marks
SENSEX Volatility
TRADE
Date STDEV STDEV/days VOLATILITY
DAYS
3/31/2015 1,938.51 244 7.94 2.82
3/31/2016 1,455.27 246 5.92 2.43
3/31/2017 1,189.69 247 4.82 2.19
Average 1,527.82 245.67 6.22 2.49
-26-
The above table 1 depicts the historical volatility of the equity bench mark index sensex for the
three years period. In the year 2014 to 15 volatility (2.82) is observed to be higher than the other
two years period volatility. The sensex three years average volatility is found to be 2.49.
Table 2: Composite Bond Index Volatility
Date STDEV DAYS STDEV/days VOLATILITY
31/03/2015 27.74 244.00 0.11 0.34
31/03/2016 5.70 246.00 0.02 0.15
31/03/2017 18.98 247.00 0.08 0.28
Average 17.47 245.67 0.07 0.26
The above table 2 reflects the bond bench mark volatility for the three years period i.e., from 2014-
15 to 2016 – 2017. The calculated value of the CBI (0.34) in the year 2014-15 is observed to be
greater than the other two years period. The Three years average volatility is found to be 0.26.
Comparison: The volatility has been calculated for the sensex and composite bond index for three
years and observed that the equity market (sensex) volatility has been greater than the debt
market (CBI) volatility (2.49 > 0.26).
Table 3: To study and compare the equity and debt market returns performance measure.
Sensex Composite Bond Index
Date
Rp Rf D= Rp -Rf Rp Rf D= Rp -Rf
Apr, 2014 -0.127593 0.666667 -0.794259 0.41263 0.66667 -0.254
May, 2014 8.094353 0.666667 7.427687 1.66792 0.66667 1.00125
June, 2014 2.952945 0.666667 2.286278 -0.057 0.66667 -0.7237
July, 2014 1.483833 0.666667 0.817166 0.27886 0.66667 -0.3878
Aug, 2014 4.541726 0.666667 3.87506 -0.3243 0.66667 -0.991
Sep, 2014 -0.882254 0.666667 -1.548921 0.47443 0.66667 -0.1922
Oct, 2014 4.884976 0.666667 4.21831 2.15088 0.66667 1.48422
Nov, 2014 2.992098 0.666667 2.325432 1.03158 0.66667 0.36491
Dec, 2014 -3.712234 0.666667 -4.378901 1.25166 0.66667 0.585
Jan, 2015 4.64377 0.645833 3.997937 1.62264 0.64583 0.9768
Feb, 2015 0.335997 0.645833 -0.309836 -0.4165 0.64583 -1.0623
Mar, 2015 -5.097399 0.625 -5.722399 -0.3395 0.625 -0.9645
Apr, 2015 -4.419051 0.625 -5.044051 -0.5883 0.625 -1.2133
May, 2015 1.228966 0.625 0.603966 -0.2923 0.625 -0.9173
June, 2015 -0.244749 0.604167 -0.848915 -1.4158 0.60417 -2.02
July, 2015 0.334358 0.604167 -0.269809 0.41849 0.60417 -0.1857
Aug, 2015 -6.754766 0.604167 -7.358933 0.10425 0.60417 -0.4999
Sep, 2015 1.783866 0.5625 1.221366 1.3206 0.5625 0.7581
Oct, 2015 1.662335 0.5625 1.099835 -0.3289 0.5625 -0.8914
Nov, 2015 -1.556827 0.5625 -2.119327 -0.9041 0.5625 -1.4666
Dec, 2015 -0.198209 0.5625 -0.760709 -0.0998 0.5625 -0.6623
Jan, 2016 -2.937399 0.5625 -3.499899 -0.1293 0.5625 -0.6918
Feb, 2016 -7.342769 0.5625 -7.905269 -0.8184 0.5625 -1.3809
Mar, 2016 6.570869 0.5625 6.008369 1.37649 0.5625 0.81399
-27-
Apr, 2016 1.333537 0.541667 0.79187 0.30634 0.54167 -0.2353

May, 2016 4.839374 0.541667 4.297707 0.03611 0.54167 -0.5056
June, 2016 1.069816 0.541667 0.52815 0.3644 0.54167 -0.1773
July, 2016 3.341142 0.541667 2.799475 1.81057 0.54167 1.2689
Aug, 2016 1.603571 0.541667 1.061905 0.40143 0.54167 -0.1402
Sep, 2016 -1.961477 0.541667 -2.503144 0.64165 0.54167 0.09999
Oct, 2016 -1.068502 0.520833 -1.589335 -0.0747 0.52083 -0.5956
Nov, 2016 -4.39006 0.520833 -4.910894 3.58707 0.52083 3.06623
Dec, 2016 0.250528 0.520833 -0.270305 -2.8021 0.52083 -3.3229
Jan, 2017 3.987562 0.520833 3.466728 -0.294 0.52083 -0.8149
Feb, 2017 2.138042 0.520833 1.617208 -2.8122 0.52083 -3.3331
Mar, 2017 2.194312 0.520833 1.673478 0.92367 0.52083 0.40283
Table 4: Modigliani Risk Adjusted Performance Method
Performance
Mean D S Mean Rf σB M2
Measure
SENSEX 0.008 0.002 0.59 1.22236 0.59413
CBI (0.36) (0.29) 0.59 3.57945 (0.45)
The above table 4 shows the Modigliani risk adjusted method for the two asset classes (equity and
debt). The sensex has been considered from the equity segment and the returns performance has
been analyzed for three years period. The M square is observed to be positive 0.59413 for equity
benchmark and debt market bench marks performance (0.45). The M square measures the returns
performance based on the risk of the asset by considering the risk free rate of return. The M
square result reveals that the sensex returns performance 0.59413 is superior than the composite
bond index returns performance (0.45).
8. FINDINGS OF THE STUDY
 The study observed that equity market bench mark sensex volatility in the year 2014 – 15 had
recorded high volatility with 2.82.
 The three years average volatility of the sensex is found to be 2.49.
 The debt market normally has less volatility. In the study NSE traded composite bond index
has been considered and measured the historical volatility. The volatility for three years result
stated low volatility 0.26.
 The performance has been measured with the help of Modigliani risk adjusted method and
result reveals that for the equity market benchmark 0.59413 return performances is greater
than the debt market benchmark return performance (0.45).
9. CONCLUSION OF THE STUDY
The paper titled „‟Comparative study of stock and bond market volatility and returns
performance‟‟ has considered equity and bond market assets for the period of April, 2014 to
March, 2017, to compare the return performance based on the risk associated with their returns.
The study result reflects that the equity market benchmark historical volatility and returns
performance found to be superior to the bond benchmark. Hence, there is a further scope to do
-28-
research in this area by considering the various economic factors and intra-asset class effects
which can also be explored in equity and debt market segments in India, so that investors will be
benefited.
REFERENCES
[1]. Francis A. Longstaff and Eduardo S. Schwartz (Jul. - Aug., 1993). Interest Rate Volatility
and Bond Prices, Financial Analysts Journal, 49(4) 70-74.
[2]. https://dbie.rbi.org.in/DBIE/dbie.rbi?site=home. Database on Indian Economy
[3]. https://www.nseindia.com/
[4]. Marshall E. Blume, Donald B.Keim and Sandeep A. Patel (March 1991). Returns and
volatility of low-grade bonds, The Journal of Finance, 46(1) 49–74.
[5]. Michael H. Hopewell and George G. Kaufman (1973). Bond Price Volatility and Term to
Maturity: A Generalized Re specification The American Economic Review 63(4) 749-753.
[6]. Murray R. Hutchings and John S. Mc Callum (Dec 1975). Bond Price Volatility: A
Numerical Analysis the Journal of Risk and Insurance, 42(4) 669-672.
[7]. Nianyun Cai (Feb 2008). Corporate bond returns and volatility, Financial Review Volume
43(1) 1–26.
[8]. Richard Cebula, X. Henry Wang and Bill Z. Yang (2010). Yield to Maturity and Total Rate
of Return A Theoretical Note Applied economics research bulletin.
[9]. Richard L. Norgaard (Sep 1974). An Examination of the yields of corporate bonds and
stocks, The Journal of Finance, 29(4) 1275–1286.
[10]. www.bseindia.com/
-29-
Human Resource Management and Innovative Practices :

Key Connections
T.S. Tomar
Department of Commerce, S.M.J.N.(P.G.) College, Haridwar, U.K., India
Email Id: tsinghtomar@gmail.com
Abstract
PAPER/ARTICLE INFO
The innovative practices and leadership theory of organizational RECEIVED ON: 15/01/2017
performance emphasizes the sustained competitive advantages gained ACCEPTED ON: 10/06/2017
from production and economic development capabilities that are rare and
hard to imitate. Under certain conditions, such capabilities become core Reference to this paper
competencies and tend to involve the human resources. There is not yet a should be made as follows:
standard research protocol for how to research key connections between
HRM and innovative practices to catalyst the core competencies of T.S. Tomar (2017), “Human
leadership. Based on a review of existing studies on innovative practices Resource Management and
and HRM from a variety of fields, a framework for studying key Innovative Practices: Key
connections between these is proposed here based on four questions: does Connections”, Int. J. of Trade
the HRM have a competitive advantage? If so, is it based on innovative and Commerce-IIARTC, Vol. 6,
practices? What is the nature of the specific core connections of No. 1, pp. 30-41
competencies involved? Do the connections have core competencies, and if
yes, what are they? Global changes in the rules of the public and private
sectors and the dramatic advancements in technology have also strongly
affected HRD needs. These evolving changes have important policy,
institutional and programmatic implications. This article, therefore,
places HRM in context of current concerns for the development of using
innovative practices.
Keywords: Innovative practices, performance rationality, value creation,
sharing initiative.
Human Resource Management and Innovative Practices: Key Connections
T.S. Tomar
1. INTRODUCTION
One standard, recommended human resource development practice is needs of front end
assessment, whereby the knowledge, skills and abilities needed for job or task performance are
identified and than used as the basis for assessing the extent to which innovative practices in the
jobs possess. The HRM has been expanded to the broader concept of innovative practices as any
characteristic of an individual that is casually related to criterion-referenced effective and superior
performance in a job situation (Shuck et al., 2016). As such practices are more than learned
knowledge management but include qualities such as motives, traits, self concept, values and so
on. Because of the obvious connections to performance, innovative practices have been a
theoretical and research focus in the HRD field for a number of years.
2. PURPOSE
The purpose of this review article is to propose the connections of HRM and innovative practice
for identifying and assessing organizations core competencies using dimensions based view
framework, particularly as that applies to HRD. There is no accepted or comprehensive
framework for carrying out such a diagnoses, limiting HRD's ability to play the role of a strategic
partner. Thus, this connection establishes foundations onto which specific review and analytic
procedures for carrying out a diagnosis of firms' core competencies can be developed. As a result,
these connections should enable HRD to play a greater strategic role in the direction and
operation of the organization. In the first section, the traditional HRD approach to competency
assessment will be reviewed to discuss the post modernism and innovative practices framework.
Organizational performance and talent management connections will be discussed in second
section. The third section provides an extended review of the methods and procedures proposed
or used for assessing and diagnosing the HRD innovative practices for core competencies. This
discussion is followed by two key issues in HRD core competency analysis in terms of value
creation and sharing initiative of the firms. The concluding section presents an initial framework
for assessing core competencies for the HRD professional and then the implications of the
connections of HRM and innovative practices.
3. METHOD
This article reviews the core themes of HRD and innovative practices. HRD review international
research journal which contains more than hundred interlinked scholarly articles were used to
research comprehensive literature for developing reliability. Firstly, an electronic search for
published research articles on four key words: organizational performance, innovative practices,
value creation and sharing initiatives was conducted. Secondly, related books and chapters based
on the titles of organizational performance, value creation, sharing initiative and other innovative
practices were research on the website of refereed national and international journals.
Approximately 38 relevant articles were selected and among them 15 related references were
reviewed and cited for this article. Related articles published in HRD review was accessed on line
and 29 articles found to be quoted and referred in this article. The review process of the relevant
literature is intended to be comprehensive, but might not be exhaustive. The critical factors
associated with the knowledge formation process and performance important was analyzed. To
construct a genuinely integrated alliance among various perspectives, the subsequent core themes
-31-
T.S. Tomar
were scrutinized are; post modernism innovative practices, organizational performance and
talent management, value creation and sharing initiatives. To synchronies the procedures of each
relevant perspective, the theory of human resource development has been more intensively
explored in a holistic view. From more practical stand point, more focus has been given to the
accumulation of innovative practices and human resource management for organizational
performance improvement.
A. Post Modernism and Innovative Practices
Heeyoung Han, et al. (2009) argue that there are significant contribution of post modernism as an
alternative perspective in theorizing and practicing in the HRD field. Post modernism might seem
to be difficult, complex and even self contradictory. However, it is those paradoxes that provide
the fundamental understanding of what we are saying and doing in HRD. Given the dynamics,
complexities and impact of change at societal, organizational and individual levels, these
paradoxes are essential for a broader understanding of HRD. Rejection of paradoxes has been
taken for granted in the field, but they may come from the dominant thoughts that legitimate our
material world and power relationship. Paradox determined by human rationality may be the
only tool to reverse human misunderstanding of the world.
Academic modesty, based on the belief that any theory of human beings cannot be truth, is one of
the fruits of postmodernism. This does not mean that we should be pessimistic and stop pursing a
theory for truth, but that we need to liberate ourselves from dominant thoughts, so that we
continuously explore and search for truth. We might not be able to fully answer the various and
complex questions in HRD, which might frustrate academic attempts in the field to do so.
However, if we view HRD as state of being rather than an act of becoming, we will fail to come
even close to understanding reality.
The concept of dysfunctional organizational behavior is relatively recent one and has been shown to
be at common place in many organizations. Many of those behaviors have recently been
illustrated in banking and financial organizations throughout the world and the lessons of the
Enron case seen not to have been learned (Giroux, 2008). Human resource management not only
is capable of conferring sustained competitive advantage in organizations but also is capable of
counterproductive of dysfunctional work behavior (Levine 2010). Cliodhna Mackenzie et al.
(2011) classify the dysfunctional behavior into three categories namely, individual team level,
organizational level and institutional level dysfunctional behavior.
Alagaraja et al. (2015) describe that externalizing and sharing, interpreting and analyzing,
negotiating and revising; and combing and creating are four process stages appear interestingly,
in most of the models for collaborative knowledge creation in organization, HRD and learning
sciences. The factors influencing collaborative knowledge creation are categorized by team
emergent states, team composition inputs and team level inputs. The stages in collaborative
knowledge creation mostly affected by these factors and the resulting challenges for open
innovation teams of HRD.
Stephen Swailes (2016) conclude that motivation to transfer is essential for the transfer of training.
Transfer motivation will benefit, if it adopts a multidisciplinary and multilevel perspective.
Theories and models of work motivation, organizational behavior, educational technology and
adult education can inspire further of employees’ motivation to transfer training. A temporal
-32-
T.S. Tomar
perspective may be used to stimulate theory building and generation of appropriate interventions
for HRD aimed at maintaining trainee's motivation to use learning in workplace.
Ascent (2014) observes some of the innovative HR practices and policies that have put in place by
the best employers of 2013. Four measurable factors contribute to assess an organizational HR are:
high employee engagement, a compelling employer brand, effective leadership and high performance
culture.
Satyakam Mohanty (2013) points out that the use of information systems and software solutions
is not new to HR teams. Yet, these tools have largely been addressing the operational elements of
the function such as payroll, performance appraisal, attendance and recruitment. The only form
of insight has been aggregating demographic and hard performance metrics into HR dashboards.
The key goals of improving employee capabilities and driving better performance remain
personal insight driven with an unprecedented amount of information now being captured by
organizations. Big data opens up the possibilities for HR to collaborate with functions such as
marketing and technology like never before. This way, the HR team adopts strategies that are
business result oriented to become true strategic partners to the business of the future. Sunder
Ramachandran (2013) finds that enterprise social networks (ESNs) are the future of
communication and are being adopted in largest organizations as a tool to promote collaboration
between meaningful conversations and meaningful people.
B. Organizational Performance and Talent Management
Andi Marston (2013) concludes that to drive organizational performance, strong talent
management practices are critical. It requires the right framework of integrating a team member's
needs with business priorities to develop a shared sense of purpose. Strong HRM is, of course, the
key to striking this balance (Star et al. 2016). Managing talent involves a series planned
collaborations at different phases of a team member's career in an organization, like:
Attracting the right talent; The key to building a robust team is to start with a well defined
process of planning and attracting the best talent pool. Organizations that offer the best work and
a strong culture often attract top talent.
On-boarding for success; The first 90 days are the most critical as the team member gradually
assimilates into the culture of the organization. This is also a good time for a manager to build
trust and set clear expectations that would help him or her align with the company's goals. An
effective on-boarding plan should include the right network of peers, mentors, online training,
classroom sessions and on the job training to help with this transition. Spending time to get to
know others will help the team member feel connected and get work done.
Continuous development; Meetings with team members should go beyond just evaluating
performance against goals. There should be a specific process to discuss development through
new skill, aspirations or hopefully both. A leader can adopt a coach mindset to guide team
members to leverage their strengths. Regular development discussions always go a long way.
Timely feedback; Every body wants to know how they are doing and where they can improve.
Leaders as advocates; Organizations that focus on team member development have dedicated
efforts from leaders to engage them in projects that are meaningful to their development. They
actively advocate for their team and are continuously looking for creative challenges to leverage
their potential.
-33-
T.S. Tomar
Planning for succession; It is difficult to foresee the talent moves that can take place in the future.
A good set of talent practices can ensure that you have the right team for the right job at the right
time. It's critical for leaders and HR to set aside regular time to discuss the expected moves and
critical capabilities that will be needed in that role. It is also important to think about succession
from a team member's standpoint to ensure that the next move is one that will challenge and
engage them. True success can be achieved only when the next role is right for both the team
member and organization.
Leaders as engagers; Along with a good plan and effective conversation about it, a leader also
needs to ensure that team members can bring their best selves to work every day. Letting them
know that they revalued through recognition is critical to showing appreciation. We should also
have to ensure that a team member's well being is taken care of both inside and outside of work.
If our benefits package of support structure does not help them take care of issues outside of
work, it could have an effect on their performance.
Aon Hewitt (2014) conducted a survey in 2013 through a newly designed model for defining best
employers in China, Hong King, India, Indonesia, Korea, Malaysia, Singapore, Taiwan and
Thailand. Four measurable factors: high employee engagement, a compelling employer brand,
effective leadership and a high performance culture have been included in the survey. And
finally, by the process of an audit of the short listed employers, the survey compiled and found
that lowest engagement scores were observed in recognition, pay and career opportunities,
indicating employee's hunger for growth, which are also the areas where the best employers
scored much higher than the Indian average. Highest scores were noticed in health and well
being, CSR and Co-workers, representing employee's growing preferences for work-life balance
and social affiliation, It is important to support capability development for HR, so that it can
contribute to business goals. The first step is to enable effective HR governance followed to define
metrics that objectively measure the impact of people initiatives of business performance, the
survey concludes.
Fig. 1: Innovative Practices of HRM

SEED Denotes: Structured Employee Engagement and Development
WAVE Denotes: We are Valued and Empowered
-34-
T.S. Tomar
C. Innovative Practices
Structured Employee Engagement and Development (SEED) encompasses the quintessential 3Es of
world class on-boarding namely; Enablement, Employees experience and Engagement (Surabhi
Paliwal, 2013). SEED is a seamless on-boarding and as assimilation programme for new
employees joining the organization. A transparent and an objective performance management
system called a new performance management system has been adopted and used to drive a culture
of performance in the company by inter-alia linking performance with pay.
Employee value proposition would be closely integrated with all existing HR practices, understood
by all, agnostic to culture, language, continents, socio-economic strata, or age and could benefit
the organization on a sustainable basis. Skill port for upcoming leaders and high potentials to get
trained based on need, which has resulted in their enhanced leadership qualities. Two-way
interactive channel called HR online, is a diligently architected platform to widen the
communication reach and increase information access at the other end. It is an umbrella covering
all HR practices and processes, which enable increased awareness and understanding of the same
and thereby, facilitate enhanced delivery.
Care for life fund is essentially the classic employee benevolent fund, which is a purely voluntary,
employee-funded and employee-managed programme. This fund provides financial support to
employees and their families in times of unexpected and unforeseen emergencies. Millions of
women in India from premier managerial and technical backgrounds have opted out of their
career to take care of their families. Through career by choice, women with more than two years of
relevant prior work experience can work flexibly with the company on live business projects
ranging from six months to a year. Performance linked variable remuneration (PLVR) is a profit
sharing mechanism unique to the company to enable employees to act as entrepreneurs.
U-Live is the company's internet portal designed and launched in 2013. It provides an intuitive,
interactive and a feature rich platform for knowledge, collaboration and communication
requirements of all the employee. Human capital review is the process of evaluating associates.
performance over time and their career potential; identifying associates to prepare for future roles
and building sufficient pools of talent for leadership roles across the company.
A community investment initiative programme is designed to involve employees in the corporate
social responsibility (CSR) initiatives. Through this programme the organization supports various
NGO's that work towards community initiatives for women, children, environment and health.
Any week of the year may be declared as appreciation week to express gratitude to all employees
for their continuous efforts to serve the customers globally. Cross exposure and international work
experience program provides local talent an opportunity to work aboard and gain international
work experience and build strong employer branding and loyalty. This initiative supports the
company's ambition to be a truly global company with global talent and builds a quality pipeline
of talent resources across regions and divisions. We are valued and empowered (WAVE) is a
platform to capture team member's opinions and empower them to come forward and jointly
make the employer a great and chosen place to work at WAVE is a journey that uses the principles
of self managed teams.
With the help of business to employee (B2E) portals, the IT-enabled HR has helped to achieve a high
level of computerization in the HR processes in all spheres of activities, by developing an wide
-35-
T.S. Tomar
information system in enterprises continuous updating of knowledge and benefiting all levels of
management as well as knowledge workers. Corporate mentoring initiative program has been
implemented in 2014. In line with the objectives of the perspective plan-2030 and the need for
cultural change, corporate HRD has started a new intervention for developing formal mentor-
mentee relationship at ONGC.
The yearly attrition analysis for the financial year 2006-07 revealed that around 68 per cent of the
new joiners left TAFE within two years of joining. Having identified the weak area-infant attrition,
the HR team brainstormed and identified the key areas, which are of concern to new joiners and
designed and administered an online questionnaire to 400 employees. Based on the feedback,
focus group classifications were organized to further fine-tune the response. The mechanism used
by TAFE is called recently joined employee survey (RJES) did at the end of 30-90-180 days of new
joiners.
Ankit Shree Ram (2014) observes that learning ability, ability to reinvent, courage and the ability
to accurately anticipate the future become a vital competency for HR, leaders and decision
makers. Employers willing to rethink their own ideas adapt faster to the needs of the changing
environment around them. These rethinkers are more solution-oriented in their thought process
and more inclusive in their style of operations. Additionally, they work with the long-term
success of the organization in mind. They evaluate any situation from a bird's, perspective when
flying over a clifft-it would increase its flight and allow it to take off to reach greater heights than
fall down to its end. However, standing meetings improve productivity through the collaboration
in groups by increasing engagement resulting physiologically activating and get people's bodies
ready to work.
A better understanding to the effects of social networks on expatriate performance is also likely to
impact HRD interventions that aim at organizational development (OD). Boundary spanning
activities often are an important part of the expatriate's performance requirements. The aim of
boundary spanning is ultimately for the organization to gain access to alternative resources, often
in the form of new knowledge or innovation. As these potentially lead to change in the
organization, the expatriate performing boundary-spanning activities also takes on the role of a
change agent. Because social network characteristics are likely to be proximal indicator of
expatriate boundary-spanning activities, OD interventions should target the development of
diverse and sparse expatriate social networks. This could be achieved both through HRD/OD
practices that formally establish network ties, such as team building, or though HRD practices
that support the expatriate's capabilities to build these ties, for example, mentoring and coaching.
Ritu Kocher (2014), observed that the HR function is working very closely with businesses to gain
and deliver the competitive advantage in the market place and hence employees perceive HR
function as a powerful entity today. In a country like India, where we are spoilt by freedom, have
forgotten to draw the line and are willing to play with the law, it is a huge responsibility for HR
to de-risk and future-proof the organizations. HR people are conscience keepers and watchdogs
of the organization, they still become friends and confidants and be the perfect bridge between
employees and the management.
Swati Prakash (2013), finds that corporate objectives of growth, profitability, high performance
and market dominance are very often at odds with employees aspirations of a dream job,
-36-
T.S. Tomar
individual empowerment freedom to work at one's own pace, great learning possibilities, good
compensation and growth possibilities. The Key is to make every employee wanted cared for. It is
a difficult objective as human being react very differently, have different needs at various times
and would want individual attention, which is not possible at all time. Focusing on growth and
profitability, which are essential for survival as a business, globalizing operations to ensure
business success and reduce risks, diversifying business risks to ensure that they can be
competitive, are the key aspects which Indian HR are rightly adopting in big organisation.
D. Value Creation and Sharing Initiative
Marianne F.F. and Wendy E.A. Ruona (2008), find that today many human resource professionals
are facing with the responsibilities of implementing ethics initiatives in the work place. The
integration of ethics is becoming an aspect of organizational life to counter unethical conduct,
enhance the organizations reputation and stimulate the attraction and retention of talent.
Leadership, infrastructure, stakeholders and organizational culture emerge as key components in
the institutionalization of ethics. These components represent a broad spectrum of activities that
together promote the institutionalization process. There is also a macro perspective on critical
levels available to HRM who could be instrumental in developing these areas to promote ethics.
Although these components are often addressed separately, when integrated in a holistic
approach, organizations are more apt to reap desirable results.
Jia Wang et al. (2009), argue that a strategic approach to HRD is an imperative in the globalization
era. A strategic perspective involves designing and implementing HRD policies and practices to
ensure that a firm's human capital contributes to the achievement of business objectives.
Garvan (2007), developed a model of Standard Human Resource Development (SHRD) which
includes three major constructs of HRD functions and the stakeholders. And four levels of context
shape the SHRD activities are: the global context; the organizational context including strategy,
structure, culture and leadership; the job; and the individual. The model also outlines three
characteristics of SHRD: focus, orientation and strategies. Furthermore, the model acknowledges
the importance of multiple stakeholders that have emerged in the design, development and
implementation of SHRD, both internal and external to the organization. These four key levels of
SHRD identified key issues at each level, encourage HRD specialists and those responsible for
crises management in organization to become more cognizant of that SHRD can play in the
effective management of crisis and crisis preparedness. Theories of crisis management might
expand their current boundaries to incorporate the SHRD contribution. The model proposes a
particular way to view the capability and learning issues that are relevant to crisis management.
Claire Gubbins (2009), explores the emergence and increasing importance of social networking
competency for HRD professional's efforts at successfully engaged in new roles. Globalization
encompasses a multiplicity of issues, including the growth in global, multinational and
transnational organizations developments in technology, mergers, acquisions and strategic
alliances. Forces of globalization are changing the work environment and roles played by HRD
professionals. Social capital and social networking have become increasingly important.
Alexandre Ardichvili and Douglas Jondle (2009), find that the discussion of issues, associated
with ethical or unethical behaviour in business organization, has become prominent in human
resource development literature in recent years. To achieve sustainable results, the efforts need to
-37-
T.S. Tomar
be supported by the creation of a dynamic and constantly evolving program of ethical education
and training for employees on all levels of the organization. This includes the incorporation of
ethics in leadership development programs, creation of mentoring and career development
programs that foster ethical culture, development and strengthen of ethical decision making
skills, the creation and review of codes of ethics or codes of conduct and succession planning
focused on sustaining the ethical culture already created. A impact on organization can only be
achieved, if the organizational values are fully integrated into all HRD interventions and day to
day operations. Because values develop and strengthen in interactions and through personal
example, HRD practitioners being among the most visible carriers and promoters of
organizational values, must act as role models of ethical behaviour within the organization.
Therefore, as suggested by Hatcher (2002), new models for HRD work should incorporate not
only considerations of economic outcomes and individual, group or organizational performance
and efficiency, but also outcomes, related to business organization's impact on society,
community and the environment.
Swati Dutta (2011), finds that human developments and efficiency levels are important for
economic development of the states in India. The low levels of human development in the
particular state could be the result of various factors, such as the topography and hilly terrain
which makes some areas inaccessible, poor expansion of economic opportunities, immigration,
ethnic turmoil and insurgency. However, most of these states have efficiently utilized their
resources in health and education; and operating with the most productive scale size. On
investigating the determinants of efficiency, she concludes that road connectivity is a positive
significant factor in determining efficiency levels. Along with road connectivity, expenditure on
social sectors, fund allocations to local bodies and states own tax revenue have positive significant
impacts on determining efficiency levels. On the contrary, crime and corruption have significant
negative impacts on efficiency levels of states human development achievement. The topography
of the region, historical factors and initial endowments may also have significant impacts an
efficiency levels.
Priya C Nair (2013), explores a new leadership model that is gaining prominence in India and
finds that there is a shift towards sharing leadership responsibilities among capable individuals
as organizations realize that without having shared leadership, inclusive growth is not possible.
Maturity of the organization, quality of people, clarity of vision, effective communication,
innovation etc. are factors that need to be taken care of before going in for shared leadership.
Achieving team alignment to common goals is the most significant challenge that has to be
overcome. The organization must have a high-spirited workforce, employee friendly HR policies;
and a strong and passionate leader who could actually work with the employees and
management to pull off this kind of initiative in the organization's interest. With changing
business scenarios and complex market situations the demands on leadership are humongous
and hence, it could be too burdensome for a single person to shoulder, so sharing could just be
the right way forward.
Ritu Mehrotra (2013), organizations have shifted their focus to employee issues at a large level to
learn whether the employee is actually excited about the work or just dragging himself/herself to
office. This has become a great concern for employers as it affects the productivity of the entire
-38-
T.S. Tomar
workforce, thus, negatively influencing the overall growth of the firm. Every organization in
these days is crystal clear about the fact that what can support them in the long run are ideas and
not hierarchy in order to keep pace with the changing work culture. Companies are striving to
provide a healthy work life balance to their employees and incorporate the culture of freedom at
the workplace at the optimum level. Many renowned corporations believe in allotting the
employees a decent amount of time span in which they are free to follow their passions other than
work, which gives way to innovation, productivity and rejuvenation of employees and establish a
win-win situation.
It is healthy for everyone to aspire to be a leader in their field of expertise (Marshall Goldsmith
Dr., 2014). There is absolutely nothing wrong with being a follower. Subramaniam Kalpathi
(2014), finds that work place conversations are powerful tools to engage and motivate a multi
generational work force. However, very few organizations capitalize on the virtue of promoting
such meaningful, transformational interactions among their employees. In a knowledge economy,
we are driven by three factors: meaningful work, other's acknowledgement and the amount of
effort we have put into accomplish a task. Ignoring the performance of people is almost as bad as
shredding their effort before their eyes.
The most common function to hold past time responsibility for corporate social responsibility
(CSR) and sustainability is HR, in India and globally. However, in India, significantly higher
number of companies holds HR responsible for CSR and sustainability, compared to the global
result (Ankita Shree Ram, 2014 a)
Fig. 2: Modes and Implications of Innovative Practices

SEED Denotes: Structured Employee Engagement and Development
Amit Malik (2014), finds that in the ever-changing organizational fabric, there is a shift in outlook
and expectations regarding values, ethos, culture and career aspirations. The work force today,
demands clear direction, accessibility of technology, instant feedback and instant gratification,
this making work a means to an end. Achievement of this end, be it a personal goal or
professional achievement, is critical in the retention of employees; and organizations have no
choice but to embrace technology to make it happen.
-39-
T.S. Tomar
4. CONCLUSION
This article has provided a critical discussion on HRM's lack of innovative practices and debated
on its theoretical framework. Innovation is steeped in a masculine rational tradition that is
preventing consideration of alternative conceptualizations of the field and perpetuating
inequities. HRD's masculine rational blinders are putting the field at risk of becoming
co-opted into dominance practices that are preventing it from fulfill its goal of humanistic
facilitating development and change. HRD's lack of self-critique or openness to alternative
models may result in it becoming irrelevant, shallow and unable to address the core potential
currents that dictate organizational behaviour, life, change, learning and performance.
This article has also attempted to unsettle our understanding of HRD and see the consequences of
narrow conceptions of the traditional field through innovative experience of HRD professionals
and HRD recipients. HRD's skewed focused toward traditional, managerial and monetary
interests results in abandonment of its humanitarian roots and prevents the field of innovations
from serving as the organization conscience, change agent or employee advocate and innovate.
This state of affairs is a call for new ways of defining and doing HRD that are more critical,
inclusive and responsible along with accountability.
REFERENCE
[1]. Alagaraja, M. et al. (2015). The mediating role of leadership and people management
practices on HRD and organizational performance, as quoted in HRD, Review, 15(1),
March, 2015.
[2]. Alexandre Ardichvili and Douglas Jondle (2009). Ethical Business Cultures: A literature
review and implications for HRD, Review, 8(2), June, 223-224.
[3]. Amit Malik (2014). The new rules of engagement, Ascent, weekly, Times of India,
November, 12, p. 4.
[4]. Andi Marston (2013). Engage, inspire and develop, Ascent, weekly, Times of India,
November, 13, p.4.
[5]. Ankit Shree Ram (2014a). Ascent, weekly, Times of India, November, 19, p.1.
[6]. Ankita Shree Ram (2014). Ascent, weekly, Times of India, September, 10, p.1.,
www.ascent@timesgroup.com
[7]. Aon Hewitt (2014). The best employers of 2013, Ascent, weekly, Times of India, January,
15., p.1., www.itsmyascent.com/bestemployers.
[8]. Ascent (2014). Times of India, January, 15, p.01, and www.itsmyascent.com
[9]. Claire Gubbins (2009). Understanding the HRD Role in MNCS: The imperatives of social
capital and networking, HRD Review, 8(2), June.
[10]. Cliodhna Mackenzie et al. (2011). understanding and preventing dysfunctional behavior,
in organizations: conceptualizing the contribution of HRD, HRD Review, Vol. 10(4),
December.
[11]. Garvan,T.N. (2007). A strategic perspective on human resource development, as quoted in
HRD review, 8(1), March, 2009.
[12]. Girouse, G. (2008). What went wrong? Accounting fraud and lessons from recent scandals,
social search, quoted in HRD Review, 10(4), December, 2011.
-40-
T.S. Tomar
[13]. Hatcher T. (2002). Ethics and HRD: A new approach to leading responsible organizations,
Cambridge, MA: Basic Books: As Quoted by Alexandre Ardichvill and Douglas Jondle
(2009) in HRD Review, 8(2), June 2009, p. 240
[14]. Heeyoung Han, K. Peter Kuchinke and David Andrew Boulay (2009). Post modernism
and HRD theory: current status and prospects, HRD Review, 8(1), March.
[15]. Jia Wang et al. (2009). Exploring the strategic role of human resource development in
organizational crisis management, HRD Review, 8(1), March.
[16]. Levine E.L. (2010). Emotion and power: Their impact on organizational citizenship and
counterproductive individual and organizational behavior, Human Resource Management
Review, 10(2).
[17]. Marianne. F.F. and Wendey E.A. Ruona (2008). Institutionalizing ethics: A synthesis of
frameworks and the implications for HRD, HRD Review, 7(3), September.
[18]. Marshall Goldsmith Dr. (2014). Ascent weekly, Times of India, September, 3, p.1.
[19]. Priya C. Nair (2013). Leadership: It takes too to tango! Ascent, weekly, Times of India,
March, 27, p.1.
[20]. Ritu Kocher (2014). HR: your workplace, Ascent, weekly, Times of India, July, 23, p.1.
[21]. Ritu Mehrotra (2013). The breakdown to hierarchies, Ascent, weekly, Times of India,
August, 28, p.5.
[22]. Satyakam Mohanty (2013). The big HR strategy, Ascent, weekly, Times of India, December,
4, p. 5.
[23]. Shuck et al. (2016). Deconstructing the privilege and power of employee engagement:
Issues of inequality for management and human resource development, HRD Review,
15(2), June, p. 183-206.
[24]. Star et al. (2016). Performance measurement and performance indicators: A literature
review and a proposed model for practical adoption, HRD Review, 15(2), June, p. 151-173.
[25]. Stephen Swailes (2016). The cultural evolution of talent management: A mimetic analysis,
HRD Review, 15(3), September, p. 340-355.
[26]. Subramaniam Kalpathi (2014). Small talks: Big gains, Ascent, weekly, Times of India,
December, 10, p.5.
[27]. Sunder Ramachandran (2013). The internal communication strategy, Ascent, weekly, Times
of India, December, 4, p.5.
[28]. Surabhi Paliwal (2013). Voice of HR, Ascent, weekly, Times of India, February, 20, p.5.
[29]. Swati Dutta (2011). Efficiency in human development achievement: A Study of Indian
States, Margin, The Journal of Applied Economic Research, Nov., Vol. 5(4), p. 421-440.
[30]. Swati Prakash (2013). A company need not strive towards zero percent attrition, Ascent,
weekly, Times of India, April, 10, p.1.
-41-
An Empirical Study of Passengers Perception of Service Quality of

Selected Indian Airlines
Sunil Kumara*, Arihant Jainb

a, bDepartment of Commerce, D.A.V. (P.G.) College, Dehradun
Abstract
PAPER/ARTICLE INFO
This research paper evaluates the underlying forces of service quality RECEIVED ON: 19/01/2017
influences on passengers’ perception of Indian airlines. The study also ACCEPTED ON: 01/04/2017
evaluates, which dimensions have a positive influence on service quality
and which dimensions have the most and least important impact on Reference to this paper
service quality in national air travel, as perceived by airline passengers. should be made as follows:
This research paper also analysed the data from passengers of three classes
- economic, business and premium. The findings of this research paper are Sunil Kumar, Arihant Jain
based on the analysis of a sample of 500 respondents each from Air India, (2017), “An Empirical Study
SpiceJet Ltd. and Jet Airways. Respondents have given their rating for all of Passengers Perception of
20 service quality attributes under four service quality factors for each Service Quality of Selected
airline and the ratings were assigned as very good-5, good-4, neither good Indian Airlines”, Int. J. of
nor bad-3, bad-2 and very bad-1. The results suggest that passengers are Trade and Commerce-IIARTC,
satisfied with the service quality dimensions delivered such as in-flight Vol. 6, No. 1, pp. 42-56
service, in-flight digital service and back-office operations. The findings
reveal that these three dimensions are positively related to perceive service
quality. Thus, it is observed that the passengers are highly satisfied with
service quality of Spice Jet Ltd. Domestic air traffic has shown a
consistent growth of 20 -25% throughout 2015 and 2016, peaking in
January this year at 25.13%. However, the domestic travel demand rose
16% in February this year (2017), ending the long streak of over 20%.
India which enjoyed the fourth position in terms of overall air passenger
traffic (both domestic and international) along with the UK, has also
inched closer to becoming the third largest one by March next year.
Keywords: Quality, Passengers’ Perception, In-flight services, In-flight
digital services, Back-office Operations.
An Empirical Study of Passengers Perception of Service Quality of Selected Indian Airlines
Sunil Kumar, Arihant Jain
1. INTRODUCTION
The Civil Aviation industry has lead in a new era of expansion, driven by factors such as Low-
Cost Carriers (LCCs), modern airports, Foreign Direct Investment (FDI) in domestic airlines,
advanced Information Technology (IT) interventions and growing emphasis on regional
connectivity. India is the ninth-largest civil aviation market in the world, with a market size of
around US$ 16 billion. India is expected to become the third largest aviation market by 2020.
“The world is focused on Indian aviation – from manufacturers, tourism boards, airlines and
global businesses to individual travellers, shippers and businessmen. If we can find common
purpose among all stakeholders in Indian aviation, a bright future is at hand” said Mr. Tony
Tyler, Ex Director General and CEO, International Air Transport Association (IATA).
According to an industry report, India has become the third largest aviation market in terms of
domestic passenger traffic, beating Japan.
According to Capa (Center for Asia Pacific Aviation), India‟s domestic air passenger traffic stood
at 100 million in 2016 and was behind only the US (719 million) and China (436 million). India
acquired the third spot globally by unseating Japan, which flew 97 million domestic passengers in
2016 “India will become the third largest market 2-3 years ahead of what was projected. This is
because the growth has been much higher,” said Kapil Kaul, head of Capa India.
According to IATA, India witnessed the highest domestic air passenger growth at 23.3% in 2016,
way ahead of neighbouring China. Last year, airlines worldwide carried 3.6 billion passengers
and 52.2 million tonnes of cargo worth USD 6 trillion. Among the world‟s largest domestic
aviation markets, India had the fastest domestic passenger growth in 2016.
In 2016, domestic airlines in India flew 81 million passengers, registering a 20% growth over 2015.
Growth was driven by low fares and average domestic fares were 15-20% lower in 2016. With
annual growth of 18.8% (in a market of 80 million domestic passengers), India‟s performance
surpassed that of Russia (11.9% growth, in a market of 47 million domestic passengers), China
(9.7% growth, in a market of 394 million domestic passengers) and the United States (5.4%
growth, in a market of 708 million local fliers). Last year, carriers flew 3.6 billion passengers on
scheduled services, an increase of 7.2% compared to 2015. SpiceJet Ltd. is India‟s 2nd budget
airline that has made flight more affordable for more Indians than ever before. SpiceJet operates
312 daily flights to 55 destinations, including 45domestics and 10 international ones. SpiceJet
connects its network with a fleet of 27 Boeing 737NG and 17 Bombardier Q-400s. The majority of
SpiceJet‟s fleet offers SpiceMAX, the most spacious economy class seating in India and perhaps
the world, at an additional fee option.
In any business, satisfying the customer is the ultimate goal or objective of any marketer.
Excellent passenger satisfaction is one of the greatest assets for aviation industry in today‟s
competitive environment. Passengers‟ satisfaction towards service arises when a company can
provide passengers with benefits that exceed passengers‟ expectation and this is considered
value-added. If the passengers‟ are satisfied with the product or service which the company is
providing then they will buy more, and do so more often. Passenger gratification is an essential
goal for each airline providing passenger services. The on-board experience is still something
special for the passenger. The passengers‟ have a wide choice to select the suitable airline product
according to their requirements. Therefore, Airlines are continuously improving their service
-43-
quality to compete with their competitors. There are many factors that can help airlines to build
its customer base so as to determine passenger satisfaction.
2. DEFINITION AND CONCEPT OF PERCEPTION
Perception is the process by which we translate sensory impressions into a coherent and unified
view of the world around us. Though necessarily based on incomplete and unverified
information, perception is equated with reality for most practical purposes and guides human
behaviour in general. In other words, it is the ability to see, hear or become aware of something
through the senses. Through this research paper, we want to ascertain the passengers‟ perception
towards service quality of selected airlines.
For aviation industry, Passengers‟ perception is one of the most important tools for the evaluation
of their marketing activities. The airlines are keen on checking the passengers‟ perceptions
towards service, perceptions towards products quality, pricing, packaging and the sales
promotion activities. Perception is the sum total of the immediate response of the passengers‟
sensory receptors. In this competitive world each and every airline is competing for creating a
good image in front of passengers. Until and unless a passenger should perceive that the
product/service is good then only they can survive in the market. If we compare the
transportation facilities of north eastern states with other states of India, the conditions in north
eastern states is very poor. Roadways and the railways are not much developed and thus
travelling is a big problem for the commuter in these states. Moreover, the states like Uttarakhand
have limited transportation facilities. This is one reason due to which most of the middle class
people are forced to avail air services especially in case of some emergency. Though the
Uttarakhand state is very small, the aviation sector is prospering in this state.
Service quality is a focussed evaluation that reflects the customer‟s perception of: reliability,
assurance, responsiveness, empathy and tangibles. Every passenger has an ideal expectation of
the service they want to receive when they use airline‟s services. Service quality measures how
well a service is delivered compared to passenger expectations. Airline‟s that meet or exceed
expectations are considered to have high service quality. There are four dimensions that
passenger consider when assessing service quality. These are:
2.1. Reliability
Reliability is the first dimension service quality. Reliability refers to the ability to perform the
promised service dependably and accurately. It is very important that aviation industry is able to
fulfil the service that it advertises at the time of selling its tickets.
2.2. Assurance
Second dimension of service quality is assurance that means service providers are knowledgeable
and have ability to convey trust and confidence to their passengers about the service they are
providing.
2.3. Responsiveness
Willingness to help customers and provide prompt service in a timely manner is third dimension
that affects service quality. It is important that employees are prepared to respond to passengers
quickly.
-44-
2.4 Empathy
Fourth dimension of service quality is empathy. It is important for aviation industry to
understand and share the feelings of their passengers and provide individualized attention.
2.5. Tangibles
Last dimension of service quality has to do with the tangibles of the service. Tangibles are the
physical facilities being provided, such as the comfortable seats and cleanliness of aircraft,
reading material and informative documents, quality of entertainment and food, handling of
luggage, demonstration of safety instructions and appearance of cabin crew.
Previous researchers have given their concluding observation on why saving of money and time,
safety and service quality, in-flight service and off-flight service are improving at an increasing
rate. But there are not sufficient empirical studies which clearly being out the key factors
responsible for passengers‟ perception of service quality in Indian aviation industry. Factors like
limited domestic flights, few airports, high fare etc. Due to these factors middle class people give
least preference to travel via airways. For effective and efficient usage of airlines, Indian
government should release some subsidiary policies or they should provide some
accommodation facilities.
It is relevant to refer briefly to the earliest studies and researches in the related areas of the subject
to find out and to fill up the research gaps, if any. Literature on prospects of aviation industry can
generally be found from a number of books, research papers, journals and websites available only
on aviation sector.
3.1 Bagozzi (1980); Cronin and Taylor (1992), “Casual models in marketing Wiley, New York,"
suggested that aviation sectors needed to understand passengers need and expectations to deliver
better service to them. According to him, customer satisfaction and service quality judgment
involves consumer comparing their prior expectations to actual service performance. Where
customer satisfaction and loyalty has been examined in the air transport context, factors such as
service value and corporate image are tended to be ignored. Such omission, however, could cause
problems of model mis-specification and weal predictive power.
3.2 Movash and Ozment (1994), “Toward Management of Transportation Service Quality”
states that delivering high quality service to passengers is essential for airlines survival. Service
quality conditions influences a firm‟s competitive advantage by retaining customer patronage
and with this comes market share, and ultimately profitability.
3.3 Nguyen and LeBlanc (1998), “The mediating role of corporate image on customers’
retention decision” states that in spite of the importance of perceived service value as a form of
assessment of services, there has also been only limited analysis of the exact nature of service
value and its influences on customer behaviour.
3.4 Mc Dougeell and Levesqye (2000), “An assessment of service quality and resulting
customer satisfaction in Pakistan International Airlines: Findings from Foreigners and
Overseas” state that value can be defined as a customer overall assessment of the utility of a
-45-
product based on perception of what is received and what is given. Service value has been
identified as an important variable of customer satisfaction and behavioural intentions.
3.5 Dr. Komal Nagar (2008), “Perceived service quality with frill and no-frill airlines: an
exploratory research among Indian passengers” states that Direct competition between full
service airlines and no-frill carriers is intensifying across the globe. This paper contributes to
literature by examining the consumer‟s perspective of the service component of the two carriers.
Based on a survey of 180 passengers of both low cost carriers and full service carriers, this paper
reveals differences in the perceived service quality of passengers of the two airlines. Results of the
study reveal that although there have been significant changes in the aviation industry, which is
currently in turmoil, yet the emergence of low fare carriers has been successful in making inroads
in this sector. The findings provide evidence for the importance of service quality in both low cost
and full cost airlines. Results show that passengers consider significant difference in the tangible
features of full service carriers in that they consider it to be an important aspect of service quality.
Whereas low cost carriers have become attractive given their low fares, passengers still consider
tangibles to be an effective source of service quality perceptions.
3.6 Gilling Water (2012), in this paper “Passenger Perceptions of the Green Image Associated
with Airlines” suggested that Environmental issues in air transport have grown rapidly in recent
years, and in response some airlines have been proactive to demonstrate their „green‟ credentials.
The aim of this paper was to identify air traveller perceptions of different airlines with regard to
green image, and how passengers perceive different measures that airlines can introduce their
environmental impact. The research was based on a large quantitative survey, of over 600
travellers, conducted at Liverpool John Lennon Airport between April and July 2010. The data in
this paper stems from a range of attitudinal statements on airlines, and measures that airlines
could adopt to improve their environmental performance. When presented with a list of airlines,
about half of respondents were able to differentiate between airlines based on environmental
friendliness. The results showed that the low-cost airlines in general are not seen as more or less
environmentally friendly than full service network airlines. Yet air travellers have indicated
differences in the environmental image based on individual airlines. Furthermore, results varied
depending on whether passengers had flown previously with a particular airline. Passengers also
differentiated between measures that airlines can adopt to reduce the environmental impact on
aviation. Using newer aircraft is showed as the most effective way to address the issue.
3.7 Naganathan Venkates (2013), in his paper entitled “A study on changing consumer
preference and satisfaction levels towards the Budget Airline, Tiger Airways and Air Asia;
Competitive prospective” analysed that in the international context, Air transport has played a
pivotal role in global social and economic growth. The entry of low-cost carriers (Budget Airlines)
had made a revolution in the Airline Industry (AI), with a different ways of operations compare
to the traditional airline. In today‟s competitive market scenario, organizations have to
understand the importance of building and efficiently manage its customers; since customer‟s
expectation are increasing due to many airlines competing with one another by giving better
offers and services. Today‟s Aviation Industry has to focus not only at delivery of the service to
the customers, but should also focus on satisfying the customers with the quality service at
-46-
competitive price. To keep the customer satisfaction the Aviation Industry need to be more
innovative and come up with the necessary changes on the basis of the customers perceptions. In
this regard, this study has been undertaken to find the passengers‟ customer satisfaction
regarding the service quality in budget Airlines. This paper has focused on the Tiger Airways and
Air Asia as the two key budget airlines and he has done the comparison of their service quality
through questionnaires, feedback and through personal interviews and the collected data has
been consolidated to give a report on both the airlines customer satisfaction and their preferences.
Further he has highlighted the comparison of public (Government owned or Full Service carriers
(FSC)) and private (LCCs) with respect to passengers service on a global perspective.
3.8 R. Archana and Dr. M.V. Subha (2013), identifying the dimensions of service quality as
antecedents to passengers’ satisfaction of Rajiv Gandhi International Airport studied the
factors which influences on passenger satisfaction. The result from the analysis has suggested that
all the five dimensions of service quality as well as service range influences the passengers
satisfaction. The information endowed with the study can be used for designing the marketing
strategies to improve the passenger satisfaction in aviation industry.
3.9 Naganathan Venkates (2013), “A study on changing consumer preference and satisfaction
levels towards the Budget Airline, Tiger Airways and Air Asia; Competitive prospective”
analysed that air transport has played a pivotal role in global, social and economic growth. The
entry of low-cost carriers (Budget Airlines) had made a revolution in the Airline Industry (AI),
with a different ways of operations compare to the traditional airline. In today‟s competitive
market scenario, organizations have to understand the importance of building and efficiently
manage its customers; since customer‟s expectation are increasing due to many airlines
competing with one another by giving better offers and services. Today‟s AI has to focus not only
at delivery of the service to the customers, but should also focus on satisfying the customers with
the quality service at competitive price. To keep the customer satisfaction the AI need to be more
innovative and come up with the necessary changes on the basis of the customers perceptions. In
this regard, the present study has been undertaken to find the passengers‟ customer satisfaction
regarding the service quality in budget Airlines. This paper will focus on the Tiger Airways and
Air Asia as the two key budget airlines.
4. RESEARCH GAP AND PROBLEM STATEMENT
Not much of the research paper has been published on the topic “An Empirical Study of
Passengers’ Perception of Service Quality of Selected Indian Airlines”. There are not enough
empirical evidences in Indian context that point out the clear factors about the service quality of
Indian Airlines. According to the review of literature it has been observed that very few studies
had been conducted at Indian level on aviation sector specifically on this topic. So, there is a
major gap of research work in aviation sector between international and national scenario.
Therefore, in the absence of similar study the proposed research paper is expected to fulfil the
research gap in India.
The present research paper focuses on service quality influences on passengers‟ perception and
the research paper also examines which dimensions have a positive impact on service quality and
which dimensions have the least important impact on service quality in Indian airlines, as
-47-
perceived by airline passengers. These dimensions include in-flight service, in-flight digital
service and back office operations.
5. OBJECTIVE OF THE STUDY
To explore the level of passengers‟ satisfaction with the service quality on Indian airlines in terms
of three dimensions of service quality instrument i.e., in-flight services, in-flight digital services
and back-office operations.
6. HYPOTHESES
Hypothesis 1
 H0: There is no significant impact of “Safety & Service Quality” on Passengers‟ Satisfaction in
selected airlines.
 Ha: There is significant impact of “Safety & Service Quality” on Passengers‟ Satisfaction in
selected airlines.
Hypothesis 2
 H0: There is no significant impact of “In Flight Service Experience” on Passengers‟
Satisfaction in selected airlines.
 Ha: There is significant impact of “In Flight Service Experience” on Passengers‟ Satisfaction in
selected airlines.
Hypothesis 3
 H0: There is no significant impact of “Off Flight Service Experience” on Passengers‟
Satisfaction in selected airlines.
 Ha: There is significant impact of “Off Flight Service Experience” on Passengers‟ Satisfaction
in selected airlines.
Research in common parlance refers to a search for knowledge. One can also define research as a
scientific and systematic search for pertinent information on a specific topic. In fact, research is an
art of scientific investigation. The advanced learner‟s dictionary of current English lays down the
meaning of research as a careful investigation or inquiry especially through search for new facts
in any branch of knowledge. “All progress is born of inquiry. Doubt is often better then
overconfidence, which leads to inquiry, and inquiry leads to invention.” which is quoted by
famous Hudson Maxim in context of significance of research. Research inculcates scientific and
inductive thinking and it promotes the development of logical habits of thinking and
organization. Research, as an aid to economic policy, has gained added importance, both for
government and business.
Research methodology is a systematic way to solve a problem. It is a science of studying how
research is to be carried out. Essentially, the procedures by which researchers go about their work
of describing, explaining and predicting phenomena are called research methodology. It is also
defined as the study of methods by which knowledge is gained. Its aim is to give the work plan of
research.
7.1 Research Design
The research work is Empirical in nature. It relies on experience or observation alone, often
-48-
without due regard for system and theory. It is data-based research, coming up with conclusions
which are capable of being verified by observation or experiment. This type of research can also
be known as experimental type of research. Empirical Research is appropriate when proof is
sought that certain variables affect other variables in some way. Evidence gathered through
experiments or empirical studies is today considered to be the most powerful support possible for
given hypothesis.
7.2. Data Collection and Analysis
7.2.1 Source of Data- This research is based on both Secondary and Primary data.
a) Secondary data: For this purpose of analysis of current status in Indian Aviation Sector,
secondary data has been analysed. The sources of such data are websites, bulletins and other
published records of airlines like annual reports, periodicals & newsletters etc.
b) Primary data: In this research paper, primary data has been collected through respondents of
selected airlines. A survey has been conducted through structured questionnaire, personal
interviews and observations etc. from the passengers of public as well as private sector
airlines.
The above mentioned data has been collected, coded and entered into SPSS 22 before processing
the same for analysis. Statistical tools used to analyse the data as per the objectives included
Descriptive Statistics (such as frequencies, percentages and arithmetic averages).
7.3 Instrument Development
On the basis of concept development based on the literature review, 20 service quality variables
for selected airlines namely Air India, Spice Jet Ltd. and Jet Airways were found relevant for the
current study and these were further supplemented with some important demographic variables
such as gender, age, area, educational qualifications, occupation and income.
The questionnaire contained close-ended questions on all variables found during literature
review and on the demographics of the respondents. Close-ended questions were chosen to have
a structured response which also helps in the formatted data collection. The questionnaire is
divided into 3 parts. Part I includes Passengers‟ Profile, Part II includes General Opinion Survey
and Part III includes Specific Opinion Survey.
Specifically Part III includes 20 service quality variables divided into four main service quality
factors such as saving of money and time, safety and service of quality, in-flight service
experience and off-flight service experience were developed on five point Likert Scale for each
airline. In a Likert Scale, the respondent is asked to respond to each of the statements in terms of
five degree, i.e., Very Good, Good, Neither Good Nor Bad, Bad, Very Bad. Likert Scale has been
used because it is relatively easy to construct the Likert-type scale and it is considered more
reliable as respondents answer each statement included in the questionnaire. It also takes lesser
time to construct.
7.4 Pilot Test
Pilot tests are often conducted to improve the content of questionnaires. Therefore, a pilot test
using the „Split Ballot‟ technique was conducted to test the questionnaire. This technique involves
the use of two or more versions of a questionnaire to measure the same thing and is used to
reduce the effect of position bias when using multiple-choice questions in a questionnaire
-49-
(http://www.surveyanalytics.com/). 100 respondents at 2 airports namely Indira Gandhi

International airport, Delhi and Jolly Grant airport, Dehradun participated in the pilot test. The
questionnaires were distributed to airport passengers and executives and were collected
personally. Two different sets of questionnaires were distributed to 50 respondents each.
Respondents evaluated the questionnaire in terms of ambiguity in wording, level of difficulty in
questions, ease of answering questions, overall structure and length of questions as well as the
time necessary to complete the questionnaire. Finally, one set of questionnaire was selected on the
basis of maximum number of responses and the above mentioned parameters.
7.5 Sample Design, Sample Area and Sample Size
For this study, non-probability sampling design was used. Non-probability sampling is that
sampling procedure which does not afford any basis for estimating the probability that each item
in the population has of being included in the sample (Kothari C.R., 2008). Under the non-
probability sampling, convenience sampling has been used. In convenience sampling, the
sampling unit may either be self-selected or selected because of ease of availability. NCR Delhi,
Mumbai Airport, Chennai Airport, Trivandrum Airport, Kolkata Airport, Ahmedabad Airport,
and Dehradun Airport have been selected for intensive study on the principle that they can be
representative of the entire country, where the availability of passengers is in huge number who
travels via airways. A structured questionnaire was administered to the respondents of all the
cities mentioned above.
A total number of 1500 respondents (Air India passengers: 500, SpiceJet Ltd.: 500, Jet Airways:
500) were approached to fill up the questionnaire.
However, only 1440 respondents filled up the questionnaires correctly and, therefore, were
included in the sample for final data analysis.
7.6 Instrument Validity
It is tested to ensure that the survey instrument is measuring what it is designed to measure or
that each scale accurately measures the variables included in the study. Construct validity (i.e., do
items measure hypothetical concepts) was tested by using Cronbach‟s alpha coefficient. Alpha
was developed by Lee Cronbach in 1951, to provide a measure of the internal consistency of a test
or scale; it is expressed as a number between 0 and 1 (Dennick, R., 2011). According to Hair, J., the
acceptable lower limit is 0.60. Scales for this study were considered to have good reliability with a
Cronbach‟s alpha value of 0.99. The instrument was found valid and reliable. The following
Tables (1-3) shows the validity test as under:
Table 1: Showing instrument found valid and reliable
N %
Valid 480 100.0
Cases Excludeda 0 .0
Total 480 100.0
a. Listwise deletion based on all variables in the procedure.
Table 2: Showing Reliability Statistics
Cronbach's Alpha N of Items
.994 20
-50-
Table 3: Showing Item Statistics

Mean Std. Deviation N
Fare Value and Insurance Facility 4.3417 .89997 480
On-time performance 4.1792 1.03245 480
Allowance for carryon baggage 4.3000 1.07038 480
Company‟s Seasonal Promotional Schemes 3.9875 1.11352 480
Communication Skills In Different
4.2417 1.20192 480
Languages
Demo of safety instructions 4.3333 1.04858 480
Trust worthiness 4.5333 .89939 480
Availability of personal space when seated 4.1875 1.05894 480
Aircraft‟s ambiance 4.1917 1.14353 480
Cabin appearance/Cleanliness 4.3500 1.16059 480
Responsiveness of cabin crew members 4.5583 .81526 480
In-Flight Entertainment Facilities 4.1958 1.14829 480
In-Flight Catering Facilities 4.2583 .80183 480
Availability and Cleanliness of lavatories 4.4750 .81697 480
Courtesy of staff 4.5208 .71341 480
Promptness of baggage delivery 3.9250 1.29339 480
Adequacy of Staff at the Counter 4.3125 .99595 480
Ease of locating the required service
4.4167 .95915 480
counter
Facilities for physically challenged persons 4.4417 .90737 480
Knowledge of Staff of Airlines 4.5958 .90877 480
8. DATA ANALYSIS AND INTERPRETATION

8.1. For this study attributes for the demographic variables are classified as under:
Table 4: Showing General Profile of the Respondents
No. of
Particular Classification Percentage (%)
Respondents
Male 860 59.72
Gender Female 580 40.28
Total 1440 100
Less than 25 years 210 14.58
25 - 50 years 582 40.42
Age 50 - 75 years 420 29.17
Above 75 years 228 15.83
Total 1440 100
NCR 810 56.25
Area NON-NCR 630 43.75
Total 1440 100
-51-
Up to HSC 50 3.47
Graduate 348 24.17
Educational
Post Graduate 658 45.69
Qualification
Professional 384 26.67
Total 1440 100
Salaried 216 15
Self-employed 588 40.83
Occupational Status Professional 414 28.75
Any Other 222 15.42
Total 1440 100
Less than Rs 25000 186 12.92
Rs 25000 – Rs 50000 438 30.42
Monthly Income Rs 50000 - Rs 75000 550 38.19
Above 75000 266 18.47
Total 1440 100
(Source: Collected from Primary Data)
Interpretation: Out of the 1500 respondents taken for the study, from which only 1440
respondents replied, 59.72% of the respondents are male, 40.42% of the respondents belong to the
age-group of 26-50 years, and 56.25% belong to NCR. In educational qualification, 45.69% of the
respondents are post graduate and 40.83% of the respondents are self-employed whose monthly
income ranging between 100001-150000.
8.2. Descriptive Statistics
The descriptive statistics mean ranking ranges from minimum value 1 to maximum value 5. The
respondents were asked to give their opinion regarding various perception dimensions namely
reliability, assurance, responsiveness, empathy and tangibles. Respondents give their rating for
all 20 attributes under four service quality factors for each airline and the rating were assigned as
very good-5, good-4, neither good nor bad-3, bad-2 and very bad-1. Higher the rating more will
be the service quality. The mean and standard deviation rating were found out for each item
through SPSS. The Results are classified as under:
Table 5: Showing relationship between the personal factors and satisfaction towards services
provided by selected airlines through ANOVA
Sum of Squares Df Mean Square F Sig.
Between Groups 395.515 4 98.879 251.363 .000
Within Groups 564.485 1435 .393
Total 960.000 1439
Interpretation: It is observed from the above Table 5 that the calculated F-ratio value is 251.363
which is higher than the table value of 3.3192 at 1% level of significance. Since, the calculated
value is higher than the table value, it is inferred that the satisfaction scores differ significantly
among the frequency of travel. Hence, all the null hypotheses are rejected.
-52-
Table 6: Showing Mean and Standard Deviation Regarding Service Quality of Air India
Factors of Service Quality Mean N Std. Deviation
Fare Value and Insurance Facility 3.0792 480 1.11826
On-time performance 3.4750 480 .89033
Allowance for carry on baggage 3.5000 480 .86693
Company‟s Seasonal Promotional Schemes 3.4083 480 .95402
Communication Skills In Different Languages 3.5125 480 .79130
Demo of safety instructions 3.2625 480 1.00617
Trust worthiness 3.3750 480 1.00987
Availability of personal space when seated 3.5292 480 .89021
Aircraft‟s ambiance 2.8833 480 1.07880
Cabin appearance/Cleanliness 2.8833 480 1.14271
Responsiveness of cabin crew members 2.8750 480 1.10842
In-Flight Entertainment Facilities 3.2500 480 .96926
In-Flight Catering Facilities 3.0500 480 .99140
Availability and Cleanliness of lavatories 3.1292 480 1.00727
Courtesy of staff 3.2500 480 .92065
Promptness of baggage delivery 3.7417 480 .61295
Adequacy of Staff at the Counter 2.9875 480 .98201
Ease of locating the required service counter 3.0083 480 1.12289
Facilities for physically challenged persons 3.0708 480 1.10379
Knowledge of Staff of Airline 3.1333 480 1.17335
Interpretation: The above Table 6 reveals that majority of respondents have given highest mean
rating for availability of personal space when seated (3.52) and the least mean rating is given for
responsiveness of cabin crew members (2.87). On the other hand, majority of respondents have
given highest standard deviation rating for staff knowledge of Air India airline (1.17) and the
least standard deviation rating is given for promptness of baggage delivery (.61). The mean and
standard deviation rating indicates that service quality factors such as tangibility, responsiveness,
reliability, assurance and empathy have a mean rating within range 1-4 (Very Bad-Good).
Table 7: Showing Mean and Standard Deviation Regarding Service Quality of SpiceJet
Fare Value and Insurance Facility 4.3417 480 .89997
On-time performance 4.1792 480 1.03245
Allowance for carryon baggage 4.3000 480 1.07038
Company‟s Seasonal Promotional Schemes 3.9875 480 1.11352
Communication Skills In Different Languages 4.2417 480 1.20192
Demo of safety instructions 4.3333 480 1.04858
Trust worthiness 4.5333 480 .89939
Availability of personal space when seated 4.1875 480 1.05894
Aircraft‟s ambiance 4.1917 480 1.14353
Cabin appearance/Cleanliness 4.3500 480 1.16059
Responsiveness of cabin crew members 4.5583 480 .81526
-53-
In-Flight Entertainment Facilities 4.1958 480 1.14829

Availability and Cleanliness of lavatories 4.4750 480 .81697
Promptness of baggage delivery 3.9250 480 1.29339
Ease of locating the required service counter 4.4167 480 .95915
Facilities for physically challenged persons 4.4417 480 .90737
Knowledge of Staff of Airline 4.5958 480 .90877
Interpretation: It is observed from the above Table 7, that the majority of the respondents have
given highest rating for staff knowledge of Spice Jet airline (4.59) and least rating is given for
promptness of baggage delivery (3.92). On the other hand majority of respondents have given
highest standard deviation rating for promptness of baggage delivery (1.29) and the least
standard deviation rating is given for courtesy of staff (.71). The mean and standard deviation
rating indicates that service quality factors such as tangibility, responsiveness, reliability,
assurance and empathy have a mean rating within a range 1-5 (Very Bad-Very Good).
Table 8: Showing Mean and Standard Deviation Regarding Service Quality of Jet Airways
Fare Value and Insurance Facility 3.0917 480 .84246
On-time performance 3.2875 480 .79969
Allowance for carryon baggage 3.3125 480 .72981
Company‟s Seasonal Promotional Schemes 3.2208 480 .87004
Communication Skills In Different Languages 3.5292 480 .72474
Demo of safety instructions 3.5375 480 .70092
Trust worthiness 3.6792 480 .57176
Availability of personal space when seated 3.6917 480 .68745
Aircraft‟s ambiance 3.5125 480 .66516
Cabin appearance/Cleanliness 3.2417 480 .87169
Responsiveness of cabin crew members 3.3292 480 .83503
In-Flight Entertainment Facilities 3.3042 480 .82446
Availability and Cleanliness of lavatories 3.1792 480 .78423
Promptness of baggage delivery 3.6167 480 .69814
Ease of locating the required service counter 3.7458 480 .56884
Facilities for physically challenged persons 3.7333 480 .60937
Knowledge of Staff of Airline 3.5250 480 .74758
Interpretation: The above Table 8 reveals that majority of respondents have given highest rating
for ease of locating the required service counter (3.74) and the least rating is given for fare value
and insurance facility (3.09). On the other hand, majority of respondents have given highest
standard deviation rating for cabin appearance/cleanliness (.87) and the least standard deviation
-54-
rating is given for ease of locating the required service counter (.56). The mean and standard
deviation rating indicates that service quality factors such as tangibility, responsiveness,
reliability, assurance and empathy have a mean rating within range 2-4 (Bad-Good).
9. CONCLUSION
Satisfying passengers is the main motto of every airline. Saving money and time, safety and
service of quality, in-flight service experience and off-flight service experience affect the
passengers‟ satisfaction. In this research paper, passengers are satisfied with the service quality
dimensions delivered such as in-flight service, in-flight digital service and back-office operations.
According to the opinion of respondents towards service quality regarding SpiceJet Ltd., mean
and standard deviation rating lies between very good to very bad, whereas Jet Airways mean and
standard deviation rating lies between good to bad and Air India mean and standard deviation
rating lies between good to very bad. The purpose of this study was to explore the level of
passengers‟ satisfaction with the service quality on Indian airlines in terms of three dimensions of
service quality instrument i.e., in-flight services, in-flight digital services and back-office
operations. Thus, from the above analysis it is concluded that the passengers are highly satisfied
with service quality of SpiceJet Ltd.
According to Capa (Centre for Asia Pacific Aviation), Japan, which flew 141 million passengers in
2016, was ahead of India whose total air passenger traffic was 131 million in the previous year,
The US with 815 million passengers in 2016 enjoyed the top position, followed by China with 490
million, according to the report.
Considering all current situations of aviation growth India will reach the third spot for both
domestic and international air travel ahead of the projected period. Therefore, Indian Aviation
Industry has lot of scope to surpass US and China in coming years.
10. LIMITATIONS
 The sample size was of only 1500 out of which only 1440 respondents replied from the large
population for the purpose of study, so there may be difference between results of sample
from total population.
 There is no way to identify the target population in this study and hence scientifically random
sample size has been taken.
 Respondents were reluctant to go into details because of their busy schedule.
 Due to continuous change in environment, what is relevant today may be irrelevant
tomorrow.
In spite of the above limitations, a sincere effort has been made to minimize them so that the
research study might be unbiased and effective.
11. FUTURE RESEARCH
The future research may attempt to study the various other variables such as, Information
Technology, Complaint Handling and Organizational Culture, and many more that were not
included. The future work can be enhanced by using the extended parametric tests or statistical
tools with special reference to other national and international airlines.
-55-
REFERENCES
[1]. Air Transport Association (2002). “Airlines in crisis: The perfect economic storm”, Air
Transport Association: Washington, D.C.
[2]. Aksoy, S., Atilgan, E., Akinci, S. (2003). Airline services marketing by domestic and foreign
firms: differences from the customers viewpoint. Journal of Air Transport Management 9,
343-351.
[3]. Alotaibi, K,F. (1992). An empirical investigation of passenger diversity, airline service
quality and passenger satisfaction. Unpublished Ph.D. thesis, Arizona State University, AZ.
[4]. Andreassen, T.W. & Lindestad, B. (1998). Customer loyalty and complex services: The
impact of corporate image on quality, customer satisfaction and loyalty for customers with
varying degrees of service expertise. International Journal of Service Industry Management,
9(1), 7-23.
[5]. Cronin. J.J. Taylor, S.A., (1992). Measuring service quality: a re-examination and extension.
Journal of marketing 56, 55-68.
[6]. Dawkins, P. and Reichheld, F. (1990). “Customer Retention as a Competitive Weapon”,
Directors and Boards, Vol. 14, Summer 42-47
[7]. International Air Transport Association (IATA), IATA Annual Review (2012), Beijing:
Author, 2012.
[8]. Malhotra, N.K., Hall, j., Shaw, M., Crisp, M., (1996). Marketing Research An Applied
Orientation. Prentice-Hall, Sydney.
[9]. Ostrowski, P.L., O’Brien, T.V., Gordon, G.L., (1993). Service quality and customer loyalty in
the commercial airline industry. Journal of Travel Research 32, 16-24.
[10]. Rogerson W.P. (1983). “Reputation and product quality”, Bell Journal of Economics, 14, 500-
510.
[11]. Soloman. M (1985). “Packaging the service provider”, Service Industry Journal, 5, 64-71.
[12]. Sultan, F., Simpson M.C., (2000). International service variants: airline passenger
expectations and perceptions of service quality. Journal of Services Marketing 14, 188-216.
[13]. Tabachnick B.G., Fidell, L.S., (2001). Using Multivariate Statistics. Allyn and Bacon,
Boston.
[14]. Tepeci M. (1999). “Increasing brand loyalty in the hospitality industry”, International Journal of
Contemporary Hospitality and Management, 11(5), 223-229.
-56-
A Study on Consumer Adoption of Mobile Wallet
Vikas Gupta
Delhi School of Management, Delhi Technological University, New Delhi, India
Email Id: vikashguptadtu@gmail.com
Abstract
PAPER/ARTICLE INFO
This paper is an attempt to understand the factors that affect consumer RECEIVED ON: 27/04/2017
adoption of mobile wallet as an alternative transaction method. For this, a ACCEPTED ON: 01/06/2017
survey of 315 respondents was made. The result shows that Personal
Innovativeness, Perceived Ease of Use, Perceived Usefulness and Variety Reference to this paper
of Services are important factors in deciding consumer adoption of mobile should be made as follows:
wallet. The findings from this research work will be good for mobile wallet
service providers, as well and for financial institutions for developing a
Vikas Gupta (2017), “A
suitable framework for consumers to adopt mobile wallet service. Study on Consumer
Keywords: Mobile wallet, Digital payments, Technology innovation Adoption of Mobile Wallet”,
Int. J. of Trade and Commerce-
IIARTC, Vol. 6, No. 1, pp. 57-
70
Vikas Gupta
1. INTRODUCTION
Mobile payments or mobile wallet bring together payment system, mobile devices and services to
enable users to initiate, authorize, and complete financial transaction over mobile network or
wireless communication technology (Chandra, 2010; Lu, 2011). India is considered to be the fasted
growing smartphone market in Asia pacific (Livemint, 2014). With the introduction of Digital
India project to transform the people of India to use the government services by integrating
economy using internet and mobile phones as the backbone along with the demonetization
exercise carried out by the government has increased the use of mobile devices and transactions
through mobile devices. It is stated in a report by IAMAI- IMRB that the internet user’s number
will increase to 450 million by June. It states that Urban India has close to 60% of penetration
whereas Rural India has only a penetration of 17%. That is out of an estimated 444 million
population in Urban India, 269 million people are using internet which reflects to the level of
saturation when compared to Rural India which is the bottom of the pyramid has only around
163 million users from an estimated population of 906 million. The report also states that 48% of
Rural India’s internet users are daily internet users and 83% use internet once in a month as
estimated. It is stated in the report that around 92% of rural users and 77% of urban users access
the internet through mobile as the primary device.
Prior to the demonetization exercise, the number of users for this mobile wallet service were low
even after having innumerable benefits for mobile wallet technology. The basic problem lies in
the attitudes and intentions of the customers at the bottom of the pyramid whose adoption of
mobile wallets would be capable of providing the required level of scale and profitability to this
new technology (Shen, 2015). Since demonetization exercise the number of users is increasing and
there is a change in customer behavior. Whether this change in attitude towards the usage of
mobile wallet is temporary or permanent need to be seen.
The theoretical foundation of adoption of technology along with banking and payment were
examined, with focus given on adoption of mobile technology, mobile commerce, mobile
payments and wallet adoption. There is a fair amount of study carried out in developed countries
to understand the factors that affect the consumer adoption of mobile wallet. Several theoretical
frameworks to understand the adoption intentions for various information technologies and
information systems have been developed. Few notable among them are the theory of reasoned
action (Fishbein and Ajzen, 1975), the technology acceptance model (TAM) (Davis, 1989), the
technology-organization and environment framework (Tornatzky and Fleischer, 1990), the theory
of planned behavior (Ajzen, 1991), the diffusion of innovations theory (Roger, 1995) and the
unified theory of acceptance and use of technology (UTAUT) (Venkatesh et al., 2003). These
theories have been based on behavioral science and individual psychology. Researches have been
conducted in the area of mobile wallet and the theoretical framework foundation that is used
TAM (Slade et al., 2015). A classical TAM consists of perceived usefulness, perceived ease of use,
attitude to understand the adoption behavior.
The adoption and wide spread of innovation in ICT has been researched using holistic model
(Lin, 2003), structural models which use quantitative technique such as the theory of reasoned
action (TRA), TAM, the extended TAM, as well as using UTAUT (Venkatesh et al., 2003). A
-58-
Vikas Gupta
holistic insights on the process of adoption in technological contexts where given by TRA which
was developed in the year 1970s (Fishbein and Ajzen, 1974), such as the internet (Hoffman and
Novak, 1996; Pedersen and Nysveen, 2002; Taylor and Todd, 1995). Davis (1986) included an
extension to TRA into the TAM, in which the acceptance of technology and behaviors is
explained. Davis theorized that the attitude towards personal computer adoption is dependent on
perceived usefulness and perceived ease of use (PEOU). TAM key purpose was to analyze how
internal beliefs, attitudes and intentions were affected by external factors (Davis et al., 1989).
Venkatesh et al. (2000) excluded attitude and added two essential variables like social influence
and cognitive instrumental processes which was an essential factor to understand the adoption
intentions while extending the original TAM model (Wu et al., 2008). Later TAM model was
criticized for not considering the individual characteristics and, thus, accepting or rejecting
technology on the basis of that (Agarwal and Prasad, 1999; McMaster and Wastell, 2005; Slade et
al., 2015).Venkatesh et al. (2003) later researched on factors affecting the integration of new
technology innovations to consumers. This helped him in forming a new model called the Unified
Theory of Acceptance and Use of Technology (UTAUT) and suggested that the actual use of
information technology comes from the intention to use information technology which comes
from the individual reaction.
Individual psychology and behavioral sciences plays a very significant role in determining the
mobile wallet adoption as suggested by (Lu, Yao and Yu 2005). They suggested that variables like
PI and SI should have to be taken into consideration even if PU and PE are strong variables when
determining consumer acceptance. Amoroso and Hunsinger (2009) expanded the original TAM
model by including variables like perceived risk, trust, privacy, website quality, e-satisfaction, e-
loyalty and expectations of internet information to better understand the consumer behavior over
the intention to purchase through internet.
F. He along with Mykytyn (2007) investigated on the factors that affect the online payment
services adoption for customers. They found out that the consumer had a consideration towards
risk involved and apart from that everyone favored the concept of online payment. Consumer’s
actual use of online payment was associated with perceived usefulness, perceived ease of use and
intention to use as suggested by a model developed by Rigopoulos and Askounis (2007).
3. OBJECTIVES OF STUDY
In this research paper, we intends to understand the factors that affect the consumer adoption of
mobile wallet so that a strategic framework can be implemented to improve their adoption with
the help of mobile wallet, mobile device manufacturers and regulatory body.
The primary objective of this research is to understand the consumer adoption status of mobile
wallet. The sub objectives includes understanding of user’s willingness to adopt a new system or
service. Also understanding the degree to which a person believes using mobile wallet service
would enhance the task performance. In this research study we try to analyze the perceived sense
of risk and trust concerning the disclosure of personal and financial information’s. Also we try to
analyze how variety of services, offers discount effects the customer perception in using mobile
wallet.
-59-
Vikas Gupta
4. PERSONAL INNOVATIVENESS
Drawing upon Roger’s theory of diffusion of innovations, Agarwal and Prasad (1998) found that
individuals with higher personal innovativeness have better chance of adopting to a new
innovation earlier. PI is known as an individual’s willingness to try out a new technological
innovation. The risk tasking propensity is a quality which is available in few individuals and not
in others. Individuals with higher level of PI are expected to have positive perception about
innovation and more positive intentions towards using a new IT/IS.
4.1 Perceived Ease of Use
Davis defined PE in his TAM as “the degree to which a person believes that using a particular
system would be free of effort” (Davis, 1989). PE is being used by many researchers as an
important factor in determining the consumer adoption of information technology related
services (Lee et al., 2004; Shin, 2009; Kim et al., 2010; Schierz et al., 2010; Wang and Yi, 2012;
Amoroso and Magnier-Watanabe, 2012; Pham and Ho, 2014; Yan and Yang, 2015). The UTAUT
research model (Venkatesh et al., 2003) also suggested this construct variable as an important
factor. It is similar to effort expectancy which is defined as “the degree of ease associated with
consumers’ use of technology” (Venkatesh et al., 2012).
4.2 Perceived Usefulness
PU is defined “as the degree to which a person believes that using a particular system would
enhance his or her job performance” (Davis, 1989).The significance of this factor is also validated
in research models like TAM2 (Venkatesh and Davis, 2000), and also in TAM3 (Venkatesh and
Bala, 2008). In the UTAUT research model suggested by Venkatesh (Venkatesh et al., 2003), PE
was among the important construct. For finding out the customer’s perspective of mobile wallet
adoption intentions, this factor was considered by other researchers (Lee et al., 2004; Shin, 2009;
Schierz et al., 2010; Kim et al., 2010; Wang and Yi, 2012; Amoroso and Magnier-Watanabe, 2012;
Pham and Ho, 2014; Slade et al., 2015; Yan and Yang, 2015).
4.3 Perceived Risk
Any product related, or any social or any financial risk that is perceived by the consumer’s while
doing an online transaction is known as PR (Wu and Wang, 2005). A large number of researchers
have this factor included for their research studies and has agreed to its significance and negative
impact it has on consumer’s intention to adopt mobile wallet (Amoroso and Magnier-Watanabe,
2012; Pham and Ho, 2014; Liébana-Cabanillas et al., 2014; Slade et al., 2015).
4.4 Marketing & Social Influence
The consumer’s decision to use a product or service usually depends on the opinions of family,
friends & relatives. The extent to which consumer’s decision of adoption depends is referred to as
SI (Riquelme and Rios, 2010). It is defined as “the extent to which consumers perceive that
important others (e.g. family and friends) believe they should use a particular technology”
(Venkatesh et al., 2012, p. 159, line 64-66). This is a widely used and accepted construct variable
by most of the previous researchers as a factor which is important in determining the consumers
intention of adoption of technologies like mobile wallet (Lee et al., 2004; Schierz et al., 2010;
-60-
Vikas Gupta
Amoroso and Magnier-Watanabe, 2012; Yang et al., 2012). TAM2 research model (Venkatesh and
Davis, 2000), UTAUT (Venkatesh et al., 2003) and UTAUT2 (Venkatesh et al., 2012).
4.5 Perceived Cost
It is the perception of cost of an individual. It is a secondary attribute as it is a way in which one
calculated the price relative to one’s disposable income (Moore & Benbasat, 1991). It is the
individual’s perception of the extent to which a new technology will cost. The use of any service
will be encouraged when customers believes that the usage of particular service could be
advantageous to them (black et al., 2001). It can be identified that cost plays a very important role
in consumer’s perception of adopting a new technology (Carlsson et al., 2006; Nysveen et al.,
2005). It has been noted by Moore and Benbasat (1991) that a major impact has been created by
perceived cost on consumers buying behavior. Majority of the respondents (59%) emphasized on
cost as a major barrier for the adoption of mobile wallet according to an extensive study
conducted by KPMG international (2009) in around 19 countries.
4.6 Variety of Service
The extent to which variety of services along with offers and discounts affect the customer
perception in adoption of mobile wallet. The adoption of a new technology is dependent on the
variety and amount of services provided. In case of mobile wallet the selection of a particular
wallet service depends on the services provided along with the offers and discounts. This is a
construct which is being made for the first time to find the intention of consumer adoption of
mobile wallet. The perception of the benefits it has to offer to its customer determines the
adoption of mobile wallet. In case of consumer based technology adoption it is true. Variety of
services include all the places where the wallet services can be used and usage of mobile wallet
for other transaction purposes. Offers and discounts include various kinds of benefits such as
coupon codes, app download cash rewards, referral points, cash discount, and loyalty points. The
promotional codes helps in enhancing the customer experience and, thus, will help in retaining
the already existing customers as well as help in gaining new customers (Bigcommerce.com,
2015). A report in UK states that on the basis of offers and promotional codes around 50% of
online customers change their purchasing decisions (Rapid Campaign Report, 2015; Brooks,
2015). A similar inclination towards the promotion and offers were showed by US customers
when a survey was conducted (Brooks, 2015). With the competition growing day by day by direct
and indirect competitors, variety of service and offers will play an important role in consumer’s
adoption of mobile wallet. A customer who is rational makes a decision based on balancing the
others factors as well as considering all the benefits being provided.
4.7 Usage Intention
UI is defined as ones intention to continue using a service in the post acceptance stage. It is in a
way similar to the repurchase decision as in both cases decisions are influenced by the usage in
the initial stage (Bhattacherjee, 2001). Analysis on both organizational level as well as individual
level this research has been conducted (Limayem, Hirt and Cheung, 2007). The initial stage
acceptance decision is the reason by the adopters to continue using the services and, thus, result
in continued usage intention behavior (Kim, Chen and Chan, 2007). Also the initial acceptance
-61-
Vikas Gupta
depends on various factors that affect the individual decision to continue using a particular
service (Limayem, Hirt, and Chin, 2001).
The proposed research model is illustrated in the figure given below (figure A). It is based on the
extensive literature review which was explained in the previous section. The model advocates
that the adoption of mobile wallet technology by consumer depends on the user’s personal
innovativeness, perceived ease of use, perceived usefulness, perceived risk, marketing, social
influence, perceived cost and variety of services.
Perceived
Innovativeness
Perceived
Ease of Use
Perceived
Usefulness
Perceived Usage
Risk Intention
Marketing &
Social
Influence
Perceived
Cost
Variety of
Services
Figure A: Proposed Model of Factors affecting Usage Intention of Mobile Wallet

The respondents were from pan India while most of them were either college going students or
working professionals. It was prerequisite before obtaining the data that Internet enabled
smartphone and bank accounts were imperative for the respondents. India is a country with
different culture and since the data was collected from pan India it will give a better and diverse
data about different customer’s attitude towards adoption of mobile wallet. Among the people
across the country the most technologically savvy and which constitutes the largest segment of
modern technology users are youngsters. (Davis, 1989; Hanafizadeh et al., 2014; Yadav et al.,
2016). Therefore the sample data collected were considered to be appropriate for the research
study.
-62-
Vikas Gupta
There are around 7 dependent variables considered for the research study of which one have been
developed for the first time. Multi scale is used for the research study which consists of around 73
questions which were identified to measure the dependent variables. All items were measured
using five point Likert scale ranging from strongly agree to strongly disagree, from highly likely
to highly unlikely, from most preferred to least preferred. The research instrument consist of
three parts. In the first part information related to General demographic details like gender, age,
education, income and the usage of mobile wallet were recorded.
The respondent’s agreement or disagreement towards the selected 37 items was recorded on the
second part. The third part consist of items in which customers attitude towards the rest of the
payment services were recorded along with the amount to which they value each variable for
those services. A pilot survey was used to pre-test the items displaying semantic differentials and
creating ambiguity during the feedback response were altered and rephrased to make a better
questionnaire and response output as those were not important in the mobile wallet context.
During the course of this research paper personal innovativeness will be represented as PI,
perceived ease of use as PE, perceived usefulness as PU, perceived risk as PR, marketing & social
influence as SI, perceived cost as PC, variety of service as VS, usage intention as UI.
This research study made use of both convenience sampling to get the respondents answer the
questionnaire. There were studies undertaken to understand the IT/IS adoption that were
conducted in the past and this was in line with that (Pham and Ho, 2014; Amoroso and Magnier-
Watanabe, 2012; Chong et al., 2012). So with the help of convenience sampling data responses for
the main survey was obtained which was later analyzed to find out the consumer adoption
behavior of mobile wallet.
6. DATA ANALYSIS AND INTERPRETATION
Around 315 respondents participated in the survey. The demographic details are given in Table 1.
Table 1: Demographic Analysis
Sample Characteristics Frequency (n=315) Percentage
Gender
Male 207 65.7 %
Female 108 34.3%
AGE
18-25 160 50.8%
26-35 148 47%
35 – 59 6 1.9%
60 and above 1 0.3%
Education
School 4 1.3%
College 132 41.9%
Working professional 167 53%
Housewife 3 1%
Entrepreneur 3 1%
Self employed 6 1.9%
-63-
Vikas Gupta
Income Level
Less than 5k 127 40.3%
5-15k 51 16.2%
15-25k 24 7.6%
25 and above 113 35.9%
Mobile wallet usage
Everyday 14 5%
3-4 times/week 55 19.7%
Once every week 54 19.4%
1-2 times/month 60 21.5%
Less than once a month 96 34.4%
The maximum amount of respondents were college going students within the age of 18-25.
Respondents in this category comprised of 50.8% which was around 160 respondents out of the
total 315. Among the respondents having smartphones and internet connections, 213 respondents
were using mobile wallet which appears to be a good number. It means around 67.6% used
mobile wallet services. While studying the usage frequency of respondents, the amount of users
using mobile wallet less than once a month was high compared to the users using it every day, 3-
4 times/week, once a week, 1-2 times/month. The details of this are given in the above table
along with the chart which shows the percentage of each category of frequency of usage.
Mean for all the construct variables were calculated. It was found PE is one of the main factor
customers look on to when using a mobile wallet which is in line with the multiple regression
result. Also along with PE, PU is another factor which is important to decision making of
customers to use mobile wallet. From the Chart (Chart A) it was inferred that Personal
innovativeness and variety of service was also a very important factor for any mobile wallet
service. Respondents also believe to use mobile wallet more when mobile wallet is widely
available in India. It can be seen that customer adoption of mobile wallet does not depend on cost
involved in mobile wallet service as long as the services are good.
Chart A: Table showing the mean values of each independent variables from the responses
-64-
Vikas Gupta
When the independent variable of age groups is analyzed with the dependent variables using
independent ANOVA test, it can be inferred from the table (Table 2) that all age groups
perception of PI, PE, PU, Marketing & social influence, PC, VS, and usage intention of mobile
wallet service are same (Value of P>0.05) except for their perspective of perceived risk.
Table 2: ANOVA between AGE and Independent Variables
Independent variable Dependent variable Significant level
AGE Personal innovativeness (PI) 0.904
Perceived ease of use (PE) 0.847
Perceived usefulness (PU) 0.362
Perceived risk (PR) 0.024
Marketing & social influence (MSI) 0.580
Perceived cost (PC) 0.588
Variety of services (VS) 0.079
Usage intention (UI) 0.139
7. REGRESSION ANALYSIS
To find out how usage intention of customers is affected by the construct being taken, a
regression analysis was done. For this independent variables like PI, PE, PU, PR, SI, PC, VS was
taken against UI to find out the customer perspective is about adoption of mobile wallet. It was
found from the table (Table 3) out that R-Square value was 0.353 (>0.25). This meant that around
35.3 percent of the dependent variable was explained by the coefficients of significance
(Independent variables). On the basis of P-value, Null Hypothesis was rejected for PI, PE, PU, PC,
and VS (P value<0.05), while it was accepted for PR and SI. This meant that PI, PE, PU and VS
have a significant role to contribute towards consumer adoption of mobile wallet. Perceived cost
was not that significant due to its negative value of beta (β= -0.128). From the value of Beta it can
be seen that PE is the most powerful contributor towards consumer adoption of mobile wallet.
Table 3: Regression analysis between independent and dependent Variables
IV DV R Square P value Beta Value
PI 0.027 0.119
PE 0.000 0.245
PU UI 0.353 0.031 0.138
PR 0.101 0.079
SI 0.307 0.053
PC 0.006 -0.128
VS 0.000 0.119
Based on the test analysis and the proposed model it is found that there will only be four factors
which really affect the consumer adoption. The figure below is the research model according to
the test analysis done.
-65-
Vikas Gupta
Perceived
Innovativen
ess
Perceived
Usage
Ease of Use
Intention
Perceived
Usefulness
Variety of
Services
Figure B: Finalized Research Model of Factors affecting Usage Intention of Mobile Wallet.
8. FINDINGS
 It was found that these factors had a positive influence on consumer perspective of mobile
wallet adoption.
 The cooperation of stakeholders who are directly or indirectly associated with the mobile
service is needed for electronic wallet transition to mobile wallet and thus the success of a
wallet service depends on not just the customers but also the mobile wallet service providers,
technology providers, financial institutions, and government.
 Mobile wallet success depends on the countries perspective towards technology and how
government is pushing towards a digital country.
 The study observed that perceived ease of use is a very significant factor when it comes to
customer’s perspective for adoption of mobile wallet. (Shin, 2009; Chierz et al., 2010; Kim et
al., 2010; Wang and Yi, 2012; Thakur and Srivastava, 2014; Yan and Yang, 2015).
 The money transactions have been made much easier compared to the bank transaction
which was previously more common before the introduction of mobile wallet service. So due
to this the customer perceive that compared to traditional modes of payment, mobile wallet
service is an easier and faster alternative.
 Another important factor was perceived innovativeness and perceived usefulness. Both are
important in customer decision of adopting mobile wallet.
 It is understood that customers perspective about the variety of services provided by mobile
wallet service providers have a significant influence on customers intention to adopt mobile
wallet (Pagani, 2004; Amoroso and Magnier-Watanabe, 2012; Venkatesh et al., 2012).
 It has been noticed that the adoption also depends on how technology savvy customers are
comfortable to a new technology.
 From the study it was understood that the customer still have a degree of uncertainty when it
comes to sharing of personal information.
-66-
Vikas Gupta
 After analysing the data it is been found that Indian customers tends to love offers and
discounts. So for this reason they tends to use mobile wallet service rather than going for
alternative mode of payment (Rapid Campaign Report, 2015; Brooks, 2015).
 The potential of mobile wallet service is huge and with the demonetization exercise carried
out by government, the wallet service providers are getting recognition.
9. RECOMMENDATIONS
 By highlighting the factors which are key for the mobile wallet service we will be able to
identify the shortcomings in the perspective of potential customers and strategize in such a
way as to increase the customer adoption by bringing in new marketing techniques and
offers.
 It is also important to emphasize on those constructed variables which are important from
customers point of view when upgrading the product or while strategizing any marketing
strategies.
 The fact that Indian customer’s tends to love offers and discounted can be utilized by wallet
service providers to lure more customers and this is a marketing strategy they have been
using to change the customers attitude towards mobile wallet services by providing offers
and discounts.
 There are customers who tends to use a technology at the introduction stage. Rest are not
bothered about a new technology as they are least bothered about that. So if given proper
guidance and knowledge about a new technology, it would be helpful in getting more
customers.
 If the mobile wallet service providers along with the help of government and telecom
operators are able to provide a better security and if they are able to maintain that level of
trust among the customers, then the perspective of customers towards the service will
change. There will be increase in the number of customers and also the frequency of usage
among the existing customers.
10. LIMITATIONS AND FUTURE SCOPE
The research relied on response data from 315 respondents. So there is chance that the sample
may suffer from selection bias. This study considers only 8 factors to determine that customer’s
perspective towards adoption of mobile wallet. There are lot of other factors too which can be
considered and which might give a more focused perspective about customers behavior towards
adoption of mobile wallet.
REFERENCES
[1]. Agarwal, R., & Prasad, J. (1999). Are individual differences germane to the acceptance of
new information technologies?. Decision sciences, 30(2), 361-391.
[2]. Ajzen, I. (2011). The theory of planned behaviour: reactions and reflections.
[3]. Akturan, U., & Tezcan, N. (2012). Mobile banking adoption of the youth market:
Perceptions and intentions. Marketing Intelligence & Planning, 30(4), 444-459.
[4]. AlGhamdi, R., Nguyen, A., & Jones, V. (2013). A study of influential factors in the
adoption and diffusion of B2C e-commerce. arXiv preprint arXiv:1302.0272.
-67-
Vikas Gupta
[5]. Alqahtani, M. A., Al-Badi, A. H., & Mayhew, P. J. (2012). The Enablers and Disablers of E-
Commerce: Consumers’ Perspectives. The Electronic Journal of Information Systems in
Developing Countries, 54.
[6]. Alshamaila, Y., Papagiannidis, S., & Li, F. (2013). Cloud computing adoption by SMEs in
the north east of England: A multi-perspective framework. Journal of Enterprise Information
Management, 26(3), 250-275.
[7]. Amoroso, D. L., & Magnier-Watanabe, R. (2012). Building a research model for mobile
wallet consumer adoption: the case of mobile Suica in Japan. Journal of theoretical and applied
electronic commerce research, 7(1), 94-110.
[8]. Chong, A. Y. L. (2013). A two-staged SEM-neural network approach for understanding and
predicting the determinants of m-commerce adoption. Expert Systems with
Applications, 40(4), 1240-1247.
[9]. Chong, A. Y. L. (2013). Predicting m-commerce adoption determinants: A neural network
approach. Expert Systems with Applications, 40(2), 523-530.
[10]. Chong, A. Y. L., Chan, F. T., & Ooi, K. B. (2012). Predicting consumer decisions to adopt
mobile commerce: Cross country empirical examination between China and
Malaysia. Decision Support Systems, 53(1), 34-43.
[11]. Dahlberg, T., Mallat, N., & Öörni, A. (2003). Trust enhanced technology acceptance model-
consumer acceptance of mobile payment solutions: Tentative evidence. Stockholm Mobility
Roundtable, 22 (23).
[12]. Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS quarterly, 319-340.
[13]. Dennehy, D., & Sammon, D. (2015). Trends in mobile payments research: A literature
review. Journal of Innovation Management, 3(1), 49-61.
[14]. Duncombe, R., & Boateng, R. (2009). Mobile Phones and Financial Services in Developing
Countries: a review of concepts, methods, issues, evidence and future research
directions. Third World Quarterly, 30(7), 1237-1258.
[15]. Fishbein, M., & Ajzen, I. (1977). Belief, attitude, intention, and behavior: An introduction
to theory and research.
[16]. Gong, W., & Li, Z. G. (2008). Mobile youth in China: a cultural perspective and marketing
implications. International Journal of Electronic Business, 6(3), 261-281.
[17]. Hanafizadeh, P., Behboudi, M., Koshksaray, A. A., & Tabar, M. J. S. (2014). Mobile-
banking adoption by Iranian bank clients. Telematics and Informatics, 31(1), 62-78.
[18]. Haque, A., Tarofder, A. K., Rahman, S., &Raquib, M. A. (2009). Electronic transaction of
internet banking and its perception of Malaysian online customers. African Journal of
Business Management, 3(6), 248.
[19]. Hwang, J. H. (2009). Mobile payment adoption in Korea: Switching from credit card.
[20]. Keeney, R. L. (1999). The value of Internet commerce to the customer. Management
science, 45(4), 533-542.
[21]. Kim, C., Mirusmonov, M., & Lee, I. (2010). An empirical examination of factors influencing
the intention to use mobile payment. Computers in Human Behavior, 26(3), 310-322.
-68-
Vikas Gupta
[22]. Kuganathan, K. V., & Wikramanayake, G. N. (2014, December). Next generation smart
transaction touch points. In Advances in ICT for Emerging Regions (ICTer), 2014 International
Conference on (pp. 96-102). IEEE.
[23]. Leavitt, N. (2012). Are mobile payments ready to cash in yet?. Computer, 45(9), 15-18.
[24]. Lee, C. P., Warkentin, M., & Choi, H. (2004). The role of technological and social factors on
the adoption of mobile payment technologies.
[25]. Liébana-Cabanillas, F., Sánchez-Fernández, J., & Muñoz-Leiva, F. (2014). Antecedents of
the adoption of the new mobile payment systems: The moderating effect of age. Computers
in Human Behavior, 35, 464-478.
[26]. Madan, K., Madan, K., Yadav, R., & Yadav, R. (2016). Behavioural intention to adopt
mobile wallet: a developing country perspective. Journal of Indian Business Research, 8(3),
227-244.
[27]. McMaster, T., & Wastell, D. (2005). Diffusion–or delusion? Challenging an IS research
tradition. Information Technology & People, 18(4), 383-404.
[28]. Pagani, M. (2004). Determinants of adoption of third generation mobile multimedia
services. Journal of interactive marketing, 18(3), 46-59.
[29]. Pham, T. T. T., & Ho, J. C. (2014, July). What are the core drivers in consumer adoption of
NFC-based mobile payments?: A proposed research framework. In Management of
engineering & technology (PICMET), 2014 Portland International Conference on (pp. 3041-3049).
IEEE.
[30]. Roger, E. M. (1995). Diffusion of innovations, The Free Press, New York, NY edition.
[31]. Schierz, P. G., Schilke, O., & Wirtz, B. W. (2010). Understanding consumer acceptance of
mobile payment services: An empirical analysis. Electronic commerce research and
applications, 9(3), 209-216.
[32]. Shin, D. H. (2009). Towards an understanding of the consumer acceptance of mobile
wallet. Computers in Human Behavior, 25(6), 1343-1354.
[33]. Slade, E., Williams, M., Dwivedi, Y., & Piercy, N. (2015). Exploring consumer adoption of
proximity mobile payments. Journal of Strategic Marketing, 23(3), 209-223.
[34]. Tan, G. W. H., Ooi, K. B., Persiaran, U. T. L., & Teknologi, B. U. (2013). Mobile Tourism
the Hidden Jewel of the Tourism Industry?. In Diversity, Technology, and Innovation for
Operational Competitiveness: Proceedings of the 2013 International Conference on Technology
Innovation and Industrial Management (pp. S6_1-14). ToKnowPress.
[35]. Thakur, R., & Srivastava, M. (2014). Adoption readiness, personal innovativeness,
perceived risk and usage intention across customer groups for mobile payment services in
India. Internet Research, 24(3), 369-392.
[36]. Tornatsky, L., & Fleischer, M. (1990). The process of technology innovation. Lexington, MA:
DC Heath & Company.
[37]. Tsu Wei, T., Marthandan, G., Yee-Loong Chong, A., Ooi, K. B., & Arumugam, S. (2009).
What drives Malaysian m-commerce adoption? An empirical analysis. Industrial
Management & Data Systems, 109(3), 370-38
[38]. Van Bossuyt, M., & Van Hove, L. (2007). Mobile payment models and their implications
for NextGen MSPs. info, 9(5), 31-43.
-69-
Vikas Gupta
[39]. Van Raaij, E. M., & Schepers, J. J. (2008). The acceptance and use of a virtual learning
environment in China. Computers & Education, 50(3), 838-852.
[40]. Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance
model: Four longitudinal field studies. Management science, 46(2), 186-204.
[41]. Venkatesh, V., &Bala, H. (2008). Technology acceptance model 3 and a research agenda on
interventions. Decision sciences, 39(2), 273-315.
[42]. Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of
information technology: Toward a unified view. MIS quarterly, 425-478.
[43]. Venkatesh, V., Thong, J. Y., & Xu, X. (2012). Consumer acceptance and use of information
technology: extending the unified theory of acceptance and use of technology.
[44]. Wang, L., & Yi, Y. (2012). The impact of use context on mobile payment acceptance: An
empirical study in China. In Advances in computer science and education (pp. 293-299).
Springer Berlin Heidelberg.
[45]. Williams, M. D., Rana, N. P., & Dwivedi, Y. K. (2015). The unified theory of acceptance
and use of technology (UTAUT): a literature review. Journal of Enterprise Information
Management, 28(3), 443-488.
[46]. Wu, J. H., & Wang, S. C. (2005). What drives mobile commerce?: An empirical evaluation of
the revised technology acceptance model. Information & management, 42(5), 719-729.
[47]. Wu, M. Y., Chou, H. P., Weng, Y. C., & Huang, Y. H. (2011). TAM-2 based study of website
user behavior-using web 2.0 websites as an example. WSEAS Transactions on Business and
Economics, 8(4), 133-151.
[48]. Xin, H. (2013). Exploring the influence of trust and culture on mobile payment adoption (Doctoral
dissertation, Auckland University of Technology).
[49]. Yadav, R., Sharma, S. K., & Tarhini, A. (2016). A multi-analytical approach to understand
and predict the mobile commerce adoption. Journal of enterprise information
management, 29(2), 222-237.
[50]. Yan, H., & Yang, Z. (2015). Examining mobile payment user adoption from the perspective
of trust. International Journal of u-and e-Service, Science and Technology, 8(1), 117-130.
[51]. Yang, K. (2010). Determinants of US consumer mobile shopping services adoption:
implications for designing mobile shopping services. Journal of Consumer Marketing, 27(3),
262-270.
[52]. Yang, S., Lu, Y., Gupta, S., Cao, Y., & Zhang, R. (2012). Mobile payment services adoption
across time: An empirical study of the effects of behavioral beliefs, social influences, and
personal traits. Computers in Human Behavior, 28(1), 129-142.
[53]. Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: a means-end
model and synthesis of evidence. The Journal of marketing, 2-22.
[54]. Zhang, L., Zhu, J., & Liu, Q. (2012). A meta-analysis of mobile commerce adoption and the
moderating effect of culture. Computers in human behavior, 28(5), 1902-1911.
[55]. Zhu, L. (2009, January). Legal and policy environments: An institutional perspective of
global e-commerce adoption. In System Sciences, 2009. HICSS'09. 42nd Hawaii International
Conference on (pp. 1-10). IEEE.
-70-
Millennium (Sustainable) Development Goals 4, 5 and 6: A Study

of Maternal and Infant Mortality in BIMARU States of India on the
Precise Course
Ashok Kumar
Sr. Manager Pilots and Operational Research,
Population Concern International (PCI), Patna-Bihar, India
Email Id: ashok_iips@yahoo.com
Abstract
Background: India is in a race against time to achieve the Millennium Development
Goals (MDGs) 4, 5 and 6, to reduce Infant Mortality Rate (IMR) to ‘27’ and Maternal PAPER/ARTICLE INFO
Mortality Ratio (MMR) to ‘109’ by 2015. This study estimates the percent net RECEIVED ON: 21/03/2017
contribution of the states and the periods in shaping BIMARU’s IMR/MMR, and ACCEPTED ON: 25/05/2017
predicts future levels. Reference to this paper
Methods: A standardized decomposition technique was used to estimate each state’s should be made as follows:
and period’s percent share in shaping India’s decline in IMR/MMR between two time
points. Linear and exponential regression curves were fitted for IMR/MMR values of
the past two decades to predict IMR/MMR levels for 2015 for India and for the Ashok Kumar (2017),
BIMARU’s states of India. “Millennium (Sustainable)
Results: Due to favourable maternal mortality reduction efforts in Bihar/Jharkhand Development Goals 4, 5 and
(19%) and Madhya Pradesh/Chhattisgarh (11%), Uttar Pradesh/Uttarkhand (33%) - 6: A Study of Maternal and
India is predicted to attain the MDG-5 target by 2016, assuming the pace of decline Infant Mortality in BIMARU
observed in MMR during 1997-2015 continues to follow a linear-trend, while the wait States of India on the Precise
may continue until 2023-2024 if the decline follows an exponential trend. Attaining Course”, Int. J. of Trade and
MDG-4 may take until 2023-2024, due to low acceleration in IMR drop in Commerce-IIARTC, Vol. 6, No.
Bihar/Jharkhand, Uttar Pradesh/Uttarakhand and Rajasthan. The maximum decline in 1, pp. 71-81
MMR during 2003-2015 coincided with the launch and uptake of the National Rural
Health Mission (NRHM) currently well known as National Health Mission (NHM).
Conclusions: Even though India as a nation is not predicted to attain all the MDG 4
and 5 (6) targets, at least four of its BIMARU’s states are predicted to do so. In the
past two decades, MMR reduction efforts were more effective than IMR reduction
efforts.
Abbreviation used: BIMARU-Where BI-Bihar/Jharkhand, MA-Madhya
Pradesh/Chattisgarh, R-Rajasthan, U-Uttar Pradesh/Uttarakhand.
Key words: Infant mortality rate, maternal mortality ratio, Millennium Development
Goals, BIMARU states of India.
Millennium (Sustainable) Development Goals 4, 5 and 6: A Study of Maternal and Infant Mortality...
Ashok Kumar
1. INTRODUCTION
Globally, maternal and child mortality are in decline, although the pace of decline is not sufficient
to attain Millennium Development Goals (MDGs) 4, 5 and 6 for 128/137 developing countries.1
Due to slow progress in reducing infant and maternal mortality and the moralurgency of
reinvigorating efforts to tackle slow progress; the United Nations (UN) launched the Global
Strategy for Women‟s and Children‟s Health in 2010. 2 As part of this strategy, India committed to
spend US$ 3.5 billion annually, for strengthening maternal and child health services in 235
districts, which account for nearly 70% of infant and maternal deaths.2
In 2010, India recorded 56 000 maternal3 and 1.3 million infant deaths,4 the highest for any
country.5,6, 7
India‟s MDG 4 target is to reduce IMR by two-thirds between 1990 and 2015, i.e., from 80 infant
deaths per 1000 live births in 1990 to „27‟ by 2015. Under MDG 4, another target is to improve the
proportion of one-year-old children immunized against measles from 42%8 in 1992-1993 to 100%
by 2015.9 India‟s main MDG 5 target is to reduce MMR by three quarters between 1990 and 2015,
i.e., from 437 maternal deaths per 100 000 live births to „109‟,9 while it has also committed to
improve the „proportion of births attended by skilled health personnel‟. With only three years left
to achieve MDGs 4 and 5 targets, there is a need to understand the progress made by India and as
well as its 09 most high priority states.
To a large extent, India shapes the global MDGs 4 and 5 (6) targets, because of its share of the
global burden of child (23%) and maternal mortality (19%).1, 3 Moreover, during the past two
decades, the 09 most high priority states, which account for 95% of India‟s population, have made
variable progress on infant and/or maternal mortality reduction efforts.5 Statewise analysis of
IMR/MMR decline provides us an opportunity for learning which strategies does and does not
work.
In this context, the specific objectives of the study are:
 To estimate percent net contribution of the 09 most high priority states and different periods,
in shaping India‟s IMR and MMR decline;
 To fit linear and exponential regression curves, and understand how IMR/MMR has declined
in India and in the 09 most high priority states;
 To use the fitted regression estimates, extrapolate the year by which India‟s MDGs 4 and 5
targets of IMR „27‟ and MMR„109‟ would be achieved by India and 09 most high priority
states.
2. METHODOLOGY
2.1 Quantifying the contribution of states ‘decline during a time period upon overall decline:
We have partitioned the difference in IMR/MMR of a state between t1 and t2 into two
components: Component-1 is the difference due to variations in state-specific IMR/MMR.
Component-2 is the difference due to variations in state-specific distribution of live births. We
-72-
Ashok Kumar
made this computation for each state by using the formula developed by Fleiss10 and refined by
Buehler et al.11 (equation-1).
{[( P1  p2)) / 2*( R1  R2]  [( R1  R2) / 2*( P1  P2)]} ...(1)
Where,
P1 and P2 represent the proportion of live births in a state at t1 and t2R1 and R2 represent
IMR/MMR of a state at t1 and t2
We added two components of equation-1 to arrive at „net-excess deaths at t2 as compared to t1‟
for each state.10, 11 We finally calculated what percentage of the total net excess deaths between t1
and t2 in India was contributed by each of the 09 most high priority states. Using Sample
Registration System (SRS) data, periodic changes in IMR were measured for the following
durations: 1999 and 2000; and 2001; and 2002, and 2005; and 2006; and 2007: and 2008; and 2009;
and 2010; and 2011; and 2012; and 2013; and 2014; and for the whole period 1999 and 2014. Using
SRS data, periodic changes in MMR were measured for the following durations: 1997–1998 and
1999–2001; 1999–2001; 2001–2003; 2007–2009; 2010-2012 and 2014-15 for the total period 1997–1998
and 2014–2015.
2.2 Estimation of trends in IMR/MMR

For understanding the trends in IMR/MMR decline, we fitted regression curves between
IMR/MMR values and their reference dates using Ordinary Least Square (OLS) method, as OLS
offers a greater degree of objectivity, in the absence of outliers.12 It is globally assumed;
IMR/MMR declines are non-linear and approximate to exponential.13,14 If the decline is
exponential, it reflects the fact that mortality cannot keep declining linearly below zero. However,
there is no evidence that IMR/MMR decline is best modelled as exponential.15 In contrast, if
decline follows a linear pattern, IMR/MMR declines at a constant rate over a defined period and
can decline below zero. Hence, we fitted linear and exponential regression-curves, separately for
India and for 09 most high priority states, using SRS data. Chi squared goodness-of-fit test was
used for assessing the appropriateness of the fitted regression curve. For fitting regression curves
of IMR, I used a moving average figure of three consecutive years as the IMR value for mid year.
Regression curves of IMR were fitted by using moving average IMRs for 16 years, during 1999–
2014. By using regression estimates, I have predicted IMR figure for 2015, and/or the year by
which it would reach „27‟ per 1000 live births. As MMRs are periodic estimates, I have measured
interpolated value of two consecutive periods as the MMR for the mid-period using linear
interpolation. Regression curves of MMR were fitted using nine MMR data points, during 1997–
2015.16 Using regression estimates, MMR figure for 2015 and/or the year by which it would reach
„109‟ were derived. Our analysis is confined to 09 most high priority states, and these 09 most
high priority states are (Assam, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Orissa,
Rajasthan, Uttar Pradesh and Uttarakhand).
-73-
Ashok Kumar
3. FINDINGS
Changes in MDG 4: Trends in IMR of India and of the 09 most high priority states – during the
past four decades are shown in Figure 1. It depicts a uniform declining trend across the states,
although the pace of decline was more rapid during 2000–2008 and again in 2009–2014. Decline
was the highest in Uttar Pradesh/Uttarakhand, followed by Orissa and Madhya Pradesh. Across
all the 09 high priority states, excluding Rajasthan - two types of declining trends is visible: 1)
higher decline when the rates are high (in early 1990s); and 2) a steady rate of decline during
2013–2014.
Table 1 provides changes in IMR, percent net contribution of the states and the periods to overall
decline in IMR of India, and predicted levels of IMR. In the last two decades, IMR of India has
declined by around 40% and number of infant deaths from around 2.2 million to 1.3 million.4
Percent decline was ≥40% only in four out of 09 most high priority states (Madhya Pradesh,
Chhattisgarh, Uttar Pradesh, Uttarakhand and Orissa), while absolute annual decline was above
the national average in Assam, Bihar, Jharkhand, and Rajasthan.
Fig. 1: Trends in 1q0 mortality Rate-1999-2014, 09 BIMARU states of India

Note: UP-UK (Uttar Pradesh & Uttarakhand), AS (Assam), BH-JH (Bihar & Jharkhand), RJ (Rajasthan),
MP-CH (Madhya Pradesh & Chhattisgarh) and OR (Orissa)
If total net decline in IMR of India during different periods of 1990-2010 is considered as 100%
(last row of Table-1): maximum decline occurred during 1990-1996 (36%) followed by 2001-2006
(26%). On the other hand, if total decline in IMR of India during 1990-2010 among the 09 most
high priority states is considered as 100% (8th column of Table-1): Uttar Pradesh/Uttarakhand
contributed maximum (20%) to this decline; followed by Madhya Pradesh and Chhattisgarh
(14%); etc. By comparing states‟ per cent share in total net decline in IMR of India with state‟s
percent share in live births – one can estimate whether a particular state has contributed
„favourably to net decline‟ (state‟s percent share in net decline > state‟s percent share in live
-74-
Ashok Kumar
births) or „unfavourably to net-decline‟(state‟s percent share in net decline ≤ state‟s percent share
in live births) in IMR of India during a particular period (4th to 8th column vs 9th column, of
Table-1).
Table 1: State-wise changes in IMR (1q0), contribution of states and periods to India's IMR
decline and year of achieving India's MDG-4 target
Change in 1q0 % Net contribution of the if 1q0 decline follows a if 1q0 achieving
between 1989-91 states to periodic decline linear trend MDGs-4 target IMR
(1990) and 2009-10 in 1q0 of India between level of '27'
(2010)
Year of achieving MDG-4 target

Year of achieving MDGs 4 target
State
% state's share to total live births

1995-97 (1996) & 2000-2002 (2001)
1989-91 (1990) & 1995-97 (1996)
2000-02 (2001) & 2005-07 (2006)
2005-07 (2006) & 2009-10 (2010)
1989-91 (1990) & 2009-10 (2010)
Expected 1q0 in 2015 (95% CI)

Expected 1q0 in 2015 (95%CI)
Annual absolute decline
during 1990-2010
1q0 level of '27'
1q0 level of '27'

% Decline
Assam 36.4 1.2 1.3 1.0 2.1 2.6 1.8 2.8 56.7 (54.7- 2043-44 58.0 (53.1- 2065-66
58.7) 62.9)
Bihar 36.1 1.4 0.8 11.8 -1.2 16.5 5.7 13.2 47.2 (44.8- 2032-33 49.0 (43.8- 2045-46
49.7) 54.1)
Jharkhand 36.1 1.4 0.8 11.8 -1.2 16.5 5.7 13.2 47.2 (44.8- 2032-33 49.0 (43.8- 2045-46
49.7) 54.1)
Madhya 43.9 2.5 17.3 19.1 10.7 11.3 14.4 10.0 52.5 (51.0- 2025-26 58.0 (52.7-63.3 2041-42
Pradesh 54.1)
Chhattisga 43.9 2.5 17.3 19.1 10.7 11.3 14.4 10.0 52.5 (51.0- 2025-26 58.0 (52.7-63.3 2041-42
rh 54.1)
Orissa 47.3 2.9 8.7 13.1 7.2 4.1 7.8 3.5 48.6 (45.5- 2022-23 56.0 (49.9- 2037-38
51.7) 62.1)
Rajasthan 34.0 1.5 -4.3 13.1 9.2 7.4 3.4 6.7 54.0 (50.0- 2032-33 56.6 (47.6- 2050-51
58.1) 65.6)
Uttar 40.8 2.1 20.2 11.0 21.2 22.2 19.6 22.1 53.6 (51.1- 2029-30 57.2 (53.0- 2046-47
Pradesh 56.1) 61.4)
Uttarakhan 40.8 2.1 20.2 11.0 21.2 22.2 19.6 22.1 53.6 (51.1- 2029-30 57.2 (53.0- 2046-47
d 56.1) 61.4)
India 42.1 1.8 41.5 (38.4- 2023-24 45.0 (41.0- 2033-34
44.7) 49.0)
During 1990-2010, Madhya Pradesh/Chhattisgarh contributed most favourably to the net decline
(with its share of 10% to live births it has contributed 14.4% to total net decline in IMR of India).
In contrast, Bihar/Jharkhand contributed most unfavourably to net decline. However, during
2006-2010, Bihar/Jharkhand, Madhya Pradesh/Chhattisgarh, Rajasthan and Uttar
-75-
Ashok Kumar
Pradesh/Uttarakhand transitioned from unfavourable to favourable states; contributing 57% to

net decline in IMR of India when their share to live births was 52% (Table 1).
If the declining trend in IMR observed during 1990-2010 continues linearly, India‟s IMR would be
42 per 1000 live births (95% CI: 38-45) by 2015 and MDG 4 target level of „27‟ would be achieved
in 2023–2024. If the decline follows an exponential trend, India‟s IMR would be 45 per 1000 live
births (95%CI: 41–49) by 2015, and MDG 4 target would be achieved in 2033–2034. Unless special
efforts are made to reduce IMR in Assam, Bihar/Jharkhand, Rajasthan and Uttar
Pradesh/Uttarakhand – it may take at least up to 2023–2024 for India to reach the MDG 4 target,
and much longer for the above mentioned states.
Measles immunization rates: India is doing well on the other MDG 4 indicator, as the percentage
of 12–23 month old children immunized against measles improved from 42% in 1992–19938 to
74% by 2009.17 Goodness of fit of linear and exponential regression curves on IMRs for India
during 1990-2010 were appropriate, with respective chi-square values of 0.79 (p<1.000) and
1.36(p<1.00).
Fig. 2: Trends in Maternal Mortality Ratio-1997-2015, India & 09 BIMARU states

Note: UP-UK (Uttar Pradesh &Uttarakhand), AS (Assam), BH-JH (Bihar & Jharkhand), RJ (Rajasthan),
MP-CH (Madhya Pradesh & Chhattisgarh) and OR (Orissa)
Changes in MDG 5: Figure 2 depicts changes in MMRs of India and of 09 most high priority
states, during 1997–2015. During this period, there is a precipitous decline in MMR of India from
398 to 212 per 100 000 live births, even though variations in the base (1997–1998) MMR levels of
states were mainly responsible for recent (2007–2009) variations. Table 2 provides changes in
MMR, percent net contribution of 09 most high priority states and periods to overall decline in
MMR of India, and predicted levels of MMR. During 1997–2015, MMR of India declined by 47%,
within annual absolute decline of 15.5 points. Maternal deaths decreased from around 100 000 to
60 000, assuming MMRs provided by SRS are correct. If total decline in MMR of India during
different periods of 1997–2015 is considered as 100%, the maximum decline occurred between
-76-
Ashok Kumar
2004-2006 and 2007–2009 (32%), followed by 2001-2003and 2004–2006 (27%). Uttar

Pradesh/Uttarakh and contributed most favourably to net-decline in MMR of India (with its
share of 18% to the live births, contributed 33% to MMR decline). Bihar/Jharkhand, Madhya
Pradesh/Chhattisgarh, Rajasthan and Assam also contributed favourably to net decline. It is
encouraging that between 2004-2006 and 2007–2009, Bihar/Jharkhand, Madhya
Pradesh/Chhattisgarh, Rajasthan and Uttar Pradesh/Uttarakhand – together contributed
Table 2: State-wise changes in MMR, contribution of states and periods to India's MMR
decline and year of achieving India's MDG-5 target
Change in MMR % Net contribution of the if MMR decline if MMR decline

between 1989-91 (1990) states to periodic decline follows a linear follows a
and 2009-10 (2010) in MMR of India between trend exponential trend
Year of achieving MDG-5

target MMR level of '109'
Year of achieving MDGs
Annual absolute decline
Expected MMR in 2015
Expected MMR in 2015

5 target MMR level of
%
1997-98 & 1999-01
1999-01 & 2001-03
2001-03 & 2004-06
2004-06 & 2007-09
1997-98 & 2007-09
state's
share
% Decline
(95% CI)
(95%CI)
to total
'109'
live
births
during
1999-
State 2014
Assam 31.3 14.8 14.2 -10.1 0.8 5.6 3.7 2.7 365 (244-486) 2046 374 (295-453) 2082-83
Bihar 50.8 22.5 37.9 3.4 15.0 15.2 18.6 11.0 119 (81-156) 2016 184 (172-196) 2024-25
Jharkhand 50.8 22.5 37.9 3.4 15.0 15.2 18.6 11.0 119 (81-156) 2016 184 (172-196) 2024-25
Madhya
Pradesh 39.0 14.3 6.7 6.7 7.8 14.2 10.6 8.4 199 (171-228) 2022 231 (205-257) 2035-36
Chhattisgarh 39.0 14.3 6.7 6.7 7.8 14.2 10.6 8.4 199 (171-228) 2022 231 (205-257) 2035-36
Orissa 25.4 7.3 -5.0 10.7 4.5 3.4 2.9 3.7 216 (119-313) 2026 234 (166-302) 2039-40
Rajasthan 37.4 15.8 -0.2 12 9.6 9.5 7.6 5.8 232 (181-283) 2023 270 (228-312) 2038-39
Uttar Pradesh 40.8 20.6 31.5 26.5 34.4 36.5 33.0 18.0 253 (219-287) 2023 300 (268-333) 2040-41
Uttarakhand 40.8 20.6 31.5 26.5 34.4 36.5 33.0 18.0 253 (219-287) 2023 300 (268-333) 2040-41
India 46.7 15.5 117 (109-125) 2016 159 (153-166) 2023-24
About 75% to the net decline in India‟s MMR, when their collective share in live births was only
43%. If the declining trend in MMR observed during 1997-2009 continues linearly, India will be
very close to achieving the MDG 5 target level of „109‟ by 2016, as the MMR is predicted to be 117
(95% CI: 109–125)in 2015. However, if the decline follows an exponential trend, India‟s MMR
would be 159 (95% CI: 153–166) in 2015, and MDG-5 target would only be reached in 2023–2024.
India is doing well on „percent deliveries attended by skilled health personnel‟, with an
improvement from 33% in 1992-19938 to 76% by 2009.17 Goodness-of-fit of linear regression curve
on MMRs of India during 1997–2009 suggests moderate deviation from the observed values[chi-
-77-
Ashok Kumar
squared=0.2 (p<0.032)], while the exponential fit suggests negligible deviation[chi-squared=0.36

(p<0.055)].
4. DISCUSSION
If the pace of linear decline in MMR during 1997-2009 continues, India will be very close to
attaining MDG-5 target level of „109‟ per 100 000 live births by 2016. However, India‟s IMR would
be hovering around 42 in 2015 if the decline follows a linear trend and the MDG 4 target level of
„27‟ would only be achieved in 2023-2024. If the declines in IMR/MMR follow exponential trends,
reaching MDGs 4 & 5 targets gets further postponed by India and most states. India‟s MMR
decline during 1997-2009 may mainly be attributed to favourable contributions from Uttar
Pradesh, Uttarakhand, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, and Rajasthan. Due to
unfavourable contributions in IMR reduction efforts by Bihar/Jharkhand, Uttar Pradesh,
Uttarakhand, Rajasthan and Assam, India‟s run for MDG-4 target is delayed. How comparable
are our IMR/MMR predictions with others? Were the state specific changes in IMR/MMR during
a particular period reflected in national level changes in a standardized way or not? Which one of
the two regression curves (linear/exponential) Indian IMRs/MMRs fits better?
Due to paucity of reliable MMR estimates for India/states prior to 1997, 18 predictions were based
on IMR. A recent Lancet series, 5 projected India‟s IMR and MMR in 2015 as 43 and 153
respectively, while another report19 projected India‟s IMR in 2015 as 46-49. These predictions
matched with our IMR predictions. Our IMR extrapolations for 2015 are in synchronization with
predictions of the Central Statistical Organization, Government of India. 14 For the states of Assam,
Orissa, and Rajasthan, there is good comparability between our MMR predictions and the Annual
Health Survey (AHS, 2010-2011).20 For MMR, our exponential regression-based predictions match
closely with other findings.3,7
Lozano et al.,1 in their paper on tracking the progress of MDGs 4 and 5 in 163 countries predicted
India‟s IMR and MMR in 2011 respectively as 49 (95% CI: 41–56) and 187 (95% CI: 142–238), while
our linear and exponential regression-based estimates respectively were 48 (95% CI: 47–49) and
50(95% CI: 46-54); and 178 (95% CI: 173–184)and 196 (95% CI: 195–197). As compared to referred
predictions1, 3,4,5,7,14,18,19 ours are more robust due to the use of more recent IMR/MMR data,
moving-average IMR estimates, and predicted IMRs/MMRs through the use of linear and
exponential regression curves.
A trend analysis of IMRs in India during 1970–2000 by Saikia et al., 21concluded that the decline
was much steeper during the 1970s and 1980s, and that IMR had stagnated during 1996–2000,
2000–2004 and 2002–2006. We also noticed that the decline in IMR was the lowest during 1996–
2001. Our decomposition of the decline in India‟s IMR among the states also matched this
finding.21. Analysis of India‟s IMRs during 1981–19976 found that the decline tended to stagnate
for brief periods and was often followed by a subsequent rapid decline. We are of the view that
India‟s IMR decline still followed a similar phenomenon, as we noted that a plateau during 1996–
2001 was followed by a rapid decline during 2001–2006(Table 1). Our findings are agreed with
previous studies made for Kerala, Maharashtra, Tamil Nadu, and West Bengal as the only states
likely to achieve MDG 4 and 5 targets.5, 14
-78-
Ashok Kumar
4.1 Contribution of state-specific changes in rate/ratio onto national-level change

If populations are similar with respect to factors associated with the event under study, there is
no problem in comparing events across states. If populations are not similarly constituted, direct
comparison of the overall events may be misleading.10 In the present analysis, rather than
measuring changes in IMR/MMR of India between two time points as mere percent/absolute
change, we estimated it as: net-effect of state-wise distribution of live births and state-specific
mortality rates/ratios - a technique used extensively22, 23 for understanding birth weight-specific
or regional differences in mortality.
4.2 Linear versus exponential regression?
While estimating the progress made by different countries including India towards MDGs 4 and
5, linear regression curves were used.1,5 However, for understanding the decline in IMRs of India
and Nepal in the past three decades, exponential regression curves were found to be more
appropriate.13
IMR decline in 18 Western nations in the 20th century was, for the most part, neither linear nor
exponential.15 For India‟s IMR decline during 1990-2010, both linear and exponential regressions
fitted well, while for MMR declines, exponential regression fits better than linear. As India‟s
IMR/MMR decline during the past two decades is an outcome of heterogeneous progress made
by different states, sometimes linear and sometimes exponential, and also taking into account
high IMR/MMR levels in a majority of the states - it is difficult to conclude which of the two
regression curves is more appropriate for the Indian scenario.
4.3 Strengths/limitations: The analysis included the latest IMRs/MMRs from SRS, the most
reliable source for national and state specific estimates. For fitting regression curves, I used
moving averages or periodic estimates, instead of point estimates. One of the limitations of this
study is that my analysis/interpretation relied completely on the quality and completeness of SRS
data. An evaluation of SRS data showed omission rates of 1.8% for births and 2.5% for deaths. 24
IMRs of SRS are considered to be robust,6 and they matched closely with all the three National
Family Health Survey (NFHS)25 estimates, for India. However, IMRs of SRS in 2010 were lower
than AHS estimates by 1–10 absolute points, in eight states.20 India‟s MMRs of SRS deviated
substantially with NFHS-226 and UN18 estimates. As MMR estimates of UN are usually indirect
estimates, 1,3,18 we are of the opinion that SRS estimates are still robust for India.
Is maximum decline in MMR between 2004-2006 and 2007-2009 due to NRHM or an artefact?
Periodic analysis of MMR decline in India during 1997–2009 indicated maximum drop between
2004–2006 and 2007–2009. Is this finding an arte fact or influence of NRHM? Lim et al.,27 indicated
that India‟s conditional cash transfer scheme „Janani Suraksha Yojana (JSY)‟ of NRHM
contributed to an increase in institutional deliveries,17 and was associated with reduction of about
four perinatal and two neonatal deaths per 1000 live births, while having no significant effect on
maternal mortality.27 Since its launch in 2005, NRHM is credited with deploying more than
750000. Accredited Social Health Activists (ASHAs), as change agents between the women and
the health system resulting in improved prospects for maternal and new born care5 as compared
to the past
-79-
Ashok Kumar
5. CONCLUSIONS
Even though the pace of decline in IMR accelerated during 2001–2015 after a period of stagnation
(1996–2001), India is still predicted to fall short of achieving its MDG 4 target level of „27‟ per 1000
live births by 2015. Assam, Bihar/Jharkhand, Rajasthan and Uttar Pradesh, Uttarakhand, need to
put special efforts for accelerating decline in IMR. Considering the pace of MMR decline during
1997–2014, two out of the 09 most high priority states have a fairly good chance of attaining
India‟s MDG5 target level of „109‟, albeit two–three years behind schedule (2016–2017).
REFERENCES
[1]. Allen DM, Buehler JW, Hogue CJ, Strauss LT, Smith JC. (1987). Regional differences in
birth weight-specific infant mortality, United States, 1980. Public Health Rep. 1987 Mar-Apr;
102(2): 138-45.
[2]. Bishai D, Opuni M. (2009). Are infant mortality rate declines exponential? The general
pattern of 20th century infant mortality rate decline. Popul Health Metr. 7: 13.
[3]. Buehler JW, Kleinman JC, Hogue CJ, Strauss LT, Smith JC. (1987). Birth weight-specific
infant mortality, United States, 1960 and 1980. Public Health Rep. Mar-Apr; 102(2): 151-61.
[4]. Central Statistical Organization, Ministry of Statistics and Programme Implementation,
Government of India. 2009. Millennium Development Goals – India country report. 2009.
Mid-Term Statistical Appraisal. http:// www.searo.who.int/EN/Section1243/Section1921/
Section1924.htm - accessed 5 September 2012.
[5]. Chatterjee A, Paily VP. (2011). Achieving Millennium Development Goals 4 and 5 in India.
BJOG. 118(Suppl 2): 47–59.
[6]. Claeson M, Bos ER, Mawji T, Pathmanathan I. (2000). Reducing child mortality in India in
the new millennium. Bull World Health Organ. 78(10): 1192-9.
[7]. Government of India (GOI). National health profile of India 2010. New Delhi, 2010. 10. Fleiss
JL, Levin B, Paik MC. Statistical methods for rates and proportions. 3rd edn. New York: John
Wiley & Sons, 2003.
[8]. Government of India. Annual health survey bulletins 2010-11. New Delhi, 2011. http://
censusindia.gov. in/vital_statistics/AHSBulletins/ahs.html – accessed 7 Aug 2012.
[9]. International Institute for Population Sciences (IIPS) and Macro International. National
family health survey (NFHS-3), 2005–06: India: Volume I. Mumbai: IIPS, 2007.
[10]. International Institute for Population Sciences (IIPS) and ORC Macro. National family health
survey (NFHS-2), 1998–99: India. Mumbai: IIPS, 2000.
[11]. International Institute for Population Sciences (IIPS). National family health survey (MCH
and Family Planning): India 1992-93. Bombay: IIPS, 1995.
[12]. Lim SS, Dandona L, Hoisington JA, James SL, Hogan MC, Gakidou E. (2010). India‟s
Janani Suraksha Yojana, a conditional cash transfer programme to increase births in health
facilities: an impact evaluation. The Lancet. Jun 5; 375(9730): 2009-23.
[13]. Linear interpolation equation calculator.
http://ww.ajdesigner.com/phpinterpolation/linear_interpolation_equation.php - accessed
1 August 2012.
-80-
Ashok Kumar
[14]. Lozano R, Wang H, Foreman KJ, Rajaratnam JK, Naghavi M, Marcus JR, et al. (2011).
Progress towards Millennium Development Goals 4 and 5 on maternal and child mortality:
an updated systematic analysis. The Lancet. 378(9797): 1139-65.
[15]. Paul VK, Sachdev HS, Mavalankar D, Ramachandran P, Sankar MJ, Bhandari N, et al.
(2011). Reproductive health, and child health and nutrition in India: meeting the challenge.
The Lancet. Jan 22; 377(9762): 332-49.
[16]. Ram F, Mohanty SK, Usha R. (2009). Progress and prospects of Millennium Development Goals
in India. Mumbai: International Institute for Population Sciences.
[17]. Registrar General of India. Report on intensive enquiry conducted in sub-sample of SRS
units. Occasional paper No. 1. New Delhi: Office of the Registrar General of India, Ministry
of Home Affairs, 1988.
[18]. Saikia N, Singh A, Ram F. (2010). Has child mortality in India really increased in the last
two decades? Economic and Political Weekly. XLV (51): 62-70.
[19]. State of Georgia. Georgia epidemiology report: Quantifying the effect of low birth weight on
racial differences in infant mortality rate, Georgia: Department of Public Health, 1989.
[20]. Thapa S. (2008). Declining trends of infant, child and underfive mortality in Nepal. J Trop
Pediatr. Aug; 54(4): 265-8.
[21]. UNICEF India Country Office, 2009. http://www. unicef.org/ India/ National_ Fact_
Sheet_CES_2009. pdf- accessed 1 August 2012.
[22]. United Nations Children‟s Fund. 2009 coverage evaluation survey: national fact sheet. New
Delhi:
[23]. United Nations Children‟s Fund. Background note on methodology for under-five mortality
estimation. New York: UNICEF.
[24]. United Nations Children‟s Fund. Levels & trends in child mortality: estimates developed by the
UN Inter-agency Group for child mortality estimation. New York: UNICEF, 2011.
http://www.childinfo.org/ files/Child_Mortality_Report_2011.pdf - accessed 1 August
2012.
[25]. United Nations Development Programme. Fact sheet: goal 5: improve maternal health. New
York: UNDP, 2008.
[26]. United Nations. Global strategy for women‟s and children‟s health. New York: UN, 2010.
Available at http://www.un.org/sg/hf/global_strategy_commitments.pdf. Accessed on
20.01.12
[27]. WHO, UNICEF, UNFPA, and the World Bank estimates (2012).Trends in Maternal Mortality:
1990 to 2010. Geneva, World Health Organization.
-81-
India's Energy Security Challenges and Policy Options
Sanjay Kumar
Department of Defense Studies, Meerut College, Meerut, (U.P.) India
E-mail Id: aridsssanjay@gmail.com, sanjaymcm@rediffmail.com
Abstract
PAPER/ARTICLE INFO
Among the various non-traditional threats that India is currently facing, RECEIVED ON: 02/01/2017
energy security is one of them. Today, India suffers from a serious energy ACCEPTED ON: 30/05/2017
crisis. Energy security has become one of the serious issues of India’s
Foreign Policy owing to certain factors such as growing energy demand, Reference to this paper
Carbon dioxide emissions and the issue of climate change, security of should be made as follows:
energy supplies and depleting fossil fuels. With the population of our
country growing day by day, the demand for energy would also
simultaneously increase. The situation is most likely to become worse due Sanjay Kumar (2017),
to the growing imbalance between the demand for energy and the supply “India's Energy Security
from its indigenous sources. Challenges and Policy
I observed that Indian energy security policies need to take into Options”, Int. J. of Trade and
Commerce-IIARTC, Vol. 6, No.
consideration the ever increasing global interdependence rather than the
1, pp. 82-96
narrow centric remote approach. In addition to this, there is a
requirement of precise and comprehensive energy policy inspiring the
much needed economic and social development through supply of reliable
energy. Ensuring economic and social development with an aim to
overcome energy poverty should be the priority for India in addition to its
commitment of mitigating climate change. Therefore, effective energy
governance is the need of the hour in India in order to find solutions and
methods to control the ever increasing energy demands and needs.
Key words: Non-traditional threats, territorial integrity, energy security,
national security, urbanisation.
Sanjay Kumar
1. INTRODUCTION
Traditionally, national security has been looked at in terms of the ability of a state to protect its
national interests such as territorial integrity, sovereignty and independence from outside
intervention. However, with the fading of Cold War, the concept of security underwent
significant transformation. There emerged an increasing acceptance that the state-centric
paradigm, which defined security purely in relation to military preparedness and force, is
outmoded. This is owing to the fact that the traditional security paradigm does not
comprehensively address the rapidly growing non-traditional threats to security like, “the
struggle for resources embedded in the pursuit of energy security, food security, climate change,
water security, environmental degradation, forced migration, terrorism, insurgency, drug
trafficking, arms smuggling and money laundering.” 1
Among the various non-traditional threats that India is currently facing, energy security is one of
them. Today, India suffers from a serious energy crisis. Energy security has become one of the
serious issues of India‟s Foreign Policy owing to certain factors such as growing energy demand,
Carbon dioxide emissions and the issue of climate change, security of energy supplies and
depleting fossil fuels. With the population of our country growing day by day, the demand for
energy would also simultaneously increase. The situation is most likely to become worse due to
the growing imbalance between the demand for energy and the supply from its indigenous
sources.
Former Indian Prime Minister Manmohan Singh has identified energy security as one of the
major challenges to the national security of India.2 Presently, India account for just 3.5 per cent of
the world energy. The future of India‟s national security is intertwined with that of a secure
energy supply. Access to adequate energy supplies for all is necessary to build and sustain the
favorable world order that is a cornerstone of India‟s national security. Keeping this in mind, the
policy makers of India need to adopt both short-term and long-term measures to meet the
demands of various sectors within the country. The paper argues that if adequate measures were
not taken in time then it would derail the economic progress of the country and foil India‟s great
power ambitions.
Energy security threat to India arises not just from the uncertainty of availability and price of
imported energy but also from the possible disruption in its imports or shortfalls in domestic
production. The primary challenges facing India‟s energy sector are coal depletion and pollution,
rising oil imports, increasing natural gas demands, inefficient electric system, energy related
water shortages and limited nuclear energy etc. It has become essential for India to reduce its
energy import dependency and it should diversify its energy supply sources and resources of
energy to be energy secure in future. From the long term point of view, meeting the increasing
demand of India‟s energy security lies in self-sufficiency and for that India has to change its
energy mix by increasing the share of nuclear energy and renewable resources.
India is the only country that uses coal to any appreciable degree and that has made some
progress in exploiting renewable energy resources. The paper seeks to outline the seriousness of
the energy security challenges facing by India and the policy options available to tackle it. In
doing so, I have first made an overview of this vital problem. Moreover, strategy on how to deal
-83-
Sanjay Kumar
with the increasing energy demand has also been discussed. The paper further argues that energy
security holds the key to India‟s progress in the standing among the world‟s economic power.
2. DEFINING ENERGY SECURITY AND ITS LINKAGE WITH NATIONAL SECURITY
The World Energy Assessment under the United Nations Development Programme (UNDP)
report has defined energy security as, “the continuous availability of energy in varied forms in
sufficient quantities at reasonable prices.”3 The Planning Commission of India defines energy
security as, “We are energy secure when we can supply lifeline energy to all our citizens
irrespective of their ability to pay for it as well as meet their effective demand for safe and
convenient energy to satisfy their various needs at competitive prices, at all times and with a
prescribed confidence level considering shocks and disruptions that can be reasonably
expected.”4 According to former Indian President, APJ Abdul Kalam, energy security is based on
conservation, secure access to all sources of energy globally and access to reliable, affordable and
environmentally friendly energy. He further defined energy security as “ensuring that our
country can supply lifetime energy to all its citizens, at affordable costs at all times.”5 The above
definitions show that energy security occupies an important place in India‟s national security.
One may ask a question as to how energy security is relevant to national security. Since the threat
to peace and security of a nation comes from both outside and within. And if security means
freedom from fear, danger and others then energy security means meeting the increasing energy
requirement of the society. There is a close relevance between energy security and national
security. Because, national security means not just defence but must encompass development.
And it is being said that defence and development are the two sides of the same coin.
Development of a nation cannot be done without energy security. Therefore, the fundamental
duty of nation is not just providing security of the societies from military attack by other
countries, but also entails securing freedom from the fear of disruption of energy supplies either
through domestic production or by importing from other countries. Our capacity to preserve and
build lasting peace for all Indians will depend on the strength of our military to defend our
borders and the potential of our economy. This is further supported by the fact that energy is the
engine of economic growth.
Energy is required for both civil and military purposes. Energy is required in every activity of our
daily lives in the fields of agriculture, industry, generating electricity, infrastructure such as
public transformation, schools, hospitals, water supply and in military and defence operations.
Military applications of nuclear energy or nuclear material are essential in areas such as nuclear
weapons or military nuclear reactors.6 None of these activities could work undisturbed if there are
not enough energy reserves, which are ultimately lead to national economic retreat. Supply
disruptions, price spikes, the indirect costs of maintaining sea-lines of communication for oil
transport, have all had profound effects on the economic well-being and national security of
India. Therefore, India cannot remain silent on the growing challenges of energy security and
needs to pay special attention to make sufficient arrangement of energy security in order to
become major powers of the world.
-84-
Sanjay Kumar
3. SIGNIFICANCE OF ENSURING ENERGY SECURITY

Why do we need to ensure energy security? India‟s economic growth is directly linked to its
capabilities to ensure unrestricted energy supplies. Rapid economic growth has offered
employment opportunities to the growing population resulting in rapid urbanisation which puts
additional strain on energy resources.7 Ensuring energy security is crucial to nation‟s growth,
security and overall development in a globalised world. From the Indian point of view, ensuring
energy security becomes very crucial due to the following reasons:
 growing population and increasing urbanization.
 sustain high economic growth.
 sustain agricultural growth.
 industrial growth in areas such as steel, cement, etc.
 boom in service sector.
 improve the standard of living.
 means of transport and transport infrastructure.8
4. INDIA’S ENERGY SCENARIO: AN OVERVIEW
India, the second largest population in the world known for its significant economic growth has
been facing the challenges arising out of the growing energy demands to meet its growing
population. In this context, assessing the energy situation of India becomes very important. There
is a close linkage between energy consumption and both economic growth and human
development. India, with over a billion people is holding less than 0.5 percent of the world‟s
hydrocarbon resources. To meet its increasing energy demands, India depends on unclean coal
for more than half which can be highly dangerous for environmental and health reasons. 9
At present, India is the sixth largest energy consumer in the world and is projected to emerge as
the fourth largest consumer after the United States, China and Japan in the coming decades or so.
Its economy is projected to grow 7 per cent to 8 per cent over the next two decades, and in its
wake there will be a substantial increase in demand for oil. For India to sustain this projected
economic growth and eradicating poverty would require solving energy problem. For more than
a decade, India‟s energy consumption has grown at a faster pace than its economy and it appears
that this trend will continue in the years to come. Moreover, even if India reduces the use of oil in
its power and manufacturing sectors, the demand for oil in the transport sector shows no sign of
dwindling. Due to stagnating domestic crude production, India imports approximately 70 per
cent of its oil. Its dependence on imported energy resources is growing rapidly. The World
Energy Outlook, published by the International Energy Agency (IEA), projects that India‟s
dependence on oil imports will grow to 91.6 per cent by the year 2020. 10
India currently suffers from a serious shortfall in electricity supply, estimated at 15 per cent and
and expected to grow further. Presently, only 3 per cent of the country‟s electricity is generated
from nuclear power plants. About two-thirds (68 per cent) is generated from coal, 15 per cent
from hydropower, 8 per cent from natural gas, 4 percent from oil and 2 per cent from
renewables. However, due to difficulties in procuring uranium, they together operate at less than
50 per cent capacity (Refer to Chart 1). The seriousness of energy security can be gauged from the
fact that only 660 billion KWh of electricity is what India produce and over 600 million
populations equal to the combined population of USA and European Union (EU), have no access
-85-
Sanjay Kumar
to electricity, and a limited access to other clean, modern fuels such as Liquefied Petroleum gas
(LPG) and kerosene. Lack of adequate energy assess is reflected in human development index
(HDI) of India. India‟s HDI is very serious when compared with other countries such as Canada,
United States, Norway, United Kingdom, Japan, etc. 11
Chart 1: Composition of India’s Energy Resources
Source: Elspeth Thomson and Dickson Yeo, “India and the Nuclear Supplier Group”, Energy
Studies Institute Bulletin Article on Energy Trends and Development, vol. 2(3), December 2009, p. 4,
available at <www.esi.nus.edu.sg/.../091231_India_and_the_Nuclear_Suppliers_Group.pdf>.
India has to import 75 percent of its oil needs from other countries while accounting 25 percent of
its oil needs from its domestic productions. The imported oil is then largely reserved for its
transportation sector. It has some hydroelectric potential left and fast-deploying renewable
energy. However, such renewable energy requires larger sustainable footprints (solar, wind, bio
fuel), and this in the long run could compete with India‟s much-needed improvements in
agriculture and food production technologies.12
5. MOUNTING INDIA’S ENERGY OBLIGATION
With the increase of population in our country, the demand for energy would also increase
simultaneously (See Table 1). India's energy demand is likely to be among the highest among the
large countries in the world including the United States and China. As per projections by the
International Energy Agency (IEA), China is expected to account for 40 per cent of energy
demand growth from 2011- 2025, and India is expected to drive the same after 2025.
With the sharp increase in the use of personal vehicles on account of the growth of the middle
class is expected to contribute substantially to oil demand growth. According to Facts Global
Energy (FGE), India will be fourth after China, the Middle East and Latin America in oil demand
growth in the next few years and is likely to account for anything between 100,000 barrels per day
(bpd) and 150,000 bpd, which is an increase of 8-12 per cent over current demand of 1.2 million
bpd.13 According to other projections, by 2040, India will be among the world‟s largest oil
consumers and importers with domestic oil product demand projected to be 9.8 million barrels
per day (mmbd) and crude oil imports in excess of 7 mmbd (a 100 percent increase over 2015). 14
At present, India‟s proven oil reserve is 5.8 billion barrels. When the production of crude oil in
2008-09 was around 36.1 MT, the demand was four times more than the production that stood at
-86-
Sanjay Kumar
around 135.0 MT.15 The majority of India‟s domestic oil production is from western off-shore
fields, most notably the Mumbai High Basin, which in 2015, accounted for roughly 40 per cent of
India‟s total crude oil production. It is also available in significant amounts in the onshore
Cambay Basin in India‟s northwest and the Arakan Basin in the Assam state of Northeast India.16
India's domestic natural gas production has increased steadily over the last few years. In 2014,
India produced 31.7 bcm of natural gas whish was far below its domestic demand of 50.6 bcm,
despite having proved reserves at 1.4 trillion cubic meters (50.4 trillion cubic feet). Currently,
domestic production is concentrated offshore with the Mumbai High Field and the Krishna-
Godavari Basins as the primary domestic production zones. The production of onshore gas is
mostly in Gujarat, Andhra Pradesh, and Assam.17
Table 1: Populations Projections (in millions)
Year 2000 2005 2010 2015 2020
Under 15 361 368 370 372 373
15-64 604 673 747 819 882
65+ 45 51 58 65 76
Total 1010 1093 1175 1256 1331
Source: Report of the Committee on „India Vision 2020‟, Paper Prepared for Planning Commission, Government of
India, New Delhi, December 2002, p. 29, available at
<http://planningcommission.nic.in/reports/genrep/pl_vsn2020.pdf>.
According to International Energy Agency (IEA), Indian total primary energy demand is
estimated to increase from 669 million tonnes of oil equivalent (mtoe) in 2009 to 1464 mtoe in
2035.18 The demand for oil, which is likely to increase by 3.4 per cent annually (from 3.3 million
barrels per day (mb/d) in 2010 to 7.4 mb/d in 2035) is widening the gap between oil demand and
domestic oil supply.19 India produces 35.4 million tonnes (mt) or 0.9 per cent of the world‟s total
oil production while it consumes 3.8 per cent or 148.5 mt of oil, which underscores the
dependence on oil imports. Oil imports are likely to rise from 76.4 percent (2010-11 figures) to
80.5 percent in 2016-17 and are estimated to reach 92 percent in 2035. India‟s currently imports are
74 percent of its crude oil from countries in West Asia.20
It has been projected that the total coal demand will nearly double, and both oil and gas demand
will triple (as shown in table 2) in the coming decades. Expanding domestic production capacity
will require substantial investments, while increasing dependence on imported forms of energy
will increase vulnerability to fluctuations in global energy prices. Total demand for power is
expected to increase by another 3.5 times or more in the next two decades, which will necessitate
a tripling of installed generation capacity from 101,000 MW to 292,000 MW by 2020. 21 The
important question that comes to my mind when 9 look at the projected energy demand for India
in the coming decades is whether it would derail the prospects of India‟s economic growth and
the development plans.
Hydro carbons constitute 42 per cent of India‟s commercial energy consumption. In the coming
decades too, it will be the only primary fossil fuel to meet the country‟s growing energy demands
in the transport and manufacturing industry sector. According to vision 2025 document, the share
of oil and gas in the total energy supply will be 45 per cent (Oil 25 percent and Gas 20 per cent) by
the year 2025. While the demand for crude oil and petroleum products are expected to grow to
-87-
Sanjay Kumar
190 million tons in 2012 and 364 million tons in 2025.22 This would require India to look for
serious long-term security arrangements for its increasing energy demands.
Table 2: Projected Fuel Demand
Coal Oil Gas
1997 311 83 21.5
2020 BAU 688 245 70.8
2020 BCS 538 195 64.7
Note: BAU- Business-as-usual encompassing Industry, transport, commercial, agriculture and
residential. And BCS refers to Best-case scenario.
Source: Report of the Committee on „India Vision 2020‟, Paper Prepared for Planning Commission,
Government of India, New Delhi, December 2002, pp. 71, available at
<http://planningcommission.nic.in/reports/genrep/pl_vsn2020.pdf >.
6. ROLE OF NUCLEAR POWER IN INDIA’S ENERGY SECURITY
Assessing the role of nuclear power becomes very important when there is a growing awareness
among the countries of the world on the need to exploit the nuclear power for meeting energy
challenges. Nuclear power would help increase energy security during a time of unstable
competition and surging demand. Nuclear power holds the key to reducing global emissions of
carbon dioxide (CO2) and sulphur dioxide (SO2). The 17 per cent reduction in emissions due to
reduced coal-fired generation being taken up by nuclear (and renewable generation) is equivalent
to 12 percent of UK emissions and 8 percent of emissions from the EU-25 countries. The civil
nuclear agreement is important for India because it helps to achieve its long-term nuclear
technology thrust, reduction in coal transport congestion and emission reduction targets.
Increased share of nuclear power in the Indian energy mix will help to diminish the reliance on
fossil fuels and reduce carbon emissions from India. 23 (Also Refer to Chart 2).
The growing nuclear renaissance should also attract the attention of the Indian government and
its policy makers when it depends on other countries to meet its increasing energy needs. Despite
of this, many of its households are without electricity. Nuclear power has a key role to play to
providing electricity to more than 500 millions people. Today, about 17 per cent of the world‟s
electricity is generated from over 441 nuclear reactors operating in 32 different countries. Besides,
another 32 reactors are under construction, and many more are on the drawing board. Nuclear
power in the coming decades would make significant contribution to global supply of
electricity.24
At present the contribution of nuclear energy to India‟s electricity requirement is very meager.
India is planning to increase the present share of around 3 per cent to 10 per cent by 2022 and 26
per cent by 2052. This translates to an increase in installed nuclear power generation capacity
from the current level of 4,780 MW to 40,000 MW by 2020 and 250,000 MW by 2050. To meet these
targets, India will need to invest $65 billion between 2010 and 2020 in new power plants.
Significant investments will also be required to secure fuel for the existing nuclear reactors,
almost all of which are based on the Pressurized Heavy Water Reactor (PHWR) technology.25
Other factors that makes nuclear energy more viable option is that hydrocarbon resources are yet
to prove themselves as viable alternatives. In addition, renewable sources have only been able to
supplement and not replace the fossil fuel requirements as mentioned above. No doubt,
-88-
Sanjay Kumar
renewable energy sources are attractive but powerless. Moreover, they are capital and land
intensive.26
Chart 2: Average Carbon Emission Levels (Global) (Pounds of Carbon Dioxide Emission MWh)
Source: Bhupendra Kumar Singh, India‟s Energy Security: The Changing Dynamics (New Delhi:
Pentagon Press, 2010), p. 32.
7. CIVIL NUCLEAR COOPERATION AND INDIA’S ENERGY SECURITY
With the operation of Kaiga nuclear power reactors, India became sixth in the world to have 20 or
more nuclear reactors under operation. Despite the increase of both ranking and the number of
reactors, the contribution of nuclear power to generating electricity is still very limited. Lack of
cooperation with other countries and limited uranium reserves of low quality are the main
reasons behind the poor show. Given this fact, there are increasing needs for civilian nuclear
cooperation with other countries, thereby helping India to meet its huge and growing energy
needs. All of these reasons have compelled the present government to invest lot of energy in
ensuring the successful conclusion of the civil nuclear cooperation agreement with the United
States. As per the Department of Atomic Energy predictions, by 2000, there should have been 43
500 MW of nuclear-generation capacity in the country. But only 3310 MW (megawatts) has been
realized, which is less than three per cent of the installed electricity generation capacity. 27
The civilian nuclear cooperation should be looked at it broadly in terms of India‟s growing energy
deficit. Efforts have been made in the past to increase the contribution of nuclear power to
generating electricity and meeting India‟s growing energy demands, but could not achieve as
projected. The Nuclear Suppliers Group waiver allows India to buy uranium for its existing
reactors, as well as technologies to reprocess spent fuel and help reduce radioactive waste from
supplier countries. The NSG waiver was a prerequisite for India‟s nuclear trade with supplier
countries and increasing India‟s installed nuclear power generation capacity. The paper further
argues that successful waiver from NSG holds the key to India‟s progress in the generation of
electricity from nuclear energy and meeting the challenges of climate change.
At present, India has about 54,000 Megaton (MT) of developed uranium reserves with a
processing capacity of about 220 MT per year. Another 23,000 MT can be developed but is facing
environmental assessment as well as local opposition. However, India‟s thirteen reactors alone
-89-
Sanjay Kumar
need about 300 MT per year. This has resulted in its nuclear plants running at reduced plant
capacity factors from 90 percent in 2003 to 81 percent in 2004 to 76 percent in 2005. Therefore, the
successful conclusion of the civilian nuclear with the United States would result in more uranium
imports to keep these plants running.28
Despite repeated commitments in the past, currently India‟s nuclear power generation capability
stands at around 3,300 megawatts. With the successful implementation of the civil nuclear
initiative, the Indian nuclear power capacity is projected to generate 10,000 MWs, 20,000 MWs,
and 150,000 MWs by 2010, 2020 and 2050 respectively. How India is planning to increase the level
of nuclear power generation capability is shown in Table 3 and Table 4. The more India
cooperates with nuclear energy and fuel-supplying countries, the easier will be the path for India
to produce more nuclear power to meet its growing energy security challenges. Achieving the
projected target would require transfer of tons of uranium from other supplier countries because
the uranium available in our country is of low quality. Besides exchange of technology and fuel
for nuclear power generation, there would also be cooperation for clean-coal with other
countries.29
Table 3: Nuclear Reactors: Operational and Planned
Reactor Type Capacity
18 reactors at 6 sites under operation: Tarapur, Rawatbhata, Kalpakkam, Narora, 4, 780 MW
Kakrapar, Kaiga and Raps-5 & 6 (2x220 MW). Total-20 reactors
4 PHWRs under construction at Kaiga (2x 220 MW) to be operational very soon 440 MW
2 LWRs under construction at Kudankulam (2x1,000 MW) to be operational 2,000 MW
during 2010-11
PFBR under construction at Kalpakkam (1x500 MW) to be operational by 2012 500 MW
Projects Planned Till 2020
PHWRs (8x700 MW), FBRs (4x500 MW), LWRs (6x1000 MW) and AHWR (1x300 13,900 MW
MW)
Total by 2020 21,620 MW
Source: “Raise Uranium Supply for Energy Security”, Economic Times (Pune), 11 February 2010
and “India Ranks Sixth in Nuclear Power Generation”, available at
<http://timesofindia.indiatimes.com/india/India-ranks-sixth-in-nuclear-power-
generation/articleshow/7001693.cms>.
Table 4: How India Plan to Increase Nuclear Power Capacity
Year Installed Capacity
2010 4,780 MW (20 reactors under operation) (3 %)
2012 7,280 MW
2017 10,080 MW
2020 20,000 MW (10 %)
2032 63,000 MW
2050 150,000 MW (26 %)
Source: Refer to “India Ranks Sixth in Nuclear Power Generation”, available at
<http://timesofindia.indiatimes.com/india/India-ranks-sixth-in-nuclear-power-generation/
articleshow/7001693.cms>.
-90-
Sanjay Kumar
Chart 3: Projected Share of Nuclear Energy in Power Generation in the year 2010, 2020 and
2050.
2010 2020 2050
Source: Prepared using data of Table 4.

While India lacks abundant indigenous supplies of oil and gas, it is loaded with coal, and 70
percent of the coal mined in India goes into producing electricity. India ranks fourth in the world
in terms of coal reserves, and is the world‟s third largest coal producer behind the U.S. and China.
However, coals that are available in India are of poor quality and malpositioned. Moreover, with
35 percent ash and low energy-content, India has already resorted to importing cheaper, higher-
quality coal, adding to congestion at its ports. Without „clean-coal‟ technology, an increased use of
coal would add to India‟s already significant problems relating pollution. While coal will
continue to dominate as a fuel for India‟s electric power sector, the country‟s leaders are anxious
to shift to cleaner means of generating electricity.30 The successful culmination of the civil nuclear
deal would open the way for the exchange of advanced technology of the times that was
restricted in the past due to U.S.-India nuclear proliferation issue.
In a bid to raise the contribution of the nuclear power to energy generation, India plans to install
another 25-30 nuclear reactors in the next three decades that is expected to fulfill its plans for
65,000 MW energy.31 By 2020 and 2050, India is expecting that the nuclear energy would account
for 10 per cent and 26 per cent reflecting a significant increase and many more to come in the
years to follow (Refer to Chart 3). This does not mean that nuclear energy would replace coal, but
to some extent it would reduce the burning of fossil fuel and low quality coal, thereby reducing
environmental deterioration. Moreover, in the long run nuclear energy would be economical and
environment friendly than any other alternatives.
8. CHALLENGES BEFORE NUCLEAR POWER
Without nuclear power, achieving energy security will be much more difficult; and without
nuclear security, nuclear power is destined to failure. Nuclear security is an important component
of achieving energy security. It is the duty of the Governments to ensure the safety and security of
using nuclear power as a source to meet growing energy challenges. Nuclear technology suffers
from genuine problems of safety and waste management. Mainly for this reason, the civil
application of nuclear energy has become a matter of serious controversy. If nuclear energy is not
generated adhering to the highest standards of safety, there is possibility of catastrophic accidents
such as Chernobyl, Three Mile Island and the deaths owing to improper disposal of Cobalt 60 in
New Delhi. The recent nuclear disaster in Japan is a serious case of concern for all those adopting
nuclear power generation. However, to stop nuclear power generation for the fear of nuclear
-91-
Sanjay Kumar
accident would be a wrong move and instead they should focus on ensuring the safety of the
nuclear power generation (in particular to India). These incidents have influenced many countries
to take up safety measures.
Certain steps need to be taken to ensure the safety and security of using nuclear power. This
includes:
• ensure maintenance of the skills base
• maintain continued effective safety regulation
• foster progress on facilities for waste disposal and management must be given serious
consideration.
• maintain and reinforce international non-proliferation arrangements.32
A newsletter of the Levin Institute, The State University of New York states that current forecasts
predict that one severe accident will occur every 100 years in network of nuclear plants such as
that possessed by the United States, and there is
much debate about whether this level of risk is acceptable. To encourage confidence among the
suppliers of technology and materials, a Nuclear Liability Act has been put in place to limit their
liability in line with the international norms. Besides, India has also signed the Convention on
supplementary compensation to provide for additional resource for assistance seeking
indemnification for loss and injury for a nuclear installation. The costs and risks to public safety
are so enormous that government must take an active role in supporting, regulating and
monitoring nuclear industry.33 India is also having a very good record in the context of nuclear
accident.
9. INDIA’S STRATEGY TO TACKLE THE ENERGY CHALLENGES
There is no short cut route to energy security. However, there must a well-defined strategy to
tackle the challenges posed by the increasing imbalance between growing energy consumption
and energy demand. At present, India pursues a holistic approach toward meeting its energy
needs. This strategy attempts to integrate commercial, economic and development needs with
geo-political, military and strategic considerations. The present Indian strategy seeks to ensure
optimal utilization of domestic energy resources, development of adequate infrastructure- both
upstream and downstream, acquisition of energy assets and diversification of imports of energy
resources, development and harnessing of renewable energy resources, increase of energy
efficiency, promotion of energy conservation and encouragement of innovation and development
of technology.
For India, Coal will continue to dominate in the future of power generation. Too much of
dependence on coal raised serious issue over health and environmental concerns. One of the
solutions is to adopt clean coal technologies for power generation, which would not only reduce
pollution. We need to extend close cooperation with countries that have advanced technology
such as the United States, Canada, France, etc.
This strategy also attempts at diversifying the types of energy being utilized, including increasing
consumption of oil, natural gas, nuclear power and renewable power, as well as improving
energy efficiency and conservation. With respect to oil and gas, India has diversified sources by
increasing domestic exploration and production and importing from numerous regions, as well as
protecting itself against oil price volatility with the development of strategic petroleum reserves,
-92-
Sanjay Kumar
and investing in equity oil. India has also attempted to secure supply-chain resources by
expanding and upgrading its oil and gas pipelines, railway infrastructure and tanker and refinery
capacity.34
While relying on coal and oil, at the same time we need to diversify the sources of supply in terms
of uranium from other country that can help increase the contribution of nuclear energy. This is
not to say that replace coal by nuclear energy immediately, but allow nuclear energy to expand its
role in the contribution of India‟s energy mix as part of fuel substitution programme.
There is a need to consider optimum use of available energy sources to ensure energy security for
sustainable development. The author also argues that nuclear power is not the immediate
solution to energy security, but in the long run, it can be prove to be very effective. This is also
due to an increasing pressure from the developed world to reduce green house emissions.
Besides, nuclear power, we need to keep all other options alive such as deepening its energy links
with countries of Central Asia, Africa, Southeast Asia, Middle East and the South Asia. However,
stable and secure energy supplies can be ensured only if energy relations are part of a broader
framework that encompasses trade and investment, cultural contact and deeper diplomatic
relations.
As part of its Strategy, India in July 2010 had signed a 35-year power import deal with
Bangladesh whereby India will import up to 500 megawatts beginning in late 2012. India also
imports some electricity from Bhutan and Nepal.35 In addition, India plans to install an incredible
175 GW of renewable capacity by 2022.36
The policy options available before India includes - increasing domestic production of primary
fuels; securing necessary imports of primary fuels at relatively stable prices; attracting investment
across all segments of the energy sector; investing in new energy technologies; reducing the
carbon intensity of energy use and lowering local pollution; increasing access to modern energy
to the marginalised sections of the society; and diversifying the primary fuel basket to increase
energy security.
Above all, there is an ultimate need for effective implementation of energy policies through the
improvement of bureaucratic and administrative processes to assure a timely completion of
energy projects. The existing intra-ministerial and inter-governmental (between central and state
governments) coordination should be enhanced. Besides, truly integrated and consistent energy
policy is critical to guide and direct India‟s energy sector and ensure investment. Strong political
will is a prerequisite to successfully cope with energy sector challenges.
10. CONCLUSION
The lack of holistic energy policies as well as the lack of effective leadership and political will has
so far failed to produce desired outcomes for India as far as energy and sustainable development
is concerned. Over the last many decades, there exists a serious energy shortage and growing
pressure on imports. India‟s energy sector is increasingly unable to deliver a secure supply of
energy amid growing demand and fuel imports. In this regard, securing long-term energy
supplies to power expanding economies and meet the rising aspirations of a growing populace
has become a intimidating task for our country. India's ambitions to become a global power in the
coming years will rely heavily on its ability to achieve and maintain energy security. India's
energy demands will continue to present it with difficult choices as the country attempts to
-93-
Sanjay Kumar
balance its development and growing power with a host of environmental and political issues.
Ensuring energy security has over the last more than one decade been given the highest care in
the country‟s foreign policy priority lists so as to ensure uninterrupted energy supply and,
therefore, its economic growth. There is no immediate solution to the growing energy needs. It is
impossible to imagine sustainable economic development without an increase in the role of
nuclear power in India‟s energy production. Nuclear Energy is a sustainable source of energy that
has the potential to limit greenhouse gas production, to conserve fossil fuel, and to increase
nation‟s energy independence. In order to garner these benefits, we need to develop new
approaches to nuclear power that solve the safety, waste management, and proliferation risks that
we face today.
Given the increasing number of population, no single energy resource or technology would
address all issues related to availability of fuel supplies, environmental impact, particularly,
climate change, and health effects. Therefore, it is necessary that all non-carbon emitting resources
become an integral part of an energy mix – as diversified as possible – to ensure energy security
for our country in the coming decades. Available sources are low carbon fossil fuels, renewable
and nuclear energy.37 Nuclear energy will enable us to meet the twin challenges of energy
security and environmental sustainability. It will also have major spin-offs for the development of
our industries, both public and private. India has to continue to work towards development of
emerging nuclear energy technologies to address its long-term energy requirements, which are
indeed very large.
Indian energy policies need to take into consideration the ever increasing global interdependence
rather than the narrow centric remote approach. In addition to this, there is a requirement of
precise and comprehensive energy policy inspiring the much needed economic and social
development through supply of reliable energy. Ensuring economic and social development with
an aim to overcome energy poverty should be the priority for India in addition to its commitment
of mitigating climate change. Therefore, effective energy governance is the need of the hour in
India in order to find solutions and methods to control the ever increasing energy demands and
needs.
REFERENCES
[1]. Ruchita Beri (2006). “Traditional and Non-Traditional Threats in a Changing Global Order:
An Indian Perspective”, Paper Presented at Center for Policy Studies International Seminar on
„IBSA Within a Changing Global Order: Regional and Human Security Dimensions‟ held in
Johannesburg, South Africa, 29-30 June p. 1, available at
<http://www.cps.org.za/cps%20pdf/pia20_2.pdf>.
[2]. Manmohan Singh (2010). „PM‟s Valedictory Address at the Seminar on the Occasion of
Golden Jubilee of National Defence College‟, Prime Minister‟s Office, Press Information
Bureau, Government of India, 22 October, available at
<http://www.pib.nic.in/newsite/erelease.aspx?relid=66514>.
[3]. Surya Sethi (2007). “Energy Choices in India's Energy Strategies”, in Anant Sudarshan and
Legia Noronha (ed.), India's Energy Security: Foreign, Trade, and Security Policy Contents (New
Delhi: Konrad Adenauer Foundation), p. 12.
-94-
Sanjay Kumar
[4]. Government of India (2006). Integrated Energy Policy: Report of the Expert Committee,
Planning Commission, New Delhi, p. 54, available at
<http://planningcommission.nic.in/reports/genrep/rep_intengy.pdf>.
[5]. Bhupendra Kumar Singh (2010). India‟s Energy Security: The Changing Dynamics (New Delhi:
Pentagon Energy Press) p. 6.
[6]. Manpreet Sethi (2009). “Nuclear Energy for India‟s Energy Security”, in Arvind Gupta (ed.),
India in a Changing Global Nuclear Order (New Delhi: Academic Foundation in Association
with Indian Pugwash Society and IDSA), p. 37. And also refer to Report of the Committee on
„India Vision 2020‟, Paper prepared for Planning Commission, Government of India, New Delhi,
December 2002, p. 86, available at
<http://planningcommission.nic.in/reports/genrep/pl_vsn2020.pdf >.
[7]. Charles K Ebinger (2011). „Securing the Future‟, The Financial Express, 03 October, available
at <http://www.financialexpress.com/news/securing-the-future/854712/0>.
[8]. Legia Noronha (2007). “Contextualizing India's Energy Security”, in Anant Sudarshan and
Legia Noronha (ed.), India's Energy Security: Foreign, Trade, and Security Policy Contents (New
Delhi: Konrad Adenauer Foundation), p. 8.
[9]. Chietigj Bajpaee, “India‟s Energy Security”, p. 25, available at
<http://csis.org/files/media/csis/pubs/090201_bsa_bajpaee.pdf>.
[10]. Ruchita Beri, n. 1, p. 3.
[11]. Ministry of Environment and Forests and Ministry of Power, Bureau of Agency, Government of
India report on, “India Addressing Energy Security and Climate Change”, October 2007, p. 1,
available at <moef.nic.in/modules/about-the-ministry/.../Addressing_CC_09-10-07.pdf>.
[12]. Ravi Seethapathy (2007). “Nuclear Co-operation with India: Strategy, Economics,
Environment”, in Karthika Sasikumar and Wade L. Huntley (ed.), Canadian Policy on Nuclear
Co-operation with India: Confronting New Dilemmas (Canada: Simons Centre for Disarmament
and Non-Proliferation Research), p. 48.
[13]. 'India Energy Security Vision 2022: From Scarcity to Abundance', PHD Chamber of Commerce
and Industry and Observer Research Foundation, pp. 7-8.
[14]. India Energy Outlook Report cited in Charles K. Ebinger (2016). "India's Energy and
Climate Policy: Can India meet the Challenges of Industrialization and Climate Change",
Brookings Energy Security and Climate Initiative, Policy Briefs 16-01, June, pp. 5-6.
[15]. Bhupendra Kumar Singh, n. 5, p. 29.
[16]. Charles K. Ebinger (2016). "India's Energy and Climate Policy: Can India meet the
Challenges of Industrialization and Climate Change", Brookings Energy Security and Climate
Initiative, Policy Briefs 16-01, June 2016, p. 12.
[17]. Ibid., p. 14.
[18]. See, International Energy Agency, World Energy Outlook 2011, p. 81.
[19]. Ibid., p. 107.
[20]. Devindar Kumar, "Securing India's Energy Future", Centre for Defence and Strategic
Studies, Australian Defence College, October 2012, p. 7.
[21]. Report of the Committee on „India Vision 2020‟, n. 6, p. 10, available at
<planningcommission.nic.in/reports/genrep/pl_vsn2020.pdf>.
-95-
Sanjay Kumar
[22]. “India‟s Energy Security”, in S. D. Muni and Girijesh Pant, India‟s Energy Security: Prospects
for Cooperation with Extended Neighbourhood (New Delhi: Rupa and Co. in Association with
Observer Research Foundation, 2005), p. 14.
[23]. Ravi Seethapathy, n. 12, pp. 52-3.
[24]. Ramendra Gupta, “Nuclear Energy Scenario of India”, p. 2, available at
<www.ucil.gov.in/web/Nu_Energy_of_India.pdf>.
[25]. “Nuclear Energy in India: A Market Overview - Selected Slides”, available at
<www.bostonanalytics.com/.../Summary%20Nuclear%20Market%20in%20India%20-
%20BA%20>.
[26]. Bhupendra Kumar Singh, op. cit, p. 82.
[27]. “India Ranks Sixth in Nuclear Power Generation”, available at
<http://timesofindia.indiatimes.com/india/India-ranks-sixth-in-nuclear-power-
generation/articleshow/7001693.cms>. and Suchitra J Y and M V Ramana, “Nuclear power:
no route to energy security”, Energy Security Insights, p. 13, available at <www.cised.org/wp-
content/.../teri-energysecurityinsights-march06.pdf>.
[28]. Ravi Seethapathy, op. cit, p. 50.
[29]. Adil Sultan Muhammad, “Indo-US Civilian Nuclear Cooperation Agreement: Implications
on South Asian Security Environment”, The Henry L. Stimson Center, July 2006, pp. 4-6,
available at <www.stimson.org/books-reports/indo-us-nuclear-cooperation-agreement-
implications-for-south-asia-regional-security/>.
[30]. Mark Bucknam (2007). “Power to the People of India: U.S. Nuclear Cooperation with India”,
Strategic Insights, vol. VI(1), January.
[31]. T.V. Paul, (2007). “The US-India Nuclear Accord: Implications for Nonproliferation
Regime”, International Journal (Canada), vol. LXII(4), Fall, pp. 858-59.
[32]. OECD Nuclear Energy Agency, “Nuclear Energy Outlook 2008- Key graphics”, p. 20, available
at <www.oecd.org/dataoecd/45/52/41504046.pdf>.
[33]. M M K Sardana, “India‟s Quest for Nuclear Energy”, pp. 1, 3, available at
<isid.org.in/pdf/DN1004.pdf>.
[34]. Chietigj Bajpaee, n. 9, p. 27.
[35]. Energy Information Administration, India Energy Data, Statistics and Analysis - Oil, Gas,
Electricity, Coal, Updated August 2010, p. 7, available at
<http://www.eia.doe.gov/cabs/India/pdf.pdf>.
[36]. Charles K. Ebinger, op. cit, p. 5.
[37]. Anil Kakodkar, “Energy in India for the Coming Decades”, p. 1, available at
<www.dae.gov.in/iaea/ak-paris0305.doc>.
-96-
Reforming the Military Institutions and National Security Strategy
Mohd. Rizwan
Associate Professor, Dept. of Defence Studies, Meerut College Meerut (U.P.)
Email Id: drrizwanmcm@gmail.com
Abstract
India needs a National Security Strategy (NSS) that takes care of present
day security threats and potential challenges to national security and
PAPER/ARTICLE INFO
RECEIVED ON: 17/03/2017
safeguard national interests. The strategy is all about the way the country ACCEPTED ON: 30/05/2017
will use the means available to it to exercise control over set of Reference to this paper
circumstances in order to achieve its objectives. Institutions play an should be made as follows:
important role in formulation and execution of strategy. India has no
clearly articulated NSS, and this mainly is the outcome of institutional
weakness. This weakness has also resulted in sub-optimal military Mohd. Rizwan (2017),
effectiveness in India. Military institutions influence military effectiveness “Reforming the Military
which in turn affects the outcome of security goals set by NSS. Institutions and National
Institutional reforms are, therefore, carrying need of the hour. Besides the Security Strategy”, Int. J. of
Trade and Commerce-IIARTC,
difficulty in changing strategic culture at directional level even military
Vol. 6, No. 1, pp. 97-106
organizations are often conservative and risk-averse and, thus, are
typically resistant to change, especially disruptive change, since it can
threaten the stability of normal day-to-day operations, standard operating
procedures, war plans and even career paths. In this article the author
opines that both institutions and belief systems have to change for
successful reform since it is the mental models of the actors that will
shape choices. He concludes that this is a difficult but not an impossible
task.
Key words: National Security Strategy (NSS), political upheaval, Internal
security, synchronization.
Mohd. Rizwan
1. INTRODUCTION
India simultaneously faces a period of strategic opportunity and confronts tremendous threats
and challenges in safeguarding its vital national interests such as elimination of terrorism,
internal cohesion, peaceful neighborhood and the like. It has to cope with prevailing uncertainty
and global shift in balance of power and persisting external threats. More importantly, despite
overall impressive economic growth, the domestic threats and challenges have the potential of
limiting the rise of India. As it grows economically and gains greater geo-political heft it will be
required to play a more pro-active role on the world stage. It is incumbent upon the leadership,
therefore, to clearly specify our ends through national vision, interests and objectives to the world
and synergies means of application of instruments of our national power to achieve the desired
ends. India needs a National Security Strategy (NSS) that takes care of present day security
threats and potential challenges to national security and safeguard national interests. The strategy
is all about the way the country will use the means available to it to exercise control over set of
circumstances to achieve its objectives. Institutions play an important role in formulation and
execution of strategy. India has no clearly articulated NSS, and this mainly is the outcome of
institutional weakness. This weakness has also resulted in sub-optimal military effectiveness in
India. Military institutions influence military effectiveness which in turn affects the outcome of
security goals set by NSS. Besides, by ensuring efficient utilisation of resources without
compromising the quality of military power, institutions help availability of resources for meeting
social goals set by NSS. Thus, reforming military institutions is necessary for the success of NSS.
Institutional behavior is not easy to change but it is essential for India‟s national security. This
paper begins with the attempt to define national security and examination of the concept of
national security and then examines the concept of military effectiveness and role of institutions
in ensuring that. It then identifies India‟s national interests, and existing threats and potential
challenges to the nation‟s security which must be addressed. In the subsequent paragraphs,
present institutional shortcomings and their indicators are enumerated before recommending the
reforms that must be taken to ensure national security. The paper ends by highlighting
impediments to change.
2. DEFINITION AND CONCEPT OF NATIONAL SECURITY
There is no single universally acceptable definition of the term national security. A simple yet
broad definition is the „quality or state of being secure from danger or anxiety‟. For social
scientists it means „the ability of a nation to protect its internal values from external threats‟. The
noted American diplomat and scholar George Kennan provided a crisp definition of national
security, in American context, as “the continued ability of this country to pursue internal life
without serious interference.” The American Journalist Walter Lippman defined it thus, “a nation
has security when it does not have to sacrifice its legitimate interests to avoid war, and is able, if
challenged, to maintain them by war.” The British political scientist Barry Buzan defines security
as „the pursuit of freedom from threat and the ability of states and societies to maintain their
independent identity and their functional integrity against forces of change which they see as
hostile.” A sample of these definitions would point to the difficulty in defining the term and the
concept of national security. It remains a weakly conceptualised, ambiguously defined, but
politically powerful concept. The scope of national security has expanded over time. Presently,
-98-
Mohd. Rizwan
the concept of national security includes all those aspects which are critical for a nation‟s survival,
growth and well being and for ensuring which a country is prepared to use all the tools of
diplomacy, persuasion, coercion, threat or use of force. Military security, an essential element of
national security, is a function of military effectiveness; which itself stems from military doctrines,
capability and readiness in terms of cost and effort.
3. CONCEPT OF MILITARY EFFECTIVENESS
A traditional instrument available to a sovereign state to provide security for its citizens are its
armed forces. They serve to defend the nation‟s vital interests. These are traditionally
summarized as defending the territorial integrity of the nation and its way of life, provide muscle
to the nation‟s diplomacy and safeguard its economic interests from hostile external environment.
To be able to perform its assigned role the military has to be effective. Military effectiveness as
defined in „Creating Military Power-The Sources of Military Effectiveness‟ 1, as “the capacity to
create military power from a state‟s basic resources in wealth, technology, population size and
human capital”. It can be assessed by looking at four central attributes: Integration - i.e. synergies
within and across levels of military activity and avoidance of counter-productive actions;
Responsiveness-„ i.e‟. ability to tailor military activity to the state‟s own resources and
environmental constraints (both internal and external) and opportunities and to its adversary‟s
strengths and weaknesses in preparing for war; Skill - ability to assimilate new technologies or to
adapt to sophisticated doctrine and demanding forms of military organisation, including the
capacity to ensure that military personnel are motivated and prepared to execute tasks on the
battlefield; and Quality - or the capacity of the state to supply itself with essential weapons and
equipment at economical rates. The more the military exhibits these attributes, the more capable it
is at generating military power. In nut shell, how well a state uses the resources available to it
determines its military‟s effectiveness. The military institutions are involved in mobilising
resources and determining their use for generating maximum military effectiveness. Effectiveness
in a very large measure is a function of robustness and efficiency of institutions and its purpose is
to serve national interests.
4. INDIA’S NATIONAL SECURITY INTERESTS
Let us begin by recapitulating the idea of national interests and then define India‟s major national
security interests which need to be guarded. The four basic national interests of nation states are
the defence of the homeland, economic well being, the creation of a favourable world order or
external environment and the promotion of national values. These national interests are generally
graded on a three or four-tiered scale of priorities or intensities as survival and/or vital, major
and peripheral interests. The most basic and abiding national interest is the survival of the state.
All other interests can and do change in intensity or priority from time to time. The sub-divisions
tend to be judgmental. I will only cover India‟s vital interests here. In my view, India‟s first order
national interests include: security of India‟s sovereign territory with its values intact (survival of
the state); internal stability and security; elimination of terrorism and violent religious extremism;
creation of a secure environment conducive for sustained economic development; access to all
sources of energy; free flow of commerce; stable international economic order and financial
-99-
Mohd. Rizwan
systems ; non-discriminatory access to scientific and technological progress : peace and stability in
its immediate neighbourhood and Indian Ocean Region, and; autonomy in decision-making.
In security terms, our vital national security interests are: protection of our sovereignty and
territorial integrity; protection of lives and property of our citizens against external aggression
and terrorism; deterrence against the use or threat of use of weapons of mass destruction;
preventing establishment of foreign military presence and ensure state stability in our immediate
neighbourhood and finally; ensure security of sea lanes of communication. It is in the context of
these interests that threats and challenges to India‟s security are examined.
5. THREATS AND CHALLENGES AND INDIA’S NATIONAL SECURITY STRATEGY
Since National Security Strategy must take care of present day security threats and potential
challenges it is necessary to identify these.
(A) Current Threats/Challenges: The following are the current threats/challenges from the
following:
(i) Pakistan. Pakistan is the source of immediate direct threat. Keeping in mind India-centricity
of Pakistan‟s foreign and security policy it would be safe to presume that it is likely to persist
with proxy war, as a corner stone of its India containment strategy. This threat is exacerbated
by US need to accommodate Pakistan because of its dependence on the country to prosecute
the war in Afghanistan and continued support from China. Its nuclear capability and
calculated low threshold for use of nuclear weapons continue to limit India‟s options in
dealing with it.
(ii) China. In the near term, threat from China exists in terms of possible border tensions,
diplomatic spats and incremental growth of China‟s footprint in our immediate
neighbourhood. A clash of interest can also occur in the IOR as China increases its forays or
questions growing Indian power and legitimacy. Moreover, cyber and space based threats
are both near and real.
(iii) Internal Threats. Internal security is the greatest challenge facing India today. Festering
insurgencies in the North East and J&K and Left Wing Extremism make India look like a
state under siege. The reasons for these developments are complex and can be traced to the
cumulative outcome of Pakistan‟s use of terror as a weapon, poor governance,
criminalisation and communalisation of politics, increasing social awareness and failure of
the state to provide economic benefits to the deprived. Networking of externally inspired
and supported terrorism with domestic terror groups makes this threat even more potent.
(B) Medium and Long Term Threats/Challenges.
(i) China. China‟s capabilities are growing at a rapid pace and difference in comprehensive
national power vis-à-vis India is increasing. China‟s intentions are, however, not clear and
we have to consider the possibility of a negative change in the Chinese posture. China‟s
posture could change in the event of a political upheaval in that country or if the power
asymmetry increases dramatically. Despite growing economic interaction and commonality
of interests on certain global issues such as climate change, there are a large number of issues
between the two countries, which if not managed with prudence, could cause conflict and
more importantly, confrontation. Conventional military conflict between India and China is
by no means inevitable. Although a credible nuclear deterrence on part of India may appear
-100-
Mohd. Rizwan
to discount the possibility of a major war being initiated against India but a limited or
localised war with the aim of showing India as a weak state is very much possible. India‟s
propensity for strategic restraint, its high nuclear threshold and China‟s history of
brinkmanship displayed during Korean War and Sino-Soviet conflict in 1969 support this
hypothesis.
(ii) Energy Security. Due to rising demand, competition for sourcing energy resources will be a
challenge for most import dependent countries. Turbulence in the Middle East may further
contribute to energy insecurity and military involvement of external powers to secure
energy resources from the region will also create a direct security challenge to India. Due to
India‟s energy dependence on the region and the presence of about five million strong
Indian diaspora in the region, any conflict there will also present a serious social and
economic challenge to India.
(iii) Maritime Security. India‟s continued economic growth will depend more and more on
increased trade, import of energy resources and raw materials. Security of its island
territories and of sea lanes of communication will be of critical importance to India. Other
major powers will also face this criticality. The perception of vulnerability and power play in
the IOR has the potential of causing serious security challenge for India.
(iv) Insecurity and instability in the Immediate Neighbourhood. This remains a real medium
and long-term challenge. Weak political institutions and poor capacity of states combined
with rising population, internal dissonance, rising trend of religious fundamentalism and
ethnic or sectarian violence may cause serious internal instability in India‟s neighbourhood.
Our adversaries may attempt to make further inroads into these countries and pose a
security threat to India.
(v) Militarisation of Space and Cyber Security. The apparent stability of the nuclear balance
and the quest for seeking new sources of military advantage may prompt some states to
move towards weaponisation of space. India, with its as yet limited space capability, will
face a major challenge in protecting its space assets in case of a conflict. Similarly, cyber
security will be a greater challenge going forward- both for security and economy.
6. INDIA’S NATIONAL SECURITY STRATEGY
National Security Strategy is the outcome of a long-term vision envisioning any long-term
perspective calls for a deep and involved thought process. For a country of our size and stature,
institutionalised strategic thinking mechanism within and outside government is inadequate.
India has never had a coherently articulated national security strategy; certainly not in the public
domain. Tanham rightly suggests that “overtime, a set of policies and strategies evolved
informally to deal with complex strategic dilemmas related to internal unity and potential threats
from abroad.” However, the general contours of India‟s NSS can be pieced together from the
speeches of its leaders on various occasions and perception of its strategic thinkers. India seeks to
achieve its national security interests through rapid and sustained economic growth to reduce
social inequality and regional imbalances; influence events to engender stability and security in
the neighbourhood; create a favourable external environment for continued economic growth;
develop adequate military power to deter external aggression or coercion and secure its energy
and resources supply, and ; create conditions for India‟s rise as an important player in
-101-
Mohd. Rizwan
international affairs consistent with its values of democracy, pluralism, secularism and rule of
law. Let us now examine the shortcomings of its military institutions have affected India‟s
national security interests.
6.1 What are the Shortcomings?
Some of the major indicators of the shortcomings are: an inability to alter strategic behaviour of
Pakistan and China and ineffectiveness of strategic deterrence ; inadequacy of the existing
doctrines and lack of higher direction in framing them resulting in failure to generate workable
alternatives in the face of crises like in 2002 and 2008; stalled or imbalanced modernisation;
continued reliance on imports for military equipment; inefficient logistics set up for want of
synchronisation of operational and logistics plans and inter-service differences; inordinately long
time taken to bring under control festering insurgencies; lack of surgical strike capability; failure
to groom and produce highly competent leaders, and; deterioration in quality of life and work
environment reflected in persisting shortage of officers in all three services. The net result is that
we have a large military establishment but not well equipped and is sub-optimally organised to
meet the existing and emerging threats in a cost effective manner. The shortcomings in India‟s
defence management originate from organisational inadequacy, lack of directional control,
intellectual stagnation and frictions among institutions. Some of these shortcomings are internal
to the armed forces but most of them result from lack of appreciation, at the highest level, of the
use of force as a useful instrument of politics and therefore abysmal lack of higher direction.
Security policy-if it exists has become subservient to foreign policy. The responsibilities to
formulate and coordinate defence policy are fragmented and ill defined resulting in lack of
accountability and therefore, poor outcomes. The NSA, who should organise and coordinate
national security management on behalf of the Prime Minister, think ahead and work as a
forward planner on national security, is saddled with executive responsibilities and diplomatic
fire fighting; the Ministry of Defence lacks human and intellectual capacity to formulate and
execute defence policy; the Department of Defence Finance functions as an instrument of
obstruction on behalf of the Finance Ministry to delay any kind of defence spending; the DRDO
neither develops reliable military systems nor permits their import in time and the procurement
process is beset with chronic delays, inefficiency and allegations of corruption. On their part, the
services are loath to review their organisations, generally dislike jointness and integration due to
perceived loss of influence; have an ageing leadership profile with inadequate tenures in
command assignments, lack systematic leadership development and education plans, suffer from
narrow regimental loyalties, give no room for innovative thinking and above all have developed
tolerance for corruption.
6.2 What Needs to be Done ?
Analysis of the shortcomings mentioned earlier also point to the path of reforms. Let me briefly
describe the institutional reforms essential for achieving military effectiveness in India at two
levels viz; at governmental level and within the military establishment.
(A) At Governmental Level.
(i) Articulation of National Security Strategy. There is a need to clearly articulate national
security strategy which can form the basis for drawing up national military strategy, long
-102-
Mohd. Rizwan
term perspective plan, force development plan, acquisition plan, etc. The organisation
mandated to formulate NSS must have domain knowledge of all aspects of national security,
emerging challenges posed by geo-political alignments, technological developments
affecting the nature of warfare, ever changing concepts of deterrence and the like. NSCS is
obviously best suited for this task.
(ii) Civil Military Relations. Sound security strategy requires that military considerations be
integrated with non-military concerns involving diplomacy, economic policies and domestic
policies. Civil-military conflict can interfere with the smooth functioning of senior policy-
making institutions and thereby undermine national strategy. To bring disparate elements
together requires close cooperation and frank, honest exchanges between civilian and
military leaders.
(iii) Higher Defence Management. There is no single or competent agency to lay down defence
policy and no coordination between various agencies such as Ministries of Home Affairs,
External Affairs, Finance and Defence and intelligence services. The National Security
Council Secretariat (NSCS) has to have an effective military component to advise on security
issues. Chief of Defence Staff (CDS) needs to be appointed to overcome inter-service
differences and render single point military advice to the Cabinet Committee on Security
(CCS). Integration of the Ministry of Defence and services headquarters is also essential for
formulation of sound defence policy. There is also a need for creation of a cadre of civil
servants specialising in matters of security. Officers so selected should be assigned only to
Ministries of Defence, Home, Finance, NSCS and Cabinet Secretariat. This will provide some
continuity and facilitate capacity building. The Armed Forces must be an integral part of the
„decision-making‟ process on issues of national security that involve them, directly or
indirectly.
(iv) Formulation of Clear Military Doctrines. This issue is relevant at both, governmental and
military levels. The doctrines have to be integrated with the political objectives that India
seeks to achieve. There is a need to define the political objectives, analyse security dilemma
of the adversaries, understand constraints of resources, structure armed forces to meet
specified ends and develop doctrines that best meet the political objectives. Politico-military
congruence is therefore a must.
(v) Resolving Procurement Dilemma. This issue which impacts defence preparedness in a
major way requires reforms at the policy level in determining the role and accountability of
DRDO, involving domestic industry in research & development and defence production and
prioritising of acquisitions based on current and future needs. Only the political leadership
can resolve inter-institutional and inter-service differences in this sphere.
(vi) Manpower Policy. The officer profile in the three services is a matter of concern. Not only
there is shortage at critical level but the quality and age profile at senior levels is
unsatisfactory. Due to very short tenures at higher levels, senior commanders can hardly
influence their respective commands and are constantly anxious about their next promotion.
There is a lack of continuity even in critical appointments, thus, affecting any forward
thinking and long-term policy planning. The government needs to take step in order to
ensure that the age profile of senior officers is brought down in a time bound manner.
-103-
Mohd. Rizwan
(vii) Integration and Jointness. Here I quote Admiral Suresh Mehta, “Today, the scope of
activity of the Indian Armed Forces … ranges from internal security tasks, augmenting
diplomatic effort, bilateral and multi-lateral cooperative efforts with other countries,
humanitarian assistance and disaster relief and go on to cover the entire range of tasks across
the full spectrum of conflict. The need for greater integration of the Armed Forces with the
MoD, and External Affairs, as well as establishment of effective coordination mechanisms
with several other ministries and agencies is, therefore, incontestable Amongst the Services,
as we develop leaders, organisations, systems and doctrines, we must continue to strengthen
trust and confidence amongst the Services and between Service components that are
committed to joint operations.” Integration and jointness are as much required between the
Service Headquarters and MoD, as amongst the Services” Considering inter-service rivalries,
this process will by necessity, have to be top driven.
(B) Reforms at Services Level.
(i) Preventing Wasteful Expenditure. India‟s developmental needs will be high in the
foreseeable future and the defence allocation is unlikely to be raised much beyond present
levels in terms of percentage of GDP. Considerable scope to improve the quality and
efficiency of defence expenditure exists both, on revenue and capital expenditure sides.
Review of organisations and establishment of joint inter-services logistics, training
institutions and functional commands can save major manpower costs. Better management
of inventories, prevention of corruption in procurement and works through improvements
in procedures and practices and better project management can spare funds for
modernisation. Instead of procuring highly expensive legacy systems, services need to focus
on niche capabilities and systems which will be appropriate to meet potential threats.
Adoption of a performance based logistics (PBL) strategy under which the original
manufacturer or its nominated contractor maintains the weapon system at the specified level
of operational readiness and usage would also help.
(ii) Military Education. India‟s military institutions are good at imparting professional skills but
do not educate its future military leaders in military history, strategy, doctrines, or creating
understanding of geo-politics, economy and much else that is required. Every officer needs
to be capable of analyzing the trends and apply theory into practice realistically. Education,
with its focus on intellectual development, is the need of the hour.
(iii) Leadership Development. The future, considering its expected complexity, ambiguity and
turbulence, will demand extraordinary leadership — especially strategic leadership —
throughout the military. The leadership development process must result in leaders who are
competent, have the right education and experience through academic and professional
education and then the service experience through appointments tenanted. Ability to
articulate one‟s honest views must be encouraged. Strategic literacy is needed if military
leaders are to provide sound strategic advice to the political leadership.
The reforms, if carried out in a comprehensive and sustained manner, will generate unity of
purpose, make institutions accountable and responsive, create strategic options, enhance India‟s
military effectiveness and, make deterrence credible.
-104-
Mohd. Rizwan
It will not only help to create a favourable external and domestic environment for stability and
growth but also engender a feeling of security amongst the citizens by reducing their fear and
anxiety.
6.3 Difficulties that Stand in the Way of Reforms
In independent India‟s history defence reforms at some scale were attempted only twice. The first
attempt was led by the then Defence Minister, Mr Y B Chavan when rationalisation of the military
and civil structures in Ministry of Defence was carried out, logistic services were overhauled and
shortages of weapons and equipment started to be made up through re-prioritising the activities
of domestic defence enterprises and opening up of foreign sources. The second attempt at reforms
started in 1980s when under the guidance of Gen Sundarji the mechanisation of the Army took
place, operational concepts and doctrines were revised and new weapon systems were inducted.
These two instances indicate that the reforms in India‟s defence structure were mainly personality
driven. Crisis can also force reforms like it did in the wake of 1962 War yet the lessons drawn
from the reform process that followed Kargil conflict does not inspire confidence. The
institutional reforms have, however, never been attempted in a meaningful way. The Need for
reforms does not mean they will automatically take place. Here I make use of the theory of Path
Dependence-mainly applied in economic field, to explain my scepticism. This theory explains
how the set of decisions one faces for any given circumstance is limited by the decisions one has
made in the past, even though past circumstances may no longer be relevant. Inferior standards
can persist simply because of the legacy they have built up. Besides, our common culture of low
expectations from institutions of state, self-before-society and, tolerance for sub-optimal outcomes
will prevent any long lasting reform process to take hold. The prevailing system of authority
without accountability is difficult to change without external direction and coercion since those
who benefit from it are least likely to support the change.
7. CONCLUSION
The international environment India faces and is likely to face in the years ahead requires a well
formulated security strategy with effective military power to back it. Writers and thinkers from
within India and abroad have been opining that India has failed to build a first-rate military with
strategic reach and an independent deterrent. Because of disconnect between the political and
military leadership and in the absence of an articulated NSS there is no common view of national
security. Due to lack of strategic vision and higher direction, the institutions work in water tight
compartments without coordination. The practice of strategic restraint has transformed into a
strategic constraint. Inter-service rivalries prevent them from integrating their headquarters,
logistic infrastructure, training institutions and developing joint doctrines. What we need is a
strategically effective military: an instrument of power capable of serving the national interests of
India in a competent and cost effective manner. Institutional reforms are, therefore, crying need of
the hour. Besides the difficulty in changing strategic culture at directional level even military
organisations are often conservative and risk-averse and, thus, are typically resistant to change,
especially disruptive change, since it can threaten the stability of normal day-to-day operations,
standard operating procedures, war plans and even career paths. Both institutions and belief
-105-
Mohd. Rizwan
systems have to change for successful reform since it is the mental models of the actors that will
shape choices. This is a difficult but not an impossible task.
REFERENCES
[1]. Cameron, Marc, National Security.
[2]. Malhotra, V.K. (1992). International Relations IV ed. Anmol Publications, Pvt. Ltd, New
Delhi.
[3]. Melkote, Rama and Rao Narasimha (Revised and Enlarged Edition 1992). International
Relations, Sterling Publishers, New Delhi.
[4]. Mellen Mc, Olson, Sondermann (1977). The Theory and Practice of International Relations
(IV Ed.) Prentice Hall of India, Pvt Ltd.
[5]. www.idsa.com.
[6]. www.megaessays.com.
[7]. www.thehindu.com/paper/national/papersnational-security.
-106-
Liquidity Management in Hindustan Unilever Limited: An

Analytical Study
Mukesh Kumar Jain

Department of Commerce, M.M.H. College, Ghaziabad (U.P.) India
Email Id: mkj.1962@gmail.com
Abstract
PAPER/ARTICLE INFO
The ultimate objective of any firm is to maximize the profit but increasing RECEIVED ON: 20/02/2017
the profit at the cost of liquidity can bring serious problems too. Liquidity ACCEPTED ON: 30/05/2017
implies conversion of current assets into cash during the normal course of
business, and to have regular uninterrupted flow of cash to meet outside Reference to this paper
current liabilities as and when due and payable. It also ensures should be made as follows:
availability of money for day-to-day business operations. Effective
liquidity management will enable organization to derive maximum Mukesh Kumar Jain (2017),
benefits at minimum cost. This study contains the liquidity management “Liquidity Management in
of Hindustan Unilever (India) Ltd. Liquidity management is evaluated by Hindustan Unilever Limited:
using the Motaal’s Comprehensive test. Statistical techniques like An Analytical Study”, Int. J.
standard deviation, coefficient of variation, Spearman’s correlation of Trade and Commerce-
coefficients’ test and Motaal’s test have been employed in order to examine IIARTC, Vol. 6, No. 1, pp.
the liquidity position and test the relationship between liquidity and 107-119
profitability. The study result shows that the company enjoyed sound
liquidity during the study period 2007 - 2016 but relationship between
liquidity and profitability are statistically not significant.
Key Words: Liquidity, Profitability, Measurement, Hindustan Unilever
Ltd.
Liquidity Management in Hindustan Unilever Limited: An Analytical Study
Mukesh Kumar Jain
1. INTRODUCTION
Liquidity management has been as an important tool to analyze the sustainability and liquidity
position of any enterprise that may also help any organization to derive maximum profits at
minimum cost. A company must maintain its ability to pay off its current obligations and have a
sound base of working capital to stay for a long in the competitive market. The management of
working capital is an important aspect to be considered for attaining sound liquidity position.
Profitability, in this reference may be the return earned on the total assets of the company. Every
firm aims to dig up maximum profits out of the invested capital pool. The success of the company
usually depends on its returns earned, keeping the liquidity prospects in view. Usually, it is a
difficult task to trade-off between the liquidity and profitability, as the conservative policy of
working capital may ensure sound liquidity but endangers the profitability. On the other hand,
aggressive policy helps in making profits but the liquidity is not promised.
Efficient working capital management involves planning and controlling current assets and
current liabilities in a manner that eliminates the risk of inability to meet due short-term
obligations on one hand (Elley, 2004). Many surveys have indicated the managers spend
considerable time on day to day problems that involve working capital decisions. One reason for
this that current assets are short-lived investments that are continually being converted into other
asset types (Rao, 1989).
Liquidity in general refers to the financial strength of an organization. The term financial relates
to two major sources of finance. These sources are categorized as internal sources and external
sources of an organization. „Strength‟ reveals the ability to meet obligations when they become
due. Liquidity management in general has three dimensions.
 Dimension I is concerned with the formulation of policies with regard to risk, liquidity and
return, keeping in view the goals and responsibilities of the firm.
 Dimension II is concerned with the decisions about the level and the composition of current
assets.
 Dimension III is concerned with the decisions about the level and the composition of current
liabilities.
Liquidity is the stage where assets may be converted into cash without losses. There is a need to
balance between earning adequate returns, and cover the financial and business risk. IT also
enables a company to make a rapid shift in its direction. In accordance Liquidity in general refers
to the financial strength of an organization. The term financial relates to two major sources of
finance. These sources are categorized as internal sources and external sources of an organization.
„Strength‟ reveals the ability to meet obligations with the market demand. In order to measure the
liquidity position of HINDUSTAN UNILEVER LIMITED, during the period 2006-07 to 2015 – 16
certain important ratios have been computed.
2. PROFILE OF THE COMPANY – HINDUSTAN UNILEVER LIMITED (HUL)
Hindustan Unilever Limited (HUL), a majority-owned subsidiary of Anglo-Dutch giant Unilever,
has been working its way into India since 1888, when it started selling its products there. As
India's largest consumer goods firm, HUL markets more than 400 brands that include beverages,
food, home and personal care goods. Hindustan Unilever Limited is engaged in fast-moving
consumer goods business comprising home and personal care, foods and refreshments. The
-108-
Mukesh Kumar Jain
Company's segments are Soaps and Detergents, which includes soaps, detergent bars, detergent
powders, detergent liquids and scourers; Personal Products, which includes products in
categories of oral care, skin care (excluding soaps), hair care, deodorants, talcum powder, colour
cosmetics and salon services; Beverages, which includes tea and coffee; Packaged Foods, which
includes branded staples (atta, salt and bread), culinary products (tomato-based products, fruit-
based products and soups) and frozen desserts, and Others that includes exports, chemicals,
water business and infant care products. The others segment also includes export sale of marine
and leather products.
3. NEED FOR THE STUDY
Liquidity management has become a basic and broad aspect of judging the performance of a
corporate entity. It is, therefore, essential to maintain an adequate degree of liquidity for smooth
running of the business operation. The liquidity should be neither excessive nor inadequate.
Excessive liquidity indicates accumulation of ideal funds which do not earn any profit for the
business and inadequate liquidity not only adversely affects the credit worthiness of the firm but
also interrupts the production process and hampers its earning capacity to a great extent.
The term „Liquidity‟ refers to the ability of a firm to meet its obligations in the short run usually
one year. The Liquidity resources of a firm may be kept in various forms: cash in hand and cash at
bank in current assets, reserve drawing power under a cash credit or overdraft arrangement and
short-term deposits. Cash balances in current account provide the highest degree of liquidity.
 Barot, Mukti R. (2016) explain working capital management is one of the most important
financial decisions in business. The optimal management of working capital will raise the
business value. In this study the researcher tried to carry out a comparative analysis on
working capital management of Raymond and Vardhman Textile Limited. The aim of this
study is to analyze which company‟s performance is better than other company. For this
analysis researcher have used only of secondary data from companies‟ annual reports,
financial reports, and websites of selected companies i.e., moneycontrol.com for ten years
2006-2015. Researcher has selected the technique of ratio analysis for data analysis.
 Kumaraswamy, Sumathi (2016) proved the relationship between working capital and firm
performance, the present study aims to explore the impact of working capital on the firm
performance of cement manufacturing Gulf Cooperation Council (GCC) firms for a period of
2008-2014. Four hypotheses pertaining to working capital components were investigated
using linear regression models. The study identified positive relationship between inventory
conversion period, average payment period with profitability and a negative relationship
amid average collection period and firm profitability. The result of regression model indicates
average collection period and inventory conversion period to be the most significant factors
followed by average payment period. It shows that the profitability of the GCC cement
manufacturing firms are greatly influenced by the average collection period and high
inventory levels.
 Patel, Kruti A. (2015) studied impact of working capital management on profitability of
Indian Oil Corporation. The study was based on secondary data and study period was 2009-
-109-
Mukesh Kumar Jain
10 to 2013-14. Pearson correlation, descriptive statistic and INM SPSS were applied as
research methodology. The results show that there is significant negative correlation between
working capital management and net profit and it also indicates that there is negative
relationship between liquidity and profitability.
 Kumar, Srivastava and Sinha (2014) described the vital role played for a successful working
of a business organization by fixed and current assets. Management of working capital is
essential as it has direct impact on efficiency and liquidity. An attempt has been made in this
paper to study the financial efficiency and liquidity positions and its impact of
Pharmaceuticals industry. The study is based on secondary data collected from annual
reports, for this purpose here; we have taken a sample of ten Indian Pharmaceuticals firms
(NSE listed) and the period of 2000-2014. Ratio analysis and descriptive statistics have been
used to analyze the data. In this way the final analysis of the operational efficiency, liquidity
and profitability of the Indian Pharmaceuticals firms have shown significant changes.
 Chouksey and Hotwani (2013) examined the Liquidity Position of Bajaj Auto Ltd. for the past
ten years. It involved in-depth analysis of working capital of the company, calculation of
liquidity ratios, discussion about results and conclusions. It is aimed at studying the different
aspects of liquidity position of company in light of basic principles governing liquidity.
Therefore, company has to initiate suitable measures to maintain sufficient liquidity to meet
its working capital requirements and above measures would go a long way to improve the
liquidity position of the company.
 Panigrahi, Ashok Kumar (2012) analysed the impact of working capital management on
profitability of ACC Cement Company. The study is based on secondary data. Data are
collected from the websites money control as well company websites and study periods are
for 10 years i.e. 1999-2000 to 2009-2010. The research methodology used in this paper is
correlations coefficient, multiple correlation analysis and multiple regression analysis. In this
paper few variables show a strong and positive correlation with the profit whereas some
others do not have. The results show that there is moderate relationship between the
efficiency of working capital and the profitability.
 Singh and Tandon (2012) examines make it clear that Asset-Liability Management (ALM) is
one of the important tools of risk management in commercial banks of India. Indian banking
industry is exposed to number of risk prevailed in the market such as market risk, financial
risk, interest rate risk etc. The net income of the banks is very sensitive to these factors or risk.
For this purpose Reserve bank of India (RBI), regulator of Indian banking industry evolved
the tool known as ALM. This paper discusses issues in asset liability management and
elaborates on various categories of risk that require to be managed. It examines strategies for
asset-liability management from the asset side as well as the liability side, particularly in the
Indian context. It also discusses the specificity of financial institutions, in India and the new
information technology initiatives that beneficially affect asset-liability management. The
emerging contours of conglomerate financial services and their implications for asset-liability
management are also described. The objective of the study is to describe the concept and
application of ALM technique. The research article is descriptive in nature. The data had been
-110-
Mukesh Kumar Jain
collected from the secondary sources such as RBI guidelines, reports etc. It has been found in
the study that ALM is a successful tool for risk management.
 Pandey Shishir and Jaiswal Vikas Kumar (2008) analyzed the effect of working capital
management on profitability of manufacturing firms. The study period for paper was five
years i.e. 2005 – 2010. The research methodology apply by author is correlation and regression
analysis (two different method fixed effects model and ordinary least squares model). The
result of correlation analysis show there is negative relationship between profitability and
debtor‟s days, inventory days, and creditor‟s days. The results of regression analysis shows
cash velocity, size of the firm, and net working capital leverage are significant both method.
 To measure and evaluate the efficiency of liquidity management;
 To compare the liquidity position of the company from year to year by applying Motaal‟s
comprehensive test;
 To assess the association between the liquidity and profitability, of the company; and
 To offer suggestions to improve the liquidity management of the company on this study.
6. HYPOTHESIS OF THE STUDY
Ho = There is no significant relationship between Liquidity and Profitability; and
H1 = There is a significant relationship between Liquidity and Profitability.
The information required for this study has been collected from the annual reports of Hindustan
Unilever Limited, from 2006-07 to 2015-2016. For the purpose of analysis the efficiency of
liquidity management of HUL, the technique of ratio analysis, Motaal‟s comprehensive rank test,
statistical techniques like averages, standard deviation, co-efficient variations, Spearman‟s rank
correlation etc, have been used in this study to test the significance of relationship between
liquidity and profitability test has also been used.
8. DATA ANALYSIS
8.1 Measurement of Liquidity
The measure of liquidity helps to indicate the level of solvency and financial flexibility of the firm.
In order to ensure a desire level of solvency and provide to enough financial flexibility to attain
the strategic goals of the enterprise, the following important liquidity ratios are used to measure
the liquidity of a concern.
8.2 Ratios
 Current Ratio
 Liquidity Ratio
 Cash Position Ratio
 Stock Ratio
 Debtor Velocity Ratio
 Current Assets to Total Assets Ratio
-111-
Mukesh Kumar Jain
8.3 Liquidity Management at Hindustan Unilever Limited

For this study the researcher has collected the data regarding liquidity position maintained by the
company during last ten years (2006-07 to 2015-16) and the relevant ratio‟s measuring the above
have been given in the following paragraphs apart from interpretation of the concerned.
Table 1: Liquidity ratios of Hindustan Unilever Limited from 2006-07 to 2015-16
Year CR QR CPR CATAR ITR DTR
2006-07 0.67 0.34 0.09 0.42 8.42 29.60
2007-08 0.63 0.25 0.04 0.48 7.53 33.19
2008-09 0.90 0.50 0.29 0.66 8.56 40.32
2009-10 0.80 0.47 0.28 0.56 8.36 26.86
2010-11 1.05 0.63 0.25 0.69 7.22 21.51
2011-12 1.21 0.82 0.28 0.71 9.06 33.58
2012-13 0.99 0.66 0.22 0.66 10.56 32.01
2013-14 1.03 0.71 0.26 0.68 10.54 35.46
2014-15 1.05 0.76 0.29 0.68 12.33 40.98
2015-16 1.03 0.75 0.12 0.66 13.39 12.27
Average 0.94 0.59 0.21 0.62 9.60 30.58
S.D. 0.18 0.19 0.09 0.10 2.05 8.67
C.V. % 19.15 32.20 42.86 16.13 21.35 28.35
Source: Computed from the annual reports of HINDUSTAN UNILEVER LIMITED, from 2006-07 to
2015-16
CR = Current Ratio; QR = Quick Ratio; CPR = Cash Position Ratio (Cash to C. Liabilities) CATAR
= Current Assets to Total Assets Ratio; ITR=Inventory Turnover Ratio; DTR= Debtors Turnover
Ratio.
A. The data in table 1 revels that current ratios in Hindustan Unilever Limited, registered a
fluctuating trend during the period under the study. It varies from 0.63 to 1.21. On an average
the CR of the company was 0.94 during the period under the study. Its shows the CR is well
below the ideal CR of 2:1. It indicates it has not maintained good liquidity positions. From the
above calculated CR I can say that the liquidity position of the company was not satisfactory.
The higher is the current ratios the more liquid the firm. However, a higher CR indicates
lower profitability of the firm. So it needs a further analysis of quality of short-term assets.
B. Quick Ratio (QR): This ratio is widely used parameter of judging the short-term repaying
ability of a firm in the near future. Quick ratio is also called Acid-test ratio because it is the
acid test of a concern`s financial soundness. It is the relationship between quick assets and
quick liabilities. Quick assets are those assets which are readily converted into cash. They
include cash and bank balances, bills receivable, debtors, short-term investments. Quick
liabilities include creditors, bills payable, outstanding expenses. A quick ratio of 1:1 is
considered satisfactory. The quick ratio supplements current ratio.
Quick ratio = Quick Assets/Quick Liabilities
Quick Assets = Current assets- (Stock +Prepaid expenses)
-112-
Mukesh Kumar Jain
Quick Liabilities = Current Liabilities –Bank Overdraft.

It is evident from the table 1 that the quick ratio also marked fluctuating trend during the
period under the study and ranged from 0.34 in 2006 – 07 and 0.75 in the year 2015 – 16. On
an average the quick ratio in Hindustan Unilever Limited was 0.59 far away to the
conventional norm of 1:1, but in the second half of the study Quick Ratio is just below the
ideal norm. It clearly indicates that the absolute liquidity position of the company was almost
satisfactory in the second half. So one can infer that throughout the period of study
particularly since 2011-12, the liquid assets of Hindustan Unilever Limited were improved.
C. Cash Position Ratio (CPR): Cash is the most liquid asset. The relationship between cash
including cash at bank and short-term marketable securities with current liabilities is
examined to know the immediate solvency. Although receivables, debtors and bills receivable
are generally more liquid than inventories, yet there may be doubts regarding their
realization into cash immediately or in given time. The formula to calculate the cash ratio is as
under.
Cash Ratio = Cash* + Marketable Securities / Current Liabilities.
* Cash means, cash in hand and cash at bank.
Table 1 depicts the fluctuating cash position ratio trend during the period under study
ranging from 0.04 to 0.29 during the period of study. On an average the ratio was 0.21 during
the period of the study. This ratio was almost nearing to the average ratio except in the year‟s
2006-07, 2007-08 and 2015-16 (3 years out of the total 10 years) the conventional norm is 50%
or 0.5:1. The study indicates that the company never had the Cash position ratio 0.5:1. It
indicates that the management of cash was poor in company as theses type of companies put
their money in stock and debtors.
D. Current Assets to Total Assets Ratio (CATAR): This ratio explains the extent of total funds
invested for working capital purpose. 1 presents current assets to total assets ratio (CTTR)
recorded almost fluctuations during the period under the study. No conventional rule is
given in anywhere about the value of this ratio to be considered satisfactory.
CATAR = Current Assets / Total Assets.
It was high as 0.71 in 2011-12 and as low as 0.42 in 2006-07. The ratio was mostly stable
during the period of study. The average percentage of current assets in relation to total assets
was 0.62 which should that nearly 62% of funds remind tied up in working capital and about
38% remind invested in permanent assets during the period under the study.
E. Inventory Turnover Ratio (ITR): This ratio throws light on the inventory control policy
adopted by a concern. This ratio shows the relationship between the cost of goods sold during
a particular year and inventories kept by a concern during that year. Higher ITR shows a
higher efficiency of the management and vice-versa.
ITR = Net sales/Ave. Stock or Closing Stock
It is evident from table 1 that inventory turnover ratio registered increasing trend during the
period of study except in the year 2007-08 and 2010-11. The highest ratio was 13.39 registered
-113-
Mukesh Kumar Jain
in the year 2015-16 and lowest was 7.22 registered in the year 2010-11. The average ratio was
9.60 during the period under the study. It is observed from the table 1 that this ratio has
improved through-out the period of study from 8.42 in 2006-07 to 13.39 in 2015-16. It is, thus
clear that the management tried to control its inventory levels to a great extent during the
period of the study. This is an indicator of dull business, accumulation of inventory, over
investment in inventory, and unbalanced inventory, etc. Hence, it is clears from the table that
inventory management of Hindustan Unilever Limited in general was satisfactory during the
period of study.
F. Debtor’s Turnover Ratio (DTR): This ratio throws light on the credit and collection policy
pursued by a concern. DTR is an important tool of analyzing the efficiency of liquidity
position of a company. The Liquidity position of a company depends on the quality position
of a company depends on the quality of debtors to a great extent. It measures the rapidity or
the slowness of their collectibles. Higher the ratio and shorter is the collection period the
better is liquidity of debtors lower. The ratio and longer is the collection period, which
implies that payments by debtors are delayed.
It can be seen from the table 1 that the debtor‟s turnover ratio was 12.27 in the year 2015-16
which is worst performance of the company compared to other year. In the years 2014 -15,
2008-09 and 2013-14 the debtors took less than 10 days to pay their debts to the company. In
other way this indicates the company followed the strict credit policy to collect the cash
from debtors. Hence the performance of the company at this front is well above
expectation.
8.4 ANALYSIS OF CO-EFFICIENT OF VARIATION (CV)
In table 1 an effort has been made to measure the consistency among all six parameters of
liquidity management more precisely by applying the co-efficient of variation (C.V). The variable
for which the C.V is greater is said to be fluctuating or conversely less consistent, less stable, and
less uniform. On the other hand, the variable for which C.V is less it is regarded as less fluctuating
or more consistent, more stable or more homogeneous.
Table 1 revels that out the six different parameters of liquidity management CV is lowest in case
of Current Assets to Total Assets Ratio (CATAR). If the current assets to total assets ratio is
variable it meets that it is more consistent and stable with 16.13. At the same time cash position
ratio is the most variable and less consistent with 42.86. The remaining ratios trend has been
followed lower to higher degree are that is 19.15 (Current Ratio), 21.28 (Inventory Turnover
Ratio), 28.35 (Debtor‟s Turnover Ratio), and 32.20 (Quick Ratio) respectively. The cash position
ratio (CPR) in Hindustan Unilever Limited is least consistent. It further supports Debtor‟s
Turnover Ratio (DTR), Inventory Turnover Ratio (ITR), Current Ratio (C.R) and Quick Ratio
(Q.R). The C.V is fluctuating ranges in between lowest 16.13 and highest 42.86 variations.
-114-
Mukesh Kumar Jain
Table 2: Liquidity Test of Hindustan Unilever Limited with Motaal Ranking from 2006–07 to 2015-16
Net Working
Inventory Liquid Assets Loans and
Capital Total
to CA to CA Advances to CA Total
Year to CA Ranks
Ultimate
Rank Rank A+B+C+D
Ratio Rank A Ratio Ratio Ratio Rank D
B C
2006-07 -0.48 7 0.49 2 0.51 9 0.24 1 19 3
2007-08 -0.59 8 0.60 1 0.40 10 0.21 2 21 1
2008-09 -0.11 5 0.45 3 0.55 8 0.14 3 19 3
2009-10 -0.25 6 0.41 4 0.59 7 0.11 4 21 1
2010-11 0.05 2 0.40 5 0.60 6 0.06 7 20 2
2011-12 0.17 1 0.32 7 0.68 4 0.06 7 19 3
2012-13 -0.01 4 0.33 6 0.67 5 0.09 5 20 2
2013-14 0.03 3 0.31 8 0.69 3 0.06 7 21 1
2014-15 0.05 2 0.28 9 0.72 2 0.07 6 19 3
2015-16 0.03 3 0.27 10 0.73 1 0.07 6 20 2
Source: Computed from Annual Reports of HINDUSTAN UNILEVER LIMITED
8.5 MOTAAL’s Comprehensive Test
Motaal‟s Comprehensive Test method of ranking has been applied to reach at a more
comprehensive assessment of liquidity in which four different ratios wiz, Net Working Capital to
Current Assets Ratio, Inventory to Current Assets Ratio, Liquid Assets to Current Assets Ratio
and Loans and Advances to Current Assets Ratio have been computed and combined in a points
score. A high value of net working capital to current assets ratio or liquid assets to current assets
ratio shows greater liquidity and accordingly ranking has been done in that order. On the other
hand, a low inventory to current assets ratio or loans and advances to current assets ratio
indicates more favourable liquidity position and, therefore, ranking has been done accordingly in
that order. Ultimate ranking has further being done on the basis that the lower the total of
individual ranks, the more favourable is the liquidity positions of the concern and vice versa.
Table 2 furnishes that in Hindustan Unilever Limited the years 2007-08, 2009-10 and 2013-14
marked the most sound liquidity position and it was followed by the year 2010-11, 2012-13 and
2015-16 as moderate liquid years but rest 2006-07, 2008-09, 2011-12 and 2014-15 are worst
performer in liquidity management as per Motaal test.
Table 3: Rank Correlation between Liquidity and Profitability (2006-07 to 2015-16)
CATAR ROCE
Year Ratio in % Rank (R1) Ratio in % Rank (R2) (R1) – (R2) = D D2
2006-07 42 10 67.0 10 0 0.00
2007-08 48 9 78.0 9 0 0.00
2008-09 66 6 107.5 5 1 1.00
2009-10 56 8 103.8 6 2 4.00
2010-11 69 2 87.5 8 -6 36.00
2011-12 71 1 96.8 7 -6 36.00
2012-13 66 6 109.1 4 2 4.00
2013-14 68 3.5 130.2 1 2.5 6.25
2014-15 68 3.5 127.7 3 0.5 0.25
2015-16 66 6 128.4 2 4 16.00
Total ΣD2 = 103.50
Source: Computed from Annual Reports of HINDUSTAN UNILEVER LIMITED
-115-
Mukesh Kumar Jain
CATAR = Current Assets to Total Assets Ratio; and ROCE = Return on Capital Employed.
 m3  m m 3  m 
6  D 2   
 12 12 
R  1
N ( N 2  1)
 23  2 33  3 
6 103.5   
 12 12 
 1
10(102  1)
6[103.5  0.5  2]
 1
990
990  636

990
 0.35758
8.6 Co-Efficient of Rank Correlation and Testing the Significance
Table 3 reveals the extent of relationship between liquidity and profitability of Hindustan
Unilever Limited by computing Spearman‟s Rank Correlation Coefficient. It is clear from the
calculation that 0.35758 is low degree of positive correlation between liquidity and profitability of
Hindustan Unilever Limited.
An attempt has also been made to test whether the computed value of Pearson correlation co-
efficient is significant or not, student‟s t-test has further been applied for this purpose the ratio of
current assets to total assets (CATAR) has been used as the liquidity indicator and the ratio of
return on capital employed (ROCE) of the company was 0.70.
The Student‟s t-test proves that the correlation co-efficient between current assets to total assets
(CATAR) and return on capital employed (ROCE) is statistically not significant. It is, therefore,
concluded that the liquidity and the profitability move in the opposite direction.
9. TESTING THE SIGNIFICANCE OF CORRELATION CO-EFFICIENT
H0 = Null hypothesis – There is no correlation between the data of Hindustan Unilever Limited;
and
H1 = Alternative hypothesis – There is correlation between the data of Hindustan Unilever
Limited.
Table 4: t-Test: Paired Two Sample for Means
CATAR ROCE
Mean 62 103.6
Variance 98 472.1422
Observations 10 10
Pearson Correlation 0.700589775
Hypothesized Mean Difference 0
df 9
t Stat -8.024636681
P(T<=t) one-tail 1.07987E-05
t Critical one-tail 1.833112923
P(T<=t) two-tail 2.15975E-05
t Critical two-tail 2.262157158
-116-
Mukesh Kumar Jain
The calculated value of “t “is higher than thetable value. The hypothesis is rejected that there is
correlation between the ranked data of Hindustan Unilever Limited.
10 SUMMARY OF FINDINGS, SUGGESTIONS
10.1 Findings
 The data in table 1 reveals that current ratios in Hindustan Unilever Limited, registered a
fluctuating trend during the period under the study it varies from 0.63 to 1.21. On an average
the CR of the company was 0.94 during the period under the study. Its shows the CR is well
below the ideal CR of 2:1. It indicates it has not maintained good liquidity positions.
 It is evident from the table 1 that the quick ratio also marked fluctuating trend during the
period under the study and ranged from 0.34 in 2006 – 07 and 0.75 in the year 2015 – 16. On
an average the quick ratio in Hindustan Unilever Limited was 0.59 far away to the
conventional norm of 1:1, but in the second half of the study Quick Ratio is just below the
ideal norm. It clearly indicates that the absolute liquidity position of the company was almost
satisfactory in the second half of study.
 The Study indicates the cash management of the company is poor which is revealed by the
cash position ratios of different years.
 The firm invested almost 62% of funds in current assets.
 It is evident from table 1 that inventory turnover ratio registered increasing trend during the
period of study except in the year 2007-08 and 2010-11. The highest ratio was 13.39 registered
in the year 2015-16 and lowest was 7.22 registered in the year 2010-11. The average ratio was
9.60 during the period under the study. It is observed from the table 1 that this ratio has
improved through-out the period of study from 8.42 in 2006-07 to 13.39 in 2015-16. It is thus
clear that the management tried to control its inventory levels to a great extent during the
period of the study.
 It can be seen from the table 1 that the debtor‟s turnover ratio was 12.27 in the year 2015-16
which is worst performance of the company compared to other year. In the years 2014-15,
2008-09 and 2013-14 the debtors took less than 10 days to pay their debts to the company. In
other way this indicates the company followed the strict credit policy to collect the cash from
debtors. Hence the performance of company at this front is well above expectation.
 In Hindustan Unilever Limited the years 2007-08, 2009-10 and 2013-14 marked the most
sound liquidity position and it was followed by the year 2010-11, 2012-13 and 2015-16 as
moderate liquid years but rest 2006-07, 2008-09, 2011-12 and 2014-15 are worst performer in
liquidity management as per Motaal test
 The calculated value of “t “is higher than the table value. The hypothesis is rejected that there
is correlation between the ranked data of Hindustan Unilever Limited.
10.2 Suggestions
 The company should try to maintain stability with respect to current ratio.
 The company should have sufficient absolute liquid assets like cash, bank balances to meet its
day to day expenses and payment of bills payable in time.
-117-
Mukesh Kumar Jain
 The study shows that the cash management by company was poor. In the light of this
situation, the company has to take care of cash management properly for which it needs to
plan cash requirements for short-term properly.
 The company could spent some more portion of fixed capital as investment in fixed assets
which are used for production purpose, that give good return on the investment.
 The company should have somewhat stringent credit policy compare to the existing credit
policy to collect the dues from debtors without losing customer‟s loyalty.
 The company should see that inventory is not accumulated too much and ensure its fast
conversion.
10.3 Conclusion
The Brands of Hindustan Unilever Limited is trying to compete with the other equally popular
brands of Nestle, ITC, Patanjali, etc. in terms of sales and market shares. The company Hindustan
Unilever Limited during the study period maintained sound liquidity positions. But in case of
certain liquidity measurement ratios like cash position ratio, consistency in the above aspects and
try to maintain good cash position and speed up the cash collection for which it needs to revamp
its credit policy and cash planning in the future. On the whole the company‟s liquidity
management was almost satisfactory.
REFERENCES
Articles
[1]. Chouksey & Hotwani (2013). „Liquidity Analysis of Bajaj Auto Ltd.‟, Indian Journal of
Accounting Vol. XLV (1) December, 112-119
[2]. Kumar, Srivastava and Sinha, (2014). An Empirical Study on Efficiency of Working Capital
Management of Indian Pharmaceutical Industry‟, Pezzottaite Journals, Volume 3, Number
3, July – September, ISSN (Print):2319-9032, (Online):2319-9040
[3]. Mukti, R. Barot (2016). A Comparative Study of Working Capital Management of
Raymond and Vardhman Textiles‟, Journal of Commerce and Management, Vol. 16 contd.,
Jan. - March, 2016
[4]. Pandey, J. &. S., (2008). Impact of Working Capital Management in the Profitability of
Hindalco Industries Limited. The ICFAI University Journal of Financial Economics, 6(4), 63-
72
[5]. Panigrahi, D. A. K. (2012). Impact of Working Capital Management on Profitability: A case
study of ACC Ltd., Asian J. Management, 3(4), 210-218.
[6]. Patel, K. A. (2015). Impact of Working Capital Management on Profitability in Indian
Petroleum Industry with special reference to Indian Oil Corporation., Research Hub
International Multidisciplinary Research Journal, 2(5), 1-4.
[7]. Singh, A. B. & Tandon, P. (2012). Asset - Liability Management in Indian Banking
Industry‟, Asia Pacific Journal of Marketing & Management Review, 1(3), November, ISSN
2319-2836
[8]. Kumaraswamy, Sumathi (2016). Impact of Working Capital on Financial Performance of
Gulf Cooperation Council Firms‟, International Journal of Economics and Financial Issues,
6(3), 1136-1142.
-118-
Mukesh Kumar Jain
Books
[1]. George E. Pinales (1990): Elements of Financial Management” Third Edition, Harper Collins
Publications, New York.
[2]. I.M. Pandey (2008): “Financial Management”, Ninth Edition, Vikas publishing House, New
Delhi, India.
[3]. Kothari and Garg, (2014), „Research Methodology: Method and Techniques‟, New Age
International Publishers, New Delhi
[4]. Ravi M. Kishore (2001) “Financial Management” Second Edition, Taxmann allied services
(P) Ltd, New Delhi, India.
[5]. Richard I. Levin and David S.Rubin (1995): “Statistics for Management”, Prentice Hall of
India (P) Ltd, New Delhi, p.738.
-119-
Identifying Factors Enabling Willingness to Adopt Mobile

Learning
S.K.S Yadava*, Abhinav Chaudharyb

aFaculty of Commerce & Business Administration, Meerut College, Meerut, U.P., India,
E-mail Id: sudhiryadavmeerut@gmail.com
bFaculty of Commerce & Business Administration, Meerut College, Meerut, U.P., India
E-mail Id: abhinav.chau@gmail.com
Abstract
PAPER/ARTICLE INFO
In today’s global and shirking world mobile learning provides a new RECEIVED ON: 17/03/2017
learning platform in which learners can access the content and just in ACCEPTED ON: 30/05/2017
time information as required irrespective of the time and place. Mobile
learning is evolving at a very high rate all across the globe and one of the Reference to this paper
major reasons behind is that it uses mobile platform. The accessibility of should be made as follows:
mobile devices like smart phones, tablets, I-pads, personal digital
assistants, E-readers etc. has increased drastically over the period of time. S.K.S. Yadav, Abhinav
In this paper, the authors have analysed external factors like affordability, Chaudhary (2017),
enjoyment, interaction and convenience to see their influence on Identifying Factors Enabling
willingness to adopt mobile learning. Willingness to Adopt Mobile
Learning”, Int. J. of Trade and
Keywords: E-commerce, Mobile Learning, Internet, Technology.
1, pp. 120-128
Identifying Factors Enabling Willingness to Adopt Mobile Learning
S.K.S Yadav, Abhinav Chaudhary
1. INTRODUCTION
Learning is a broad term that happens both lifelong and life-wide. Education is considered a
subset of learning that can drive growth, economic prosperity and advancement of an individual,
a community and a country. Learning doesn’t need an institution and can happen informally.
Education often happens in an institutionalised manner in a more formalized way. Yet, in the
kind of education system that children are going through, they are educated inside the four walls
of a classroom and learning often happens outside it. This kind of a boundary is not preparing
students effectively to become the global citizens of 21st century. Imagine a world where the
boundary between formal and informal ways of learning are blurred, learning and education
become synonymous and ubiquitous, independent of time, available materials, resources,
previous qualification, pace and style. Technology, especially Mobile technology in e-commerce
has the potential to achieve such a transformation.
1.1 E-learning
E-learning is a learning system which is based on formal teaching with the help of the electronic
resources. While teaching can be based mostly in or out of the lecture rooms, the utilization of
computers and also the net forms the main part of E-learning. E-learning may also be termed as a
network enabled transfer of skills and information, and also the delivery of education to a
vast variety of recipients at similar or completely different times. Earlier, it had not been accepted
wholeheartedly because it was assumed that this method lacked the human part needed in
learning.
E-learning has proved to be the most effective mean in the corporate sector, particularly for the
training programs. These training programs are conducted by companies for employees across
the world making employees obtain important skills while sitting in a board room, or by having
seminars, which are conducted for members of the same or the different companies under similar
roof. The schools which use E-learning technologies are leading ahead to those which still use the
traditional and standard approach for learning.
1.2 M-learning
M-learning or mobile learning can be explained as "learning across multiple contexts, through
Interaction and content interactions, using personal electronic devices." It is one form of distance
education where mobile-learners use this technology at their time and as per their convenience.
M-learning technologies include notebooks, mobile phones, tablets and I-Pads. M-learning has
major focus on the mobility of the student and allow interaction with portable technologies. Using
mobile tools for creation of learning aids and materials has become a very important part
of informal learning.
2. OBJECTIVES
2.1 Primary Objective
 The primary objective of this research is to study the factors enabling the consumer
willingness to adopt mobile learning in e-commerce.
2.2 Secondary Objective
 To study the relationship between enjoyment, affordability and usefulness of mobile learning
-121-
 To study the relationship between convenience, interaction and ease of use of mobile learning
in e-commerce.
 To study the relationship between usefulness and ease of use on willingness to adopt mobile
learning
 To analyse gender difference with respect to adoption of mobile learning
 To analyse difference between students and working professionals for adoption of mobile
learning
3. CONCEPT OF M-LEARNING
The concept of M-learning (mobile learning) is presumed to have emerged from distance learning
(d- learning) to electronic learning (e-learning) (Sharma & Kitchens 2004). The popularity of
mobile learning can be credited to the development of iPads and smartphones that work through
wireless technology (Park et al. 2012). M-learning can be summarized as the acquisition of any
information & skills by using of mobile technologies at anyplace and any-time (Liu et al. 2010). To
understand better it can be said that mobile learning is learning through mobile-devices like
smartphones, tablets, computers, personal digital assistants (PDAs), MP3s and MP4 devices as
well as other portable device (Milošević et al. 2015). Devices like these are handy (convenient for
holding in hand and do not require to be installed on a computer), compact (can be taken or
carried anywhere easily in a handbag or pockets and have easy battery charging options) and also
lightweight (device do not weigh a lot) (Nor din et al. 2010). The advancement of Social media
and its free applications and software allow easy communication and boost m-learning
(Rodriguez 2011).
4. THE CURRENT STATE OF MOBILE LEARNING
Currently, cell phones which were at first advertised firmly as communication and entertaining
gadgets are now becoming an imperative part in economies and society at large. Cell phones have
affected almost each and every task, from managing an account to governmental issues, and are
presently being utilized to build profitability in various fields. As these gadgets turn out to be
progressively noticeable around the world, mobile learning is also getting lot of attraction.
Students and faculties are utilizing this technology for various educational purposes while the
government is also being supportive in making policies to promote this innovative method of
mobile learning in both formal and informal education setting. Many local educational institutes
are also adopting this technology due to its advantages. The specialists in education sector believe
that m-learning has now reached to level where its systematic integration with learning both
inside and outside of institute's premises is necessary. Choices made today will definitely impact
the significance of m-learning in years to come. Some of the latest trends in m-learning are as
follows. It includes the innovations in formal and informal education.
Out of the 150 responses the minimum age person from which data was obtained was 16 years.
The maximum age person from whom data was obtained was of 31 years. While the mean age of
the sample was 25 years with a count of 35 responses.
-122-
Figure 1: Age group graph

The occupation of the sample was also noted. Out of 150 responses obtained there were 126
students, 23 working professionals and 1 self-employed respondent. Since self-employed
respondents were negligible, therefore, for analysis self-employed and working were clubbed
together.
Figure 2: Occupation of respondents

5. DESCRIPTIVE ANALYSIS : The analysis of this study can be as follows:
N Mean Std. Deviation
Willingness 150 4.2267 0.69656
Convenience 150 3.61 0.54456
Interaction 150 3.63 0.52673
Enjoyment 150 3.8767 0.60183
Affordability 150 3.825 0.59904
Ease 150 4.216 0.60624
Usefulness 150 4 0.66778
Valid N (listwise) 150
-123-
(Source: Primary data Table 1: Descriptive Analysis Analysed)

All the 26 items were computed under 6 different variables which are convenience, Interaction,
enjoyment, affordability, ease of use and usability. Descriptive analysis was done on these
variables and their mean and standard deviation were calculated. The table of the analysis is as
follows.
Table Descriptive statistics
Figure 3: Descriptive statistics

6. INFERENTIAL ANALYSIS
Regression analysis has been done on the variables. Regression analysis has been done 3 times. In
first step enjoyment and affordability are kept as independent variable, while Usefulness is kept
as dependent variable.In second step Convenience and Interaction are kept as independent
variable, while Ease of use is kept as dependent variable. In last step Usefulness and Ease of use
are kept as independent variable, while Willingness to adopt is kept as dependent variable.
6.1 Regression Analysis
Null Hypothesis (H0): There is no significant relationship between Enjoyment and Affordability
with respect to Usefulness.
Alternate Hypothesis (H1): There is significant relationship between Enjoyment and Affordability
with respect to Usefulness.
Table: Model Summary
Model R R Adjusted Std. Change Statistics
Square R Square Error of R F df1 df2 Sig F
the Square Change change
Estimate Change
1 .437a .191 .180 .60477 .191 17.333 2 147 .000
a. Predictors: (Constant), Affordability, Enjoyment
b. Dependent Variable: Usefulness
-124-
Table: ANOVA
Model Sum of df Mean Square F Sig.
Squares
1 Regression 12.679 2 6.340 17.333 .000b
Residual 53.765 147 .366
Total 66.444 149
a. Dependent Variable: Usefulness
b. Predictors: (Constant), Affordability, Enjoyment
Table: Coefficients
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
1 (Constant) 1.702 .393 4.328 .000
Enjoyment .301 .087 .271 3.455 .001
Affordability .296 .087 .265 3.381 .001
a. Dependent Variable: Usefulness
7. FINDINGS
 It was observed in the sample that almost everyone has once used mobile devices for learning
purposes.
 It was observed that both students and working professionals are using mobile devices for
learning purposes.
 It was observed that mostly respondents fall in medium usage category, which is 0 to 2 hours
per day usage of mobile devices for learning purposes.
 It was found in regression 1 that there is significant relationship between Enjoyment and
Affordability with respect to Usefulness
 It was found in regression 2 that there is significant relationship between Convenience and
Interaction with respect to Ease of use.
 It was found in regression 3 that there is significant relationship between Ease of use and
Usefulness with respect to Willingness to adopt.
 It was found that as compare to Usefulness, Ease of use is a better enabler of willingness to
adopt mobile devices for learning.
 In T-Test it was found that there is no significant gender difference with respect to
willingness to adopting.
 In T-Test it was also found that there is no significant difference between students and
working professionals with respect to willingness to adopting.
8. CONCLUSION
Mobile learning is one of the latest advancements in technology which is gaining popularity day
by day. It is gaining so much popularity because of the fact that it uses mobile platform. The
accessibility of mobile devices like smart phones, tablets, i-pads, personal digital assistants, e-
readers etc. has increased drastically which is the main reason for mobile learning’s popularity.
-125-
Apart from having access to smart gadgets, there are various other factors which affect the
willingness of any individual to adopt m-learning.
Perceived ease of use and perceived usefulness are the two important factors which are found in
literature that affect the new technology acceptance. The technology acceptance model was
developed by Davis in 1989. These two factors have been analysed in this research to understand
the willingness to adopt. Other external variables which have been considered are enjoyment,
affordability, convenience and Interaction. A questionnaire was prepared on the basis of these
variables and data was collected. A total data of 150 respondents was taken into consideration for
the analysis. In the analysis it was found that ease of use and usefulness are the factors which
enables the willingness of an individual to adopt the mobile learning but the strength of both the
factors varies. Ease of use is more significant to enable the willingness to adopt as compared to
usefulness. Hence, ease of use is must for a user to make him adopt the mobile learning system.
REFERENCES
[1]. Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting
Interactionbehavior. Englewood Cliffs, NJ: Prentice-Hall.
[2]. Almasri, A.K., (2014). The influence on mobile learning based on technology acceptance
model (Tam), mobile readiness (Mr) and perceived interaction (Pi) for higher education
students. International Journal of Technical Research and Applications, 2(1), 5-11.
[3]. Andreea, M., & Cristina, H. (2012). Mobile learning: An economic approach. In G. Sabine,
L. Fuhua, Rory, M. Kinshuk (Eds.), Intelligent and adaptive learning systems: Technology
enhanced support for learners and teachers. (311-326). USA: Information Science References
(an imprinted of IGI Global).
[4]. Chao, H. C, Lai, C. F., Chen, S. Y., & Huang, Y. M. (2013). A M-learning content
recommendation service by exploiting mobile Interaction interactions. IEEE Transactions
on Learning Technologies, 7(3), 221–230.
[5]. Chiu, C. M., & Wang, E. T. (2008). Understanding web-based learning continuance
intention: The role of An Empirical Study of Factors Driving the Adoption of Mobile
Learning in Omani Higher Education Sarrab, Al Shibli, and Badursha
[6]. Chiu, C. M., Sun, S. Y., Sun, P. C., &Ju, T. L. (2007). An empirical analysis of the
antecedents of web-based learning continuance. Computers & Education, 49(4), 1224–1245.
[7]. Ciampa, K. (2014). Learning in a mobile age: an investigation of student motivation. Journal
of Computer Assisted Learning, 30(1), 82-96.
[8]. Cole, J. S., Bergin, D. A., & Whittaker, T. A. (2008). Predicting student achievement for low
stakes tests with effort and task value. Contemporary Educational Psychology, 33(4), 609–
624
[9]. Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer
technology: A comparison of two theoretical models. Management Science, 35(8), 982–1003.
[10]. Davis, F.D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of
information technology. MIS Quarterly, 13(3), 319-340.
[11]. Eccles, J. S., & Wigfield, A. (2002). Motivational beliefs, values, and goals. Annual Review
of Psychology, 53(1), 109–132.
-126-
[12]. Economides, A.A., & Nikolaou, N. (2008). Evaluation of handheld devices for mobile
learning. International Journal of Engineering Education (IJEE), 24(1), 3–13.
[13]. Florence, M., & Jeffrey, E. (2013). Here and now mobile learning: An experimental study
on the use of mobile technology, Computers & Education, 68, 76–85
[14]. Haung, J. H., Lin, Y. R., & Chuang, S.T. (2007). Elucidating user behavior of mobile
learning: A perspective of the extended technology acceptance model. The Electronic
Library, 25, 585-598.
[15]. Huang, R. T., Hsiao, C. H., Tang, T. W., & Lien, T. C. (2014). Exploring the moderating role
of perceived flexibility advantages in mobile learning continuance intention (MLCI). The
International Review of Research in Open and Distance Learning, 15(3), 140-157.
[16]. Isaiah, T. A., & Martin, C. (2015). Using management procedure gaps to enhance e-learning
implementation in Africa. Computers & Education, 90, 64–79.
[17]. Isidora Milosevic (2015). The effects of the intended behaviour of students in the use of M-
learning. Computers in Human Behavior 51 (2015) 207–215
[18]. Legris, P., Ingham, J., & Collerette, P. (2003). Why do people use information technology?
A critical review of the technology acceptance model. Information & Management, 40(3),
191–204.
[19]. Li, Y. Q., Qi, J. Y., & Shu, H. Y. (2008). Review of relationships among variables in TAM.
Tsinghua Science & Technology, 13(3), 273–278.
[20]. Liu, Y. (2008). An adoption model for mobile learning. In Proceeding for the IADIS
International Conference e-Commerce. Amsterdam, The Netherlands.
[21]. Liu, Y., Han, S., & Li, H. (2010). Understanding the factors driving m-learning adoption: A
literature review. Campus-Wide Information Systems, 27(4), 210-226.
[22]. Manoj, P., &Jayesh, M. P. (2014). The factors influencing in mobile learning adoption: A
literature review. International Journal of Application or Innovation in Engineering &
Management (IJAIEM), 3(9), 133-138.
[23]. Mehdipour, Y., &Hamideh. Z. (2013). Mobile learning for education: Benefits and
challenges. International Journal of Computational Engineering Research, 3(6), 93-101.
[24]. Moore, J. L. Camille, D., & Krista, G. (2011). e-Learning, online learning, and distance
learning environments: Are they the same? Internet and Higher Education, 14, 129–135
[25]. Nordin, E.(2005). Association between pornog-raphy consumption and sexual practices
among adolescents in Sweden.Inter-national Journal of STD & AIDS-16, 102–107.
[26]. Park, S.E. (2012). Assessing the environmental and ecosystem service implications of
climate change adaptation strategies in Timor-Leste. Conference Proceedings Climate
Change and Social Issues. p17. 2nd International Conference on Climate Change and Social
Issues, 28 –29 November, Kuala Lumpur, Malaysia.
[27]. Park, Y. S., Nam, M. W., & Cha, S. B. (2012). University students' behavioral intention to
use mobile learning: Evaluating the technology acceptance model. British Journal of
Educational Technology, 43(4), 592-605.
[28]. Park. Y. (2011). A pedagogical framework for mobile learning: Categorizing educational
applications of mobile technologies into four types. International Review of Research in
Open and Distance Learning, 12(2), 78–102.
-127-
[29]. Rodriguez- Arancon (2011). A Pedagogic assessment of mobile learning applications. In

proceeding of ICDE 2013, Mobilizing Distance Education, UNED Madrid
[30]. Romani, V. (2009). The politics of higher education in the Middle East: Problems and
prospects.
[31]. Sarrab, M. K, Al-Shih, H. I., & Rehman, O. M. (2013). Exploring major challenges and
benefits of m-learning adoption. British Journal of Applied Science & Technology, 3(4), 826-
839.
[32]. Sarrab, M. K. (2014). M-learning in education: Omani Undergraduate Students Perspective,
International Educational Technology Conference (IETC-2014), September 3th – 5th,
Chicago, USA.
[33]. Sharma, S.K. & Kitchens, F.L. (2004). Web Services Architecture for M-Learning. Electronic
Journal on e-Learning. 2(1), 203–216
[34]. Uzunboylu, H., &Ozdamli, F. (2011). Teacher perception for m-learning: Scale
development and teachers' perceptions. Journal of Computer Assisted Learning, 27(6), 544–
556.
[35]. Walker, K. (2006). Introduction: Mapping the landscape of mobile learning. In M. Sharples
(Ed.), Big issues in mobile learning: Report of a workshop by the kaleidoscope network of
excellence mobile learning initiative. University of Nottingham, UK.
-128-
Export-Led-Growth: A Strategic Approach to India’s Economic

Development
Himanshu Agarwal
Associate Professor, Faculty of Commerce and Business Administration,
D. N. College, Meerut, UP – 250002, India.
E-mail Id: drhimag@gmail.com
Abstract
PAPER/ARTICLE INFO
Government of India after a ling struggle and worth some network, RECEIVED ON: 30/01/2017
proved to be nearly fail may be because of either the defective policy ACCEPTED ON: 08/06/2017
structure or the short-vision of the policy-makers or the rising population,
diversification of national setup or the financial crunch in meeting out Reference to this paper
expenses for the removal of above mentioned basic constraints. „Export- should be made as follows:
led-growth‟ is a strategy that encourages and supports production for
exports. The rationale behind this belief is that the enhancing exports can Himanshu Agarwal (2017),
play a pivotal role in the overall growth-process of the country. India is an “Export-Led-Growth: A
interesting case study of the export and economic growth relationship. Strategic Approach to India‟s
The present study evaluates the export-import policies followed in India Economic Development”, Int.
and analyses time series data rigorously to draw conclusions regarding J. of Trade and Commerce-
the various potential positive roles of exports if there are any, and IIARTC, Vol. 6, No. 1, pp.
suggests a suitable strategy for development in India. Overall, it may be 129-144
fair to say that openness, by leading to lower prices, better information
and newer technologies, has a useful role to play in promoting growth.
But it must be accompanied by appropriate complementary policies (most
notably, education, infrastructure, financial and macroeconomic policies)
to yield strong growth results. The precise mix of trade and other policies
that is needed will strongly depend on the specific circumstances of each
country.
Keywords: Export, Import, Export-led-Growth, Economic Development.
Export-Led-Growth: A Strategic Approach to India‟s Economic Development
Himanshu Agarwal
1. INTRODUCTION
India followed the basic policy of self sufficiency and further self-reliance for its growth and
development over the years. But, it is obvious that to prove to be a welfare state, India could not
gather much concentration on the fronts such as positive balance of payment situations and
inclusive balanced economic development. Even today there are the regions like Orissa, Bihar,
Madhya Pradesh and Eastern Uttar Pradesh, where the rampant poverty prevails and some other
regions like Punjab, Haryana, Delhi, Gujarat and Goa, which are affluent states. It indicates that
Indian states have not developed uniformally.
Unemployment, unequal regional development, inadequate education facilities, child labour,
infrastructural facilities, power-shortage, lacking water and health amenities, government of
India after a long struggle of 66 years and a worth some network, proved to be nearly fail may be
because of either the defective policy structure or the short-vision of the policy-makers or the
rising population, diversification of national setup or the financial crunch in meeting-out
expenses for the removal of above mentioned basic constraints.
The trade can transmit development in a country. As, trade, no doubt has been an engine of
growth for the countries, which lack basic infrastructure, welfare amenities and livelihood
facilities. This statement do not contradict the basic vision of the policy-makers and the pillars of
the Indian economy, but, the locus of the problems of India has shifted and it can only be riddled-
out through the change in the vision and through setting-up of the effective strategy for future
growth and development. Otherwise, the country will fall weak and tender to the emerging socio-
economic challenges from inside and outside.
„Export-led-growth‟ is a strategy that encourages and supports production for exports. The
rationale behind this belief is that the enhancing exports can play a pivotal role in the overall
growth-process by effective exploitation of available resources, stimulating demand, encouraging
savings and capital accumulation, and by raising the capacity to import.
Benefits of exports are justified by the classical economists through the traditional argument of
comparative advantage. This way, a country‟s market can be opened up to international markets
to allow that country more efficiently produce and allocate resources in which it has a
comparative advantage based on its natural factor endowments. Thus, world trade markets allow
producers and consumers of the participating countries to benefit from lower-prices, higher-
quality, more diverse supply of goods and higher growth.
Further, in later years, economists started believing that only developed countries get benefits
from such trade practices. As the developing countries involved in trade with developed
countries are generally producers and exporters of primary products and import manufactured
goods from developed countries. They have to supply on low prices, whereas developed
countries get returns of high productivity due to improved technology transferred to the workers
and results in increased wages and incomes. Thus, developed economies get more benefits than
developing economies. But, on the contrary, the middle-income developing countries have been
showing impressive economic growth through export-led-growth strategy in the early 1980s.
Hong Kong, Singapore, South Korea, Taiwan and Japan favoured outward-oriented policies of
increased openness and export promotion strategies.
-130-
Himanshu Agarwal
This way, the affirmative relationship between export expansion and economic growth has
become point of concentration in recent years for those countries who need quick, accurate and
sustainable development. Several empirical studies have been conducted to assess the role of
exports in the economic growth of developing countries from varous aspects (Michaely [1977],
Tyler [1981], Feder [1982], Balassa [1978], Chow [1987], Krueger [1990], Ram [1985, 1987] and
Sengupta and Espana [1994] Bhagwati [1978], Sharma and Dhakal [1994] and more recently by
Dhawan and Biswal [1999] and many more). The above studies have highlighted the positive role
of export-led-growth in the effective economic development of the developing countries:
 increasing the supply potential of the economy by increasing the potential to import;
 stimulating demand and encouraging savings and capital accumulation;
 financing development and more capacity utilization;
 creating technological dynamism through the externality effect of exports in the diffusion of
modern technology across other sectors and industries;
 creating employment and increasing labour productivity;
 increasing the effects of economies of scale, industrialization, and import of capital goods;
 increasing the Total Factor Productivity and consequently the well-being of the country;
 relaxing the balance of payment constraint to sustain economic growth and development
 relaxing the current account pressures for foreign capital goods by increasing the country‟s
external earnings and attracting foreign investment; and
 improving allocation of scarce resources throughout the economy.
However, above mentioned points are not automatic and their impact on poverty reduction and
human development goals largely depends on the actual quality and character of both economic
and export growth. It is argued that key to the success of East-Asian countries was a coherent
strategy of raising the returns of private investment through a range of strategies that included
credit subsidies, tax incentives, education promotion, establishment of public enterprises, export
inducements, duty free access to inputs and capital goods and government coordination of
investment plans. Moreover, any export strategy works only if it is framed with peculiarity of a
country‟s environment, its stage of development and its range of endowments and capabilities.
Summing up, whatever coherent strategy a country adopts but the Export-Led-Growth strategy
encourages nations to settle problems of employment, education and inflation.
2. STRATEGY FOLLOWED IN INDIA
Up to the 1960s, India had followed an import substitution policy. However, the failure of import
substitution as a viable industrial policy and the rapid escalation of import bills and balance of
payments deficits in the late 1960s, forced India to shift to an export-oriented strategy. Recent
economic reforms in India have largely accentuated this export orientation.
India is an interesting case study of the export and economic growth relationship. It is difficult
from the Indian experience to assess the nature of this causal relationship. The trade sector
constitutes a small section of the Indian economy and this seems to indicate a minor role for
exports in economic development. However, it is important to recognize that the size of the
export sector in India does not by itself exclude the possibility of export-led growth. The study
evaluates the export-import policies followed in India and analyses time series data rigorously to
-131-
Himanshu Agarwal
draw conclusions regarding the various potential positive roles of exports if there are any, and
suggests a suitable strategy for development in India.
3. REVIEW OF THE LITERATURE
A number of studies have been conducted on Export-Led Growth in India and Abroad. Experts,
researchers and other field investigators have done various outstanding studies on this subject
and related themes. Albeit, it is a strong belief of the researcher here that research studies on the
similar lines have not been conducted so far. Therefore, some short references of such studies are
enumerated here below:
Girija Nimgaonkar (Vishvakarma Institute of Management, Pune: 9th Global Conference on
Business and Economics, ISSN 978-0-9742114-2-7) writes in her paper Export-led-growth in South
East Asia, “The miraculous performance of the East and South East Asian Countries during 1970s
to 1990s cannot be analysed without considering the connection between the export-oriented
policies and economic growth. The shift from traditional import substitution policies to export-
oriented policies in these countries has long-term policy implications for many of the developing
countries including India. In the newly Industrialized Economies from East and South East Asia,
the general macro-economic policies as well as selective export promotion policies facilitated the
high export and economic growth”.
Ranjan Kumar Dash (NCAER, New Delhi, South Asia Economic Journal Sept. 2011) quotes in his
paper Revisited Export–Led growth Hypothesis : An Empirical Study on India “Over the years,
there has been extensive research on the relationship between a country‟s export and economic
growth with ambiguous and mixed results. The mixed results are due to bi-variate approach used
in the analysis and periodication (Combining both import substitution and export promotion
periods).
Dhawan and Biswal (Applied Economics, Vol. 31 No. 4, 1 Ap., 1999, pp 525-530) investigate in their
research paper „Re-examining export led growth hypothesis: a multivariate cointegration analysis
for India‟ that “the ELG hypothesis using a vector autoregressive (VAR) model by considering the
relationship between real GDP, real exports and terms of trade for India between 1961-93. They
employ a multivariate framework using Johansen‟s cointegration procedure. They find one long-
run equilibrium relationship between the three variables and the causal relationship flows from
the growth in GDP and terms of trade to the growth in exports. However, they conclude that the
causality from exports to GDP appears to be a short run phenomenon.
In a similar framework, Asafu-Adjaye and Debasish Chakraborty (Australian Economic Papers Vol.
38 Issue 2, Page 164-175, June - 1999) consider three variables in their paper Export-Led-Growth
and import compression: Further Time Series Evidence from LCDs: Exports, real output and
imports (for the period 1960-1994). They do not find any evidence of the existence of a causal
relationship between these variables for the case of India and no support for the ELG hypothesis,
which is not too surprising given India‟s economic history and trade policies.
Anwer and Sampath (Western Agricultural Economics Association 1997, Reno/Sparks, Nevada:
Annual Meeting July 13-16, 1997), also find evidence against the ELG hypothesis for India in the
paper entitled Exports and Economic Growth.
In contrast, Nidugala, G. K. (Indian Economic Journal 47, 3, pp67-68, 2001) builds in the research
paper Export and Economic Growth in India: An Empirical Investigation on Esfahani‟s (1991)
-132-
Himanshu Agarwal
model and uses an augmented production function with exports as a regressor. Nidugala finds
evidence in support of the ELG hypothesis for the case of India particularly in the 1980s. He finds
that export growth had a significant impact on GDP growth. Further, his study reveals that
growth of manufactured exports had a significant positive relationship with GDP growth while
the growth of primary exports had no such influence.
Ghatak, S. and S. W. Price (Weltwirtschaftliches Archiv., 133,3, pp. 538-53, 1997) test the ELG
hypothesis for India in the article Export Composition and Economic Growth: cointegarationa dn
Causality Evidence for India for the period 1960-1992, using as repressors‟ a measure of GDP that
nets out exports, along with exports and imports as additional variables. Their results indicate
that real (aggregate) export growth is Granger-caused by non-export real GDP growth in India
over 1960-92. Their cointegration tests confirm the long run nature of this relationship. However,
imports do not appear to be important for the case of India. As corroborated subsequently by
Nidugala (2001), their disaggregated analysis shows that non-traditional manufactured exports
(such as machinery and transport equipment) are found to Granger cause output growth, while
traditional manufactures (such as textiles, wood, paper) have little effect.
4. OBJECTIVES AND METHODOLOGY OF THE STUDY
4.1 Objectives
 To discuss the export-led-growth theoretically.
 To analyze the relationship between emerging export-oriented industries and economic
growth.
 To draw conclusion regarding the various potential positive roles of exports and suggest a
suitable strategy for national development.
4.2 Methodology
The methodology of this paper is simply based on secondary data and analysis. Primary data on
exports and economic development of India is not possible to collect, individually. Hence,
Government published data has been adapted for present study.
5. EXPORT-LED-GROWTH: A STRATEGIC APPROACH TO ACCELERATE ECONOMIC DEVELOPMENT
A country like India should always accumulate wealth and precious metals in span of time
through emphasis on achieving trade surpluses to become a perfect welfare state. As, it has been
discussed earlier that classical belief was that the trade is a result of comparative advantage which
leads to an effective and efficient use of natural resources in each country and thus increases
welfare by transmitting development through trade. The neo-classical view believes that growth
can be achieved by export-led-growth strategy in recent situations. Thus, enhancing exports must
be related to economic growth to accelerate economic development. The export-led growth model
was initially upheld with the success of Asian Newly Industrializing Countries (NICs) - in
particular, Hong Kong, Singapore, Korea and Taiwan and second-generation NICs (Malaysia and
Thailand)- are cited as such examples. Over the las thirty years these NICs have approximately
doubled their standards of living every ten years. China is the latest country to join this group.
The World Bank (1993) perceives that the experiences of these countries serve as a model for
-133-
Himanshu Agarwal
development, a view also supported by the US Agency for International Development and the
International Monetary Fund.
Thirlwall has rightly argued that the growth of exports plays a major part in the growth process
by stimulating demand, encouraging savings and capital accumulation since exports increase the
supply potential of the economy, by raising the capacity to import.
There are a number of reasons within trade theory to support the Export-led-Growth strategy to
boost economic development:
 Export growth means an increase in demand for the country‟s output in other countries
which helps to increase the real output of the exporting country.
 If the exports are expanded then the country‟s specialization in the production of export
products gets promoted, this helps in boosting the productivity level and causes the general
level of skills to improve in the export sector. This leads to a reallocation of resources from the
(relatively) inefficient non-trade sector to the higher productive export sector and hence
output growth of the exporting country. The outward-oriented trade policy may also give
access to advanced technologies and better management practices (e.g., Hart, 1983; Bern-
David and Loewy, 1998) that may result in further efficiency gains.
 An increase in exports may help in earning foreign exchange (Chenery and Strout, 1966), for
importing inputs to meet domestic demand; debt servicing and preventing an overvaluation
of the domestic currency.
There are some other important justifications also for export promotion. Some of these are (Asian
Development Bank, 2005) given below:
 Participating in trade, especially export production and promotion, exposes a country to the
latest and most advanced production and marketing techniques, and a “learning-by-doing”
process that brings about dynamic innovation and technological diffusion into the economy.
It also drives a country to higher production and to economies of scale, which lead to
increasing returns (Felipe 2003).
 According to Taylor‟s “two-gap or three-gap” models (1993) which justify the need to earn
foreign exchange via exports, the investment-savings gap and the foreign exchange gap are
major obstacles to the growth and development of many developing countries. Since
countries need precious foreign exchange for their development needs (capital goods,
industrial raw materials, oil, and food), export earnings are more efficient means to finance
these needs than foreign debt. Foreign debt is vulnerable to adverse exogenous shocks and
currency risks and, therefore, may lead to debt defaults.
 A similar argument (McCombie and Thirlwall, 1994) claims that large balance-of-payment
deficits, spurred by large import propensities or elasticities, may be a hindrance to growth for
many developing countries. Thus, moderate trade deficits, or trade surpluses, are more
desired. This, of course, implies that export growth should be in pace with, or ahead of,
import growth.
 Felipe (2003), also argues that export-led strategies allow an expansion of aggregate demand
without much inflationary pressure and without the danger of a wage-price spiral, compared
-134-
Himanshu Agarwal
with strong domestic demand injections. Export growth and large earnings from exports help
in real appreciation of the country‟s currency, keep inflation within manageable limits and
allow real wages to rise.
But, the support for export-led-growth is not universal. There have been some critics as well. It
works till some countries are there to import. Paul Krugman described that there is no “miracle”
... He said: “Asian growth, like that of the Soviet Union in its high-growth era, seems to be driven
by extraordinary growth in inputs like labor and capital rather than by gains in efficiency.” Critics
point out that the experiences in the East and Southeast Asian countries are unique in many ways
and not necessarily replicable in other countries (Buffie, 1992). The UNDP report of November
2009, based on the study of the impact of the global financial crisis on the Asia-Pacific region
(Chhibber, Ghosh and Palanivel, 2009) concludes that Asia‟s export-led growth model is
unsustainable.
6. PROBLEMS OF EXPORT-LED GROWTH
Every model of growth has its own benefits and limitations. Every policy does not fit all
countries. It has been argued at International discussions that „the export-led-growth model,
which was once considered as an important force behind Asia‟s successful economies, is now
under fierce attack and may not be developing nations‟ favourite development policy in the
future. The sub-prime crisis led near-collapse in international trade that followed synchronized
global recession in 2008, has seriously shaken Asia's confidence in this growth policy. In the
recent past, the demand from major developed economies suddenly became pessimistic, leading
to the international monetary fund anticipating a double-digit contraction in world trade
volume‟.
Some economists argued that the emphasis on export-led growth of most East Asia countries had
a series of negative effects. If prevented the development of domestic market growth and has
reinforced the dependency of developing countries on the developed world, thus becoming
vulnerable to slowdowns in the latter‟s markets. Export-oriented economies are extremely
dependent on foreign (mostly Western) demand. The problem is that any economic recessions in
Europe, Japan, or US results into slow growth in the developing world.
To sum up, that the export-led-growth model followed by East Asian countries for several
decades is not a permanent and potential strategy any longer and it is risky and dependent on the
consumption pattern of the importing nations. Export-led-growth has harmed developing
countries in several ways.
 To gain competitive advantage in international markets countries compromise and compete.
As a result, companies are lowering requirements relating to labour laws and environment
etc. or shifting production to countries in which these requirements are lower.
 The export-led-growth model encourages countries to divert more and more production
capacity to produce export goods and commodities for global markets, which results in
reduction of export prices and further starts a vicious cycle which has long been visible in
deteriorating terms of trade in case of producers of primary commodities.
-135-
Himanshu Agarwal
 Developing countries borrow in hard currency, and as their terms of trade deteriorate it
becomes even harder to earn the currency needed to service their debts.
 Here, the argument is that export-led growth, especially when associated with export-
processing zones, leads to superficial development with weak backward and forward
linkages into the rest of the economy. This includes exploitation of workers, failure to
generate widely shared rising incomes, increasing income disparities etc., which make it
difficult to develop domestic markets and autonomously sustainable growth.
 Export-led development may work when adopted by one or even a few countries, but it takes
on a zero-sum dimension when adopted by all.
 It has shifted the focus away from development rooted in domestic market growth and has
increased exploitation of workers in developing countries. It has also harmed the global
economy by creating an environment of excess capacity and deflation.
Thus, it can be said that such growth can work for first-comers, but it falls apart once all try to
adopt the export-led-growth strategy. China‟s advent on to the world trading scene needs special
mention in this regard. It is supplying huge labor force at low wages and its current population
growth ensures that this will remain as it is in the future also. It is clear at this juncture that any
developing country cannot possibly enter now the hierarchy of export-led-growth system with
production costs below those of China.
7. ROLE OF EXPORT-ORIENTED INDUSTRIES IN ECONOMIC GROWTH
Import Intensity of India’s Exports: It is considered imperative here to find the import content in
major exports to find foreign exchange earnings per unit of export and import intensity of
exports. This may give us some idea of contribution of changing export composition to overall
growth. For this purpose latest input-output table prepared by Government of India is used. The
50 commodities × 50 commodities groups I-O table for India for the year 2014-15, is the main
source for data presented in Table 1. This is the latest year for which a comprehensive and
consistent I-O table for the Indian economy is available from official sources online.
The necessity of data provided in I-O Table was felt because it is difficult to estimate import
intensity of exports from the aggregative macro-economic data on exports, imports and imports
data a uniform system of industry-wise classification is not followed. Importing and exporting
industries are different. Besides, the data on imports relate to total import requirements rather
than import requirement for domestic manufacturing. This data is not directly useful for
estimating import intensity of exports. Table 1 gives an idea of import content in major exports. In
this table those industries are selected and considered export oriented where the value of exports
is more than half million as per the export column of I-O table where figures are given in ` Lakh
and USD Millions in Brackets.
The Table 1 shows that all the traditional exports commodities are less import intensive as
compared to the non-traditional commodities.
-136-
Himanshu Agarwal
Table 1: Input-Output Table ( Export and Imports)

April-2014-March-2015 Net
Exchange
Exports Imports earning Import
S.
Name of Products Value in INR Value in INR per unit Intensity
No.
Lacs (Value in Lacs (Value in of export (Im/Ex)
USD Million) USD Million) (Ex-
Im/Ex)
1 Mineral Fuels, Mineral 35,111,080.15 95,343,879.64 -1.72 2.715493
Oils And Products of (156,400.01) (57,620.04)
Their Distillation;
Bituminous Substances;
Mineral Waxes.
2 Natural or Cultured 25,393,999.05 38,151,469.87 -0.50 1.502381
Pearls, Precious Or Semi- (62,379.92) (41,549.72)
precious Stones
3 Vehicles Other Than 8,852,545.59 19,416,276.83 -1.19 2.193299
Railway Or Tramway (31,730.65) (14,473.84)
Rolling Stock, And Parts
And Accessories
4 Nuclear Reactors, 8,443,257.50 20,276,399.06 -1.40 2.40149
Boilers, Machinery And (33,149.35) (13,802.85)
Mechanical Appliances
5 Organic Chemicals 7,306,890.31 10,831,982.70 -0.48 1.482434
(17,746.39) (11,948.91)
6 Pharmaceutical Products 7,081,510.40 7,139,778.21 -0.01 1.008228
(11,690.78) (11,584.58)
7 Cereals 5,828,221.99 6,518,454.42 -0.12 1.118429
(10,670.01) (9,550.98)
8 Electrical Machinery 5,315,391.02 7,551,631.15 -0.42 1.42071
And Equipment And (12,342.01) (8,696.79)
Parts
9 Cotton 4,724,469.94 4,575,982.77 0.03 0.968571
(7,471.64) (7,717.95)
10 Iron And Steel 5,307,513.71 3,066,257.87 0.42 0.57772
(4,959.36) (8,684.38)
11 Articles Of Apparel And 5,622,087.16 4,310,910.32 0.23 0.766781
Clothing Accessories, (7,049.60) (9,192.14)
Not Knitted Or
Crocheted
12 Articles Of Iron Or Steel 4,644,505.96 4,504,007.18 0.03 0.969749
(7,361.19) (7,592.08)
-137-
Himanshu Agarwal
13 Articles Of Apparel And 4,680,411.21 3,910,614.77 0.16 0.835528

Clothing Accessories (6,386.62) (7,654.62)
14 Plastic 3,102,209.23 3,141,315.34 -0.01 1.012606
(5,136.97) (5,081.47)
15 Fish and Crustaceans 3,208,437.78 2,226,848.57 0.31 0.69406
(3,640.61) (5,249.51)
16 Aircraft, Spacecraft, And 3,775,464.90 2,972,245.62 0.21 0.787253
Parts (4,861.67) (6,159.63)
17 Meat and Edible Meat 3,018,652.81 2,879,290.84 0.05 0.953833
Offal (4,707.23) (4,929.27)
18 Other Made Up Textile 2,840,596.25 2,549,353.52 0.10 0.897471
Articles, Sets, Worn (4,177.54) (4,645.64)
Clothing And Worn
Textile Articles
19 Ships, Boats And 3,265,722.06 2,435,514.10 0.25 0.745781
Floating Structures. (3,978.75) (5,352.61)
20 Miscellaneous Goods. 586,316.24 1,986,374.01 -2.39 3.387888
(3,253.58) (958.83)
21 Miscellaneous Chemical 1,943,227.63 2,287,782.49 -0.18 1.177311
Products. (3,739.75) (3,177.26)
22 Residues And Waste 1,000,615.29 1,964,148.35 -0.96 1.962941
From The Food (3,214.36) (1,630.12)
Industries; Prepared
Animal Foder
23 Copper 2,057,558.53 1,602,106.17 0.22 0.778644
(2,624.95) (3,360.90)
24 Coffee, Tea, Mate and 1,756,310.10 1,580,186.59 0.10 0.89972
Spices (2,586.03) (2,871.86)
25 Rubber 1,665,754.81 1,660,861.64 0.00 0.997062
(2,717.56) (2,726.26)
26 Man-Made Filaments. 1,462,108.71 1,735,882.15 -0.19 1.187246
(2,834.42) (2,392.28)
27 Footwear 1,801,237.96 1,628,775.20 0.10 0.904253
(2,672.08) (2,948.14)
28 Tanning Or Dyeing 1,720,585.80 996,129.16 0.42 0.578948
Extracts, Tannins And (1,628.06) (2,818.61)
Their Deri. Dyes,
Pigments And Other
Colouring Matter, Paints
29 Lac, Gums, Resins and 1,189,543.31 982,051.79 0.17 0.82557
other Vegetable Saps and (1,608.02) (1,947.54)
Extracts
-138-
Himanshu Agarwal
30 Leather,Saddlery And 1,550,118.38 1,032,308.23 0.33 0.665954

Harness,Travel Goods, (1,687.74) (2,535.78)
Handbags
31 Ores, Slag And Ash. 599,229.20 787,346.19 -0.31 1.313932
(1,286.24) (982.07)
32 Optical, Photographic 1,445,896.81 629,006.97 0.56 0.435029
Cinematographic (1,028.79) (2,364.22)
Measuring, Checking
Precision, Medical Or
Surgical Inst.
33 Man-Made Staple Fibres. 1,333,421.06 850,840.53 0.36 0.638088
(1,386.82) (2,179.38)
34 Salt; Sulphur; Earths 1,199,278.27 504,161.95 0.58 0.420388
And Stone; Plastering (824.87) (1,962.68)
Materials, Lime And
Cement.
35 Aluminium 1,737,710.32 479,262.95 0.72 0.275801
(784.34) (2,833.47)
36 Oil Seeds and Olea, 1,356,084.23 517,448.36 0.62 0.381575
Fruits, Grains, Seeds and (845.66) (2,213.94)
Fruits
37 Edible Fruit and Nuts, 985,913.05 451,142.81 0.54 0.457589
Peel, or Cirtrus fruits (739.67) (1,610.71)
38 Carpets And Other 1,112,030.92 446,582.42 0.60 0.401592
Textile Floor Coverings. (730.28) (1,819.67)
39 Essential Oils And 892,774.05 235,269.66 0.74 0.263527
Resinoids, Perfumery, (383.27) (1,460.66)
Cosmetic Or Toilet
Preparations.
40 Inorganic Chemicals; 874,917.72 466,857.78 0.47 0.533602
Organic Or Inorganic (762.86) (1,429.87)
Compounds Of Precious
Metals, Of Rare-Earth
Metals
41 Sugars And Sugar 657,472.60 453,897.15 0.31 0.690367
Confectionery. (743.74) (1,075.16)
42 Edible Vegetables 721,603.07 385,665.37 0.47 0.534456
(630.96) (1,180.80)
43 Articles Of Stone, Plaster, 852,549.38 448,239.17 0.47 0.525763
Cement, Asbestos (733.43) (1,395.84)
44 Raw Hides And Skins 814,104.40 410,617.30 0.50 0.504379
And Leather (671.85) (1,333.64)
-139-
Himanshu Agarwal
45 Furniture, Bedding, 719,440.53 446,276.14 0.38 0.62031

Mattresses, Mattress (729.43) (1,175.83)
Supports, Cushions And
Similar Stuffed
Furnishing, Lamps And
Lighting Fittings
46 Paper And Paperboard 703,696.54 384,673.63 0.45 0.546647
(630.78) (1,151.35)
47 Tobacco And 586,858.67 0.42343,067.84
0.584583
Manufactured Tobacco (560.44) (958.62)
Substitutes.
48 Animal Or Vegetable 595,502.25 305,413.51 0.49 0.512867
Fats And Oils And Their (498.89) (973.29)
Cleavage Products; Pre.
Edible Fats; Animal Or
Vegetable Waxex.
49 Tools Implements, 544,081.95 418,870.41 0.23 0.769866
Cutlery, Spoons And (686.48) (889.84)
Forks, Of Base Metal
50 Dairy produce, Birds, 231,358.14 332,244.52 -0.44 1.436062
Eggs Natural Honey (541.59) (379.03)
India's Total Export/ 182,220,266.94 268,555,703.22
Imports (439,607.24) (298,224.66)
Source: Government of India Data 2014-2015
Ten industries where import content per unit of export is more than one unit are - Other non-
metallic minerals, Communication equipment, Iron, Steel and Ferro alloys, Organic heavy
chemicals, Edible oils other than Vanaspati, Electrical industrial machinery, Synthetic fibres and
resin, Other electrical machinery, Other non-electrical machinery and Non-ferrous basic metals.
All these industries are non-traditional from the point of view of exports. Other industries where
import content per unit of exports is less than one are - Gems and jewellery, Ready-made
garments, Petroleum products, Motor vehicles, Miscellaneous food products, Cotton textile,
Drugs and medicines, Rubber products, Iron ore, Fishing, Leather and Leather products,
Miscellaneous metal products, Miscellaneous textile products, Wheat, Art silk, Synthetic fiber
textiles and Plastic products.
The Table reveals that import intensity of export commodities is in the range of -0.31 for ore (item
no. 31) to 0.47 for metals (item no. 40). Increasing export of all the non- traditional commodities,
which has been a result of export promotion policies, import intensity is greater than one. These
are also the sectors which earn import entitlement for producing exportable commodities. If the
export promotion policies result in additional exports which are import-intensive and also earn
an import entitlement, then the net value to the country of the export earnings is likely to be
significantly negative.
-140-
Himanshu Agarwal
It is a general contention that that higher the import intensity of exports, lower is the net increase
in the final demand in the economy on account of increased exports and hence, lower is the direct
indirect effects in terms of growth of income and output... Increased import intensity for exports
also implies lower linkage effects on the domestic economy. Thus, increasing exports by
importing more is also a strategy basically aiming at trade balance rather than overall
development of the domestic economy. To a very limited extent, it becomes a part of the „export-
led-growth‟ strategy. The genuine export promotion strategy has to be an integral part of the
overall growth strategy of the country because it would generate linkage effects to the rest of the
economy and direct and indirect effects on income, output and the indirect tax revenue of the
government. Special attention has to be paid to specific problems of sectors and markets abroad.
Similarly, efforts have to be made to induce entrepreneurs to take export business more seriously
and on a long-term or permanent basis rather than the current practice of generally considering it
a short-term and ad-hoc phenomenon.
On the basis of the foregoing analysis it can be concluded here that successful export-oriented
industries are those which use less imported inputs and contribute more to the foreign exchange
earnings. Such industries are-Readymade Garments, Miscellaneous Food Products, Cotton
Textiles, Rubber Products, Iron Ore, Miscellaneous Textiles, Fishing and Leather and Leather
Products. Some of these industries like– Readymade Garments and Miscellaneous Food Products
and also show an upward trend as per the time-series export data. The industries like– Non-
metallic Minerals, Organic Heavy Chemicals, Other Non-electrical Machines, Non-Ferrous Basic
Metals, Other Electrical Machinery and Electrical Industrial Machinery which have started
showing high exports recently, are highly capital import intensive also.
For arriving at some concrete conclusion each industry is required to be studied separately.
However, on the basis of present analysis it can be inferred that the industries which can really be
called export-oriented and are net foreign exchange earners are labour intensive, agro-based,
traditional or raw material based. These industries should be promoted more and more.
8. CONCLUSIONS AND SUGGESTIONS
India needs some form of export-led growth to achieve economies of scale. The reason is that
export-led-growth is not simply about exporting, but exporting in the context of a development
strategy based on upgrading Indian Socio-economic-agro-industrial objective. It is about
achieving an efficient combination between export-led-growth and economic growth. And
thirdly, because the discussion of the policies to resume growth has to be framed in the more
general context of what is constraining growth in present day circumstances.
Successful and sustained growth required growth in net exports. It is when one strategy is
overemphasized at the expense of the other, that the growth strategy becomes unstable. The
conclusion is that, for an export-led development strategy to cover all aspects of the economy as
possible a more balanced and equitable growth in exports and imports from India is required.
Obviously, it requires the cooperation and participation of all sectors of the country so that India
can access the large world markets and reduce its trade deficits with the surplus from other
-141-
Himanshu Agarwal
countries and with a push to growth in the domestic demand and tradable sectors and a high
level of infrastructure building.
A more balanced and equitable trade arrangement in India‟s trade should, therefore, lead to trade
surpluses and trade deficits so that will be able to share in the benefits of international trade.
What may happen is a move towards greater balance between the external and internal sources of
growth and the adoption of a middle-path strategy between Export-led-Growth and Economic
Growth.
The trade policy reforms which initiated in 1991, in India have drastically changed the foreign
trade sector scenario and have resulted in the shift from inward-oriented policies to and outward-
oriented policy. According to Deepak Nayyar, in large countries like India, where the domestic
market is overwhelmingly important, sustained industrialization can only be based on the growth
of the internal market. The vital fact is that the macro-economic interconnections between the
foreign trade sector and the overall process of planning for industrialization are crucial. The
solution to the problems of the national economy cannot be found through the foreign trade
sector on the simple recipes associated with that. On the other hand, the problems of the foreign
trade sector can be resolved to a considerable extent through an improved performance and a
better management of the economy at home. In other words, “the tail cannot wag the dog”.
Overall, it may be fair to say that openness, by leading to lower prices, better information and
newer technologies, has a useful role to play in promoting growth. But it must be accompanied by
appropriate complementary policies (most notably, education, infrastructure, financial and
macro-economic policies) to yield strong growth results. The precise mix of trade and other
policies that is needed will strongly depend on the specific circumstances of each country. It is
therefore, important to focus on the detailed pathways through which trade liberalization in each
country has and impact on poverty.
REFERENCES
[1]. Alias, Nor Zahidi (2009). My Say: The demise of export-led-growth?, The Edge Malaysia,
Issue 781, Now 16-22, 2009.
[2]. Singh, Arun Kumar and Agarwal, P.K. (2012). Foreign Direct Investment: The Big Bang in
Indian Retail, VSRD International journal of Business & Management Research 2(7), 329.
[3]. Asian Development Bank (2005). Export-led growth strategy, Asian Development
Outlook.
[4]. Balassa, B. (1978). Export and Economic Growth: Further Evidence, Journal of
Development Economics, 5(2), 181-189.
[5]. Bandyopadhyay, Debdas, Effects of Export Promotion and import Substitution on Pverty,
Inequality and Growth in India: An analysis in “closed loop” Input-Output framework,
University of Kalyani, West Bengal, India.
[6]. Banerjee, Nirmala (1977). Exports and the Indian economy, Economic and Political Weekly,
April 16, 637.
-142-
Himanshu Agarwal
[7]. Barajas, Adolfo, Ralph Chami, Connel Fullenkamp, Michael Gapen and Peter Montiel
(2009). Do Workers‟ Remittances Promote Economic Growth? Middle Eastern and central
Asia Department, IMF Working Paper No. 153, July.
[8]. Ben-David, D. and Loewy, M.B. (1998). „Free-trade, growth, and convergence‟. Journal of
Economic Growth, 3, 143-70.
[9]. Bhagwati, J. and T.N. Srinivasan (1993). “Indian Economic Reforms,” Working Paper,
Ministry of Finance, Government of India.
[10]. Biswal, B. and Dhawan, U. (1998). Export-led Growth Hypothesis for Taiwan, Applied
Economics Letters, 5(2), 699-701.
[11]. Blecker, R. A. (2000). “The Diminishing Returns to Export-Led Growth,” paper prepared
for the Council of Foreign Relations Working Group on Development, New York.
[12]. Blecker, R., (2002). “The Balance of Payments-constrained Growth Model and the Limits to
Export-Led Growth.” In P. Davidson, ed., A Post Keynesian Perpective on Twenty-First
Century Economic Problems. Northampton, MA: Edward Elgar.
[13]. Buffie, E.F., (1992). On the condition for export-led growth, Canadian Journal of Economics
25, 211-25.
[14]. Chow, P.C.Y. (1987). “Causality Between Export Growth and Industrial Development: Empirical
Evidence from the NICs,” Journal of Development Economics, 26, 55-63.
[15]. Datt, Ruddar and K.P.M. Sundharam (2009). Indian Economy, S. Chand and Company Ltd.,
New Delhi.
[16]. Dholakia, Ravindra H., Bakul H. Dholakia and Ganesh Kumar, (1992). Issues in Strategy
for Export Promotion: An Inter-industry Analysis, Economic and Political Weekly November,
28 M149.
[17]. Feder, G. (1982). On Exports and Economic Growth. Journal of Development Economics, 12,
59-73
[18]. Felipe, Jesus (2003). Is Export-led Growth Passe?
[19]. elipe, Jesus and Joseph Lim., (2000). Forthcoming. “Export or Domestic demand-Led Growth
in Asia.” Economics and Research Department Working Paper Series. Asian Development Bank,
Manila.
[20]. Giles, Judith A. and Cara L. Williams, (2000). Export-led Growth: A Survey of the
Empirical Leterature and Some Noncausality Results Part 1, Econometrics Working Paper
EWP0001, ISSN 1485-6441, University of Victoria, January.
[21]. Helpman, E. and Krugman, P.R., (1985). Market Structure and Foreign Trade, Cambridge
(Mass.): MIT Press.
[22]. International Monetary Fund (IMF) (1998). “India: Recent Economic Developments”, Staff
Country Report No. 98/120, IMF.
[23]. Jaime de Melo and Sherman Robinson, (March 1990). “Productivity and Externalities:
Models of Export-Led Growth”, Country Economics Department, The World Bank, WPS 387.
[24]. Jalan Bimal, (1992). “Balance of Payments, 1956-1991”, in Bimal Jalan (ed), The Indian
Economy: Problems and Prospects, New Delhi, 178.
-143-
Himanshu Agarwal
[25]. Kapila, Uma (2008-09). “India‟s Economic development Since 1947”, Academic Foundation,
New Delhi.
[26]. Karmakar, Suparna, (2009). Global Crisis: India May Fare Better, The Business Times, March
13.
[27]. Krueger, A. (1990). “Asian Trade and Growth Lessons,” American Economic Association Papers
and Proceedings, 80, 1990, pp. 108-12.
[28]. Malhotra, Kamal, (December 2006). “A Sustainable Human Development Approach to the Role
of Exports”, Ecofair Trade Dialogue, UNDP, Discussion Papers No. 4.
[29]. Marjit, Sugata and A. Raychaudhuri, (1997). “India‟s Exports: An Analytical Study‟,
Oxford University Press, New Delhi.
[30]. Ram, R. (1985). “Exports and Economic Growth: Some Additional Evidence”, Economic
Development and Cultural Change, 33, 415-25.
[31]. Sengupta, J.; Espana, J. (1994). “Exports and Economic Growth in Asian NICs: An
Econometric Analysis for Korea,” Applied Economics, 26, 41-51.
[32]. Srinivasan, T. N., (1998) „India‟s Export Performance: A Comparative Analysis‟ in I. J.
Ahluwalia and I M D Little (eds), India‟s Economic Reforms and Development: Essays for
Manmohan Singh, Oxford University Press, Delhi.
[33]. Thirlwall, A. P., (1994). Growth and Development. 5th ed. London: Macmillan.
[34]. Tyler, W., (1981). “Growth and export Expansion in Developing Countries,” Journal of
Development Economics, 9, 121-30.
-144-
A Study on Consumer Buying Behaviour for Personal Care

Products
Princi Guptaa*, Padma Misrab

aDepartment of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut, U.P (India)
Email Id: princigupta@yahoo.com
bDepartment of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut, U.P (India)
Abstract
PAPER/ARTICLE INFO
The first and most objective of my study is to study consumers buying behavior RECEIVED ON: 18/02/2017
regarding personal care products. The study of consumer behavior is the ACCEPTED ON: 31/05/2017
important factor for marketing of any goods and services. The consumer behaviour
suggests how individual, groups and organization select, buy, use and dispose off
goods, services, ideas or experience to satisfy their needs and wants. It also clues
for improving or introducing products or services, setting price, devising channels
etc.
Since liberalization 100% FDI is allowed in India. This has attracted foreign Princi Gupta, Padma Misra
companies to penetrate the Indian market. The marketers always look for emergent (2017), “A Study on
trends that suggest new marketing opportunities and here in India a lot of Consumer Buying Behaviour
opportunities are available. for Personal Care Products”,
The personal care sector is one of the best and important sectors at the present Int. J. of Trade and Commerce-
time. There are a lot of future opportunities in this sector. The increasing trend of IIARTC, Vol. 6, No. 1, pp.
different cosmetic products, beauty care products, skin care products, hair care 145-153
products etc fuels the market growing opportunities for cosmetic products.
From the last couple of years, the demand of personal care products is not only
increasing in only women but also it is increasing in men. e.g., Himani Fair and
Handsome-“mardon wali fairness cream”. Like that there are many opportunities
have been arising and changes are made in consumers’ perception.
Keywords: FMCG, cosmetics, personal care, cosmetic, buying behaviour
A Study on Consumer Buying Behaviour for Personal Care Products
Princi Gupta, Padma Misra
1. INTRODUCTION
Generally, personal care products are those products which are used by consumers for his
personal purpose. It includes different types of cosmetic and skin care products like talc, cold
cream, fairness cream, toothpaste, toothbrush, perfume, deodorant, hair oil, shampoo, soap, and
all type of baby care and beauty care products. These are the core FMCG products. Any person
need for these products every day.
Personal care products are part of FMCG industry. In other words we can say that personal care
products are the backbone of FMCG industry. As per the time passes away, the demand of
personal care products are increasing day by day and future of these products are also very bright
and profitable. There was a time when consumers did not spend too much amount on the
personal care products. But in present days, they are not only eager for spending more money on
the cosmetic products, but at the same time they are looking for a good and prestigious brand for
the particular product.
Modern media and advertisement plays an important role in the increasing of demand of
personal care goods. People of metro cities are too much brand conscious but if we look at the
people of semi-urban and rural areas, they are also looking for a good brand for the particular
product. Himani Fair and Handsome Mardon Wali Fairness Cream, Thanda Thanda Cool Cool
Navratna talc, International Lux etc. are the some of the front drive of advertisement in the way of
the success of personal care products.
1.1 Mazor Companies of Personal Care Sector
Company:
 L’Oreal
 Procter & Gamble
 Unilever
 Estee Lauder
 Shiseido
 Avon
 Beiersdorf
 Johnson & Johnson
 Alberto Culver
 Henkel
 Kao Limited
 LVMH
 Colgate-Palmolive
 Kanebo
 Coty
 Yves Rocher
 Mary Kay
-146-
 Kose
 Alticor
1.2 Market Size
The personal care market in India was estimated to be about Rs. 141 billion in 2015-16 (Rs 128
billion in 20014-15) recording a value growth of about 10%. This includes two important daily
hygiene product categories - personal wash (soap) and dental care (toothpaste and powders),
which cannot really be classified as cosmetic products. Excluding these products, the size of the
Indian cosmetics market is Rs. 64 billion in 2016 (Rs. 57.5 billion in 2015). The major segments, by
value, are skin care and shampoos, followed by men’s grooming products (which also includes
shaving accessories). A key market characteristic is the state of increasing competition and
aggressive pricing.
1.3 Table 1: Major Segments in Personal Care Market:
Product Category Rs. Billion % Value
Shampoos 16.5 11.7%
Skin Care 21 14.9%
Hair Dyes & Colours 7 5.0%
Colour Cosmetics 3.5 2.5%
Oral Care 22.5 15.9%
Men’s Grooming 12.75 9.0%
Personal Wash 55 38.9%
Deodorants & Perfumes 3.1 2.2%
Total 141.4 100%
Source: India: Personal Care Market Segments, by Value share
Fig. 1: Pie diagram showing major segments in Personal Care Market

Source: Prepaerd on the basis of Table no 1.
-147-
2. CONSUMER BEHAVIOUR DEFINED

The American Marketing Association has defined consumer behaviour as, “The dynamic
interaction of affect and cognition, behaviour, and the environment by which human beings
conduct the exchange aspects of their lives.” Peter D. Bennett, ed. Dictionary of Marketing Terms,
2nd ed. 1995. “Consumer behaviour refers to the actions and decision processes of people who
purchase goods and services for personal consumption.” James F. Engel, Roger D. Blackwell and
Paul W. Miniard, “Consumer Behaviour” (1990). Consumer behaviour refers to “the mental and
emotional processes and the observable behaviour of consumers during searching for, purchasing
and post consumption of a product or service.”. How consumers make decisions to spend their
available resources such as money, time and effort on consumption and use-related items is the
subject of consumer behavior study.
2.1 Model of Buyer Behaviour
Indian cosmetic industry is one of the profitable and stable sector. There is a bright and golden
opportunity in this sector. Many of the scholars, research agencies have done their research on
this sector and given their own different views and suggestions.
The global outlook series on Personal Care Products provides a collection of statistical anecdotes,
market briefs, and concise summaries of research findings. The report offers exclusive preludes,
and primers on the global Cosmetics and Toiletries markets such as Skin Care Products, Hair
Care, Oral Hygiene, Shaving Products, Bath & Shower Products, Facial Care, Lip Care, Feminine
Hygiene Products, Deodorants, and Fragrances & Perfumes.
“Consumer behaviour...... is the study of the processes involved when individuals or groups
select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and
desires.”
(Solomon,Bamossy et al. 2006,).
(Schiffman and Kanuk 2007) take a similar approach in defining consumer behaviour: “the
behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing
off products and services that they expect will satisfy their needs.”
-148-
According to Leslie Lazar and Schiffman (2004): consumer behaviour as individual differs as
from group. The family decision for a purchase decision is entirely different from individual
decision making. The authors discussed various variables that affect consumer’s purchase
decision. The book focused on family life cycle and various needs of consumer during different
life stages. The family decision making process as a group decision making is elaborated and it is
recommended to segment the market according to family need hierarchy.
Studies on consumer behaviour particularly in the Indian context are limited some of such
important studies are briefly reviewed in the following papers:
Subrahamanyam & others (2011) conducted a study on “Marketing of consumer goods” in
Vishakapatnam. It was found that large number of respondents purchased consumer products
from private retail shop followed by super bazaar & consumer co-operative store and housewife
played a vital role in taking purchase decision.
Ramakrishna Rao, Rama Raju & Ram Prasad (1987) conducted a survey on “Husband-Wife
Involvement in Buying Decision Making”. One of the major findings of the study is husband who
are young, highly educated & belongs to high income group are relatively less dominated than
their older, less educated & low income counterparts.
Singh J.D. (1981) conducted a survey on “A study of Brand loyalty in India”. The study
concluded that Indian consumers have been found becoming more and more brand loyal.
Depending upon the nature of the product, they have single or multiple brand loyalty are
“quality of the product, “habit of use‟ and “regular availability‟ of the product.
4. BACKGROUND AND PROBLEM
Everyone wants to be beautiful. The global world we are living in sets stereotypes that become
models. Models that are over represented all around us: in the magazines, on the television, in the
fashion shows, in the commercials, in the streets and even at work or at school. It is a fact,
everybody wants to look like the magazines’ figures, men as well as women: a perfect skin and a
perfect body for a perfect life.
Thus, in this paper we have studied about consumer buying behavior for Personal Care Products.
5. NEED OF THE STUDY
The study is done for getting a deep knowledge and idea about Indian cosmetic and personal care
sector. The need or objective of the study is to know how much consumers give preferences to
the brand of cosmetic goods whether the customers are satisfied with the cosmetic products of
the company and how far the company is able to satisfy the customer in terms of quality and
cost factors since in today’s modern era customers are the focus for any company, any
organization that without satisfying them no company can survive in this global competitive age.
Non satisfaction of the potential customers can lead them to switchover to another one. Now the
policy every company or organization is to provide satisfaction as there exists a lot of competition
for them. Hence, it becomes necessary to conduct a comprehensive research in terms of customer
-149-
satisfaction so that it is able to know how far it stands before others. This also helps to judge
whether if there is any lag in the policy and could take immediate action to rectify it. The need of
this paper also arose because an extensive survey could help the company whether the work done
by the company in the area of new products or/and satisfy the customers. The major focus of the
research conducted, therefore, is to discover the factors that people are aware about the upcoming
new products and the attribute of the product which attracted them for a trial.
6. RESEARCH OBJECTIVE
To know about consumer’s perception and buying behaviour about cosmetic goods when they
purchased it.
6.1 Sub Objective
1. To determine the actual demand of consumers.
2. To know about the performance of popular brands of different companies in market.
Research design specifies the methods and procedures for collection of requisite information and
its measurements and analysis to arrive at certain meaningful conclusion at the end of the the
study.
We conducted this research in Meerut on 100 respondents with the help of primary and
secondary data in order to analyze the consumer buying behaviour for personal care products.
The methodological tools used in the report are secondary in nature.
 Primary data- through questionnaire
 Secondary Data
o Internet database
o Books
o Research of articles from:
- Business journals,
- Magazines
- Internet blogs
-150-
8. ANALYSIS
Brand name is the major factor which influence customer’s buying decision. About 45%
respondents opened this fact too.
Expenditure on Personal care Products is another important factor to judge consumer’s buying
behaviour. People on an average spend Rs. 1500-Rs. 2500 on Personal Care Products.
Source of Brand awareness is another factor which provide latest information and inffluence
consumer behaviour. Most of the customers (25%) get latest information about brand awareness
from Newspaper.
-151-
Mostly 40-45% customers interested in getting more and more discounts.

9. CONCLUSION/FINDINGS
1. Customers like best quality product on any price, so company should add latest technology to
manufacture their products.
2. After sales service is the area where Indian and International Company can highly satisfy the
existing customers, because they can make more customers through their word of mouth. So
Indian and International Company should provide latest and reliable service to their
customers.
3. Customer’s behaviour always looks for some extra benefit with purchasing. They demand for
affordable price for product and gifts with purchasing.
4. International Company should make strategy to cater every income group customers in city.
Upper income group are affordable to purchase but lower income group is not. So
International Company should make policies to send their product and every home.
5. The Indian company should give more emphasis on advertising to create market awareness
and to make a brand image in the minds of investors.
The study clearly brings out that the Indian market is by and large for basic and essential
personal care: essential products like hair oil, shampoo and beauty creams (fairness creams, cold
creams, etc) are the most important categories. Therefore, a presence in this mainstream Segments
is essential to develop a national brand in personal care. However, it is also important to have a
product portfolio covering as wide a range of products as feasible (hair colours/dyes, colour
cosmetics, talcum powder etc.) to optimize the cost and effort of establishing itself in the Indian
market.
REFERENCES
[1]. Alexander, Lovejeet (2011). All’s Fair in India’s Cosmetics Market”, beauty packaging, New
Delhi. Journal of Pakistan association of dermatologists, 17, 100-104.
-152-
[2]. MU. Subramanian, (2011). Buying Behaviour of them Aged Indian Women,
Indian Journal of Commerce and Management Studies. 11(1), 143-147.
[3]. Khan, Shahzad (2012). ’Factors Affecting Buying Behaviour of Females for Purchase of
Cosmetics’ International Review of Business and Social Sciences, 1(9), 68-76.
[4]. Kotler, P. and Keller, K.L. (2009). Marketing Management. Pearson International Edition.
13thEdition. Pearson Education Inc. Upper-saddle River.
[5]. Kotler, Philip and Pfoertsch, Waldemar (2006). B2B Brand Management, ISBN 3-
540-25360-2.
[6]. Leon G. Schiffman and Leslie Lazar Kanuk, (2004). “consumer behaviour”, 8th edition,
January 1.
[7]. Noel, (2009). Consumer Behaviour. AVA publishing SA. Lavsanne.
[8]. Perner, L. (2010). Consumer behavior: the psychology of marketing. Retrieved October 2, 2010,
from http://www.consumerpsychologist.com/.
[9]. Ramakrishna Rao, Rama Raju & Ram Prasad, (1987). “Understanding consumer
behaviour”, Business standard 20 and 21 November, pp. 5
[10]. Ravikumar (2012). A study on impact of visual media advertisements on women consumers
buying behaviour in Chennai city’, International Journal of Multidisciplinary Research, vol.
2, issue 2, ISSN 2231 5780. www.thefreelibrary.com/Euromonitor.-a0132846700
http://ws.elance.com/file/Consumers_Attitude_towards_Cosmetic_Products.pdf?crypted1
[11]. Schiffman and Kanuk (2007). “Consumer behaviour”, 8th edition, ISBN 10: 0130673358 .
-153-
Indian Capital Market: Issues and Challenges
Preeti Singh
Department of Management Studies, JIMS, New Delhi, India
E-mail Id: preeti055@yahoo.com
Abstract
PAPER/ARTICLE INFO
Capital market deals with medium term and long term funds. It refers to RECEIVED ON: 01/05/2017
all facilities and the institutional arrangements for borrowing and lending ACCEPTED ON: 16/06/2017
term funds (medium-term and long-term). The demand for long-term
funds comes from private business corporations, public corporations and Reference to this paper
the Government. The supply of funds comes largely from individual and should be made as follows:
institutional investors, banks and special industrial financial institutions
and Government. Modern capital markets are almost invariably hosted on Preeti Singh (2017), “Indian
computer-based electronic trading systems, most can be accessed only by Capital Market: Issues and
entities within the financial sector, but some can be accessed directly by Challenges”, Int. J. of Trade
the public. Despite fast economic growth, India still faces massive income and Commerce-IIARTC, Vol. 6,
inequalities, high unemployment and malnutrition. India needs to follow No. 1, pp. 154-161
through with deeper and more wide ranging reforms which will bring the
regulatory environment and the framework of the economy to a level
which can cope with the challenges of growth. The present paper aims at
focusing the issues and challenges of Indian capital market in current
scenario and also suggests necessary policy reforms for a relatively
effective capital market.
Keywords: Equity-backed securities, SEBI, Bond market, Stock market,
SIFMA.
Preeti Singh
1. INTRODUCTION
A capital market is a market for the buying and selling of long-term debt or equity-backed
securities. In other words, it is defined as a market in which money is provided for a period on
more than a year. These markets direct the wealth of savers to those who can put it to long-term
productive use, such as companies or Governments making long-term investments. The capital
market includes the stock market where the equity securities are traded and the bond market
where the debt securities are traded. Financial regulators, such as the India’s Securities and
Exchange Board of India (SEBI) or the U.S. Securities and Exchange Commission (SEC),
administer the capital markets in their designated jurisdictions to ensure that investors are protected
against fraud, among other duties. Certain rules and regulations are formulated by them which
must be adhered to stick on to so as to safeguard the interest of the investors. Modern capital
markets are almost invariably hosted on computer-based electronic trading systems, most can be
accessed only by entities within the financial sector or the treasury departments of Governments
and corporations, but few can be accessed directly by the public. There are many such systems,
most serving only small parts of the overall capital markets. Entities hosting the systems include
stock exchanges, investment banks, and government departments. Physically the systems are
hosted all over the world, though they tend to concentrate in the countries like USA, U.K etc.
2. DIVISION OF THE CAPITAL MARKET
Capital market consists of primary markets and secondary markets. Primary markets deal with
trade of new issues of stocks and other securities, whereas secondary market deals with the
exchange of existing or previously-issued securities. Another important division in the capital
market is made on the basis of the nature of security traded, i.e. stock market and bond market.
Governments tend to issue only bonds, whereas, companies often issue either equity or bonds.
The main entities purchasing the bonds or stock include pension funds, hedge funds, sovereign
wealth funds, and less commonly wealthy individuals and investment banks trading on their
own behalf. In the secondary markets, securities existing are bought and sold among investors or
traders, usually on an exchange, over-the-counter, or elsewhere. The existence of secondary
markets increases the willingness of investors in primary markets, as they know they are likely to
be able to rapidly cash out their investments if the need arises.
Based on the type of securities traded capital market is divided into two parts i.e., stock market
and bond market.
 Bond Market - The bond market which is also known as the credit, or fixed income market is
that part of capital market where participants buy and sell debt securities which are usually
in the form of bonds.
 Stock Market - A stock market or equity market is a public entity for the trading of company
stock i.e., shares and derivatives at an agreed price. For Example: Bombay Stock Exchange or
BSE is one of the oldest stock exchanges and also enjoys its stature of being the fourth largest
stock exchange in Asia, deals with the trading of securities where about 5,085 Indian
companies are listed.
The Securities Industry and Financial Markets Association (SIFMA) classifies the bond market
into five different specific segments:
 Government & agency
-155-
Preeti Singh
 Funding
 Corporate
 Municipal
 Mortgage backed, asset backed, and collateralized debt obligation
3. ROLE OF THE INDIAN CAPITAL MARKET
The primary role of the capital market is to raise long-term funds for Governments, banks, and
corporations while providing a platform for the trading of securities. This fundraising is
regulated by the performance of the stock and bond markets within the capital market. The
member organizations of the capital market may issue stocks and bonds in order to raise funds.
Investor can then invest in the capital market by purchasing those stocks and bonds. The capital
market, however, is not without risk. It is important for investors to understand market trends
before fully investing in the capital market. To that end, there are various market indices available
to investors that reflect the present performance of the market. Ratios relating to Indian capital
Market are presented below in the table :
Table 1: Market Capitalization to GDP Ratio (percent)
Year BSE Market NSE Market Derivative segment
capitalization to GDP capitalization to GDP (BSE+NSE)
Ratio Ratio
2012-2013 87.7 86.0 375.2
2013-2014 69.2 67.0 358.3
2014-2015 63.2 61.7 382.6
2015-2016 65.3 64.1 417.7
Source: SEBI Annual Report, 2015-16
In the table 1, the ratios such as market capitalization to GDP (m-cap ratio), traded value to GDP
(traded value ratio) and price to earnings per share (P/E ratio) are monitored to gauge the extent
of development of stock market. After declining for three successive years the market
capitalization ratios have improved during 2015-16. The BSE market capitalization to GDP ratio
has increased from 63.2 percent in 2015-16 to 65.3 percent in 2015-16. Similarly, at NSE also the
ratio has increased from 61.7 percent in 2014-15 to 64.1 percent in 2015-16. The all-India cash
turnover to GDP ratio however declined further in 2015-16 to 29.5 percent from 32.2 percent in
2014-15. In the derivative segment, there was a substantial increase in the turnover-GDP ratio
from 382.6 percent in 2014-15 to 417.7 percent in 2015-16
4. ISSUES AND CHALLENGES OF THE INDIAN CAPITAL MARKET
Indian Economy is the tenth largest economy in the world by nominal GDP and the fourth largest
by purchasing power parity (PPP). Following a strong economic reform post-independence
socialist economy, the country’s economic growth progressed at a rapid pace, as the LPG policy
was implemented in 1991 for international competition and foreign investment. Despite fast
economic growth, India still faces massive income inequalities, high unemployment and
malnutrition.
-156-
Preeti Singh
Given below are the significant issues and challenges of the Indian capital market:
 Inflation – Inflation is the rate at which the prices for goods and services are rising and
subsequently, purchasing power is falling. The inflation situation in the economy continues to
be a cause of concern. Despite tightening of the monetary policy by the apex of India, RBI and
other steps taken by the government, inflation continues to remain close to the double digit
mark. High international oil prices, high global food prices are some of the causes of high
inflation.
 Non-uniform Tax reforms - With the non-uniformity in the tax system across the states it is a
difficult task to carry out the businesses which resulted in under-growth of the same. The
different tax rates implemented in some states across pan India is a major challenge to carry
out the business smoothly and also it accounts for a reason of increasing prices of goods and
services.
 Population – The current population of India is over 1.27 billion, making it the second most
populous country in the world after China, with over 1.35 billion people. India represents
almost 17.99% of the world’s population which is a serious concern. If the trend of growth
continues, the crown of the world’s most populous country will move on India from China by
2030. The population growth rate is at 1.58% with which it is predicted India would reach 1.5
billion mark by 2030.
 Education and Unemployment – 9.4 % of the population is unemployed which is yet another
alarming issue for the growing nation. The literacy rate in India is 74.04% as of April 2011
population census which constitutes of 65.46% females and 82.14% males. The literacy rate is
increasing but the rate of increment is low, which again is a matter of concern.
 Index of Industrial Production – Weakness in industrial production trend continues to be a
point of concern for the economy. The recent IIP numbers was registered below expectation.
Weakness was seen with growth in the capital goods segment, intermediate goods segment
and consumer goods segment which slowed down drastically during these months.
 Foreign Policy – Foreign investment flows into India saw a dip of about 3% in the year 2013
over the previous year. This dip is largely on account of a slowdown seen in case of FDI. In
2012, India attracted US$ 22.78 billion of FDI, which was reduced to US$ 22.03 billion in 2013.
 Poverty – About 37 % of Indian population lies below poverty line which is a very alarming
situation for a growing economy like India. The main reason for such diversity is the uneven
distribution of wealth in the economy where a handful of people are the owner of maximum
revenue and the majority of the population is too poor to even arrange for their daily bread.
The poor people are high in number, while the high net worth people is very few in numbers.
5. SUGGESTIVE REFORMS
India needs to follow through with deeper and more wide ranging reforms which will bring the
regulatory environment and the framework of the economy to a level which can cope with the
challenges of growth. The following reforms are suggested:
 Expand the retail investor base for a developed Capital market, and also enhance the investor
morale and domestic allocation. Investors’ confidence need to be rebuilt through, enhanced
investor protection, better transparency, market integrity, market efficiency and enhanced
quality of supervision over market intermediaries.
-157-
Preeti Singh
 India has to streamline financial market regulatory architecture and move to single window
approval process because there is an urgent need of redefining regulatory architecture gaps.
The over lapping regulatory body is the major cause of ineffective regulations, inability and
delay in exploring new markets and products design etc., for e.g. the most recent conflict
between IRDA and SEBI over Unit Linked Insurance Plans (ULIP).
 Target Tier II and Tier III cities because, the share of household savings invested inequities
are low and there is availability of immense potential in Tier II and Tier III cities. These cities
should be the central point to attract investment in Capital Markets. This can be achieved by
organizing investor awareness programmes and also few special incentive schemes may be
launched for these regions.
 An initiative has to be taken for the increasing amounts of domestic savings and global
investment into the infrastructure sector and other productive sectors. Initiatives required to
be taken is (i) liberalizing buyback regulations to allow vendors of major equipments to hold
equity in initial stages and buying back such when projects get operational; (ii) Allowing
Private Equity Funds as bidding partners in infrastructure projects (iii) allowing pension
funds to invest a greater part of their corpus in equities either directly or through mutual
funds to infrastructure projects; and (iv) encouraged private initiatives.
 To focus on other instruments like Mutual Funds other than the equities where the funds are
managed by big firms and portfolio managers.
 India’s warrants market is underdeveloped due to challenges in participation, product design
and pricing, therefore, allow registered, well-capitalized entities with risk management
capabilities to act as third-party issuers for warrants, trading of preferentially allotted
warrants in the secondary market and introduce multiple warrant products to meet diverse
investor needs.
 Interest-rate derivatives are needed to hedge rate risks, the largest macro-economic risk.
Globally, interest rate derivatives constitute the largest part of derivatives turnover on both
exchange traded as well as OTC products. In India, interest-rate derivates account for less
than 1 per cent of turnover.
 Deepen corporate bond, Deepen warrants market, Deepen interest futures market and
streamline securities lending and borrowing. Allow pension funds to invest in investment-
grade corporate bonds, credit hedging instruments such as Credit Default Swaps and
insurance companies to invest in all investment-grade corporate bonds, creating a liquid
benchmark index that can be used for pricing.
6. CONCLUSION
India has successfully implemented the first phase of reforms in 1990s which slowed down. India
needs to follow through with deeper and more wide ranging reforms which will bring the
regulatory environment and the framework of the economy to a level which can cope with the
challenges of growth. Emerging economies like India have an advantage of learning from the
mistakes of others. Policy makers must ensure broad and deep financial market. A practical
approach is required by both regulator and service provider. Regulation must not create hurdle
for financial engineering and innovation and service providers must not create a situation of
moral hazard by insensitive approach. Innovate for inclusive growth rather growth of balance
-158-
Preeti Singh
sheet figure. As India is poised to develop as a super economic power it must address various
challenges associated with the development of capital on priority. It has scope of development in
sectors like Pharmaceuticals, Retail industry, Automobiles, Education, etc. FDI should be allowed
in sectors to attract the foreign investors though keeping our own economy stable of its own and
not mostly dependent on global market. Inter and Intra terrestrial issues should be dealt with
proper policy making and private players should be encouraged in other sectors also so as to
enhance the overall growth of the capital market and the economy.
REFERENCES
Books:
[1]. Babu, G. Ramesh (2005). “The Financial services in India”, New-Delhi, Concept Publishing
Company.
[2]. Baums, Theodor, Richard M. Buxbaum, Klaus J. Hopt, Gruyter, Walter de (1994).
Institutional Investors and Corporate Governance
[3]. Bhalla, V.K. (2002). “Portfolio Analysis & Mangement”, New-Delhi, Sultanchand & Sons
Publication, 9th Edition.
[4]. Bhalla, V.K. (2004). “Investment Management”, New-Delhi, Sultanchand & Sons
Publication, 10th Edition.
[5]. Bharti, V. Pathak, (2006). “The Indian Financial System”, Pearson Education [India] Ltd.
2nd Edition,
[6]. Bhasin, Niti (2009). Foreign Investment In India, , New century Publication New-Delhi-
110002
[7]. Bhatia, B.S. and Batra, G.S. (2001). “Management of Capital Markets, Financial Services
and Institutions”, New-Delhi, Deep & Deep Publication Pvt Ltd.
[8]. Bhattacharyy, Dipak Kumar (2010). “Research Methodology”, Excel Books, New-Delhi,
2nd Edition.
[9]. Chandra, Prasanna (2006). “Investment analysis & Portfolio Management”, New-Delhi, The
McGraw Hill Company Ltd. 6th edition
[10]. Chopra, Chanchal (2004). Foreign Investment In India, Deep & Deep Publication Pvt Ltd.
New-Delhi-110027,
[11]. Davis, E. Philip, Steil, Benn (2004). Institutional Investors, MIT Press.
[12]. Donald R. Cooper and Pamela, S. Sachindler (2010). “Business Research Methods”, The
Mc Graw-Hill Education Private Limited, New-Delhi, 9th Edition.
[13]. Gordon & Natarajan (2007). “The Financial Markets & Services”, New-Delhi, Himalya
Publishing House, year 2007.
[14]. Hooda, R.P. (2003). “Statistics for Business and Economics”, Macmillan India Ltd. 3rd
Edition, Year 2003.
[15]. Jyee, Ravi, Sahai, Devendra, Kamat, Dushyant (2010). Indian Capital Market, Jnanada
Prakashan in association with Confederation of Indian Universities.
[16]. Khothari C.R. (2004). “Research Methodology”, New-Delhi, New Age International Pvt.
Ltd. Publisher, 2nd Edition.
[17]. Kohn, Meir (1999). Financial Institutions and Market, Tata MC Graw-Hill Publication.
-159-
Preeti Singh
[18]. Lesson on financial planning for young investors, publication securities exchange board of
India.
[19]. Pandian, Panithavathy (2005). “Securities Analysis and Portfolio Management”, Newdelhi,
Vikash Publishing House Pvt. Ltd.
[20]. Ranganathan, M. & Madhumahi, R., “Investment Analysis and Portfolio Management”.
Pearson Education [India] Ltd.
[21]. Rao, P. Mohan (2008). Financial System & Economic Reforms, Deep & Deep Publication Pvt
Ltd. New-Delhi-110027.
[22]. Rubin, Levin (2011). Statistic for management, Pearson Education [India] Ltd. 7th Edition,
Year 2011.
[23]. Sankaran, Sunder, “Securities Market and Products” New-Delhi, Taxman Publication Pvt.
Ltd.
[24]. Santosh, Gupta (2002). “Research Methodology”, New-Delhi, Deep & Deep Publication,
2nd Edition
[25]. Verma, M. L. (1999). Foreign Trade Management In india, Vikas Publishing House Pvt. Ltd.
Magazines
[1]. Business Standard
[2]. Dalal Street Investment
[3]. Economic and Political Weekly
[4]. India Today
[5]. Indian Economic Review
[6]. Money and Finance
[7]. The Capital Market
[8]. The Developing Economies
[9]. The World Economy
News Papers
[1]. Business Standard
[2]. The Economic Times
[3]. The Finance Express
[4]. The Times of India
Journals
[1]. Economic Research Unit
[2]. Financial Management and Analysis
[3]. Indian Accounting Review
[4]. Indian Journal of Accounting, Indian Accounting Association
[5]. Indian Journal of Commerce & Management Studies
[6]. Indian Journal of Commerce & Management Studies
[7]. Indian Journal of Management Accounting
[8]. Indian Securities Market Review
[9]. International Journal of Oceans & Oceanography (IJOO)
[10]. Internationally Indexed Journal
-160-
Preeti Singh
[11]. Journal of Financial and Quantitative Analysis

[12]. Journal of Financial Economic, The ICFAI University
[13]. Journal of stock market volatility
[14]. Monetary Research Project
[15]. Professional Banker.
[16]. The Indian Economic Journal
Web-Sites
[1]. www.BSEIndia.com
[2]. www.Capitaline.com
[3]. www.Capitalmarket.com
[4]. www.Wekipidia.com
[5]. www.CNBC.com
[6]. www.Moneycontrol.com
[7]. www.Indiainfo.com
[8]. www.googlebook.com
-161-
Marketing of Paintings: A Case of Thangka Paintings
Archana Rani
Department of Drawing & Painting, R.G. (P.G.) College, Meerut (U.P.) India
Email Id: drarchana.art@gmail.com
Abstract
PAPER/ARTICLE INFO
Thangka Paintings are a very much popular Tibetan paintings. A 'Thangka' RECEIVED ON: 21/03/2017
is also known as 'Tanka' or 'Tangka'. In Tibet the word 'thang' means flat. ACCEPTED ON: 11/05/2017
Thangka Paintings are painted or embroidered with the Buddhist banner. The
thangka painting's look is complicated and is a composite three-dimensional Reference to this paper
object. Thangka is a beautiful wall-hanging that is being further decorated should be made as follows:
with gold, silk and wood. Thangka paintings are visually very stimulating
and usually used for various functions and which even depict the life of the
Buddha. The most common shape in which a Thangka Paintings is done is in Archana Rani (2017),
the upright rectangular form. These paintings as mentioned used to represent “Marketing of Paintings: A
the life of Buddha and were used in temples, however, in the present scenario Case of Thangka Paintings”,
it is more appreciated as a form of pure art. Some artists even encouraged the Int. J. of Trade and Commerce-
IIARTC, Vol. 6, No. 1, pp.
incorporation of elements like train; plane etc to show the development of the
162-172
traffic of India. The price of the Thangka depends on the skills of the artist and
the perfection of the painting. As the Thangka was enjoying great popularity
and received high demands, the prices of the paintings increased as a result of
which fake or immature thangkas were introduced in the market known as
commercial Thangkas. Although it wasn’t popular in the market then and
remained confined in the monasteries, but later with the increased demand
and appreciation, cheap or fake Thangkas flushed in the market as commercial
Thangkas. One has to have good knowledge about this artwork before
purchasing so that the person is not cheated by the frauds in the market who
know various tacts to give the painting and old and original appearance.
Having good knowledge about the Thangkas is the only remedy to appreciate
the original artwork and its popularity in the Indian market.
Keywords: Thangka Painting, Travelling monks, Abhidhorms teachings,
Budhist scripture.
Archana Rani
1. INTRODUCTION
A "Thangka," also known as "Tangka", "Thangkaa" or "Tanka" is a Tibetan silk painting with
embroidery, usually depicting a Buddhist deity, scene, or mandala of some sort. A thangka, was
hung in a monastery or over a family altar and occasionally carried by monks in ceremonial
processions. It can be rolled up when not required for display, and is sometimes called a scroll-
painting. Thangka painting was popular among travelling monks because the scroll paintings
were easily rolled and transported from monastery to monastery. These thangka served as
important teaching tools depicting the life of the Buddha, various influential lamas and other
deities and bodhisattvas. One popular subject is the Wheel of Life, a visual representation of the
Abhidharma teachings (Art of Enlightenment). The devotional images acted as centerpieces
during rituals or ceremonies and were often used as mediums through which to offer prayers or
make requests. The visually and mentally stimulating images were used as a focus meditation
practice, to bring the practitioner closer to enlightenment. Painted thangkas are done on treated
cotton canvas or silk with water soluble pigments, both mineral and organic, tempered with a
herb and glue solution. The entire process demands great mastery over the drawing and a
profound understanding of econometric principles. The artist must paint according to certain
basic rules that dictate the number of hands, the color of the deity‟s face, and the posture of the
deity, the holding of the symbols and the expression of the face. Final touches may be added
using 24-carat gold. The composition of a thangka is highly geometric. Arms, legs, eyes, nostrils,
ears, and various ritual implements are all laid out on a systematic grid of angles and intersecting
lines. A skilled thangka artist generally includes a variety of standardized items ranging from
alms bowls and animals, to the shape, size, and angle of a figure's eyes, nose, and lips, in the
composition. Thangka often overflow with symbolism and allusion. Because the art is explicitly
religious, all symbols and allusions must be in accordance with strict guidelines laid out in
Buddhist scripture. The artist must be properly trained and have sufficient religious
understanding, knowledge, and background to create an accurate and appropriate thangka.
According to historical records, around the seventh or eighth century A.D. Thangka drawings
began to be made in Tibet. This approach stems from Indian storytelling, where the image from
which the story was told is vertically suspended, to visually assist in the story-telling. The most
common shape in which a Thangka Paintings is done is in the upright rectangular form.
2. HISTORICAL BACKGROUND
The origin of the basic and the original Thangka painting is from the ancient Indian religious art.
These paintings even today are heavenly drawn inspirations from Nepalese, Chinese and
Kashmiri styles. Thangkas are very much flexible that can also be rolled and called a scroll-
painting. A Thangka painting is an object which craves for devotion, spiritual practice, and is a
harbinger of blessings. Thangkas exclusively comes in variety of styles, portraying the Buddha
and other Hindu deities. It is believed that the hanging painting which brings blessings in the
household and serves as a constant reminder of the Buddha‟s teachings of compassion, kindness
and wisdom. Tibetan thangka painting is based upon the Indian religious art of pata and
mandala, complex paintings whose designs were used in certain religious rites. As the Tibetans
closely adhered to the religious teachings of the Indian Pandits, so did they follow the strict
guidelines laid down by Indian and later, Nepalese and Chinese artist? Eventually, it was the
-163-
Archana Rani
Nepalese and Chinese painters who had the most far-reaching influence on the development of
the Tibetan thangka.
A thangka painting is not simply a decoration or a creation of beauty, but a religious object and a
medium for expressing Buddhist ideals. These works of art function as models on which the
practitioner can reflect and meditate. The Thangka until today is still mainly a form of virtuous
duty by artist for the temple, some to decorate temples, some used to form lasting bonds with
people to the living Buddha. But over time the development of Thangka has come out of the
scope of religion and emerged as a pure and beautiful art form.
Turning to the future of Thangka collection trends, Xie Ji-sheng said that the value of this art form
will continue to rise give the increasing attention do to the Tibetan culture. For many years,
thangkas were not known to the Western world it influenced Indian market too. But with the
modernization of Tibet and India, the paintings have been turning up with increased frequency in
local and international art collection markets. At a sale in New York in 1994, a large embroidered
thangka painted at the time of the Ming Dynasty (1368-1644) was sold for $1 million. In 2002, the
same thangka was sold again for around $3.6 million, making it a record for any auctioned
thangka. However, nowadays it is rare to find thangkas painted before the Ming Dynasty.
Apart from ancient classic works created in Tang (618-907) and Qing (1644-1911) dynasties,
modern thangka paintings have also been favored by enthusiasts and collectors both home and
abroad. Some works of contemporary artists have great value for collectors because of the
painters' consummate skill and innovation of blending modern painting styles or approaches
with traditional characteristics. With the development of a new generation of thangka artists, the
content of thangka artworks has been enriched as well.
Since 2006, Thangka has been included in the first national list of intangible cultural heritage
protection. With the Tibetlogy boom Thangka has also been gaining attention among collectors.
Thangka have become a major focus of auction markets in India. The works of Thangka masters
and many other contemporary works are also frequently sold in the tens of thousands of dollars;
few have even reached tens of millions of yuan.
In recent years, the Thangka collection in Indian market continues to heat up, from 2000 to date;
the price of Thangka has nearly jumped 10 times. Those from the Ming and Qing dynasties have
set record high prices such as at the 1994 Christies auction in New York of one million U.S. dollars
for a Thangka named Red Night Magic of the Yongle Imperial system. At the 2002 Christie
auction in Hong Kong, a price of 30.8741 million Hong Kong dollars set a new record. On August
13, 2008, "The Thousand Thangka of Gesar to welcome the Olympics" exhibition opened in
Beijing Cultural Palace of Nationalities. The National Political Consultative Conference Chairman
Jia Qinglin, Panchen Lama and other leaders visited the exhibition. The exhibition had aroused
widespread attention at home and abroad.
In August 2008, the first International Thangka Art and Cultural Heritage Expo was held in
Qinghai where many Thangka art treasures at home and abroad had attracted a lot of collectors.
At the fair held during a Thangka art auction, after fierce bidding, eight Thangka works were
auctioned off totaling 690,000 yuan. It is apparent that collecting Thangka is increasing becoming
favored by consumers of Indian and western market.
-164-
Archana Rani
According to Professor Xie Ji-sheng, with the opening and maturity of the art market, more art
forms have gained exposure through the auction markets allowing Thangka to be seriously
appreciated as one of the earlier art forms. How a Thangka is valued is affected by its art style
and genre, the complexity of the painting, material texture and quality. No less is the value also
dependent upon the skill of the artist. A skilled artist takes about 6 to 8 months to complete a
Thangka of one squared meter in size, based on a daily work schedule of 6 to 8 hours. To account
for the length of careful production, such a Thangka will typically sell for 30,000 RMB or higher.
Therefore, a high quality Thangka of significant size will be correspondingly valued higher.
Originally a Buddhist art depicting a Buddhist deity or a famous scene suddenly became very hot
on the art market. Things seem to have changed overnight. With thangka paintings well received
on the art auction market, a collection craze has been sweeping both Indian and other countries.
Sep 21, 2015 auctions, A finely embroidered Buddhist thangka was sold for $1.5 million at
Sotheby‟s, New York on Wednesday. Estimated to sell for between $80,000 and $120,000, the
artwork fetched 15 times the expected price.
The 18th century Qing dynasty thangka hung in an Arizona home for decades. The artwork was
bought by the collector Wilton D. Cole and his wife in 1971 and passed down to their children,
who were reportedly unaware of the artifact‟s value.
Antiques and the Arts Weekly reported that six potential buyers fought to secure the thangka in a
protracted bidding war that lasted several minutes. Eventually, a private collector from Aisa
landed the artwork with a winning bid of $1,510,000.
Sep 21, 2015 auctions, A painting of Chakrasamvara and Vajravarahi, Nepal, 16 th century. Sold for
$545,000 in the The Van der Wee collection of Himalayan Paintings auction on 15 March 2016 at
Christie‟s New York.
An important and exceptionally fine painting of Vaishravana, Tibet, 18th century. This work was
offered in the the Vander Wee Collection of Himalayan Paintings auction on 15 March 2016 at
Christie‟s New York.
3. THEORETICAL ASPECTS
There are many reasons for commissioning a thangka, the most common being to create an object
of worship which will lead to the accumulation of merit. For even looking at a thangka is in itself
a good deed. By meditating on such objects, one can train the mind and gain an understanding of
certain types of awareness that specific image portrays. Other reasons for commissioning a
thangka painting may be to bring about good health, prosperity or long life. Sometimes they are
commissioned to aid the recovery of a sick person, or to protect a person through vulnerable
periods in his or her life, or to help in the rebirth of someone who has recently died. In all these
cases, a lama is usually consulted to advice on which deity should be painted to give the greatest
assistance to that person. So if somebody dies, the family of the deceased will consult a lama or an
astrologer who will advise them which deity would be the most propitious in assisting a good
rebirth.
A Thangka is more than just a painting. It is an object of devotion, an aid to spiritual practice, and
a bringer of blessings. Thangka paintings come in a variety of styles, portraying the Buddha or
other deities. The iconography of the thangka is informative. Hanging a Thangka painting is
-165-
Archana Rani
considered auspicious and brings blessings to the household and serves as a constant reminder of
the Buddha‟s teachings of compassion, kindness and wisdom.
Originally, Thangka painting became popular among travelling monks because the scroll
paintings were easily rolled and transported from monastery to monastery. These Thangkas
served as an important teaching tool depicting the life of Buddha, various influential lamas and
other deities and bodhisattvas. One popular subject is the Wheel of Life, which is a visual
representation of the Abhidharma teachings (Art of Enlightenment). To Buddhist people these
Tibetan religious paintings offer a beautiful manifestation of the divine, being both visually and
mentally stimulating.
For Tibetan Buddhist monks and nuns alike, Thangka is regarded as an essential tool during
religious practice. Worship Thangka could earn merit while observing Thangka would evoke
associations of Buddhist teachings. Similarly, at home, the faithful would invite the painter to
create a Thangka for worship. Some would also personally paint and dedicate it to the monastery
temple as decoration. The most spectacular can be found in monasteries during festivals and
religious assemblies when monks bring out their collection of Thangka for public display as a
demonstration of the glory of the great Buddha. They would also give speeches along with
singing and dancing, creating an occasion of magnificence of solemnity. Normally the Thangka
used for indoor worship is generally not more than one meter in length. However those used for
public display when opened in full can completely cover one side of a mountain.
As a kind of Tibetan scroll-banner painting and a unique art form, the thangka painting requires
serenity and sacredness of the painters. Before painting a thangka, a painter needs to take a bath,
burn incense and chant scriptures in order to paint in the state of tranquility. The whole process
goes without any utilitarian purpose. Thangka paintings can have multiple functions. The images
of deities can be used as teaching tools while preaching of Buddha. They can describe the various
historical events in the life of the Lamas and narrate mythological stories. These paintings use
devotional images which are the centerpiece in a ritual and prayers are offered to them. Most
important Thangka Paintings depict the wheel of life, Buddha life story, Abhay Mudra, yantra
mandala, medicine Buddha mandala, etc. Most important aspect of Thangka Paintings is that all
these paintings are hand painted by dedicated artisans. Thangka painting is a Nepalese art form
that came down from Nepal to Tibet to India. Thangka paintings are especially painted or
embroidered Buddhist banners which are hung in a monastery or a family altar or even carried in
ceremonial processions.
4. METHOD AND TECHNIQUE
Thangkas are painted on cotton or silk. The most common is loosely woven cotton produced in
widths from 40 to 58 centimeters (16 - 23 inches). While some variations do exist, thangkas wider
than 45 centimeters (17 or 18 inches) frequently have seams in the support. The paint consists of
pigments in a water soluble medium. Both mineral and organic pigments are used, tempered
with an herb and glue solution. In Western terminology, this is a distemper technique.
Line drawing is the basic means of traditional Tibetan painting and had once reached a high level
of development. In most cases, Thangka uses gold threading to outline the figures and scenery
through varying the line thickness, thereby drawing focus to every part of the picture. The artists
are very good at using gold, and often use pink gold as the bottom layer, and then use gold to
-166-
Archana Rani
outline patterns, so as to increase the layering effect of gold shine. They have very strict quality
requirements for gold, using only the purest gold personally processed to powder. In order to
increase the brightness of some outline in gold, they use what is called the "cat's eye stone”
repeatedly rubbing onto the surface where gold is applied. As a result, the entire picture appears
rich in cultural style and can be used as an elegant decoration.
In addition to composition and the artistic treatment of these characteristics, methods such as in-
shading, hook lines, paint smudging is also strengths. Generally iridescent greens are used for
rocks, trees, sky and the ground. People, buildings and large areas of the Buddha are created with
warm tones of yellow and red. This color contrast of warm and cool color tones not only
splendidly demonstrates well coordination within the picture but also a structured yet decorative
coloring effect. Artists mainly use opaque mineral pigments for coloring, such as cinnabar, stone
yellow and malachite green. These pigments are enhanced for anti-corrosion ensuring the
longevity of the colors. Therefore, despite the passing of time, the colors remain as fresh as ever a
further testament to the artist‟s consideration.
The Tibetan artists not only pay attention to the overall effect of the picture but also focus on the
detailed portrayal of each image. For instance within each frame, the natural objects such as rocks
and plants and the characters are blended using the same coloring scheme with different shades
creating a layering effect.
The contents of the Thangka paintings range widely. They include religious activities and
characters from Buddhism and story scenes while also depict the traditions and many sights of
the high plateaus. To reflect such voluminous content in a scroll painting requires extraordinary
skills and rich life experiences. In particular, the stories are portrayed according to history
without conceptualization. The Thangka artists paid the utmost attention to detail for every single
aspect in the painting from the architecture of popular customs down to the weaponry and
armor. Such careful composition demonstrates the artist‟s creative skills in realistically depicting
life. Tibetan Thangka is generally 60 cm in width and 90 cm in length. The center of the frame
contains a big Buddha, which is surrounded by stories depicted in a clock-wise fashion around
the Buddha, which serves as a focal point for each of the stories.
Traditionally, it is said that an artist should possess certain characteristics: modesty, devotion to
religion, soundness of all senses, diligence and a kindly disposition. In addition, depending on
the subject of the work, it is said that the artist may have to follow certain personal restrictions:
abstinence from meat, alcohol, onion and garlic and strict personal cleanliness. Creating Thangka
requires extreme patience and precision. The process is complicated, and painters have to abide to
the classic principles of Tibetan Buddhism, which Thangka is based on, as well as painting
techniques. The pigments are made from natural mineral materials to prevent the color from
fading. The meditation may take many forms. One way is for the painter to meditate on a
particular deity, which is not necessarily the one that will be featured in the painting. The image
of the deity, Manjushri, the deity of wisdom, for example, may be used and is placed in front of
the artist, who imagines the image melting into his body before he generates himself as
Manjushri.
The next step is to invoke the image of the deity about to be painted. If it is one of the Taras, for
example, the artist will visualize the goddess who then dissolves into the canvas, brushes and
paints, thus, making them the essence of that deity.
-167-
Archana Rani
The final step is the motivation for creating the thangka, when the artist thinks of all the suffering
beings in all the different realms and remembers that he is painting the thangka for the benefit of
them all. Innovations to Thangka are underway in various aspects. Lhaug Dakpo, a Thangka
artist, gradually combined modern painting techniques and changed the composition of pictures,
scenery and perspective in his work, after his Thangka did not sell well.
In one painting, a Buddha figures changes into a Indian girl surrounded by musical instruments.
Penpa hopes to add planes, trains and tourists in his future painting, to reflect the development of
traffic in India. For him, traditional Thangka paintings are distinctly Buddhist and tied with faith.
Modernization will limit the development and spread of Thangka. He stresses the importance of
keeping traditional painting techniques.
Thangka paintings often cater to tourists, with changes made in the background and designs,
with only the Buddha figures kept. Ma Shengde said this might hinder Thangka. Innovation
should be prudent and respectful. The core of Thangka is its religious aspects. It's not for mass
consumption and should not cater to public demands," he said. "Our descendants should know
what original Thangka looks like."
For Tibetans, traditionally, Thangka painting is only passed down to monks or males in the
family, whereas a Thangka master walks by the tradition and teaches Thangka skills to his
daughter for the better inheritance and development of the Thangka art.
„The painters of Tibet and India pursue their art in an orderly and systemic way. When creating
thangka paintings they proceed through six clearly defined steps. The first is the preparation of
the painting surface. Second comes the establishment of a design on that surface by means of a
sketch or transfer. The third step involves the initial coats of paint, and that is followed by steps
four and five: shading and outlining. The sixth and last step consists of several finishing touches.‟
As a thangka painting is made to be rolled up in a scroll fashion, it is painted on cloth whose
surface has two layers: the support and ground. The most common cloth, or support, used today
is light-weight Indian cotton of fine but slightly open weave. An open weave allows the „gesso‟ a
kind of white paint to settle more evenly. This underlying material holds the subsequent layer of
ground and paint. Once the artist has acquired the cloth, it is washed, dried and cut to fit the
wooden frame upon which it is stretched. This must be done carefully to avoid any bulging
which, if it occurs, will be permanent.
Once the fabric is secured onto the frame three steps are taken to prepare the cloth for painting.
First is the sizing of the cloth, which involves the preparation of warm solution of hide glue
which is applied to both sides of the cloth with a large brush or a wadded rag. Once the cloth is
saturated, any excess is removed and the cord that connects the cloth to the stretcher is tightened.
Then the canvas is aside to dry.
Secondly, the cotton support is coated with gesso. The gesso used is a solution of either chalk or
white clay, whichever is the most available and is combined with size solution until it reaches the
consistency of buttermilk. The mixture is then strained through a cloth to remove any lumps and
is applied to both sides of the cloth in thin even coats with a wadding rag or gesso knife. When
the first coat has dried the artist determines if another is necessary by holding the canvas up to
the light. If light comes through, another application of gesso is applied.
-168-
Archana Rani
Finally, the surface is polished until it is perfectly smooth and ready for use. The drawing of a
thangka is done in several stages – first are the lines of orientation. The most important line is the
central vertical axis, which forms the exact centre of the painting around which the composition
will be laid out. The vertical axis usually marks the centre of the main figure – in relation to which
all the other figures of the composition are to be positioned. The figures portrayed have to be in
perfect relationship to the central axis, any mistakes affect the religious value of the painting.
There are eight major lines of orientation to be drawn. The first of these are the two diagonals.
These are drawn from one corner of the canvas to its diagonal opposite and enable the drawing of
these two axes. Such lines are drawn with the use of a chalk line or a compass. The second lines to
be drawn are the vertical axis and the horizontal line and finally the four outer lines that define
the edges of the painting are added.
Once the eight major lines are established the artist can begin his sketching. The first step is to
establish the area of the main figure on the vertical axis and its position in relation to the
horizontal axis. In order to sketch the figure properly the artist must know the iconographic
measurements of each deity as established by Buddhist tradition. The main iconographic classes,
in order, are: buddhas, peaceful bodhisattvas, goddesses, tall wrathful figures, short wrathful
figures, and humans. Other iconographical systems exist with more classes that are basically sub-
divisions of the above classes with the addition of some rare types. The next step is to apply paint
to the canvas. This is a two step process which includes filling in the areas of different base
colours and shading and outlining these areas. Mineral pigments, mixed with a binder of either
size or glue, are used for the initial coats of colour, while dye and lakes are used for the shading
and outlining.
After applying the initial coats of colour the next step is the shading. Shading, shadowing and
gradation of tones are done to give a three dimensional quality to objects such as clouds. There
are two main methods of shading: wet and dry. Wet shading is the blending of two wet colours,
which is done during the application of the initial coats of colour. Dry shading is usually a
secondary step and is the application of successive thin washes of colour over the dry preliminary
coat. The main shading colours are organic dyes and lakes; mainly indigo (blue) and lac dye (red).
Other dyes used are mainly yellow and orange. Typically, indigo is used to shade the initial blues
and greens, lac dye is used for the areas of red, maroon, orange, yellow or flesh colour, while
yellow is used to intensify and highlight the greens. Shading is done much as the initial coats of
colours are applied – working from the farthest planes to the closest and working with as much of
one colour at once as possible. Shading is an important feature of Thangkaa painting, taking up a
large portion of the artist‟s time, and is done very carefully and precisely.
Outlining is one of the final steps in the process of Thangka painting. It is done to intensify
distinct objects, setting them off from their surroundings. It is used to indicate any small or fine
details. The colours mainly used in outlining are indigo and lac dye, each used to outlined shaded
areas of the same colour. Other colours used are: white, for water and bone ornaments; gold, for
nimbuses, seats, flowers, leaves, robes, multi-coloured lotuses and rocky crags. These are applied
in stronger concentrations than in shading to contrast the base colour and the background more
sharply.
-169-
Archana Rani
The last major step in painting the thangka is drawing the faces of the main figures. This demands
great attention. The application of the gold with a burnishing tool is the final step in thangka
painting. There are two main types of burnishing, flat burnishing, in which large areas of gold are
uniformly polished, and selective burnishing, polishing certain areas or drawing designs onto the
gold with the point of the burnisher.
Most thangka paintings are mounted in a brocade frame. Although there is nothing to stipulate
that it has to be brocade or even cloth, it is a tradition that has continued from the past. Silk
brocade is the most popular form of mounting since it is seen as having greater religious merit
than other less expensive types of cloth. The quality of brocade used, varies from patron to
patron, but again it is generally thought that the higher the quality, the greater the religious value
the painting will assume. Likewise, the greater the number of brocades used, the greater the
enhancement of the painting. Often, for example, brocade square is sewn on to the mount below
the picture to draw attention to the subject, whilst other paintings are framed with one or two
thin strips of brocade, often red and yellow, before being placed on the main brocade, again for
emphasis.
The proportions of the mounts tend to be the same, although sizes may vary according to the
intended wall space on which the painting is to be hung. Normally, the amount of brocade used
at the bottom equals half the size of the thangka, whilst the amount at the top is a quarter of the
size of the thangka. Similarly, the mounting at the edge is equal to one eighth of the size of the
thangka.
One final addition may be a curtain, which tens to be a piece of orange or yellow cotton material
attached to the top of the brocade mount and which, when let down, covers the painting. Two
thin red strips of material often hang down in front of this. The purpose of the curtain is mainly
twofold, although not all thangkas have them. First, it is used as a form of protection, preventing
the accumulation of dust and is raised only on special occasions and secondly, it is an extra
adornment to enhance the value of the work further.
5. MARKET AND MARKETING OF THANGKA PAINTINGS
On the one hand, the collection craze shows that thangka paintings enjoy a great popularity. On
the other hand, some illegal phenomena begin to show up on the market. Some fake printed
thangka paintings appear on the market; some so-called "thangka paintings" are only made semi-
manually. Some illegal merchants even use new smoked thangka paintings to pass for old ones
for higher prices. When thangka paintings become commercial, changes have also taken place in
the painters' attitude and purpose.
Some thangka painting workshops create thangka paintings on production lines with different
painters having specific divisions of work in order to improve work efficiency and make higher
profits. Many painters now use shabby and low-priced paints to replace the ever gem, coral and
turquoise paints to cut costs, damaging thangka paintings' quality and image.
The market changes every day with the value of the thangka art remaining unchanged. So, what
is vital to thangka is to keep an upright attitude and motive. Anyhow, the inheritance of the
thangka art is more important than money.
Art lovers and collectors can divide thangkas basically into three different categories:
 Cheap thangkas made for the tourist market
-170-
Archana Rani
 Thangkas older than 100 years.

 High quality thangkas created in the 20th century.
Thangkas older than 100 years were and not allowed to be exported out of India, which can be
considered the most important country for Tibetan thangka painting. In terms of quality, old
thangkas are not necessarily the better thangkas. In former times there were good and poor
handicraftsmen just as today, or the quality standard was limited due to what the commissioner
of a thangka was willing or could afford to pay. If you are familiar with the subject, you can easily
verify this fact by visits to museums of East Asian Art.
I also want to mention that a large part of "old" thangkas and 'old' Tibetan bronzes offered in the
Western art market, is in my personal and humble opinion of rather recent nature. Nepalese
handicraft people are great masters in making things "old". (Maybe one should really speak of
artists in such cases.
A thangka of the highest quality created in the 20th century can be a real masterwork, which
required several months of work. But how can a non-expert discern a good from a poor.
But there are also a few good indications for inexperienced newbies:
• The level of elaborateness and details of the painting
• The harmony of the color combinations
• The use and quality of color gradations
• The price
• The use of real gold
• The quality of the cloth
Take some time for comparisons, and by and by we will get an eye for good quality. Take also a
look at the depiction of the smaller gods and goddesses outside of the center of the thangka. For a
top quality thangka we should accept a price of ca. $ 1,000 and more. Cheap tourist thangkas are
available in Nepal for as little as $ 20. As the use of real gold is by nature expensive, it is used only
for the best thangkas. But beware, cheap thangkas may also be painted with golden colors, but
this is a golden color not from real gold. These color pigments do not have the brilliance and
shining of the real gold colors. They are easily recognizable. As far as I remember, the dealers in
Dharmshala used the terms "gold colors" and "golden colors" to fool the tourists without
offending the experts. Provided a thangka still has its original cloth, it too can be an indicator for
quality. Lush brocade cloths usually (but not always vice versa) decorate a thangka of better
quality.
6. CONCLUSION
Unfortunately, today, thangka painting and with it, other aspects of Tibetan art are threatened by
the influx of fake or badly finished paintings. In many tourist areas such as Delhi, Srinagar or
Kathmandu, these pieces are offered to the unsuspecting buyer as authentic Thangkaas. Many
have been prematurely „aged‟ by holding them over butter lamps for long periods or by twisting
them tightly thereby cracking the paint to give the effect of an old, much-used item. The symbols
used in some of these paintings have been incorporated with little or no regard to the traditional
guidelines laid down over the centuries. Often the grids have been badly or incorrectly drawn
and the figures and features from many different mandalas combined into one picture.
Furthermore, the silks and paints used are often of inferior quality, which often leads to cracking.
-171-
Archana Rani
Most of the painting must be appealing, beautiful and pleasing to the eye. The image must appear
to be well proportioned. There are certain characteristics to look for in determining if the image
has been done properly. In a well executed thangka painting the feet and hands are youthful with
long tapering fingers and toes, marked with the sign of the wheel (dharmachakra) and the endless
knot. The limbs are graceful unblemished and the anklebones hidden. In the case of a thangka
painting depicting a Buddha, his stomach is wide; the navel twisted clockwise, the waist well-
defined and the upper body broad with rounded shoulders. The throat is tapered, the lips red and
the nose long and pointed. The eye, the most important detail, should resemble lotus petals with
the whites and pupils clearly defined. The eyebrows must be distinct and should feature a fine
white hair (urna) between them, whilst the head should be large and rounded with broad
forehead, distinct hairline and the ears long and lobed. Gema Lama States in his book. The
Principals of Tibetan Art that, „Generally, the form is meant to be large and erect, with dignified
bearing and pleasing mien‟. He goes on to point out that the masculine and feminine features
„should be clearly defined and the clothing graceful‟.
To sum up, Traditionally, thangka paintings are not only valued for their aesthetic beauty, but
primarily for their use as aids in meditational practices. Practitioners use thangkas to develop a
clear visualization of a particular deity, strengthening their concentration, and forging a link
between themselves and the deity. Historically, thangkas were also used as teaching tools to
convey the lives of various masters. A teacher or lama would travel around giving talks on
dharma, carrying with him large thangka scrolls to illustrate his stories.
REFERENCES
[1]. Asvaghosa (1978). Buddhacarita (Ed.), E.R. Johnston Pub.
[2]. Beal, Samuel (1969). Dhammapada, Indo-Asian Publishing House Delhi-7.
[3]. Beer Robert (2016). Buddhist Art Coloring Book: Figures, Shambhala Publications,
Incorporated, 16 Feb.
[4]. Kashyap, J. (1956) ed. Nalanda Devanagari Edition.
[5]. Kashyap, J. (1956). Cullavagga (Ed.), Nalanda Devanagari Edition, Nalanda.
[6]. Kashyap, J. (1961) Ed. Kathavasthu, Nalanda Devanagri Edition, Nalanda.
[7]. Novick, Rebecca McClen (1999) Ed. Fundamentals of Tibetan Buddhism, Crossing Press.
[8]. Oldenberg, H. (ed.) Dipavamsa
[9]. Personal visit of different Buddhist monasteries of Indian Himalayan Region of India.
[10]. Vaidya, P.L. Dasabhumikasutra Institute of Sanskrit Learning, Darbhanga.
[11]. Yeshe De Project (1987). Art of Enlightenment: A Perspective on the Sacred Art of Tibet,
Dharma Publishing, Berkeley, CA.
[12]. http:/www.dinkunstner.com", for thangka paintings.
[13]. Source: Xinhua/Global Times.
-172-
New Era in Telecommunication- The Study of Reliance Jio
B. Kumar
Faculty of Commerce & Business Administration, Meerut College, Meerut (U.P), India
E-mail Id: drsunil345@gmail.com
Abstract
PAPER/ARTICLE INFO
Being world’s second largest population of 1.2 billion, India is a young RECEIVED ON: 11/03/2017
nation with 63% of its population under the age of 35 years. It has a fast ACCEPTED ON: 16/05/2017
growing digital audience with 800 million mobile connections and over
200 million internet users. Reliance thoroughly believes in India’s Reference to this paper
potential to lead the world with its capabilities in innovation. Towards should be made as follows:
that end, Reliance envisages creation of a digital revolution in India.
Reliance Jio aims to enable this transformation by creating not just a B. Kumar (2017), ―New Era
cutting-edge voice and broadband network, but also a powerful eco-system in Telecommunication- The
on which a range of rich digital services will be enabled – a unique green- Study of Reliance Jio‖, Int. J.
field opportunity. of Trade and Commerce-
The three-pronged focus on broadband networks, affordable smart phones IIARTC, Vol. 6, No. 1, pp.
and the availability of rich content and applications has enabled Jio to 173-180
create an integrated business strategy from the very beginning, and today,
Jio is capable of offering a unique combination of telecom, high speed data,
digital commerce, media and payment services.
In this article I have made efforts to study of Reliance Jio action plan to
provide customers the best services in Telecom sector.
Key words: Reliance Jio, Telecommunication, Broadband, 4G LTE.
B. Kumar
1. INTRODUCTION
Reliance‘s vision for India is that broadband and digital services will no longer be a luxury item.
Rather, Reliance envisions the India where these are basic necessities to be consumed in
abundance by consumers and small businesses alike, as much in far-flung villages as in our
metropolitan cities. The initiatives are truly aligned with the Government of India's ‗Digital India‘
vision for our nation. The following are the main areas where Jio is working:
Affordable Devices: Jio has worked with all the leading device manufacturers of the world to
ensure availability of 4G LTE smartphones across all price points – from ultra-premium models
on one hand, to entry level models on the other.
Digital Communication: The application Jio4G Voice brings the 4G communication suite to all
smart phones. With its RCS (Rich Communication Services) features like Enriched calling, Chat,
File share and Unified Messaging, it redefines the calling and messaging experience. It also
enables Jio‘s cutting edge voice and video call service on non-VoLTE smartphones.
Digital Currency: Jio envisions a new India which will use digital currency instead of paper
money for a more secure and convenient way to transact. Jio Money, Jio‘s digital currency and
digital payments business, will play a crucial role in this by offering a platform for ubiquitous,
affordable and secure digital payments.
Jio Drive: Micro and small businesses will soon have access to cutting-edge cloud storage
technologies which were once affordable to big companies only, giving them a new edge to
compete on a global landscape. Jio Drive is an application that brings powerful cloud capabilities
to every Smartphone. Using Jio Drive anyone can store, sync and share any content between their
own devices and also with their friends.
Digital Education: Teachers and students from far flung areas can connect with each other,
crowd-source knowledge and adapt new age learning techniques and, thus, lift the level of
education to a completely different plane.
Digital Healthcare: Expert medical advice would be available anytime, anywhere - with medical
practitioners able to grow their practice without constraint and provide quality of life to the
crores that make up our country.
Digital Entertainment and social connectivity: Jio Chat is a powerful communication application
that integrates chat, voice, video calling, conferencing, file sharing, photo sharing and much more.
Jio Play enables users to watch HD TV anytime, anywhere on any device, from hundreds of
channels, across categories and languages. Jio Beats is a premier digital music streaming service
that gives instant access to million of songs and curated playlists. Jio Mags and Jio News provide
access to the most popular collection of magazines and news from leading publishing houses
across multiple languages.
Digital Entrepreneurship: Jio is building a powerful platform on which a range of rich digital
products and services can be enabled - digital currency, digital commerce, digital education,
digital healthcare, e-governance, Smart Cities, M2M and the Internet of Things. It does not matter
whether these services are created by Jio itself, its eco-system partners or anyone globally.
Reliance is committed to the principles of Net Neutrality.
"Our dreams have to be bigger. Our ambitions are higher. Our commitment is deeper.
And our efforts are greater. This is my dream for Reliance and for India." - Dhirubhai Ambani
-174-
B. Kumar
2. LAYING THE FOUNDATION FOR THE FUTURE

Reliance Jio is creating the most extensive and future-proof network in India and perhaps in the
world. It will provide next generation legacy-free digital services over an end-to-end all-IP
network, which can be seamlessly upgraded even to 5G and beyond. In addition to the existing
pan India 2300 MHz spectrum and 1800 MHz in 14 circles, Jio invested over Rs 10,000 crore
during this year's auction to acquire 800 MHz spectrum in 10 circles and 1800 MHz spectrum in 6
circles. This brings the cumulative investment in spectrum assets to nearly Rs 34,000 crores. Jio
now has the largest footprint of liberalized spectrum in the country, acquired in an extremely cost
effective manner.
Reliance Jio has laid more than 2.5 lakh kilometres of fibre-optic cables, covering 18,000 cities and
over one lakh villages, with the aim of covering 100% of the nation‘s population by 2018. It has an
initial end-to-end capacity to serve in excess of 100 million wireless broadband and 20 million
Fibre-to-Home customers. Reliance Jio has also built nearly half-a-million square feet of cloud
data centres and a multi-Terabyte capacity at international network.
The infrastructure is being built in partnership with some of the world‘s most technologically
advanced companies.
3. COMPANY BACKGROUND
Dhirubhai Ambani (28 December 1932 – 6 July 2002) epitomised the dauntless entrepreneurial
spirit of a visionary always on the march to change the destiny of a nation. Acclaimed as the top
businessman of the 20th century and lauded for his dynamic, pioneering and innovative genius.
Dhirubhai was an inspiring leader with sterling qualities.
Dhirubhai‘s unique vision redefined the potential of the Indian corporate sector and he
challenged conventional wisdom in several areas. He was probably the first Indian businessman
to recognise the strategic significance of investors and discover the vast untapped potential of the
capital market and channelize it for the growth and development of industry.
He visualised the growth of Reliance as an integral part of his grand vision for India. He was
convinced that India could become an economic superpower within a short period of time and
wanted Reliance to play an important role in realising this goal. Today, the Group's turnover
represents nearly 3 percent of India's GDP.
Mukesh Ambani joined Reliance in 1981 and became its Chairman and Managing Director in
2002. An extreme innovator and believer in game-changing businesses of the future, Ambani is
known for challenging conventional wisdom and spotting opportunities quickly. For his vision
and leadership in ushering the telecom revolution, Ambani was awarded the ‗World
Communication Award for the Most Influential Person in Telecommunications‘ by Total Telecom
and ‗Telecom Man of the Year‘ by the Voice and Data magazine.
From path-breaking initiatives in oil and gas exploration to production, Ambani led Reliance‘s
foray into new frontiers and thereby, helped it to discover India‘s largest natural gas field, KG-D6.
He sees a huge opportunity in transforming the agriculture sector through Reliance‘s retail
business, which has a unique value and supply chain model – famously referred to as the ‗farm-
to-fork‘ model. His vision of reinventing education, finance, retail, healthcare through
innovations deployed over 4G will usher in the digital revolution in the country and beyond.
Sustained value creation over the past 10 years under Ambani‘s leadership
Turnover 370% | Net Profit 200% | Exports 800% | Net Worth 450% | Market Cap 250%
-175-
B. Kumar
4. BOARD OF DIRECTORS
 Mukesh D. Ambani (Chairman & Managing Director)
 Nita M. Ambani (Non-Executive, Non Independent Director)
 Hital R. Meswani ( Executive Director)
 Nikhil R. Meswani (Executive Director)
 P.M.S. Prasad(Executive Director)
 P.K. Kapil (Executive Director)
 R.A. Mashelkar (Independent Director)
 Adil Zainulbhai (Independent Director)
 Mansingh L. Bhakta (Independent Director)
 Dipak C. Jain (Independent Director)
 Dharam Vir Kapur (Independent Director)
 Yogendra P. Trivedi (Independent Director)
 Ashok Misra (Independent Director)
 Raminder S. Gujral (Independent Director)
5. RELIANCE JIO INFOCOMM LIMITED, OR JIO,
It is a LTE mobile network operator in India. It is a wholly owned subsidiary of Reliance
Industries headquartered in Navi Mumbai, Maharashtra that provides wireless 4G LTE service
network (without 2G/3G based services) and is the only 'VoLTE-only' (Voice over LTE) operator
in the country which lacks legacy network support of 2G and 3G, with coverage across all
22 telecom circles in India.
The services were first beta-launched to Jio's partners and employees on 27 December 2015 on the
eve of 83rd birth anniversary of late Dhirubhai Ambani, founder of Reliance Industries, and later
services were commercially launched on 5 September 2016.
In June 2010, Reliance Industries (RIL) bought a 96% stake in Infotel Broadband Services Limited
(IBSL) for ₹4,800cr. Although unlisted, IBSL was the only firm to win broadband spectrum in all
22 zones in India in the 4G auction that took place earlier that year. Later continuing as RIL's
telecom subsidiary, Infotel Broadband Services Limited was renamed as Reliance Jio Infocomm
Limited (RJIL) in January 2013.
In June 2015, Jio announced that it will start its operations all over the country by the end of
2015. However, four months later in October 2015, the company's spokesmen sent out a press
release stating that the launch was postponed to the first quarter of the financial year 2016-2017.
Later in July, a PIL filed in the Supreme Court by an NGO called the Centre for Public Interest
Litigation, through Prashant Bhushan, challenged the grant of pan-India license to Jio by the
Government of India. The PIL also alleged that Jio was allowed to provide voice telephony along
with its 4G data service, by paying an additional fees of just ₹165.8 crore (US$26 million) which
was arbitrary and unreasonable, and contributed to a loss of ₹2,284.2 crore (US$350 million) to
the exchequer.
The Indian Department of Telecom (DoT), however, refuted all of CAG's claims. In its statement,
DoT explained that the rules for 3G and BWA spectrum didn't restrict BWA winners from
providing voice telephony. As a result, the PIL was revoked, and the accusations were dismissed.
-176-
B. Kumar
6. BETA LAUNCH AND COMMERCIAL LAUNCH

6.1 Beta Launch
The 4G services were launched internally to Jio's partners, its staff and their families on 27
December 2015. Bollywood actor Shah Rukh Khan, who is also the brand ambassador of Jio, kick
started the launch event which took place in Reliance Corporate Park in Navi Mumbai, along
with celebrities like musician A R Rahman, actors Ranbir Kapoor and Javed Jaffrey, and
filmmaker Rajkumar Hirani. The closed event was witnessed by more than 35000 RIL employees
some of whom were virtually connected from around 1000 locations including Dallas in the US.
6.2 Commercial Launch
The company commercially launched its services on 5 September 2016. Within the first month of
commercial operations, Jio announced that it had acquired 16 million subscribers. This is the
fastest ramp-up by any mobile network operator anywhere in the world. Jio crossed 50 million
subscriber mark in 83 days since its launch. Jio crossed 100 million subscribers on 22 February
2017.
6.3 Alliance
Jio, in February 2016 announced a global alliance of Mobile Network Operators which include:
 BT Group
 Deutsche Telekom
 Millicom
 Orange S.A.
 Rogers Communications
 MTS (network provider)
 Telia Company
 Telecom Italia
6.4 Partnerships
Ahead of its digital services launch, Mukesh Ambaniled Reliance Jio entered into a spectrum
sharing deal with younger brother Anil Ambani backed Reliance Communications. The sharing
deal is for 800 MHz band across seven circles other than the 10 circles for which Jio already owns.
In September 2016, Jio signed a pact with BSNL for intra-circle roaming which would enable users
of the operators to use each other's 4G and 2G spectrum in national roaming mode.
In February 2017, Jio announced a partnership with samsung to work on LTE - Advanced Pro and
5G.
6.5 4G Broadband
The company launched its 4G broadband services throughout India on September 2016. It was
started to release in December 2015 after some reports said that the company was waiting to
receive final permit from the government.
The company has a network of more than 250,000 km of fiber optic cables in the country, over
which it will be partnering with local cable operators to get broader connectivity for its
broadband services. With its multi-service operator (MSO) licence, Jio will also serve as a TV
channel distributor and will offer television-on-demand on its network.
-177-
B. Kumar
6.6 LYF Smartphones

In June 2015, Jio tied up with domestic handset maker Intex to supply 4G handsets enabled with
voice over LTE (VoLTE) feature. Through this, it plans to offer 4G voice calling besides rolling out
high-speed Internet services using a fiber network, in addition to the 4G wireless
network. However, in October 2015, Jio announced that it would be launching its own mobile
handset brand named LYF.
On 25 January 2016, the company launched its LYF smartphone series starting with W 1, through
its chain of electronic retail outlets, Reliance Retail. Three more handset models have been
released so far, namely Water 2, Earth 1, and Flame 1.
6.7 Jionet WiFi
Prior to its pan-India launch of 4G data and telephony services, Jio has started providing free Wi-
Fi hotspot services in cities throughout India including Surat, Ahmedabad in Gujarat,
and Visakhapatnam in Andhra Pradesh, Indore, Jabalpur, Dewas and Ujjain in Madhya Pradesh,
select locations of Mumbai in Maharashtra, Kolkata in West Bengal, Lucknow in Uttar
Pradesh, Bhubaneswar in Odisha, Mussoorie in Uttarakhand, Collectorate's Office in Meerut, and
at MG Road in Vijayawada among others.
In March 2016, Jio started providing free Wi-Fi internet to spectators at six cricket stadiums
hosting the 2016 ICC World Twenty20 matches. Jionet was made available in Wankhede
Stadium (Mumbai), Punjab Cricket Association IS Bindra Stadium (Mohali), Himachal Pradesh
Cricket Association Stadium (Dharamshala), Chinnaswamy Stadium (Bengaluru), Feroz Shah
Kotla (Delhi), and Eden Gardens (Kolkata) in India.
6.8 Jio Apps
In May 2016, Jio launched a bundle of multimedia apps on Google Play as part of its upcoming
4G services. While the apps are available to download for everyone, a user will require a Jio SIM
card to use them. Additionally, most of the apps are in beta phase. Following is a list of the apps:
 MyJio - Manage Jio Account and Digital Services associated with it
 JioTV - A live TV channel service
 JioCinema - An online HD video library
 JioChat Messenger - An instant messaging app
 JioMusic - A music player
 Jio4GVoice (earlier JioJoin) - A VoLTE phone simulator
 JioMags - E-reader for magazines
 JioXpressNews - A news and magazine aggregator
 JioSecurity - Security app
 JioDrive - Cloud-based backup tool
 JioMoney Wallet - An online payments/wallet app
 JioSwitch - Transfer content
6.9 Affordable 4G Phones
Reliance Jio has teamed up with Google to manufacture affordable 4G handsets. These phones
will run exclusively on Jio network. The two companies are also working on developing a
software for smart-TV services. Both are expected to launch in September/October, 2017.
-178-
B. Kumar
6.10 JioFi
Jio has also launched Wi-Fi routers by the name JioFi.
7. CUSTOMER SATISFACTION
A term frequently used in marketing, is a measure of how products and services supplied by a
company meet or surpass customer expectation. Customer satisfaction is defined as "the number
of customers or percentage of total Customers, who reported their experience to a firm, its
products, or its services (ratings) exceeds specified satisfaction goals."In researching satisfaction,
firms generally ask customers whether their product or service has met or exceeded expectations.
Thus, expectations are a key factor behind satisfaction. When customers have high expectations
and the reality falls short, they will be disappointed and will likely rate their experience as less
than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction
rating than a budget motel —even though its facilities and service would be deemed superior in
―absolute‖ terms.
8. CONCLUSION
In these days the main objective of business is the customer satisfaction and to meet the customer
expectation by providing reliable services and products because customer is the king of today‘s
market. Customer satisfaction ratings can have powerful effects. They focus employees on the
importance of fulfilling customers‘ expectations. Furthermore, when these ratings dip, they warn
of problems that can affect sales and profitability. These metrics quantify an important dynamic.
When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free
and highly effective.
As research on consumption experiences grows, evidence suggests that consumers
purchase goods and services for a combination of two types of benefits: hedonic and utilitarian.
Hedonic benefits are associated with the sensory and experiential attributes of the product.
Utilitarian benefits of a product are associated with the more instrumental and functional
attributes of the product.
Thus, I can say that Reliance Jio possesses wide network coverage, attractive 4G schemes and
customer services as well as lifetime roaming services.
Reliance Jio has become a very successful brand in India and providing customer satisfaction is
the main motive for the company.
Reliance Jio is the home brand company and a very emerging brand in India and will be
successful in overseas market in upcoming years.
REFERENCES
[1]. "Jio opens Mobile Number Portability, urges incumbent telcos to fulfil regulatory
obligations". India Today. 2016-09-03. Retrieved 2016-09-03.
[2]. "Petition against 4G licence to Reliance Jio: Apex court seeks Centre's reply". The Hindu.
Retrieved 10 June 2014.
[3]. "Reliance Jio & 8 Other Global Telecom Operators Forge Alliance To Expand Reach & Digital
Footprint". Trak.in - Indian Business of Tech, Mobile & Startups. 2016-02-15. Retrieved 2017-
05-09.
-179-
B. Kumar
[4]. "Reliance Jio creates world record: 16 million subscribers in one month". The Indian Express.
2016-10-09. Retrieved 2016-10-09.
[5]. "Reliance Jio goes for the kill". Rediff.com. 17 January 2014. Retrieved 10 June 2014.
[6]. DoT refutes CAG's charges of favoring Reliance Jio by allowing it to convert its ISP permit into a
unified license". The Economic Times. Retrieved 4 July 2014.
[7]. Doval, Pankaj (22 February 2017). "Reliance Jio crosses 100 million users within 6 months -
Times of India". The Times of India. Bennett, Coleman & Co. Ltd. Retrieved 22 February 2017.
[8]. http://indianexpress.com/article/technology/tech-news-technology/reliance-jio-crosses-
50-million-subscriber-mark-in-83-days-4400972/
[9]. Reliance Industries buys 95% stake in IBnfotel Broadband for Rs 4,800 cr, The Economic
Times Business Line
[10]. Reliance Jio 4G launch in 28 photos: Shah Rukh Khan, AR Rahman, Ambani family make the event
memorable, CNN-IBN, December 27, 2015, retrieved December 29, 2015
[11]. Reliance Jio 4G Services Launched for Reliance Employees, Gadgets 360 - NDTV, December 25,
2015, retrieved December 29, 2015
[12]. Reliance Jio employees to get freebies, discount on 4G service, Gadgets 360 - NDTV, December 25,
[13]. Reliance Jio Infocomm launches 4G services for its employees, The Economic Times, December 27,
[14]. Reliance Jio Infocomm Limited, Cellular Operators Association of India
[15]. Reliance Jio Infocomm plans to launch pan-India LTE, RCR Wireless News
[16]. Reliance Jio launches 4G service for employees, Business Standard, December 27, 2015,
retrieved December 29, 2015
[17]. Reliance Jio likely to delay its December pan-India launch, Live Mint
[18]. Reliance Jio to launch commercial operations by December; to alter telecom industry landscape, say
experts, The Economic Times
[19]. Reliance Jio to roll out broadband service on fibre across 900 cities, The Economic Times
[20]. RIL's Infotel Broadband renamed Reliance Jio Infocomm, The Times of India Business Line
-180-
A Comparative Study of Working Capital Management in Steel

Authority of India Limited and Tata Steel Limited
Yogesh Kumar
Department of Commerce & Business Administration, A.S. College, Sikandrabad, (U.P.) India
E-mail Id: apec.yogeshsaxena@gmail.com
Abstract
PAPER/ARTICLE INFO
Working capital has an impact on profitability because effective working RECEIVED ON: 16/04/2017
capital management is about striking a trade off between profitability and ACCEPTED ON: 11/06/2017
liquidity. Working capital management refers to the administration of all
components of working capital-cash, marketable securities, debtors and Reference to this paper
stock and creditors. Working capital is one of the powerful measurements should be made as follows:
of the financial position. The goal of working capital management is to
manage the firm’s current assets and current liabilities in such a way that
Yogesh Kumar (2017), “A
a satisfactory level of working capital is maintained. In several units there Comparative Study of
is adequate working capital but the mismanagement of working capital Working Capital
increases the costs and reduces the rate of return. The efficient Management in Steel
management of working capital minimizes the cost and can do much more Authority of India Limited
for the success of the business. With this background this paper attempts and Tata Steel Limited”, Int.
to make a comparative study of working capital management with the help J. of Trade and Commerce-
of financial and statistical tools in SAIL and Tata Steel Ltd, which are IIARTC, Vol. 6, No. 1, pp.
capital intensive firms of steel sector with significant investments in 181-193
working capital i.e. inventory, receivables and cash.
Keywords: Working Capital Management SAIL, Tata Steel Ltd., Steel
Industry.
A Comparative Study of Working Capital Management in Steel Authority of India Limited and Tata Steel Limited
Yogesh Kumar
1. INTRODUCTION
Indian steel industry plays a significant role in the country‟s economic growth. The major
contribution directs the attention that steel is having a stronghold in the traditional sectors, such
as infrastructure & constructions, automobile, transportation, industrial applications etc.
Although India's steel industry is growing at a rate higher than a lot of the other developing
countries, the effect of the world-wide economic slowdown can be felt in the dampened rate of
growth. With higher inflation and interest rates, the automotive and construction industry are
likely to lower domestic demand in the short-term.
Indian steel companies are ramping up their capacity through both Greenfield and Brownfield
projects. Small companies are developing niche sectors like the production of sponge iron. India
has emerged as the fourth largest steel producing nation in the world, as per world steel
association in April 2017. India became the 3rd largest producer of steel in 2015 and is now well
on track to emerge as the 2nd largest producer after China. There is significant potential for
growth given the low per capita steel consumption of 61 Kg in India, as compared to world
average of 208 Kg.
In this study researcher has focused on the working capital management of government owned
SAIL and private player truly global steel company Tata Steel Limited Steel.
1.1 Steel Authority of India Limited
SAIL is the sixth largest company in India. Steel Authority of India Limited (SAIL) is the leading
steel-making company in India. It is a fully integrated iron and steel maker, producing both basic
and special steels for domestic construction, engineering, power, railway, automotive and defence
industries and for sale in export markets. SAIL is ranked amongst the top ten public sector
companies in India in terms of turnover. SAIL manufactures and sells a broad range of steel
products. The government of India owns about 86 per cent of SAIL„s equity and retains voting
control of the Company. SAIL produces iron and steel at five integrated plants and three special
steel plants, located principally in the eastern and central regions of India and situated close to
domestic sources of raw materials, including the company„s iron ore, limestone and dolomite
mines. The company has the distinction of being India„s largest producer of iron ore and having
the country„s second largest mines network. This gives SAIL a competitive edge in terms of
captive availability of iron ore, limestone, and dolomite which are inputs for steel making.
1.2 Tata Steel Ltd.
Tata Steel is the ninth largest company in India with a sales turnover of Rs 37814.69 crore in
2016. Established in 1907, Tata Steel is the world„s 6th largest steel company with an existing
annual crude steel capacity of 28 million tons. It has operations in 24 countries and commercial
presence in over 50 countries. Founded by Jamsedji Nusserwanji Tata, Tata Steel completed 100
glorious years of existence on August 26, 2007. The first private sector steel plant which started
with a production capacity of 1, 00,000 tons has today transformed into a global giant. The
company also has three Greenfield steel projects in the states of Jharkhand, Orissa and
Chhattisgarh and proposed steel making facilities in Vietnam and Bangladesh. Through
investments in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel Asia,
Singapore, the Tata Steel has created a manufacturing and marketing network in Europe, South
-182-
Yogesh Kumar
East Asia and the Pacific-rim countries. Tata Steel„s vision is to be the global steel industry
benchmark for value Creation and corporate citizenship. Tata Steel is one of the few steel
companies in the world that is Economic Value Added (EVA) positive. It was ranked the
“World„s Best Steel Maker”, for the third time by World Steel Dynamics in its annual listing in
February, 2006. Tata Steel has been conferred the Prime Minister of India„s Trophy for the „Best
Integrated Steel Plant‟ five times.
2. REVIEW OF THE LITERATURE
Many researchers have studied working capital from different views and in different
environments. The following studies an useful for our research:
2.1 Sharma, M. G. (2016) examined the working capital performance of Bharti Airtel during the
period 2007-08 to 2014-15. An attempt has been made to measure the working capital
performance with the help of ratio analysis. Motaals test also indicated significant improvement
in liquidity performance during the study period. Finally, there exists significant negative
relationship between liquidity and profitability, which indicates that Bharti Airtel has maintained
post optimal level of liquidity (i.e., excess liquidity) during the period under study.
2.2 Sasikala, R. and Balakrishnan, K.P. (2015) explained in their study which was based on
secondary data collected from companies report, and profile of the organization. The strength of
any research is based on the efficient method of data collection analysis. Financial analysis is a
powerful mechanism which helps in ascertaining the strength & weakness in the operation and
financial position of the companies. The current study has frightened major absorption ratio
analysis, from the 5 years balance sheet and profit and loss a/c. The objectives of the study are to
compute financial position of the company and to suggest ways and means to improve present
conditions. Examine overall performance of the company. To study the profitability, liquidity,
solvency position of the industries. Based on the data suggestions are given by the researcher to
the industries for better improvement in weaker sections.
2.3 Babu N. Suresh and Chalam, G.V. (2014) suggested that managers can create value for their
shareholders by reducing the number of day‟s accounts receivable and increasing the account
payment period and inventories to a reasonable maximum and also suggests that managers of
these firms should spend more time to manage cash conversion cycle of their firms and make
strategies of efficient management of working capital.
2.4 Madhavi, K. (2014) studied “Working Capital Management of Paper Mills” during the period
from 2002-2003 to 2010-2011 with the help of accounting tools and statistical techniques. From the
study, it analyzes that the management of Andhra Pradesh Paper Mills Ltd (APPML) must
initiate necessary steps to utilize its idle cash and bank balances in attractive investments or to
pay back in short term liabilities.(current ratio).The low quick ratio may also have liquidity
position, if it has fast moving inventories and is more satisfactory in Seshasayee Paper Boards Ltd
(SSPBL) with APPML. Cash ratio is not satisfactory in APPML as compared to SSPBL and it needs
the attention of the management to induce effective utilization of cash and bank balances.
2.5 Makoril Daniel Mogaka and Jagongo Ambrose (2013) concluded that the management of a
firm can create value for their shareholders by reducing the number of day‟s accounts receivable.
-183-
Yogesh Kumar
The management can also create value for their shareholders by increasing their inventories to a
reasonable level. Firms can also take long to pay their creditors in as far as they do not strain their
relationships with these creditors. Firms are capable of gaining sustainable competitive advantage
by means of effective and efficient utilization of the resources of the organization through a
careful reduction of the cash conversion cycle to its minimum. In so doing, the profitability of the
firms is expected to increase.
2.6 Haresh (2012) explained in his paper, Working capital refers to the firms‟ investment in short
terms assets. The management of working capital is important to the financial health of business
of all sizes. The management of working capital affects the liquidity and profitability of the
corporate firm and consequently its net worth.
2.7 Ray (2012) in his study has tried to investigate the relationship between working capital
management components and the profitability of a sample of Indian manufacturing firms using a
sample of 311 Indian manufacturing firms for a period of 14 years from 1996-97 to 2009-10 and
have studied the effect of different variables of working capital management including the
average collection period, inventory turnover in days, average payment period, cash conversion
cycle and current ratio, debt ratio, size of the firm and financial assets to total assets ratio on the
net operating profitability of Indian firms. The result suggests a strong negative relationship
between the measures of working capital management including the number of days accounts
receivable and cash conversion cycle, financial debt ratio with corporate profitability.
2.8 Gumber and Kumar (2012) the main objective of their paper was to analyze the significance
and growth of various constituents of both current assets and current liabilities among the co-
operative sector and the public sector fertilizer companies. The co-operative sector possessed
more amounts of working capital than the public sector and the former's working capital need
grew at a rate which was almost double the rate of the public sector. It was observed and
concluded that the co-operative sector was better off than the public sector as regard liquidity and
payment to creditors as their credit period were much shorter than the public sector.
2.9 T. Chandrabai, D. J. (2011) proposed that the working capital management refers to efficient
management of short term assets. There is a direct relationship between a firm„s growth and its
working capital needs. The firm needs to invest more in components of working capital with
increase in sales. Working capital indicates the liquidity position of the firm and suggests the
extent to which the working capital maintained.
2.10 Singh (2011) analyzed the impact of working capital on the return on capital employed for
cement companies in India. Some results of the study are in complete departure from previous
results. He has found that there exists on relationship between days sales outstanding and cash
conversion cycle and profitability of a firm in cement industry in India.
2.11 Bagchi, B. and Khamrui, B. (2010) In this study, Selected a sample of 10 FMCG (Fast Moving
Consumer Goods) companies in India from CMIE database covering a period of 10 years from
2000–01 to 2009–10. Profitability has been measured in terms of return on assets (ROA). Cash
conversion cycle (CCC), interest coverage ratio, age of inventory, age of creditors, age of debtors
and debt-equity ratio have been used as explanatory variables. Pearson‟s correlation and pooled
ordinary least squares regression analysis are used in the study. The study results confirm that
-184-
Yogesh Kumar
there is a strong negative relationship between variables of the working capital management and
profitability of the firm. As the CCC increases, profitability of the firm decreases, and managers
can create a positive value for the shareholders by reducing the CCC to a possible minimum level.
There is also a stumpy negative relationship between debt used by the firm and its profitability.
2.12 Abdul Raheman and Mohamed Nasr (2004) In this paper the author made an attempt to
examine the Working Capital Management And Profitability – Case Of 94 Pakistani Firms
selected a sample of 94 Pakistani firms listed on Karachi Stock Exchange for a period of 6 years
from 1999 – 2004, Found that there is a significant negative relationship between liquidity and
profitability. They cleared that there is a significant positive relationship between size of the firm
and its profitability. There is also a significant negative relationship between debt used by the
firm and its profitability.
The objectives of this study are as follows:
 To study the efficiency of working capital in steel majors through financial ratio.
 To make a comparative study of working capital management between SAIL and Tata Steel
Limited recommend ways and means to improve present condition.
 To give suggestions to improve the working capital management in such a cash intensive
sector.
4. HYPOTHESIS OF THE STUDY
 There is no difference between Current Ratio, Quick Ratio and Cash Ratio of the selected
companies; and
 There is no difference between the mean of Working capital Turnover Ratio and Fixed Assets
Turnover Ratio of Tata Steel Limited and SAIL.
5. METHODOLOGY
The methodology adopted for this study regarding source of data, period of study, data analysis
and research tools & techniques are as follows: Source of the data is mainly based on the
secondary data. These were collected from the annual reports of selected companies as well as
from various journals, magazines and newspapers. Period of this study is ten years starting from
2006-07 to 2015-16. Researcher has used in this research financial and statistical tools and
techniques which are mainly ratios analysis (Current Ratio, Quick Ratio, Cash Ratio, Working
Capital Turnover Ratio & Fixed Assets Turnover Ratio) and Student‟s t-test in Statistical tools.
This is an attempt to have a micro level imperial analysis in the financial progress and
performance of Tata Steel Limited. The findings and suggestions throw light on the guidelines for
future policy formulation and implementation for the effective functioning of Steel industries in
other districts of the state and the country also. Every effort has been made to conclude relevantly
and suggest for the best performance in the most adoptable way, keeping in view the market and
production levels.
7. LIMITATIONS OF THE STUDY
This study is based on only secondary data; the limitations of the secondary data would have
affected the study. Ratios are computed on the basis of financial statements of the selected
-185-
Yogesh Kumar
companies. Hence, future performance of these units will not reflect. The financial statements are
subject to window dressing by the corporate. It will affect the results in the process of analysis.
The absolute figures may prove decorative as ratio analysis is primarily quantitative analysis and
not qualitative analysis. Many people may interpret the results in different ways as ratio is not an
end by itself.
8. DATA ANALYSIS
The data analysis has been done in this study is given below:
8.1 Current Ratio
Current ratio may be defined as the relationship between current assets and current liabilities.
This ratio also known as working capital ratio is a measure of general liquidity and is most
widely used to make the analysis of a short-term financial position or liquidity of a firm. It
calculated by dividing the total of current assets by total of the current liabilities.
Current Ratio = Current Assets/Current Liabilities
The statistical data relating to calculation of current ratio was computed through the financial
statements referred in their respective annual reports of Tata Steel Limited for the study period
from 2006-07 to 2014-16 are depicted in the below mentioned table.
As a conventional rule, a current ratio of 2:1 is considered satisfactory. This rule of thumb should
not blindly be followed because low current ratio indicates that the unit may not be having
sufficient funds to pay off liabilities or it may be trading beyond its capacity. Higher current ratio
may not be favourable because of slow moving stocks, stocks may pile up due to poor sale, debt
collection may not be satisfactory, cash and bank balances may be lying idle because of
insufficient investment opportunities. This ratio is below the accepted standard norm in Tata Steel
limited in the entire study period, excepting 2006-07 and 2007-08. In case of SAIL it was up to the
standard till 2009-10. Later on, it clearly indicates that the company adopted the normal general
accepted solvency to meet their current obligations in time. The management of both the steel
companies must initiate necessary steps to utilize its idle cash and bank balances in attractive
investments or to pay back its short term liabilities.
Table 1: Current Ratio
Years Current Ratio
Tata Steel SAIL
2006-07 2.03 1.81
2007-08 4.64 1.96
2008-09 0.96 1.84
2009-10 1.23 1.90
2010-11 1.38 1.51
2011-12 0.76 1.52
2012-13 0.70 1.23
2013-14 0.61 0.95
2014-15 0.71 0.83
2015-16 0.68 0.58
* Source: Annual Reports of Tata Steel Ltd. and SAIL
-186-
Yogesh Kumar
8.1.1 Testing Hypothesis

Null Hypothesis: There is no difference between the mean of Current Ratio of Tata Steel Limited and
SAIL.
Table 2: Test Statistic: Student t-test
t-Test: Two-Sample Assuming Equal Variances
Tata Steel SAIL
Mean 1.37 1.413
Variance 1.514066667 0.24209
Observations 10 10
Pooled Variance 0.878078333
df 18
t Stat -0.102609324
P(T<=t) one-tail 0.459703769
P(T<=t) two-tail 0.919407539
Test statistic has t-distribution with 10+10-2=18 degree of freedom. Critical value for this two-
tailed test at 5% level of significance is 2.100922037 at 18 degree of freedom. Computed value of
test statistic is -0.1023609324 which is smaller than table value, hence null hypothesis is accepted.
8.2 Quick Ratio or Liquid Ratio
Quick ratio is also called Acid-test ratio because it is the acid test of a concern`s financial
soundness. Quick ratio is the relationship between quick assets and quick liabilities. Quick assets
are those assets which are readily converted into cash. They include cash and bank balances, bills
receivable, debtors, short-term investments. Quick liabilities include creditors, bills payable,
outstanding expenses.
Quick ratio = Quick Assets/Quick Liabilities
Quick Assets = Current assets- (Stock +Prepaid expenses)
Quick Liabilities = Current Liabilities –Bank Overdraft.
A quick ratio of 1:1 is considered satisfactory. The quick ratio supplements current ratio.
Table 3: Quick Ratio
Years Quick Ratio
Tata Steel SAIL
2006-07 1.50 1.22
2007-08 0.13 1.25
2008-09 0.23 1.13
2009-10 0.56 1.26
2010-11 0.59 0.99
2011-12 0.37 0.71
2012-13 0.25 0.47
2013-14 0.23 0.37
2014-15 0.12 0.22
2015-16 0.29 0.13
*Source: Annual reports-Tata Steel Ltd. and SAIL
-187-
Yogesh Kumar
A quick ratio of 1:1 is considered to represent a satisfactory current financial condition. A quick
ratio of 1:1 does not necessarily mean satisfactory liquidity position, if all debtors cannot be
realized and cash is needed immediately to meet current obligations. A low quick ratio does not
necessarily mean a bad liquidity position as inventories are not an absolutely non-liquid. It is
observed from the above data the quick ratio is less than the accepted norm from 2007-08 to 2015-
16 in Tata steel, whereas it is well above the standard in 2006-07 to 2009-10 and exactly equal to
the standard in 2010-11 in case of SAIL. In rest of the years Quick ratio is very poor in both the
companies, so these selected companies shall increase their liquidity position, it will help to meet
day to day expenses.
Null Hypothesis: There is no difference between the mean of Quick Ratio of Tata Steel Limited and SAIL
Tata Steel SAIL
Mean 0.427 0.775
Variance 0.167668 0.201828
Observations 10 10
df 18
t Stat -1.8104
P(T<=t) one-tail 0.04348
P(T<=t) two-tail 0.08696
tailed test at 5% level of significance is 2.100922 at 18 degree of freedom. Computed value of test
statistic is -1.8104 which is smaller than table value, hence null hypothesis is accepted.
8.3 Cash Ratio (Absolute Liquid Ratio)
Cash is the most liquid asset. The relationship between cash including cash at bank and short
term marketable securities with current liabilities is examined to know the immediate solvency.
Although receivables, debtors and bills receivable are generally more liquid than inventories, yet
there may be doubts regarding their realization into cash immediately or in given time. The
formula to calculate the cash ratio is as under.
Cash Ratio = Cash* + Marketable Securities / Current Liabilities.
* Cash means, cash in hand and cash at bank.
-188-
Yogesh Kumar
Table 5: Cash Ratio

Years Cash Ratio
Tata Steel SAIL
2006-07 1.14 0.86
2007-08 0.06 1.02
2008-09 0.15 0.97
2009-10 0.32 1.09
2010-11 0.55 0.72
2011-12 0.30 0.34
2012-13 0.16 0.17
2013-14 0.18 0.10
2014-15 0.09 0.07
2015-16 0.25 0.01
*Source: Annual reports of Tata Steel Ltd. and SAIL
The ideal cash ratio is 1:2 or 0.5 or 50 percent. In case of Tata Steel Ltd., Cash ratio is less than the
standard and not encouraging for the entire study period except in 2006-07 and 2010-11. On the
other hand the Cash Ratio of SAIL gives a better picture till 2010-11 from 2006-07 later on the
situation becomes worse, so these selected companies shall increase their liquidity position, it will
help to meet day to day expenses.
Null Hypothesis: There is no difference between the mean of Cash Ratio of Tata Steel Limited and SAIL
Tata Steel SAIL
Mean 0.32 0.535
Variance 0.1028 0.191628
Observations 10 10
df 18
t Stat -1.25299
statistic is -1.25299 which is smaller than table value, hence null hypothesis is accepted that there
is no difference between the means of the selected companies.
-189-
Yogesh Kumar
8.4 Working Capital Turnover Ratio

This ratio indicates whether working capital has been effectively utilized in making sales or not. It
can be calculated by:
Net sales/Net Working capital
Table 7: Working Capital Turnover Ratio
Years Working Capital Turnover Ratio
Tata Steel SAIL
2006-07 2.51 3.76
2007-08 0.68 3.11
2008-09 -53.80 2.79
2009-10 10.89 2.19
2010-11 5.79 3.50
2011-12 -8.32 4.76
2012-13 -7.61 8.73
2013-14 -5.64 -32.22
2014-15 -8.68 -7.65
2015-16 -5.67 -2.46
Working Capital turnover ratio is not satisfactory. Additional funds raised are invested in fixed
asset instead of providing necessary working capital, as it is shown from the data of both the
companies. In case of Tata Steel Limited in 2008-09 and since 2011-12 onwards, working capital
turnover ratio is in negative on the other hand in case of SAIL WCTR is negative in the last three
years of study. The companies may not be in a position to meet its obligations in time.
Null Hypothesis: There is no difference between the mean of Working capital Turnover Ratio of Tata Steel
Limited and SAIL
Tata Steel SAIL
Mean -6.985 -1.349
Variance 314.6502 136.8905
Observations 10 10
df 18
t Stat -0.83873
-190-
Yogesh Kumar
statistic is -0.83873 which is smaller than table value, hence null hypothesis is accepted that there
is no difference between the means of the selected companies.
8.5 Fixed Asset Turnover Ratio
This ratio indicates the extent to which the investment in fixed assets contributed towards sales.
This ratio can be calculated by:
Net sales/Net fixed Assets
Table 9: Fixed Assets Turnover Ratio
Years Fixed Assets Turnover Ratio
Tata Steel SAIL
2006-07 1.58 3.02
2007-08 1.56 3.55
2008-09 1.68 3.69
2009-10 1.56 3.34
2010-11 1.67 3.16
2011-12 1.23 2.95
2012-13 1.12 2.93
2013-14 0.96 1.85
2014-15 0.86 1.32
2015-16 0.72 0.92
Fixed asset of a company are not held for sale but use in the business for a long span of time.
Therefore, a lower fixed asset turnover ratio is better. Tata Steel limited maintain lower ratio.
Lower fixed assets ratio is satisfactory. On the other hand, in case of SAIL the FATR is higher
during the first five-six years of study but it shows a decreasing trend and in the last couple of
years it comes to the level of Tata Steel.
Null Hypothesis: There is no difference between the mean of Working Capital Turnover Ratio of Tata
Steel Limited and SAIL
Tata Steel SAIL
Mean 1.294 2.673
Variance 0.130827 0.925512
Observations 10 10
df 18
t Stat -4.2429
-191-
Yogesh Kumar
statistic is -4.2429 is greater than table value, hence null hypothesis is rejected.
9. CONCLUSIONS
The Lower fixed assets ratio of Tata Steel Limited is satisfactory but differs with SAIL as test
statistic shows clearly. On the rest of Ratios both the companies is below standard and not
encouraging for the entire study period i.e. 2006-07 to 2015-16 except for one or two years. The
study shows that the additional funds raised are invested in fixed assets instead of providing
necessary working capital, therefore, the Working Capital turnover ratio is not satisfactory in both
the companies. Accordingly, the management may resort to effective utilization of cash and bank
balances in attractive investments or to pay back in short term liabilities (current ratio).
DIRECTION FOR FUTURE RESEARCH
The present study is limited to the extent of only two companies. Hence, further research may be
conducted to reflect the overall view of working capital management in the Indian Steel industry.
REFERENCES
[1]. Babu, N. Suresh & Chalam, G.V. (2014). „Study on the Working Capital Management
Efficiency in Indian Leather Industry- An Empirical Analysis.‟ International Journal of
Research in Management & Technology (IJRMT). 4(5) October.
[2]. Bagchi, B. and Khamrui, B. (2012). Relationship between Working Capital Management
and Profitability: A Study of Selected FMCG Companies in India. Business and Economics
Journal.
[3]. Chandrabai, D.R.T. (2011). Working capital management of Indian electrical equipment
manufacturers- A comparative study. International journal of multi diciplinary research, 1
(8).
[4]. Daniel, M. M. and Ambrose, J. (2013). „Working Capital Management and Firm
Profitability: Empirical Evidence from Manufacturing and Construction Firms Listed on
Nairobi Securities Exchange, Kenya.‟ International Journal of Accounting and Taxation,
1(1), December.
[5]. Gumber, Mansavi and Kumar, Surender, (2012). “A Comparative Analysis of
Management of Working Capital in Fertiliser Industry”, International Journal of
Innovations in Engineering and Technology (IJIET), August, 1(2), 83-89
[6]. Haresh, B. (2012). Working capital management and profitablity: Evidence from India.
GFJMR, 2, 1-16.
[7]. Khan, M.Y. and Jain, P.K. (2004). “Financial Management”, 2nd Edition, Tata McGraw Hill.
[8]. Kothari, C.R. & Garg, G., (2014). „Research Methodology: Method and Techniques‟, New
Age International Publishers, New Delhi, 3rd Ed.
[9]. Madhavi, K., (2014). „Working Capital Management of Paper Mills.‟ International Journal of
Research in Business Management., ISSN(E): 2321-886X; ISSN(P): 2347-4572 2(3), March, 63-
72
[10]. Raheman, Abdul and Nasr, Mohamed (2007). Working Capital Management And
Profitability – Case Of Pakistani Firms. International Review of Business Research Papers.
-192-
Yogesh Kumar
[11]. Ray, Sarbapriya (2012). ”Evaluating the Impact of Working Capital Management
Components on Corporate Profitability: Evidence from Indian Manufacturing Firms,”
International Journal of Economic Practices and Theories, 2(3), 119-126.
[12]. Sasikala, R. and Balakrishnan, K.P. (2015). Comparative financial performance about Tata
steel and sail steel companies. International Journal of Advanced Multidisciplinary
Research 2(5), 57–61
[13]. Sharma, M. G. (2016). „Working Capital Management and Its Impact on Profitability.‟
Imperial Journal of Interdisciplinary Research, 2(3), 265-271.
[14]. Singh, D.P, (2011). “Net Working Capital Level and Return on Capital Employed In Firms
of Cement Industries in India”, VSRD-IJBMR, 1(4), 269-280.
-193-
An Analytical Study of Telecom Infra Industry of India
Kanika Maheshwari
Meerut College, Meerut (U.P.) India
E-mail Id: kanika.mh31@gmail.com
Abstract
PAPER/ARTICLE INFO
The rationale of this paper is to study the growth and future prospects of RECEIVED ON: 03/03/2017
the recent business model of infrastructure sharing in Indian telecom ACCEPTED ON: 30/04/2017
industry. It discusses the various forms of infrastructure sharing which
include active, passive and backhaul sharing. A study of the various Reference to this paper
passive infrastructure sharing companies in India is done. The various should be made as follows:
parameters of these industries in terms of tenancy ratio etc. are compared.
A study of the various mergers and acquisitions taking place amongst the Kanika Maheshwari (2017),
tower companies in India in past years is taken to understand the “An Analytical Study of
progressive trends and expected growth. The valuation of the deals over Telecom Infra Industry of
the years has been explored and the reasons for growth and slowdown are India”, Int. J. of Trade and
being evaluated. Conclusively various benefits of infrastructure sharing Commerce-IIARTC, Vol. 6, No.
are discussed. 1, pp. 194-206
Keywords – Passive infrastructure sharing, OPCOS, Telecom Industry,

Solution Ltd.
PDF awarded by UGC

Kanika Maheshwari
1. INTRODUCTION
Mobile telephony in developing countries like India plays a pivotal role in not only connecting
most corners of the map, but also spurting economic activity and development across the society.
Its fast paced penetration in India is a story remarkably ready to be replicated across other
continents and geographies untapped of telecom benefits. Whilst the growth for the Indian
telecom sector has been rapid, the evolution of its business models has been equally dynamic. The
mobile operator companies‟ (OpCos) instinctive priority was increasing subscriber base and, thus,
the spotlight was more towards marketing their services. Speedy network expansion was the next
point of focus, and active equipment service providers, the next natural partners of OpCos. This is
when the eco-system needed another key partner to manage its backbone. Tower Cos brought in
optimal utilization of infrastructure, and significant Capex saving opportunities for OpCos to
help focus on increasing reach to their end-users.
Functioning of a Tower Infrastructure Company: A tower infrastructure company provides
passive infrastructure on a sharing basis to telecom operators.
The role of a tower infrastructure company may be summarised as follows:
 Site planning, keeping in view the network rollout plans of prospective customers.
 Site acquisition, including entering into long-term agreements with land owners.
 Obtaining of necessary regulatory approvals.
 Erection and commissioning of tower and allied equipment.
 Provision of support services such as back-up power, air-conditioning and security.
 Provision of turnkey solutions to telecom companies such as sourcing of equipment, testing
and maintenance.
Fig. 1: Telecom Tower Structure with Key Components

 Types of Towers: Telecom towers are broadly classified on the basis of their placement as
Ground-based and Roof-top.
(i) Ground-Based Tower: Erected on the ground, ground-based towers (GBTs) are taller
(typically 200 to 400 feet) and are mostly used in rural and semi-urban areas because of the
-195-
Kanika Maheshwari
easy availability of real-estate space there. GBTs involve a capital expenditure in the range of
Rs. 2.4 to 2.8 million, depending on the height of the tower.
(ii) Roof-Top Tower (RTT): Roof-top towers (RTTs), which are generally placed on the roofs of
high-rise buildings, are shorter (than GBTs) and more common in urban and highly
populated areas, where there is paucity of real-estate space. Typically, these involve a capital
expenditure of Rs. 1.5 to 2 million.
It is the height of a telecom tower that determines the number of antennas that can be
accommodated, which in turn determines the capacity of the towers, apart from factors such as
location and geographical conditions (wind speeds, type of terrain, etc.). Hence, typically, while
GBTs can accommodate up to six tenants, RTTs can accommodate two to three tenants.
Economics of the Model—Tower Infrastructure Companies
The key points relating to the working of tower infrastructure companies are discussed in
following bullet list.
 High initial capital investments: On an average, while a roof-top tower involves a capital
expenditure of Rs. 1.5 to 2 million; a ground-based tower requires a capital expenditure of Rs.
2.4 to 2.8 million. Given the high capital investments required in the business, tower
companies are generally highly leveraged.
 Stable and predictable cash flow business: Once a tower asset is rented out, it usually
generates a stable and predictable cash flow in the form of tower rentals from occupants over
the term of the MSA between the two parties.
 Low working capital requirement: The tower business is also characterised by low working
capital requirements, as most of the operating expenses (such as electricity and fuel and other
variable operating expenses) are reimbursable by the tenants on actual basis. Moreover, the
larger companies with a bigger and geographically spread out portfolio of networks may be
able to get rentals for the towers in advance and also obtain better credit terms from their
suppliers, thus further improving their working capital cycle.
High incremental profitability: The costs of operating a tower, particularly the ones borne by the
tower company such as security and maintenance and ground rent, are largely fixed in nature.
Thus each increment in tenancy is accompanied by a minimal increase in costs. This leads to a
more than proportionate increase in profits for every increase in occupancy.
1.1 Telecom Infra Industry
India's 425,000 telecom towers require about 16.5 billion units of electrical energy and contribute upto 70
percent to the total operating costs in rural areas and 25 percent to the total operating costs in urban areas.
1.2 Initiatives
The need of adequate electric grid infrastructure in India is restricting other infrastructural
developments like telecom, real estate, and transport among others. In excess of 2.6 billion liters
of diesel is consumed by diesel generators at telecom towers annually to meet the energy
demand-supply gap, emitting 7 million metric tonnes of carbon dioxide.
With the growing 3G and forthcoming LTE networks, the subscriber base is expected to grow to
over 1.2 billion by the end of 2017. This growth will require 100,000 more towers to ensure
network availability. The number of towers required to launch 4G services because of frequency
band of 2300 MHz will be more than that required for 2G services.
Telecom infrastructure companies are turning to green power management solutions comprising
demand management, supply management, and renewable energy adoption.
-196-
Kanika Maheshwari
Activities like passive infrastructure sharing, replacement of old Base Transceiver Stations (BTS)
with new generation BTS, usage of outdoor BTS, optimized cooling at shelter, usage of intelligent
transceivers (TRXs), reduction of air conditioner load by using cold ambient air for shelter cooling
and operating air conditioners using stored energy in the batteries to reduce diesel consumption,
and carbon emission are some of the initiatives that have been implemented so far.
Technologies like Integrated Power Management Systems (IPMS), variable speed DC diesel
generators (DC-DG) and fuel catalysts are few of the solutions that have been implemented to
increase power source efficiency. Solar photovoltaic, wind power, fuel cell, and other renewable
energy sources have been deployed in about 4,021 telecom sites in India.
1.3 Market Dynamics
The Indian telecom tower market is estimated at Rs. 20,000 crore for the year 2012-13, witnessing
a growth of 20 percent over the last year.
Viom Networks operates a total of 40,000 towers as of March 2013. Disruptive solutions like lite-
anchor sites will likely play an important role in the success of this IP-1 player as it will create
compelling business propositions for the telecom operators.
Reliance Infratel is in discussions with three telecom players for a large infrastructure sharing
deal. Currently, the company has about 50,000 towers.
Reliance Industries is the only pan-India 4G spectrum owner. The service rollout is reported to be
in 2013 and its best option remains to lease towers from Reliance Infratel.
GTL is now focusing on improving the efficiency and tenancy of operations. The company is
looking forward to the developments in the industry and the growth plans of operators, in terms
of the much expected rollouts of the 4G-LTE and BWA roll outs.
Bharat Sanchar Nigam Ltd is planning to set up a new company to manage its more than 70,000
telecom towers. The company plans to give towers on lease to the private telecom service
providers. The company has initiated the process of appointing a consultant for hiving off tower
assets into a new company.
1.4 Growth Drivers
As smartphones, laptops, and other devices increasingly become integral to consumer's mobile
experiences, mobile data demand is expected to grow between 25 and 50 times current levels
within 5 years The Indian market is likely to mimic the trends in the mature markets of the
United States and Europe, where the increase in the data usage has led to growth in the telecom
towers that are required for maintaining the quality of experience.
Using 4G and BWA technology, operators can provide high speed data services to subscribers.
With Internet penetration the growth of data services is expected to ride on easy availability of
smartphones in India. The launch of these networks is expected to give further fillip to the
requirement of telecom towers.
1.5 Infrastructure Status
Grant of infrastructure status to the telecom tower industry is expected to attract investments,
access low cost funds, and draw tax benefits. The Cabinet Committee on Infrastructure has
included telecom towers along with fixed line in the harmonized list of sub-sectors and an
implementation committee consisting of representatives from RBI, SEBI, IRDA, and the Planning
Commission has been formed. TAIPA will work with the implementation committee to bring
commonality of interest to ensure rapid progression.
-197-
Kanika Maheshwari
The telecom towers will be instrumental in driving broadband penetration to reach the rural
hinterlands. While data will be the key driver in urban market, voice will still dominate the
upcountry markets. Low rural tele-density of merely 39 percent is an indication of the scope that
lies ahead.
2. COMPANY PROFILE
ACME Cleantech Solutions Ltd. formally known as ACME Telepower Ltd. (ATPL) provides
comprehensive passive infrastructure solutions to wireless telecom players both in India as well
as overseas. Focusing on innovation and R&D, ATPL has developed a range of innovative
products that help to provide cost-effectiveness, energy-efficiency, integrated, passive
infrastructure solutions etc., to telecom companies.
 ACME started its operations in 2003 as infrastructure supplier to Bharti Airtel with a 15 core
member team.
 ACME has emerged as a leader in providing passive infrastructure solution in the telecom
industry and is associated with almost all the prestigious players.
 Today the company is having a global presence with total on roll employee strength of about
900 and off roll strength of about 1200.
 ACME is also pursuing solar energy generation and is in process of establishing some of
Asia‟s largest solar thermal power plants in Gujarat, Rajasthan, Odisha and Maharashtra.
 Other services being provided by the company include alternate energy and wastewater
treatment and environmental impact solutions, which are geared towards energy.
 optimization and cost efficiency.
 The Global Energy Management Centre (GEMC) has been developed by ACME Tele Power
Ltd. to help companies monitor energy consumption patterns from multiple sources. These
patterns are analysed for usage, cost, carbon footprint in a number of ways that help to
understand the energy optimization method.
2.1 About ACME
At ACME, the philosophy is to envision and develop technologies that not make great economic
sense in terms of acceptability, efficiencies and return on investment, but also have a lasting
impact on social well-being. The company firmly believe that any technology it develop has to be
socially rewarding, through augmenting and enriching the environment. The principal idea is to
make the „green approach‟ financially rewarding.
2.2 Vision
Being the global benchmark for green energy solution.
2.3 Mission
Making the „Green Approach‟ profitable.
 To get exposed to the industrial environment.
 To get a basic understanding of the culture, work ethics and trade related work practices at
the Organization, i.e. ACME Cleantech Solutions Ltd., with which I was associated for a
period of two months.
 To understand the processes, procedures and standards that the industry uses to ensure
delivery to market, pricing and market positioning of the products or services that it
undertakes.
-198-
Kanika Maheshwari
 To refine my skills in conducting entry level industry analysis of a competent

product/services industry.
 To experiment the skills required with identifying strengths and weaknesses of the particular
organization.
4. INDUSTRY ANALYSIS
Porter’s Model
SUPPLIER POWER
 The components need in Telecom
Infrastructure market have not
been commoditized.
 Specialized firms make the
required hardware / software
and the services.
 Telecom service providers rely
highly on suppliers for smooth
THREATS OF NEW running of their services.
ENTRANTS
 Multiple companies THREATS DUE TO
have devised way to SUBSTITUTION
succeed and match
 The only threat by substitution
economies of scale. INDUSTRY in this industry is by the
 Capital requirements of regular technology changes in
new entrants in this RIVALRY one or the other product sub-
industry is fairly low. segments.
 Access to distribution is
not typically tough in
this industry vertical. BUYER POWER
 There are few
 Telecom business is a big chunk of all
business transactions taking place and
government regulations relies totally on its infrastructure.
on the products and
services of this industry.
 In the current scenario the buyer have a
power to do heavy negotiations as the
 There is no mechanism competition level is at its peak.
of retaliation by existent.  Buyers have power to negotiate credit
terms due to heavy competition.
 Buyers have the power to enable heavy
customizations in standard specification as
vendors are ready to make sales no matter
what?
 Telecom service companies are very much
informed about the product they are using.
 The percentage in cost of telecom
infrastructure is less than 50% of total roll
out cost.
 Size of telecom operator is exponentially
high as compared to infra OEMs.
-199-
Kanika Maheshwari
5. SWOT ANALYSIS OF ACME

STRENGTHS WEAKNESSES
 Good Integrated Manufacturing Facility  Weak & unstructured information of
 Sustained / survived the Telecom Market / Customer/Competition
downslide  Inadequate Sales & Marketing structure
 Country-wide Good Service Network for Telecom Domestic / International and
 IP understanding & IP organization Non-Telecom
 Positive & Energetic Team  Quality inconsistency particularly in new
 Better placed for the integrated Solution products
selling  Lack of Subject Matter Experts (SMEs)
 Encouraging activities done on monthly  Interdepartmental alignment is not up to
basis like Employee of the month the mark
 Customer care centre in ACME provides  Ownership acceptance issues
our customers a 24x7 availability for  Lack of focused approach towards filling
service in field the gaps/issues in collective manner
 Reach- A total of 34 offices of ACME  Compromise with Product Quality
across Globe  Customer response on poor after sales
 Innovative Approach; products like PIU, service support
DCDG, FCU, EMU have proved their  Poor training sessions for ground level
existence in Market staff
 Structural realignment needs to be
initiated and implemented
 No concrete investment in R&D
 Need to focus on product feasibility and
scalability (Customer point of view)
 Dependency on only 2 customers only
 Under utilization of factory/space, No
long term approach & consistency in biz
plan
OPPORTUNITIES THREATS
 Probability of gaining business / market  Consolidation of Operators / Tower
share by strengthening the relationship at companies will put more pressure on our
all levels at Customers Sales prices
 Business opportunities in upcoming  Loosing / falling reputation as front
Telecom International markets such as runner innovations / solutions providing
Africa, Latin America, Asia / ASEAN companies
countries  Uncertainty of revival phase in Telecom
 Opportunities to do in-house Fabrication  Cheaper similar product range as of
of all sheet metal enclosures by adding ACME from competitors like Mahindra
little more investments in machineries. It makes it difficult to survive in market
will result in cut in development time,  International Players with complete
-200-
Kanika Maheshwari
cost delivery time and also quality of telecom solutions; like Hawaii, ZTE
products  Loss of Current Market Share and
 Capturing the markets in Bangladesh negative growth
 External Expansion other than Africa  Low morale employee
 To introduce New products in the market  Price war with competitors
and phase out Old and obsolete products  Loss of existing manpower to competition
(Product Innovation) (Technical and Non Technical)
6. INFRASTRUCTURE SHARING IN TELECOM INDUSTRY

The telecom industry is following the trend of infrastructure sharing as a business process so as to
keep their investments low and to compete for the economy of scale. There are mainly three kinds of
infrastructure sharing possible and deployed worldwide.
 Passive Infrastructure sharing is sharing non-electronic infrastructure at cell site. Passive
Infrastructure is becoming popular in telecom industry worldwide. It includes the sharing of:
Steel tower, BTS shelter, Power supply, Generators, Batteries, Air-conditioners, Fire
extinguishers
 Active Infrastructure sharing is sharing electronic infrastructure. This includes: Spectrum,
Switches, Antenna, Transceivers, Microwave equipment
 Spectrum-sharing concept is based on a lease model and is often termed spectrum trading. An
operator can lease a part of its spectrum to another operator on commercial terms.
 Frequency Sharing Base station sharing is prospective while each operator maintains control over
logical Node B so that it will be able to operate the frequencies assigned to the carrier, fully
independent from the partner operator and retains control over active base station equipment.
 Radio Network Controller (RNC) sharing represents maintaining logical control over the RNC of
each operator independently.
 MSC and Routers sharing or backbone sharing includes sharing switches (MSC) and routers
(SGSN) on the operator's fixed network.
 Network Sharing where a network infrastructure is created expressly for the purpose of sharing
resources.
Geographical Splitting
3. Backhaul Infrastructure Sharing Core network elements such as switching centers, GPRS service
nodes, transmission equipment and all links connecting elements of the core network.
Different Passive Infrastructure Sharing Model
To bring to your notice Indian telecom operators primarily use the passive infrastructure sharing.
Thus in the following section shows the various models of passive infrastructure sharing deployed in
telecom industry.
 Telcos owned Tower Companies: This category consists of companies created by hiving off the
tower portfolios of telcos into subsidiaries. Among operator-owned companies, while most are
owned by a single telco, Exp: Reliance Infratel and Bharti infratel
 Independent Telecom Tower Companies jointly owned: This category consists of companies that are
not owned or managed by telcos. These companies build, own and lease telecom towers to telcos.
This is a fragmented segment with a large number of players. Exp: the joint venture, Indus
-201-
Kanika Maheshwari
Towers Limited (ITL), the shareholding in which is held by three telcos: Bharti Airtel Limited,
the Vodafone group, and the Idea Cellular group.
 Inter-operator tower sharing: Operators generally use bilateral arrangements to execute Inter-
operator sharing of passive infrastructure. Typically, bilateral agreements are on an „in-kind‟
basis, with no payments made between the parties. The two parties agree to install BTSs on each
other‟s towers.
 Third-party tower companies: Independent companies assume responsibility for tower deployment
and maintenance, entering agreements with operators that allow them to install their BTSs on the
towers. In this model, the ownership of passive infrastructure equipment lies with the tower
company. The decision to outsource tower operations to third-party tower companies typically
involves a strategic shift to focus on service innovation and improving customer experiences.
This aspect becomes critical in highly competitive telecom markets.
 Contract approach: Infrastructure built in accordance to the requirements of the company as
signed in the contract
 Anticipatory approach: Tower companies build infrastructure and then lease it.
Exp GTL, QTIL, Essar telecom
Suitability These business models have shown varying degrees of success. Regional operators need to
evaluate their strategic direction to determine which of the two suits them best.
7. TOWER COMPANIES IN INDIA
The major passive infrastructure sharing tower companies in India are:
 Viom Networks is a joint venture between Tata Teleservices, which owns 54 percent, and a
consortium led by the Srei group.
It has over 40,000 mobile tower sites in India and a per tower tenancy ratio of 2 : 4,
 GTL Infrastructure, after acquiring Aircel‟s towers, had 32,650 towers and 41,700 tenants as on
March 31, 2011. But it also has a debt of Rs 10,000 crore on its books. A merger will ensure scale
and higher tenancies.
 Indus Towers, a joint venture among Bharti Airtel, Vodafone Essar and Idea Cellular, is the
market leader with about 110,000 towers.
American Tower Corp. (ATC) ATC India owns or operates over 10,000 tower sites throughout the
country, with an average of 1.8 tenants per tower. We have established relationships with major
wireless service providers in India and now have a presence in all telecom circles in India.
Tower Company Tenancy Ratio
GTL Infrastructure 1.2
Indus Towers 1.71
Bharti Infratel 1.5
Reliance Infratel 1.7
BSNL/MTNL 1.07
VIOM 2.4
ATC 1.8
ETIPL 1.9
Others 1.47
Total 1.63
Fig: 1
-202-
Kanika Maheshwari
In the near future, we are also looking to provide customized collocation solutions through
Distributed Antenna Systems (DAS), which support seamless in-building and outdoor wireless
coverage. Globally, American Tower is a leading passive infrastructure provider in the Americas.
 ETIPL has a portfolio of 4,630 wireless communications tower sites, including a number of
towers under construction. It has operations across 14 of the 23 telecom circles in India and has an
industry leading tenancy ratio of TIL is an indirect wholly owned Indian subsidiary of American
Tower Corporation, a leading independent owner and operator of more than 27,800 wireless and
broadcast communication sites and distributed antenna systems globally.
 Reliance Infratel
 Bharti Infratel
 Quippo Telecom Infrastructure Ltd
 Tower Vision
 Aster Infrastructure Ltd
 Indian Telecom Infrastructure Ltd
 KEC International
8. MERGERS AND ACQUISITIONS AMONG THE TOWER COMPANIES

The robust development of the telecom and mobile services in India has lead to the occurrence of
various deals in the industry. Although the passive infrastructure sharing in India is very recent
nevertheless there have been a significant number of deals taking place amongst the tower
companies. There have been a wide variety of deals in infrastructure industry which include
deals of tower companies with other telecom operators, telecom solution providers, capital
investment firms or banks etc. The following table fig. 3 enlists all the major deals of tower
companies amongst them or with telecom operators the below table entries show that a
significant number of mergers and acquisition have taken place in India even during the
recessionary period. This indicates the high returns are availed by the telecom operators as a
result of sharing due to which there have been M & A in this sector for years now. The number of
deals was large during the years 2006 to 2010 but thereafter a slowdown has been observed in the
mergers and acquisitions. The type of deal has been indicated showing a greater percentage of
-203-
Kanika Maheshwari
sales of infrastructure assets amongst the tower companies and operators. The deal between
BSNL and Swan telecom was a roaming agreement.
M & A Among the Telecom Infrastructure Sharing Companies in India
Year Target/ seller Merger/ acquirer Type of deal
2012 Indian Telecom Infrastructure Ascend telecom Infrastructure Merger
Ltd Ltd
2010 Chennai Network GTL Infrastructure Ltd Merger
Infrastructure Ltd
2010 Aircel Ltd GTL Infrastructure Ltd Sale of Assets
2009 Idea Cellular Idea Cellular Infrastructure ltd Sale of Assets
2009 Xcel telecom Private Ltd ATC Sale of Assets
2009 Reliance Communication Reliance Infratel Sale of Assets
2009 Viom Network QTIL Merger
2008 Tata Teleservices 21st Century Infratel Ltd Sale of Assets
2008 Swan Telecom BSNL Agreement
2007 Idea Cellular Ltd Vodafone Essar Tower Ltd Sale of Assets
2007 GTL Ltd France Telecom Sale of Assets
2006 Reliance Communication Reliance Infratel Sale of Assets
2006 GTL Ltd GTL Infrastructure Ltd Sale of Assets
9. KEY FINDINGS
As the number of deals in the Indian infrastructure companies have varied over the years so have
the deal amount of these mergers and takeovers.
The bar graph below shows the variations in the deal amount over last five years in the
infrastructure sharing industry in India. The time from when these companies prevailed
consistent deals have taken place.
Taking an overlook:
In 2012 the merger between Chennai network infrastructure and GTL infrastructure was a non
cash merger followed by an investment of 400 crores. There have been no significant deals in 2011
however. In 2010 there had been a boom in the deals and their amounts when GTL bought the
towers of Aircel for 8400 crores.
In 2010, ATC bought the assets of Xcel telecom for 800 to 850 crores. Another big deal in the year
2009 was the merger of QTIL and Tata tele services which closed at 2367 crores.
From 2006 to 2008 there had been significant deals such as that between Idea cellular and
Vodafone Essar Towers Ltd.
It has to be observed that only the deals amongst the tower companies and between telecom
operators and tower companies have been considered.
-204-
Kanika Maheshwari
Fig. 4 : Comparison of the average amount of passive infrastructure sharing deals (only tower
companies) over last five years
Benefits of Passive Infrastructure Sharing
 Reduced Capex: Telecom business is heavy on Capex, and as much as 40-60% of the Capex is
utilized for setting up and managing the Telecom infrastructure By sharing infrastructure,
Operators can optimize their Capex, and focus on providing new and innovative services to
their subscribers.
 Reduced Opex: By outsourcing the day-to-day management of your Telecom infrastructure to
Infratel, your Opex costs are hugely reduced. The cost-savings can be used to provide
innovative services, and improve customer satisfaction.
 Reduced Time to Market: By leveraging existing Infrastructure that are deployed in active
Telecom circles, a new operator can drastically cut down the time taken to begin operations.
The resulting savings in Capex can then be diverted towards Marketing and promotional
activities which are crucial in the initial months.
 Increased Connectivity: Deployed tower infrastructure in rural and remote locations which are
characterized by erratic power supply, poor access, difficult terrain and lack of adequate
backup saved the hassle of operating in such conditions, and enables increase in penetration.
 Highest uptime: The use of efficient processes and superior monitoring ensures minimum
downtime for operators.
 Cost and energy efficiencies: One of the most significant implications of towers sharing is that
the reduced number of towers reduces the emissions and hence the diesel consumption. The
concept of green tower has also come into existence.
10. CONCLUSION
The paper clearly reflects the various kinds of infrastructure sharing in India. Due to cost benefits
attained by telecos due to sharing has lead to various mergers and acquisitions even during
recession period. The slowdown in the growth of this sector after 2010 can be attributed to the 2G
scam in the Indian telecom sector due to the licences of the various telecom operators were
cancelled by SC and many operators were facing trials. In spite of these hurdles the Indian
-205-
Kanika Maheshwari
telecom industry is yet to see many more such deals between the tower companies and also to
avail the benefits of active infrastructure sharing which is only in nascent form in India today.
REFERENCES
[1]. C.R. Kothari (2004). Research Methodology, by New age International Publisher.
[2]. Ranjit Kumar, Research Methodology by Sage Publication.
[3]. Roger, L. Freeman, Fundamentals of Telecommunication.
[4]. Rekha Jain, Infrastructure Development & Financing (Term Report).
[5]. Deals in Telecommunication Services Industry CMIE: Business Beacon.
[6]. Indian Telecom Tower Industry. Consolidation Round the Corner ICRA Rating Feature.
[7]. Infrastructure Sharing in Telecom Sector Cellular Operators Association of India.
[8]. International journals on Networks Monitoring device and system (US Patent).
[9]. Passive Infrastructure Sharing in Telecommunications KPMG.
[10]. Telecom Infrastructure Sharing Regulatory Enablers and Economic Benefit Booz&co.
-206-
360 Degree Evaluation Boon for Self Development of Employees
Mani Aroraa*, Deepti Kanojiab

aGovt.Girls Degree College Kharkhuda, Meerut, (U.P.) India
E-mail-Id: mani13049@gmail.com
bMultanimal Modi College, Modinagar, (U.P.) India
E-mail-Id: kanodeep@gmail.com
Abstract
PAPER/ARTICLE INFO
Multi-source feedback extends traditional performance appraisal by RECEIVED ON: 18/02/2017
collecting information from subordinates, peers, supervisors and ACCEPTED ON: 29/04/2017
customers. Ratees often receive the results along with normative data and
self-ratings. This paper explores how multi-source feedback goes beyond Reference to this paper
traditional performance appraisal by providing ratees with comparative should be made as follows:
information. Focusing on person, perception and information processing
dynamics, this paper develops a model and associated propositions to
Mani Arora, Deepti Kanojia
explain the effects of multi-source feedback on perceptions of goal (2017), “360 Degree
accomplishment, re-evaluation of self-image, and changes in outcomes Evaluation Boon for Self
such as goals, development, behavior and performance. Moderators of Development of Employees”,
relationships between the major components in the model include Int. J. of Trade and Commerce-
individual difference variables (self-image, feedback seeking, self- IIARTC, Vol. 6, No. 1, pp.
monitoring, task-specific self-efficacy, and impression management) and 207-215
situational conditions (the content and process of multi-source feedback
and organizational performance standards). Issues of research and
practice intended to improve understanding and effectiveness of multi-
source feedback are discussed.
Keywords: Performance Appraisal, Ratees, TQM, 360 Degree,
Evaluation.
1. INTRODUCTION
Performance appraisal, also known as employee appraisal, is an ongoing process of any
organisation that involves determining and communicating to an employee, how he or she is
performing the job and ideally (generally in terms of quality, quantity, cost and time),
establishing a plan of improvement. It is a establishing a plan of improvement. It is a continuous
function and not merely an issue of formal reports at particular points of time. It is a part of career
development, a regular review of employee performance within organizations.
A performance appraisal is a systematic and periodic process that assesses an individual
employee’s job performance and productivity in relation to certain pre-established criteria and
organizational objectives. Other aspects of individual employees are considered as well, such as
accomplishments, potential for future improvement, strengths and weaknesses, etc. It helps the
subordinate answer two key questions: first, "What are your expectations of me?" second, "How
am I doing to meet your expectations?”
According to Heyel, performance appraisal can be defined as – “The process of evaluating the
performance and qualifications of the employees in term of the requirements of the job for which
he is employed, for purpose of administration including placement, selection for promotions,
providing financial rewards and other actions which require differential treatment among the
members of a group as distinguished from actions affecting all members equally."
Michael Armstrong prefers to use the term performance management. He defines it as "A process
for establishing shared understanding about what is to achieved, and an approach to managing
and developing people in a way which increases the probability that it will be achieved in the
short a long term."
The nature of performance appraisal and its effectiveness depend a great deal on how human
resources are viewed and treated in an organization. The strength of any organisation is its
people. If people are attended to properly by recognizing are likely to be dynamic and grow fast.
Unlike the physical resources, human resources have the capability of expanding to unlimited
extents.
The most important goal of any dynamic organization is to ensure that its people are capable of
doing the variety of tasks associated with their roles/position. Thus, appraising and motivating
the employees from time to time and rewarding them for their performance is a must. For this
performance appraisal serves as an indispensable tool and those who does not recognize the
importance of this process, tend to sabotage unknowingly their own development opportunities.
Several studies (Hazucha et al., 1993; London and Wohlers, 1991; Walker and Smither, 1999)
indicate that the use of 360-degree feedback helps 136 people improve performance. In a 5-year
Walker and Smither (1999) study, no improvement in overall ratings was found between the 1st
and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years. A study
by Reilly et al. (1996) found that performance increased between the 1st and 2nd administrations,
and sustained this improvement 2 years later. Additional studies show that 360 feedbacks may be
predictive of future performance (Maylett and Riboldi, 2007). Some authors maintain that 360
processes are much too complex to make blanket generalizations about their effectiveness
(Bracken, Timmreck, Fleenor and summers, 2001b; Smither, London and Reilly, 2005). Smither et
-208-
al. (2005) suggested, “We, therefore, think that it is time for researchers and practitioners to ask,
under what conditions and for who is multi-source feedback likely to be beneficial? ‟ (Rather than
asking, does multi source feedback work?).” Their meta-analysis of 24 longitudinal studies looks
at individual and organizational moderators that point to many potential determinants of
behaviour change, including positive feedback orientation, positive reactions to feedback, goal
setting, and taking action.
3. PERFORMANCE APPRAISAL METHODS
An article of Smriti Chand (PMO) titled "Performance Appraisal Methods: Traditional and
Modern Methods!" which focuses on the topic "Each method of performance appraisal has its
strengths and weaknesses may be suitable for one organisation and non-suitable for another one.
As such, there is no single appraisal method accepted and used by all organisations to measure
their employees’ performance. All the methods of appraisal devised so far have been classified
differently by different authors. While DeCenzo and Robbins’ have classified appraisal methods
into three categories: absolute methods, relative methods and objective methods; Aswathappa has
classified these into two categories past-oriented and future-oriented.
A more widely used classification of appraisal methods into two categories, viz., traditional
methods and modem methods which is given by Strauss and Sayler. The traditional methods lay
emphasis on the rating of the individual’s personality traits, such as initiative, dependability,
drive creativity, integrity, intelligence, leadership potential, etc.; while the modem methods, on
the other hand, place more emphasis on the evaluation of work results, i.e., job achievements than
the personal traits
Traditional Methods Modern Methods
1. Ranking Method 1. Management by Objectives (MBO)
2. Paired comparison 2. Behaviourally anchored rating scales
3. Grading 3. Assessment centres
4. Forced distribution method 4. 360-degree appraisal
5. Forced choice method 5. Cost accounting method
6. Checklist method
7. Critical incident method
8. Graphical scale method
9. Essay method
10. Field review method
11. Confidential report
3.1 Traditional Method
3.1.1 Performance Ranking Method: Ranking is a performance appraisal method that is used to
evaluate employee performance from best to worst. Manager will compare an employee to
another employee, rather than comparing each one to a standard measurement.
3.1.2 Paired comparison analysis: Paired comparison analysis is a good way of weighing up the
relative importance of options. A range of plausible options is listed. Each option is
compared against each of the other options. The results are tallied and the option with the
highest score is the preferred option.
-209-
3.1.3 Grading Method: In this method, certain categories of worth are established in advance
and carefully defined. There can be three categories established for employees: outstanding,
satisfactory and unsatisfactory. There can be more than three grades. Employee
performance is compared with grade definitions. The employee is, then, allocated to the
grade that best describes his or her performance.
3.1.4 Forced ranking (forced distribution): Forced ranking is a method of performance appraisal
to rank employee but in order of forced distribution. For example, the distribution
requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10
percent in the bottom.
3.1.5 Forced-Choice Method: The forced-choice method is developed by J. P. Guilford. It
contains a series of groups of statements, and rater rates how effectively a statement
describes each individual being evaluated. Common method of forced-choice method
contains two statements, both positive and negative.
3.1.6 Weighted checklist: This method describe a performance appraisal method where rater
familiar with the jobs being evaluated prepared a large list of descriptive statements about
effective and ineffective behaviour on jobs.
3.1.7 Critical incident method: The critical incident for performance appraisal is a method in
which the manager writes down positive and negative performance behavior of employees
throughout the performance period
3.1.8 Graphic rating scales: The Rating Scale is a form in which the manager simply checks off
the employee’s level of performance. This is the oldest and most widely method used for
performance appraisal.
3.1.9 Essay Evaluation: This method asked managers / supervisors to describe strengths and
weaknesses of an employee’s behavior. Essay evaluation is a non-quantitative technique.
This method usually use with the graphic rating scale method.
3.1.10 Field Review Method: When there is a reason to suspect rater’s biasedness or his/her
rating appears to be quite higher than others, these are neutralised with the help of a review
process. The review process is usually conducted by the personnel officer in the HR
department. The review process involves the following activities: (a) Identify areas of inter-
rater disagreement. (b) Help the group arrive at a consensus. (c) Ensure that each rater
conceives of the standard similarity.
3.1.11 Confidential Report: It is the traditional way of appraising employees mainly in the
Government Departments. Evaluation is made by the immediate boss or supervisor for
giving effect to promotion and transfer. Usually a structured format is devised to collect
information on employee’s strength weakness, intelligence, attitude, character, attendance,
discipline, etc.
3.2 Modern Methods
3.2.1 Management By Objectives (MBO): MBO is a process in which managers/ employees set
objectives for the employee, periodically evaluate the performance and reward according to
the result.MBO focuses attention on what must be accomplished (goals) rather than how it
is to be accomplished (methods).
-210-
3.2.2 Behaviourally anchored rating scales (BARS): This method is used to describe a
performance rating that focused on specific behaviors or sets as indicators of effective or
ineffective performance. It is a combination of the rating scale and critical incident
techniques of employee performance evaluation.
3.2.3 Assessment Centres: An assessment centre is a central location where managers come
together to participate in well-designed simulated exercises. They are assessed by senior
managers supplemented by the psychologists and the HR specialists for 2-3 days.
3.2.4 360 degree performance appraisal: 360 Degree Feedback is a system or process in which
employees receive confidential, anonymous feedback from the people who work around
them.
3.2.5 Cost Accounting Method: This method evaluates an employee’s performance from the
monetary benefits the employee yields to his/her organisation. This is ascertained by
establishing a relationship between the costs involved in retaining the employee, and the
benefits an organisation derives from him/her.
4. 360O APPRAISAL SYSTEMS
360-degree Appraisal is an assessment process used to improve managerial effectiveness by
providing the manager with a more complete assessment of their effectiveness, and their
performance and development needs. 360-degree feedback is an evaluation method that
incorporates feedback from the worker, his/her peers, superiors, subordinates and customers.
Results of these confidential surveys are tabulated and shared with the worker, usually by a
manager. Interpretation of the results, trends and themes are discussed as part of the feedback.
The primary reason to use this full circle of confidential reviews is to provide the worker with
information about his/her performance from multiple perspectives. From this feedback, the
worker is able to set goals for self-development which will advance their career and benefit the
organization. With 360-degree feedback, the worker is central to the evaluation process and the
ultimate goal is to improve individual performance within the organization. Under ideal
circumstances, 360-degree feedback is used as an assessment for personal development rather
than evaluation (Tornow, W., 1998). Unfortunately, not all circumstances are ideal.
360 degree feedback provides a comprehensive view of the skills and competencies of the
individual as a manager or as a leader. The individual gets a feedback on how other people
perceive and assess him as an employee. 360 degree feedback is beneficial to both an individual as
well as organization. It leads to pooling of information between individual and other
organizational members. It encourages teamwork as there is full involvement of all the top
managers and other individuals in the organization. It stresses upon internal customer
satisfaction. It develops an environment of continuous learning in an organization. Based on a 360
degree feedback, the individual goals and the group goals can be correlated to the organizational
strategy, i.e., the individual and the group can synchronize their goals with the organizational
goals.
5. HISTORY
The German military first began gathering feedback from multiple sources in order to evaluate
performance during World War II. Others also explored the use of multi-rater feedback during
this time period via the concept of T-groups.
-211-
One of the earliest recorded use of surveys to gather information about employees occurred in the
1950s at Esso Research and Engineering Company. From there, the idea of 360 degree feedback
gained momentum, and by the 1990s most human resources and organizational development
professionals understood the concept. The problem was that collecting and collating the feedback
demanded a paper-based effort including either complex manual calculations or lengthy delays.
The first led to despair on the part of practitioners; the second to a gradual erosion of
commitment by recipients.
However, due to the rise of the Internet and the ability to conduct evaluations online with
surveys, Multi-rater feedback use steadily increased in popularity. Today, studies suggest that
over one-third of U.S. companies use some type of multi-source feedback others claim that this
estimate is closer to 90% of all Fortune 500 firms in recent years, Internet-based services have
become standard in corporate development, with a growing menu of useful features (e.g., multi
languages, comparative reporting, and aggregate reporting.
Fig. 1
The above diagram has shown the various centric types of feedback systems, some of them were
previously used some are in use and some will be used in future. Every time the peripheral of
collecting the feedback has increased as it gives an intense analysis of various types of
competencies present and required for the development of employees. Starting with the 90 degree
appraisal where only employee manager relationship is of utmost importance it first increased to
one upper level of manager than to peers and subordinates and finally reaching to all four parts
and including the customers as well.
-212-
360 degree feedback is the system which is currently being used in many corporate lobbies but
now a day’s more recent topic is 720 degree feedback system which simply means twice the 360
degree system as feedback is taken before and after the work has been done.
Table 1: Implementation Model of 360- Degree feedback
Using 360o for Appraisal Using 360o for Development
 Emphasis on assessment of performance  Personal development is main priority
 Participation in compulsory  Participation is (usually) voluntary
 The manager select respondents (or has  The subject of the questionnaire selects
the right of veto) the respondents
 The manager has access to the report  The subject receives the report (and
decides what to share with the manager)
 Manager needs training to interpret and  Subject needs support to interpret the
give feedback constructively report
 The outcome is agreement on the  The outcome is development plan
assessment of current performance and
targets for improvements
6. STAKEHOLDERS OF 360O ASSESSMENT

The stakeholders of 360° assessment employees’ may be peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact
with the employee and can provide valuable insights and information or feedback regarding the
“on-the-job” performance of the employee. 360 degree appraisal has four integral components:
1. Self appraisal
2. Superior’s appraisal
3. Subordinate’s appraisal
4. Peer appraisal.
Self-appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance.
Superior’s appraisal forms the traditional part of the 360 degree appraisal where the employees’
responsibilities and actual performance is rated by the superior.
Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work, leadership
qualities etc.
Peer appraisal allows feedback given by peers which can help to find employees’ abilities to work
in a team, co-operation and sensitivity towards others.
Self-assessment is an indispensable part of 360 degree appraisals and, therefore, 360 degree
Performance appraisal have high employee involvement and also have the strongest impact on
behaviour and performance. It provides a "360-degree review" of the employees’ performance
and is considered to be one of the most credible performance appraisal methods.
7. PROS AND CONS OF 360 DEGREE APPRAISAL
Pros of 360 degree appraisal:
 More comprehensive system because responses are gathered from multiple perspectives.
-213-
 Feedback from peers and others may increase employee self-development.

 It may lessen prejudices because the feedback comes from more people, not just one person.
 Quality of information is better.
 It complements TQM initiatives by emphasizing internal/external customers and teams.
 Increases responsibilities of employees to their customers.
 The mix of ideas can give a more accurate assessment.
 Not only manager should make assessments on its staff performance but other colleagues
should do, too.
 People who undervalue themselves are often motivated by feedback from others.
 If more staff takes part in the process of performance appraisal, the organizational culture of
the company will become more honest.
Cons of 360 degree appraisal:
 Requires training to work.
 Employees could give dishonest and invalid feedback and it can be expensive too.
 Complex system in combining all responses.
 Feedback can be intimidating. Employees could feel like they are being “attacked”.
 Could be conflicting opinions, but accurate from their own standpoints.
 Extension of exchange feedback can cause troubles and tensions to several staff.
8. CONVENTIONAL VS 3600 FEEDBACK SYSTEM
Table 2:
Categories Traditional Appraisals Modern, Systems Appraisals
Guiding Values Individualistic, Control oriented, Systematic, Developmental,
Documentary Problem solving
Leadership Styles Directional, Evaluative Facilitative, Coaching
Frequency Occasional Frequent
Formalities High Low
Rewards Individualistic Grouped, Organizational
9. CONCLUSION
360 degree feedback is a process for providing a person with structured feedback from a group of
people who have a range of different perspectives. For example, a manager can receive feedback
on their leadership, communication and planning & organising capabilities from their direct
reports, peers, their own manager and possibly internal and external customers. Feedback is
almost always a sensitive matter. People are often curious, sometimes fearful and occasionally
emotional about it. Many companies like HCL, Infosys, LG Electronics India Ltd., IndiaPlaza.com
are now using this system.
360 Degree feedback allows wonderful opportunities for increasing insight and awareness,
improving communication, identifying learning and development needs, prioritizing learning
activities, motivating building confidence and program evaluation. In choosing a 360 Degree
Feedback system, consider the question of Role. Does the system you choose deliver practical,
flexible and meaningful results, in a cost and time effective manner? And does it do this while
-214-
maximising learner interest and relevance, while minimising anxiety, fear and resistance?
Increasing individual’s performance with 360-degree evaluations will lead to overall success for a
firm. The feedback must be confidential so as to ensure its reliability and legitimacy. The feedback
must be accepted with positivity and an open-mind. The effectiveness of the feedback must be
evaluated and analyzed on a regular basis
REFERENCES
[1]. Aswathappa, K. (2008). Human Resource Management, Text & Cases, P.241
[2]. Bracken, D.W., Timmreck, C.W., Fleenor, J.W., & Summers, L. (2001b). 360 degree
feedback from another angle.Human Resource Management, 40 (1), 3–20.
[3]. Carruthers, F. (2003, November 14). Nothing but the truth. Australian Financial Review, p.
78.
[4]. Clark, S., Whittall, A. (2003, August 17). Performance management develops productivity.
Winnipeg Sun. Retrieved from http://web.lexis nexis.com/universe/document on January
28, 2004.
[5]. Decenzo, D. A. and Robbins, Stephen P. (2002). Human resource management. John Wiley
and sons, 7th edition.
[6]. Hazucha, J.F., Hezlett, S.A., & Schneider, R.J. (1993). The impact of 60-degree feedback on
management skills development. Human Resource Management, 32(2-3), 325-351.
[7]. Heathfield, S. (2001, April 25). 360 degree feedback: the good, the bad and the ugly defines
and examines multirater feedback. Retrieved from
http://humanresources.about.com/library/weekly/aa042501b.htm on January 26, 2004.
[8]. London, M., & Wohlers, A. J. (1991). Agreement between subordinate and self-ratings in
upward feedback. Personnel Psychology, 44(2), 375-390.
[9]. Maylett, T. M., & Riboldi, J. (2007). Using 360° Feedback to Predict Performance. Training
+ Development, September, 48–52.
[10]. Reilly, Richard R. Smither, Vasilopoulos, James W. (1996). A Longitudinal study of
upward feedback. Personnel Psychology; Durham; Autumn; 49(3), 599.
[11]. Shaking things up. (2003, October 8). Editor, Retrieved from
http://www.trainingmag.com/training/index.jsp on January 28, 2004.
[12]. Smither, J. W., London, M., & Reilly, R. R. (2005). Does performance improve following
multisource feedback? A theoretical model, meta-analysis, and review of empirical
findings. Personnel Psychology, 58(1), 33-66.
[13]. Smriti Chand (2012). Performance Appraisal Methods: Traditional and Modern Methods,
(PMO) Legal & General.
[14]. Strauss G., Sayles L. R., (1971). Personnel: The Human Problems of Management, New
Delhi Prentice Hall of India Pvt. Ltd., 550-560.
[15]. Sullivan, J. (1998). HR program evaluation template: 360-degree feedback. Retrieved from
http://www.drjohnsullivan.com/articles/1998/net12.htm on February 2, 2004.
[16]. Tornow, W., London, M. (1998). Maximizing the value of 360-degree feedback. San
Francisco: Jossey-Bass Inc.
[17]. Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What managers
do with their results matters. Personnel Psychology, 52(2), 393-423.
-215-
Commodity Futures Trade – Dimensions of Corporate Social

Responsibility [Special reference to Hapur Commodity Exchange
Limited (HCEL)]
Vinayaka Tripathia*, Madhusoodan Tripathib, Patanjali Tripathic

aE-mail Id: tripathivinayak3@gmail.com
bDepartment of Commerce, SSV (PG) College, Hapur Affiliated to CCS University, Meerut, (U.P.) India
E-mail Id: madhusoodantripathi1@gmail.com
cDepartment of Commerce, SSV (PG) College, Hapur Affiliated to CCS University, Meerut, (U.P.) India
E-mail Id: patanjalidigi04@gmail.com
Abstract
Trade includes two important dimensions i.e. Physical trade and Futures trade. PAPER/ARTICLE INFO
Commodity futures trade is an important part of trade as well as futures trade. RECEIVED ON: 02/03/2017
Commodity Futures Trading in India has a long history of more than a century ACCEPTED ON: 23/05/2017
having active futures markets as early in 1875. “Corporate Social responsibilities
(CSR) refer to the businessmen‟s decisions and actions taken to reasons at least
partially beyond the firm‟s direct economic or technical interest.”In broad sense, Reference to this paper
CSR when comes into action is called corporate social work. Parties concerned should be made as follows:
directly-indirectly towards which any organization has to do corporate social work
are Society, Government, Employees, Customers, Shareholders, Creditors, Vinayaka Tripathi,
suppliers, etc. Hapur commodity exchange limited (formerly known as The Madhusoodan Tripathi,
Chamber of Commerce, Hapur), one of the exchanges from where the Indian Patanjali Tripathi (2017),
commodity futures trade began, was incorporated on October 1923. It provides an ―Commodity Futures Trade –
independent, transparent and efficient system regarding trading, clearing and Dimensions of Corporate
settlement. HCEL fulfils its obligation of corporate social work to the parties Social Responsibility [Special
concerning with him directly-indirectly. There are many ups and downs in last 3
reference to Hapur
years in following its CSR by HCEL. Towards Society - Its Charity payable in FY
Commodity Exchange
2014-15 was INR 368,661.20. Its festival expenses shows an increase of INR
Limited (HCEL)]‖, Int. J. of
10,66,832. Towards Government- HCEL sincerely follows its social duty towards
government. There is an increase of INR 3,03,812 in „Current tax paid‟ as well as
Vol. 6, No. 1, pp. 216-225
for „Provision for income Tax‟ it shows an increase of INR 172,091.00. Towards
Customers / shareholders / creditors its Total Guarantee Fund increases by INR
46,67,796.1. Towards Social Audit- HCEL has its own vigilance committee. This
is a unique factor. HCEL fulfils its obligation of CSR towards various parties. It
seems to be satisfactory. On part of social Audit, after Analysing the Annual
Reports of three previous years, it finds that there is not even a single issue comes
under vigilance committee. It seems to be non-satisfactory. It is recommended that
SEBI should investigate as well as issue guidelines in this context.
Keywords: Commodity Futures, Hapur Commodity Exchange Limited, Forward
Markets Commission, CSR (Corporate Social Responsibility).
Commodity Futures Trade – Dimensions of Corporate Social Responsibility [Special reference to Hapur Commodity…
Vinayaka Tripathi, Madhusoodan Tripathi, Patanjali Tripathi
1. INTRODUCTION
Trade includes two important dimensions i.e. Physical trade and Futures trade. Commodity
futures trade is an important part of trade as well as futures trade. Commodity Futures Trading in
India has a long history of more than a century. India is perhaps the only country in the world
besides USA and UK, which could boast of having active futures markets as early in 1875 in a
large number of primary commodities and their products.
As on July 2014, Governmental agencies regulated 17 trillion worth of commodity trade in india. *1
Before September 2013, commodity futures trade was overseen by Forward Markets Commission
(FMC), Ministry of Consumer Affairs, Food and Public Administration, India. On 28 th September
2015 Forward Markets Commission was merged with Securities and Exchange Board of India
(SEBI).*2
Commodity trading is performed in 146 Commodities. At present, 22 exchanges are recognized /
registered for the futures trading in commodities, of which 6 are national and rest are regional
commodity exchanges. Futures trading in commodities is performed through future / forward
contract, which is a legally enforceable agreement for delivery of goods or the underlying asset on
a specific date in future at a price agreed on a date of contract.
There is a three tier regulatory system for futures trading in existence in India, namely
Government of India, Securities and Exchange board of India (SEBI), Commodity Exchange. *3
Various researches have been carried out in commodity derivatives. They have explained
analysis of various commodities in different exchanges in different countries. However, very less
studies have been carried out in context of CSR activities in Hapur commodity exchange limited.
Some of the studies are reviewed as under:
• Highlights/important developments for the fortnight from 1.07.2014 to 15.07.2014, Forward
Markets Commission, Mumbai, Ministry Of Finance, Govt. of India.
• Finance minister unveils merger of FMC with SEBI, PR no. 237/2015 dated September 28,
2015, SEBI, Ministry of Finance, Govt. of India.
• FAQ on Commodity Derivatives- Forward markets Commission Govt. of India.
(Kondhar, SangHyun, Clairmont, and Zhang, 2015) discuses the definition and reasons for CSR
activities through review of relevant CSR literature. From three UK based companies: Barclays,
The Royal bank of Scotland and Tesco, the evidence of CSR reporting were presented by them. In
addition to traditional annual financial reports, CSR reports are now annually prepared and are
relevant to demonstrate how caring companies have been and how they intend to continue to be
even more so in future periods. (Soundarya) gives an insight of the current scenario of CSR and
its contributions towards sustainable development. Through social responsibility tries to
emphasizes the scope of corporate sustainability. (Albareda, Lozano, Tencatti, Midtun, and
Perrini, 2008) aims to understand the role of government in promotion of CSR. They focuses on
drivers and responses of government three European countries: United Kingdom, Norway and
Italy as well as compare the public policies and CSR initiatives of these countries. However, they
also focus on the differences between the three governments when applying CSR public policies.
These divergences are based on the previous cultural and political framework, such as the welfare
state typology, the organizational structures and the business and social and cultural background
-217-
in each country. (Chaudhri, 2016) examined the communication imperative for corporate social
responsibility (CSR). Based on in-depth interviews with CSR managers in large domestic and
global corporations in India, the study made efforts to situate communication as central to the
enactment of socially responsible behaviour. Participant discourses suggest an important and
multi-dimensional role for communication, emphasize the need for subtlety and balance in
communicating CSR, and point to the role of the media as a potential (dis)enabler for ―getting the
word out.‖ It also reflects on the inter sections and departures between scholarship and practice
of CSR communication.
3. RESEARCH GAP
No Doubt, the reviewed literature highlighted various strategies evolving in the country‘s
commodity market in various commodities. The six nation-wide commodity exchanges and
sixteen other regional commodity exchanges have gained respect and admiration but it can
further be raised up to a greater extent. The reviewed literature does not spell the CSR activities in
Hapur commodity exchange limited (HCEL). CSR is dealing in commodity trading, fulfilling of
CSR by HCEL. In past 3 years, element of Social Audit is also fulfilled by HCEL. This study arms
at to seeks to bridge the gap.
 To study the dimensions of CSR in Trade,
 To analyze the CSR by HCEL,
 To study the Social Audit element in HCEL during last three years.
The study is descriptive in nature. It is based on secondary data. Secondary data regarding
commodities are collected for the previous three years from various annual reports of HCEL;
Various Annual Income & Expenditure Statement of HCEL; Various Auditor‘s reports of HCEL,
SEBI, commodity market bulletins, various internet sources etc.
5.1 Analysis and Interpretation
Dimensions of CSR in trade
―Social responsibilities refer to the businessmen‘s decisions and actions taken to reasons at least
partially beyond the firm‘s direct economic or technical interests.‖*4
In broad sense, CSR when comes into action is called corporate social work. On the basis of above
definition, following features of CSR can be identified:
 The CSR contains three types of behaviour- Positive, neutral and negative. The negative and
neutral aspects of behaviour are as important as positive.
 Every person in the society has a social obligation to fulfil. However, the emphasis is on CSR
of management as a group because it is in a position to use the resources of the society in the
way it likes. Therefore, it must be conscious about its CSR.
 CSR fulfilling obligations to various parties concerned with the functioning of an
organization. Some of these parties are concerned directly, others may be concerned
indirectly.
-218-
 These parties are Society, Government, Employees, Customers, Shareholders, creditors,

suppliers, etc.
 The standard fixing the fulfilling obligations to various parties are to be decided according to
corporate social norms and expectations. Therefore, these obligations may vary from society
to society.
Society- Organization exists within a social system and gets facilities from the system. Therefore,
they owe obligations to the society as a whole. It is the obligation of management to protect the
interest of society because management process goes a long way in determining the life in the
society. In this context, management should behave in the following ways-
 Management should maintain fair business policies and practices.
 It should set up socially desirable standards of living and avoid ostentation and wasteful
expenditure.
 It should play a proper role in civic affairs.
 It should provide and promote general amenities and help in creating better living conditions
in general.
 It should set examples for others how developmental programmes can be taken for the
benefits of the society.*4
Keith Davis (1984). ―The meaning and scope of Social Responsibility,‖ in Joseph W. McGuire
(ed.), contemporary management, Englewood, Cliffs, NJ: Prentice Hall, p.631
Government: Government is very closely related with the business system of the country. It
provides various facilities for the development of business. No doubt, government exercises
controls over business, but these controls are meant for overall development of business.
Management can discharge its obligation to government in following ways-
 Management should be law-abiding citizen.
 Management should pay taxes and other dues fully, timely and honestly.
 It should not corrupt public servants and democratic process.
 It should not buy political favour by any means.
Employees: Employees have direct interest in organization because by working there, they satisfy
their needs. The traditional economic concept of organizational functioning does not give
employees their proper share in the distribution of income. In the present context, it is the
management‘s responsibility to protect the interest of employees in the organization. This can be
done by the management in following ways –
 Management should treat employees as another wheel of the cart.
 Management should develop administrative process in such a way that promotes cooperative
endeavour between employers and employees.
 The management should adopt a progressive human resource policy based on recognition of
employees rights-participation in management, creating a sense of belongingness and
improving their working conditions.
 Management should pay fair and reasonable remuneration and other financial benefits to
employees.
Customers: A customer may broadly be defined as a person who has a favourable impression of a
company and its products. Thus, a person may be categorized as customer even though he may
-219-
not have committed the act of buying; he may be only a potential customer. Management owes a
primary obligation to give a fair deal to customers. This can be done in the following ways-
 Customers should be charged a fair and reasonable price.
 The supply of goods and services should be of uniform standard and of reasonable quality.
 The distribution of goods and services should be widespread so that customers do not face
any problems in procuring them.
 Management should not indulge in profiteering, hoarding or creating artificial scarcity.
 Management should not mislead the customers by false, misleading and exaggerated
advertisement.
Creditors, suppliers and others-Creditors, suppliers and other groups affect the organization in
various ways. Therefore, management is responsible to fulfil its obligations to them. This can be
done in the following ways-
 Management should create healthy and cooperative inter-business relationships between
different businesses.
 Management should provide accurate and relevant information to creditors and suppliers.
 Payments of price of materials, interest on borrowings and other charges should be prompt.
Shareholders: The first responsibility of business is to protect the interest of shareholders. The
interest of majority of shareholders and large minority of shareholders are generally well
protected through either direct participation in the management actions or they have real power
to intervene, if necessary. However, large number of shares of minority shareholders are not such
in position. Therefore, management is expected to use the resources provided by them effectively
and to protect their interests. They should be informed about the functioning of the organization
adequately and timely. Though the provisions of the Companies Act provide safeguard to the
investment made by shareholders, whether minority or otherwise, management can find
loopholes in these. Therefore, management has responsibility to provide proper safeguard to the
money invested by shareholders.
CSR by HCEL: Futures Trading perform two important functions of CSR-
 Price discovery and
 Price risk management with reference to the given commodity*5.
It is useful to all segments of economy. It is useful to the producer because he can get an idea of
the price likely to prevail at a future point of time and, therefore, he can decide between various
competing commodities, the best that suits him. It enables the consumer in that, he gets an idea of
the price which the commodity would be available at a future point of time. He can do proper
costing and also cover his purchases by making forward contracts. The futures trading is very
useful to the exporters as it provides an advance indication of the price likely to prevail and
thereby helps to the exporter in quoting a realistic price and thereby secure export contract in a
competitive market. Having entered into an export contract, it enables him to hedge his risk by
operation in futures market. Other dimensions of commodity futures trading as CSR are-
 Price stabilisation – in times of violent price fluctuations, this mechanism dampens the peaks
and lifts up the valleys i.e. the amplitude of price variation is reduced.
 Leads to integrated price structure throughout the country.
 Facilitates lengthy and complex, production and manufacturing activities.
-220-
 Ensures balance in supply and demand position throughout the year. Futures Trading & Its
Prospects, Document issued by Forward Markets Commission, Govt. of India, page 3. *5
 Encourages competition and acts as a price barometer to farmers and other functionaries.
HCEL fulfils its obligation of CSR to the parties concerning with its directly-indirectly—Society –
HCEL runs various hospital cum clinics, avail its seminar hall and chamber‘s guest house to the
society on discounting rates for marriage-reception and other anniversary functions. Its Charity
payable in FY 2014-15 was INR 368,661.2.
Its festival expenses in FY 2014-15 are INR 327,897.00 which was INR 217,713.25 in FY 2013-14
and INR 1,394,729.00 in FY 2012-13 (as shown in Figure 1). It shows an decrease by 10,66,832 INR.
Figure 1: Decline in Festival Expenses of HCEL
Source – Annual Reports & Income – Expenditure Statements of various years of HCEL
The amount spent on donation and charity in FY 2014-15 was INR (31,331.90), INR (49,435.81) in
FY 2013-14 and nil in FY 2012-13 (as shown in Figure 2).
Figure 2: Growth/Decline in Donation & Charity of HCEL
-221-
Government- HCEL sincerely follows its social duty towards government. The Current tax paid
for FY 2014-15 was INR 527,025.00, for FY 2013-14 it was INR 488,922.00 and INR 223,213.00 for
the FY 2012-13.
Provision for income tax was INR 172,091.00 as at 31.03.2015, 146,218.00 as at 31.03.2014 and nil as
at 31.03.2013 respectively.
As per Figure 3, It Shows an increase in ‗Provision for Income Tax‘ by INR 1,72,091 INR whereas
increase by INR 3,03,812 in ‗Current Tax‘.
Figure 3: Growth in Provision for Income Tax & Current Tax of HCEL
Source – Annual Reports & Income – Expenditure Statements of various years HCEL
Employees- The social work and fair treatment of HCEL goes smoothly for their employees.
Figure 4: Growth in Employees Benefit Expenses of HCEL
As per Figure 4, the Employees Benefit Expenses as at 31.03.15 was INR 26,39,170.00 , INR
22,70,977.00 as at 31.03.14 and INR 21,84,279.00 as at 31.03.2013.It shows and increase of INR
3,68,193.00 in year 2014-15 and increase of INR 86,697 in 2013-14. It shows an Increase by INR
454,891.
The Staff provident Fund as at 31.03.2015 was INR 21,74,755.60 and as at 31.03.2014 INR
21,11,370.60 and INR 19,22,075.95 as at 31.03.2013. As per Figure 5, there is an increase in amount
of Staff Provident Fund by INR 2,52,679.65.
-222-
Figure 5: Growth in Staff Provident Fund of The COC, Hapur
Source – Annual Reports & Income – Expenditure Statements of various years of The COC, Hapur
Customers/shareholders/creditors, etc.-The safety and protection of investor‘s investment as a
CSR is always a primary concern for HCEL.
Figure 6: Growth in Staff Provident Fund of HCEL
Its Total Guarantee Fund increases by INR 15,11,474.80 in 2014-15 and increases by INR 31,56,321
in 2013-14. The total Trade Guarantee Fund as on 31.03.2015 was INR 2,26,07,132.22; INR
2,10,95,657.42 as on 31.03.2014 and INR 1,79,39,336.12 as on 31.03.2013 (as shown in Figure 6). It
shows a total increase by 46,67,796.1 INR.
It is Evident from Figure1, Figure 2, Figure 3, Figure 4, Figure 5 and Figure 6 that except decline
in Financial Expenses(which seems to be recovered), there is growth rate towards all the parties
(i.e. government, employees, customers, shareholders, suppliers, etc). Hapur commodity
exchange limited fulfils its CSR effectively and efficiently.
-223-
Social Audit in HCEL

Social Audit- When an organization undertakes social activities, it must also evaluate to the
extent which these activities are performed effectively. Social audit is primarily aimed to measure
the effectiveness of these activities. Bauer and Fenn have defined social audit as follows-
―Social audit is a commitment to a systematic assessment of and reporting on some meaningful,
definable domain of the company‘s activities that have social impact *6
Apart from Securities and Exchanges Board of India (SEBI) vigilance committee, HCEL for social
audit has its own vigilance committee. This is a unique factor.
As a part of social Audit, its own vigilance committee exists in HCEL. After Analysing the Annual
Reports of last three years, it finds that there is not even a single issue comes under vigilance
committee. It seems to be non-satisfactory.
R.A. Bauer and D.H. Fenn, “What is a corporate Social Audit?” Harvard Business Review,
January-February, 1973, p. 38.*6
6. CONCLUSION
HCEL fulfils its obligation of social work and fair treatment towards various parties such as
society, government, employees, customers, shareholders, etc. concerned directly or indirectly. It
seems to be satisfactory.
As a part of social Audit, its own vigilance committee exists in HCEL. After analysing the annual
reports of three consequent previous years, it finds that there is not even a single issue comes
under vigilance committee. It seems to be satisfactory that HCEL is involving in CSR.
7. RECOMMENDATIONS
HCEL has fulfilled all of its obligations of CSR. It is recommended that SEBI should focus on the
fulfilment of CSR in all exchanges of India which directly or indirectly helps in awareness
towards CSR.
It is recommended that SEBI should investigate the non satisfactory issue of vigilance committee
of HCEL. Issue necessary guidelines as well as take corrective measures-action in this context.
REFERENCES
[1]. Albareda, L., Lozano, J. M., Tencatti, A., Midtun, A., & Perrini, F. (2008). The changing
role of governments in corporate social responsibility: drivers and responses. Business
Ethics: A European Review , 17 (4), 347-363.
[2]. Arevalo, J. A., & Arvind, D. (2011). Corporate social responsibility practices in India:
approach, drivers, and barriers. Corporate governance: the international journal of business in
society , 11 (4), 399-414.
[3]. Bhattacharya, C., Korschun, D., & Sen, S. (2008). Strengthening stakeholder-company
relationships through mutually beneficial corporate social responsibility initiatives. Journal
of business ethics , 85 (2), 257-272.
[4]. Chaudhri, V. (2016). Corporate social responsibility and the communication imperative:
perspective from CSR managers. International journal of business communication , 53 (4), 419-
442.
[5]. Delhi, P. H. (2013). Corporate social responsibility in India- Global CSR Summit. New Delhi:
E&Y Publications.
-224-
[6]. Desai, P., & Chandawarkar, M. R. (2015). CSR PRACTICES AND SUSTAINABILITY OF
HEALTH CARE ORGANIZATIONS. Journal of Exclusive Management Science , 4 (8), 1-6.
[7]. Gautam, R., & Singh, A. (2010). Corporate Social Responsibility Practices in India: A Study
of Top 500 Companies. Global Business and Management Research: An International Journal , 2
(1), 41-56.
[8]. Kondhar, K., SangHyun, S., Clairmont, C., & Zhang, M. (2015). Corporate Social
Responsibility: Evidence from The United Kingdom. journal of international business research ,
4 (1), 85-100.
[9]. Kotler, P., & Lee, N. (2008). Corporate Social Responsibility – Doing the Most Good for Your
Company and Your Cause. Delhi, New Delhi, India: Wiley India pvt. ltd.
[10]. Nishandar, V. V. (2015). Corporate Social Responsibility- the way ahead. The business &
management review , 5 (4), .
[11]. PricewaterhouseCoopers Private Limited (PwC India). (2013). Hand book on Corporate Social
Responsibility in India. Gurgaon, Haryana, India: PricewaterhouseCoopers Private Limited.
[12]. Ramakrishnan, M., & Reshma, K. (2010). Corporate Social Responsibility Initiatives of
Companies in Karnataka. Prabandhan: Indian Journal of Management , 3 (7), 23-28.
[13]. Shetty, J. (2012). Corporate Social Responsibility: a means for inclusive growth. International
Journal in Multidisciplinary and Academic Research (SSIJMAR) , 1 (4), 1-11.
[14]. Soundarya, S. (n.d.). Corporate Social Responsibility: A Contemporary Approach Towards
Sustainable Development. IOSR Journal of Business and Management (IOSR-JBM) , 40-43.
[15]. UNCTAD. (2011). UNCTAD Trade and Development. New York and Geneva: UNCTAD.
[16]. Forward Contract (Regulation) Act- 1952
[17]. Forward Contract (Regulations) Rules- 1954
[18]. Bye Laws of The Chamber of Commerce, Hapur
[19]. www.thecochapur.com
[20]. www.sebi.gov.in,
[21]. www.rbi.org.in
ABBREVIATIONS
[1]. HCEL – Hapur Commodity Exchange Limited
[2]. SEBI – Securities and Exchange Board of India
[3]. FY – Financial Year
[4]. FMC – Forward Markets Commission
[5]. CSR – Corporate Social Responsibility
-225-
Life After 60s : In A Changing Scenario
Sangeeta Gupta
Department of Sociology, Meerut College, Meerut (U.P.) India
E-mail Id: drsangeetaguptamcm@gmail.com
Abstract
PAPER/ARTICLE INFO
Ageing is an important and on-going aspect of human life. All of us have RECEIVED ON: 01/01/2017
to pass through this stage of life. There are two ways to live life after 60 ACCEPTED ON: 27/03/2017
plus. One is feeling unhappy: health-wise, money-wise and insecurity-
wise. The another way to live life is to live gracefully and making active Reference to this paper
and pleasant life after sixty plus. should be made as follows:
In many of the cases, elderly people are opting the second option and
making their lives happy. In this paper the author discussed various issues
Sangeeta Gupta (2017), “Life
and suggested many happy and healthy ways to live life after 60s. After 60s : In A Changing
Key words: Human life, Elderly people, Identity, Re-marriage, Spouse. Scenario”, Int. J. of Trade and
1, pp. 226-229
Sangeeta Gupta
1. INTRODUCTION
Ageing is an important and on-going aspect of human life. All of us have to pass through this
stage of life. Modern medicines and improved hygienic conditions have increased not only the
possibility of life expectancy but longevity also. Now, the number of senior citizens ageing
persons is increasing in India which is giving birth to various social challenges. This new situation
has attracted the attention of social scientists and scholars.
At present, India ranks at 4th place in the world in the terms of absolute size of the elderly people.
It is estimated that the number of elderly people will be double by 2025 and half elderly people
will be there in developed countries. India is expected to have 323 million elderly people in 2050
(The slop statesman 12th August 2004).
In fact, the last years of the life are the most important. We are like a tree and old age is a period
of ripening. It can be the most valuable time in human life, when we have rich experience, a
deeply polished character and a pure and gentle heart.
There are two ways to live life after sixty plus. One why of living life is feeling unhappy-health-
wise, money-wise and insecurity-wise. The another way of living life is by ageing gracefully and
making the life very active and pleasant after sixty plus. Old age is directly related with our
outlook and attitude. There is a saying that goes “To a fool, old age is a bitter winter; to a wise
man, it is a golden time.” It depends how old people approach life. Now the approach of many
elderly people is changing towards their life. They do not want to be sad for their ageing because
they think that their bodies may age but hearts and minds will remain young.
Research also shows that when people make continuous use of their powers of memory and
concentration, these abilities do not fade. An active interest in others, finding new pastimes and
making new friends-such positive attitudes have shown reduced physical and mental decline. 1
To quote the Poet Samuel Ullman, “Youth is not a time of life, it is a state of mind, it is not a
matter of rosy cheeks, red lips and supple knees it is a matter of the will, a quality of imagination,
a vigor of the emotions, it is the freshness of the deep springs of life.”2
These elderly people can play an important role in the family, in their own lives and in society
with their life long experiences, knowledge and participation by having the positive attitude and
being active in this age.
In fact, many elderly people are also changing and adopting new values. They are perceiving
social activities and inter-actions in a different way. Forces of social change i.e., modernization,
urbanization, westernization and mass-media are also influencing them effectively. Now, they are
changing with the time coming out and gradually realizing the needs of time.
Now, an increasing number of such people are choosing to live a life of their own, in place of
living with their children and grand children as the apron strings are being loosened bit. They
want to enjoy their space and sense of dignity so they prefer to live separately. As Shahs has
mentioned in his article named after the marriage of the children.
As Joeanna Rebello Fernandes has mentioned in his article that elderly people who are staying in
the retirement housing complex, 90 km. from Mumbai are very happy and enjoying the
independence. Now they can do whatever they want.3
-227-
Sangeeta Gupta
They have their own social network to fulfill their Need and desires. They also remain in regular
touch with their children. They visit them at their place. This also helps in maintaining good
relations between parents and married children.
2. IDENTITY MATTERS
According to Shielu Srinivason, the Founder Chairperson of Dignity Foundation, “The increase
in disposable income and the preference for a nuclear family set up has promoted many elderly
people to opt for an independent life and carve an identity of their own.”
An increasing number of such people are also very careful or sensitive about their dignity so they
do every effort to maintain it. They do not like to depend economically on their children and
grand children. Many elderly people continue to work even after retirement. They join many self
supporting systems coaching institute or start any small business. They get rich dividends from
their investments to fulfil their needs to part from a feeling of being burden on their kids. They
believe engagements are necessary. In this way, they live their life in the way they want.
Consequently, there is no conflict between two generations and no need of constantly adjustment
with their schedules.
3. HEALTH MATTERS
In case of occasional illness and mishappenings, they take the help of their supportive system
where their neighbours and friends extend the necessary help by arranging health delivering
system, food and medicine. There are many clubs, associations, ashrams and institutions to
extend their help in day to day life i.e., Walker’s club, Geeta Gosthi, Prathna Sabha, Keertan
Mandlis, Yoga groups, local sports club and some other free time activity clubs.
Elderly people are becoming more health conscious day by day. Media also plays a significant
role in this matter. They make each and every efforts for good health. They control their diet, do
yoga, go for walking join laughter clubs, visit health check up camps whenever they get
opportunity. This is the reason many of them are healthy even after sixty years of age. Today
many elderly people are having pretty healthy and good looking in advanced age. This was not
the case fifty years ago. This has further increased the life expectancy thus active working life
makes them health-wise fit. This activeness raises their self esteem desire enormously.
Social activist Shailesh Gandhi has rightly said that, “Today if a person dies at the age of 50, it is
considered a pre-mature death, but this situation was not there in the past 50 years ago. In fact, if
the retirement age is increased, society could still benefit from the productive work of seniors.” 4
4. PSYCHOLOGICAL ASPECT OF AGEING
Everything depends on our way of thinking and how we approach life. We may view old age in
two meanings. Firstly, we can view it as a period of decline, ending in death. Secondly, as a
period in which we have the opportunity to attain our goals and bring our life to a rewarding and
satisfying completion.
Our old age depends mainly on our thinking and it will differ depending upon our outlook. They
take their life towards the oriented goals in place of putting themselves in age old traditional
thinking of not working. Various researches show that people who do not engage themselves in
creative activities get bored and become sick.
-228-
Sangeeta Gupta
People become older according to their age but their psychological aspect like their thoughts, and
emotions remain same. They even want to look good, smart and expect compliments. Growing
old does not mean giving up the joys of life and age has no limitations to emotions.
5. REMARRIAGE AMONG ELDERLY PEOPLE
Elderly people are not only aware and conscious about the health and identity but in remarriage
also. More and more people are getting married at an age considered ripe for retirement
previously. In a changing scenario, they prefer love in place of arranged marriage. There are
many examples of such cases and number such marriages are increasing day by day, 75 years
Yezitata remarried to 58 years old bride. This was done in 2000. There are many other examples of
renowned renounced personalities also who did remarriage in their sixties e.g., Jyotsna Sahai
remarried at 55, Latha, Ashok Jaitley, H.K. Due, Shahnaz Hussain etc.
Today, senior citizens are registering on marriage portals and placing matrimonial advertising in
newspapers with the active encouragement of their children.6
In fact, man is a social animal who always like to move in the company of others. He can not
survive alone. He needs the company of other people. After the death of the spouse, men/women
become alone.
At the advanced age, children are in the settled age groups, have their own family
responsibilities, work set ups and have no time for their aged parents. Nandita Sen Gupta has
also focused on this issue that reduced interaction within family emerges as the greatest factor
leading to feeling isolated. The report, conducted via interviews in urban and rural randomly
selected districts found that at nationally, 87% of those in their 70s reported loneliness. 5
Sometimes, their children are not with them or out of station or out of country. In this situation,
they feel the need of companionship and friendship. They need someone to share the rest of their
lives with. According to A.M. Badal, chief executive officer of the marriage portal
remmariage.com. Over 4000 persons over the age of 50 have registered at their matrimonial
website. He says that since they started arranging marriages for senior citizens in 2002 there has
been an increase of almost 20 percent in membership. He again reported that age is no bar here.
They can be in their fifties or eighties. All that is needed is the will to remarry. Help Age India, an
NGO working for the elderly, surveyed, 14 matrimonial sites in 2004 and found that about 12
percent of persons registered were over the age of 50, over half of these were over the age of 60.
Nidhi Raj Kapoor, Head of Communications, Help Age India also reported that today most go up
to 99 years.
In fact, this is the change in the thinking of the elderly people. 7
REFERENCES/NOTES
[1]. Mind Over Matter (2008). “Live Life Till the End”, Times of India, New Delhi, Jaunary 13, pp.
23.
[2]. Ibid.
[3]. Fernades J.R. (2010). “Good 01 Days “ Times of India, New Delhi, December 6, pp. 19
[4]. Gandhi Sailesh (2005). “India’s Elderly Ageing”, Times of India, December 20, pp. 11.
[5]. Gupta Nandita Sen (2010). “Loneliness Creeps up on Elders”, Times of India, March 15.
[6]. Majumdar Swapna (2008). “The Best is Yet to Come”, The Hindu, May 18.
[7]. Ibid.
-229-
Job Satisfaction among Female Faculty Members in Higher

Education: A Study of Dehradun Region
Ishan Jaina*, Somya Sharmab, Shagun Bhardwajc

a, b, cVICT, Meerut, U.P., India
E-mail Id(s): ishan.2288@rediffmail.com, somyasharma81@gmail.com, shagun.bharadwaj05@gmail.com
Abstract
PAPER/ARTICLE INFO
The higher education sector is crucial for a country or a region specified, RECEIVED ON: 21/02/2017
since it plays a vital role in development of the human resource of any ACCEPTED ON: 29/04/2017
country. Higher education is not only important for the students but it is
also very important for the faculties working there. Considering more Reference to this paper
specifically the female faculty member in higher education system and should be made as follows:
their job satisfaction does also play an important role. Job satisfaction in
regards to one’s feeling or state of mind regarding nature of their work. Ishan Jain, Somya Sharma,
Job can be influenced by variety of factors like quality of one’s relationship Shagun Bhardwaj (2017),
with supervisor, quality of physical environment in which they work, “Job Satisfaction among
degree of fulfillment in their work, etc. . It ultimately decides the extent of Female Faculty Members in
employee motivation through the development of organization climate or Higher Education: A Study
environment. Job satisfaction has been a subject of hot chase by of Dehradun Region”, Int. J.
researchers. We studies in this paper that the job satisfaction level of of Trade and Commerce-
female faculty members in higher education sector in Garhwal region of IIARTC, Vol. 6, No. 1, pp.
Uttrakhand with special reference to Dehradun district. The paper is 230-243
based on primary as well as secondary data. Sample size taken here is 125
in which data was collected from faculties in higher education. Data was
collected from 6 Universities of Dehradun district.
Keywords: Job satisfaction, higher education sector, motivation, working
environment, educational qualifications.
Job Satisfaction among Female Faculty Members in Higher Education: A Study of Dehradun Region
Ishan Jain, Somya Sharma, Shagun Bhardwaj
1. INTRODUCTION AND MEANING OF JOB SATISFACTION

1.1 Introduction to Job Satisfaction
Job satisfaction is one of the most crucial but controversial issues for studying industrial
psychology and behaviour management in an organization. It ultimately decides the extent of
employee motivation through the development of organization climate or environment. Job
satisfaction is the attitude one has towards his or her job. Stated in another way it is one‟s is
affective response to the job. Job satisfaction is concerned with the feeling one has towards the
job. The importance of job satisfaction is fairly evident from a description of importance of
maintaining morale in any industry. If a worker is not satisfied with work, and then both the
quantity and quality of his output will suffer. If his job satisfaction increases then there will be
improvement in both the quality and quantity of production. Factories in which the workers are
satisfied with their work are also characterized by a high morale.
1.2 Defining Job Satisfaction
Positive attitude towards job is equivalent to job satisfaction whereas negative attitude towards
job has been defined variously from time to time. In short job satisfaction is a person‟s attitude
towards job.
Job satisfaction is an attitude which results from balancing & summation of many specific likes
and dislikes experienced in connection with the job their evaluation may rest largely upon one‟s
success or failure in the achievement of personal objective and upon perceived combination of the
job and combination towards these ends.
According to Pestonejee, Job satisfaction can be taken as a summation of employee‟s feelings in
four important areas. These are:
1. Job-nature of work (dull, dangerous, interesting), hours of work, fellow workers,
opportunities in the job for promotion and advancement (prospects), overtime regulations,
interest in work, physical environment, and machines and tools.
2. Management-supervisory treatment, participation, rewards and punishments, praises and
blames, leave policy and favoritism.
3. Social relations-friends and associates, neighbours, attitudes towards people in community,
participation in social activity scalability and caste barrier.
4. Personal adjustment-health and emotionality.
Job satisfaction is an important indicator of how employees feel about their job and a predictor of
work behaviour such as organizational citizenship, Absenteeism, Turnover.
Job satisfaction benefits the organization includes reduction in complaints and grievances,
absenteeism, turnover, and termination; as well as improved punctuality and worker morale. Job
satisfaction is also linked with a healthier work force and has been found to be a good indicator of
longevity.
According to Weiss, “Job satisfaction is general attitude, which is the result of many specific
attitudes in three areas namely:
 Specific job factors
 Individual characteristics
 Group relationship outside the job”
-231-
According to Blum and Naylor, “Job satisfaction is defined, as it is the result of various attitudes
the person hold towards the job, towards the related factors and towards the life in general.”
According to Glimmer, Job satisfaction is defined, as any contribution, psychological, physical,
and environmental circumstances that cause a person truthfully say, „I am satisfied with my job.”
According to Mr. Smith, “Job satisfaction is defined, as employee‟s judgement of how well his job
on a whole is satisfying his various needs.”
According to Locke, “Job satisfaction is defined, as a pleasurable or positive state of mind
resulting from appraisal of one‟s job or job experiences.”
2. HIGHER EDUCATION
Over the last 50 years, the Government of India has provided full policy support and substantial
public funds to create one of the world‟s largest systems of higher education. These institutions,
with the exception of some notables ones, have however, not been able to maintain the high
standards of education or keep pace with developments in the fields especially in knowledge and
technology. Over time, financial constraints with exploding enrolments, and a very high demand
for higher education has led to the deterioration in the financial support provided by the
government. In terms of higher education, however, on the science and technology side, India has
however built up the largest stock of scientists, engineers and technicians. 1
Today, academicians do not need to spend much time on library research poring over bulky
tomes and taking copious notes. They have the facility of faster and surer access to a much wider
range of information through the internet, not just to read but to print or save or forward to
others as might suit their purpose. Teachers prefer to receive tutorials on-line, which not only
lends itself to faster transmission, but also avoids the difficulty in reading a manuscript. Similarly,
some teachers not only put up their course materials on the website, but also their lectures, which
can be heard on-line such that students who were unable to attend can also benefit from them.
The faculty and students remain connected through email on which students receive instructions,
send essays/assignments, fix appointments, etc. All students are expected to have their own
laptop or notebook computer. While traditional western universities still have face-to-face
lectures, it also offers on-line courses especially during the summer break. While such courses
have the obvious disadvantages of the absence of personal interaction, they allow for discussion
through setting up of chart rooms. Such on-line courses and discussions have often proved to be
more rewarding than regular classroom interactions as they allow for students and teachers from
different parts of the world to converge. On-line Universities, which do not require physical
infrastructure, have facilitated greater accessibility to education than ever before.
Nhat, Cong Nguyen et al. (2013) conducted a study on “Factors affecting Job Satisfaction of
teachers of Hue University in Viet Nam”. The purpose of this study was to investigate the
relationship and inter dependence between rewards and recognition, supervision and job
characteristics on teacher‟s job satisfaction and that of job satisfaction on the personal motivation
1 All India survey on Higher Education, Ministry of Human Resource Development department of higher education
planning, monitoring & statistics bureau, 2011.
-232-
of teachers. 219 usable responses were received which were analyzed through SPSS 17.0. The
findings of the study showed significantly positive relationship between reward and recognition,
satisfaction with supervision and the job characteristics, with job satisfaction as well as a very
negative and significant relationship was also observed between job satisfaction and personal
motivation.
Katoch, Om Raj (2012) conducted a study on “Job Satisfaction among College Teachers: A Study
on Government Colleges in Jammu (J&K)”.College Teachers are the most important group of
professionals for our nation‟s future. Therefore, it is astonishing to know that even today many of
the college teachers are dissatisfied with their jobs. Job satisfaction among college teachers is an
important issue not only for themselves but society as a whole. It increases productivity and
classroom performance in the college. The data used in this paper is primary in nature and
collected through personal interviews in the form of questionnaire from a sample of 98 college
teachers selected from the five Government Colleges of Jammu. Two types of statistical tools are
used in the present study for analysis i.e., percentage analysis and chi-square analysis. Research
shows that female college teachers are more satisfied with their job than male teachers and
income per annum is an important factor impacting the level of job satisfaction.
Spagnoli, Paloa et al. (2011) in their study examines the evolution of job satisfaction in a service
organization over a six-year period. The following aspects affecting job satisfaction were
examined: management practices, rewards, work climate and the work itself. The main theoretical
implication of this study resides in its contribution towards filling the literature gap on
satisfaction with job aspects from a time perspective.
Nadeem Malik (2011) conducted a study on “Job Satisfaction factors of faculty members at the
University of Balochistan”. The main purpose of this study was to examine the factors affecting
job satisfaction of faculty members of university of Balochistan that explained by Herzberg job
motivator & hygiene factors. A random sample of 120 faculty members of Balochistan University
was selected as a statistical sample. It was found that faculty members in University of
Balochistan were generally satisfied with their jobs. However, male faculty members were less
satisfied than female faculty in the current study. The factor “work itself” was the most
motivating aspect for faculty. The least motivating aspect was “working conditions”. The
demographic characteristics were negligibly related to overall job satisfaction. The factors “work
itself” & “advancement” explained 60% of the variance among faculty members overall level of
job satisfaction.
Ghazi, Safdar Rehman (2010) conducted study on “University Teachers‟ Job Satisfaction in the
North West Frontier Province of Pakistan”. The major purpose of this study was to explore the
level of job satisfaction of university teachers in the North West Frontier Province of Pakistan. A
sample of 108 university teachers was drawn from this population. A questionnaire following the
theoretical framework of Herzberg‟s two factor theory was developed. The findings show that
university teachers were generally satisfied with their jobs. However, teachers were neutral with
dimensions: working conditions, organizational policies and practices, recognition, supervision
technical and promotion opportunities. The teachers were satisfied with work variety, creativity,
moral values, compensation, work itself, colleagues‟ cooperation, responsibility, ability
utilization, authority, activity, social status, job security, achievement and students‟ interaction.
-233-
Fauziah, Noordin (2009) conducted study on “Levels of Job Satisfaction amongst Malaysian
Academic Staff”. A study of job satisfaction of Academic staff of a public university in Malaysia
used 7-item general satisfaction scale in a survey to determine the level of job satisfaction of the
academic staff. The results indicated that overall the academic staff of the university has a
moderate level of job satisfaction. In addition, current status, marital status, age and salary appear
to have significant impact on the respondents‟ level of job satisfaction. Implications on the study‟s
findings to the management of the university are also discussed.
Parveen Ali (2009) conducted study on “Job Satisfaction characteristics of Higher Education
Faculty by race”. The primary goal of this study was to investigate, at a national level, the job
satisfaction characteristics of higher education faculty of 5 different races. Data for this
quantitative secondary analysis study were taken from the national study of post secondary
faculty collected. The faculty‟s job satisfaction was examined by applying job satisfaction theory.
The result of this study indicated some similarities and differences in job satisfaction
characteristics of faculty by race. The analysis indicate that where achievement, recognition and
responsibility are measured in terms of publications, funded research and number of committees
served, Asian/Pacific Islander members performed better than other races in this study. It also
appears from the analysis that the majority of faculty of all races was deriving satisfaction from
extrinsic factors measured in terms of institutional policies, work climate and benefits.
5. RESEARCH OBJECTIVE OF THE STUDY
 To study the level of job satisfaction among the female faculty members in higher education
sector of Dehradun region.
 To find out what extent do organizational factors such as academic qualification,
interpersonal relationship, participation in decision making, administrative leadership
influence the female faculty‟s job satisfaction.
The study is an empirical research and it is based on primary and secondary data. Sample size
taken here is 125 respondents from higher education. It useful variety of evidence documents,
artifacts and interview to explain and test assumptions concerning casual relations among
variables under investigation.
The main purpose of this study is to analyze the level of female faculty‟s job satisfaction.
Measuring job satisfaction guides me to follow quantitative method also.
6.1 Research Design
The research design for the purpose of the study is drafted and the steps to be taken in the
research were set out in a systematic manner. The present research design explains how the
research process is carried out.
6.2 Tools for Primary Data Collection
The primary data for the purpose of the study were information and responses from female
faculties of Dehradun. The required data was collected by addressing the appropriate class of
respondents and requesting them to provide necessary information.
1. Questionnaire-based Survey of Faculty’s: The faculties are respondents who provide
information regarding their understanding, experience, opinion and perception towards
-234-
teaching practices (job satisfaction) adopted by colleges of Dehradun district. The

questionnaire incorporated different scaling techniques as demanded by the study.
A well-structured and comprehensive questionnaire was prepared to collect data from these
respondents. The questionnaire consisted of both open and closed ended questions.
2. Sources of Secondary Data Collection: The secondary data provided the researcher with the
information regarding the activities, scope and opinions of other researchers and experts in
the initial stages. The data further guided the researcher in defining the variables of the study.
For this purpose, secondary data was collected from all associated courses that include:
 Books
 Research journals
 Magazines
 Newspapers, published materials & websites.
6.3 Universe & Sample Plan
The phenomenon of job satisfaction of female faculty‟s became a major event in Dehradun
district. This study has tried to reveal the job satisfaction of female faculty‟s in higher education of
Dehradun.
6.4 Sample Size Determination
Sample size taken here is 125 in which data was collected from faculties in higher education. Data
was collected from 6 Universities of Dehradun district.
7. HYPOTHESIS TESTING
Following Null hypothesis were tested:
 H0: Academic assignment match with your teaching assignment
 H1: Academic assignment did not match with your teaching assignment
 H0: Level of satisfaction does not depend on qualification level
 H1: Level of satisfaction depends on qualification level
 H0: Level of satisfaction does not depend on terms of fulfilling expectation
 H1: Level of satisfaction depends on terms of fulfilling expectation
 H0: Level of satisfaction does not depend on interpersonal relation with peers
 H1: Level of satisfaction depends on interpersonal relation with peers
 H0: Level of satisfaction does not depend on taking part in decision making
 H1: Level of satisfaction depends on taking part in decision making.
8. DATA ANALYSIS AND INTERPRETATIONS
1. Does your academic qualification match with your teaching assignments?
Ho : μ = 0.9 Population Mean = 0.9
H1 : μ ≠ 0.9
Significance
Statistic of Sample Statistic of Population Std Error
Level
Size Mean Std Deviation Mean Std Deviation
125 0.928 0.259528108 0.9 Not Known 0.023213 5%
-235-
Calculated value of Z:
Sample Mean - Population Mean
Zcal = = 1.206225867
Standard Error of Mean
Table Value of Z:
Significance Range
Ztab = 0.045496447 To -0.045496
1.96 To -1.96
Scale of Satisfaction Scale Frequency

1 0 0 9
Yes No 1 116
Rating about Academic Qualification

Interpretation: This graph shows that academic assignments match with the academic
qualification.
Since, Z cal < Z tab = We Accepted Null Hypothesis. Means the Alternate Hypothesis Should be
Rejected. It shows that academic assignments match with the academic qualification.
2. Rate your level of satisfaction in relation to your academic qualification and job.
Ho : μ = 3.5 Population Mean
H1 : μ ≠ 3.5
Significance
Level
125 3.8 0.740531631 3.5 Not Known 0.066235 5%

Zcal = = 4.529316271
-236-
Significance Range
Ztab = 0.129818533 To -0.129819
1.96 To -1.96
Scale of Satisfaction
5 4 3 2 1
Highly Satisfied Satisfied Average Dissatisfied Highly Dissatisfied
Scale Frequency
1 2
2 4
3 25
4 80
5 14
N=125
Level of satisfaction in relation to academic qualification and job

Interpretation: This graph shows that level of satisfaction depends on qualification level. High
qualification gives more satisfaction.
Since, Z cal > Z tab = We Rejected Null Hypothesis. Means the Alternate Hypothesis Should be
Accepted. It shows that level of satisfaction depends on qualification level. High qualification
gives more satisfaction.
3. Rate this job in terms of fulfilling your expectation.
Ho : μ = 3.5
H1 : μ ≠ 3.5
Significance
Level
125 3.688 0.711835429 3.5 Not Known 0.063668 5%

Zcal = = 2.952794725
-237-
Significance Range
Ztab = 0.12478796 To -0.124788
1.96 To -1.96
Accepted. It shows that level of satisfaction depends on terms of fulfilling our expectations.
5 4 3 2 1
Scale Frequency
1 2
2 6
3 27
4 84
5 6
Level of satisfaction of job in terms of fulfilling their expectations

Interpretation: This graph shows that female faculty‟s are satisfied with their job in terms of
fulfilling their expectation.
4. Rate the level of satisfaction because of interpersonal relationship with your colleagues.
Ho : μ = 3.5
H1 : μ ≠ 3.5
Significance
Level
125 3.936 0.564315172 3.5 Not Known 0.050474 5%

Zcal = = 8.638130669
-238-
Significance Range
Ztab = 0.098926994 To -0.098927
1.96 To -1.96
Accepted. It shows that level of satisfaction depends on interpersonal relationship with the
colleagues.
5 4 3 2 1
Scale Frequency
1 0
2 1
3 21
4 88
5 15
Level of satisfaction on interpersonal relationship with colleagues

Interpretation: This graph shows that level of satisfaction of female faculty‟s depends on
interpersonal relationship with their colleagues.
5. Rate your satisfaction in context of freedom of expression of your views/ideas in job.
Ho : μ = 3.5
H1 : μ ≠ 3.5
Significance
Level
125 3.736 0.763523243 3.5 Not Known 0.068292 5%

Zcal = = 3.455769342
-239-
Significance Range
Ztab = 0.133849066 To -0.133849
1.96 To -1.96
Accepted. It shows that level of satisfaction depends on context of freedom to express our
views.
5 4 3 2 1
Scale Frequency
1 2
2 6
3 27
4 78
5 12
Level of satisfaction in context of freedom of expression

Interpretation: This graph shows that level of satisfaction of female faculty‟s depends on context
of freedom to express their views.
9. FINDINGS
There are some findings of the survey that has been stated below:
 It has been seen from the survey that female faculty‟s are satisfied with their job in terms of
fulfilling their expectations.
 Female faculties are satisfied with the working environments which are provided by their
colleges.
 It has been seen from the survey that female faculty‟s are satisfied with their personal
relationship among colleagues.
 Level of satisfaction of female faculty‟s depends on context of freedom to express their views.
10. LIMITATIONS
 The sample distributed 150 out of which only 125 responses were obtained.
 Some female faculties are not ready to provide correct information.
-240-
 Due to the busy schedule of the female faculty‟s they could not spare enough time for proper
guidance.
 The findings of the survey are based on the subject opinion of the respondents and there is no
way of assessing the truth of the statement.
11. CONCLUSION
This study has tried to discover the perception of job satisfaction of female faculty members in
higher education of Dehradun region to identified the factors those cause satisfaction and
dissatisfaction to the female faculty‟s. Most of the female faculty willingly to enter into this
profession. They think that teaching profession is the best professions to build one‟s career. Most
of the faculties perceived that job satisfaction on having a secured job as well as getting the social
status and prestige. It has also found from the study that female faculties are more satisfied with
working environment. From the survey it has been found that mostly the female faculties who are
working in University of Petroleum and Energy Studies are highly satisfied as compared to other
universities of Dehradun region. During the study the factors found as the causes of satisfaction
or dissatisfaction are related either to the motivator factors or to the hygiene factors. However,
according to Herzberg salary, interpersonal relation, working environment and supervision are
only hygiene factors. This study findings stated that these were as motivating factor also. The
purpose of this study was to investigate the perception of female faculty‟s about their present job
in the area of Dehradun region. For decades, job satisfaction has been one of the most extensively
research concepts in work and organizational psychology. Job satisfaction is believed to reflect an
individual‟s affective and/or cognitive assessment of his or her working conditions and job
attributes. It has been traditionally used to confirm the effectiveness of job design and
motivational conditions at work.
The present study has tried to discover the level of job satisfaction among female faculty members
in Higher Education Sector at Dehradun. The study shows that workplace condition, professional
development and infrastructure significantly creates overall job satisfaction of the teaching
faculty.
12. RECOMMENDATION & SUGGESTION
 The internal mapping of each organization has its own yardsticks based on year of experience
with many employees. The deserving candidate gets their reward sooner or later. To make
employees understand it, appraisal yardsticks should be conveyed to concerned faculties in
advance may lead to further job satisfaction and reduction in grievances.
 The work environment should be more structured. More work related freedom should be
given to the faculty members.
 Faculty member can be included for decision making with respect to academic matters. This
would create better relationship between employer and employee.
 There should be greater job security because in the survey we found that female faculty‟s
feels that there is no job security where they are working. Organization should be supportive,
less interference in private affairs and working place should be healthy.
 UGC scale should be implemented uniformly.
 Management should develop clear compensation and promotion policies for its employees.
-241-
 Time to time workshops should be arranged for faculties. More events for faculty
participation should also be introduced besides teaching.
 Proper training and development programs should also be introduced for improvement of
quality of education & work among faculties.
 A female faculty‟s will be satisfied by her job and will give the best when she got mental
support from her family and their management staff.
REFERENCES
Journals and Periodicals:
[1]. All India survey on Higher Education, Ministry of Human Resource Development
department of higher education planning, monitoring & statistics bureau, 2011.
[2]. Anjaneyulu, B.S.R. (1968). Teaching Profession and Job Satisfaction, Educational India.
37(10), 340-342.
[3]. Autem, Walter, Demas, Jr. (1989). Educators Job Satisfaction and Attitude Towards School
Reform Analyzed by Position Level, “Dissertation Abstracts, International, University,
Microfilm International, July, 50(1), 30-A.
[4]. Barry M. Staw; Yochi Cohen Charash (2005). Introduction: The dispositional approach to
job satisfaction, Journal of organizational Behaviour, 26, 59-98.
[5]. Bullock, R.P. (1952). Social factors related to job satisfaction. A technique for the
measurement of job satisfaction, (Columbos Ohino, Bureau of Business Research), p 7.
[6]. Castillo Jamie X. (1999). “Job Satisfaction of Ohio agricultural education teacher‟s Journal
of Agricultural Education, 40(21), 19.
[7]. Chatterji, R. (1960). Job Satisfaction, Industrial Relations, 12, 262-264.
[8]. Fauziah Noordin and Kamaruzaman Jusoff (2009). Levels of Job Satisfaction amongst
Malaysian Academic Staff. Asian Social Science, 5(5), 122-128.
[9]. Ghazi, Safdar Rehman (2010). “University Teachers‟ Job Satisfaction in the North West
Frontier Province of Pakistan”, Asian Social Science, 6(11); November, 188-192.
[10]. Hayes, Henry Harlow, (1984). Elements of Job Satisfaction and Conditions of Employment
among Part Time Instructors in Community College: A model for employing Part time
members in Washington Community College”, Dissertation Abstract International,
October, vol 4, 1018.
[11]. Hoppock, R. (1935). Job Satisfaction, (New York; Harper and Brothers Publishers).
[12]. Hutcherson, Shirlie Jean (1981). The relationship of the job satisfaction of classroom
teachers to student perceptions of classroom satisfaction, University of Nebraska-Lincoln.
[13]. Jaime X. Castil and Jamie Cano (2004). “Factors explaining Job Satisfaction among
Faculty”, Journal of Agricultural Education, 45(3).
[14]. Katoch, Om Raj (2012). “Job Satisfaction among College Teachers: A Study on Government
Colleges in Jammu (J&K)”, Asian Journal of Research in Social Science & Humanities, 2(4),
164-180.
[15]. Katz, D. (1949). Morale and Motivation in Industry, in Current Trends in Industrial
Psychology, University of Pittsburg Press, Pittsburg, 159-160.
[16]. Kaul S. (2006). Higher Education in India seizing the opportunity, Indian council for
Research on International Economic relation. Working paper No. 179.
-242-
[17]. Kressel, Neil J. (1990). Job and Degree Satisfaction among Social Science Graduates”,
“Journal of Teaching of Psychology”, 17(4), 222-227.
[18]. Locke, E.A. (1976). The nature and causes of job satisfaction, (Chicago; R and McNally), p
95.
[19]. Nadeem Malik (2011). “A Study on Job Satisfaction Factors of Faculty Members at the
University of Balochistan”, Journal of Research in Education, 21(2), 49-57.
[20]. Nadeem Malik (2011). “A Study on Job Satisfaction Factors of Faculty Members at the University of
Balochistan”, Journal of Research in Education, 21(2), 49-57
[21]. Nhat, Cong, Nguyen (2013). “Factors affecting Job Satisfaction of teachers of Hue
University in Viet Nam”, Journal of Research in International Business and Management,
3(5), 169-17, May, ISSN 2251-0028.
[22]. Oshagbemi, Titus (2000). “Gender Difference in the Job Satisfaction of University Teacher”,
Journal of Women in Management Review, MCB UP LTd., 15(7), 331-343.
[23]. Parveen Ali (2009). “Job Satisfaction characteristics of higher education faculty by race”,
April.
[24]. Pravee Ali (2009). Job Satisfaction characteristics of higher education faculty by race.
Educational Research and Review, 4(5) IISN1990-3839, 289-300.
[25]. Report on Higher Education National University of Education Planning and
Administration, 2010.
[26]. Research in Higher Education, 44(2), AIR Forum Issue (Apr., 2003), 173-204.
[27]. Reyes, Pedro and Hyle Douglas (1992). “Teachers Satisfaction with Principal
Communication”, The Journal of Education Research, Jan/Feb, 85(3), 163.
[28]. Ronald F. Piccolo, Timothy Alocke (2005). Core self evaluations in Japan: Relative effects
on job satisfaction, life satisfaction, and happiness, Journal of Organisational Behaviour, 26,
965-984.
[29]. Salleh, Nor. Azizah, Mohd. (1989). Job Satisfaction and Professional Needs of College
Trained Teachers in Selangor, Malaysia and Its Implication for Continuing Education,
“Dissertation Abstracts International, University Microflims INC, April vol 49(19) p 2898-A
[30]. Similansky, J. (1984). External and Internal Correlates of Teacher‟s Satisfaction and
Willingness to Report Stress, British Journal of Education Psychology, 54(1), 84.
[31]. Sinha and Singh, P. (1961). Job Satisfaction and Absenteeism, Indian Journal of Social
work, 21, 337-343.
[32]. Sinha, D, and Sharma, K.C. (1962). Union Attitude and Satisfaction in Indian Workers,
Journal of Applied Psychology, 46, 247-257.
[33]. Spagnoli Paola, Antonio Caetano and Susana Correia Santo (2012). Satisfaction with job
aspects: Do patterns change over time? Journal of Business Research, 65(5) 609-616.
[34]. Tim. Hill (1994). “Primary Head Teachers: Their Job Satisfaction and Future career
Aspirations”, Journal of Educational Research, Infer by Routledge, 36(3) winter, 223.
[35]. Valthaisong, Arkon (1983). A Study of Job Satisfaction and Dissatisfaction among Faculty
Members in Teacher Training Institutions in Thailand, “Dissertation Abstracts
International”, University Microfilm International, Aug., 44(2) 468A.
-243-
Demonetization: A Step towards Cashless Economy in India
Priyanka Saroha
College of Vocational Studies, University of Delhi, India
E-mail Id: priyankasaroha4@gmailcom
Abstract
PAPER/ARTICLE INFO
Cashless economy is considered as harbinger of transparency and RECEIVED ON: 21/03//2017
economic growth by many economists. Many developed nations have ACCEPTED ON: 30/05/2017
implemented less cash economy in financial transactions. India, however
has been largely been a cash transaction oriented economy. Move of Reference to this paper
demonetization by Prime Minister of India in 2016 has been a significant should be made as follows:
trigger for transformation to cashless economy. Current study analyzes
cashless economy in Indian context with its advantages, disadvantages Priyanka Saroha (2017),
and hurdles faced by India in adapting to digital mode of transactions. “Demonetization: A Step
This move has been like a shock treatment for many people in India, as towards Cashless Economy
whole economy was brought to stand still for some time owing to lack of in India”, Int. J. of Trade and
capital. Initially portrayed as step to remove unaccounted money, finally Commerce-IIARTC, Vol. 6, No.
it was switched towards implementation of cashless economy. People were 1, pp. 244-250
forced to adopt a digital means of transactions. In hindsight, it has been a
revolutionary move as it will lead to a modern India where transactions
will be digital and will be accounted for. Ultimately it will be able to
reduce corruption and limit black money and improve financial wellbeing
all of each and every citizen.
Keywords: Cashless Economy, Demonitization, Digital Transactions.
Priyanka Saroha
1. INTRODUCTION
As per the dictionary of economics, the cashless economy is “An economy that operates without
notes and coins. When the concept was first introduced it was envisaged that checks and credit
card transactions would steadily replace cash. This has not occurred, but the growth of electronic
money has revived the possibility of the arrival of a cashless economy” [1]. The idea of a cashless
society originated in United States around mid-1950s with hope that all traditional money
exchange using currency bills, cheques and coins will be gradually taken over by electronic
transfer [2]. No nation is truly cashless if this definition is faithfully followed. However, in most
of economies of developed nations, majority of transaction are conducted without involving
currency bills. Scenario is little different in India where cash is used in more than 90%
transactions.
In an unannounced address to nation on 8 th November 2016, Prime Minister of India announced
that 500 and 1000 INR bills, which constituted 86% of currency in circulation, would no longer be
legal tenders from same midnight. It sent shock waves throughout country with everybody trying
to exchange currency. This was an audacious and very bold stand taken by chief executive of an
economy where income tax is paid by less than 5% of population and which suffer from endemic
corruption. Only radical move could change condition in a nation, plagued by so much
dysfunctionality.
2.1 Nature of Data: Secondary data: Already published work used for secondary data. It was
both internal and external. Internal source: Originated from the specific field or institution
where research was carried out e.g. published brochures, official reports etc.
External source: Originated outside the field of study, such as books, periodicals, journals,
newspapers and the internet.
2.2 Data Collection and Analysis: Secondary data was used for this study, collected from
articles, reports, journals, magazines, newspapers, reports prepared by research scholars,
universities and internet. Simple analysis was made to find conclusion.
 To investigate the conceptual issues related to cashless economy with their implication on
Indian economy.
 To understand the benefits and disadvantages of move of demonetization, hurdles on path of
cashless economy and prediction of futuristic scenario.
Cash dependency of Indian economy: In India, a high proportion of financial transactions are
done using cash. It has one of the highest of currency notes to GDP ratio. It was 12.42% for India,
compared to 4% for Brazil. By conducting its business in cash, India is plagued with old rigid
system of finance and it is putting obstacles in its to path to modernity.
“No force on earth can stop an idea whose time has come”, said the great French author of 19th century,
Victor Hugo. This is the time for India to change, to claim its position in world order. A growing
economy and regional superpower of South East Asia, India needs to adapt to ways of modern
world to realize its aspirations. There are many drawbacks with using cash for transaction. First
there is cost involved in printing proof, paper bills, disbursing it in system and collecting it few
-245-
Priyanka Saroha
years to pump new currency in system. Even after using cutting edge technology and best efforts,
forgers are able to make counterfeit bills and push it in financial system. Massive amount of
counterfeit currency is used by terrorist groups and mafia syndicate in India, as revealed by
intelligence reports from time to time. A cashless economy will put an end to such „criminal‟
economy.
In a cashless economy, money is in possession of a third party, which could be government or
banks. This money could be used for transaction whenever needed. Money not being used for
transaction could be used by third party. This feature of cashless economy uplifts the overall
economy.
People in India, don‟t love, they just worship cash bills. Before demonetization, 90% transactions
were conducted in cash. Even in posh malls, which are frequented by upper middle class and
upper class people, most of transactions are in cash. Many people in India have debit cards, but
these are used only for withdrawing money from ATM. Using cash is not a big problem. Real
issue is that it is intermingled with black economy. A shopkeeper dealing in cash can do without
recording all dealings in his account books. Many small level businesses do not even maintain
proper books due to lack of training and inability to hire an accountant. Even big businesses omit
some deals and conduct operation in cash to avoid paying taxes. In India, only 5% of people pay
taxes in their income and only 15% of national income is accounted by tax authorities (Economic
survey of Government of India). It does not mean that every person is dishonest. May people are
patriotic and upright citizens. They want to pay taxes to contribute in development of nation.
However, tax rate is very high and market is very competitive.
Many whole sale dealers do business at a narrow margin of 2-3% profit. They have to keep their
rates minimum considering rates offered by their competitor. Now, if one of those businesses is
diligently paying its taxes in regular manner, they need to increase the price to make profit. But,
then their price will be higher than others and they will find it extremely difficult to do any
business. Conversion of economy to cashless will force people to pay taxes regularly and
accordingly set price to be able to make profit. In USA, reduction of corporate taxes in era of
President Ronald Reagan saw a massive increase in economy. A similar move by Indian
government is expected to boost Indian economy too.
4. ADVANTAGES OF CASHLESS ECONOMY
Implementing cashless economy has many advantages. It will boost tax collection as it will be
difficult to hide transactions. The black money generation will be curbed as expenses will be
tallied with income and investments and money trail will be impossible to bury. For real estate
deals, major part of money was paid in cash due to avoid paying tax as well to hide source of
income. Many deals used to be benami, so real estate purchase was a front for a rich person to
stash his ill-gotten wealth and use someone else‟s name as front. All these factors resulted in
enormous hike in prices of real estate in India in last 15 years. Affordable housing had become a
distant dream for a major segment of population and those could fulfill it had to pay heavy EMI
from their earning or sale ancestral properties or give up luxuries of modern society such as air
travel, tourism, entertainment, dining out.
Demonetization will bring banking services at everyone‟s doorstep as no other than digital
means, no other infrastructure is required. It will also promote a healthy environment as many
-246-
Priyanka Saroha
notes are soiled or stained with tobacco or germs. By removing compulsion to touch currency,
germ spread will also be reduced. It will also increase speed of getting things done. No time will
be wasted in counting money or standing in queue to withdraw money from ATM. People will
keep money in bank which will increase tax revenue and banks will have more money to
distribute loans at reduced interest rate. Government will be able to spend more money for
welfare programs.
It is not just taxation which is affected by cash. In many organized sectors such as construction
salary is paid in cash and employer avoid paying other facilities such as provident fund, medical
and life insurance. A cashless economy will make employer more accountable and force them to
provide all facilities for employee. Many businesses are planning to go complete cashless. There is
no possibility of stealing money, no need to keep enough change to maintain smooth transactions,
no need to tally balance at the end of day and clerks do not have to rush to bank to deposit the
sales amount.
Kenneth S. Rogoff, the Thomas D. Cabot Professor of Public Policy at Harvard University and
former chief economist of the International Monetary Fund, is a strong proponent of cashless
economy. He is the author of bestseller book, „The Curse of Cash‟. According to him world is
drowning in cash and it is making world poorer and unsafe place to live. An average American
hardly touches a $ 100 bill. Yet there are 42 of these bills in circulation for each US citizen. This
surplus of cash is nourishing corruption, tax evasion, terrorism, narcotics business, trafficking of
human beings for sex and labour, and promoting a parallel underground economy. He argues
that by promoting a cashless system, the central banks replaces stacks of money with digital
money and are in position to have full authority on monetary policies. He accepts that it is
virtually impossible to have a perfect cashless system. So he advocates a less cash system.
Demonetization move in India will lead to create such a „less cash‟ system.
Move of demonetization has been a blessing in disguise for law and order for Indian cities.
Central government has reported that since demonetization crime rates including robbery,
extortion and burglary kind of crimes have reduced by half in capital Delhi and financial capital
Mumbai. Moreover, it is more convenient. No longer had one need to carry wallet filled with
money. It is not uncommon in India to see people carry money in airbags or sacks if they need to
make huge transaction (say 30 lakh INR) for business or real estate deals or for paying tuition fee
at a private college.
5. CRITICISM OF CASHLESS ECONOMY
1. Lack of confidence in internet banking is a big deterrent in converting to a cashless
economy. Many people in India are not even educated, not to talk about familiar it with
internet and mobile transactions. Such people could be easily duped by others. Even personal
computers could be hacked and important information could be stolen by hackers.
2. Critics of cashless economy state that dealings and transaction could be illegal and these
give rise to black economy. Currency is not black on its own and a cashless economy will not
stop creation of black money. However, they forget that it was the availability of funds in
form of cash which is conducive for dubious dealings, enable evasion from scrutiny by
taxation authority and provide an environment conducive for parallel economy of black
economy to thrive. Supply of black money will be greatly reduced by demonetization. It will
-247-
Priyanka Saroha
be immature to presume that demonetization move will bring back all black money (or black
wealth) to the financial system. A large chunk of that is stashed in offshore accounts, tax
heavens, real estate or jewelries. However, it will be able to pull back some of it into system
and lower the rate of creation of further transfer of money in black economy.
3. For a cashless economy to thrive and be viable, there are few prerequisites. These are
financial literacy, digital integration and strong security infrastructure. India has a good cell
phone network, thanks to telecommunication of previous decades. Government has recently
introduced digital transaction app; BHIM which could be accessed in various regional
languages.
4. Security is a big concern for cashless system in India. In US, all financial institutions have a
strong cyber security force, which keep close eye on all transactions and intervene if it
suspects any wrong doing. Even if somebody loses money due to false transaction or hacking
of bank account, bank takes full responsibility and refunds the money to customer without
much hassle. Such provisions create confidence in customer. In India, somebody‟s card had
been wrongly charged or somebody intentionally withdraw money by hacking account or
getting access to online account ID and password, it becomes nightmare for customer to get
his money back. He has to run to higher officials, lodge FIR with police and pursue his case
for long time. He may not get his money back even after all efforts.
5. Move of demonetization had an adverse effect on economy in initial run. India‟s GDP had
a growth rate of 7.6% in first two quarters of 2016. Rating agency ICRA (owned by Moody‟s)
predicted this to have lessened to 7.2%. Another agency S & P predicted the rate to have been
reduced by 17% in first quarter of 2017. Small businesses did not have sufficient cash in hand
to purchase raw materials and pay to their employees.
6. This resulted in job loss of 30-50% of workforce for small to medium size ventures in
manufacturing, agriculture, construction and retail. For two months, India growth story
seemed to be going in reverse mode, bringing bad reputation for ruling party and its head,
PM Modi. Slowly as more and more cash was available and new means to perform cashless
transaction became popular, things started coming to be normal.
In ordinary conditions, it would have taken nation 30-40 years to be able to move to cashless
mode. Demonetization has been like a long waited fast track surgery, which will propel country
towards growth and prosperity.
6. GROUND REALTY OF CASHLESS ECONOMY IN INDIA
Internet connectivity is poor, mainly in small cities and rural area. It is said that there are two
nations in India. One is Bharat (poor rural section) and other is India (affluent and modernized
section). Same goes for internet and mobile banking. Cyber security is another big issue. India
does not have strong cyber workforce to thwart hacking and cyber laws to prosecute the wrong
doers. Only 50% population has access to banking facility. In a nation, where half of their
population does not have access to clean drinking water, toilets and roads, internet banking is a
big thing. Internet penetration rate is 27%, much below the other developing nations such as
Kenya, Indonesia and even Nigeria. Ideally it should be about 67% for effective internet
-248-
Priyanka Saroha
transactions. Only 15% people have smartphones with internet connections and internet speed is
very slow compared to global standards. There only 856 point of sales machines per million
people, required for debit/credit card transactions, compared with 4000 per million people in
China. To sum up, India do not have infrastructure needed for cashless economy at the moment.
Government is taking steps to address these issues and increase internet banking and cyber
security to enhance public confidence.
7. CONCLUSION
Rogoff argues that by replacing cash with a digital store of value, central banks are able to take
full control over monetary policy. By move of demonetization, government pulled money from
circulation and it took around 4 months to replace it by new bills partially. Left in a limbo, people
were forced to adopt measures of cashless transaction. After passage of this revolutionary time
period, things are getting to normalcy in India. Businesses are thriving as earlier and all activities
are undergoing as earlier. Thus, demonetization has been a blessing in disguise for Indian
economy.
India of this day is undergoing an overall transformation in the way financial transactions are
made. More and more people are able to open bank account, rapid growth is seen in terms of use
of e-services, cash transaction has reduced to a great extent, online shopping for all kind of
merchandise and digital options of payment are mushrooming. The share market is soaring
again, foreign exchange is amassing and INR is becoming stronger in comparison to USD. All
these factors will contribute in achieving higher growth rate. Current regime in India came in
power with promise of make economic development within reach of even the weakest person of
society. Cashless economy in India will be large leap to come closure to this goal.
REFERENCES
[1]. Black, John, Hashimzade, Nigar and Myles, G. (2009). A Dictionary of Economics, Oxford
University Press.
[2]. Internet desk (2016 Nov 12). Recalibration of ATMs will take upto to 3 weeks says Jaitley.
The Hindu retrieved from http://www.thehindu.com/news/national/demonitisation-
arun-jaitley-on-atms-going-dry/article9338238.ece
[3]. Lazo, Bátiz, Haigh, B.T. and Stearns, D.L. (2014). How the Future Shaped the Past: The
Case of the Cashless Society. Enterprise & Society. 15(1): 103-131
[4]. Padminisivarajah (2016 November 11). “Demonetization Madurai corporation makes
record text collection on a single day”. The times of India retrieved from
http://timesofindia.com/city/chennai/demonetisation-madhurai-corporation-mix-record-
tax-collection-on-a-single-day/articleshow/55374378.cms
[5]. PTI. (2016, Nov, 9). Demonetization will benefit economy in long run Jaitley. The Hindu
Business Line. retrieved from
http://www.thehindubuisnessline.com/economy/demonitisation-to-increase-eco-size-
enhance-revenue-base-sales-jaitley/article9324312.ece
-249-
Priyanka Saroha
[6]. PTI. (2016, Nov., 12). Hyderabad civic body collects rupees 65 crore of property tax. The
Indian Express. Retried from http://indianexpress.com/article/india/india -news-
india/demonitisation/hyderabad-civic-body-collects-rs-65-crore-of-property-tax-
4372156/
[7]. Special Correspondent. (2016 Nov, 13). As ATMs run out of cash , RBI encourages public to
go digital. The Hindu. Retrievd from http://www.the hindu.com/business/economy/rbi-
urges-public-to-adopt-digital-as-atms-run-dry/article9339020.ece.
-250-
Impact of Depreciation and Taxation Policy on the Profitability of

Public Sector Enterprises
Arvind Kumar Yadav

Faculty of Commerce, KMGGPGC, Badalpur, G.B. Nagar, (U.P.) India
Email Id: arvind3510@rediffmail.com
Abstract
PAPER/ARTICLE INFO
The depreciation policy of the business is evidenced by the rate at which RECEIVED ON: 08/02/2017
depreciation is charged off each year. It must be remembered that ACCEPTED ON: 19/05/2017
depreciation is a cost of doing business which must, alongwith other
expenses, be considered in determining net profits. A concern which is Reference to this paper
liberal in the amount charged off each year is said to have a conservative should be made as follows:
depreciation policy. In considering a depreciation policy a concern which
is on the alert to repair and renew of its assets and thereby reduces the Arvind Kumar Yadav (2017),
amount necessary to charge to depreciation each year. Before “Impact of Depreciation and
Independence, the main function of taxation was considered to be to raise Taxation Policy on the
an amount of revenue large enough to enable the Government to discharge Profitability of Public Sector
its basic functions, and enough attention was not paid to the welfare Enterprises”, Int. J. of Trade
responsibility and role of a welfare state. In 1956, the state was pledged to and Commerce-IIARTC, Vol. 6,
move in the direction of a socialistic society. Hence it was realised that the No. 1, pp. 251-259
taxation policy and proposals should be so framed as to realise the goal of
socialist economy. In this research paper researcher studied the impact of
depreciation along with all aspect of providing depreciation in public
sector enterprise including methods of depreciations and also the effects of
depreciation under changes of price level and its practicability in India.
Taxation is also a very important factor for computing profit of public
sector enterprises so researcher studied direct and indirect taxation
policies of Government of India.
Keywords: Depreciation, Price level change, Taxation, Tax holidays.
Impact of Depreciation and Taxation Policy on the Profitability of Public Sector Enterprises
Arvind Kumar Yadav
1. INTRODUCTION
The whole theory of depreciation, therefore, implies that the capital sunk by any concern in the
acquisition of its fixed assets must be preserved intact and that the loss in value arising from the
use of such assets should be made good from revenue each year by distributing such charge fairly
over their working life and not left over until the last moment when assets have ceased to be
useful. Depreciation is loss of value in tangible assets arising from physical, functional and
incidental causes. It includes also the loss in value of intangible assets that are affected by time
limitation or abandonment. The term depreciation applies to assets which are limited in respect to
time, such as patents, copyrights, trademarks, leases and so on. Deterioration is used to designate
a loss in quality. This loss arises through wear and tear in the normal use of the asset, or it may be
due to decay through the action of nature. Depletion arises in connection with assets which can
not be replaced, or the duration of which can not be lengthened by repairs and renewals, and thus
is a loss in quality. These assets are some-time referred to as wasting assets, oil wells and mines
are subject to depletion, building and machinery depreciates. Obsolescence is the decline in value
owing to technological improvements. Deterioration and obsolescence may both occur without
any use of the asset.
Henceforth, depreciation will be used in the broader sense, that is, inclusive of depletion,
deterioration and obsolescence.
2. OBJECTIVE
Objectives of this paper are as follows:
 To understand the various methods of charging depreciation in present scenario,
 To identity needs and methods of Charging Depreciation under changing price level,
 Taxation Policy in India, understanding the meaning of Set off and carry forward of losses.
3. METHODOLOGY
The present paper is based on secondary data. For collecting secondary data various books
related to depreciation and taxation policies, research paper, news paper, magazines are
consulted along with the internet.
4. DEPRECIATION VIS-A-VIS APPRECIATION
Appreciation is the opposite of depreciation. It is the increase in the value of an asset. Some
companies have contended at times that since the appreciation in the value of their properties
more than offsets the depreciation there was no net depreciation and, thus, no charge for
depreciation against profits was made. Depreciation is not only a decline in the value of an asset
due to wear and tear and other causes, but it is also a cost of doing business. Even though,
appreciation in assets may take place, depreciation should be charged, if only, for the sake of the
recognition of cost. Where there is marked appreciation in the value of an asset, it may
established on the books of the company by a debit to the asset and a credit to unrealised surplus.
However, this policy should be used only in exceptional cases.
5. VARIOUS METHODS OF CHARGING DEPRECIATION IN PRACTICE
There are several methods of charging depreciation. Some are more accurate than others. All,
however, involve at least three factors:
-252-
Arvind Kumar Yadav
1. Original Cost of the Asset.

2. Scrap or residual value
3. The estimated life of the Asset
Some methods involve a fourth consideration, namely, interest rate.
The following are the main methods of depreciation:
5.1 Straight Line Method: This is the simplest and commonly used method. By this arrangement
the annual depreciation charge is equal to original cost of the asset minus the scrap value, the
resultant net figure being divided by the estimated life in years.
5.2 Composite Life Method: In this method, the depreciation rate, instead of being applied to
individual assets, is applied to all the assets. When the average rate is obtained it can be
applied to all assets in one total charge.
5.3 Working Hour Method: In the straight line method the depreciation charge is based on time
alone. In the working hour method, the basis is the number of hours that the asset is actually
in use.
5.4 Unit Production Method: This method differs from the working hour method. In this
method, first of all the cost of assets is divided by total units in life and then it is multiplied by
units produced in a year.
5.5 Diminishing Value Method: This method is based upon the assumption that an asset
depreciates more or less evenly percentage wise from the preceding period's value. In this
scheme the book value of the asset would never reach zero, but it would in time reach the
scrap or residual value.
5.6 Sum of Years' Digits Method: This is another method of depreciation where the amount of
depreciation goes on decreasing in the coming years.
5.7 Compound Interest Method: The chief consideration involved in compound interest method
is that the amounts set aside in depreciation fund are expected to earn interest like any other
'funds'. There interest accruals should reduce the amounts of the depreciation charges. In
compound interest method, sinking fund method and annuity method are included.
5.8 Revaluation Method: At the close of each period an estimate is made of the value of the asset
and the difference between the total original cost and present revaluation value is charged to
depreciation.
6. DEPRECIATION UNDER CHANGING PRICE LEVEL
The existing technique of showing assets on historical cost method and charging depreciation on
the basis of this cost is based on the principle that the fixed assets will be used for a long time. But
it does not exhibit the real state of affairs of a company as rupee profits rise in a period of inflation
and the fixed assets continue to be shown on historical cost basis and the depreciation is charged
on that cost. Thus, the profits are over-stated to the extent of the rising price level creating secret
reserves. Efforts should, therefore, be made to explore possibilities of improving financial
reporting in times of rapidly changing prices.
The alternative methods of valuing fixed assets and providing depreciation under changing price
level may be, the following:
1. Historical cost adjusted for changes in specific index number.
2. Historical cost adjusted for changes in general index number and
-253-
Arvind Kumar Yadav
3. Replacement cost.
Under historical cost method, the fixed assets continue to be shown at the cost of their acquisition
minus depreciation from year to year, irrespective of the change in the purchasing power of the
rupee which is constantly falling in a period of rising prices.
6.1 Historical Cost Adjusted for Changes in Specific Index Number: By Specific Index Number,
we mean that the index number of the cost of the asset, assuming the year of purchase as the
base. In case the same is not available for the particular brand and type of Asset, Index
Number of the group to which this asset belongs may form the basis for adjustment. Under
this method the value of the asset shall be adjusted on the basis of the index-number of the
asset at the beginning of the year and provision for depreciation shall be made at the fixed
rate on the adjusted value.
6.2 Historical Cost Adjusted for Changes in General Index Number: Index Number of prices
of representative goods and services which indicates the change in general price level are
known as General Index Numbers. Under this method, the historical cost of the plant will be
adjusted according to the Index Number at the beginning of year and provision for
depreciation shall be made at the fixed rate per cent the adjusted value. The first thing that
emerges from a study of the aforesaid alternative bases of valuing fixed assets and providing
depreciation is that the liability for taxation is the highest in the existing historical cost
method. Thus, in any case the historical cost method deserves rejection as under this method
more taxes are paid, less depreciation fund accumulates, and last but not the least, the wage-
earners get an opportunity to claim higher wages on the basis of fallacious profits at the cost
of inadequate provision for depreciation. Not only this, the share-holders are also likely to be
paid excessive dividends, may be even out of capital thereby leading to erosion of capital. The
next problem is whether specific index number should form the basis of adjusting the
historical cost. Usually the specific index number is more advantageous both in respect of tax
liability and depreciation fund. But the position would be reversed if the rise in the general
index number is greater than that in the specific index number. Thus, no one method is likely
to give a lasting advantage over the other. There are, however, some practical difficulties in
adopting the index number method. Firstly, the element of comparability will be destroyed as
different enterprises may follow different methods of adjusting the historical cost (specific or
general Index number method) based upon index numbers prepared by different units. The
non-comparability of the financial statements will not only create confusion in the minds of
the prospective investors but will also render difficulty for the economic analyst to derive any
correct conclusion for the nation as a whole. Secondly, adjustment method may hold good to
some extent in a period of rising prices but if a decline sets in, the depreciation fund will be
even less than the actual cost. Thirdly, even if it is assumed that the trend of rising prices
continues, the depreciation fund would not be sufficient to replace the asset at the end of its
life.
6.3 Replacement Cost: The replacement cost means the market price at which the asset can be
replaced. Under this method it is assumed that there will be continuous replacement of the
depreciated asset value and the provision for depreciation is to be so adjusted each year that
it makes available sufficient depreciation fund to replace the depreciated asset value at the
-254-
Arvind Kumar Yadav
end of each year. The replacement cost method seems to be most equitable, besides creating
sufficient fund to replace the plant and maintaining the capital intact in the form of
purchasing power, it also gives the due share to the exchequer, the Shareholders and the
wage earners, and thus the fear of dividends bring paid out of capital exchequer taking away
more than its due share and the wage earners claiming for higher wages will also be
eliminated. It may be argued that old plant is generally not replaced by a similar plant in an
era of technological developments. Thus, the available fund will fall short of the replacement
cost. Again, this method is opposed on the ground of complexity in its preparations as well as
its difficulty in understanding by the general investors. Lastly, it may be alleged that it would
be difficult to get every year the standard market price of the particular plant for replacement,
as the design and pattern of plants are undergoing frequent changes these days. As such, they
may favour the continuance of the historical cost method. The non-availability of the market
price of a plant regularly throughout its life has little weight. But as in the early life of a plant
its market price would be easily available (the change in design and pattern, being expected
after a few years, the problem would arise only after some years when an improved type of
plant would be introduced in the market and the manufacture of the old one is discontinued.
In such a case the specific index number may form the basis of determining the market price.
This replacement cost method of valuing fixed assets and providing depreciation seems to be
the most equitable. It would be a good compromise if besides publishing the financial
statements based on replacement cost method, supplementary reports according to historical
cost method are also attached for the convenience of the general public.
7. ITS PRACTICABILITY IN INDIA
In case of India, the practices of other countries cannot be blindly accepted for application. In
India, we do not have comparable index numbers for the period since 1939. Another problem that
arises in this connection in the effect form which price level adjustment will be given effect to.
Logically, a firm's accounts should be adjusted for the whole period to its life. In the case of older
firms, it becomes a typical problem. The Institute of Chartered Accountants of India should
consider the matter and attempt to suggest the method which will be followed by all the
businesses while preparing the financial statements. Once the Institute formulates the plan for
price level adjustments, all the practising Chartered Accounts will be guided by these and a
greater uniformity will be brought about in the preparation of financial statements. So far as the
question of preparing primary and final accounts exclusively in current values is concerned, it
will be possible only when the Income Tax Act is amended in respect of the grant of depreciation
allowance, and the Companies Act should also be amended to achieve uniformity in presentation.
However, acting on the advice of the Institute of Chartered Accountants of India, The Govt. may
amend these Acts to make presentation and audit of supplementary accounts compulsory. Such
provisions in the Act, needless to say, will be specified in detail and leave no scope for
manipulations.
8. TAXATION POLICY
Direct taxation may be classified into two categories, Income Tax and Other Taxes.
-255-
Arvind Kumar Yadav
8.1 Income Tax

Income Tax is charged on the total income of the previous year of a corporation at the flat rate
prescribed by the Finance Act for the particular assessment year. During the First Five Year plan
period and the first year of the Second Five Year plan, the rate of Income Tax for Corporations
was maintained at 25%. In 1957-58, the rate was increased to 30%, because the existing resources
of revenue could not keep pace with the desired revenue required for the planned development
of the country. In the last year of the Second Five Year plan period, the rate of Income Tax was
reduced from 30% to 20%. Actually, this was not a relief of taxes because in the name of
simplification of corporate taxation, the Govt. abolished the system of 'Grossing up of the
dividend, the net effect of which was that the shareholders were required to pay tax on dividends
declared in addition to the tax paid by the corporations on their profits.
The Finance Act, 1985 provides, the maximum rate of 50% in case of a domestic company in
which the public are substantially interested and 60% in the case of a domestic company in which
the public are not substantially interested. In the case of a company other than a domestic
company, the maximum rate is 65%. Present rate of income tax on companies is 30%.
Surcharge on Income Tax: The object of imposing surcharge was to bring in more revenues to
meet the increasing expenditure and to prevent inflationary pressure. The Govt. levied surcharge
of Income Tax in The Finance Act, 1985-86. Thus, the amount of income tax computed in
accordance with the preceding provisions of this Finance Act shall be increased by a surcharge
calculated at the rate of 10% of such income tax.
Upto the Finance Act, 1964 Companies also paid super tax where it was called corporation tax.
The Finance Act, 1965 merged the corporation tax with Income Tax and now the companies are
liable to pay only Income Tax on their incomes at rates prescribed by the Finance Act.
8.2 Other Taxes
Corporations pay income tax on their revenues at the prescribed rates, but this alone does not
indicate the total incidence of taxation on their incomes, as from time to time they have been
asked to pay other taxes also like, Wealth Tax, Gift Tax etc.
Before 1951, The Govt. of India imposed Excess profit Tax on the excess profits earned to use in
conditions w.e.f. 1st Sept., 1939. The tax was imposed on excess profits earned over standard
profits of the base year at the rate of 50%. As the tax was a war measure, it was abolished w.e.f.
1st April, 1946.
After the abolition of E.P.T. Business Profits Tax was imposed from 1st April, 1946. The
Corporations were liable to pay this tax on their business profits and it would not exceed 6
percent of capital or rupees one lakh whichever was greater. This tax was also abolished from 1st
April, 1950.
8.2.1 After 1951
From 1st April, 1951 to 31st March, 1963, The Companies were required to pay only Income Tax
and Super Tax and there was no other direct tax on their incomes. It was only with effect from 1st
April, 1963, that a new tax was imposed on their super profits.
The tax on super profits of companies was imposed by the Super Profits Tax Act, 1963. This tax
was abolished after a year of its adoption.
-256-
Arvind Kumar Yadav
8.2.2 Incentives for Capital Maintenance - Depreciation Allowances

The Indian Income Tax Act provides liberal depreciation allowances to maintain the capital intact.
The allowances are liberal in the sense that the normal depreciation is allowed for normal use of
the asset, extra shift allowance is allowed for multiple shift working, initial depreciation is
allowed at the rate of 40% of the cost of buildings erected for residence or welfare of the low paid
staff and in the case of transfer of asset the capital loss is allowed as terminal depreciation.
If the profit of a business in any year is not sufficient to absorb the depreciation allowances, the
unabsorbed balance can be carried forward to subsequent years and set off against profits of the
business in any later year or years, provided there is no change in the ownership of the business.
Thus, an assessee can get back 100% capital invested in buildings, furniture, plant and machinery
used for the business or profession.
8.2.3 Set Off and Carry-Forward of Losses
The losses suffered in a year can be set off against any other income of the same year. If the
business and capital losses could not be wholly set off on account of insufficiency of profits, the
balance of the amount not so set off can be carried forward to be set off in the next eight years
regarding business loss and short-term capital loss and in next four years in case of long-term
capital losses.
9. GRANT OF CAPITAL EXPENDITURE
Capital expenditure on Scientific Research or research of a Medical nature which has a special
relation to the welfare of workers employed in the business is deductible at the rate of 20% in
each of the five consecutive accounting years. Similar treatment is accorded to capital expenditure
incurred for promoting family planning amongst the employees.
Thus, the grant of capital expenditure helps in maintaining the capital intact. In tenth uses the
industrialists to promote family planning amongst their employees, to use the latest patents and
to set up scientific laboratories for improving the quality of goods.
10. DEVELOPMENT REBATE
A special deduction by way of development rebate was allowed at a specified percentage on the
cost of a new ship or a new plant and machinery owned by the assessee and used wholly for the
purpose of business. Development rebate has been discontinued after 31st May, 1974. However,
unabsorbed development rebate would be carried-forward for a period not exceeding eight
assessment years.
11. TAX HOLIDAY
An important tax incentive to encourage establishment of new industries is the tax holiday for the
first five years after commencement of manufacture. The profits are exempted from tax upto a
limit of 6 per cent of the capital employed in the undertaking. The impact of the incentive varies
with the Capital structure and profitability of the undertaking as the exemption is granted on the
basis of capital employed. A company may not be able to utilized fully this incentive because of
the absence of sufficient operating profits against which the tax holiday is to be utilised. New
undertakings have a considerable gestation period and often show little or no profits in the initial
years. In the first few years, infact the depreciation allowances and the investment allowance are
-257-
Arvind Kumar Yadav
large enough to offset tax purposes. The result in many cases is that there are either no taxable
profits or only a small amount is left for the concession of a tax holiday. In order to make it more
effective the tax holiday benefit may be applicable from the time a surplus is available after
providing depreciation and investment allowances.
Before 1965, it was compulsory to deduct the depreciation and development rebate before
claiming the advantage of tax holiday. In a case Supreme Court held that an assessee can
postpone the claim for depreciation allowance. By so postponing the claim for depreciation
allowances for the period of tax holiday and also not lose the claim for depreciation, which will in
any case be allowed in subsequent years. In the case of a company assessee profits and gains
derived from an industrial undertaking which beings to manufacture or produce articles or
operate its cold storage plant after 31st March, 1976 or from a ship which is first brought in two
use after that date or from the business of a hotel which starts functioning after that rate
deduction at the rate of 7½% will be allowable in place of 6 per cent. The benefit of deduction is
allowed for a period of first five assessment years. Where the industrial undertaking etc. are run
by a cooperative society, the deduction is allowed for a period of seven assessment years.
12. CONCLUSION
The conclusion is that all assets which are more or less constantly in use, naturally diminish in
value by reason of wear and tear. As the wasting of an asset contributes to the expense and in
order to arrive at the profits of an undertaking, it is imperative that the question of depreciation
should be considered, as no true profit can be ascertained until all losses or expenses incurred for
the purpose of earning an income are charged against such income. Another reason, why
depreciation should be brought into account is that unless the shrinkage in the value of the assets,
due from any cause, is provided for, the value of assets will be overstated in the Balance Sheet.
High rate of taxation has adversely influenced the growth of corporations. The tax policy of the
Government seems to be one of trial and errors; taxes on dividends distribution and issue of
bonus shares were levied and later withdrawn when they failed in their purpose. The super
profits tax had to be replaced by sur-tax in the following year.
Although tax incentives have been given, the conditions attached to them are generally difficult of
fulfilment and the advantages are not as widespread as they could otherwise be. Thus, we
conclude that the taxation policy of the Government should not only maximise the flow of funds
to the exchequer but also promote the generation of funds for further investment, create
employment, boost production and earnings and in turn reap larger revenues for the Government
to defray the increasing current expenditure on social welfare.
REFERENCES
[1]. Agarwal, A. N. (2014). Administration of Govt. Industries, Three essays on the Public
Corporation, Indian Institute of Public Administration, New Delhi.
[2]. Mehrotra H.C. (2017). Direct Taxation, Sahitya Bhawan Publication, Agra.
[3]. Bansal, B.L. (2015). Pricing Policies in Public Sector, Mumbai.
[4]. Das, Nabagopal (2013). The Public Sector in India, Mumbai.
[5]. Farooqi, Shrat, H, (2008). Macro Structure of Public Enterprises in India(A.U.)
[6]. Ghosh, S. (2014). On the Public Sector (Delhi).
-258-
Arvind Kumar Yadav
[7]. Hansan, A.H. (2012). Public Enterprise and Economic Development.

[8]. Laxmi Narain (2015). Principles and Practice of Public Enterprise Management.
[9]. Economic and Political Weekly
[10]. Economic Journals
[11]. Eastern Economist
[12]. Economic Times
[13]. Dainik Jagran
[14]. Amar Ujala
[15]. The Hindu.
-259-
Impact of Training & Development Programmes on Employee’s

Performance under HRD Activities
Deepak Singh
Department of Commerce, Govt. P.G. College, Noida, (U.P.) India
Email Id: deepaksingh8384@gmail.com
Abstract
PAPER/ARTICLE INFO
Under HRD Activities there are so many tools like Recruitment and RECEIVED ON: 17/02/2017
Selection Process, Performance Appraisal Programmes, Training and ACCEPTED ON: 28/04/2017
Development Programmes, Employees Welfare and Motivation
Programmes, but this paper is basically focused on the impact of Training Reference to this paper
and Development Program for the employees in the organization. To should be made as follows:
improve overall organizational effectiveness and productivity, to ensure
competitive edge, to compete in liberalized and open market scenario. Deepak Singh (2017),
These changes necessitate the need of training and development of ―Impact of Training &
personnel in the organization. Few companies are grooming very well in Development Programmes
their field because these companies are following the training & on Employee’s Performance
development program in superlative manner and these companies are under HRD Activities‖, Int. J.
growing up with their organizational culture, employee morale, of Trade and Commerce-
technology advancement, and increase productivity, up gradation of IIARTC, Vol. 6, No. 1, pp.
quality and personal growth of employees also. 260-264
Keywords: Training and development, HRD activities, Employee’s

performance.
Impact of Training & Development Programmes on Employee’s Performance under HRD Activities
Deepak Singh
1. INTRODUCTION
Under HRD activities the training play a vital role to enhance the skill of employees so that they
can give their best to their work and they can develop themselves for the future and besides this
the training always make a way through which organization can also achieve its goal and as we
all know very well that once the training program has been designed, it needs to be implemented
because without implementation no impact will be created in the organization. In many
organization, most managers are action-oriented and frequently say that they are too busy to
engage in training efforts. Secondly, the availability of trainers is a problem. As we know that
there are so many tools in HRD activities so it is very difficult that how to schedule training
without disrupting the regular work? and there is also the problem of record keeping about the
performance of a trainee during his or her training period. If we will notify the causes by which
the training & development programs could not follow up in the organization, we must make
solution for such cases so that the impact of training & development programs will be strongly
affected the overall growth for employees, employer & for the society also so that we could
measure the impact of the training & development programmes among all the tools of HRD
activities.
The main Example to show that our organization has reached at very high level in corporate
world and the society through Training & Development program. An example of Infosys
company as discussed below :
American Society for Training & Development (ASTD) honored Infosys with the Excellence in
Practice Award 2003 for its exemplary practice - Global Business Foundation School. The award,
which recognizes training practices aligned to organizational goals, is a testimony of Infosys’
commitment to providing added value to its clients through high quality and trained workforce.
Infosys Technologies Ltd (NASDAQ: INFY) said ―The spirit of liability among our people and an
organizational commitment to continuous personal and professional development keeps Infosys
at the forefront of the fast-changing industry. Our framework for continuous learning at Infosys is
built around a number of focused programs for our employees. These range from major
initiatives such as the Infosys Leadership Institute of various ongoing management development
and personal improvement programs. These complement a host of technology advancement and
ongoing training options,‖ said Kris Gopalakrishnan, Deputy Managing Director and Chief
Operating Officer, Infosys Technologies Ltd.
-261-
Deepak Singh
Table 1: Results Example – New Employee Orientation

BASELINE PROJECTED ACTUAL RESULT
MEASURE TARGET (AFTER TRAINING
MEASUREMENT CATEGORY: TIME AND DEVELOPMENT
EFFORT)
 Average New Employee Orientation time 30 working days 20 days 15 days

(from general company introduction
through basic, On-the-job training)
 The time required for new employees to 60 days 30 days 25 days
be performed at 90 percent efficiency
 Average time spent by Benefits
Specialists answering basic policy 500 hours per year 100 hours 75 hours
questions—after New Employee
Orientation
MEASUREMENT CATEGORY: OUTPUT BASELINE TARGET ACTUAL
 Number of new employees going 25 50 45
through New Employee Orientation per
month
 A number of partnerships established to 0 10 9
support New Employee Orientation
process
 New Employee Orientation feedback 0 12 4
sessions per year
MEASUREMENT CATEGORY: QUALITY BASELINE TARGET ACTUAL

 Customer satisfaction with New 5 out of 10 9.5 out of 10 9 out of 10
Employee Orientation—as reported back
by new employees
 Customer satisfaction with New
Employee Orientation—as reported back 3 out of 10 9 out of 10 9 out of 10
through Business Unit Management
 The degree to which the New Employee
Orientation process addresses basic
benefit questions—as validated by the 20% 90% 80%
Benefits Specialist Group
MEASUREMENT CATEGORY: COST BASELINE TARGET ACTUAL
 New Employee Orientation cost per new $1,200 $200 $335
employee
 Average monthly costs of a New
Employee Orientation $30,000 $10,000 $15,000
 Operating budget variance per New
Employee Orientation program
20% over 5% over 7% over
-262-
Deepak Singh
And through this parameter ASTD measured the impact of training & development and Infosys
had won the first annual ASTD BEST Awards 2002. The ASTD BEST award recognizes
organizations that demonstrate enterprise-wide success as a result of employee learning and
development.
2. OBJECTIVE
The main objective of this paper is to examine the level of enhancement of the impact of training
& development on employee’s performance in organization under HRD activities. Because
without knowing the main reasons for failure of these programs we cannot make some initiative
step to increase the level of impactful training & development programs for which we must
arrange the method to provide an environment which will be beneficial & profitable for the
employees & employer as well as for the society also. By a single step we will try to find out all
interrelated causes and effects of training and development in a chronicle systematic, scientific
and objective manner.
3. FINDING
So many studies have been done to know the impact of training & development program and to
know the causes of failure of this progress in organization to enhance the quality of Training &
Development programs because it is the only programme through which we can make our
employee more effective than other programme whether he/she is new employee or existing
employee because other programme like performance appraisal is only for existing employee not
for new employee and the efficiency and productivity of workers working in an organization not
only depends upon the skills they possess or working environment, they are working in, but also
depend upon the policy and culture of the company and we all know that all the policies are
made for Human Resource Development. Systematic analysis of facts with visualization provides
the positive and negative aspects for training & development programs. In the present global
scenario in India has a vision of a developed country by 2020, but the organization still has some
old issues (as we had at the time of old economic policies). But still we are far from our vision. For
training there must be an important factor which is a continuous learning, & it is the need of
organization in a changing world. Providing training & development of the employees according
to the demand of the job to enhance the productivity of human resources. So in this paper we
tried to know the efficiency of worker in organization after the training & development Program
and how it can create a culture of learning, which is only in this programme.
4. METHODOLOGY
The data collected by one and used by other becomes secondary data. Hence secondary data are
like journals, government & non-government publications, few annual reports of the company,
international publications, etc. In the view of the objectives, this paper is based on secondary data.
5. CONCLUSION
In the millennium when the corporate world is designing newer techniques for developing
employees and retaining them, so there is no way behind that and the organizational structure is
such that people work hand in hand to align the organizational goals with the individual’s goals.
As we know, in today’s global scenario the employees are the most important assets for any
-263-
Deepak Singh
organization. In order to cope up with the changing market conditions, development of

technology, rising expectations of employees and introduction of new management systems, it is
essential to increase emphasis on training and development. To match the employee
specifications with the Job requirements and organizational Needs: Management finds deviations
between employee’s present specifications and the job requirements and organizational needs.
So we must design the programs of training & development so that all employees can take keen
interest in the programs and can follow up the programs after obtain it. Because without follow
up the programme, the main objective of programs will be fail and after follow up we can see the
huge development and growth in employees and in the organization which will be very helpful
for our developing country INDIA, so we focused on the tool, named training & development
programme among all the tools of HRD activities.
REFERENCES
[1]. Bunch, K. J. (2007). Training Failure as a Consequence of Organizational Culture. Human
Resource Development Review, 6(2), 142-163.
[2]. Flippo B Edwin, ―Personnel Management‖, sixth edition, Hill Book Company
[3]. Infosys website- Newsroom-press release 2004
[4]. Kothari C.R., (2000). ―Research Methodology‖, revised edition, Vishwa Prakashan.
[5]. Memory C.B., (2001). ―Personnel Management‖ 21st revised and enlarged edition,
Himalaya Publishing House.
[6]. richardchangassociates.com
[7]. Sadri, Golnaz, Snyder, and Peggy, J. (1995). Methodological Issues in Assessing Training
Effectiveness. Journal of Managerial, 10(4), 30-32
[8]. Santos, A. And Stuart, M. (2003). Employee Perceptions and Their Influence on Training
Effectiveness. Human Resource Management Journal. 13(1), 27-46
[9]. Thome, Kaye & Mackey David (2007). Everything You Ever Needed to Know the Training
–AMACOM.
-264-
Opportunities and Challenges of Demonetization
Pulkit Agarwala*, Kamlesh Kumarb

aDepartment of Commerce, Mohammad Ali Jauhar University, Rampur (U.P.)
bDepartment of Commerce, Mohammad Ali Jauhar University, Rampur (U.P.)
E-mail Id: pulkiagarwal2087@gmail.com; pulkitagarwal 2007@gmail.com
Abstract
PAPER/ARTICLE INFO
A cashless economy is one in which all the transactions are done using RECEIVED ON: 10/02/2017
cards or digital means. The circulation of physical currency is minimal. ACCEPTED ON: 19/04/2017
Indians use too much cash for transactions. The number of currency notes
in circulation is also larger than in other large economies. On eighth Reference to this paper
November 2016 the Prime Minister of India took a brave step of should be made as follows:
demonetization of INR 500 and INR 1,000 currency notes. Currency of
Rs 500 & Rs 1000 notes was withdrawn from the economy. Today online Pulkit Agarwal, Kamlesh
payment option is popular in urban areas as compared to rural areas. Our Kumar (2017),
society is mainly based on cash transactions and most of the people are not “Opportunities and
aware to digital payment methods. This move will achieve the twin Challenges of
objectives of economic growth and financial inclusion. It will help to fight Demonetization”, Int. J. of
the problem of counter currency. The result of it would be known in near Trade and Commerce-IIARTC,
future but there are various challenges to be faced by people. The global Vol. 6, No. 1, pp. 265-268
average Internet connectivity speed is 7 Mbps, according to the Akamai
report. South Korea leads the APAC countries with the highest average
Internet speed of 26.1 Mbps, and India with 5.6 Mbps of average
connectivity speed. This creates hurdel to make online transaction. The
infrastructural facilities should be made better to facilitate online
transactions/banking transaction without using currently physical form.
Keywords: APAC- Asia Pacific Region, Cashless economy.
Pulkit Agarwal, Kamlesh Kumar
1. INTRODUCTION
Cashless Economy can be defined as a situation in which the flow of cash within an economy is
non-existent and all transactions must be made through electronic channels such as direct debit,
credit cards, debit cards, electronic clearing, and payment systems such as Immediate Payment
Service (IMPS), National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement
(RTGS) in India. It is believed that moving from cash to cashless economy has numerous benefits.
As Per the World Payments Report (2015), global non-cash transactions reached 358 billion in
2013, an increase of 7.6% over 2012. Further, European Central Bank (ECB) data on access and use
of payment instruments and terminals show steady increase cashless payments.
The total number of non-cash payments in the EU increased by 2.8% in 2014 over 2013 and by
6.0% in 2013 over 2012. During the period 2000–2014, while credit transfers and direct debits
increased, card payments also increased. Moody‟s Analytics (2013) studied the impact of card
usage on gross domestic product (GDP) of 51 countries, found that electronic card usage added
USD 1.1 trillion paperless banking transaction for private consumption and GDP from 2003 to
2008.
On line transaction system has become a necessary component of business strategy management
and a strong tool for achieving cashless economy and economic development. India, as one of the
developing countries, is lacking behind in reaching the expected level in global economy and
banking system, so there is a need to improve on the banking system and any other financial
industries. The drastic digitalization over the past few years has indeed affected almost every
sphere of our lives. One of the most recent effects has been the move towards a cashless economy
in India. Starting with the note ban in November 2016 due to the sudden withdrawal of the
currency notes of Rs. 500 and Rs. 1000 denominations from the economy overnight. Thus, the
Indian economy is going cashless. In other words, least paper transactions will be involved,
substituted by more digital transactions with the help of internet banking, digital wallets, Point-
of-Sale machines, credit and debit cards, etc.
2. CHALLENGES TO CASHLESS ECONOMY IN INDIA
It would help to transform the lives of 131 billon people of India and Indian economy as a whole.
But the availability of basic infrastructural facilities like electricity supply and internet facilities in
the rural as well as urban areas are some of the challenges that needs to be addressed adequately.
The cashless economy will make vulnerable hacking of the personal information over the internet
such as credit and debit card numbers, PINs, passwords and other sensitive information due to an
increase of digital transactions. Cyber crimes will increase if proper internet security measures are
not taken on time. The poor section of India and the majority population is not covered under
banking system, so they are totally dependent on cash for their daily wages. Various sectors such
as real estate, retail, restaurants, cement and other Medium Small Enterprises, where huge cash
transactions are involved, going to be affected badly. Inadequate internet availability, low
internet speeds, limited smartphones and broadband penetration, very less Point of Sale machines
are the biggest hurdles in achieving full digitalization as they are the main substitute for cash
transactions. Funds will always be in control of the third party such as Government, banks,
payment interfaces, etc. which lead to extreme uncertainty.
-266-
3. PROSPECTS OF CASHLESS ECONOMY IN INDIA

Cashless transactions will help to reduce corruption to a large extent and to eliminate counterfeit
currency. The Central Government is making efforts for online and card-based transactions in the
country to achieve its target of becoming a largely cashless economy. There is drastic growth of e-
payment start-ups in the country providing job opportunities to unemployed youth. Launching of
Unified Payments Interface (UPI) to facilitate cashless transactions. A cashless economy will help
in making payment digitally. One can use mobile as a one-stop solution for all kinds of
transactions such as bill payments, fees payments, funds transfer, recharge, etc. It will ensure a
„black-money free India‟ or wiping out so-called „parallel economy‟ where people are in the habit
of keeping money in their homes instead of the banks to avoid tax. Crime rates have already
started declining due to cash ban as most of the terrorist activities are funded with black money.
In addition to this, other crimes such as burglary, extortion, bank robbery, etc. are also declining.
One of the major benefits is the increase in the income tax collection. Due to least involvement of
cash, transactions have to be done through banks where proper Know your customer (KYC)
verifications are now required prior to banking transactions and hence, it will be easier for the
Government to monitor and mend the income tax evasion by the people. It will help in increasing
the revenue of the government.
The present Government had absolute clarity from day one that it would move against the
shadow economy and black money. Its first decision was to constitute SIT under the directions of
the Supreme Court. The Prime Minister had proposed to the G-20 at Brisbane that international
cooperation in sharing information with regard to base erosion and profit shifting should be
expedited. The arrangement with the United States furthered this object. The Government
completed its agreement with Switzerland that w.e.f. 2019; details of assets held by Indian citizens
in Switzerland and vice versa would be provided to each other. Since 1996, the Double Taxation
Avoidance Treaty with Mauritius was being renegotiated. The treaty effectively incentivised
round-tripping. It was renegotiated. Similar treaties with Cyprus- and Singapore have also been
renegotiated. The Black Money Law dealing with illegal assets outside India opened a-window
for disclosure with 60 per cent tax and provides a ten year imprisonment.
According to a Moody‟s report the impact of electronic transactions to 0.8% increase in GDP for
emerging markets and 0.3% increase for developed markets because increased velocity of money.
4. CONCLUSION
A cashless economy can only be possible with sufficient infrastructure and planning that are
required for supporting an economy like India. The latest World Bank report has mentioned that
the demonetisation will not have any long-term adverse effect on the health of Indian Economy.
Rather it will prove beneficial with growth of the Indian economy rising to 7.6% in fiscal year
2018. Liquidity expansion in the banking system post-demonetisation has helped the banks to
lower lending rates, which in turn is bound to lift economic activity. The benefits of this move
will the change the habit of people and more people will use to digital method 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 modernisation in money transactions,
with e-payment services gaining unprecedented momentum. A large number of businesses, even
-267-
street vendors, are now accepting electronic payments, prompting the people to learn to transact
the cashless way at a faster pace than ever before.
REFERENCES
[1]. A brief history of India pulling bank notes from circulation, Quartz,
(https://qz.com/831674/rupee-currency-demonetization-a-brief-history-of-india-pulling-
bank-notes-from-circulation/)
[2]. Allen, Larry (2009). The Encyclopedia of Money Sanata Barbara ABCCL10 pp. 250-251.
[3]. Braga, F.D., Isabella G and Mazzon J.A., (2013). Digital wallets as a payment method
influence consumer in their buying behaviour.
[4]. Demonetisation and after, the Hindu, November, 15, 2016.
[5]. Hammond, Bray (1991). Bank and Politics in America Princlton University Press, pp 108-109.
[6]. Paul M. Horvitz (1974). Monetory Policy and the Financial System 114 Prentice-Hall 3rd
Edition.
[7]. Report by national institute of public finance and policy New Delhi.
[8]. www.quora.com
[9]. Zywicki, Todd (2014). Article 1, Section 8 in The Heritage Guide to Constitution, Regnery
Publishing, p 147.
-268-
A Study on Paradigms of Quality of Work Life and Its Dimensions

Aman Roshana*, V.C. Sharmab
aSchool of Commerce, Hemvati Nandan Bahuguna Garhwal (A central) University, Srinagar,U.K., India
E-mail Id: amanroshan2807@gmail.com
bSchool of Commerce, Hemvati Nandan Bahuguna Garhwal (A central) University, Srinagar,U.K., India
E-mail Id: drvcsharma88@gmail.com
Abstract:
PAPER/ARTICLE INFO
In today’s competitive global economy, human is among the most crucial RECEIVED ON: 11/01/2017
resources. To retain human resource and to attain maximum productivity ACCEPTED ON: 05/03/2017
from them is a great challenge for the organizations. Since it is easy to
obtain a person physical presence at work place but loyalty, commitment Reference to this paper
and job involvement comes through the quality of work life. It has become should be made as follows:
important to comprehensively construct an environment at work place
which reflects the employee well being over there. Thus, providing Aman Roshan, V.C.
satisfaction at mind and declining negative personal consequences of the Sharma (2017) “A Study on
Paradigms of Quality of
employees through quality of work life is the necessity of these days.
Work Life and Its
Quality of work life of employees has been widely studied and is it still has
Dimensions” Int. J. of Trade
a greater focus on increasingly far more and more humanizing the job and Commerce-IIARTC, Vol.
conditions as well as the total work environment from different angle. 6, No. 1, pp. 269-275
Thus, employee’s quality of work life seems to be highly important because
satisfaction of these people is a back-bone for organizational survival and
development. The main objective of this study is to understand the
perspective of quality of work life and to identify various dimensions of
quality of work life. For this purpose secondary data is being used. The
findings of the study states that the quality of work life is not only
measured by one or two factors but there are group of factors which affects
the quality of work life. Furthermore, an effective implication of quality of
work life in any organization is advantageous for both the employee and
employer.
Keywords: Quality of work life, job involvement, human resource, job
satisfaction.
Aman Roshan, V.C. Sharma
1. INTRODUCTION
Work is an essential part of anyone’s life, as it is livelihood or earnings of his life. When a person
joins any work place, it becomes his identity in the society. Since on an average an employee
spend eight hours a day in the organization. Human being is mainly emotional entity. He joins an
organization in his capacities to satisfy his economic, social and psychological needs. In any
organization an employee has to adhere to the given quality of working life and play pre-
formatted prearranged roles. Hence, a good quality of working life of any organization plays an
integral part to develop employee’s working skills, positive attitudes toward his job in particular
and organization as a whole, level of job satisfaction, job involvement and commitment for his
respective organization. An organization with high quality of work life is the one that promotes
and maintain a work environment that results into excellence in everything it does-by ensuring
open communication, appreciation, admiration, faith, support, safety and satisfaction of its
members, both personality and professionalism. The concept of quality of work life in the
contemporary management has become a major social issue throughout the world, while in the
past few decades only personal life (non-professional) was emphasized on. The supporters of
quality of work life theory seek new systems to help the staff so that they could draw a balance
between their work life and personal life (Akdere, 2006).
Singh, Rashmi and Tripathi, Shruti (2016) examined the relationship the quality of work life
(QWL) of working professionals in IT industry executives and to identify the various variables
that contributes to quality of work life. The study conducted on 330 respondents from Bangluru,
India. The findings of the study show that QWL and job performance has the significant
differences towards each dimension and the significant personal variables can have an effect on
the QWL and job performance.
Mosadeghrad, Ali Mohammad (2013) determined the level of quality of work life (QWL) among
hospital nurses. The study carried on 316 respondents from six hospitals, three ministry of health
hospitals, one social security and two private hospitals of Isfahan, Iran. The results of the study
bring out that level of QWL and education level are correlated.
W.N. Thalang et al (2010) studied on quality of work life indicators as a corporate social
responsibility of electrical and electronics private Organizations in Thailand. It is a documentary
research and data was collected from the in-depth interview with experts and specialist. Health
environment, total life span, work life balance, adequate and fair compensation, social integration
support used as dimensions of QWL and four major dimensions of CSR, namely: economic,
environmental, social and ethics used as a parameters. The finding shows that QWL indicates
perception about for a more effective CSR, developing a good quality of work life (QWL) is
crucial.
Rose, Raduan Che et al. (2006) analyzed the level and relationships between the quality of work
life (QWL) and career related variables. The respondents were selected on the basis on random
sampling and sample consisted of 475 respondents from free trade zone of Malaysia. The finding
shows that the three exogenous variables are significant: career satisfaction, career achievement
and career balance with 63% of the variance in QWL.
-270-
Data, Tanmoy (1999) examined the quality of work life (QWL) with the perspective of human
values. The study was conceptual based on theoretical framework. The study results that QWL of
individual increases when he believes in organization vision and other human values attached to
the job.
1. To understand the concept of quality of work life.
2. To identify various dimensions of quality of work life.
To achieve the above stated objectives based on quality of work life and its dimensions, secondary
data has been collected from the various sources. Sources to collect the data are research articles,
published theses, newspaper articles, magazines, books and online sources of related study.
Mainly secondary data has been utilized for making the study more comprehensive, comparable
and result oriented.
5. HISTORICAL PERSPECTIVE AND CONCEPT OF QUALITY OF WORK LIFE
The thought or concept of quality of work life has its roots back to decade of 1910s. When F.W.
Taylor published his book “The Principles of Scientific Management” in which he elaborated the
concept of scientific management and also discussed about the approaches towards management
by science. The traditional job design of scientific management focuses on division of labor, job
hierarchy, close supervision and the one best way of doing work. The system of job-hierarchy had
made workers fully dependent upon their superior resulting demoralization of employees’
personal skills. These consequences arouse demand for humanized jobs which can satisfy workers
with higher needs, higher skills and bring better productivity from them.
The term quality of work life officially was first time used by Davis in 1972 in the forty third
American Assembly conferences on “the changing world of work” at Columbia University,
Arden house, New York. Thereafter many academicians, managers and researchers worked on
the concept of quality of work life and bring various theories and model on it. Quality of working
life of employees has been widely studied and it is still has a greater focus on increasingly far
more and more humanizing the job conditions as well as the total work environment from
different angle. Thus, employee’s quality of work life seems to be highly important because
satisfaction of these people is a back-bone for organizational survival and development.
6. DEFINITIONS OF QUALITY OF WORK LIFE
There are no generally acceptable definitions which defines the term quality of work life. From
the beginning of 1900s the term quality of work life has been defined differently by different
psychologist, researchers and managers in their own respective ways to cover various aspects of
quality of work life at large. Thus, these all can be made clearer by going through various
definitions of quality of work life. They are as follows:
Quality of work life is defined by Lawler (1968) as “the employee perceptions of their physical
and mental well-being at work”.
Spink (1975) defined quality of work life as “the degree of excellence in the work and working
conditions which contribute to overall satisfaction of the individual and enhance individual as
well as organizational effectiveness”.
-271-
According to Lippit (1977) thought quality of work life as, “the degree to which work provides an
opportunity for an individual to satisfy a wide variety of personal need to survive with some
security, to interact with others, to have a sense of personal usefulness, to be recognized for
achievements and to have an opportunity to improve one’s skills and knowledge”.
As per Blau and Robins (1990) QWL is “a process by which an organization responds to employee
needs by developing mechanisms to allow them to share fully in making the decisions that design
their lives at work”.
Heskett, Sasser and Schlesinger (1997) define QWL as the feelings that employees have towards
their jobs, colleagues and organizations that ignite a chain leading to the organization’s growth
and profitability. A good feeling towards their job means the employees feel happy doing work
which will lead to a productive work environment. This definition provides an insight that the
satisfying work environment is considered to provide better QWL.
7. DIMENSIONS OF QUALITY OF WORK LIFE
Since early 1970s academicians, psychologist and managers become interested in studying
various aspects of quality of work life and various attempts have been made to identify various
dimensions of quality of work life. Some have given emphasis to the improvement of work
conditions leading to better quality of work life, while other feel a fair compensation and job
security should be emphasized.
Walton (1975), one of the major interpreters of quality of work life movement has proposed eight
major dimensions to understand the concept of quality of work life. These dimensions have been
given in fig. 1.
Fig. 1: Dimensions of QWL by Walton (1975)

Taylor (1979) had described the essential components or dimensions of quality of working life as;
(1) Basic job factors, (2) Wages, (3) Working hours and working conditions, (4) Intrinsic job
characteristics and (5) Nature of the work itself. He suggested that a number of other aspects
could be added in quality of work life. The main dimensions among them are given in fig. 2.
Fig. 2: Dimensions of QWL by Taylor (1979)
-272-
These aspects are worker participation in the management, fairness and equity, social support,
use of one’s present skills, competency development, a meaningful future at work, social
relevance of the work and effect on extra work activities. He suggested that quality of work life
concepts is globally relevant, although their magnitude may vary according to given organization
and employee group.
Heizel et al. (1993) proposed four dimensions of quality of work life as; (1) Growth, (2) Mastery,
(3) Involvement, and (4) Self control. These dimensions are focused to the individual variables
related to employee. Therefore these dimensions help in improving quality of work life of the
employee and shown in fig. 3.
Fig. 3: Dimensions of QWL by Heizel et al.

European Foundation for the Improvement of Living and Working Condition (2002) had used
different set of dimensions in their quality of work life studies. The dimensions of quality of work
life selected are as follows: (1) Health and well-being, (2) Job security, (3) Job satisfaction, (4)
Competency development, and (5) Work and non-work life balance. The foundation focused on
the job related environment and as well as well being of the employee in the organization. The
dimensions have been shown in fig. 4.
Fig. 4: Dimensions of QWL by E.F.I.L.W.C.

8. CONCLUSION AND SUGGESTIONS
The Quality of Work Life (QWL) has understood an increasing interest and importance in all the
countries of the world. It is very significant in the context of commitment to work, job
involvement, motivation and job performance. It means to facilitate the fulfillment of human
needs and goal accomplishment. Quality of work life consists of opportunities for active
involvement in group working, problem solving that are of mutual benefit to employers and
employees based on labor management cooperation. Quality of work life as a set of methods such
as autonomous work groups, job enrichment and high involvement aimed at boosting the
satisfaction and productivity of workers. The finding of the study states that the quality of work
life is not only measured by one or two factors but there are group of factors which affects the
-273-
quality of work life. These may be as; fair compensation, healthy working conditions, growth and
security, social relevance of work life, working hours and working conditions, job involvement,
work and non-work life balance, competency development, intrinsic job characteristics, etc.
Therefore, considering these factors or variables an organization can design suitable programs
aimed to improve the quality of working life of its employees. Furthermore, an effective
implication of quality of work life in any organization is advantageous for both the employee and
employer. It makes the employment in an organization an advantageous, personal and social
situation, without improvement in the quality of work life in the organization it is difficult to
improve the organizational performance.
REFERENCES
[1]. Akdere Mesut (2011). Improving Quality work Life Implications for Human Resources.
Business Review 1.
[2]. Blau, D. M., & Robins, P. K. (1990). Child Care Demand and Labor Supply Young Mothers
Overtime. Annual Meeting of the Population Association of America, Toronto, Ontario.
[3]. Datta, Tanmoy (1999). Quality of work life: a human values approach. Journal of human
values, 5(2), 135-145.
[4]. Devis, L.E. (1972). Paper presented at International conference, Arden House. New York,
September 25-29.
[5]. European Foundation for the Improvement of Living and Working Conditions (2002),
First survey on working conditions in the candidate countries, 36, Luxembourg.
[6]. Heizel, F.P., Berko, R.M., Ling, P., Hakimi, J. & Schoenhaut, D.S. (1993). Interleukin 12 is
Produced in Vivo during Endotoxemia and Stimulates Synthesis of Gamma Interferon.
Infect Immune,62, 4244-4249.
[7]. Heskett, J., W. E. Sasser Jr., and L. Schlesinger (1997). The Service Profit Chain: How
Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value. New
York: Free Press, 1997.
[8]. Lawler, E.E. (1968). Effects of hourly overpayment on productivity and work quality.
Journal of personality and social psychology, 10(3), 306-313.
[9]. Lippit, G.L. (1977). Quality of work life; Organizational reward in action. Training and
development journal, 32(7), 4-8
[10]. Mosadeghrad, Ali Mohammad (2013). Quality of working life and turnover intentions:
implications for nursing management. International journal of research in nursing, 4(2), 47-54.
[11]. Rose, R. C., Beh, L.S., Uli, J. and Idris, K. (2006). An Analysis of Quality of Work Life
(QWL) and Career- Related Variables. American Journal of Applied Sciences, 3(12), 2151-2159.
[12]. Rose, Raduan Che et al. (2006). Quality of work life: implications of career dimensions.
Journal of social sciences, 2(2), 61-67.
[13]. Singh, Rashmi & Tripathi, Shruti (2016). A study of quality work life of working
professionals in information technology industry. Journal for Advanced Research in Commerce
and Management, 39(1), 79-93.
[14]. Spink, P. (1975). Some comments on quality of work life. Journal of occupational psychology,
September, 48 (3), 179-148.
-274-
[15]. Taylor, J. C., Cooper, C.L. and Mumford, E (1979). The quality of working life in Western
and Eastern Europe. ABP.
[16]. Tylor, F.W. (1911). The principles of Scientific Management. Harper and Row. New York .
[17]. W.N., Thalang et al. (2010). Quality of Work Life Indicators as a Corporate Social
Responsibility (CSR) of Electrical and Electronics Private Organizations in Thailand, 4th
Asian Rural Sociology Association (ARSA) International Conference.
[18]. Walton, R.E. (1973). Quality of Work Life: What is it? Sloan Management Review, 11-21.
[19]. Walton, R.E. (1975). Criteria for Quality of Work Life. In Davis L.E. Cherns. A.B and
Associates (Eds) the quality of work life, The Free Press, New York, 91-104.
-275-
Human Resource Management : A Value Based Approach
P. K. Srivastava
Faculty of Commerce & Business Administration, S.D. (P.G.) College, Muzaffarnagar (U.P.) India
Email Id: premsri4577@gmail.com
Abstract
PAPER/ARTICLE INFO
Nowadays every organization has to compete with its competitors in a competitive RECEIVED ON: 02/02/2017
market to capture and expand its market share with the objective to win for ACCEPTED ON: 13/05/2017
survival, growth and development. Business has emerged itself as a complex
organization with various important components for which strategic management
became an important concept. It includes not only determination of strategy but
its formulation, implementation and evaluation too. Manpower is the most
important component among the five M’s of any organization i.e. manpower,
material, machinery, money and methods. Though there are much efforts made to P. K. Srivastava (2017),
find the most effective way for human resource management but still ancient “Human Resource
Indian value based management methods are ignored by the policy makers, so the Management : A Value Based
study of ancient and modern concepts of human resource management is the need Approach”, Int. J. of Trade and
of the hour. In this present study analytical research methodology is applied by the Commerce-IIARTC, Vol. 6, No.
researcher. The study finds that human resource management concentrates on 1, pp. 276-281
four main aspects of HR i.e. acquisition, development, motivation and
maintenance, in which later two are more important than the former. There are
several strategies for motivation but our Indian ancient philosophy had also
explained the value based internal motivational system, where the person feels
fresh and enthusiastic so that he can perform his duties effectively and efficiently.
The study concludes that it is an emerging need of any organization to formulate
such HRM strategies that are depending on Indian philosophical thought too. We
should not solely follow the strategies adopted by the Western countries.
Organization must consider the fact that organizational welfare and employee’s
welfare are inter-related. So for the development of HRM strategies we should
consider our own theories which are not only fruitful but value based too.
Key Words: Strategic Human Resource Management, Value Based Management,
Organizational Structure, Scientific Management, Information Revolution.
P. K. Srivastava
1. INTRODUCTION
Business is like a war in one respect, where a nation has to fight with enemies to win. In business
the organization has to vie with competitors in a competitive market to capture and expand its
market share. The objective in both cases is to win for survival, growth and development. For
such a tuff task, planning is essential and when this planning includes science, art, tact and
quality it takes the shape of strategy. This term became more and more popular in business due to
the change of commercial climate, business environment, changing technologies and
globalization etc.. Business has emerged itself as a complex organization with various important
components such as its scope, resources (human and material), competitive advantages, complex
functioning etc., for which strategic management became an important concept. It includes not
only determination of strategy but its formulation, implementation and evaluation too. This
approach as a new management philosophy has come into being in the business world, which
enables the management to run their enterprises successfully in the midst of enormous problems
and uncertainties stemming from radical changes in the economic, social, political and
technological environment. The essence of business strategy is to offer better value to customer
than the competition does in the most cost effective and sustainable way. Today thousands of
competitors of every corner of the world are able to serve customers well. To develop an effective
strategy it is essential to understand what is happening in the rest of the world and reshape our
organization to respond accordingly. No one can hope to guide an enterprise in future without
understanding the structural, political and social impact of global economy. Many scholars argue
that we are now in a new industrial era or at least on the verge of information revolution which
will take us out of the machine age. These shifts are echoed within organization as they are
encouraging their corporate citizenship roles seriously such as rewarding executives on the basis
of community involvement. Thus, today HR function plays an important role in viewing an
integrating business opportunity stimulating employee, developing employee strength and
creating corporate team that share the companies' vision and translate this concern into profit.
2. NEED AND SIGNIFICANCE OF THE STUDY
In any organization the most important component among five M’s (manpower, material,
machinery, money and methods) is manpower. To achieve the maximum benefits of the skills of
employed manpower is very difficult but important and unavoidable. For this, an organization
needs strategy for its human resource management. Management is a dynamic process concerned
with getting things as per plan, programme and budget with the optimum utilization of available
resources. The manpower resources include technical know-how skills of human resource. The
success of any institution or organization depends on the performance of persons involved within
and their management. Strategic Human Resource Management (SHRM) is an approach that
takes an integrated and long-term approach of people management. It is managing the people
process in a way that is not just linked to corporate goals and visions but also broadly derives
from the goals. This connection with the very culture, character and style of the company is
particularly strong in service industries. Thus, SHRM involves all management decisions and
practices that directly effect or influence the people or manpower who works for organization.
The utilization of people can be traced to ancient time though informal in nature but with the
time the best use of human resources has taken a formal and specialized shape. The history of
-277-
P. K. Srivastava
HRM can be characterized as moving through four phases - the craft system, scientific
management, human relation approach and current organization science human resource
approach. The craft system was popular in the earlier in Egypt and Babylon where training in
craft skills was organized to maintain an adequate supply of craft workers. This system was
suited to domestic industries. The scientific management of human resource was founded by an
American mechanical engineer F. W. Taylor. This was based on the theory that there is one way
which is the best to do a job and this way should be most efficient, fastest and least expensive.
The workers should do the job with this way and for which they may be motivated by money.
This theory was applied in US but this philosophy has ignored the human feelings and actual
motivation of the workers. They were not satisfied with their job resulting in the development of
welfare secretaries to see the welfare of employees. The third stage emerged in the form of human
relation with the effort of US social scientist Elton Mayo. This movement emphasized to
understand needs of employees so they may be satisfied and become productive. The result was
satisfactory but could not consistently support. Though there are much effort made to find the
most effective way for human resource management but still ancient Indian value based
management methods are ignored by the policy makers, so the study of ancient and modern
concepts of human resource management is the need of the hour.
Since for the proposed study is analytical in nature so analytical research methodology is applied
by the researcher for which the researcher has collected secondary data related to ancient and
human resource management.
4. ANALYSIS AND INTERPRETATION
4.1 Modern Concept of Human Resource Management
The modern concept of HRM has emerged as an organizational structure. As we know that HRM
grew out of the organizational science trend and combines learning from previous movement
with current researches in behavioral science. Business is also a complex organization, where the
focus is on total organization not just on individual. From a purely HRM perspective, the factors
as accounting for the increasing interest in and resort to HRM practices are inter- alia : (a)
improving the management of people or utilizing human resources better as a means of achieving
competitive advantage, (b) the traditional role of personnel managers has failed to exploit the
potential benefits of effective management of people, (c) the emergence of better educated
workforces with higher individual expectations, changes in technology and the need for more
flexible jobs have, in turn, created the need to incorporate HRM into central management policy,
(d) many important aspects of HRM such as commitment and motivation emanate from the area
of organizational behavior and place emphasis on management strategy. This has provided an
opportunity to link HRM with organizational behavior and management strategy.
The objectives of human resource management are to strike best match between people and
organization in order to contribute to the successful survival and growth of organization and help
the people in achieving satisfaction of their economic and other needs. The strategy of human
resource management concentrates on four main aspects of HR i.e. acquisition, development,
motivation and maintenance. Organization first forms strategies for the acquisition of right
-278-
P. K. Srivastava
number, right kind of people at right place, at right time with efficient and effective capabilities to
complete provided task which can be helpful to achieve its overall objectives. It is also essential to
formulate strategies for the development of employed personnel which is concerned with the
increase in skills to perform a specific job, education to develop general knowledge and
understanding of total environment. The training strategies are developed to make personnel
more creative and innovative.
Another two aspects of human resource are motivation and maintenance which are more
important than the others. It has been experienced that the acquisition of right kind of persons
and their training & development do not necessarily ensure enhanced productivity and improved
effectiveness of an organization. The desire and willingness of the persons to do task actively and
potentially is also essential which may be called motivation. There are several strategies for
motivation such as – managerial communication, theory X and Y, Flexi time job designs, behavior
modification, participative management etc., but our Indian ancient philosophy had also
explained the internal motivational system, where the person feels fresh and enthusiastic so that
he can perform his duties effectively and efficiently.
4.2 Ancient Indian Approach of Human Resource Management
Human personality and its development is the major area of study in psychology. Indian
psychology encompasses the vast body of India’s wisdom that concerns the human being. Indian
philosophy and psychology share a framework and believe that human has enormous potential
hidden in its being. The Indian sages from ancient times have given thought to this area, which is
preserved in ancient text and scriptures. Indian psychology is sophisticated, rich and practical
and it also has technology to raise the consciousness of human being for example--the concept of
“Panch Koshas” given in Taittiriya Upnishad and its development. This system is like a series of
ring or sheath surrounding the self. The outer sheath is concerned with the awareness of physical
body named as “Annamaya Kosha”. It indicates that the food we eat gets transformed into
muscles, veins, nerves, blood and bones. If proper diet exercise is given the Annamaya Kosha
develop well. The second sheath is the awareness of vital body (Pranamaya Kosha) which is
concerned with proper training and education of sense organs. Third sheath is mental
(Manomaya Kosha). All these three types of awareness are inter connected and composes the next
sheath called psychic body or inner mind (Vijnanamaya Kosha). The inner most core of self is
called spiritual cell (Anandamaya Kosha). This indicates the presence of supreme energy and
divine power in all of us.
In all organization employees want to be treated fairly. Employees input for organization are
experience, education, special skills, efforts and time worked, while outcomes are pay, benefits,
achievements, recognition and other rewards. There should be parity between these two. If an
organization considers the needs of its employees in psycho-philosophic manner and tries to
fulfill their needs fairly it can make employees internally satisfied and motivated. As discussed
earlier the first two sheaths of individual self are Annamaya and Pranamaya Koshas which are
concerned with the monetary emoluments, training and education etc. The sign of healthy
development of Annamaya and Pranamaya Koshas are enthusiasm, ability to use one’s voice
effectively, suppleness of body, forcefulness of personality, perseverance, leadership, discipline,
honesty and nobility. The satisfaction of these Sheaths is helpful for employee’s motivation and
-279-
P. K. Srivastava
maintaining their potential performance. The satisfaction of third and fourth sheaths of human
self i.e. Manomaya and Vijnanmaya Koshas, make an individual deeply involved with the
organization. The employee should also be provided non-monetary rewards like- honors,
promotion on the basis of their performance, social recognition and job security etc. These lead
him towards soul satisfaction. One can realize the fact that his welfare is related with the welfare
of organization. Both are complimentary to each other, no one is exploiting the other, then the
employees will be ready to give their best for the organization without any hindrance.
Indian sages from ancient time have given thought to this area. Bhagwat Geeta at different places
gives the models of highly developed human potential in its totality and has explained human
resource management strategies for the best and unfailing results. Various Upanishad give profile
of highly developed life ways and also provide the constituent of human potential. Sri Aurbindo
said everyone has in him some divine, something his own, a chance of perfection and strength in
however small sphere which God offers to take or refuse. The task is to find it, developed it and
uses. The proper use of these potential present in human being is to turn towards yogic exercises
which an organization can provide easily for its own benefits. Now the whole world has
recognized the power of yoga as UN declared 21st June as international yoga day.
5. CONCLUSIONS & SUGGESTIONS
Now it is an emerging need of any organization to formulate HRM strategies that are depending
on Indian philosophical thought too. We should not solely follow the strategies adopted by the
Western countries as their work culture; working conditions and needs of the employees are far
different to ours. Organization must consider the fact that the welfare of organization and
employees is inter-related. If the employees are satisfied not only materially but mentally too, this
will be the true motivation for them and only than they may provide their best to the
organization. Then they can feel their duty and work as worship and will perform it with full
devotion. So for the development of effective HRM strategies we should consider our own
theories which are not only fruitful but value based too. Though worldwide many organizations
are paying maximum attention towards motivation and satisfaction of their employees together
with their health and other personal caring but still much better result can be obtained if we really
explore and apply value based ancient Indian approaches of human resource management.
REFERENCES
[1]. Aswathappa, K (2010). Human Resource Personnel Management (Text and Cases), New
Delhi Tata McGraw Hill, 4th edition.
[2]. Bhattacharya S.K. and Venkataraman N (1983). Managing Business Enterprises Strategies -
Structure and System, New Delhi Vikas Publishing House.
[3]. Bhattacharya, S.C. (1998). Strategic Management- Concepts and Cases, New Delhi Wheeler
Publishing House.
[4]. Bratton John and Gold Jeffrey (2003). Human Resource Management (Theory and Practice)
New York Palgrave Macmillan.
[5]. Dessler, Gary (1997). Human Resources Management Pearson London Prentice Hall,.
Evaluation), New Delhi Nirmal Publishers and distributors, 10th edition.
-280-
P. K. Srivastava
[6]. French, Wendell L. (1994). Human Resource Management: Chennai All India Publishers and
Distributors.
[7]. G. Ranjit Sharma (1987). Trends in Contemporary Indian Philosophy of Education (A
Critical
[8]. Seetharamu, A.S. (1989). Philosophies of Education, New Delhi Ashish Publishing House.
[9]. Sethna, K.D (1953). The Indian Spirit and the World future, Pondecherry Sri Aurobindo
Ashram.
[10]. Sharma, R.N. (1972). Indian Philosophy, New Delhi Orient Longman’s Ltd.,
[11]. Srivastava, R.M. & Nigam Divya (2000). Corporate Strategic Management, Meerut Pragati
Prakashan
[12]. Stephen, David A. Decenzo & Robbins, P. (IIIrd Edition): Personnel/ Human Resource
Management, New Delhi Prentice Hall of India.
-281-
Impact of Working Capital Management on Liquidity, Profitability

and Risk: A Case Study of Hindustan Petroleum Corporation
Limited (HPCL)
Ajay Maheshwari
Department of Commerce
Krishan College of Science & Rural Technology, Fatehabd Agra, (U.P.) India
Email Id: drajaymaheshwari@gmail.com
Abstract
This paper makes an attempt to assess the impact of working capital
management on liquidity, profitability and risk of HPCL, a leading public
PAPER/ARTICLE INFO
RECEIVED ON: 27/02/2017
sector enterprise in India over a 10 year period (i.e. from 2006-07 to 2015- ACCEPTED ON: 03/05/2017
16). It also makes an attempt to gauge and test the correlation between Reference to this paper
liquidity and profitability as well as between profitability and risk. In this should be made as follows:
study, an attempt has also been made to establish the linear relationship
between liquidity and profitability with the help of a multiple regression
Ajay Maheshwari (2017),
model. The study is based on secondary data collected from published “Impact of Working Capital
annual reports of HPCL. The available data have been analyzed by using Management on Liquidity,
some important managerial and statistical tools. Various statistical tests Profitability and Risk: A Case
viz. Average, SD, CV, CAGR, Spearman Correlation, Student t-test, and Study of Hindustan
Durbin and Watson test have been applied to test the significance of the Petroleum Corporation
results obtained. Limited (HPCL)”, Int. J. of
Keywords: Liquidity, Profitability, Risk, Working Capital Management Vol. 6, No. 1, pp. 282-300
and HPCL
Impact of Working Capital Management on Liquidity, Profitability and Risk: A Case Study of Hindustan…
Ajay Maheshwari
1. INTRODUCTION
Originally, the activities of the public sector enterprises were limited to a definite field of basic
and key industries of strategic importance. There were certain fields where the private enterprises
were shy to operate as they involved huge investment and risk. It was the public sector alone
which could build the capital-intensive infrastructure such as power, transport, etc. Since then the
ideological objective of capturing the “commanding heights” by the public sector appears to be
fulfilled. It not only has succeeded in creating the necessary infrastructural base for sustained
industrial growth but also has tremendously boosted the technological capabilities. The public
sector enterprises have firmly established the foundation for the construction of a self-generating
industrial economy. During the planned era, the public sector has diversified its activities to cover
a wide spectrum of industries. Today, the public sector in India has entered into the production of
consumer goods such as bread, paper, watches, scooters, T.V., cement, and drugs. Some of the
researchers are of the view that the public sector should now enter the fields of distribution and
rural development as well.
This indicates the positive attitude of the government towards generation of greater employment
opportunity for the vast population of the country by establishing more and more PSEs along
with higher blockage of fund following the traditional production function approach whereby
fixed capital is considered as one of the explanatory variables to establish the relationship
between output and profit ignoring the role of working capital. In the wave of globalization and
economic liberalization, growth and survival stability of the enterprises largely depend on the
effective management of working capital, which has a direct bearing on the economic well-being
of the country as a whole. Thus, it is felt that there is a need to manage various components of
working capital in such a way that an adequate amount of working capital is maintained for
smooth running of the wheel of an enterprise for the fulfilment of twin objectives of liquidity and
profitability as well as for reducing non-insurable risk and uncertainty bearing associated with
the volatility of various components of working capital in the firm's operating environment.
Chandra H. and Selvaraj A. (2012) analyses the working capital management of selected Steel
Companies in India for the period from 2000-01 to 2009-10. To measure the effective utilization of
working capital, operating cycle and cash conversion cycle were used. Besides, to measure the
determinants of cash conversion cycle, the Kieschnick model was used. The study concludes with
the observation that the size of a company plays a vital role in determining the efficiency of its
working capital management. The working capital ratios across the small, medium and large
sized steel companies have played a vital role in determining the working capital management of
the selected Indian steel companies.
Dr. Panigrahi Ashok Kumar (2012) studies the relationship between working capital
management and profitability of ACC Cement Company, the leading cement manufacturer of the
country for assessing the impact of working capital management on profitability during the
period 1999-2000 to 2009-10. The study is based on secondary data. The main objective of the
study was to find whether the working capital management affects the performance of the firm. It
can be deduced that there is a moderate relationship between working capital management and
the firm’s profitability.
-283-
Ajay Maheshwari
Dr. Khatik S. K. and Jain Rashmi (2009) state that the management of working capital is one of
the most important and key resources of an organization for its day-to-day operations. Working
capital can be taken as funding resources for routine activities of business. It is the most vital and
important part of fund management and profitability for business. The writer has analyzed the
working capital position of MPSEB (Madhya Pradesh State Electricity Board) by ratio analysis
technique and it was found that the position of current ratio, quick ratio, acid-test ratio, working
capital ratio, inventory turnover ratio are not up to the standard benchmark.
Arunkumar O. N. and Jayakumar S. (2010) explain how working capital is considered to be the
lifeblood and controlling nerve centre of the business. Profitability and solvency are two vital
aspects of working capital management. The survival and growth of the company depends upon
the ability to meet profitability and solvency. Here the authors have concentrated on the analysis
of liquidity and solvency position of the major Public Sector Electrical Industries in Kerala such as
Kerala Electrical and Allied Engineering Company Ltd (KEL) and Transformers and Electrical
Kerala Ltd (TELK) for the financial years 1997-98 to 2007-08 and 1997-98 to 2005-06 respectively.
In conclusion the authors have made a few important observations with regard to the companies.
Both the companies show a trend of very low level of solvency position. The liquidity position of
the companies is below the normal value. KEL has a lower level of net profit compared to TELK
for the stated period. In comparison with KEL, the sensitivity of changes in the level of current
assets is high in case of TELK.
Jain P. K. and Yadav Surendra S. (2007) study the different facets of working capital
management. The issues addressed include relationship between CAs and CLs, the financing of
working capital, and ways of dealing with excess or shortage of working capital. The study is
based on an analysis of a thirteen year period data from 1991 to 2003 covering 137 public sector
enterprises. In a nutshell, it is reasonable to contend that the sample PSEs (Public Sector
Enterprises) are faced with long duration of net working capital cycle (time necessary to complete
the following three events: 1. Conversion of cash into inventory 2. Conversion of inventory into
debtors and 3. Conversion of debtors into cash less credit available from creditors) necessitating
substantial working capital to be carried by them, eventually affecting their profitability in
adverse manner.
Bhattacharya, (1997) explains modern financial management aims at reducing the level of current
assets without ignoring the risk of stock outs.
Luther, (2007) describes that a firm should formulate certain policies to control the working
capital so as to meet financial distress, which may occur in future. Efficient management of
working capital is, thus, an important indicator of sound health of an organization, which
requires reduction of unnecessary blockage of capital in order to bring down the cost of financing.
In the light of the above an attempt has been made in this study to assess the impact of working
capital on profitability and risk as well as on liquidity of Hindustan Petroleum Corporation
Limited (HPCL), a leading Public Sector Enterprise in India during ten years (i.e. from 2006-07 to
2015-16).
3. PURPOSE OF THE STUDY
The main objective of the present research is to provide an insight into the conceptual side of
working capital and to assess the efficiency of working capital management and its impact on
-284-
Ajay Maheshwari
liquidity, profitability and risk of HPCL on the basis of available data collected from published
annual reports of the company over a period of 10 years (i.e. from 2006-07 to 2015-16). The specific
objectives of this study are as follows:
 To evaluate the liquidity position of HPCL;
 To determine the profitability position and risk factors of HPCL;
 To find out the correlation between liquidity and profitability as well as between profitability
and risk; and
 To establish the linear relationship between liquidity and profitability with the help of simple
as well as multiple regression equations fitted on the basis of least-squares principles.
Sample design: The sample for the study has been selected a company named HPCL which is
one of the top public sector companies in the mining sector.
Data Collection: The study is mainly based on secondary data which are collected from the
annual reports and accounts of HPCL.
Time Period: The study covers the data from 2006-07 to 2015-16 .i.e. ten years data is being
collected to analyze the performance of the company.
Research Tools: The available data have been analyzed by using various financial ratios as a
managerial tool as well as some simple statistical tools like Arithmetic Mean, Standard Deviation,
Co-efficient of Variation, Correlation and Regression etc. Various statistical tests viz. F-test, t-test
and Durbin and Watson test have been applied for the purpose of testing in this study with the
help of SPSS version 23.
5. HINDUSTAN PETROLEUM CORPORATION LIMITED (HPCL) - COMPANY PROFILE
HPCL is a Government of India Enterprise with a Navratna Status and a Fortune 500 and Forbes
2000 company, with an annual turnover of Rs. 1,32,670 crores and sales/income from operations
of Rs 1,43,396 crores during the financial year 2010-11 having about 20% marketing share in India
among PSUs and a strong market infrastructure. HPCL's crude throughput and market sales
(including exports) are 14.75 Million Metric Tons (MMT) and 27.03 MMT respectively during the
same period. HPCL operates 2 major refineries producing a wide variety of petroleum fuels and
specialties, one in Mumbai (West Coast) with a capacity of 8.3 MMTPA. HPCL holds an equity
stake of 16.95% in Mangalore Refinery & Petrochemicals Limited, a state-of-the-art refinery at
Mangalore with a capacity of 9 MMTPA. In addition, HPCL is constructing a 9 MMTPA refinery
at Bathinda, in the state of Punjab, as a Joint venture with Mittal Energy Investments Pvt. Ltd.
HPCL also owns and operates the largest Lube Refinery in the India producing Lube Base Oils of
international standards, with a capacity of 335 TMT. This Lube Refinery accounts for over 40% of
the India's total Lube Base Oil production. HPCL's vast marketing network consists of 13 zone
offices in major cities and 101 regional offices facilitated by a supply and distribution
infrastructure comprising Terminals, Pipeline networks, Aviation Service Stations, LPG Bottling
Plants, Inland Relay Depots & Retail Outlets, Lube and LPG Distributorships. HPCL, over the
years, has moved from strength to strength on all fronts. The four main products of HPCL are
petrol, diesel, lubes and LPG. Besides these, the other products that HPCL have are kerosene,
aviation fuel, naphtha, hexane, bitumen, MTO, gas oil (which after cracking becomes gasoline),
-285-
Ajay Maheshwari
benzene, light diesel oil, furnace oil, low sulphur heavy stock (goes to chemical industries. The
biggest customer is Century Chemicals).
Meaning and Definition of Working Capital: The term working capital refers to the quantum of
fund required to maintain day-to-day expenditure on operational activities of a business
enterprise. It is actually required to run the wheels of the business. It is regarded as the life blood
of human body. The estimation of working capital of a firm is a difficult task for the management
because of its varying characteristics in a dynamic operating environment. It actually varies
across the companies in an industry as well as over the period under consideration for a
particular firm. It also varies with the nature and size of the enterprise, level of production,
operating cycle, credit policy of the firm, different macro-economic factors. (viz. inflation, fiscal
policy, business cycle etc.), availability of raw materials and so on and so forth.
Various Concepts of Working Capital: There are two approaches of working capital:
A) Balance Sheet Approach: Under balance sheet approach, there are two interpretations of
working capital: (i) Gross working capital and (ii) Net working capital.
Gross working capital refers to the firm's investment in current assets that circulates from one
form to another in the ordinary course of business. Thus, it simply refers to the sum total of
current assets, which include cash, and near cash items of short term resources e.g. cash and
bank balance, receivables, inventories, prepaid expenses, loans and advances, marketable
securities etc.
Net working capital on the other hand refers to the difference between current assets and
current liabilities. The difference between current assets and current liabilities may be of three
types:
 Positive (if CA>CL),
 Negative (if CA<CL) and
 Zero (if CA = CL),
where CA = Current Assets, and CL = Current Liabilities.
B) Operating Cycle Approach: This approach has been gaining more and more importance in the
present business scenario. Under this concept, the requirements of working capital depend on
the operating cycle of a firm and the cost of all operational activities. The, Operating Cycle
(OC), refers to the period during which investment of one unit of money will remain blocked
in the normal course of operation till recovery out of revenue (Banerjee, 1973). It is the
average time intervening between the acquisition of materials or services entering this
process and the final cash realization (Fees, 1978). It may be broadly classified into the
following four stages:
 Raw Material Storage Stage
 Work-in-Progress Stage
 Finished Goods / Inventory Stage and
 Receivables Collection Stage.
The necessary calculations under this approach for obtaining required working capital of a firm
can easily be made on the basis of published annual financial statements of the firm. In our
present study we are not dealing with the computation of required working capital under
-286-
Ajay Maheshwari
operating cycle approach. We simply follow the traditional concept of working capital dimension
i.e. balance sheet approach, for our purpose of the study.
The concept of working capital discussed above is exhibited in the following diagram:
Diagram-2: Various Concept of Working Capital
6. WORKING CAPITAL MANAGEMENT

Working Capital Management refers to the management of all types of current assets of the
business enterprise in which adequacy of current assets as well as the level of non-insurable risk
posed by current liabilities are optimally identified. It is concerned with the problems relating to
the administration of all aspects of current assets, current liabilities and the inter-relationships
that exist between them. It aims at reducing the locking up of funds in working capital so as to
improve the return on capital employed (i.e. profitability in the business). It seeks to formulate
proper policies for managing current assets and liabilities as well as the techniques for
maximizing the benefits derived from it. The policies for managing the working capital of a firm
should be such that the firm can accomplish its three important goals simultaneously--(a)
Adequate liquidity (b) Maximizing profitability and (c) Minimization of non-insurable risk and
uncertainty.
7. ADEQUATE LIQUIDITY
The term 'liquidity' refers to the capability of a firm to meet short-term financial obligations [i.e.
Current Liabilities (CL)] by converting the short-term assets [i.e. Current Assets (CA)] into cash
without suffering any loss. Here current assets refer to those which are readily convertible into
cash within one accounting period. Current liabilities, on the other hand, are those, which are to
be met within one accounting period. The liquidity of a firm actually depends on the effective
management of the composition of CA vis-a-vis CL. In fact, the components of CA other than
cash have varying degree of liquidity depending on the time taken for conversion of assets into
cash. The components of CL also have varying degree of the span of time made available to the
firm by the short-term creditors. A business enterprise making no profit may be considered as
-287-
Ajay Maheshwari
sick but one having no liquidity will die soon. As a matter of fact, liquidity is a necessary
condition (or a pre-requisite) for the very survival of the firm. The liquidity position of a firm is
generally analyzed with the help of some important ratios computed on the basis of different
constituents of working capital either in isolation or in aggregate or both. The important ratios
reflecting the liquidity position of a firm are as follows:
1. Current Ratios: It is the ratio of current assets to current liabilities for establishing the
relationship between them. It is determined by using the following formula:
Current Ratio =
This ratio measures the short-term solvency (i.e. liquidity) position of a firm indicating the
amount of current assets available per unit of current liabilities. Higher the ratio the more will be
the firm's ability to meet short-term obligations and the greater will be the safety of funds of
short-term creditors.
2. Quick Ratio / Acid Test Ratio: It is the ratio of quick assets to quick liabilities for establishing
the relationship between them. It is computed as follows:
Quick Ratio = =
Quick assets refer to those current assets which can be converted into cash/bank immediately or
at a short notice without suffering any loss. It actually means the current assets excluding
inventories and prepaid expenses. Generally, a quick ratio of 1:1 is considered satisfactory for a
firm though it depends on many factors. Quick ratio is a more rigorous and penetrating test of the
liquidity position of an organization as compared to the current ratio of the firm.
3. Current Asset to Total Asset: It is calculated by using the following formula.
Current Asset to total Asset Ratio =
It explains the relationship between current assets and total investment in assets. Higher the
investment in current assets, the more will be the liquidity of a firm but as the same time it
decreases profitability. Thus, this ratio prescribes the optimum level of current assets that should
be maintained in the firm by considering the concept of both liquidity and profitability.
4. Working Capital to Turnover Ratio: This ratio shows the number of times the net working
capital of a firm is turned over within a specified period. It is calculated as follows:
Working Capital Turnover Ratio =
It helps to assess the degree of efficiency in the use of short-term fund for operating sales. Higher
the ratio, the lower will be the investment in working capital and the greater will be the
profitability of a firm. However, a very high working capital turnover ratio is a symptom of over
trading which may put the organization into financial crisis.
-288-
Ajay Maheshwari
5. Inventory Turnover Ratio: This ratio is calculated as follows:
Inventory turnover Ratio =
It establishes the relationship between cost of goods sold during a particular period and the
average inventory level maintained by a firm during that period. It shows how rapidly the
inventory is turned into account receivables through sales. It indicates whether investment in
inventory is efficiently used or not and thus it is linked with the inventory control policy adopted
by the management of a firm. A high inventory turnover ratio implies good inventory
management. However, a very high ratio is a symptom of under-investment in inventory which
adversely affects the ability of a firm to meet the customers' demand. This situation creates the
problem of stock-out associated with high stock out cost and vice versa.
6. Debtors Turnover Ratio: It is calculated by using the following formula:
Debtors Turnover Ratio (DTR) =
By the analysis of DTR we supplement the information regarding the liquidity of one item of
current assets of the firm. This ratio reflects the efficiency of credit and collection policy pursued
by the concern.
8. PROFITABILITY
The term 'Profitability' means the ability to earn profits by an enterprise on its static resources (i.e.
invested capital). It, thus, expresses the relationship between profits and capital. The firm is said
to be successful if its profitability exceeds the weighted average cost of capital to the firm. The
profitability acts as a yardstick to measure the operating efficiency of the enterprise. The greater
the profitability the more will be the efficiency and vice-versa. Some important ratios relating to
profitability of a firm are briefly discussed below:
1. Gross Profit Ratio: This ratio establishes the relationship between gross profit and sales. It is
calculated by using the following formula:
Gross Profit Ratio = _
It is also known as gross profit margin. It measures the percentage of each sales rupee remaining
after meeting firm's expenses on its goods. The gross profit margin indicates the limit beyond
which sales are not tolerated to fall. A high ratio of gross profit to sales is a symbol of good
management whereas a relatively low gross profit margin is clearly a danger signal for the firm.
2. Net Profit Ratio: This ratio measures the relationship between net operating profit and sales
of a firm. It is computed by using the following formula:
Net Profit Ratio =
It is also known as net profit margin. It indicates the efficiency of management to operate the firm
successfully in relation to earned revenues and all types of costs associated with it at a reasonable
-289-
Ajay Maheshwari
level of risk and uncertainty. The high net profit ratio ensures good return to the owners and
enables a company to maintain its survival stability in adverse economic condition like declining
selling price, rising cost of production, falling demand etc.
3. Earnings Per Share (EPS): The overall profitability of a company can also be measured by
computing earnings per share with the help of the following formula:
(EPS) = =
where EBIT = Earnings before Interests & Taxes; I = Interest; t = Tax Rate; Pd = Preference
Dividend and N = No. of Ordinary Shares held.
This is a well-known and widely used indicator of the economic performance of a corporate
entity. It measures the profit available to equity shareholders on per share basis. The higher the
ratio, the better will be the performance of the entity and vice-versa. It can be used to draw
inference about the performance of a firm on the basis of its trend over a period of time,
comparison with the EPS of nearest competitive firms and comparison with the industry average.
4. Return on Net Worth (RONW): It is the ratio of net profit after taxes to the amount of fund
invested by the owners. It is calculated as under:
Return on Net Worth = x 100
It indicates how profitably the shareholders' fund or net worth has been utilized by the enterprise.
It is an important yardstick to judge the performance of a firm for the equity shareholders. The
higher the ratio, the better will be the performance of the firm in relation to the utilization of
owner's fund and vice-versa.
5. Return on Assets (ROA): This ratio measures the average profitability of a firm in terms of the
relationship between Net Profits and Assets. It is also known as profit to asset ratio. It is generally
computed as follows:
Return on Assets (ROA) = 100
Though widely used, ROA is an old measure because its numerator measures the return available
to both equity and preference shareholders whereas its denominator represents the contribution
of shareholders and lenders.
6. Return on Capital Employed (ROCE): The strategic aim of a business enterprise is to earn a
return on capital. Measuring the historical performance of an investment entity calls for a
comparison of the profit that has been earned with capital employed. The rate of return on capital
employed is determined by dividing the earnings before interest and taxes (EBIT) by the capital
employed or investment made to achieve that profit. Thus, it is computed as follows:
Return on Capital Employed (ROCE) = 100
-290-
Ajay Maheshwari
9. LIQUIDITY-PROFITABILITY TANGLE
The relationship between liquidity and profitability can be explained with the help of return on
capital employed ratio expressing it in the following form:
P=
Where P= Profitability, EBIT=Earnings before interest and taxes, and NWC= Net working capital.
This ratio indicates that other things remaining unchanged, continuous reduction in NWC (i.e.
liquidity) improves the profitability (P) of a firm with the simple passage of time. This suggests
that there always exists a negative relation between liquidity and profitability. But in reality it is
seen that unless there is a minimum level of investment in CA, which could provide a promising
vehicle for increasing profitability, the required amount of output and sales cannot be
maintained.
9.1 Liquidity and Profitability-Risk Trade-off
Liquidity and profitability-risk trade-off may be discussed in the light of firm's net working
capital position. The level of net working capital of a firm has a bearing on its liquidity,
profitability as well as non-insurable risk and uncertainty. Liquidity is a two-dimensional concept
– time and risk. Time dimension of liquidity is concerned with the speed of convertibility of
different current assets (other than cash) into cash. Risk dimension of liquidity indicates the
degree of certainty about the conversion of current assets into cash without suffering any loss or
with as little sacrifice in price as possible. The term 'Profitability' used in this context is measured
by profit after expenses. It is expressed as the ratio of profit after expenses to the invested capital
(i.e. Fixed Asset + Net Working Capital). In the light of profitability of a firm the risk may be
understood as the probability of technical insolvency. Technical insolvency occurs whenever a
firm is unable to meet its cash obligations when they become due for payment. This risk of
becoming technically insolvent is measured by detailed analysis of any change in the level of
current assets and current liabilities (i.e. the change in the Net Working Capital). Any change in
Net Working Capital brings about a considerable change in the quantum of profit after expenses
of the firm. The evaluation of profitability-risk trade off in relation to NWC is based on the
following three assumptions:
 the firm under consideration is a manufacturing firm;
 current assets of the firm are less profitable than non-current assets; and
 short-term financing is less costly than the long-term financing.
Under these assumptions, the trade off can be identified by using the ratio of current assets to
total assets (CATA) which indicates the percentage of current assets in total assets. The higher the
ratio of CATA the lower will be the profitability and risk and vice-versa. This trade off can also be
demonstrated by using the ratio of current liabilities to total assets (CLTA). This ratio reflects the
percentage of total assets financed by current liabilities. The higher the ratio of CLTA, the higher
will be the profitability and risk and vice-versa. The combined effect of these two ratios reflects
the true profitability-risk trade off of a firm.
-291-
Ajay Maheshwari
The liquidity position of HPCL over the period of 10 years as captured by different liquidity
ratios calculated on the basis of available data in its annual reports is presented in Table-1 given
below:
Table 1: Liquidity Ratios of HPCL (Period 2006-07 to 2015-16)
Year CR QR CATA WCTR ITR DTR
2006-07 0.95 0.28 0.36 -161.05 11.08 56.87
2007-08 1.16 0.44 0.46 39.93 8.68 60.98
2008-09 1.05 0.47 0.34 170.09 14.21 55.75
2009-10 0.79 0.31 0.40 -19.76 8.53 44.02
2010-11 0.85 0.37 0.49 -26.07 8.03 43.39
2011-12 0.86 0.41 0.52 -30.00 9.16 49.97
2012-13 0.88 0.50 0.50 -41.04 12.56 41.85
2013-14 1.13 0.59 0.51 50.35 11.88 40.80
2014-15 1.16 0.62 0.41 52.86 15.91 57.28
2015-16 1.03 0.55 0.39 256.23 14.11 42.76
CAGR 0.81 6.98 0.80 4.75 2.45 -2.81
Average 0.99 0.45 0.44 29.15 11.41 49.37
SD 0.14 0.11 0.07 116.71 2.77 7.69
CV 14.14 24.44 15.91 400.38 24.28 15.58
Source: Annual Reports of HPCL (calculated values).
From Table-1 it is seen that the current ratio of the company grows at compounded rate of 0.81%.
This ratio is below the standard norm of 2:1 over the period under study except in the year 2007-
2016. The average current ratio is 0.99 which is found to be below the standard norm 2:1. Thus,
the company is not capable to meet its short term obligations and it is also an indication about the
inability of funds for the short term creditors.
The quick ratio of the company grows at a compounded rate of 6.98%. It is seen that the quick
ratio throughout the period under study is tuned on an average at 0.45 which is again below the
standard norm of 1:1. Thus, the quick short-term solvency position of the company is also very
poor. From Table-1 it is also seen that the inventory turnover ratio of the company over the period
under study is considerably high. The compounded growth rate of this ratio is 2.45% and the
average ITR is 11.41%. The high inventory turnover of HPCL indicates good inventory
management assuming that there is no problem of stock-out situation. Considering the current
ratio in conjunction with the quick ratio and inventory turnover ratio of the company it may be
pointed out that the company has a mixed liquidity position. It is seen that average CATA ratio is
0.44 which means that HPCL has maintained current assets on an average at 44% level out of the
fund invested in total assets. It grows at the compounded rate of 0.80% over the period under
consideration. It reveals that HPCL has given a considerable emphasis on working capital
investment which has a bearing on liquidity as well as profitability of the firm.
Average DTR of HPCL (49.37) is found to be satisfactory with a compounded growth rate of -
2.81%. The coefficient of variation of this ratio is 15.58%. Therefore, the credit management of
HPCL is efficient enough. Moreover, less instability is found in this ratio over time, which
indicates that credit collection policy pursued by the firm is more or less stable. These ratios
-292-
Ajay Maheshwari
indicate that the ability of the company to pay its short-term contractual and non-contractual
obligations is poor. Thus, in totality, it may be said that the short-term solvency position of HPCL
over the period under study is found to be poor enough simply on the basis of analyzing the
ratios and other statistical measures relating to those ratios. Motaal prescribes a comprehensive
test for determining the soundness of a firm as regards liquidity position. According to him, a
process of ranking is used to arrive at a more comprehensive measure of liquidity in which the
following three ratios are combined in a point score:
9.2 Motaal's Comprehensive Test of Liquidity
i) Working Capital (WC) to Current Asset Ratio
=
ii) Stock to Current Asset Ratio
=
iii) Liquid Resources (LR) to Current Asset Ratio
=
The higher the value of both working capitals to current asset ratio and liquid resources to current
asset ratio, relatively the more favourable will be the liquidity position of a firm and vice-versa.
On the other hand, lower the value of stock to current assets ratio, relatively the more favourable
will be the liquidity position of the firm. The ranking of the above three ratios of a firm over a
period of time is done in their order of preferences. Finally, the ultimate ranking is done on the
basis of the principle that the lower the points score, the more favourable will be the liquidity
position and vice-versa. The Motaal test has been applied for determining the liquidity position of
HPCL over the period under consideration. As per Table 2, on the basis of ultimate ranking as
suggested by Motaal it may be concluded that liquidity position of HPCL in the year 2014-15 was
best followed by the years 2007-08, 2013-14, 2008-09, 2015-16, 2006-07, 2012-13, 2011-12, 2010-11,
2009-10 respectively in that order. It indicates that liquidity position of the enterprise is more or
less fluctuating over the period under study. The result of the Motaal test as revealed in the study
corroborates with the result about the liquidity position of HPCL by other important set of ratios
presented inTable-1.
Table 2: Motaal's Comprehensive Test of Liquidity of HPCL
(Period 2006-07 to 2015-16)
WCTCAR STCAR LRTCAR Ultimate
Year Rank Rank Rank Total
(%) (%) (%) Rank
2006-07 -4.86 6 70.64 1 29.36 10 17 6
2007-08 13.54 2 62.29 2 37.71 9 13 2
2008-09 4.59 4 54.98 5 45.02 6 15 4
2009-10 -26.30 10 60.94 3 39.06 8 21 10
2010-11 -17.31 9 56.17 4 43.83 7 20 9
2011-12 -16.15 8 52.92 6 47.08 5 19 8
2012-13 -13.16 7 43.00 10 57.00 1 18 7
2013-14 11.15 3 47.25 7 52.75 4 14 3
2014-15 14.15 1 47.00 8 53.00 3 12 1
2015-16 2.55 5 46.23 9 53.77 2 16 5
-293-
Ajay Maheshwari
9.3 Profitability Position of HPCL through Profitability Ratios: In the following table we
analyze the data relating to profitability of HPCL in terms of important ratios.
Table 3: Profitability Ratios of HPCL
(Period 2006-07 to 2015-16)
Year NPR (%) ROA (%) ROCE (%) RONW (%) EPS (%)
2006-07 1.75 4.94 8.62 16.37 46.35
2007-08 1.09 2.73 5.17 10.74 33.48
2008-09 0.46 1.22 6.13 5.36 16.96
2009-10 1.21 2.52 6.43 11.26 38.39
2010-11 1.15 2.53 5.79 12.27 45.45
2011-12 0.51 1.28 5.28 6.95 26.92
2012-13 0.44 1.19 4.05 6.59 26.72
2013-14 0.78 2.23 4.82 11.55 51.2
2014-15 1.32 4.05 6.80 17.06 80.72
2015-16 2.15 5.48 8.96 21.04 114.07
CAGR 2.08 1.04 0.39 2.54 9.42
Average 1.09 2.82 6.21 11.92 48.03
SD 0.57 1.53 1.58 5.03 29.10
CV 52.11 54.48 25.48 42.19 60.58
Source: Annual Reports of HPCL (calculated values).
From Table-3 it is seen that net profit on sales ratio of HPCL is slightly fluctuating over time. The
average net profit ratio of the firm is 1.09%. The compounded growth rate of this ratio is 2.08%
which indicates that the ratio is improving to a favourable extent over the period under study.
Therefore it may be said that the profitability on sales of the company is averagely satisfactory. It
also indicates that the management operates the firm successfully in relation to earned revenues
and the costs associated with it. The same trend is observed in case of ROA, RONW & ROCE. The
average growth rate of these three ratios is 1.04%, 0.39% and 2.54% respectively. Moreover, the
average values of ROA, RONW, ROCE are found to be 2.82%, 6.21% and 11.92% respectively. The
profitability ratios discussed above are found to be, more or less, in a stable position over time on
the scrutiny of their coefficient of variations shown in Table-3. The Earning per Share ratio
fluctuates considerably over the period of 9 years. The instability of EPS is clearly shown by its
coefficient of variation, which is found to be 46.68%. The average EPS figure is 21.34% with
standard deviation 60.58%. From the analysis of EPS it is clear that the company is in a favourable
position towards the earnings available to equity shareholders on per share basis though it
fluctuates over time. Thus, in totality, it can be said that the overall profitability position of HPCL
is satisfactory enough for the period under study and the company is in a favourable position to
create sufficient surplus for its growth and survival stability in the present competitive business
environment.
9.4 Liquidity and Profitability Analysis by using Simple Rank Correlation: In the following
table the relationship between liquidity and profitability is analyzed with the help of rank
correlation:
-294-
Ajay Maheshwari
Table 4: Liquidity and Profitability: The Relationship

(Using Rank Correlation)
Rank d
Year CATA (%) ROCE (%) Rank (R2) d2
(R1) (R1-R2)
2006-07 36.07 9 8.62 2 7 49
2007-08 46.41 5 5.17 8 -3 9
2008-09 33.94 10 6.13 5 5 25
2009-10 39.95 7 6.43 4 3 9
2010-11 48.70 4 5.79 6 -2 4
2011-12 51.70 1 5.28 7 -6 36
2012-13 50.14 3 4.05 10 -7 49
2013-14 51.22 2 4.82 9 -7 49
2014-15 40.86 6 6.80 3 3 9
2015-16 39.01 8 8.96 1 7 49
∑d2 288
Source: Annual Reports of HPCL (calculated values). Amounts in Million Rupees.
The relationship between liquidity (measured by CATA) and profitability (measured ROCE) of
HPCL over the period of 9 years is presented in Table-4. This relationship is established by using
Spearman's Rank Correlation Coefficient. The rank correlation between CATA and ROCE is
computed by applying the formula rrank = 1- since there is no tie for giving the rank to the
value of CATA and ROCE; here d = difference in rank and n = number of pairs of observations.
Correlations
CATA ROCE
Correlation Coefficient 1.000 -.745*
CATA Sig. (2-tailed) . .013
N 10 10
Spearman's rho
Correlation Coefficient -.745 * 1.000
ROCE Sig. (2-tailed) .013 .
N 10 10
*. Correlation is significant at the 0.05 level (2-tailed).
Putting the respective values of in SPSS ver. 23 we obtain rrank = -0.745 which indicates that there
is a high negative correlation between liquidity and profitability of the company. To find out the
significance of the above result we test the hypothesis with the help of student t-test in SPSS as
under:
Null Hypothesis Ho: p =0 against
The Alternative Hypothesis H1: p ≠ 0.
If Ho is true, then the value of test statistic
t0.05, 8 = 2.306 (Table value of t)
For a correlation of -0.745 based on 10 observations, t(8) = -3.159, p = 1.986582 (2-sided p value).
Note: This tool mimics SPSS' t-test procedure for correlations.
-295-
Ajay Maheshwari
Since computed value of t (-3.159) is greater than the table value of t (i.e. 2.365 at 5% level of
significance), the null hypothesis, H0: p=0 is rejected at 5% level of significance and thus, the
alternative hypothesis, H1: p ≠ 0 is accepted both at 95% level of confidence. Therefore, we may
conclude that there is no direct relationship between liquidity and profitability of the firm under
study at 5% level of significance.
9.5 Liquidity and Profitability Analysis by Using Linear Multiple Regression: In order to find
out the influence of liquidity ratios under consideration on profitability of the firm the following
linear multiple regression model is used:
y = b0+ b1x1+b2 x 2+b3 x 3+b4 x 4+b5 x 5+b6 x 6 ………... (Equation-1),
where y = Return on Capital Employed (ROCE), x1 = Current Ratio (CR), x2 = Quick Ratio (QR), x3
= Current Assets to Total Assets (CATA), x4 =Working Capital Turnover Ratio (WCTR), x5 =
Inventory Turnover Ratio (ITR) and x6 = Debtors Turnover Ratio (DTR). In this study CR, QR,
CATA, WCTR, ITR and DTR have been taken as the explanatory variables and ROCE has been
used as the dependent variable. For selecting the explanatory variables the correlation matrix is
constructed (Table-5a) giving the correlation coefficients between the explanatory variables and
the dependent variables. This table reveals that there is a poor correlation between CBTR and
each of the remaining variables and hence CBTR has not been used in multiple regression
analysis.
Table 5a: Correlation Matrix
ROCE CR QR CATA WCTR ITR DTR
ROCE 1.000
CR .056 1.000
QR -.177 .686 1.000
CATA -.737 -.155 .185 1.000
WCTR .209 .460 .623 -.274 1.000
ITR .295 .541 .721 -.431 .528 1.000
DTR .191 .479 -.120 -.438 -.101 .120 1.000
The pooled regression results of the model used in this analysis representing the impact of
working capital on profitability of the firm under study are exhibited inTable-5b.
Table 5b: Multiple Regression Analysis Results
Multiple Regression Mode: y = b0+ b1x1+b2 x 2+b3 x 3+b4 x 4+b5 x 5+b6 x 6
Coefficientsa
Standardized
Unstandardized Coefficients
Model Coefficients t Sig.
B Std. Error Beta
ROCE (Constant) 10.888 19.023 .572 .607
CR 5.098 12.600 .447 .405 .713
QR -13.212 34.970 -.956 -.378 .731
CATA -8.632 35.329 -.360 -.244 .823
WCTR .003 .011 .187 .221 .840
ITR .302 .970 .530 .311 .776
DTR -.070 .135 -.340 -.519 .639
-296-
Ajay Maheshwari
a. Dependent Variable: ROCE

Model Summaryb
Adjusted R Std. Error of the
Model R R Square Durbin-Watson
Square Estimate
1 .768a .590 -.229 1.75289 1.318
a. Predictors: (Constant), DTR, WCTR, CATA, ITR, CR, QR
b. Dependent Variable: ROCE
Note: SPSS version 23.0 is used to compute the results shown in the table from the original values of
dependent and independent variables.
Putting the respective values of all regression coefficients in equation-1 from Table-5b we obtain
the required multiple regression equation as under:
y = 10.888+5.098x1-13.212x2 – 8.632x3 + 0.003x4 + 0.302x5 - 0.070x6
The multiple correlation coefficient of ROCE on CR, QR, CATA, WBTR, ITR and DTR is 0.768
which reveals that the profitability of the firm was highly influenced by those explanatory
variables. The value of R2 indicates that the explanatory variables taken together contributed
about 59.00% of the variations in the profitability of the company. The regression analysis results
also show that goodness of fit of the regression equation is statistically significant at 5% level.
Table 7: Computation of Risk Factor
Shareholder’s Long term Fixed Assets Current Assets Risk Factor
Year
Funds (a) Debts (b) (c) (d) = [(a+b)-c]/d
2006-07 9,598.65 8,615.18 13,064.40 11,464.70 0.45
2007-08 10,563.29 12,535.09 15,245.23 19,297.38 0.41
2008-09 10,730.63 19,252.83 16,655.82 15,992.69 0.83
2009-10 11,557.97 11,785.89 19,194.26 20,641.94 0.20
2010-11 12,545.81 5,418.05 22,340.53 29,593.21 -0.15
2011-12 13,122.52 6,291.37 25,294.12 36,765.26 -0.16
2012-13 13,726.40 8,947.18 27,721.57 38,230.64 -0.13
2013-14 15,012.16 15,554.88 30,497.80 39,736.78 0.01
2014-15 16,022.09 14,855.83 32,537.23 27,599.48 -0.06
2015-16 18,356.10 10,633.48 35,322.71 27,488.73 -0.23
The risk factor is measured by using the following formula:
Risk Factor =
Table 7: Risk and Profitability: The Relationship (using rank correlation)

Risk Factor Rank d
Year ROCE (%) Rank (R2) d2
(Rt) (R1) (R1-R2)
2006-07 0.45 2 8.62 2 0 0
2007-08 0.41 3 5.17 8 -5 25
2008-09 0.83 1 6.13 5 -4 16
2009-10 0.20 4 6.43 4 0 0
2010-11 -0.15 8 5.79 6 2 4
-297-
Ajay Maheshwari
2011-12 -0.16 9 5.28 7 2 4

2012-13 -0.13 7 4.05 10 -3 9
2013-14 0.01 5 4.82 9 -4 16
2014-15 -0.06 6 6.80 3 3 9
2015-16 -0.23 10 8.96 1 9 81
∑d2 164
Source: Annual Reports of HPCL (calculated values). Amounts in Million Rupees.
The relation between profitability and risk of HPCL over the period of ten years is analyzed in
Table-7. This relationship is established by using the rank correlation between the risk factor (R t)
and profitability measured in terms of ROCE of the enterprise.
The rank correlation between the ranks of Rt and ROCE is calculated with the help of SPSS
Correlations
Risk Factor ROCE
Correlation Coefficient 1.000 .006
Risk Factor Sig. (2-tailed) . .987
N 10 10
Spearman's rho
Correlation Coefficient .006 1.000
ROCE Sig. (2-tailed) .987 .
N 10 10
Here, the rank correlation is 0.006, This indicates that there is a very low positive correlation
between risk and profitability.
Now, we may test the null hypothesis again with the help of SPSS. For a correlation of 0.006 based
on 10 observations, t(8) = 0.017, p = 0.986875 (2-sided p value).
Note: This tool mimics SPSS t-test procedure for correlations.
t0.05, 8 = 2.306 (Table value of t)
Since the actual value of t (0.017) is lower than table value of t (2.306 at 5% level), the null
hypothesis is rejected at 5% level of significance with 8 d.f. and thus the null hypothesis H 0: p = 0
is accepted at 95% level of confidence. Hence, there is no direct relationship between risk and
profitability. This relationship is statistically insignificant at 5% level.
10. CONCLUSION
 From my study, it is shown that there is a significant relationship between profitability and
liquidity of the firm. Therefore, the performance of the company should not be judged only
on the basis of surplus generating capability/profitability measured in terms of return on
sales and investment. This performance has a direct link with the fluctuation of working
capital of the firm. Thus, management should also emphasize the growth and efficiency of
investment in working capital along with the effective management of fixed capital over time.
 The study shows that there is a positive correlation between liquidity and profitability of the
firm. It indicates that the investment in current assets lies in such a specified domain that
increase in liquidity leads to an increase in profitability and vice-versa. Thus, the
management may increase its investment in current assets up to that point of liquidity-
profitability frontier (i.e. according to Gentry's Hypothesis) where the curve changes its
-298-
Ajay Maheshwari
curvature from zero to negative because after that point the relationship between liquidity
and profitability would become negative which is not desirable. Thus, liquidity-profitability
analysis throws some light on the path of investment in current assets by which financial
managers get an insight into the effect of their decisions regarding working capital
investment in the way of achieving short-term as well as long-term goal of the organization.
 The multiple regression analysis in the study shows that the profitability of the firm is highly
influenced by different liquidity ratios taken as the explanatory variables. It indicates that the
different components of working capital influence the profitability differently. Therefore, the
change of composition of working capital should also be analyzed to get a clear picture about
the corresponding change in the profitability of a firm.
 In this study, I observe that there is a significant relationship between risk and profitability.
The enterprise should always try to maintain a reasonable risk with optimum level of
working capital for better profitability. Here the risk actually refers to the ability to meet the
financial obligation (both-short-term & long-term) by the firm. The lack of sufficient liquidity
to meet its short term financial obligations has a considerable contribution towards risk.
Therefore, the management should maintain adequate level of working capital along with the
fixed capital so that the firm can minimize its risk which has a bearing on profitability. This
study relating to liquidity and profitability helps the financial managers to make their
important decisions regarding the investment side of the pool of fund procured from
different providers of capital.
 From the analysis so far it may be concluded that working capital management is very much
useful to ensure better productive capacity, good profitability and sound liquidity of an
enterprise, specifically the PSE in India, for managerial decision making regarding the
creation of sufficient surplus for its growth and survival stability in the present competitive
and complex environment. From our observation it is also clear that the overall financial
health of an enterprise not only depends on the profitability of the concern but also it
depends on the liquidity position of the firm. It is also observed that liquidity and
profitability are two closely related concepts in financial management of a firm in the way of
achieving its desired goals. Moreover, the risk dimension of liquidity cannot be ignored in the
measurement of overall performance of the firm. Thus, it can be said that the efficiency of
financial managers largely depends on their effective utilization of working capital for the
growth and sustainability of the enterprise in the present global scenario. It is obvious that
our study suffers from the inherent limitations in the construction of different financial ratios
under considerations. Further research study may be conducted in this field of enquiry
rigorously to explore the real situation behind the day to day problem of running the wheel of
the enterprises, particularly the PSEs, in India.
REFERENCES
Articles
[1]. Arunkumar, O.N. and Jayakumar, S. (2010). Analysis of Working Capital Management in
Major Public Sector Electrical Industries in Kerala, Udyog Pragati, Vol. 34, No.1, pp. 45-55
-299-
Ajay Maheshwari
[2]. Bhattacharya, H. (1997). Working Capital Management, Sage Publication India Pvt. Ltd.,
New Delhi.
[3]. Chandra H. and Selvaraj A., (2012). Working Capital Management in Selected Indian Steel
Companies, Indian Journal of Finance, Vol. 6, No. 11, pp.5-15
[4]. Jain, P.K., and Yadav, Surendra S., (2007). Working Capital Management Practices: A
Study of Public Sector Enterprises in India, Management and Change, Vol. 11, No.2,pp.1-68
[5]. Khatik S. K. and Jain Rashmi, (2009). Working Capital Analysis of Public State
Undertaking (A Case Study of Madhya Pradesh State Electricity Board, Indian Journal of
Finance, Vol. 3, No. 5, pp. 31-38
[6]. Luther, C.T.R. (2007). Liquidity, Risk and Profitability Analysis: A Case Study of Madras
Cements Ltd. 42(10), 784-789.
[7]. Panigrahi Ashok Kumar, (2012). Impact of Working Capital Management on Profitability-
A Case Study of ACC Ltd, Asian Journal of Management, Vol. 3, No. 4, pp. 210-218
Books
[1]. M. Pandey, “Financial Management”, Vikas Publishing House Pvt. Ltd, pp108-157,808-939
[2]. Kothari and Garg, (2016). Research Methodology: Method and Techniques, New Age
International Publishers, New Delhi, 3rd Ed.
[3]. Prasanna Chandra (IIM B), “Financial Management Theory and Practice”, Second Edition,
Tata Mc-Graw Hill Publications, New Delhi, pp- 245-265
[4]. Sharma, “Working Capital Management”, Surabhi Publications, 103-173.
-300-
Post Purchase Dissonance: A Focus on Consumers
Princi Guptaa, Padma Misrab*

aDepartment of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut, U.P (India)
E-mail Id: princigupta@yahoo.com
bDepartment of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut, U.P (India)
Abstract
PAPER/ARTICLE INFO
According to post purchase behaviour theory, there is a tendency for RECEIVED ON: 18/04/2017
individuals to seek consistency among their cognitions (i.e., beliefs, ACCEPTED ON: 23/06/2017
opinions). When an inconsistency between attitudes or behaviours
(dissonance) occurs, some change must be made in order to eliminate this Reference to this paper
behaviour. In the case of a discrepancy between attitudes and behavior, it should be made as follows:
is most likely that the attitude will change to accommodate the behavior.
Past research on consumers’ post-purchase behavior has focused on Princi Gupta, Padma Misra
understanding satisfaction. However, the consumer-product relationship (2017), “Post Purchase
is much broader. This paper aims to deal with another aspect of post- Dissonance: A Focus on
purchase behavior: the emotional bond consumers experience with their Consumers”, Int. J. of Trade
durables during ownership. and Commerce-IIARTC, Vol. 6,
No. 1, pp. 301-306
Keywords: Behavior, Bonding, Consumers, cognitive, post purchase,
consumer behavior
1. POST PURCHASE BEHAVIOUR

According to Strydom et al. (2000: 79), after purchasing the product, the buyer will experience
some level of satisfaction or dissatisfaction. The marketer’s job does not end when the product is
bought but continues into the post purchase period. Marketers must monitor post purchase
satisfaction, post purchase actions and cognitive dissonance. The buyer’s satisfaction or
dissatisfaction will influence future behavior. A satisfied buyer will purchase the product again
and recommend it to others. Dissatisfied buyers will respond differently. They may stop using the
product, return it, or take some form of public action.
In support, Lamb et al. (2004: 77) state that when buying products, consumers expect certain
outcomes or benefits to accrue from the purchase. How well these expectations are met
determines whether the consumer is satisfied or dissatisfied with the purchase.
1.1 Post-Purchase Dissonance

This is a common consumer reaction after making a difficult, relatively permanent decision.
Doubt or Anxiety – referred as - post-purchase dissonance. The probability of a consumer
experiencing post-purchase dissonance, as well as the magnitude of such dissonance, is a function
of:
 Degree of commitment/irrevocability of the decision.
 Importance of decision to customer.
 Difficulty of choosing among the alternatives.
 Individual’s tendency to experience anxiety.
Post-Purchase Satisfaction: Satisfaction is a function of the closeness between expectations and
the product’s perceived performance. - If performance falls short of expectations the consumer is
disappointed. - If the performance meets expectations the consumer is satisfied. - If the
performance exceeds expectations the consumer is delighted.-Consumer form their expectations
on the basis of messages received from sellers, friends, and other information sources. -The
-302-
importance of post-purchase satisfaction suggests that a product claim must truthfully represent
the product’s likely performance.
2. WHAT IS COGNITIVE DISSONANCE?
People tend to seek consistency in their beliefs and perceptions. So what happens when one of
our beliefs conflicts with another previously held belief? The term cognitive dissonance is used to
describe the feeling of discomfort that results from holding two conflicting beliefs. When there is
a discrepancy between beliefs and behaviours, something must change in order to eliminate or
reduce the dissonance.
2.1 Why is Cognitive Dissonance Important?
Cognitive dissonance plays a role in many value judgments, decisions and evaluations. Becoming
aware of how conflicting beliefs impact the decision-making process is a great way to improve
your ability to make faster and more accurate choices.
2.2 Examples of Cognitive Dissonance
Cognitive dissonance can occur in many areas of life, but it is particularly evident in situations
where an individual's behaviour conflicts with beliefs that are integral to his or her self-identity.
For example, consider a situation in which a man who places a value on being environmentally
responsible just purchased a new car that he later discovers does not get great gas mileage.
2.3 The Conflict
 It is important for the man to take care of the environment.
 He is driving a car that is not environmentally-friendly.
In order to reduce this dissonance between belief and behaviour, he has a few difference choices.
He can sell the car and purchase another one that gets better gas mileage or he can reduce his
emphasis on environmental-responsibility. In the case of the second option, his dissonance could
be further minimized by engaging in actions that reduce the impact of driving a gas-guzzling
vehicle, such as utilizing public transportation more frequently or riding his bike to work on
occasion.
A more common example of cognitive dissonance occurs in the purchasing decisions
we make on a regular basis. Most people want to hold the belief that they make good
choices. When a product or item we purchase turns out badly, it conflicts with our
previously existing belief about our decision-making abilities.
2.4 Causes of Cognitive Dissonance
Strydom et al. (2000: 79) furthermore state that some of the alternatives not chosen may have
attractive features, so that the correctness of the choice is not obvious. Cognitive dissonance is
most likely to occur for major purchases that are difficult to select and undo.
According to Singh (2003: 13), it appears that dissonance is likely to occur under the following
conditions.
 A minimum threshold of dissonance tolerance is passed. That is, consumers may tolerate a
certain level of inconsistency in their lives until this point is reached.
 The action is irrevocable. For instance, when a consumer purchases a new car, there is little
likelihood of reversing this decision and getting the money back.
-303-
 There are several desirable alternatives. Today’s car buyer, for example, has an abundance of
choices among similar attractive models. In fact, research indicates that those consumers who
experience greater difficulty in making purchase decisions, or who consider a wider range of
store and brand options, are more likely to experience greater magnitudes of post purchase
dissonance.
 Available alternatives are quite dissimilar in their qualities (there is little „cognitive overlap‟).
For instance, there are many automobile models, each one may have some unique
characteristics.
3. TYPES OF CONSUMER BUYING BEHAVIOUR
Types of consumer buying behavior are determined by:
 Level of Involvement in purchase decision. Importance and intensity of interest in a product
in a particular situation.
 Buyer’s level of involvement determines why he/she is motivated to seek information about
a certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible to others,
and the higher the risk the higher the involvement. Types of risk are as follows:
 Personal risk
 Social risk
 Economic risk
The four type of consumer buying behaviour are:
 Routine Response/Programmed Behavior-buying low involvement frequently purchased low cost
items; need very little search and decision effort; purchased almost automatically. Examples
include soft drinks, snack foods, milk etc.
 Limited Decision Making--buying product occasionally. When you need to obtain information
about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount
of time for information gathering. Examples include Clothes--know product class but not the
brand.
 Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently
bought products. High degree of economic/performance/psychological risk. Examples include
cars, homes, computers, education. Spend alot of time seeking information and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go through
all six stages of the buying process.
 Impulse buying, no conscious planning.
In support, Lamb et al. (2004: 77) state that when buying products, consumers expect certain
outcomes or benefits to accrue from the purchase. How well these expectations are met
determines whether the consumer is satisfied or dissatisfied with the purchase. Hasty and
Reardon (1997: 154) believe that when people recognize inconsistency between their values or
opinions and their behaviour, they tend to feel an inner tension or anxiety called cognitive
dissonance (postpurchase doubt). Weitz et al. (2001: 363) point out that customers like to believe
they have chosen intelligently when they make a decision. After important decisions, they may
-304-
feel a little insecure about whether the sacrifice is worth it. Such feelings are called buyer’s
remorse or post-purchase dissonance. Etzel et al. (2001: 100) state that cognitive dissonance is a
state of anxiety brought on by the difficulty of choosing from among alternatives. Unfortunately
for marketers, dissonance is quite common, and if the anxiety is not relieved, the consumer may
be unhappy with the chosen product even if it performs as expected. Post purchase cognitive
dissonance occurs when each of the alternatives seriously considered by the consumer has both
attractive and unattractive features.
5. RESEARCH OBJECTIVES
1. To determine the causes of post purchase dissonance.
2. To study post purchase behaviour of consumers.
Research design specifies the methods and procedures for collection of requisite information and
its measurements and analysis to arrive at certain meaningful conclusion at the end of the
proposed study.
I conducted this research with the help of secondary data in order to analyze the post purchase
dissonance: a focus on consumers
The present study examines after purchasing the product, the buyer will experience some level of
satisfaction or dissatisfaction. For this purpose, mainly secondary data has been gathered.
The methodological tools used in the paper are statistical tools like underage.
6.1 Secondary Data
Paper was made with the help of secondary research, which included Internet database, Books,
Research of articles from: Business journals, Magazines, Internet blogs
7. ANALYSIS OF DATA
People tend to seek steadiness in their beliefs and perceptions. The term cognitive dissonance is
used to describe the feeling of discomfort that results from holding two conflicting beliefs. When
there is a incongruity between beliefs and behaviors, something must change in order to eliminate
or reduce the dissonance. Several factors are responsible for creating cognitive dissonance. Some
of these are like values, belief, attitudes, customs, political philosophy, religious value, emotional
reaction, norms, culture, social status, peer group influence etc. People living in a particular
culture may hold a strong belief that he or she should purchase that product that must be
accepted by that particular culture. In purchasing products conflict may arise regarding whether
to purchase or not. Will it be accepted by my society? This situation creates cognitive dissonance.
Besides people may have different values, belief, customs which might create dissonance in case
of purchasing products. A religious value is one of the most important factors which are
responsible for generating cognitive dissonance. People of different religion purchase items based
on their religious belief. Some items are strongly prohibited by some religion and when people
purchasing those, it creates dissonance. In addition to this political value, emotional reactions,
social status also affect purchase decision and thus creating cognitive dissonance.
8. CONCLUSION
Based on literature review, Dissonance and consonance are relations among cognitions, that is,
among options, beliefs, knowledge of the environment, and knowledge of one’s own actions and
feelings. Two opinions, or beliefs, or items of knowledge are dissonant with each other if they do
-305-
not fit together; that is, if they are inconsistent, or if, considering only the particular two items,
one does not follow from the other (Jones and Ince, 2001: 10).
After a consumer makes an important choice decision, he or she experiences an intense need to
confirm the wisdom of that decision. The flip side is that he or she wants to avoid the
disconfirmation. One of the processes that occur at this stage is cognitive dissonance: a post-
purchase doubts the buyer experiences about the wisdom of the choice. Methods of reducing
dissonance and confirming the soundness of one’s decision are seeking further positive
information about the chosen alternative and avoiding negative information about the chosen
alternative (Phipps and Simmons, 2000: 152).
REFERENCES
[1]. Aaker, D.A., Kumar, V., and Day, G.S (2003). Marketing Research. Eighth Edition. New
York: John Wiley & Sons.
[2]. Arens, W.F, (2004). Contemporary Advertising. Ninth Edition. Boston: McGraw-Hill.
[3]. Cognitive dissonance. (2012). In Wikipedia. Retrieved March
14,fromen.wikipedia.org/wiki/Cognitive dissonance.
[4]. Duesenberry, J.S, (1949). Income saving and Theory of consumer Behaviour, Cambridge
Harvard University Press.
[5]. Engel, F. James, (1968). Consumer Behaviour, New David, T. Kollat and York: HoltRinehart
& Winston Roger, D. Blackwell Inc.
[6]. Etzel, M.J., Walker, B.J., and Stanton, W.J. (2001). Marketing. Twelfth Edition. Boston:
McGraw-Hill.
[7]. Ferber (1962). Robert and Research Method in Economics P.J. Verdourn and Business, New
york: Macmillan.
[8]. Festinger Leon, (1957). A theory of Cognitive Dissonance, Stanford University Press,
Stanford, CA.
[9]. Festinger, L. (1957). “A theory of cognitive dissonance”: Stanford University Press.
[10]. Hasty, R. & Reardon, J. (1997). Retail management. Mcgraw-Hill Compnay, Inc., USA:
McGraw-Hill.
[11]. Howard, John A. (1977). Consumer Behaviour-Application of Theory, New york: McGraw
Hill Book Co.
[12]. Icek, Ajzen. (2001). Nature and Operation of Attitudes. Annual Reviews. 52:27-58
[13]. Mahajan, B.M. (1980). Consumer Behaviour in India, New Delhi, Concept Publishing Co.
[14]. Markinl, Rom (1974). Consumer Behaviour–A cognitive orientation, New York; Macmillan.
[15]. Phipps, R. and Simmons, C. (2000). The Marketing Customer InterfaceOxford: Butterworth.
[16]. Singh, J. 2003. Consumer Complaint Intentions and Behaviour. Online.
Availableon:http://www.sharjah.ac.ae/courseware/business_admin/syedaziz/consumer_
behavior/presentations/Post-purchase%20Behaviour.pps. [Accessed on: 11 May 2005].
[17]. Strydom, J.W., Cant, M.C., and Jooste, C.J. (2000). Marketing Management. Fourth Edition.
Cape Town: Juta.
[18]. Weitz JS, Hartman H, Levin SA. (2001). Coevolutionary arms races between bacteria and
bacteriophage. Proc Natl Acad Sci USA 102: 9535–9540.
-306-
BOOK REVIEW
Socio-Economic Development of Bangladesh: Sustainability of
BNF’s Partner Organizations and Beneficiaries
Muhammad Mahboob Ali

Published By: MTC Global, India,
Price: IRS 200.,
Published on : 8th January, 2017.
Book Reviewer
S.K.S. Yadav
Faculty of Commerce & Business Administration, Meerut College, Meerut, (U.P.) India
Email Id: sudhiryadavmeerut@gmail.com
 The Government of the People's Republic of Bangladesh has established Bangladesh NGO
Foundation (BNF) to support the NGOs, with a view to associate the Non-Governmental
Organizations and assigned to take up socio- economic development activities and poverty
alleviation. The country has also been facing massive challenges of feeding the rapidly
increasing population or even to support their livelihood in a sustainable manner. Bangladesh
NGO foundation already disbursed more than 100 Crore taka through partner organizations
out of which 36% is male while 64% is female beneficiary. In the book there are seven
chapters and also appendix is given. Quotation is used as follows: “Micro-savings, not the
micro-credit, can develop the fate of the country’s under privileged people.”-Honorable
PRIME Minister Sheikh Hasina, Bangladesh.
 The basic objectives of the BNF are given as follows:
 To Improve the well-being of the poor, the ultra-poor, the impoverished, the
disadvantaged and the vulnerable communities and/or persons in Bangladesh through
funding the Partner Organizations.
 To finance the POs working for capacity building of the disadvantaged and other
backward sections of the population.
 To appraise the proposals on social development activities submitted to the BNF by the
POs for funding.
The key factors behind Bangladesh’s growth are more working age people, employment
generation, export, infrastructure, control inflation, political stability, work with modern
Socio-Economic Development of Bangladesh: Sustainability of BNF’s Partner Organizations and Beneficiaries
S.K.S. Yadav
technology, foreign reserve, SME sector development and importantly increase of participation of
women in overall economic development along with empowerment of men and women.
To evaluate sustainability of BNF partners the study will use following core factors: Has own
land, Contribution in innovation and production, Fund collection system and regular source of
income. In line with constitutional obligations and international commitments to human rights,
Bangladesh Government wants to develop the country up to a level for which it has taken Vision
2021 and Vision 2041 which main motto is through socio-economic development with social
justice, income inequality and creating purchasing power through economic development.
In the 1st Chapter, ”Background Information and Overview” have been described nicely. In the
literature review at Chapter 2, Review of literature and research gap is given. Chapter 3, consisted
of Objectives, methodology, hypothesis testing and Gantt chart. Chapter 4, analysed the findings
while Chapter 5, includes Field visit, Chapter 6, consist of BNF grant Model and also a social
networking model. Chapter 7, described Discussion, Conclusions, Implications and Future
research directions. Besides references, at appendix two questionnaires of the study were given.
Some pictures were given.
1. SURVEY WORK
Out of 1120 BNF partner organizations, 23 NGOs were selected for survey those who regularly
got installment up to 7th installment; Two self-administered questionnaires were used in the study
to collect the data; Sustainability of BNF grant was also judged by secondary sources of data;
Time period of the study is 15th May 2016 to 15th December, 2016. The study has been conducted
upon 23 different participants from 23 different NGOs of 12 Districts through one questionnaire.
Further from 23 NGOs, we received 526 beneficiaries’ responses out of distributed 624
questionnaires through another questionnaires.
• To determine the factors associated with sustainability of BNF‘s Partner Organization for
Socio- economic Development of Bangladesh.
• To investigate whether BNF fund helps to sustain individual NGOs.
• To investigate whether BNF fund generates income of the partner organization.
• To find out impact on beneficiaries through utilization of BNF’s grant.
• To observe fulfillment of SDG 5(Achieve gender equality and empower all women and girls)
through BNF.
• To find out whether BNF can act as a Financial intermediary between Micro savings and
Micro investment.
Three alternative hypothesis were developed:
 HA1: BNF fund helps to sustain individual NGOs for socio-economic development of the
country.
 HA2: BNF fund generates income for partner organizations.
 HA3: BNF fund generates income for beneficiary’s sustainability.
-308-
S.K.S. Yadav
Comparison between beneficiaries to show the Goal 5 of SDG

Paired Mean Std. Std. 95%
Differences Deviation Error Confidence t df Sig. (2-
Mean Interval tailed)
Lower Up
per
Female 5.067 4.590 1.185 2.525 7.6 4.275 14 0.001
beneficiaries 08
– Male
beneficiaries
The study also observed following results:
Variable Category Sustainable Total Chi Square
No Yes
Do you think that entrepreneurial Strongly Disagree 2 7 9 63.197***
role of men and women can play Disagree 18 116 134
diversified economical Neutral 27 6 33
Factor? Agree 64 179 243
Strongly Agree 33 74 107
Whether this NGO activities leads Strongly Disagree 5 3 8 20.24***
to innovation and growth of Disagree 5 3 8
production? Neutral 1 8 9
Agree 31 139 170
Strongly Agree 102 229 331
Are you currently working in any No 7 7 14 3.7*
area of economic development? Yes 137 375 512
3. OBSERVATIONS: COMMENT FROM NGOS AND BENEFICIARIES
 Though NGOs put emphasis on honesty of fund management of BNF but process of getting
installment is lengthy and regarding monitoring system they do not relatively feel
comfortable.
 Maximum NGOs thought that if BNF grant will increase then their goodwill to get fund from
other NGOs will be easy.
 NGOs think that more involvement of BNF fund importance on digitalization process and
environment process.
 Creating awareness of BNF from Head office has been suggested by two NGOs for which
they suggested news /media /social networking process by the public relations officer.
 Some NGOs think that BNF should come forward with marketing strategy and setting up
business incubator.
 NGOs request for more involvement of implementation of SDGs through BNF by the Govt.
 While visiting different NGOs we found that though one NGO’s address is Dhaka but it is
working at another district.
-309-
S.K.S. Yadav
 Beneficiaries sometimes mislead by Partner Organizations from which organization fund they
are getting.
Author has developed following:
(a) BNF Grant Model:
(Source: Developed by the author).

(b) Model Indicating Community Banking –needs regulatory body to control
(Source: Developed by the author).

Key Recommendations were made by the author
 BNF can work as financial intermediaries between micro savings to transform Micro
investment;
 BNF can establish business incubator for micro and small entrepreneurs;
-310-
S.K.S. Yadav
 BNF can be involved in the process of implementation of some SDGs with more rigorous
manner such as:
 SDG 1-End poverty in all its forms everywhere.
 SDG 6- Ensure availability and sustainable management of water and sanitation for all.
 SDG 8 - Promote sustained, inclusive and sustainable economic growth, full and
productive employment and decent work for all.
 SDG 12-Ensure sustainable consumption and production patterns.
 Unless BNF has its own training institute it can train its manpower through Dhaka School of
Economics for which a MOU can be signed.
In the Conclusion part of the book the author suggested that
• There was significant association between NGOs role for innovation and production and
giving the right training/education. Through the binary logistic regression, the author
observed that 57.2% NGOs who received funds are sustainable without BNF fund.
• Sustainability of BNF’s partner organizations will help Bangladesh to attain sustainable
development goal (SDG) by 2030 as government of Bangladesh is very keen for socio –
economic development.
• BNF grant model is appropriate. NGOs are giving priority to women members by financial
and training support to achieve the fifth Sustainable Development Goal (SDG- 5).
• BNF can participate in developing lifestyle of underprivileged people :
• To rehabilitee refugee of victim of Natural disaster;
• To provide training to Trainers of Autistic personnel and support them;
• To support through creating employment opportunity of Dalit and Indigenous group of
people;
• BNF can train their officials in the field of Entrepreneurial economics/development
/environment through arranging Post graduate diploma or another Master’s degree program
in DScE so that capacity could be built up among the officials.
• BNF can also take a project for preparing jute bags for wholesalers of different products
which will be least value addition and competitive with plastic bags through creating nano
entrepreneurs by giving grant through their POs.
4. FUTURE RESEARCH WORK
A project may be undertaken by the BNF to test the theory developed by Ali(2016) how BNF can
work in the process of social networking and Community banking to transform from micro
savings to Micro investment for betterment of the empowerment of the people.
Professor Dr. Muhammad Mahboob Ali did a good research work. The book may be awarded
for wonderful research work. The language of the book is very lucid except few typing errors. I
recommend this book for research feternity and policy makers. Thus, it is a good piece of research
work.
-311-
BOOK REVIEW
Service Marketing Integrating Customer Focus Across the Firm

Valarie A. Zeithamal, Mary Jo Bitner
Published By TaTa Mc Graw-Hill Publishing company limited, New Delhi
Pages in Book: 668,
ISBN No: 0,-07-053042-4,
Edition: Third
Price Rs 423/-
Book Reviewer:
Bharat Bhushan Sharma

Student of Pre Ph.D. Course Work in Commerce, Meerut College, Meerut (U. P.), India
E-mail: bharat237@ gmal.com
The book “Service Marketing Integrating Customer Focus Across the Firm” is a highly research
oriented book. It helps us to understand the marketing of services. As we know that services
marketing is totally different with the marketing of goods. It‟s provides a yardstick for
understand the marketing of services and it‟s vital role that services play in the economy and its
future.
This book is divided into Six Parts. Part one, deals with focus on the customer. Part Two deals
with listening TC customer requirements. Part Three deals with aligning strategy, service design,
and Strategy Part Four deals with Delivering and performing service Promises. Part five deals
with managing service Promises. Part six deals with financial and economic effect. The matter
spreaded in above six Parts has been explained in Eighteen chapters The review of these chapters
is as follows:
CHAPTER 1: SERVICE DELIVERY
The author in this chapter discusses about the services as well as new ways to deliver service.
Service marketing is totally different with marketing of good in term of tangible, in term of perish
ability and heterogeneity etc. The technology is changed the face of customer Services, the
internet is also providing services. To understand the services marketing it is also need to
understand or study the marketing mix for service Product, place promotion, price, people
physical evidence and process.
CHAPTER 2: CONSUMER BEHAVIOR IN SERVICES

The second chapter consist with the consumer Behaviour for the consumption or utilization of
services. First we have to focus on recognition of needs of the customers and information search
than evaluation of alternatives, go for purchase and assumption. In India, we know that there are
number of customers which affected the behaviour of consumer.
CHAPTER 3: CUSTOMER EXPECTATIONS OF SERVICE
The book also covers the different types of expectations for service performance. Authors have
also written about most important current issues surrounding customer expectations. This
chapter discusses that customers hold different types of service expectations: (1) Desired service,
which denotes what customers want (2) adequate service, what customers are willing to accept
and (3) predicted service, what customers believe they are likely to get.
CHAPTER 4: CUSTOMER PERCEPTIONS OF SERVICE
One of the author discusses customer perceptions of service by introducing two critical concepts:
customer Satisfaction and service quality. After go through the chapter we found that author gave
more emphasize over the customer Satisfaction. The second most important purpose of the
chapter was „Moments of truth”, as the foundations for both satisfaction and quality. Finally, the
authors also described strategies of firms used to enhance customer perceptions of service quality
and increase customer satisfaction
CHAPTER 5: UNDERSTANDING CUSTOMER EXPECTATIONS AND PERCEPTIONS THROUGH
MARKETING
The authors have highlighted the importance of marketing research as well as the role of
marketing research in understanding customers perceptions and expectation. Important topics in
researching service including developing research objectives and presenting data. Marketing
research is very helpful to fulfil the gap between customer expectation and company standard.
CHAPTER: 6: BUILDING CUSTOMER RELATIONSHIP
In this chapter authors focused on benefits through long-term relationship with the customers. To
maintain long-run relationship it has to follow once important relationship strategies like effective
work on Segmentation to identify who the organization wants to have relationship, regular
development of services and up to date customer database. This chapter also focused on the
concept like “The customer is not always right,” because long-term relationship with the
customer can be extremely profitable, firm should not attempt to build relationship with just for
the time being with any customer.
CHAPTER 7: SERVICE RECOVERY
The chapter consists with the response of the organization or step taken by the organization in
response to a service failure. The Author also discussed the causes of service failure like delivered
late or too slowly, unavailability of service, poorly executed and employee may be rude etc. This
chapter also discussed the importance of an effective service recovery strategy for enhance the
positivity among the customers.
In this chapter authors also discussed about the response of customers to service failure and why
some complain while other do not. Some strategies for service recovery are as-(1) right time
delivery, (2) encouraging complaints (3) quick response and chapter ended with service
quarantines as a tool used by many firms.
-313-
CHAPTER 8: SERVICE DEVELOPMENT AND DESIGN

The authors have highlighted, the challenged inherent in service design because services are
intangible and heterogeneity in nature so, develop a service is very complex and challenging. The
new service development process has presented in the chapter includes nine stages, starts form
Business strategy development or review and ends with post introduction evaluation of new
service.
Service Blue print is useful technique in the new service development process. A Blue print can
make a complex and intangible service as visual depiction at all level. A new Service
Development Quality Function Development (QFD) was introduced as another tool for linking
customer requirements to internal elements of service design.
CHAPTER 9: CUSTOMER – DEFINED SERVICE STANDARDS
The chapter consists of discrepancy between perception of customer expectation and the
standards they set to deliver to these expectations. The authors also discussed some necessary
factors for appropriate service standers as standardization of service behaviour and actions. The
chapter also defined the process for development of customer defined standards. Unless the
operations, standards are defined by properties of customer
CHAPTER 10: PHYSICAL EVIDENCE AND THE SERVICES CAPE
The Chapter focused of Physical evidence in forming customer and employee perceptions. Since
services are intangible and they are often produced and consumed at the same time. It is very
difficult to compare and evaluate before their purchase. It helps to customer to setting their
expectations before purchase.
Primarily, chapter focused on the services cape-physical surroundings or physical facility where
the service produced, delivered and consumed. This chapter provides the framework for services
cape to understand the behavior of customer and employee. It is very crucial for firm to think
strategically about the management of the tangible evidence of service, physical evidence can be
part of an effective delivery of service.
CHAPTER 11: EMPLOYEES’ ROLES IN SERVICE DELIVERY
The author has focused on human resource development for delivery of service. Many services
delivered by people to people in real time. Employee faced the customer and tried to satisfying
them by delivering expected serviced. Authors also focused on understanding of the importance
of service employee and the nature of their rules in the organization. The Chapter focused on
Develop people to deliver service Quality by focusing on them a firm can move towards a true
service culture.
CHAPTER; 12: CUSTOMERS ROLES IN SERVICE DELIVERY
This chapter consists the role of customer in service delivery as the input of the customer is very
important for the organizations productivity. The chapter also focused on developing the
strategies to enhance the customer participation. The service manager faced this issue because
their customer are often present and active partners in production of service.
CHAPTER 13: DELIVERING SERVICE THROUGH INTERMEDIARIES AND ELECTRONIC CHANNELS
The Chapter highlights the benefits and challenges of delivering service through intermediaries.
Because service is intangible and perishable, inventories not exist, making whorehouses is
dispensable, so many channels available to goods produced are not feasible for service firms
-314-
chapter described the four forms of distribution in service as franchises agents, brokers and
electronic channels , though these channels firm delivered the services Successfully.
CHAPTER 14: MANAGING DEMAND AND CAPACITY
The chapter helps to understand the issues of managing supply and demand in capability. The
chapter presented number of strategies for matching supply and demand. The basic strategies
consist two heads demand strategies and supply strategies. In services, it is very complex
situation to manage the demand and supply because inventories are not there. The last section of
chapter discussed about situation, where it is not possible to align supply and demand strategies
for effectively managing through waiting lines.
CHAPTER 15: INTEGRATED SERVICES MARKETING COMMUNICATIONS
This chapter consists with delivery of service and external communication which had a strong
effect on customer perception of service quality. The chapter also helpful to understand the role of
integrated service marketing communications. The authors discussed the problems in marketing
communication and provided the four strategies for overcome those problems (1) Managing
service promise (2) Managing customer expectations (3) Improving customer education, (4)
Managing internal marketing communication. By discussed the difficulty of exceeding
expectation of customer on regular basis and recommended ways that companies can avoid
problems in promising to delight customers.
CHAPTER 16: PRICING OF SERVICES
The authors have focused on the prices of services which are differ from the price of goods. The
authors discussed three major ways which showed the difference between the price of goods and
price of services (1) Monetary price is not only relevant price for service customer (2) Price is
important for quality in services (3) customers have reference for services. The chapter also
discussed common pricing strategies like –cost based, competition and demand based. The
chapter also discussed about customer perceptions of value and suggested appropriate pricing
strategies, which meet with the customer definition.
CHAPTER 17: THE FINANCIAL AND ECONOMIC EFFECT OF SERVICE
The Chapter highlights the relationship between service and profitability. The chapter used a
conceptual framework to link all the variables:
(1) The direct relationship between service and profit (2) offensive marketing effects of service for
more better customers, (3) Defensive marketing effects of service on profits (4) Perceptions of
service, Behavioral intentions, and profits, and (5) the key drives of service quality, customer
retention and profits. The chapter closed by discussion of Balance performance score card for
corporate or company performance measurement.
CHAPTER 18: THE INTEGRATED GAPS MODEL OF SERVICE QUALITY
The chapter presented the integrated gaps model of service quality framework for understanding
and important in service quality. Effective service marketing is a complex task, to remove the gap
between customer expectation and perception a company need to end this gap in order to
maintain long-term relationship by satisfying their customers. To end this gap the model suggests
that four other gaps need to be filled up.
-315-
Gap 1: Not knowing what customer expect.

Gap 2: Not selecting the right service design and standards.
Gap 3: Not delivering to service standards.
Gap 4: Not matching performance to promise.
Overall, Valarie A. Zeithaml and Mary Jo Bitner‟s book on Service Marketing is good book. The
book is extremely helpful to understand the ever-growing importance of services and the unique
challenges faced by managers of services. Had the book taken into account all these components,
It would become a more comprehensive guide for both students and business profession also to
understand the rapidly growing the business of services.
-316-
BOOK REVIEW
Consumer Behavior
Leon G. Schiff Man, J. Wisenbilt, S.R. Kumar
Published by: Pearson Education Inc.
Pages in book: 501
ISBN NO. 978-93-325-5509-9
Edition: Eleventh
Price: Rs. 450.00
Book Reviewer:
Jitesh Singh
Pre Ph.D. Course Work in Commerce, Meerut College Meerut, U.P. India
E-mail Id: jessica.nirmal2007@rediffmail.com
Authors in this book entitled „CONSUMER BEHAVIOR‟ has tried to focus on the leaping success
towards the vital synthesis of media, entertainment content and marketing. As in past marketers
used Medias‟ “audience profile” in order to decide where to place „one size fits for all‟. But in
today‟s dilemma there is dynamic-ad-server which customizes consumers‟ internet browsing
behavior. This book has been categorized into five sections and divided into 15 chapters which
open with a hands – examples which certainly satisfy all the queries and doubts which were-
coming before reading in the minds of readers.
In chapter 1 of part one chapter‟ Technology driven consumer behavior „ in this chapter the
authors have tried to make out clear view about evaluation of marketing concept and connect it
with internet and technology to improve marketing transaction by adding beneficial value to both
marketer and consumer. And also they tried to establish relation between customer values,
satisfaction retention and technology revolution in order to understand consumer behavior to
make decision for varied products.
Chapter 2 of part one is based on segmentation , targeting and repositioning in respect to
consumers , which make us easy to understand the gap between market segmentation , targeting ,
positioning and select wide and best target area. It gives clear basis for segmentation which
includes demographic, product usage, psychographic etc. In this chapter more attention is paid
on behavioral targeting and its key roles in today‟s marketing and also understands the product‟s
differentiation repositioning.
Consumer Behavior
Jitesh Singh
Chapter 3 of part two is based on „the consumer as an individual‟. In this chapter has highlighted
the dynamics of motives, needs, goals which have an impact on consumer behavior, also made
this clear by stating the various theories of philosopher and researchers such as Maslow‟s
Hierarchical theory of Needs, Freud‟s theory of Psychoanalytic theory, Trait theory, and
personification of products and brands to peruse consumer behaviour in order to attract more
consumer and influences their buying behaviour. Author explained it more clearly by giving
concept of self image and its effect on buying references of consumer.
In chapter 4 of part two about consumer perception here authors tried to throw light on element
of consumer perception and its importance in decision-making. It also made clear why consumer
process only a small amount of information which they receive. Very smartly authors have solved
the puzzle that how consumer organise consumption related information and given many
genuine reasons with latest trend in market followed by consumers. They also explains how and
why consumer “adds” are bias to stimuli and its tendency implications for consumer marketing.
They clearly stated the elements of consumer‟s imagery and determines the quality of product
and services according to present trend of consumer behavior. And somehow focus on
consumer‟s perceived risk and ways to handle these aligned risk within it.
In chapter 5 part two about consumer learning in this author explain the old concept of learning
through simple definitions such as behavioral learning, classical conditioning, stimulus
generalization with examples to make clear the tough concepts such as instrumental conditioning,
observational learning and cognitive learning which is a frame work for consumer decisions. He
also understand consumer involvement through passive learning and throws light on these
various learning elements impact on purchasing decision of consumers and retention of goods
and services.
In chapter 6 of part two authors discussed about consumer attitude formation and change in
nature. It make somehow clear view about what is attitude , how are they formed and their role in
buying behaviour, they also gave terminology „tri component‟ in context to attitude model and its
implications in brief with lively examples from market. However, they concluded by giving
various illustrations that how attitude can proceed behaviour in form of cognitive dissonance and
the resolution of conflicting attitudes and made people to understand the reason people assign
casualty to events .
In chapter 7 of part three „communication and consumer behaviour‟. Author highlights the
elements and persuasive capabilities of communication, as well as barriers of communication by
clearly stating its elements. They tried to distinguish between broadcasting and narrowcasting by
giving instances of various media and their channels. In context to various marketers authors
explained how to frame persuasive message effectively and also stated its prominent pros and
corns.
In chapter 8 of part three which is entitled „from print and broadcast media to social and mobile
media. In this authors felt that there was strategic superiority of impression over segment based
targeting and also made this concept very clear by giving example of very famous media
company ‟google‟ that how its advertising capability affecting so wide range of consumer.
Therefore, they stated the dynamics of social media and, its technical and promotional advantage
over old medias. Authors represented various instances of mobile media in eyes of both
-318-
Consumer Behavior
Jitesh Singh
consumers and marketers. They focused on effectiveness of traditional advertising and social
media through advancement of print and broadcasting media.
In chapter 9 of part three give a glance about reference group and word of mouth. This section
discussed about credibility of reference group and word of mouth and their effects on consumer
behavior. Authors analysed important aspects about the persuasive strength and credibility of
spokes person, models, salesman, vendors, media, or endorsers. This section underlines the
dynamics and measurement of leadership which have a vital influence on others or even might
affect decision of buyers. The authors explained the strategic applications, advantages, and
potential perils of „word of mouth‟ along with diffusion of innovations in market.
In chapter 10 of part four the family and its social understanding discussed, the families have
been observed as a satisfied consumer or socialised agent. In order to make family a positive
customer and further transform into a satisfied agent marketers must understand the family life
cycle, their decision making , consumption related roles in respect to traditional or non-
traditional family. At last, authors clearly stated the impact of social satisfaction on consumer
behaviour by measuring social class and segment accordingly.
In chapter 11 of part four the cultural influence on consumer behavior. In this chapter the authors
highlighted the cultural role, dynamics, evolution, impact on priority and behavior of consumer.
To make it more easy authors focus on various other field such as language , geographical area ,
symbols, rituals and other expression of cultural field. And showed the impact on consumer
behavior on which they are attached with various rituals or artifacts.
In chapter 12 of part four about cross cultural consumer behavior an international perspective
here author highlighted the importance of globalisation and capturing consumer attention all
around the world , for example various companies offer varied products as per requirement of
global consumer author also make clear picture about varied values and different customs of
consumers in order to develop effective market technique and understand global marketing
opportunities to flourish the product hence more wide area for product.
In chapter 13 of part five which is about consumer decision making and diffusion of innovations.
In this chapter authors focused on how gifting behaviour have an impact on dynamics of buying,
and on consumer decision making. Here gifts consider purchase for oneself as it resembles the
level of consumer. They also focused on innovative offering gain acceptance within market
segments and how consumer accepts or neglects new product or services.
In chapter 14 of part five „marketing ethics and social responsibility‟, here they about trend
nowadays being accepted by company which have been shifted from profit motive to social
responsibility hence followed some marketing ethics. Here authors have given some examples
discussed relating market exploiting consumer by targeting children and encouraging habits like
over eating , false appearance and unwise buying and throw some question in mind of reader
which make them aware of nature of consequences of provocative advertising, and how
consumer privacy abused and mention some measure to stop such practices.
In chapter 15 of part five in this author concluded the book on consumer research that how to
develop research objectives, collection of data through primary and secondary sources. They
stated about various research methods which are categorized into qualitative and quantitative.
-319-
Consumer Behavior
Jitesh Singh
The authors explained the idea about making combination of both qualitative and quantitative
research for analysing data and hence giving research reports based on observations.
The authors have given lots of instances especially from latest trends which are aired on TV.,
websites, mobile, newspaper and all other present media which makes a reader to easily
understand the concept without any ambiguities. The best aspects of this book are good paper
quality, lot of examples, charts, tables, the review and discussion of questions accompanied with
which are so self explanatory. This book can be said “ultimately superb” book on consumer
behavior. Last but not least the fonts, and font color of titles is somehow very eye stressing
otherwise book touches the horizon in world.
-320-
AUTHOR GUIDELINES
As a guide, papers must be between 3,000 and 3,500 words in length and must be contained within 12-
15 pages including tables and references. A title of not more than fifteen words should be provided.
Please use the checklist provided below to ensure that your paper meets the requirements prior to
publication. In case of noncompliance to these guidelines, your paper will be excluded from being
published.
Please send us your paper in word format, not PDF files.
All submitted Research manuscripts must follow pattern given below:
Article Pattern-
 Title (Maximum 120 Characters)
 Author Name, Affiliation and Email ID
 Abstract (Maximum 200 words)
 Keywords (Maximum Five)
 Introduction
 Literature Survey
 Problem Definition
 Methodology / Approach
 Results & Discussion
 Conclusion
 Future Scope
 References
 Each Author (s) Short Profile with Photo(s)
 The covering letter should list the name, affiliation, e-mail addresses and telephone numbers of all
authors with brief abstract and key words. The corresponding author should be indicated.
INSTRUCTIONS FOR PREPARATION OF MANUSCRIPTS
XXXX1*, YYYY2 and ZZZZ3

1Department, Affiliation, City, Country, Email ID
________________________________________________________________________________________________
Received: Accepted:
________________________________________________________________________________________________
Table 1: Font Sizes and Styles
Item Font Size Font Style
Title 18 Bold, Capitals, Times New Roman
Authors’ names 12 Regular
Affiliations, addresses, e-mail addresses 9 Regular
Abstract 9 Bold
Section Headings 10 Bold
Body Text 10 Regular
References 9
Fig./Table Caption 10 Regular
Reference bullet [1], [2] ... Regular
Line Spacing 1.0 pt
Paper Size A4
DETAILED AUTHORS’ GUIDELINES
Abstract:
The abstract is typically a single paragraph. The abstract should be considered as an independent
document, so that the abstract does not rely upon any material in the body of the report and,
similarly, the body of the report does not rely upon any material in the abstract. The first sentence
should clearly state the objective of the experiment. If the experiment is based upon a hypothesis,
which is greatly preferred, the hypothesis should be stated and followed with statements
describing its basis and evaluation. The subsequent sentences describe how the investigation was
carried out. The following sentences describe, with as much precision as possible without being
verbose, the results of the experiment. The final sentences describe the significance of the results
and the impact of this work on the general field of study.
Keywords: Five most important terms that describe your research domain and specific problem
area investigated.
1. INTRODUCTION:
The introduction requires a short review of the literature pertaining to the research topic. The
introduction is then best constructed as a descriptive funnel, starting with broad topics and
slowly focusing on the work at hand. Perhaps three to four paragraphs are needed. One approach
may be to start with one or two paragraphs that introduce the reader to the general field of study.
The subsequent paragraphs then describe how an aspect of this field could be improved. The final
paragraph is critical. It clearly states, most likely in the first sentence of the paragraph, what
experimental question will be answered by the present study. The hypothesis is then stated. Next,
briefly describe the approach that was taken to test the hypothesis. Finally, a summary sentence
may be added stating how the answer of your question will contribute to the overall field of
study.
2. LITERATURE SURVEY:
This section includes a short history or relevant background of the research area being addressed
or Research Gap. All citations given in Review of Literature must be detailed in Reference Section.
The way how detail of reference is to be mentioned may be referred in below mentioned Heading
“Reference”. All citations must be given in Reference Section.
3. METHODS:
This section should be a straightforward description of the methods used in your study. Each
method should be described in a separate section. Begin, in a single section, with a statement of
the materials used in the study, indicating the vendor and vendor contact information for each
material. This information is critical so that readers have the capability to repeat the work in their
own institutions. Next describe, in separate sections, each key procedure and technique used in
the study. Keep explanations brief and concise. If a specific experimental design is utilized,
describe this design in the second section of the Methods, after the materials section. Similarly, if a
theoretical or modelling component is utilized, it should also be incorporated in the initial portion
of the Methods. Finally, remember to describe the statistical analysis methods that were utilized
to analyze the results, most likely in the final section of the Methods section. Although it is
typically not recommended, the use of the passive voice is probably appropriate in the Methods
section.
4. RESULTS:
The Results section presents the experimental data to the reader, and is not a place for discussion
or interpretation of the data. The data itself should be presented in tables and figures (see below).
Introduce each group of tables and figures in a separate paragraph where the overall trends and
data points of particular interest are noted. You may want to indicate the placement of a
particular table or figure in the text. For experimental studies, key statistics such as the number of
samples (n), the index of dispersion (SD, SEM), and the index of central tendency (mean, median
or mode) must be stated. Include any statistical analysis that was performed, and make sure to
indicate specific statistical data, such as p-values. Note that each table and figure in the paper
must be referred to in the Results section. Be succinct.
5. DISCUSSION:
The discussion section, often the most difficult to write, should be relatively easy if the previous
suggestions have been followed. In particular, look to the last paragraph of the introduction. If the
work has characterized a phenomenon by studying specific effects, use the results to describe
each effect in separate paragraphs. If the work has presented a hypothesis, use the results to
construct a logical argument that supports or rejects your hypothesis. If the work has identified
three main objectives for the work, use the results to address each of these objectives. A well-
defined study that is described in the Introduction, along with supporting results that are
presented in the Results section, should ease the construction of the Discussion section.
Begin the Discussion section with a brief paragraph that again gives an overview to the work.
Summarize the most important findings and, if applicable, accept or reject the proposed
hypothesis. Next, identify the most interesting, significant, remarkable findings that were
presented in the Results section, and contrast these findings in light of other studies reported in
the literature. It is often informative if a discussion of the potential weaknesses of the
interpretation is also included. Finally, at the end of the Discussion section, consider the other
works in the literature that address this topic and how this work contributes to the overall field of
study.
6. CONCLUSIONS:
Again, first introduce the work and then briefly state the major results. Then state the major
points of the discussion. Finally, end with a statement of how this work contributes to the overall
field of study.
7. ACKNOWLEDGEMENTS:
Provide a brief statement acknowledging the efforts of any participants or consultants who are
not included as authors of the manuscript. State all of the funding sources for the work, ensuring
that the statement adheres to the guidelines provided by the funding institution.
8. REFERENCES:
Include all references that have been cited in the text. The references should be well considered,
so that they contain all key sources in the field as well as previous studies that support or
motivate the present work. However, do not include extraneous references in an effort to simply
cite particular authors or journals. It may be appropriate to cite previous publications from your
own laboratory, but this should be done judiciously.
You must use the reference format that is mandated by the journal to which you are submitting
the manuscript. Software packages make citing literature particularly easy. Use small (lower case)
letters to denote them.
Example: Yadav (2005a), Yadav (2005b).
Other references should follow the following formats
Books:
[1] Yadav, S.K.S. (2008), Principles of Economic Development, Arvind Prakashan, Meerut, India.
Business Magazine:
[2] "Three Letter Acronyms That Mean Business", (April 2007) Benef of Business- IT Magazine,
SFY Group Vol-1 Issue 4
News Paper:
[3] Times of India, New Delhi Edition, Column 3, Page-7, Date 08/07/08
Chapters in Edited Books:
[4] Gupta, S.K. (2008), 'Development of Financial Services'. In R. Prasad (Ed.) Framework of
Financial Services (pp. 45-70). New York: Free press
Journals & Periodicals:
[5] Gupta, S. and Sharma, T.P. (2010), 'Stock Market and Indian Economy', International Journal of
Trade & Commerce-IIARTC, Vol.1, No.1, pp.08-24.
Reports:
[6] National Stock Exchange (2010), Report of NSEI Committee on Delisting of Shares-
Chakarvarty Committee.
Electronic/Internet Information
WEBSITES: Pearson, R. (2010) Online Development study guide,
http:\\www.dev.ac.usa\schools\skills\refern.htm, Date accessed 10/07/2010.
CD ROMS: Lewis, D. (2009) A Guide to Financial Literature, CD-ROM, USA: Sunshine Publishers.
Use (ed.) for one editor, and (ed.s) for multiple editors.
When listing two or more works by one author, use XXXX (YYYY,YYYY), such as after Agarwal
(1997, 2001) etc, in chronologically ascending order...
Indicate (opening and closing) page numbers for articles in journals and for chapters in books.
Note that italics are used only for titles of books and names of journals. Double quotation marks
are used for titles of journal articles, book chapters, dissertations, reports, working papers,
unpublished material, etc.
Bibliography:
Each Author (s) provide their short profile with photo(s).
Tables and Table Captions:
Tables should generally be included in a separate section after the References section. The tables
should be headed with a caption and title in bold (i.e., Table 1: Material Properties), followed by
a sentence or two that describes the content and impact of the data included in the table. The table
itself should be formatted so that the data is clearly presented and easily interpreted by the
reviewer, however the table is likely to be reformatted by journal to conform to its standards.
Make sure that each table is referred to in the manuscript text; this will most likely occur in the
Results section, but may also occur in the Introduction, Methods, or Discussion sections.
Figures and Figure Captions:
As with the tables, figures can also be placed in a separate section after the References section.
Again, clarity is the key factor, especially with images and graphs. All images should be as large
as possible, and include accurate scale bars. The graphs should be large, with data points and axis
labels in a large font. Legends can be included within the graph or in the caption. All figures need
a caption. The caption should identify the figure in bold (i.e., Figure 3), state a brief title to the
figure, succinctly present the significant result or interpretation that may be made from the figure
(this may be modified from the Results or Discussion section text), and finally state the number of
repetitions within the experiment (i.e., n=5) as well as what the data point actually represents (i.e.,
the data are means and the associated error bars represent standard deviations). As with the
tables, make sure that each figure is referred to in the manuscript text.
Authorship and Originality:
Finally, we have assembled some points to consider in regards to authorship and originality of
manuscripts submitted for publication
Plagiarism is unfortunately a major concern among editors and publishers. Therefore, be certain
of the sources of all data and text. If the article is based upon prior work, be sure to reference that
prior work properly. An original research paper can not contain previously published data in any
form without a proper citation.
Authorship and the order of authorship must be agreed upon by all of the authors and any other
personnel who participated in the work but are not included as an author.
It is not permissible to submit a work that is a translation of a previously published paper.
NOTE:
Author(s) while preparing Manuscripts must strictly adhere Authors’ Guidelines. If manuscript is not as
per Authors’ Guidelines it will be returned back to the author(s). Manuscripts will be accepted with the
understanding that they have not been submitted, accepted or published elsewhere. If copyrighted material
is used, the author should give prior information to the editor-in-chief and submit the necessary copyright
release along with the manuscript. IJTC-IIARTC will not be responsible for any charges for obtaining the
necessary copyright release, if any.
All the manuscripts will be peer-reviewed and only the recommended manuscripts by reviewers will be
published. Authors may be asked for revision of the manuscript within a stipulated time period. The revised
manuscript should be submitted along with cover-page outlining the changes introduced to the manuscript.
After the submission of the revised manuscript, proofs will be sent to the corresponding author. Authors
should check their proofs very carefully and return within three days of receipt. No interim requests will be
entertained.
International Journal of Trade and Commerce- IIARTC is a Journal of Social Science and
Humanities. It is biannual (Jan-June & July-Dec.) and bilingual Journal of Indian Institute of
Advance Research in Trade and Commerce.
Copyright of the published research papers vest in the editors. The objective is to ensure full
copyright protection and to disseminate the research papers, and the Journal, to the widest
possible readership. Authors may use the research paper elsewhere after obtaining prior
permission from chief editor.
Research Papers related to humanities and Social Sciences are invited for Publication in the
Journal. Research Papers, Book Review, Subscription and other query should be sent to :
Dr. S. K. S. Yadav, 121/1A, Gali No.-2, Pragati Nagar, Meerut, Pin-250001, Mob. 09411023524,
you may also e-mail your research paper and suggestions at sudhiryadavmeerut@gmail.com
All the articles are published only after the proper approval of the Board of Editorial Advisors
and the Blind Review Committee. The editors cannot be held responsible for errors and any
consequences arising for the use of information contained in this Journal. Website:
www.sgsrjournals.co.in
STATEMENT ABOUT OWNERSHIP & OTHER PARTICULARS ABOUT
ISSN-2277-5811(PRINT) & ISSN- 2278-9065(ONLINE)
FORM IV
(As Required by Rule 8 of Registrar’s Act)
Place of Publication : Meerut/Pune

Periodicity of Publication : Bi-Annual
Publisher : Indian Institute of Advance Research on Trade and
Commerce-IIARTC
Nationality : Indian
Address : 121/1A, SCHOOL LANE, PRAGATI NAGAR, MEERUT, U.P.
PIN: 250001
Owner’s Name : Dr. S.K.S Yadav
Printer’s Name and Address : M/s Shree Prakashan SR No. 48/1/17,
Waghjai Nagar Ambeygaon(KH) Katraj, Pune-46
Maharashtra, India, Mob. +91-9422566159
I, S.K.S. Yadav hereby declare that the particulars given above are true to the best of my
knowledge and belief.
30th June, 2017 Dr. S. K. S. YADAV

Reg. No. 2121 (Delhi)
INTERNATIONAL JOURNAL OF DEVELOPMENT STUDIES (IJDS) ISSN 0975-5799

Bi-Annual Journal of Gandhian Institute of Studies, Varanasi (INDIA)
Fellow Colleagues, Scholars and friends

It gives me enormous gratification and great privilege while approaching a person of letter like
you who has great exposure in DEVELOPMENTAL STUDIES. It gives me immense pleasure to
INVITE YOU to contribute A RESEARCH PAPER for the bi-annual edition of this Global Journal
of International Journal of DEVELOPMENT STUDIES (IJDS) is a peer-reviewed multi disciplinary
journal. With our inception in 2009 we have successfully brought out five numbers with
substantial papers, articles and manuscripts in our Journal. The themes are multidisciplinary in
every Edition of “DEVELOPMENT STUDIES”. It includes all the areas of Science, Medical and
Health, Political economy, Social, Cultural, Organizational and cognitive impacts of Development
Economics, Trade, Commerce, Management, Economics, Geography, Sociology, Law, Women
Studies, Center for Agriculture and Rural Development, Globalization, NREGA, Humanities,
Cooperative Management, Retail, FDI, Sustainable Development inter-alia, Information
Technologies, Engineering and various Multidisciplinary concerns and advances currently being
discussed around the world. This publication expands the frontiers of the body of knowledge
regarding the impact of development economies, assisting researchers and practitioners to work
out more effectual systems for managing the human development. The forthcoming issue would
be an attempt to reach out to the academicians, industry professionals, policy makers, citizens,
opinion leaders, media persons working on the issues related to economy. This provides
opportunity to scholars to knock their intellectual capacities for personal and professional
expansion. The Journal is going to cater a huge number of articles. There are lot of academicians
and working professionals from India as well as other part of the world who are directly as well
as indirectly associated with it. The theme can be from any field. The Editorial Team of this
journal is a battery of well-established academics with substantial publication. I request you to
submit abstract (250 words in Times New Roman) with full paper of at least 10 to 15 pages and
sent it by e-mail/CD and a hard copy by post as early as possible up to 30th April for our June
volume and 30th October for December volume for our numbers eagerly awaited all over India
and outside India. We shall be highly grateful to you for kind cooperation and help extended by
you towards the mission of expanding knowledge undertaken by International Journal of
Development Studies (IJDS) ISSN: 0975-5799. The Journal welcomes expressions of all shades and
opinions.
Full Information about the Journal Visit: www.rsmeena.com/ijds
All correspondence should be addressed to:
Dr. R.S. Meena, New F-1, Hyderabad Colony, Banaras Hindu University, Varanasi-221005 (India)
Email: ijdsindia@gmail.com Resi.: 91-0542-2575724 (O): +91-0542-6701307[Direct], Mobile:
(+91) 09415813184
ABOUT THE AUTHORS
Md. Zahir Uddin Arif, Department of Marketing, Faculty of Business Studies, Jagannath University, Dhaka-1100,
Bangladesh
Murad Hasan, Department of Business Administration, Green Business School, Green University of Bangladesh, Dhaka,
Bangladesh
Mohammad Maksudul Karim, Department of Management Studies, Comilla University, Comilla, Bangladesh
Faisal Bin Hamad, Department of Accounting, College of Business Administration, University of Hail, Kingdom of Saudi
Arabia
M. Shekar, Department of Accounting College of Business Administration, University of Hail, Kingdom of Saudi Arabia
Thota Haripriya, Research Scholar, JNTUH, Telangana State, India
Y. Rama Krishna, Malla Reddy College of Eng. Tech., Dhulapally, Hyderabad, Telangana State, India
Sindhu, School of Management Studies, JNTUH, Telangana State, India
T.S. Tomar, Department of Commerce, S.M.J.N.(P.G.) College, Haridwar, U.K., India
Sunil Kumar, Department of Commerce, D.A.V. (P.G.) College, Dehradun
Arihant Jain, Department of Commerce, D.A.V. (P.G.) College, Dehradun
Vikas Gupta, Delhi School of Management, Delhi Technological University, New Delhi, India
Ashok Kumar, Sr. Manager Pilots and Operational Research, Population Concern International (PCI), Patna-Bihar, India
Sanjay Kumar, Department of Defense Studies, Meerut College, Meerut, (U.P.) India
Mohd. Rizwan, Associate Professor, Dept. of Defence Studies, Meerut College Meerut (U.P.)
Mukesh Kumar Jain, Department of Commerce, M.M.H. College, Ghaziabad (U.P.) India
S.K.S Yadav, Faculty of Commerce & Business Administration, Meerut College, Meerut, U.P., India
Abhinav Chaudhary, Faculty of Commerce & Business Administration, Meerut College, Meerut, U.P., India
Himanshu Agarwal, Associate Professor, Faculty of Commerce and Business Administration, D. N. College, Meerut, UP –
250002, India.
Princi Gupta, Department of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut, U.P
(India)
Padma Misra, Department of Management & Commerce, AVGSIMC, Swami Vivekanand Subharti University, Meerut,
U.P (India)
Preeti Singh, Department of Management Studies, JIMS, New Delhi, India
Archana Rani, Department of Drawing & Painting, R.G. (P.G.) College, Meerut (U.P.) India
B. Kumar, Faculty of Commerce & Business Administration, Meerut College, Meerut (U.P), India
Yogesh Kumar, Department of Commerce & Business Administration, A.S. College, Sikandrabad, (U.P.) India
Kanika Maheshwari, Meerut College, Meerut (U.P.) India
Mani Arora, Govt. Girls Degree College Kharkhuda, Meerut, (U.P.) India
Deepti Kanojia, Multanimal Modi College, Modinagar, (U.P.) India
Vinayaka Tripathi, E-mail Id: tripathivinayak3@gmail.com
Madhusoodan Tripathi, Department of Commerce, SSV (PG) College, Hapur Affiliated to CCS University, Meerut, (U.P.) India
Patanjali Tripathi, Department of Commerce, SSV (PG) College, Hapur Affiliated to CCS University, Meerut, (U.P.) India
Sangeeta Gupta, Department of Sociology, Meerut College, Meerut (U.P.) India
Ishan Jain, VICT, Meerut, U.P., India
Somya Sharma, VICT, Meerut, U.P., India
Shagun Bhardwaj, VICT, Meerut, U.P., India
Priyanka Saroha, College of Vocational Studies, University of Delhi, India
Arvind Kumar Yadav, Faculty of Commerce, KMGGPGC, Badalpur, G.B. Nagar, (U.P.) India
Deepak Singh, Department of Commerce, Govt. P.G. College, Noida, (U.P.) India
Pulkit Agarwal, Department of Commerce, Mohammad Ali Jauhar University, Rampur (U.P.)
Kamlesh Kumar, Department of Commerce, Mohammad Ali Jauhar University, Rampur (U.P.)
Aman Roshan, School of Commerce, Hemvati Nandan Bahuguna Garhwal (A central) University, Srinagar,U.K., India
V.C. Sharma, School of Commerce, Hemvati Nandan Bahuguna Garhwal (A central) University, Srinagar,U.K., India
P. K. Srivastava, Faculty of Commerce & Business Administration, S.D. (P.G.) College, Muzaffarnagar (U.P.) India
Ajay Maheshwari, Department of Commerce, Krishan College of Science & Rural Technology, Fatehabd Agra, (U.P.) India
Bharat Bhushan Sharma, Student of Pre Ph.D. Course Work in Commerce, Meerut College, Meerut (U. P.), India
Jitesh Singh, Pre Ph.D. Course Work in Commerce, Meerut College Meerut, U.P. India
EDITOR –IN- CHIEF, IJTC-IIARTC
Dr. S.K.S. YADAV, M.Com, C.A. Inter, Ph.D., FDP

Dr. S.K.S. Yadav at present Associate Professor in Faculty of Commerce & Business
Administration, Meerut College, C.C.S. University, Meerut, U.P., India. His
several research papers have been published in National and International
Journals. He has contributed many papers in National and International seminars.
Sixteen candidates have been awarded Ph.D. under his supervision. He has also
completed a major Research Project sponsored by UGC, New Delhi. He has
authored four books on Corporate Accounting, Hindi and English Editions, Cost
Accounting, Hindi and English Editions, Published by Kedarnath Ramnath &
Sons, Meerut. He was Programme officer of NSS for 5 years in Meerut College,
Meerut. He organised 5 camps of NSS. He is also editors of many reputed Journals
published in India. He is Coordinator of Computor Lab. of Commerce
Department. He is Examiner of different Universities of India. He has served in
IPM Lucknow as Assistant Director, Associate Professor in IMS, Roorki, Sr. Research Associate in Indian Institute
of Finance, New Delhi, Lecturer in A.K. P.G. College, Shikohabad, He has also audited many companies during
his article ship in C.A. study.
DEPUTY CHIEF EDITOR OF IJTC-IIARTC
Dr. CHALAM V. GORIPARTHI,

Prof Chalam V. Goriparthi is a Professor of Finance, Department of Commerce &
Business Administration Acharya Nagarjuna University, Nagarjuna Nagar, India.
He is having a wide experience of Teaching & Research field. His papers have
been published in National, International Journals and Edited books. He is active
participator of National and International Seminars. He is Dean, College
Development Council, Acharya Nagarjuna University (June 23rd 2012 – till date)
He was Coordinator, PG & Professional Courses (Examinations) Acharya
Nagarjuna University (2008 - 2012). He was also Head (Chair), Department of
Commerce & Business Administration (2004-2006). He remained Additional
Director, Center for Distance Education (2002-03), Acharya Nagarjuna University.
He was coordinator for the implementation and monitoring of the UGC/DRS/SAP for New Management
Program, Acharya Nagarjuna University during 2004-06. He was also Additional Coordinator for the
UGC/DRS/SAP in the Department of Commerce, Acharya Nagarjuna University during 2004-06.He was also
Academic Counsellor, IGNOU since 1986-87 for their MBA and MCA Programs both at Guntur and Vijayawada
study Centers. He was also coordinator for Commerce and Management program of Centre for Distance
Education, Acharya Nagarjuna University during 2003-04. He has visited around 20 Business Schools in the
United States that are in top 100 ranked business schools, viz., Kellogg Business School of Management, Chicago
Graduate School of Business, Fisher College of Business, Stuart Graduate School of Business, Liautaud Graduate
School of Business, Kellstadt School of Business, etc. He has also got several awards in his academic life.
Dr. DHARMENDRA YADAV

Dharmendra Yadav is a Assistant Professor in the Department of Mathematics at
Vardhaman (P.G.) College, MJP Rohilkhand University, Bijnor, U.P. (India). He
received his PhD degree in Inventory Management from C.C.S. University. His
major research fields include production and operation management, supply chain
and logistics management, inventory management etc. His articles have appeared in
journals such as OPSEARCH, International Journal of Systems Sciences, Asia-Pacific
Journal of Operational Research, International Journal of Operational Research,
Control and Cybernetics, International Journal of Mathematics in Operational
Research, International Journal of Procurement Management, Yugoslav Journal of
Operations Research, International Journal of Operational and Quantitative
Management.

Untitled

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Untitled

Uploaded by

Copyright:

Available Formats

INTERNATIONAL JOURNAL OF TRADE & COMMERCE-IIARTC

Dr. S.K.S. Yadav

INDIAN INSTITUTE OF ADVANCE RESEARCH IN TRADE

SOCIETY FOR GLOBAL STUDIES AND RESEARCH (SGSR)

NATIONAL EDITORIAL BOARD, DEPUTY EDITOR-IN-CHIEFS

Please accept the subscription for a period of ....................................................................................................Years.

Bank Account No. [Current A/c]: 4842005500000237

Dr. S.K.S.YADAV, Editor-in-Chief

Dr. S.K.S. Yadav, Editor-in-Chief,

INTERNATION JOURNAL OF TRADE & COMMERCE-IIARTC

Bank Draft No:...............................................Bank Draft...........................................................................................................................

Bank Drawn on:...........................................................................................................................................................................................

Factors Influencing Job Satisfaction of Employees of Private

Md. Zahir Uddin Arifa*, Murad Hasanb, Mohammad Maksudul Karimc

8. CONCLUSION AND RECOMMENDATION

PMJDY Status: Pre & Post Demonetization

Faisal Bin Hamada*, M. Shekarb

Email Id: mokshitfeb22@gmail.com / dr.shekar@uoh.edu.sa

7.5 Status of PMJDY and Predemonetization Stage

7.6 STATUS OF PMJDY AND POST DEMONETIZATION STAGE

Comparative Study of Stock and Bond Markets Volatility and

Thota Haripriyaa*, Y. Rama Krishnab, Sindhuc

Email Id: priyaruthvik2006@gmail.com

Apr, 2016 1.333537 0.541667 0.79187 0.30634 0.54167 -0.2353

Human Resource Management and Innovative Practices :

Fig. 1: Innovative Practices of HRM

Fig. 2: Modes and Implications of Innovative Practices

An Empirical Study of Passengers Perception of Service Quality of

Sunil Kumara*, Arihant Jainb

(http://www.surveyanalytics.com/). 100 respondents at 2 airports namely Indira Gandhi

Table 3: Showing Item Statistics

8. DATA ANALYSIS AND INTERPRETATION

In-Flight Entertainment Facilities 4.1958 480 1.14829

A Study on Consumer Adoption of Mobile Wallet

Figure A: Proposed Model of Factors affecting Usage Intention of Mobile Wallet

Millennium (Sustainable) Development Goals 4, 5 and 6: A Study

2.2 Estimation of trends in IMR/MMR

Fig. 1: Trends in 1q0 mortality Rate-1999-2014, 09 BIMARU states of India

Year of achieving MDG-4 target

% state's share to total live births

2000-02 (2001) & 2005-07 (2006)

2005-07 (2006) & 2009-10 (2010)

1989-91 (1990) & 2009-10 (2010)

Expected 1q0 in 2015 (95% CI)

1q0 level of '27'

1q0 level of '27'

Pradesh/Uttarakhand transitioned from unfavourable to favourable states; contributing 57% to

Fig. 2: Trends in Maternal Mortality Ratio-1997-2015, India & 09 BIMARU states

2004-2006 and 2007–2009 (32%), followed by 2001-2003and 2004–2006 (27%). Uttar

Change in MMR % Net contribution of the if MMR decline if MMR decline

Year of achieving MDG-5

Expected MMR in 2015

Expected MMR in 2015

1999-01 & 2001-03

2001-03 & 2004-06

2004-06 & 2007-09

1997-98 & 2007-09

squared=0.2 (p<0.032)], while the exponential fit suggests negligible deviation[chi-squared=0.36

4.1 Contribution of state-specific changes in rate/ratio onto national-level change

India's Energy Security Challenges and Policy Options

3. SIGNIFICANCE OF ENSURING ENERGY SECURITY

Source: Prepared using data of Table 4.

Reforming the Military Institutions and National Security Strategy

Liquidity Management in Hindustan Unilever Limited: An