Vol XVI

KINDLER
THE JOURNAL OF ARMY INSTITUTE OF MANAGEMENT KOLKATA

(FORMERLY NATIONAL INSTITUTE OF MANAGEMENT CALCUTTA)
VOLUME XVI q NUMBER 1&2 q ISSN 0973-0486 q JANUARY-JUNE 2016

JULY-DECEMBER 2016
Page No.
A Comparative Analysis: The Impact of NPA on Profitability of SBI& ICICI 721

Abhijit Pal and Nabanita Maity
Boardroom Presence : Gender in a New Focus 2232
Dr Arundhati Bhattacharyya
A Comparative Study of Depreciation under Companies Act 2013 and Companies Act 1956 3343
Dr Soheli Ghose
A Comparative Study of IFRS and Indian Accounting Standard in Thirty Top Companies in India 4463
Surajit Das and Dr Tapash Ranjan Saha
Micro insurance for the Deprived-A Case Study of Burdwan District of West Bengal 6476
Dr. Sreemoyee Guha Roy
Corporate Social Responsibility and Inclusive Growth : An initiative by Bandhan 7792
Sreyasi Ray and Arpita Sil
An Empirical Study on the Effectiveness of CRM in a Private College in West Bengal 93104
Bratin Maiti, Madhurima Banerjee and Dipankar Das
Year Wise Impact of Rights Issue Announcements on the Stock Prices 105114
Dr Swati Mittal
Demonetization in Emerging Markets : Boon or Bane 117123
Surajit Malakar and Dr Ravi Chatterjee
Study of Various Initiatives Taken by District Panchayat, Ahmedabad 126134
Saurav
Book Review 137138
Editor's Note
Having taken over as Editor from Dr Parveen Ahmed Alam, I feel honoured to
address the body of researchers who form the audience of our Journal, Kindler.
The year 2016 has seen a myriad of events affecting global business panorama.
Earlier in June, 51.9% votes ensured the departure of United Kingdom from the
European Union, coining the portmanteau of British and exit: Brexit.
The first week of November saw two events affecting the Indian economy. On
November 8, 2016, Prime Minister Narendra Modi announced Demonetization,
wherein, that existing INR 500 and INR 1000 banknotes were no longer accepted
as legal tender. Demonetization was expected to curb counterfeiting, tax evasion
and the parallel economy. Offshore and across countries away, the 58th
quadrennial American presidential election saw the Republican ticket of
businessman Donald Trump and Indiana Governor Mike Pence defeating
the Democratic ticket of former Secretary of State Hillary Clinton and U.S. Senator
from Virginia Tim Kaine. The new US global leadership demonstrates altered
views on free trade, globalisation, and open markets, as the Trump administration
works on immigration reforms affecting very many skilled workers such as
research analysts, financial advisors, web developers, teachers, artists, medicos,
paramedics and above all, IT workers.
Zora Neale Hurston has quoted Research is formalized curiosity. It is poking
and prying with a purpose. As, we, at the Army Institute of Management, Kolkata,
continue with our search for the wealth of knowledge in the arena of Business
Management, we present to you Volume XVI of our journal.
Volume XVI has two ensconced issues: 1 & 2, covering a diverse variety of
research topics related to dilemmas in Business Management. I wish you all
an informative reading of the same.
Best wishes,
Dr Swapna Datta Khan

Editor
LIST of External Reviewers for This Issue of Kindler
l Dr Rajesh W. Vaidya, Assistant Professor at Shri Ramdeobaba College

of Engineering & Management, Nagpur.
E-mail : rwvaidya@gmail.com; Ph : 9822570970
l Dr Abhay Kumar, Assistant Professor (Finance), NMIMS University, Mumbai.

E-mail : abhay10059@gmail.com; Ph : 9371533461
l Dr Sonali Gadekar, Head of Department, Mumbai Educational Trusts MET

Institute of Management, Bhujbal Knowledge City, Nashik. India.
E-mail : sonaligadekar@rediffmail.com; Ph : 9890496869
l Dr Arvind Kumar, Guest Faculty, DTU (Delhi Technological University) and

NSIT (Netaji Subhas Institute of Technology), University of Delhi.
E-mail : phd_arvind.d13@fms.edu, arvind.dahiya@aimk.org; Ph : 7838990838
l Prof Pramit Sengupta, ex Faculty of Army Institute of Management,

Kolkata.
E-mail : pramit.sg@gmail.com; Ph : 9477006745
l Prof Arundhati Chatterjee, Former Head, Operations and Marketing

Initiatives at Medicraft Technologies Pvt. Ltd and ex Faculty of Army Institute
of Management, Kolkata;
Email : arundhati.mbe@gmail.com; Ph : 9903475107
LIST of Internal Reviewers for This Issue of Kindler
l Dr Ravi Chatterjee, Area : Marketing;

Email : ravic.aimk@gmail.com; Ph : 7044106607
l Dr Ayan Chattopadhyay, Area : Marketing;

Email : chattopadhyay.ayan28@gmail.com; Ph : 9830898046
l Prof Rajib Bhattacharya, Area : Finance

Email : bh.rajib@gmail.com; Ph : 9007995333
l Prof Sougata Majumder, Area : HR & OB

Email : sougata_majumder@rediffmail.com; Ph : 9836190412
RESEARCH CONTRIBUTION
A Comparative Analysis: The Impact of NPA on
Profitability of SBI & ICICI
Abhijit Pal* and Nabanita Maity**
ABSTRACT
The major threat that the banking sector is facing today is the problem of NPA which is increasing
day by day and here we are trying to find out the impact of NPA on profitability. For this
purpose we have selected the two most important banks SBI from the nationalised/public sector
banks and ICICI from the private sector banks. Here we have confined our study to find the
relationship between Total Advances, Net Profit, Gross and Net NPA. Our study uses the annual
reports of SBI and ICICI for the period of 5 years from 2010-11 to 2014-15. Financial performance
of the bank is largely dependent on how the management is managing their NPAs, how they
are monitoring on their advances because the liquidity of the bank is largely dependent upon
proper management. The data has been analysed using various tables, grouped bar diagram
and correlation coefficient. As it is known that reduction of NPA will add to the profitability of the
banks, our objective is to establish a relationship between NPA and profitability of these two
major banks from different sectors.
Key Words : Non Performing Assets, Profitability, Liquidity
INTRODUCTION
Bank plays an important role in the economic development of every country. After the
economic liberalisation in 1991 the banking industry has undergone a drastic change
and so credit management came into surface. As financial intermediaries banks are
exposed to certain specific types of risks credit risk, interest rate risk, foreign
exchange rate risk, liquidity risk, price risk, operating risk and solvency risk. Thus it
becomes a matter of immense importance to identify measure, monitor and control
different types of risks. Internationally the banks approach to risk management is
based on committee approach. On the one hand the asset- liability management
committee (ALCO) deals with different types of market risk, while on the other hand
the credit policy committee (CPC), and oversees the credit or counter party risk and
country risk. Thus the market risk and the credit risks are managed in the parallel
two-track approach. As a matter of principle the policies and procedures for market
risk are addressed in asset-liability management policies and credit risk is taken care
of in loan policies and procedures as NPA is becoming the largest cause of concern
of the banking sector of India today. The Basel Committee on Bank Supervision
(BCBS) with its objective to prevent the bank crisis evolved a set of core principles
* Assistant Professor, Pailan College of Management & Technology, Kolkata -104; Ph: 9883241136; Email:
abhijit_pal03@yahoo.co.in
** Assistant Professor, Pailan College of Management & Technology, Kolkata -104; Ph: 9903655971; Email:
nabomaity06@gmail.com
Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016 7

of sound banking based on the best prevalent international practices. Nonperforming
assets play the most significant role in determining the earnings of banks. Other
factors like commissions, foreign exchange earnings, Cash Reserve Ratio (CRR) also
contribute by and large to the earnings of the banks.
REVIEW OF LITERATURE
Rajaraman and Vasistha (Indira Rajaraman, February 2, 2002) carried out an empirical
study which shows an evidence of significant bivariate relationships between the
operating inefficiency indicator and the problematic loans provided by the public sector
banks.
Das & Ghosh (Das, November 2003)studied empirically and tried to find out the
various indicators such as asset-size, credit growth and macro-economic condition,
and operating inefficiency indicator which causes non-performing loans of public sector
banks of India.
Kavitha. N (N.Kavitha, 2012) examined NPAs of public sector banks and their impact
and magnitude on profitability. Credit of total advances was in the form of doubtful
assets which has an adverse impact on profitability of all public sector banks. The
study observed that there is increase in advances over the period of study. However
the decline in the ratio of NPA indicates the improvement in the asset quality of SBI
group, Nationalised Banks and Private Sector Banks.
Dr. Pravin Choudhury and Apoorva Bhatnagar (Bhatnagar, 2014) made a comparative
study of NPA of HDFC and PNB. The study made an analysis of impact on profitability
by rise in NPAs and also about the model of the management of NPA in public and
private sector banks. The study has suggested measures to control NPAs like
i) there must be an effective regular follow up with the customers and need to watch
if there is any diversion of funds at regular intervals ii) a number of personal visits
after sanction and disbursal of credit and close monitoring of the operations of the
accounts of borrowed units iii) frequent discussions with the staff in the branch and
taking their suggestions for recovery of NPAs iv) RBI need to take necessary actions
against defaulters like publishing names of defaulters in newspapers, broadcasting
media which is helpful to other banks and financial institutions.
Dr. Sonia Narula and Monika Singh (Singla, 2014) carried out an empirical study on
NPAs of banks. When PNB Gross & Net NPA compared with Total Advances, they
got the result that there is mismanagement on the side of PNB. While analysing the
impact of NPA level on PNB they derived the conclusion that there is a positive
relation between Net Profit and NPA of PNB. They found that as profit increases NPA
also increases and stated that this is due to the mismanagement on the side of the
Bank.
OBJECTIVES OF STUDY
1. To study the impact of NPA on profitability of SBI and ICIC
2. To compare the Total Advances, Net Profit, Gross NPA and Net NPA of SBI and
ICICI
3. To study the statistical correlation between Net Profit and Net NPA of SBI and
ICICI
8 Kindler Vol. XVI l No. 1&2 l Jan-Jun 2016, Jul-Dec 2016
RESEARCH METHODOLOGY
Our study is fully based upon secondary data which were collected from the published
annual reports of SBI and ICICI from internet. Compilation of the data critically analyzes
the Total Advances, Net Profit, Gross NPA and Net NPA. Our study is confined for
the period of 5 years from 2010-11 to 2014-15. The data has been analysed by using
tables, grouped bar diagrams and correlation coefficient. The tables and diagrams
are used to compare Total Advances, Net Profit, Gross NPA and Net NPA of SBI and
ICICI. By using the correlation coefficient we want to determine if any relationship
between Net Profit and Net NPA of SBI and ICICI exists or not.
DATA ANALYSIS AND INTERPRETATION

If NPAs are not properly managed it will adversely affect the profitability. NPA plays a
pivotal role for the financial performance of banks as it results in declining margin
and higher provisioning for doubtful debts. Reduction of NPA is necessary to improve
the profitability and liquidity position of banks and fulfil with the capital adequacy
norms as per the Basel accord.
TABLE 1
SBI
YEAR TOTAL NET PROFIT GROSS NPA NET NPA
ADVANCES
2011 7,56,719.45 8,264.52 25,326.29 12,346.89
2012 8,67,578.89 11,707.29 39,676.46 15,818.85
2013 10,45,616.55 14,104.98 51,189.39 21,956.48
2014 12,09,828.72 10,891.17 61,605.35 31,096.07
2015 13,00,026.39 13,101.57 56,725.34 27,590.58
Table 1: SBI TOTAL ADVANCES, NET PROFIT, GROSS NPA AND NET NPA
(Source: http://www.moneycontrol.com/financials/statebankindia/balance-sheetVI/SBI#SBI)
Interpretation of Result : The table here is comparing Total Advances with Net
Profit, Gross NPA and Net NPA of SBI which provides with the knowledge about the
performance of the bank. The data here depicts that on one side Total Advances
given by SBI and correspondingly the net profit is increasing continuously from 2011
2013 which generally means that bank was performing well. Even though there
was continuous increase in both gross NPA & net NPA over the years, which might
be due to other relevant operating factors. The table simply depicts that if other
operating factors work to a satisfactory extent, the NPA may not influence the
profitability but in fact remains, had there been proper management of NPA in
profitability would have gone high. But suddenly in the year 2014 although there was
increase in total advances yet the net profit declined. One of the factors is increase
in gross NPA & net NPA affecting profitability, synergy may reduce the operating
income as a resultthe net profit dropped to Rs 10,891.17 but again it revived in
2015.On the other hand Gross NPA and Net NPA is seen to increase steadily since
2011 till 2014 which means the performance of the bank was declining due to

mismanagement of NPA. But in 2015 performance has increased as both the NPAs
have decreased.
TABLE 2
ICICI
YEAR TOTAL NET PROFIT GROSS NPA NET NPA
ADVANCES
2011 2,16,365.90 5,151.38 10,034.26 2,407.36
2012 2,53,727.66 6,465.26 9,475.33 1,860.84
2013 2,90,249.44 8,325.47 9,607.75 2,230.56
2014 3,38,702.65 9,810.48 10,505.84 3,297.96
2015 3,87,522.07 11,175.35 15,094.69 6,255.53
Table 2 : ICICI TOTAL ADVANCES, NET PROFIT, GROSS NPA AND NET NPA
(Source: http://www.moneycontrol.com/financials/icicibank/balance-sheetVI/ICI02#ICI02)
Interpretation of Result : The table here is comparing Total Advances with Net
Profit, Gross NPA and Net NPA of ICICI which provides with the knowledge about the
performance of the bank. The data here depicts that on one side Total Advances
given by ICICI and correspondingly the net profit is increasing continuously from
2011 2015 which means that bank is performing well. On the other hand Gross
NPA and Net NPA are seen to increase steadily since 2012-2015 since the
management failed to deal properly with high advances they provided.
TABLE 3
SBI
YEAR TOTAL GROSS NPA GROSS NPA/
ADVANCES TOTAL ADVANCES
2011 7,56,719.45 25,326.29 0.0335
2012 8,67,578.89 39,676.46 0.0457
2013 10,45,616.55 51,189.39 0.0490
2014 12,09,828.72 61,605.35 0.0509
2015 13,00,026.39 56,725.34 0.0436
Table 3 : Computation of SBIs Gross NPA/Total Advances
Figure 1 : The graphical representation of Table 3 is presented below for

comparative study

Figure 2
Interpretation : The figure and the table reveals that total advances has increased
steadily as well as percentage of NPA has also increased steadily till 2014 after that
it has reduced that means some measures has been taken to control the NPAs. The
Figure2 shows that the ratio of Gross NPA to Total Advances has increased steadily
from 2011 to 2014 and after that the bank has taken certain stringent measures for
which it came down sharply.
Table 4
SBI
YEAR TOTAL NET NPA NET NPA/
2011 7,56,719.45 12,346.89 0.0163
2012 8,67,578.89 15,818.85 0.0182
2013 10,45,616.55 21,956.48 0.0210
2014 12,09,828.72 31,096.07 0.0257
2015 13,00,026.39 27,590.58 0.0212
TABLE 4 : Computation of SBIs NET NPA/Total Advances
Figure 3 : Graphical representation of Table 4 is presented below for

comparative study

Figure 4
Interpretation: The figure and the table shows that total advances has increased
steadily as well as percentage of NPA has also increased steadily till 2014 after that
it has reduced that means some measures has been taken to control the NPAs.
Similar to Figure2 here in this case the net NPA has also increased steadily from
2011 to 2014 but due to some measures taken by the bank it came down by 2015.
SBI
YEAR TOTAL NET PROFIT NET PROFIT/
2011 7,56,719.45 8,264.52 0.0109
2012 8,67,578.89 11,707.29 0.0135
2013 10,45,616.55 14,104.98 0.0135
2014 12,09,828.72 10,891.17 0.0090
2015 13,00,026.39 13,101.57 0.0101
TABLE 5 : Computation of SBIs NET Profit/Total Advances

comparative study
Figure 6
Interpretation : The figure and the table shows that Total Advances given by SBI
and correspondingly the net profit is increasing continuously from 2011 2013 which
means that bank was performing well. But suddenly in the year 2014 the net profit
dropped to Rs 10,891.17 but again it revived in 2015. Figure 4 reveals that ratio of
Net Profit to Total Advances increased from 2011 to 2012 then remained steady in
2013 and fell sharply in 2014 after that taking some measures it started reviving.
SBI
YEAR NET NET PROFIT NET PROFIT/
NPA NET NPA
2011 12,346.89 8,264.52 0.6694
2012 15,818.85 11,707.29 0.7401
2013 21,956.48 14,104.98 0.6424
2014 31,096.07 10,891.17 0.3502
2015 27,590.58 13,101.57 0.4749
TABLE 6 : Computation of SBIs NET Profit/NET NPA
Figure 7 : The graphical representation of Table 6 is presented below for comparative study

Figure 8
Interpretation : The figure and the table shows that the net profit is continuously
increasing from 2011 till 2013, dropped in 2014 and increased again in 2015.But the
percentage figure of Net Profit over Net NPA had steadily decreased from 2012-2014
and again it had increased during 2015 which means that necessary measures by
Bank has been taken. Figure 8 states that Net Profit to Net NPA ratio increased very
little from 2011 to 2012 then again it came down in 2013 and during 2014 it fell quiet
sharply after that some improvement is noticed during 2015. Due to high NPAs bank
failed to scale up the profit.
ICICI
YEAR TOTAL GROSS NPA GROSS NPA/
2011 2,16,365.90 10,034.26 0.0464
2012 2,53,727.66 9,475.33 0.0373
2013 2,90,249.44 9,607.75 0.0331
2014 3,38,702.65 10,505.84 0.0310
2015 3,87,522.07 15,094.69 0.0390
TABLE 7 : Computation of SBIs Gross NPA/Total Advance
Figure 9 : Computation of ICICIS Gross NPA/Total Advance

Figure 10
Interpretation: From the figure and the table it can be seen that total advances has
increased steadily as well as percentage of NPA decreased steadily till 2014 after
that it has increased during 2015 that means NPAs are not monitored properly.
Figure10 is just the reverse of Figure2. In this case the ratio has steadily decreased
from 2011 to 2014 but increased in 2015 as the disbursement of loan is quiet high
compared to the previous years so they failed to adhere to their credit policy.
ICICI
YEAR TOTAL NET NPA NET NPA/
2011 2,16,365.90 2,407.36 0.0111
2012 2,53,727.66 1,860.84 0.0073
2013 2,90,249.44 2,230.56 0.0077
2014 3,38,702.65 3,297.96 0.0097
2015 3,87,522.07 6,255.53 0.0161
TABLE 8 : Computation of ICICIs NET NPA/Total Advance

comparative study

Figure 12
Interpretation : The figure and the table shows that total advances has increased
steadily as well as percentage of NPA has decreased steadily till 2014 after that it
has increased in 2015 that means some measures has not been properly taken to
control the NPAs. Figure12 showed the same scenario which is very much expected
keeping in view with the above Figure10.
ICICI
YEAR TOTAL NET PROFIT NET PROFIT/
2011 2,16,365.90 5,151.38 0.0238
2012 2,53,727.66 6,465.26 0.0255
2013 2,90,249.44 8,325.47 0.0287
2014 3,38,702.65 9,810.48 0.0290
2015 3,87,522.07 11,175.35 0.0288
TABLE 9 : Computation of ICICIs NET Profit/Total Advance

comparative study

Figure 14
Interpretation : The figure and the table show that Total Advances given by ICICI
and correspondingly the net profit has been increasing continuously. Also from the
above tables and graphs it is revealed that the NPAs increased but still the bank has
able to increase their profits. Compare to Figure 6 where the ratio of SBI is fluctuating
but ICICI shows a little increase from 2011 to 2013 and then remained steady. This
reveals that ICICI has much better credit monitoring system compared to SBI.
ICICI
YEAR NET NET PROFIT NET PROFIT/
NPA NET NPA
2011 2,407.36 5,151.38 2.1398
2012 1,860.84 6,465.26 3.4744
2013 2,230.56 8,325.47 3.7325
2014 3,297.96 9,810.48 2.9747
2015 6,255.53 11,175.35 1.7865
TABLE 10 : Computation of ICICIs NET Profit/NET NPA
Figure 15 : The graphical representation of table 10 is presented below for

comparative study

Figure 16
Interpretation : The figure and the table show that the net profit is continuously
increasing. But the percentage figure of Net Profit over Net NPA had steadily increased
from 2011-2013 and then it had decreased which means that necessary measures
has not been taken by Bank because Net NPA has increased significantly. Figure16
shows sharp increase in ratio from 2011 to 2013 and then decreased steadily but if
the ratio of Net Profit to Net NPA are compared then a clear picture is coming out
which shows profit is double of net NPA in case of ICICI but reverse is the case of
SBI.
RELATIONSHIP BETWEEN NET NPA AND NET PROFITS OF SBI

Correlation is used to measure the degree of association between variables. Here we
have chosen correlation to see whether there exist any relation between Net Profit
and Net NPA of SBI.
Covariance (XY)
Formula : r =
S.D (X). S.D (Y)
YEAR NET NET X2 Y2 XY
PROFIT(X) NPA(Y)
2011 8,264.52 12,346.89 68302290.83 152445692.7 102041119.3
2012 11,707.29 15,818.85 137060639.1 250236015.3 185195864.4
2013 14,104.98 21,956.48 198950460.8 482087014 309695711.3
2014 10,891.17 31,096.07 118617584 966965569.4 338672584.7
2015 13,101.57 27,590.58 171651136.5 761240104.7 361479915.2
TOTAL 58,069.53 1,08,808.87 694582111.2 2612974396 1297085195
r = 0.4749
Table 11 : Calculation of correlation between Net Profit and Net NPA of SBI
Interpretation: From the above table we have computed the correlation coefficient of
SBI which is equal to 0.4749. It means that there exist a positive relation between
Net Profit and Net NPA. This means that Net Profit and Net NPA are directly related.
YEAR NET NET X2 Y2 XY
PROFIT(X) NPA(Y)
2011 5,151.38 2,407.36 26536715.9 5795382.17 12401226.16
2012 6,465.26 1,860.84 41799586.87 3462725.506 12030814.42
2013 8,325.47 2,230.56 69313450.72 4975397.914 18570460.36
2014 9,810.48 3,297.96 96245517.83 10876540.16 32354570.62
2015 11,175.35 6,255.53 124888447.6 39131655.58 69907737.19
TOTAL 40,927.94 16,052.25 358783718.9 64241701.33 145264808.7
r = 0.79804
Table 12 : Calculation of correlation between Net Profit and Net NPA of ICICI
Interpretation : From the above table we have computed the correlation coefficient
of ICICI which is equal to 0.79804. It means that there exist a more positive relation
between Net Profit and Net NPA compared to SBI. This means that Net Profit and
Net NPA are directly related.
Comparing the magnitude of correlation co-efficient it can be seen that net profit and
net NPA are strongly associated in case of ICICI than that of SBI. This is due to the
fact that ratio wise the net profit is nearly triple than that of SBI. ICICI has taken
more stringent policy compared to SBI at the time of disbursement as well as
monitoring of loan.
YEAR SBI ICICI
2011 1.17 1.34
2012 1.20 1.31
2013 1.20 1.34
2014 1.14 1.37
2015 1.15 1.39
Table 13 : Interest Coverage Ratio of SBI & ICICI
Here the interest coverage ratios of ICICI are better compared to SBI but both are
below the standard.
YEAR SBI T.A ICICI T.A SBI T.A/ SBI NET ICICI NET SBI NET NPA/
ICICI T.A NPA NPA ICICI NET NPA
2011 7,56,719.45 2,16,365.90 3.50 12,346.89 2,407.36 5.128809152
2012 8,67,578.89 2,53,727.66 3.42 15,818.85 1,860.84 8.50091894
2013 10,45,616.55 2,90,249.44 3.60 21,956.48 2,230.56 9.843483251
2014 12,09,828.72 3,38,702.65 3.57 31,096.07 3,297.96 9.428880278
2015 13,00,026.39 3,87,522.07 3.35 27,590.58 6,255.53 4.41059031
Table 14 : Comparision between SBI and ICICI

CONCLUSIONS & RECOMMENDATIUONS
Broadly leaving apart the credit rating vis-a-vis quality of credit, this simple study
reveals that according to Table 14 the Total Advances of SBI to ICICI is around 3.50
and the Net NPAs of SBI to ICICI ranges from 4.4 to 9.8. So we can say this area of
NPA management is a critical one to be looked after. Though the ratio range from
9.4 to 4.4 does not establish to be conclusive, policies can be adopted by SBI to go
for quality credit followed by recovery. In a broader perspective it may be suggested:
1. To ensure that end uses of borrowed fund to derive saveable surplus
2. To monitor on an ongoing basis the fund invested by tracking changes from time
to time
3. Detailed operative areas like responsibilities of different functionaries of
disbursement control, security documents, statement of stocks and book debts
should be monitored effectively
4. In practice the factual part of profitability and the conclusions based on total
advances & NPA: these are however the best indicators; until other operative
factors are taken into account though profitability based on advances & NPA cannot
be commented upon
5. To look for early warning signals, after proper utilization of fund and arresting
diversion of fund if any
6. Tracking of accounts to safeguard the accounts from big Non Performing Assets
Though it is not the part of our study, by and large it can be said that the concept of
recovering debts through Debt Recovery Tribunals has not yielded desired result. The
concept of establishing Asset Reconstruction Company (ARC) has greatly benefitted
the banks in containing the NPAs at a manageable level. ARC has to take over the
bad debts of the public sector banks. The banks may liquidate the assets of defaulting
companies overwriting off these bad debts.
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194-199 Volume 2(1).

Boardroom Presence : Gender in a New Focus
Dr Arundhati Bhattacharyya*
ABSTRACT
There has been considerable discourse regarding increase of diversity in the boardrooms in
Companies all around the world. Quotas have been opted. Norway was the first country to go
for quota for women. Several other countries have gone the quota way, including France, Australia
etc. India has gone for Company Law, 2013 so that there is one woman director in the
boardrooms in India. This step has brought in changes in some Indian corporate environment.
However, some Companies have failed to follow the rule. Here, some Public Sector Undertakings
have failed. The government has been criticized for this slow stance in the step to implement
the rules. The reasons behind the low representation in the boards are analyzed. There is a
need for changing mindset in the society about capability of women in boardrooms. Women
also need to upgrade their capabilities and capacities, all along the career route, when called
up for a job; they can do it very efficiently. This can become a model for the future workforce in
the corporate world.
Key Words : Women, Glass Ceiling, Corporate
OBJECTIVES OF PAPER
1. To understand the position of women in boardrooms, worldwide
2. To analyze the changes taking place after the implementation of the Companies
Act, 2013
3. To analyze some of the ways which will help in increasing representation of
women in boardrooms
METHODOLOGY OF RESEARCH
The study is based on secondary resources, including reports, books, journals,
newspaper articles, internet sources etc.
SCOPE OF PAPER
The scope of the paper broadly, includes the changing representation of women in
the boardrooms of Companies, the world over, the reasons behind low representation
of women in the top level management, including the board, the issue of quota for
women in boardrooms in some countries of the world; the legislation of the Companies
Act, 2013 and the changing scenario of representation of women in the Indian boards
and some of the deficiencies of the system, that needs to be overcome.
* Assistant Professor, Department of Political Science, Department of Political Science Diamond Harbour
Womens University; Email: bhattacharyya.arundhati4@gmail.com

INTRODUCTION
The Board is the highest level of corporate hierarchy. The Board of Directors of a
company is the vital governing body and directors are ultimately responsible for stable,
highly efficient, and profitable running of the concerned company, safeguarding the
interests and progress of the company and its stakeholders. The Board is elected by
the shareholders and responsible for running the Company. It is collectively responsible
for making good policies for the Company. Inclusiveness can add to the diversity
angle of the Boards, which are being considered as an essential attribute of consistent
profitability.
Low representation of women becomes an issue as one goes higher in the corporate
ladder. Women are successful in academics and in their early careers. However,
attrition rates increase as they progress through the career graph. Companies miss
out on the talent and the resource-base of women as they are hardly found in the
boardrooms. The boardroom is where strategic decisions are taken and risks
undertaken. It is therefore necessary that boards are made up of competent high
calibre individuals who together offer a mix of skills, experiences and backgrounds.
Board appointments must always be made on merit. But, even after women achieving
the highest qualifications and leadership positions in many walks of life, the poor
representation of women on boards, has raised questions about whether board
recruitment is in practice based on skills, experience and performance.(Abersoch,
2011) Greater number of women in executive positions results in stronger rates in
corporate return on equity, according to many studies.
GLASS CEILING
The glass ceiling is a metaphor for a barrier preventing women from rising above a
certain organizational level. Glass ceiling has been the reality in boardrooms in India
and other parts of the world. Women in corporate world are also affected by expatriate
glass ceiling, which implies restrictions for foreign management assignments and
experience needed for better eligibility of upper management. This impacts the
motivation level and career prospects among young management trainees. (Gary S.
Insch, Nancy McIntyre, Nancy K. Napier, 2008).
There is need for shattering the glass ceiling for the sake of justice and market
needs. A company that mirrors the general population will be able to make proper
decisions regarding consumer needs. As women, today, are playing an important role
as buyers, their psyche and preferences will be better understood by women directors.
Both men and women approach management differently and both the aspects are
fruitful for better results. (Alison Eyring, 1998) Even after several legislations put
forward by several countries, today 90 per cent of the boardroom comprises of
men.(Women in the Boardroom: A Global Perspective, 2013)
WORLDWIDE REPRESENTATION OF WOMEN IN BOARDROOMS

The negligible presence of women at the board level is also borne out by Fortune
magazines annual listings. In 2006, over 77 per cent of the 200 largest companies in
the world, as ranked by Fortune, had at least one woman director on their board.
Only 36 per cent of Indian companies have women holding senior management

positions as compared to 91 per cent of companies in China. India ranked 30th,
regarding the presence of women directors of companies. In 2009, a study, Women
Managers in India: Challenges and Opportunities by the Centre for Social Research
(CSR) found that women are primarily placed in non-strategic sectors and have
positions with titles but little real power or supervisory authority. Men are in those
sectors that involve financial decision-making or revenue-generating responsibilities,
such as sales and production, positions that are critical for advancement to the top.
Other factors hindering womens career growth are: discriminatory practices; male
resistance to women in top level management positions; absence of proper legislation,
decision-making processes to ensure pro-women measures in companies/
establishments; smaller numbers in a company which limit bargaining strength; non-
participation of women managers in forums within and outside the organisational
structure etc. Womens career paths are apt to be more interrupted than those of
men which are typically linear.(Sundar, 2013)
In September 2012, the Credit Suisse Research Institute reported that public
companies with at least one woman on the board handsomely outperform those with
none. This was a game changing revelation. Prime Minister of Australia, announced
soon after that the Australian government is committed to achieving a minimum of
40% of women in Australian Government Board by 2015 A quota may be the best
way of achieving this.(J. F. Corkery and Madeline Taylor, 2012)
Deloitte study analyzes female board representation at 6,000 companies in 49
countries, including 2,806 companies in the U.S. alone. (The report is uneven on its
company counts. In Colombia it examines only 11.) The picture is that 12 per cent of
board seats are held by women worldwide. Only 4 per cent of companies are chaired
by women globally.(Adams, 2015)
According to another study jointly conducted by Kohn Ferry, a global people advisory
and National University of Singapore Business School Centre for Governance Institution
and Organization, women comprise 10.2 per cent of the directors in the Asia-Pacific
region in 2014. This has shown an upward trend from 2013 and 2012, which were
9.4 and 8, respectively. In Australia, the number has increased from 18.6 to 21.9 per
cent in the years, 2013 and 2014.In Malaysia, the government had also set the target
of women representation in the boards at 30 per cent. It increased from 8.3 to 12.5
per cent from 2013 to 2014.(Women Representation on Company Boards Rise in
India: Study, 2016)According to Pricewaterhouse Coopers study, there are only ten
women among the 359 permanent or interim CEOs in the 2500 largest global
companies in 2015.Some surveys have revealed that women hold 50 per cent of
middle management positions, but, that gets lessened to less than 5 per cent at the
top level. (Rajghatta, 2016)
FACTORS WHICH ARE BOOSTING WOMENS REPRESENTATION IN BOARD-
ROOMS
An increasing number of countries are opting for legislating quotas, requiring companies
to appoint boards that include up to 40 per cent women. Norway is a pioneer, passing
the first such law. Among the 22 Norwegian companies Deloitte study analyzed, 36.7
per cent of the board seats are held by women. Norway, still, is at the top of all the
countries. But just 18.2 per cent of the Norwegian boards have women chairs.

Denmark also has a quota rule, though it is less stringent than Norways. Deloitte
reports that Danish legislation requires companies to work actively towards gender
equality (40% board participation by women). However, there are no sanctions attached
to law. Nevertheless, Danish boards have 21.8 per cent female representation. Yet
female board representation has not been translated to board leadership. There are
no corporate boards chaired by women in Denmark. While most of the board quota
legislation is in Europe, India and Malaysia have both passed laws requiring corporate
boards to appoint women. Indias law is weak, according to critics. Malaysias requires
female board representation of at least 30 per cent by 2016. (Adams, 2015)France
has a target to reach 40 per cent women on boards by 2017. It has already reached
29.7 per cent by 2014. (Ramanathan, 2016)
There has been a practical necessity to have greater representation of women in the
boardrooms, as they are proving to be better for the Companys profit. Women play
an important role in the household purchases, so having more women in decision
making level, implies better business. There have been greater searches for suitable
women to implement the law. According to John H. Bryan, board chairperson of
Catalyst and CEO of Sara Lee Corporation, has stated that the pool of women with
the capability and experience to serve on boards is larger than is generally
believed.(Sweetman, 1996)More women in boardrooms may mean greater acceptability
of women in the workplace, by men. Women board members can turn to be inspiration
and act as models for the new women recruits.(Catherine M. Daily, S. Trevis Certo,
Dan R. Dalton, 1999)
Another aspect of low board membership is the socio-cultural phenomena. Since the
1970s, Norwegian female have fought for equal access to work. Norwegian women
have high participation in workplace and a family-friendly culture. Norwegian women
gain continuous work experience. But, in the United Kingdom, women gain less work
experience as it is expected that women needs to stay at home to take care of their
children. Gender stereotyping is common in the workplace. It is thought that womans
career will be a discontinuous one, due to pregnancy, maternal responsibilities and
household chores. These stereotypes lead firms to offer lower wages to female
employees.(Lan Zhu Yang, Bo Qin, 2011) There has been a wrong perception of
capability of women, by many. Their bias against women rises from lower participation
rates, weaker adaptability, and poorer mobility and attendance records. Women
employees are considered as burden than asset, due to their physiological conditions.
(Cooke, 2001)A report published by a project covering hundreds of Asia-Pacific-based
female employees (2014), only 20 per cent of them felt that their company culture
and mindset supported the progression of women, and 31 per cent stated that they
would ideally like to leave their current employer.(Zhu, 2014)In September 2012, the
Credit Suisse Research Institute reported that public companies that had at least one
woman on the board outperformed those with none. This is a game changing
revelation.
INDIAN LAW
The Companies Act, 2013 passed by the Indian Parliament has received the assent
of the President of India on 29th August, 2013. This law has supported mandatory

inclusion of women directors in the boards of the Indian Companies. Entry to the
Board of Directors is now well-facilitated and secured through second proviso of sub-
section 1 of Section 149 of the new Indian Companies Act 2013. (Hemant Goyal,
Sandhya Agarwal, 2014). Under the Companies Act, 2013 in India, notified by the
Corporate Affairs Ministry, every listed company and those public firms having paid
up share capital of Rs 100 crore or more should have at least one woman director
on their board. It will be also applicable to entities with a minimum turnover of Rs
300 crore. For the purpose of complying with the rules, the paid up share capital and
turnover, among others, as recorded in the latest audited financial statements should
be taken into consideration by the companies. (New Companies Act: Firms to have
at least one woman, two independent directors, 2014) Any intermittent vacancy in the
Woman Directors should be filled up immediately but not later than three months
from the date of such vacancy or the next Board meeting whichever is later. All listed
companies are required to mandatorily appoint woman directors on their Board.
Whether the woman directors have to be carved out of the independent directors
quota is not clear as also whether the woman director can be part of the promoters.
If the latter is true then we will see a lot of wives, daughters, etc. entering into Board
positions. There is also no provision regarding a registry of woman directors just like
the case of independent directors. (Section 149 of Companies Act, 2013 Board of
Directors, 2014)
Securities and Exchange Board of India (SEBI), the regulator in India wrote to the
Cabinet Secretary that women directors should be appointed on the boards of public
sector undertakings to meet corporate governance norms. SEBI stated that if a
company does not comply according to rule, which mandates appointment of at least
one woman director on the board before June 30, 2015; it would have to pay a fine
of Rs 50,000. Companies complying with this requirement between July 1 and
September 30, 2015, would have to give Rs 50,000 plus Rs 1,000 per day starting
from July 1 till the date of compliance and those entities complying on or after October
1, 2015, would have to pay Rs 1.42 lakh plus Rs 5,000 per day from October 1,
2015, till the date of compliance.
India is one of the several countries to mandate an appointment of woman directors
on the boards of listed companies, but many companies that have complied have
female relatives of the promoters in order to comply with the new rules. Companies
seem to be finding it difficult to find qualified women directors or are appointing
women who are merely proxies to ensure compliance. (Sebi may take action against
companies for not hiring female director, 2015)According to a study conducted after
the implementation of the Company Act, 2013; Companies have tried to increase the
women representation in their boardrooms, by drawing on the existing networks. The
study Building Diversity in Asia Pacific Boardrooms was jointly conducted by Kohn
Ferry, a global people advisory and National University of Singapore Business School
Centre for Governance Institution and Organisation. Indias corporate boards without
women have decreased from 44 per cent in 2013 to 29 per cent in 2014. The highest
number of female board members was found in the Telecommunications sector, with
17.5 per cent. It is followed by the Information Technology sector and the financials
with 11.6 per cent and 9.6 per cent, respectively. The lowest number of women in

boards is in the industrials, with only 4.9 per cent.(Women Representation on Company
Boards Rise in India: Study, 2016)
Some of the Indias largest public sector units, including the Oil and Natural Gas
Corporation, GAIL (India) Limited, Indian Oil Corporation, Bharat Petroleum Corporation
Limited, Metals and Minerals Trading Corporation of India, National Fertilizers Limited,
Oriental Bank of Commerce, Power Finance Corporation, Madras Fertilisers, Rashtriya
Chemicals and Fertilizers Limited, Rural Electrification Corporation, State Trading
Corporation of India etc are among the companies that have yet to follow the
requirement of at least of a woman director on their boards, even after the law has
been enforced. According to PRIME Database, about half of the 56 National Stock
Exchange-listed companies have yet to meet the rule are state-owned enterprise. It
has been considered a matter of shame that the public sector enterprises have failed
to appoint a woman director. According to ICRA Chairman, there is sufficient number
of women who are eligible for the board, but, the internal processes of the Public
Sector Undertakings are proving to be an obstacle. The Indian industry houses have
started mentoring of women leaders. However, it is not easy for a woman to get a
board position, unless she is a well-known person.(Kala Vijayraghavan, Rica
Bhattacharyya, 2016)
ANALYSIS
There are loopholes within the system. Implementation of laws is much more difficult
than its legislation. Concerns are there in the corporate corridors, whether capable
women will be included as women directors or not. One of the woman directors of an
esteemed IT company stated that in many cases, these woman directors fail to voice
their honest opinion. They continue as puppets. So, their presence does not make a
difference in decision making. Another woman director, on the other hand, stated that
it is a beginning of a new revolution in the offing. The woman directors must come to
the meeting with their homework on the subject matters through. Another woman
director of a manufacturing company reported that she is allotted very little room to
speak out her feelings and suggestions.
The provision is not clear regarding independence of the women director. If the women
director is independent, it will benefit the companies as by appointing independent
women director they will be complying two provisions of section 149 i.e. by appointing
the women director and Independent Director.(Tiwari, 2014)Many business families
are including their women family member in their boardrooms, in order to follow the
Indian law. For example, Reliance Industries has added Nita Ambani, wife of chairman
Mukesh Ambani as a director. Vijay Mallya brought in his stepmother onto the board.
Other major companies like the Raymond Group, Aditya Birla Group, TVS, Apollo
Hospitals, and Asian Paints etc have added family members as women directors of
their respective companies.(Ghosh, 2015)The law does not prescribe any eligibility
criteria for women directors. It also does not prescribe that women should be
independent.(Haldea, 2015)
Lord Davies has stated that board appointments must always be based on merit.
Even after women being in the fray of corporate competition, very few women make
it to the boards, and then it needs to be questioned whether board recruitment is

only based on skills, experience and performance. (J. F. Corkery and Madeline Taylor,
2012) Merit should always remain the criterion for performance. However, in many
boards, group thinking becomes the norm and this leads to utter failure. Dominant
decision-making by a single influential board member can smash the independent
thinking process of others. Instead of pooling diverse resources, ego-driven decisions
are taken in the boardrooms. This, at times, is detrimental for the Companys
interests.(OConnor, 2006) This aspect needs to be understood by the section of the
boards, who believe that women directors will be puppets. It also needs to be analyzed
about the degree of independent and intelligent decision-making by every male director
in the boards.
Appointing someone on gender-basis is not showing anti-merit stance. Quota is a
way of turning the current flawed advancement and promotional systems into
meritocracies.(Quotas and the merit myth)Many men have not welcomed this move
of quota of the Indian government. This view was supported by 2016 April Global
Board of Directors study by Spencer Stuart and Women Corporate Directors Foundation
surveyed 4000 male and female directors from 60 countries. The study revealed that
49 per cent of women directors supported diversity quotas. Only 9 per cent of the
male directors supported thediversity quota. (Ramanathan, 2016)
FINDINGS
There are many companies, including public sector undertakings, who have failed to
have a woman director in the Boards of the Indian Companies. Table 1 provides a
picture of the representation of women in boardrooms, around the world. Those
Companies who have put up woman member have mainly done through appointing
relatives from the business families. Glass ceiling, however, is slowly getting cracked,
through quota, not only in India, but also, throughout the world.
COUNTRIES % OF SEATS
Norway 35.5
Finland 29.9
France 29.7
Sweden 28.8
Belgium 23.4
UK 22.8
Denmark 21.9
Netherlands 21
Canada 20.8
USA 19.2
Australia 19.2
Germany 18.5
Spain 18.2

COUNTRIES % OF SEATS
Switzerland 17
Austria 13
Ireland 10.3
Hong Kong 10.2
India 9.5
Portugal 7.9
Japan 3.1
Table 1 : Womens Share of Board Seats around the World
(Source: Madhok, Diksha, Indian Boardrooms Are The Best At Keeping Women Out, Quartz
India, Http://Qz.Com/325719/Indian-Boardrooms-Are-The-Best-At-Keeping-Women-Out/)
Many countries around the world have opted for quota for women in the boardrooms.
Norway, France, Sweden, Belgium have all gone the quota way, in order to increase
representation of women in their boards. India has also followed it, through legislation
as representation of women was not happening, by itself. Changes and increase in
diversity are happening in the Indian boards, though at a slower pace.
Increase in representation of women in the boards, in the future, will increase many-
fold, when the Company bosses realize the benefits of greater diversity in their resource
pool. For that, women have to be confident about their capabilities, and also prepare
themselves for better job opportunities. They also need to prove their mettle in their
job, so that they can prove to be a model for future women executives.
LIMITATIONS
The study is not based on primary resources. There was lack of time and resources
to get into the field-level research. Further field study and analyses would lead to a
broader and holistic paper.
CONCLUSIONS
The corporate world has been traditionally dominated by men. Gender ratio is skewed
critically in favour of them. Even at the senior management level, women are still
fewer when it comes to board-level positions in Indian companies. It is estimated that
out of 1,112 directorships of 100 companies listed on the Bombay Stock Exchange,
only 59 positions, or 5.3 per cent, are held by women. This compares with 15 per
cent in Canada, 14.5 per cent in the US, 12.2 per cent in Britain, 8.9 per cent in
Hong Kong and 8.3 per cent in Australia. (Sundar, 2013) According to the recent
Deloitte study, women are slowly joining boardrooms, but they are not leading them.
Women have to not only learn the language of the boardroom, but also develop
unique capabilities, to deal with issues. It is a revolutionary and empowering step for
women in the corporate field. When needed, change may not come from below, so,
the State had to take a decision in order to improve representation of women in the
boardrooms.
The Companies Act of 2013 is a step in the right roadmap. There have been many
women in key posts in the corporate world, like Chhanda Koachar, Kalpana Morparia,

Naina Lal Kidwai, who have made a place of their own. (Rao, 2013)If this legislation
passes the test of time, it needs to be seen. Companies with women on their boards
are more likely to sponsor or create organizations that benefit the work-life balance,
surrounding communities and also are more likely to have a formal employee volunteer
program in place. The number of female directors has a positive relationship with a
companys charitable giving habits.(Richard A. Bernardi, Veronica H. Threadgill, 2010)
Gaps in Corporate Social Responsibilities towards social welfare can be identified
and plugged by women Directors in a far better fashion.
The preconceived patriarchal mindset needs to be kept aside, in order to get the
greatest benefit of the new legislation. If countries, like, Norway have been successful
in increasing gender diversity and acting profitably; then, Indian Companies, also
need to look into the positive aspects that can come out of the legislation.
RECOMMENDATIONS
It is very necessary that the active work experience needs to be added as requirement
for women directors. Then, only, the legislation can help in the improvement of
efficiency of the board. Women have to remain tactful in dealing with people. Being
emotional in the professional decisions may make life difficult. Having quotas can be
small time options. It is necessary to focus on diversity at the recruitment stage and
more and more flexible options for women at middle level, so that they do not drop-
out from their career. It is a loss for the Company as they lose the talent and skills of
a sizeable portion of women employees.
There are around 1530 firms on National Stock Exchange. If every Company has one
woman Director, women will compose 10 per cent of the board directors. The present
statistics reveal that there are 13 per cent women directors. The reason is that 205
firms have more than one woman director. In order to reach Norway standards, firms
need to be pro-active in including more capable women in their boardrooms.
Companies need to strengthen and widen the talent pool of women in leadership
roles. More and more women from the lower and middle-level management need to
be mentored, suitably, so that they become tailored for the role of directors and
CEOs, in the long run. Women in the Companies also need to engage in active
networking, so that they remain visible, when the posts of directors become
vacant.(Ramanathan, 2016)
Until one is put on the job, the success or the failure of the person cannot be assessed.
Just like after the 73rd and 74th Amendments of the Constitution, 30 per cent reservation
in Panchayats and Municipalities, have brought in a huge number of women in the
public domain. From them, there have risen many women leaders who have proved
their mettle in the job. Similarly, women in the boards have to be assessed on their
merit. They are getting an opportunity through the legislation and time will provide an
answer towards the critics of more women in boardrooms. The different perspective
of women directors should be given full play in Corporate Governance. Companies
with high female representation on their boards tend to have stronger corporate
governance than those with few or no women on the board of directors. (Rosener,
2003) The presence of female board members also signals potential to current female
employees about their chances for advancement within the company.

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(2013). Women in the Boardroom: A Global Perspective. Deloitte.
Women Representation on Company Boards Rise in India: Study. (2016, April 19). Retrieved
from The Economic Times: file:///C:/Users/a/Desktop/Women%20representation%20on% 20
company% 20boards%20rise%20in%20India_%20Study%20-%20The% 20Economic% 20
Times.html
Zhu, H. (2014). Women as strategic resource and organization performances :a perspective of
resource synergy Open Access Theses and Dissertations paper 72. Retrieved from Hong
Kong Baptist University: http://repository.hkbu.edu.hk/cgi/viewcontent.cgi?article=1071&
context=etd_oa

A Comparative Study of Depreciation under
Companies Act 2013 and Companies Act 1956
Dr Soheli Ghose*
ABSTRACT
Depreciation is the normal wear & tear of Fixed Asset which is usually charged to Profit & loss
Account. Depreciation is generally charged annually. The sixty years old legislation has been
replaced by The Companies Act, 2013. There a lot many amendments in the new companies
act as compared to old act. One of such key changes is related to regulations governing
depreciation provisions. The Companies Act 2013 does not prescribe the Rate of Depreciation
as stipulated under Income Tax Act 1956. The Useful lives of the Fixed Assets are specified in
Schedule II of Companies Act, 2013. The enterprises have to calculate the depreciation as the
rate mentioned in the Schedule II. In this paper I have discussed about the new rules and
regulation for calculating depreciation. I have also focused on the significant changes relating
to depreciation in Companies Act 2013 in comparison to the earlier act. Numerical calculations
have been done to show the effect of changes in the treatment of depreciation.
Key Words : Residual value, Shift, Useful life
INTRODUCTION
Every business acquires some non-trading fixed assets. These fixed assets are used
in the business for facilitating its trading activities and enhancing its revenue earning
capacity. These assets are basically purchased for the business with the intention of
permanent use and not for resale. All fixed assets except the value of land decreases
with the passage of time. The value of these assets decreases each year. Such
gradual reduction or decrease in the value of fixed assets for the purpose of earning
revenue is called depreciation. Depreciation is closely related with the determination
of profit or loss for the period. Unless depreciation is charged to the revenues, the
true income of the business cannot be ascertained properly. As such, depreciation is
a revenue expense. Fixed assets are also called depreciable assets. The characteristics
of depreciable assets are as follows.
The expected life of the asset is more than one accounting period.
Those assets have a limited useful life.
Those assets are held by the business for use in production of goods and services.
Those assets are not for the purpose of sale in the ordinary course of business.
The cost of fixed asset indicates the price for the future service of the assets. It is
necessary to spread its cost over a number of years during which benefit of the
asset is received. This process of allocating the cost of fixed assets is termed as
* Asst. Prof. Department of Commerce (Morning) St. Xaviers College, Kolkata; Email: sohelighose@gmail.com;
Ph: 9230424836

depreciation. The recent enactment of the Companies Act, 2013 is a dawn of a new
era. After bringing far-reaching changes in various areas, the spectrum of financial
reporting has widened and brings higher responsibilities to those associated with
financial reporting, be it the auditors or the management. One such area is
Depreciation.
LITERATURE REVIEW
In his address delivered before the convention of central water works association,
Detroit, Walford Erikson basically emphasized the need of providing depreciation in
the books of accounts to present a true and fair view of the financial books of accounts.
(Erikson, 1912)Also the idea was to show case how the value of an asset should be
rationally depreciated so as to replace such asset in the long run .This also emphasized
on numerous factors that were responsible for depreciating the value of assets, to
name a few, reasons like efflux of time, obsolescence, change in technology etc.
Hercules Bantas, in his book looks at the various types of fixed assets and the role
they play in financial reporting. (Bantas, 2013) Topics covered include depreciation,
disposal of assets, and gain/loss on disposal. Subrata Kar in his book deals with the
depreciation methods and procedures to be followed as per the Companies Act 2013.
(Kar, 2013) The book has been specially designed keeping in mind the various
amendments as per the new Companies Act 2013, attempts has been made to
incorporate all possible changes of the new act and its impact on various sectors.
Samuelson has worked on how income should be defined if present discounted
valuations of all assets, and therefore all optimization decisions. (Samuelson, 1964)
Darr, Argote and Epplein their paper examined the acquisition, depreciation and transfer
of knowledge acquired through learning by doing in service organizations. (Darer,
Argote, & Epple). They also highlighted the accurate ways of computing depreciations
in the Service organisations.
Also, (Francis & Taylor, 1925), (Bare Act, 2013)
OBJECTIVES OF THE STUDY

1. To analyse the changes in depreciation with respect to Companies Act 2013 with
numerical examples and illustrations
2. To analyse the effect of change in depreciation clauses before and after Companies
Act 2013
RESEARCH METHODOLOGY AND DATA COLLECTION

The data has been collected from secondary sources of authentic websites, reports,
journals and books. The study undertaken is Descriptive Research. The study of the
Schedule II and the Companies Act 2013 as a whole is theoretical in nature. The
source includes a collection of Reports by competent Chartered Accountants and
Committees as well as websites on the internet.
ANALYSIS AND INFERENCES
Depreciation Accounting (AS 6)
AS 6 is mandatory in respect of accounting periods commencing on or after April 1,
1995. It applies to all enterprises. Para 3.4 of AS 6 states Depreciable amount of a

depreciable asset is its historical cost, or other amount substituted for historical cost
in the financial statements, less the estimated residual value. (This standard does
not deal with the treatment of the revaluation difference which may arise when historical
costs are substituted by revaluations.).Para 13 of AS 6 states, The statute governing
an enterprise may provide the basis for computation of the depreciation. For example,
the Companies Act, 1956 lays down the rates of depreciation in respect of various
assets. Where the managements estimate of the useful life of an asset of the
enterprise is shorter than that envisaged under the provisions of the relevant statute,
the depreciation provision is appropriately computed by applying a higher rate. If the
managements estimate of the useful life of the asset is longer than that envisaged
under the statute, depreciation rate lower than that envisaged by the statute can be
applied only in accordance with requirements of the statute.
Schedule II Part A
The MCA vide Notification dated 29 August, 2014 has amended Schedule II -
Paragraph 3 (i) of Part A as below:
l The useful life of an asset shall not ordinarily be different from the useful life
specified in Part C and the residual value of an asset shall not be more than five
per cent. of the original cost of the asset:
l Provided that where a company adopts a useful life different from what is specified
in Part C or uses a residual value different from the limit specified above, the
financial statements shall disclose such difference and provide justification in this
behalf duly supported by technical advice.
l Section 205 of the Companies Act, 1956 (the 1956 Act) read with Section 350 of
the said Act, when specifying the requirements relating to depreciation for
determination of profits for purposes of dividend, inter alia, required a company to
provide depreciation (at least) at the rate specified in Schedule XIV to the 1956
Act.
l Sub-Section (2) of Section 123 of the Companies Act, 2013 (the 2013 Act) which
deals with the similar issue under the 2013 Act states For the purposes of clause
(a) of sub-Section (1), depreciation shall be provided in accordance with the
provisions of Schedule II.
l It may be noted that unlike Section 205 of the 1956 Act read with Section 350 of
the said Act, Section 123 of the 2013 Act does not specify that the depreciation
should be provided only (at least) using the useful life (or rates derived there
from) specified in Schedule II for purposes of determining profit available for
distribution as dividend.
l With the amendment to Schedule II, it is clear that a company may adopt a useful
life that is different - higher or lower than the useful life specified in Schedule II,
provided a justification supported by technical advice for using the different life is
disclosed in its financial statements.
For intangible assets,
the provisions of the accounting standards applicable for the time being in force
shall apply,

except in case of intangible assets (Toll Roads) created under Build, Operate and
Transfer, Build, Own, Operate and Transfer or any other form of public private
partnership route in case of road projects, which can continue to be amortised based
on the expected revenue from operating such assets .[MCA Notification dated 31
March, 2014]
Schedule II Part B
l The useful life or residual value of any specific asset, as notified for accounting
purposes by a Regulatory Authority constituted under an Act of Parliament or by
the Central Government shall be applied in calculating the depreciation to be
provided for such asset irrespective of the requirements of this Schedule.
Schedule II - Part C
l Useful life in respect of Special Plant and Machinery - based on industry category.
Production and exhibition of motion picture films (13 years), Steel (20-25 years),
Glass manufacturing (8-13 years), Non-ferrous metals (25-40 years), Mines & quarries
(8 years), Medical & surgical operations (13-15 years), Telecommunication (13-18
years), Pharmaceuticals and Chemicals (20 years), Exploration, production and refining
of oil & gas (8-30 years), Civil construction (9-20 years), Generation, transmission
and distribution of power (22-40 years) , Salt works (15 years).
l Depreciation of plant & machinery based on industry category specified industries:
Schedule II is applicable to all companies, except in case of:
1. Regulatory Authority constituted under an Act of Parliament or by Central
Government for which notified rates are applicable.
2. Intangible Assets, for which notified Accounting Standards apply.
l Other companies (viz. other than those mentioned above)
Useful life and residual value shall not be more than that specified in Part C.
However, the Ministry of Corporate Affairs had later issue amendment vide notification
F No. 17/60/2012-CL-V where it has been provided that the useful life of an asset
shall not be longer than the useful life specified in Part C and the residual value of
an asset shall not be more than five per cent of the original cost of the asset.
*Provided that in case useful life or residual value of the asset is different from the
above limits, justification for the difference shall be disclosed in its financial statement.
Thus, now all companies (other than the entities in respect of which a Regulatory
Authority has specified the useful life or residual value) will have to take the useful
life and residual value as per Part C of schedule II. In case it differs from what is
stated in Schedule II, they will have to give reasons justifying the same. By virtue of
this, a level playing field has been provided to the Indian Companies vis- a -vis the
international practices in this regard.
Notes :
1. Factory buildings does not include offices, godowns, and staff quarters.
2. Where, during any financial year, any addition has been made to any asset, or
where any asset has been sold, discarded, demolished or destroyed, the

depreciation on such assets shall be calculated on a pro rata basis from the date
of such addition or, as the case may be, up to the date on which such asset has
been sold, discarded, demolished or destroyed.
3. The following information shall also be disclosed in the accounts, namely:
(i) depreciation methods used; and
(ii) the useful lives of the assets for computing depreciation, if they are different
from the life specified in the Schedule.
4. Useful life specified in Part C of the Schedule is for whole of the asset and where
cost of a part of the asset is significant to total cost of the asset and useful life of
that part is different from the useful life of the remaining asset, useful life of that
significant part shall be determined separately. (b) The requirement under sub-
paragraph (a) shall be voluntary in respect of the financial year commencing on or
after the 1 April, 2014 and mandatory for financial statements in respect of financial
year commencing on or after 1 April, 2015.
5. Depreciable amount is the cost of an asset, or other amount substituted for cost,
less its residual value. Ordinarily, the residual value of an asset is often insignificant
but it should generally be not more than 5% of the original cost of the asset.
6. The useful lives of assets working on shift basis have been specified in the
Schedule based on their single shift working. Except for assets in respect of which
no extra shift depreciation is permitted (indicated by NESD in Part C above), if an
asset is used for any time during the year for double shift, the depreciation will
increase by 50% for that period and in case of the triple shift the depreciation
shall be calculated on the basis of 100% for that period.
7. From the date this Schedule comes into effect, the carrying amount of the asset
as on that date
(a) shall be depreciated over the remaining useful life of the asset as per this
Schedule;
(b) after retaining the residual value, shall be recognised in the opening balance
of retained earnings where the remaining useful life of an asset is nil.
8. Continuous process plant means a plant which is required and designed to operate
for twenty-four hours a day
THE 2013 ACT VS THE 1956 ACT, AN OVERVIEW : The Depreciation on fixed
asset as per Schedule-II of Companies Act, 2013 became operational from 01/04/
2014 vide MCA notification no S.O.902 (E) dated 26/03/2014. From the date this
Schedule comes into effect, the carrying amount of the asset as on that date
(a) shall be depreciated over the remaining useful life of the asset as per this Schedule;
(b) after retaining the residual value, may be recognised in the opening balance of
retained earnings where the remaining useful life of an asset is nil.
Thus in respect of assets, whose remaining useful life is NIL, there is an option to
charge the carrying amount of asset either to retained earnings or to the Statement
of Profit and Loss

Particulars Schedule II to the 2013 Act Schedule XIV to the 1956 Act
Definition of Para 1 of Part A to Schedule II of the Companies
the term Act, 2013 defines:Depreciation is a systematic
depreciation, allocation of the depreciable amount of an asset
depreciable amount over its useful life.depreciable amount of an asset
and useful life is the cost of an asset or other amount substituted
Not Defined
for cost, less its residual value.useful life of an
asset is the period over which an asset is expected
to be available for use by an entity, or the number
of production or similar units expected to be
obtained from the asset by the entity
Mode of Depreciation Useful Life regime:Schedule II lays down useful life As per life of the assets (AS 6) or
to compute depreciation. rates prescribed by Schedule XIV.
Shifts based Useful life has been determined on the basis of
Depreciation single shift .For specified assets working on double
shifts, depreciation increases by 50% and in case
of triple shift it increases by 100% according to
number of days used.
Assets costing below No such Concept 100% Depreciation except in
Rs. 5000 certain cases
Residual life Residual life not to be more than 5 % of original No such concept.
cost with exceptions.
Depreciation on Entire charge to Statement of Profit and Loss Incremental depreciation on revalue
revalued assets portion can be adjusted against
revaluation reserve by transfer of an
equivalent amount to Statement of
Profit and Loss account on the
Guidance Note of the Institute of
Chartered Accountants of India
Residual life Residual life not to be more than 5 % of original No such concept.
cost with exceptions
Component Approach Schedule II introduced a new concept to estimate No such concept.
useful life of each component in an asset and
depreciate that specific component over its
estimated useful life.
Table 1 : The key differences

Depreciation treatment as per companies act, 2013
DEPRECIATION AND WDV AS PER 1956 ACT DEPRECIATION AND WDV AS PER 2013 ACT
Year of Orginal No of year Depreciation Net Residual Useful life Remaining Amount to Depreciation
Acquisition Cost used as on Charged as Carrying Value as per Useful life be changed on to be
of asset 31/03/2014 on Amount 5% of CA as on to provided
31/03/2014 As Cost 2013 31/03/2-014 Opening for
@6.33% on retain 2014-15
(Sch-XIV 31/03/2014 earnings/
CA-1956) Statement
of Profit
and Loss on
01/04/2014
(1) (2) (3) (4) (5)=2-4 (6)=2* (7) (8) (9)=5-6 (10)=
5% (5-6)/8
2002-03 10,000 11 6,963.00 3,037.00 500 10 0 2,537
2003-04 10,000 10 6,330.00 3,670.00 500 10 0 3,170
2004-05 10,000 9 5,697.00 4,303.00 500 10 1 3,803
2005-06 10,000 8 5,064.00 4,936.00 500 10 2 2,218
Table 2 : Furniture & Fixtures

Asset cost: Rs.1,000, 5% residual value, new useful life of 3 years under the 2013
Act. For determining the WDV rate under the 2013 Act, a computation would be
required to arrive at the rate (63%), which would depreciate the asset to 95%:
(http://www.icai.org/new_post.html?post_id=11504&c_id=240, 2016), (http://taxguru.in/
company-law/application-scheduleii-companies-act-2013-contradiction-as6.html, 2016),
(http://www.mca.gov.in/SearchableActs/Schedule2.htm, 2016), (http://scn.sap.com/docs/
DOC-57392, 2016), (http://taxguru.in/company-law/depreciation-schedule-ii-companies-
act-2013.html, 2016), (http://taxguru.in/company-law/depreciation-schedule-ii-companies-
act-2013.html, 2016), (https://www.kpmg.com/IN/en/IssuesAndInsights/first-notes/
Documents/First-Notes-24April2015, 2016), (http://www.ey.com/Publication/vwLUAssets/
EY-depreciation-of-fixed-assets/%24FILE/EY-depreciation-of-fixed-assets, 2016), (http:/
/www.charteredclub.com/depreciation-as-per-companies-act/, 2016)
Beginning WDV Depreciation WDV Depreciation WDV Depreciation WDV Depreciation

of under charge as under charge as under charge as under charge as
RBM per RBM SLM per SLM RBM per RMB SLM per SLM
@ 40% @ 16.21% @ 63% @ 31.67%
Year 1 100 400 1000 162 1000 630 1000 317
Year 2 600 240 838 162 370 233 683 317
Year 3 360 144 676 162 137 87 366 316
Year 4 216 86 514 162 50 50
Year 5 130 52 352 162
Year 6 78 28 190 140
Year 7 50 50
Table 3 : Effect of changes in depreciation

SIGNIFICANT CHANGES
1. The existing Companies Act, 1956 requires depreciation to be provided on each
depreciable asset so as to write- off 95% of its original cost over the specified
period. The remaining 5% is treated as residual value. Further, Schedule XIV to
the Companies Act, 1956 prescribes SLM and WDV rates at which depreciation
on various asset need to be provided. Other key aspects impacting depreciation
under the existing Companies Act, 1956 are as below.
a. In accordance with AS 6, depreciation rates prescribe under Schedule XIVare
minimum. If useful life of an asset is shorter than that envisaged under
Schedule XIV, depreciation at higher rate needs to be provided
b. The MCA has issued a General Circular dated 31 May 2011, which states
that for companies engaged in generation/supply of electricity, rates of
depreciation and methodology notified under the Electricity Act, will prevail
over the Schedule XIV to the Companies Ac, 1956
c. The MCA amended Schedule XIV in April 2012. The amendment prescribes
amortization rate and method for intangible assets (toll roads) created under
BOT, BOOT or any other form of PPP route (collectively, referred to as BOT
assets). In accordance with the amendment, such intangible assets will be
amortized using amortization rate arrived at by dividing actual revenue for the
year with total estimated revenue
d. Schedule XIV provides separate depreciation rates for double shift and triple
shift use of assets
e. According to a Circular issued by the MCA, unit of production (UOP) method
is not allowed
f. Assets whose actual cost does not exceed 5 thousand are depreciated @ 100%
g. The ICAI Guidance Note on Treatment of Reserve Created on Revaluation of
Fixed Assets clarifies that for statutory purposes, such as, dividends
andmanagerial remuneration, only depreciation based on historical cost of
the fixed assets needs to be provided out of current profits of the company.
Accordingly, the Guidance Note allows an amount equivalent to the additional
depreciation on account of the upward revaluation of fixed assets to be
transferred to the statement of profit and loss from the revaluation reserve.
2. The key requirements of the Companies Act, 2013 (particularly, Schedule II) are
listed below:
a. No separate depreciation rate is prescribed for intangible assets. Rather, the
same will be governed by notified AS
b. Depreciation is systematic allocation of the depreciable amount of an asset
over its useful life
c. The depreciable amount of an asset is the cost of an asset or other amount
substituted for cost, less its residual value
d. The useful life of an asset is the period over which an asset is expected to
be available for use by an entity, or the number of production or similar units
expected to be obtained from the asset by the entity

e. All companies will be divided into the following three classes to decide
application of depreciation rates
i. Class of companies as may be prescribed and whose financial statements
comply with the accounting standards prescribed for such class of
companies These companies will typically use useful lives and residual
values prescribed in the schedule II. However, these companies will be
permitted to adopt a different useful life or residual value for their assets,
provided they disclose justification for the same
ii. Class of companies or class of assets where useful lives or residual
value are prescribed by a regulatory authority constituted under an act of
the Parliament or by the Central Government These companies will
use depreciation rates or useful lives and residual values prescribed by
the relevant authority for depreciation purposes
iii. Other companies For these companies, the useful life of an asset will
not be longer than the useful life and the residual value will not be higher
than that prescribed in the proposed Schedule
f. Useful life specified in the Schedule II to the Companies Act, 2013 is for
whole of the asset. Where cost of a part of the asset is significant to total
cost of the asset and useful life of that part is different from the useful life of
the remaining asset, useful life of that significant part will be determined
separately
g. No separate rates are prescribed for extra shift depreciation. For the period
of time an asset is used in double shift, depreciation will increase by 50%
and by 100% in case of triple shift working
h. There is no specific requirement to charge 100% depreciation on assets whose
actual cost does not exceed 5 thousand
i. Useful lives of fixed assets prescribed under the Companies Act, 2013 are
different than those envisaged under Schedule XIV. For instance, the useful
life of buildings other than factory buildings and other than RCC frame
structure prescribed under Schedule XIV is approximately 58 years, whereas
the same under the Companies Act, 2013 will be 30 years. The useful life for
general furniture and fittings will be reduced from 15 to 10 years. Separate
useful lives have been introduced for many items of plant and machinery
used in specific industries, e.g., useful lives have been prescribed for
machinery used in the telecommunications business, manufacture of steel
and non-ferrous metals, which are not currently laid down in Schedule XIV.
j. From the date of the Companies Act, 2013 coming into effect, the carrying
amount of the asset as on that date:
i. Will be depreciated over the remaining useful life of the asset according
to the Companies Act, 2013
ii. After retaining the residual value, will be recognized in the opening retained
earnings where the remaining useful life is nil

LIMITATIONS OF THE STUDY
The research is descriptive in nature and an empirical analysis can be done in future.
Also the scope of the theoretical study can be extended to Component Accounting
as per Companies Act 2013.
CONCLUSION
Thus the significant changes can be described as follows.
1. The useful life of an asset can be the number of production or similar units expected
to be obtained from the asset. This indicates that a company may be able to use
UOP Method for depreciation, which is currently prohibited for assets covered
under Schedule XIV.
2. Companies, covered under class (i) above, will be able to use different useful lives
or residual values, if they have justification for the same. Although it appears that
this provision is aimed at ensuring compliance with Ind-AS 16 for such companies,
if the MCA does not prescribe class (i) companies immediately, these companies
would fall under class (iii) and may be forced to strictly apply useful lives as per
the schedule.
3. Companies will need to identify and depreciate significant components with different
useful lives separately. The component approach is already allowed under current
AS 10, paragraph 8.3. Under AS 10, there seems to be a choice in this matter;
however, the Companies Act, 2013 requires application of component accounting
mandatorily when relevant and material.
4. Overall, many companies may need to charge higher depreciation in the P&L
because of pruning of useful lives as compared to the earlier specified rates.
However, in some cases, the impact will be lower depreciation, i.e., when the
useful lives are much longer compared to the earlier specified rates, such as
metal pot line, bauxite crushing and grinding section used in manufacture of non-
ferrous metals.
REFERENCES
(2013). Companies Act.
http://scn.sap.com/docs/DOC-57392. (2016, Feb 17). Retrieved from http://scn.sap.com.
http://taxguru.in/company-law/application-scheduleii-companies-act-2013-contradiction-as6.html.
(2016, Feb 12). Retrieved from http://taxguru.in.
http://taxguru.in/company-law/depreciation-schedule-ii-companies-act-2013.html. (2016, Feb 27).
Retrieved from http://taxguru.in.
http://www.charteredclub.com/depreciation-as-per-companies-act/. (2016, Mar 4). Retrieved from
http://www.charteredclub.com.
http://www.ey.com/Publication/vwLUAssets/EY-depreciation-of-fixed-assets/%24FILE/EY-
depreciation-of-fixed-assets. (2016, Mar 4). Retrieved from http://www.ey.com.
http://www.icai.org/new_post.html?post_id=11504&c_id=240. (2016, Jan 27). Retrieved from http:/
/www.icai.org.
http://www.mca.gov.in/SearchableActs/Schedule2.htm. (2016, Feb 16). Retrieved from http://
www.mca.gov.in.

https://www.kpmg.com/IN/en/IssuesAndInsights/first-notes/Documents/First-Notes-24April2015.
(2016, Mar 4). Retrieved from https://www.kpmg.com.
Bantas. (2013). Fixed Assets and Depreciation (Financial Accounting Basics Book 1). Reluctant
Geek Smashword Edition.
Darer, Argote, & Epple. (n.d.). The acquisition, transfer, and depreciation of knowledge in service
organizations, 41, 11.
Erikson. (1912). Address delivered before the convention of central water works association.
Francis, & Taylor. (1925). A general mathematical theory of depreciation, H Hotelling. Journal of
the American Statistical Association, 20, 151.
Kar. (2013). Corporate Depreciation Accounting. Sbs publishers.
Samuelson. (1964, December). Tax deductibility of economic depreciation to insure invariant
valuations. The Journal of political economy, 72(6).

A Comparative Study of IFRS and Indian Accounting
Standard in Thirty Top Companies in India
Surajit Das* and Dr Tapash Ranjan Saha**
ABSTRACT
Uniform accounting standard for reporting financial statement is required when any company
establishes its businesses outside the country of origin for accessing the global markets. Based
on this need, an International Financial Reporting Standard was developed. When a company
switches over from local GAAP to IFRS, they have to modify their accounting system and
prepare comparative financial information between their previous GAAP and new IFRS. In India,
after globalization, a number of companies listed their securities on the stock exchanges outside
India. At that point, there was a requirement to prepare a financial statement as per the global
language. On the basis of this requirement, in 2010, Ministry of Corporate Affairs officially
announced the date of IFRS adoption in India for the first time. The motivation behind this
paper is to make a parallel comparison and evaluate the impact of IFRS quantitative factors of
financial report prepared by Indian companies under IFRS and Indian GAAP simultaneously.
Key Words : IFRS IGAAP, Financial Statement, Comparison
INTRODUCTION
Since the advent of internet, the world has shrunk, distances have lost their importance
and information has no more remained the differentiating factor. In this global arena
one of the foremost requirements to operate a business successfully, is to have a
good financial reporting system. If we believe in the old saying, Accounting is the
language of business, then the business enterprises around the globe should be
speaking in same languages to each other while exchanging and sharing financial
results of their international Business activities.
With the growing economy and increasing integration among the global economies,
Indian companies are also raising their capital globally due to diversification, cross-
border mergers, investments or divestments. At this point, it is the need of the hour
to have globally set standards in all domains to avoid discrepancies and conflicts
across boundaries and have a well defined, structured policy framework throughout.
International Financial Reporting Standards (IFRS) are designed as a common global
language for business affairs so that company accounts are understandable and
comparable across international boundaries.
BACKGROUND
When a company adopts any new accounting standard to prepare their financial
statement it may be positively or negatively impact on financial indicators. Sometimes
* Asst. Professor of Institute of Management Study; Email: surajitdas.d@rediffmail.com;
** Director, Professor of Institute of Management Study; Email: tapashsaha@hotmail.com;

it remains unchanged. Several researches around the globe shows that IFRS adoption
changed the financial indicators like equity position, solvency position, profitability
position, total assets valuation and liquidity position ((Callao, Jarne, & Lainez, 2007),
(Lantto & Sahlstrom, 2009), (Sovbetov, 2013), (Terzi, Oktem, & Sen, 2013).On the
other hand some research reveals that adoption of IFRS does not affect on Financial
Indicators. These remain unchanged. ((Agca & Aktas, 2007)(Dimitros, Eriotis,
Paraskevopoulos, & Vasiliou , 2013), (Ibiamke, Adzor, Atehboh-Briggs, & Patricial,
2014), (Jindichovsk & Kubkov, 2014).On the other hand Some research around
the world revel that adoption of IFRS improved the earning quality of the
companies[(Jeanjean, Ding, & Stolowy, 2009), (Houge & Zijl, 2010), (Manzano &
Conesa)). Earning quality of an organization can be classified as Discretionary
accrual(DA) and Non-discretionary Accruals(NDA).Some research concluded that
Impact of IFRS adoption on earning quality remain unchanged((Goncharov &
Zimmermann, 2006), (Majors & Marques), (Ton, 2011)).All the study considered post
and pre adoption year of IFRS and then compare the financial figure. The Core
Group of Ministry of Corporate Affairs of India (MCA) has recommended convergence
to IFRS in a phased manner from April 1, 2011. But they failed to meet the target.
Still it is not a mandatory criterion. One stream of study reveals some challenging as
well as beneficial factors for IFRS implementation. Challenging factors like Legal
system, External environment, huge transaction cost, lack of training, Amendment of
existing law.[(Ball),(Irvine & Lucas, 2006), (Gyasi, 2010), (Yadav & Sharma,
2012);(Chauhan, 2013);(Anbalagan, 2013);(Dhankar & Gupta, 2014);(Das.S, 2015)].
Beneficial factors are better access to global capital market, easier access to financial
reporting, Better quality of Financial reporting, helps in decision making process,
Reliability of Information. [(Kavitha & Sambaru, 2011), (Ikpefan & Akande, 2012),
(Ailemen & Akande, 2012)]. (Gray, 1980)had developed a formula [1-(RNew standard-ROld
standard
) / RNew standard] to measure the conservativeness of information. Later, It has been
used by several subsequent studies to interpret the level of information quality between
two accounting standard. One line of researchers have worked on the original scaled
proposed by Gray and found some changes in accounting number like equity
ownership. (Istrate, 2014)Profitability, liquidity[(Ibiamke & Ateboh-Briggs, 2014);(Punda,
2011);(Malaquias & Lemes, 2013),(Lopes.T & Viana, 2008)]. On the other hand one
stream of researcher have applied the modified scaled proposed by Gray.and found
that there is no material effect on liquidity position ,solvency position Profitability position
and equity position[((Brabete, Mihai, Dragan, & Iota, 2013); (Dani, Lei, & Davey,
2012))].Some researcher also applied this index to measure the nature of the
organization, whether it is pessimistic, optimistic or belong in neutrality region((Sucher
& Jindrichovska, 2004)) and found that most of the firm carried a pessimistic
characteristic.
In this study the researcher try to make a parallel comparison between IFRS and
IGAAP and try to find out the impact of IFRS on quantitative factors of financial
reports prepared by Indian Companies, listed at BSE, NSE Stock Exchange with the
time span 2010-11 to 2014-15. The researcher also applied gray Conservative Index
to find out the conservativeness of the financial information. So that it will contribute
significantly to the accounting and finance knowledge from the perspective of the
upcoming companies as well as the users of the companys financial information.

FACTORS IFRS RULES INDIAN GAAP IMPACT AREA
As per IFRS, financial As per IGAAP, financial
statement consist of : statement consist of :
1) Statement of financial 1) Balance Sheet
position 2) Profit & loss Account
2) Statement of comprehensive 3) Cash flow statement
Income including revaluation
Component 4) Notes to accounts,
gain, foreign exchange
Annexure and explanation.
of fluctuation. Qualitative factors
For public Ltd company with
Financial Statements 3) statement of changes in
subsidiaries have to prepare
equity
consolidated statement along
4) Cash flow statement with stand alone
5) Notes to accounts, Annexure
and explanation.For public Ltd
company with subsidiaries
have to prepare consolidated
statement along with stand
alone
IFRS does not provide any Accounting standard does not
particular format. But a liquidity provide any format But
presentation is used on the Company Act 1956 schedule
basis of current and non- VI, Banking Act, Insurance Act
current assets & Liabilities. It prescribe certain format for
provides more reliable and banking industry, Insurance
relevant information. Industry and other public ltd
IFRS does not provide any Company.
Format of Balance Qualitative factors
particular format. But as per Accounting standard does not
Sheet
IAS 1, expenditure is presented provide any format But
and classified as per function Company Act 1956 schedule
or nature. VI, Banking Act, Insurance Act
prescribe certain format for
banking industry, Insurance
Industry and other public ltd
Company.
As per IFRS, cash flow from As per IGAAP cash flow from
operating activities, Investment operating activities, Investment
activities and financial activities activities and financial
Cash Flow Statement Qualitative factors
recorded separately and its activities recorded separately.
mandatory for all who ever But Level III entities (Non
adopted IFRS. corporate Entities) are
exempted.
Statement of Changes It shows all the transaction with No separate statement require
In Equity owners like accounting profit as per IGAAP. In balance
and all other relevant capital sheet separate schedule
Qualitative factors
transaction disclosed Share Capital and
Reserve & Surplus

Statement of A Statement of recognized
Recognized Income And income and expenses can be Not required Qualitative factors
Expenses presented if the Statement Of
Changes In Equity is absent.
Consolidated financial Consolidated financial
statement are preparing as per statement are preparing as per
uniform accounting policies for uniform accounting policies for
all the entities in a group. all the entities in a group. If
Rule For Preparing uniform accounting policies is Qualitative factors
Consolidated Financial not applicable, that should be
Statement disclosed with the proportion
of item to which different
accounting policies have been
applied
IFRS does not recognized any IGAAP permitted to present
Presentation of Extra extraordinary or exceptional extra ordinary item in income Income statement
Ordinary Items item adjusted income statement as profit before tax
statement or in notes. and exceptional items Qualitative factors
IFRS 3 deals with business No Comprehensive accounting

combination which is defined standard described such
as a transaction or other deals. However AS14 deals
Type of Business event in which an acquirer with Amalgamation, merger, Qualitative factors
Combination obtains control of one or more demerger etc carried out Assets & liabilities
businesses. As per the pursuant to Indian Companies position
standard all business Act. This does not deal with
combination consider as acquisitions.
Acquisition.
Dividend proposed after the Dividend proposed after the
end of reporting period but end of reporting period but Liquidity position
Dividend Proposed After
before preparing financial before preparing financial
The End Of Reporting
statement is prohibited to statement is approved to
Period
consider as liabilities. record as current liabilities in
the financial statements.
Change In Depreciation Treated as change and Treated as change in
Method consider prospectively. accounting policy and Profitability position
accounted by retrospective
effect.
In case of Business
Combination, purchase method
and uniting interest method is
Accounting For In case of Business Qualitative factors
recognized as per IGAAP.
Business Combination Combination, Purchase
Uniting Interest Method is a
Method is recognized only as
method in which combined
per IFRS.
companies were portrayed as
if they had always operates as
a single entity.

IFRS 3 prescribes that , in AS14 provides that if there is
case the difference of net any difference between
identifiable assets acquired purchase consideration and
based on fair value exceeds net assets acquired is
Valuation of Goodwill purchase consideration then accounted as capital reserve Profitability
such gain is accounted as (negative goodwill) or Goodwill valuation
profit or loss to acquirer goodwill. Goodwill is
otherwise it is recorded as amortized over a period of 5
goodwill and is tested for years unless longer period is
impairment annually justified.
Intangible Assets can have Intangible Assets must be
Measurement of indefinite useful life and, measured at cost only and Assets Position
Intangible Assets measured at cost or revalued have a definite life (usually 10
as per active market price. years). Qualitative factors
If revaluation is require on If revaluation is require on Valuation of fixed

property plant and equipment, property plant and equipment, assets
Assets Revaluation
the entire class of assets to the entire class or selective
which that assets belong, class of assets consider for
Qualitative factors
should be revalued. revaluation.
If the economic value is Contingent assets are
Valuation of assets
Contingent Assets probable from those contingent disclosed as a part of Director
assets, that should be Report, not in financial Qualitative factors
Disclosure
disclosed in financial statement.
statement.
Deferred tax is determined Deferred tax is determined Assets and Liability
based on temporary based on timing differences, position
differences, being the being the difference between
difference between the carrying accounting income and
Deferred taxation amount and tax base of assets taxable income for a period
and liabilities. that is capable of reversal in
one or more subsequent
periods.
EPS only calculated in EPS must be reported in
Earnings per share consolidated financial consolidated financial
statement of the Parent Co statement as well as separate
financial of the Parent Co
Each major PPE cost should In IGAAP there is no such
Component accounting Qualitative factors
be recorded and depreciated kind of requirement.
separately.
Entities may present financial Schedule VI prescribe Indian
Reporting Currency statement in different currency rupees as reporting currency. Qualitative factors
and profit can be measured at
functional currency.

Uniform Accounting Financial statement must be Policies may be differs as per Qualitative factors
policy prepared by using uniform the situation.
accounting policies across all
entities in a group.
Interest & Dividend paid As per IGAAP, when dividend
reported either financial and interest paid, it should be Cash Flow Statement
activities or operating activities reported under financial
Interest & Dividend
activities but when it will
received reported under
investment activities
Bank Overdraft Under IFRS, Bank (o/d) It is considered under financial Cash Flow Statement
treated as cash and cash activities as per IGAAP
equivalent item
Table 1: Basic difference between IFRS & IGAAP

OBJECTIVES:
The review of literature disclosed that where a country changed her accounting
language from local standard to IFRS. The financial figures as well as qualitative
factors are also changed. So, on the basis of this concept, the objectives of this
study are:
1. To find out the impact of IFRS on Indian Companies for disclosing liquidity position.
2. To find out the impact of IFRS on Indian Companies for disclosing Profitability
position.
3. To find out the impact of IFRS on Indian Companies for disclosing Assets position.
4. To find out the impact of IFRS on Indian Companies for disclosing Cash Flow
position
METHODOLOGY
Research Methodology comprises of varies steps to solve the problem which are
obtained from the research question.
Sample Design : In this study the sample design used for selecting the Companies
is considered those Companies who are reporting their consolidated financial
statements as per Indian GAAP as well as in IFRS in their annual report.
Sample Size : For attaining the different objectives based on secondary data, the
researcher focused on MCA announcement regarding IFRS convergence in India early
2010.In this announcement, MCA proposed a phase approach regarding this matter. In
the first phase they have considered the conversion of opening balance sheet as at 1st
April 2011 by grouping the Indian companies in to three broad heads. These are :
Group A : Companies that are part of NSE 50 (Nifty 50).
Group B : Companies that are part of BSE Sensex (BSE 30).
Group C : Companies whose shares or other securities are listed on a stock exchange
outside India.

Group D-: Companies, listed or not, having net worth exceeding INR1, 000 crore.
Out of these four groups, the researcher first considered BSE-30 companies to analyze
the financial data prepared as per IFRS as well as IGAAP. For that reason the
researcher visited to each companys website and try to obtained annual report from
2010-11 to 2014-15.Out of these 30 companies only 3 companies completely shows
their consolidated financial statement as per IFRS and IGAAP simultaneously in their
annual report. These are: Wipro Ltd, Infosys, Dr. Reddy Lab. It shows that the sample
size is so small to interpreted data. Then the researcher critically reviews the reasons
behind the difficulties for implementing IFRS in India (Ch-Literature). After that The
researcher emphasis on Group-A listed companies, forming part of NSE-50.Out of
these 50 companies, 28 are also listed in BSE-30 and one company (Siemens India)
out of rest 12, have adopted IFRS and prepared their financial statement as per
IFRS only in their annual report. Then the researcher considered Group-C listed
companies and found that 3 more companies (Listed in London or Luxemburg stock
exchange) have prepared their financial statement as per IFRS as well as IGAAP
and disclosed it in their annual report. These are Rolta India, NTBL and Dabur India.
But after 2011-12, Dabur stop to prepare their financial statement as per IFRS basis.
Lastly the researcher concentrate on Group D listed companies and found another
company who have prepared their financial statement as per IFRS as well as IGAAP
simultaneously. That is MindtreeConsulting. So the final sample size for this research
came up with 6 Indian companies. They are 1. Wipro Ltd. 2. Infosys Ltd. 3. Rolta
India Ltd. 4. Noida Toll Bridge ltd 5. Dr Reddy Laboratories Ltd. 6. Mind Tree consulting.
Data Analysis : When data on different quantitative factors are collected, there are
two sets of information, one for IGAAP and other for IFRS for Five years (2010-11to
2014-15) each. Due to Non probabilistic sampling method (Judgment sampling) for
choosing the companies and small sample size (6 companies), the data set may not
be followed the rules of normality. For that reason, Wilcoxon Signed Rank testis
being used for testing hypotheses at 5% level of significance((P, 2011)) , but before
that, Gray Conservative Index method has been applied to know the conservativeness
of all the financial positions. If the index value lay in between 0.95 to 1.05, means
there is no significant impact of new accounting standard on financial position.
Operational Definitions : The basic motive of this research is to draw a parallel
comparison between IFRS and IGAAP and try to find out significant difference between
this two. Financial statement basically helps to measure a companys different
parameter like profitability position, liquidity position, leverage position and assets
position. When a company adopts new rules for preparing financial statement that
can directly affect on companys financial parameter (profitability position, liquidity
position, leverage position and assets position).In this research, the researcher try to
identify the impact of IFRS on quantitative Characteristics of financial statement,
prepare as per IFRS as well as IGAAP.

AREA Ratio FORMULA
Profitability Return on Assets (RA) Net Profit/Total Assets
Return on Equity (RE) Net Profit/Total Equity
Net Profit Margin (NP) Net profit/Total Net sales
Return on Capital Employed (ROCE) Net profit/Capital Employed
EPS valuation Actual Value
Liquidity Current Ratio (CR) Current Assets/Current Liabilities
Quick Ratio (QR) Quick Assets/Current liabilities
Assets position Goodwill To Assets Ratio (GAR) Goodwill/Total Assets
Degree of Depreciation & Amortization (DD&A) Depreciation/Fixed Assets
Valuation of Fixed Assets (VFA) Cl.Bal-Op.Bal/Op.bal
Cash Flow Position Operating cash flow ratio (OCF) CFO/Current Liabilities
Financial Policy ratio (FPR) CFA/Total Assets
Cash Flow Margin (CFM) CFO/Sales
Table 2 : Quantitative Areas
HYPOTHESIS
Hypotheses 1
Ho: Discloser of Liquidity position did not improve after the adoption of IFRS voluntarily.
H1: Discloser of Liquidity position improved after adoption of IFRS voluntarily.
Hypotheses 2
Ho: Discloser of Profitability position did not improve after the adoption of IFRS
voluntarily.
H1: Discloser of Profitability position improved after adoption of IFRS voluntarily.
Hypotheses 3
H0: Discloser of Assets position did not improve after the adoption of IFRS voluntarily.
H1: Discloser of Assets valuation improved after adoption of IFRS voluntarily.
Hypotheses 4
H0: Discloser of Cash flow position did not improve after the adoption of IFRS
voluntarily.
H1: Discloser of Cash flow position improved after adoption of IFRS voluntarily.
TESTING OF HYPOTHESES
Hypothesis I
Hypothesis I aim to test the impact on Liquidity position after voluntary IFRS adoption
by Indian companies. Liquidity refers to a companys ability to meet its continuing
obligations as they arise. To evaluate liquidity of the company, Current ratio and
quick ratio are considered.

LIQUIDITY POSITION
Current Ratio Quick Ratio
YEAR COMPANY
IFRS IGAAP IFRS IGAAP
WIPRO 2.661066 2.222285 2.631504 1.756489
ROLTA 2.735505 2.719095 2.735505 2.719095
NTBL 0.325623 0.220973 0.317665 0.215572
2014 -15
INFOSYS 4.148901 3.047281 4.148901 3.047281
Dr.REDDY 1.872615 1.74112 1.473693 1.364373
MINDTREE 3.720661 3.055079 3.720661 3.055079
Mean 2.577395 2.167639 2.504655 2.026315
Stnd Deviation 1.369371 1.080726 1.421084 1.128755
Median 2.698285 2.47069 2.683504 2.237792
WIPRO 2.605074 2.221125 2.588232 2.206424
ROLTA 0.967893 0.97871 0.967893 0.97871
NTBL 0.558117 0.393581 0.549841 0.387753
2013 -14
INFOSYS 4.707704 3.580583 4.707704 3.580583
Dr.REDDY 1.919002 1.783245 1.475223 1.365519
MINDTREE 4.06059 3.34274 4.06059 3.34274
Mean 2.46973 2.049997 2.250804 1.976955
Stnd Deviation 1.659564 1.265361 1.43618 1.295033
Median 2.262038 2.002185 2.546444 1.785971
WIPRO 2.123829 1.815933 2.101285 1.796224
ROLTA 1.204381 1.000489 5.617722 4.363872
NTBL 0.698158 0.576152 0.693339 0.572158
2012 -13
INFOSYS 5.617722 4.363872 5.617722 4.363872
Dr.REDDY 1.597771 1.518166 1.195131 1.134569
MINDTREE 3.839434 3.120793 3.839434 3.120793
Mean 2.513549 2.065901 2.359381 2.558581
Stnd Deviation 1.865152 1.422 2.17286 1.636405
Median 1.8608 1.66705 2.97036 2.458508

LIQUIDITY POSITION
Current Ratio Quick Ratio
YEAR COMPANY
IFRS IGAAP IFRS IGAAP
WIPRO 2.323899 1.985366 2.233301 1.906323
ROLTA 1.207436 1.142218 1.207436 1.142218
NTBL 0.721756 0.646573 0.719291 0.64436
2011-12
INFOSYS 6.346202 4.71509 6.346202 4.71509
Dr.REDDY 1.609572 1.524372 1.164289 1.101124
MINDTREE 2.646606 2.57656 2.646606 2.57656
Mean 2.475912 2.098363 2.310632 2.014279
Stnd Deviation 2.023266 1.444997 2.070456 1.489511
Median 1.966735 1.754869 1.720369 1.52427
WIPRO 2.308871 2.266793 2.212397 2.158733
ROLTA 1.149335 3.786141 1.149335 3.786141
NTBL 0.620724 0.652591 0.617131 0.648816
2010-11
INFOSYS 6.50618 5.052911 6.50618 5.052911
Dr.REDDY 1.16038 2.011046 0.768841 1.334222
MINDTREE 3.087248 2.990637 3.087248 2.990637
Mean 2.472123 2.793353 2.390189 2.66191
Stnd Deviation 2.171486 1.523304 2.225808 1.62218
Median 1.734626 2.628715 1.680866 2.574685
Table 3 : Financial Indicators for Liquidity position under IFRS -IGAAP-Hypothesis II
The above defined variables are used to define liquidity position as per IGAAP based
financial statement. It further helps to test Hypothesis I.
From the above tables, it is being observed that most of the year, mean of quick
ratio and mean of Current ratio have improved under IFRS as compared to IGAAP.
This indicates that the absolute values of quick assets, current liabilities and current
assets under IFRS are better compared to IGAAP.
Ratios Index Value (Over All)
Current Ratio 0.89343
Quick Ratio 0.88138
Table 4 : Gray Index value for Liquidity position Indicators
The initial values of IC for all the liquidity ratios are less than 0.90. This may suggest
that IFRS has quite relative impact on the liquidity position of all the selected Indian
companies. To prove the statistical impact and testing hypothesis I, the researcher
applied Wilcoxon Sign Rank test on all the above mentioned ratios.

YEAR Ratio Median p-one-tail
IFRS IGAAP
2014-15 Current Ratio 2.698285 2.47069 0.0315
2013-14 Current Ratio 2.262038 2.002185 0.0305
2012-13 Current Ratio 1.8608 1.66705 0.0308
2011-12 Current Ratio 1.966735 1.754869 0.0943
2010-11 Current Ratio 1.734626 2.628715 0.293
2014-15 Quick Ratio 2.683504 2.237792 0.0224
2013-14 Quick Ratio 2.546444 1.785971 0.0332
2012-13 Quick Ratio 2.97036 2.458508 0.0125
2011-12 Quick Ratio 1.720369 1.52427 0.1035
2010-11 Quick Ratio 1.680866 2.574685 0.3213
Table 5: Test statistics for liquidity position
First three years values of liquidity ratios lay in the critical region and as per the
proportionate principal, it proves that the results of all the ratios are significant at 5%
level of significance. So we can say that reporting of liquidity position has been
improved under IFRS voluntary adoption as compared to IGAAP.
The main reason for this significant improvement in liquidity ratios may be reduced
current liabilities and strengthened current asset. When Indian GAAP considers
dividend before it is approved by shareholders, IFRS requires approval before payment
of dividend. This reduces provision for liability to a considerable extent. IFRS consider
lease advance and rentals as current assets where Indian GAAP treats lease advance
and rentals in PPE. This reporting difference has boosted current asset in IFRS and
resulted in a better liquidity position.
Hypothesis II
Hypothesis II aims to test the impact on Profitability position after voluntary IFRS
adoption by Indian companies. Profitability position measure a companys ability to
generate earnings relative to sales, assets and equity and capital.
PROFITABILITY POSITION
Return on Return on Capital
Assets Return on Equity Net Profit Margin Employed EPS
Year Company IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP
WIPRO 0.15 0.15 0.213 0.234 0.185 0.186 0.1997 0.224 35.25 35.28
ROLTA 0.03 0.03 0.127 0.107 0.069 0.067 0.0363 0.034 15.67 15.2
NTBL 0.2 0.12 0.222 0.159 0.964 0.647 0.2184 0.136 4.45 3.92
2014-15
INFOSYS 0.19 0.19 0.23 0.244 0.231 0.232 0.2289 0.244 109.3 108.3
Dr.REDDY 0.11 0.13 0.199 0.237 0.15 0.159 0.1696 0.198 130.2 137.2
MINDTREE 0.2 0.2 0.25 0.266 0.15 0.151 0.246 0.262 63.65 63.85
Mean 0.15 0.14 0.207 0.208 0.292 0.24 0.1831 0.183 59.75 60.62
Stnd Deviation 0.07 0.06 0.043 0.061 0.334 0.206 0.0765 0.085 51.06 53.03
Median 0.17 0.14 0.217 0.236 0.168 0.172 0.209 0.211 49.45 49.57

PROFITABILITY POSITION
Return on Return on Capital
Assets Return on Equity Net Profit Margin Employed EPS
Year Company IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP IFRS IGAAP
2013-14 WIPRO 0.16 0.16 0.227 0.248 0.181 0.184 0.2141 0.234 31.76 32.37
ROLTA 0.05 0.04 0.181 0.128 0.138 0.113 0.0618 0.049 21.48 17.58
NTBL 0.1 0.08 0.125 0.111 0.538 0.45 0.1039 0.092 2.88 2.96
INFOSYS 0.19 0.19 0.224 0.239 0.212 0.213 0.2222 0.237 186.4 186.5
Dr.REDDY 0.13 0.12 0.237 0.25 0.163 0.15 0.1852 0.192 126.5 115.5
MINDTREE 0.21 0.21 0.261 0.275 0.15 0.149 0.2584 0.272 54.33 53.85
Mean 0.14 0.13 0.209 0.208 0.23 0.21 0.1743 0.179 70.55 68.12
Stnd Deviation 0.06 0.07 0.049 0.07 0.153 0.123 0.0758 0.089 71.13 70.05
Median 0.14 0.14 0.226 0.243 0.172 0.167 0.1997 0.213 43.05 43.11
2012-13 WIPRO 0.15 0.14 0.234 0.232 0.155 0.165 0.2261 0.228 25.01 25.02
ROLTA -0.01 -0.1 -0 -0.43 -0.4 -0.39 -2E-04 -0.157 -53.8 -52
NTBL 0.06 0.06 0.087 0.086 0.421 0.389 0.0734 0.075 2.23 2.47
INFOSYS 0.2 0.20 0.237 0.248 0.233 0.234 0.2351 0.247 164.9 165
Dr.REDDY 0.12 0.11 0.229 0.24 0.144 0.134 0.1891 0.195 98.82 89.93
MINDTREE 0.19 0.20 0.236 0.258 0.137 0.144 0.2347 0.257 78.81 82.79
Mean 0.12 0.10 0.171 0.105 0.115 0.113 0.1597 0.141 52.66 52.2
Stnd Deviation 0.08 0.13 0.102 0.271 0.273 0.262 0.0996 0.16 77.51 76.37
Median 0.13 0.13 0.232 0.236 0.15 0.154 0.2076 0.212 51.91 53.91
2011-12 WIPRO 0.13 0.12 0.196 0.195 0.151 0.142 0.1759 0.177 21.36 22.82
ROLTA -0.02 0.05 -0.05 0.126 -0.05 0.133 -0.026 0.062 -5.95 15.02
NTBL 0.06 0.07 0.091 0.097 0.443 0.479 0.0702 0.08 2.38 3.11
INFOSYS 0.22 0.22 0.249 0.268 0.247 0.256 0.2477 0.268 145.6 147.5
Dr.REDDY 0.12 0.11 0.248 0.261 0.147 0.138 0.1876 0.193 84.16 76.76
MINDTREE 0.16 0.16 0.224 0.228 0.114 0.114 0.2221 0.227 54.1 54.14
Mean 0.11 0.12 0.159 0.196 0.175 0.21 0.1463 0.168 50.27 53.23
Stnd Deviation 0.08 0.06 0.119 0.071 0.164 0.141 0.1038 0.081 57.5 53.55
Median 0.12 0.12 0.21 0.212 0.149 0.14 0.1818 0.185 37.73 38.48
2010-11 WIPRO 0.14 0.14 0.222 0.233 0.017 0.17 0.1969 0.189 20.49 21.72
ROLTA 0.1 0.11 0.187 0.211 0.195 0.222 0.131 0.118 21.82 24.9
NTBL 0.03 0.06 0.049 0.084 0.271 0.436 0.0355 0.066 1.36 2.72
INFOSYS 0.22 0.22 0.25 0.263 0.248 0.254 0.247 0.263 119.5 112.3
Dr.REDDY 0.12 0.11 0.24 0.248 0.148 0.138 0.2045 0.157 65.28 58.72
MINDTREE 0.11 0.1 0.137 0.131 0.071 0.067 0.1325 0.127 26.98 24.85
Table 6: Financial Indicators for Profitability position under IFRS-IGAAP Hypothesis II

The above defined variables are used to define profitability position as per IGAAP
based financial statement. It further helps to test Hypothesis II.
From the tables above, it is being observed that in mean of ROA, ROE and NP have
improved under IFRS as compared to IGAAP. But ROCE and absolute value of EPS
has been unchanged or decreased. This means that the absolute values of ROA,
ROE NP under IFRS are better compared to IGAAP.

Ratios Index Value (Over All)
ROA 0.972
ROE 0.985
NP 1.0153
ROCE 1.003
ROA 0.976
EPS 1.043
Table 7 : Gray Index value for profitability position Indicators
The initial values of IC for all the profitability ratios are in between 0.95 to 1.05. This
may suggest that IFRS and IGAAP are same for defining profitability position of all
the selected Indian companies. To prove this and testing hypothesis II the researcher
applied paired t test on all the above mentioned ratios.
IFRS IGAAP
2014-15 ROA 0.175 0.142 0.2345
2013-14 ROA 0.143 0.146 0.1367
2012-13 ROA 0.139 0.135 0.1765
2011-12 ROA 0.124 0.128 0.1632
2010-11 ROA 0.115 0.119 0.1325
2014-15 ROE 0.217 0.236 0.4732
2013-14 ROE 0.226 0.243 0.4691
2012-13 ROE 0.232 0.236 0.2070
2011-12 ROE 0.215 0.212 0.1272
2010-11 ROE 0.204 0.222 0.0274
2014-15 NP 0.168 0.172 0.1890
2013-14 NP 0.172 0.167 0.1031
2012-13 NP 0.158 0.154 0.3931
2011-12 NP 0.149 0.145 0.2221
2010-11 NP 0.171 0.196 0.0742
2014-15 ROCE 0.209 0.211 0.4932
2013-14 ROCE 0.199 0.213 0.2134
2012-13 ROCE 0.207 0.212 0.2612
2011-12 ROCE 0.181 0.185 0.0821
2010-11 ROCE 0.164 0.142 0.3456
2014-15 EPS 49.45 49.57 0.2568
2013-14 EPS 43.05 43.11 0.1225
2012-13 EPS 51.91 53.91 0.4033
2011-12 EPS 37.33 38.48 0.2392
2010-11 EPS 24.42 24.88 0.1911
Table 8 : Test statistics for profitability position
All the p values of profitability indicators do not lie in the critical region, but lies in the
acceptance region and so H0 gets accepted. Thus, there is no statistical evidence at
5% level of significance, to prove that Profitability position has been improved under
IFRS voluntary adoption as compared to IGAAP. Therefore, even though differences
can be observed in absolute terms, there is not enough evidence to prove the same
statistically.
Hypothesis III
Hypothesis III aims to test the impact on Assets position after voluntary IFRS adoption
by Indian companies. Goodwill valuation, Depreciation treatment of tangible assets
and revaluation method are the major area, affected by IFRS.
ASSETS POSITION
Goodwill To Degree of Valuation of
Year Company Assets Ratio Depreciation Fixed Assets
IFRS IGAAP IFRS IGAAP IFRS IGAAP
2014 -15 WIPRO 0.113 0.099 0.204 0.216 0.171452 0.048468
ROLTA 0.061 0.07 0.129 0.127 -0.02733 -0.01957
NTBL 0 0 0.074 4E-04 -0.10339 -0.00243
INFOSYS 0.047 0.054 0.111 0.084 0.209138 0.297998
Dr.REDDY 0.017 0.024 0.132 0.129 0.097804 0.118645
MINDTREE 0.028 0.035 0.204 0.172 0.338453 0.502798
Mean 0.044 0.047 0.143 0.121 0.114355 0.157651
Stnd Deviation 0.04 0.035 0.052 0.075 0.161385 0.204597
Median 0.037 0.044 0.131 0.128 0.134628 0.083557
2013 -14 WIPRO 0.126 0.118 0.207 0.205 0.02641 0.040585
ROLTA 0.067 0.078 0.075 0.073 0.113148 0.103328
NTBL 0 0 0.011 4E-04 -0.10436 -0.00306
INFOSYS 0.038 0.039 0.167 0.141 0.203774 0.128035
Dr.REDDY 0.02 0.037 0.129 0.123 0.144957 0.143786
MINDTREE 0 0 0.213 0.206 0.270021 0.244304
Mean 0.042 0.045 0.134 0.125 0.108992 0.109496
Stnd Deviation 0.049 0.046 0.079 0.079 0.133089 0.086196
Median 0.029 0.038 0.148 0.132 0.129052 0.115682
2012 -13 WIPRO 0.125 0.124 0.207 0.189 -0.2158 -0.16894
ROLTA 0.075 0.087 0.33 0.082 0.370015 0.341059
NTBL 0 0 0.011 3E-04 -0.06731 -0.0015
INFOSYS 0.043 0.048 0.165 0.133 0.224651 0.347274
Dr.REDDY 0.022 0.046 0.114 0.119 0.091435 0.12031
MINDTREE 0 0 0.211 0.197 0.202469 0.180867
Mean 0.045 0.051 0.173 0.12 0.10091 0.136511

ASSETS POSITION
Goodwill To Degree of Valuation of
Year Company Assets Ratio Depreciation Fixed Assets
IFRS IGAAP IFRS IGAAP IFRS IGAAP
Stnd Deviation 0.049 0.049 0.107 0.073 0.212948 0.20042
Median 0.033 0.047 0.186 0.126 0.146952 0.150588
2011 -12 WIPRO 0.156 0.157 0.152 0.163 0.081942 0.034495
ROLTA 0.071 0.077 0.135 0.131 0.430934 0.441338
NTBL 0 0 0.009 0.01 -0.13448 -0.00817
INFOSYS 0.026 0.03 0.168 0.129 0.141047 0.06684
Dr.REDDY 0.018 0.048 0.117 0.126 0.043528 0.032632
MINDTREE 0 0 0.284 0.26 -0.11861 -0.11008
Mean 0.045 0.052 0.144 0.136 0.07406 0.076176
Stnd Deviation 0.06 0.059 0.089 0.08 0.206617 0.18914
Median 0.022 0.039 0.143 0.13 0.062735 0.033563
2010 -11 WIPRO 0.148 0.147 0.133 0.15 0.10876 0.09873
ROLTA 0.068 0.078 0.153 0.141 0.48347 0.45321
NTBL 0 0 0.008 8E-04 -0.09877 -0.07543
INFOSYS 0.026 0.032 0.176 0.128 0.176548 0.109764
Dr.REDDY 0.023 0.069 0.094 0.1 0.064321 0.043876
MINDTREE 0 0 0.247 0.237 -0.12378 0.109652
Mean 0.044 0.054 0.135 0.126 0.101759 0.1233
Stnd Deviation 0.056 0.056 0.08 0.077 0.220828 0.176418
Median 0.025 0.051 0.143 0.135 0.086541 0.104191
Table 9 : Financial Indicators for Assets Position under IFRS-IGAAP Hypothesis IV
The above defined variables are used to define Assets position as per IGAAP and
IFRS based financial statement. It further helps to test Hypothesis IV.
From the table above, it is observed that in absolute terms, mean of GAR has
significantly increased for most of the year. And DD&A and VFA value has slightly
decreased under IFRS as compared to IGAAP for most of the years.
Ratios Index Value(Over All)
GAR 1.02
DD&A 0.93
VFA 1.04
Table 10 : Gray Index value for Assets position Indicators
The initial values of IC for all the Assets position ratios are varies between 0.95 to 1.05.
This may suggest that IFRS does not have any relative impact for defining Assets
position of all the selected Indian companies. To prove this and testing hypothesis IV the
researcher applied Wilcoxon Sign rank test on all the above mentioned ratios.

IFRS IGAAP
2014-15 GAR 0.037 0.044 0.2466
2013-14 GAR 0.028 0.0382 0.196
2012-13 GAR 0.032 0.0471 0.058
2011-12 GAR 0.022 0.039 0.099
2010-11 GAR 0.024 0.050 0.113
2014-15 DD&A 0.130 0.127 0.0762
2013-14 DD&A 0.147 0.131 0.0256
2012-13 DD&A 0.186 0.125 0.118
2011-12 DD&A 0.143 0.130 0.1869
2010-11 DD&A 0.143 0.134 0.1810
2014-15 VFA 0.1346 0.0835 0.1675
2013-14 VFA 0.1290 0.1156 0.4919
2012-13 VFA 0.1469 0.1505 0.0924
2011-12 VFA 0.0627 0.0335 0.4716
2010-11 VFA 0.0865 0.1041 0.3226
Table 11 : Test statistics for Assets position
All the value of Assets valuation ratios does not lie in the critical region (except DD &
A 2013-14), but lies in the acceptance region and so H0 gets accepted. Thus, there is
no statistical evidence at 5% level of significance, to prove that Reporting Assets
under IFRS voluntary adoption is improved as compared to IGAAP. Therefore, even
though differences can be observed in absolute terms, there is not enough evidence
to prove the same statistically.
Hypothesis V
Hypothesis V aims to test the impact on cash flow position after voluntary IFRS
adoption by Indian companies. Treatment of Bank overdraft, Interest and Dividend
are the major areas, affected by IFRS adoption.
Operating Cash Financial Policy
Cash Flow Margin
Flow Ratio Ratio
Year Company IFRS IGAAP IFRS IGAAP IFRS IGAAP
2014-15 WIPRO 0.477123 0.4031 -0.014 -0.01421 0.167 0.1669911
ROLTA 0.629111 0.4969 0.0532 0.05892 0.141 0.1193327
NTBL 1.456027 0.0051 -0.155 0 0.651 0.0028757
INFOSYS 0.964835 0.5388 -0.077 -0.07445 0.202 0.1566609
Dr.REDDY 0.391171 0.3699 -0.021 -0.02329 0.169 0.1716363
MINDTREE 1.173939 0.9866 -0.051 -0.05183 0.166 0.1679721
Mean 0.848701 0.4667 -0.044 -0.01748 0.249 0.1309115

Operating Cash Financial Policy
Cash Flow Margin
Flow Ratio Ratio
Year Company IFRS IGAAP IFRS IGAAP IFRS IGAAP
Stndrd Deviation 0.420413 0.3172 0.0697 0.046069 0.198 0.065611
Median 0.796973 0.45 -0.036 -0.01875 0.168 0.161826
2013-14 WIPRO 0.498685 0.4353 -0.07 -0.07184 0.156 0.1563659
ROLTA 0.550615 0.4997 0.0172 0.01913 0.254 0.236905
NTBL 1.615122 0.0019 -0.207 0 0.723 0.0009985
INFOSYS 1.758043 0.8166 -0.055 -0.05519 0.32 0.1959787
Dr.REDDY 0.304515 0.3402 -0.001 -0.00151 0.125 0.1504794
MINDTREE 0.892467 0.7326 -0.053 -0.05302 0.108 0.1061816
Mean 0.936575 0.4711 -0.061 -0.01716 0.281 0.1327151
Median 0.721541 0.4675 -0.054 -0.02726 0.205 0.1534226
2012-13 WIPRO 0.486541 0.3862 -0.015 -0.02611 0.163 0.1708282
ROLTA 1.397987 1.1896 0.1349 0.140514 0.525 0.4917706
NTBL 0.717584 0.6358 -0.092 -0.08254 0.737 0.6501426
INFOSYS 2.031339 0.9104 -0.069 -0.06928 0.316 0.1827171
Dr.REDDY 0.248238 0.2435 -0.013 -0.01163 0.115 0.1206409
MINDTREE 0.816057 0.7231 -0.007 -0.00739 0.113 0.1127953
Mean 0.949624 0.6814 -0.01 -0.00941 0.328 0.1696498
Median 0.76682 0.6795 -0.014 -0.01887 0.24 0.1548942
2011-12 WIPRO 0.340536 0.2972 -0.04 -0.03973 0.108 0.1078015
ROLTA 1.375282 1.277 0.0782 0.078439 0.52 0.5149197
NTBL 1.083198 0.9595 -0.103 -0.08783 0.879 0.754333
INFOSYS 1.723038 1.0449 -0.061 -0.06483 0.243 0.2018302
Dr.REDDY 0.371606 0.3512 0.0313 0.03436 0.167 0.1709548
MINDTREE 0.53064 0.5571 0.0312 0.027349 0.101 0.1077172
Mean 0.90405 0.7478 -0.01 -0.00871 0.336 0.3095927
Median 0.806919 0.7583 -0.004 -0.00619 0.205 0.1863925
2010-11 WIPRO 0.401886 0.4502 -0.071 -0.07459 0.013 0.1302801
ROLTA 0.799361 2.8708 0.0142 0.013466 0.39 0.3836189
NTBL 0.966725 1.0369 -0.098 -0.0929 0.852 0.6934992
INFOSYS 1.622356 1.098 -0.116 -0.12615 0.215 0.1871972
Dr.REDDY 0.19527 0.3197 -0.004 0.005091 0.107 0.1043832
MINDTREE 0.146692 0.2027 0.0049 0.000197 0.02 0.0286945
Mean 0.688715 0.9964 -0.045 -0.04582 0.266 0.2546122
Median 0.600624 0.7435 -0.037 -0.0372 0.161 0.1587386
Table 12 : Test statistics for Assets position

The above defined variables are used to define Cash Flow position as per IGAAP
and IFRS based financial statement. It further helps to test Hypothesis V.
From the table above, it is observed that in absolute terms, mean of OCF, FPR and
CFM has been increased for most of the year.
Ratios Index Value(Over all)
OCF 0.879
FPR 0.823
CFM 0.794
Table 13 : Gray Index value for Cash Flow position Indicators
The initial values of IC for all the Cash Flow position ratios are below 0.95. This may
suggest that IFRS have relative impact for defining Assets position of all the selected
Indian companies. To prove the statistical impact and testing hypothesis IV the
researcher applied Wilcoxon Sign rank test on all the above mentioned ratios.

IFRS IGAAP
2014-15 OCF 0.79 0.45 0.072
2013-14 OCF 0.72 0.46 0.073
2012-13 OCF 0.76 0.67 0.096
2011-12 OCF 0.806 0.75 0.101
2010-11 OCF 0.600 0.743 0.213
2014-15 FPR -0.036 -0.018 0.172
2013-14 FPR -0.054 -0.027 0.182
2012-13 FPR -0.014 -0.018 0.378
2011-12 FPR -0.004 -0.0619 0.298
2010-11 FPR -0.037 -0.0372 0.0341
2014-15 CFM 0.168 0.161 0.158
2013-14 CFM 0.205 0.153 0.143
2012-13 CFM 0.24 0.15 0.0754
2011-12 CFM 0.205 0.186 0.127
2010-11 CFM 0.161 0.158 0.375
Table 14 : Test statistics for Cash Flow position
All the value of Cash Flow ratios does not lie in the critical region (except FPR 2010-
11), but lies in the acceptance region and so H0 gets accepted. Thus, there is no
statistical evidence at 5% level of significance, to prove that Reporting cash flow
under IFRS voluntary adoption is improved as compared to IGAAP. Therefore, even
though differences can be observed in absolute terms, there is not enough evidence
to prove the same statistically.

CONCLUSION
These findings led the conclusion that IFRS adoption does not have a significant
effect on the financial ratios of Indian firms except liquidity indicators. Comparing
ratios based on IFRS figures with those based on IGAAP is not fully appropriate so it
is the suggestion to the future analysts for the further research is to adopt a cautious
approach when examining financial ratios during the transition to IFRS. They can
also adopt any non-parametrical test to prove the hypothesis.
ACKNOWLEDGEMENT
The authors wise to express their deep gratitude to Prof.A.Roy, Dean, IMS Business
School ,Prof.MeghdootGhosh and the entire family of IMS for their enormous support
and encouragement.
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Micro insurance for the Deprived-A Case Study
of Burdwan District of West Bengal
Dr. Sreemoyee Guha Roy*
ABSTRACT
Micro insurance is the protection of low-income people against perils in exchange of regular
premium payments proportionate to the likelihood and cost of risk undertaken. This section also
throws light on the literature review on the factors affecting micro insurance take up. Then the
paper goes on to identifying the research problem and consequently analyzing the same.
Poor women have traditionally managed and coped with risk by such means as selling assets,
relying on their husbands, pulling children out of school to earn income, or utilizing informal
mechanisms such as helping groups for support. They also practice risk-averse behavior, such
as prioritizing savings over investing and spreading what little investment they have made across
several low risk/low return businesses. While these approaches offer some protection to poor
women, they are frequently limited, inefficient, unreliable, or even harmful. For example, in poor
households, high savings rates mean that women have few remaining resources to invest in
their businesses. Allocating resources in this way stunts their businesses ability to grow and
alleviate poverty.
Micro insurance offers a promising new way for poor women to manage risk. In India successful
micro insurance programs have emerged in recent years as powerful tools to help poor families
cope with risk and alleviate poverty. Women form a significant segment of this market because
they seek micro insurance both for themselves and for their families, serving as risk managers
for entire households. Nonetheless, millions of poor women are uninsured.
The second part of the paper deals with the performance of micro insurance products in Burdwan
district of West Bengal. A sample of 390 respondents from informal sector worker has been
collected from both the districts. With this sample size the paper seeks to explain how the
determinants of micro insurance demand affects insurance take up and its subsequent renewal.
Key Words : Micro insurance, Risk Coping Strategy, Impact
INTRODUCTION
Need for managing financial risks has given birth to the insurance industry which has
become an integral part of global finance system as well as financial system of a
nation: Insurance. Thus provides security for unforeseen future risk, which is required
for both rich and poor. But till few years back insurance facility was not available to
the low-income people.However, the spread of insurance has been uneven. Certain
unprivileged sections of society have not been benefited by insurance products. But
it is well accepted in present that for development of any economy, inclusion of
marginalized and under privileged sections of society is highly necessary, and that is
why micro insurance has become an important insurance mechanism in all emerging
markets including India.
* Assistant Professor, Accounting and Finance, St. Xaviers (Autonomous) College, Kolkata;
Email: sreemoyeeguharoy@gmail.com; Phone: 9830953340

IRDA Regulations 2002 entitled Obligations of Insurers to Rural Social Sections
actually forced the insurance industry to reach to the under privileged low-income
sections of society, who were outside the ambit of insurance. This actually shaped
the concept of micro insurance in India, besides earlier community based insurance
scheme, and in-house insurance schemes run by MFIs,NGOs,TU etc. for low-income
people.
A consultative group on micro insurance was set up in 2003 to look into the issues
which highlighted the:
l Non-availability of standalone Micro insurance programme
l Apathy of insurance company towards micro insurance
l The potential of all channel
There are no unanimously accepted definitions of micro insurance despite its profound
use and understanding across stakeholders and others in developing and
underdeveloped countries. In common parlance, micro insurance is the provision of
insurance schemes to low-income households, which serves as an important tool to
reduce risks for the already vulnerable population. Micro insurance is defined as
insurance that is accessed by the low-income population, provided by a variety of
different entities, but run in accordance with generally accepted insurance practices.
Next important step in this regard is the IRDA Micro insurance Regulations 2005,
which provides a platform to distribute affordable insurance products to the rural and
urban poor and to enable to be an integral part of the countrys wide insurance
system.
Around the world millions of women lead a very vulnerable life, the difference between
life and death often lies in having an effective way to cope when a disaster strikes.
Having coping mechanisms is crucial for poor women, who not only face a heightened
vulnerability to risk for themselves, but who also shoulder the burden of managing
their familys risks.
Over the course of a womans lifetime, these risks can include health problems for
themselves and family members, the loss of a breadwinners income due to death or
divorce, vulnerability in old age, worry over the care of children in case of own death,
domestic violence, job-related risks such as income volatility or on-the-job injuries,
natural disasters, and other emergencies. Unmanaged, any one of these risks can
deliver serious and often devastating financial shocks to poor women and their
households, potentially intensifying poverty, instability, and vulnerability.
Poor men confront many of these same risks. However, the impact on poor women
is far greater. Globally, women comprise 70 percent of the worlds poor. They face
disproportionate levels of physical vulnerability and violence. They earn less income,
often from informal sector employment, with less ownership and control of property.
When these vulnerabilities are combined with the responsibility of ensuring the welfare
and security of their families, it is clear that women have not only a unique and
pressing need for appropriate means to manage risk, but also serve as proxies for
the risk management of their entire families.
Poor women have traditionally managed and coped with risk by such means as selling
assets, relying on their husbands, pulling children out of school to earn income, or
utilizing informal mechanisms such as helping groups for support. They also practice
risk-averse behavior, such as prioritizing savings over investing and spreading what
little investment they have made across several low risk/low return businesses. While
these approaches offer some protection to poor women, they are frequently limited,
inefficient, unreliable, or even harmful. For example, in poor households, high savings
rates mean that women have few remaining resources to invest in their businesses.
Allocating resources in this way stunts their businesses ability to grow and alleviate
poverty. Poor people are more susceptible to risks because of their lack of income
and assets, insecure and often unsafe working conditions, and increased exposure to
health risks through poor housing, sanitation, and so on. Among poor people, women
are especially vulnerable.
To begin with, womens biological roles make them vulnerable to particular health
risks associated with pregnancy and childbirth. They are also at higher risk for certain
diseases, such as HIV/AIDS, driven not only by their physiological vulnerability, but
also by the fact that women in many cultures find it hard to negotiate safe sex.
Furthermore, women face additional risks related to their gendered position in society.
They are more vulnerable to domestic violence, divorce, and loss of support in old
age than men. Such risks are aggravated by their unequal ownership of property,
especially housing. These vulnerabilities can be further intensified in cultures where
women have ongoing obligations to extended families, or where diminished
independence and mobility limits their ability to seek help from outside the home.
Womens own income-earning activities are also subject to a wide range of pressures.
The responsibility for caring for sick family members often means that the ill health of
children, partners and extended family members impinges on their ability to generate
income. Less income means fewer resources to invest in reliable equipment, good
quality housing, or disease-resistant strains of livestock, making these assets much
more likely to be damaged or destroyed. Womens physical vulnerability makes their
property particularly susceptible to theft and crime. This is especially true for the
many women who work in the informal sector, where in addition to theft and crime,
they are also vulnerable to harassment, confiscation of property, and the destruction
of market stalls by authorities.
Micro insurance can allow women to live healthier and more secure lives. A key
component of this is reducing womens dependency on many of the inadequate and
sometimes harmful risk strategies previously described. For example, comprehensive
health micro insurance can help poor women tackle expensive health-related costs
for themselves and their family members without taking out high-cost loans or cutting
food expenses, which can cause significant stress to the household. Likewise, well-
designed life micro insurance can help poor women cope with both the short-term
expenses (funeral costs) and long-term adjustments (loss of a breadwinners income)
associated with the death of a husband, and can help poor women ensure that their
children are cared for in case of their own death without having to sell productive
assets or exclusively depend on children or social relationships for support. Micro
insurance spreads the costs of expensive health treatments or death-related expenses
over many years, moderating a burden that falls disproportionately to women. Further,
the likelihood of a woman being widowed in many countries is quite high. Thus, life

micro insurance can reduce the financial shock associated with losing a spouse and
the payout they receive can help them contribute towards securing their old age.
Micro insurance can also provide women with better quality and more convenient
and consistent health care.
LITERATURE REVIEW
Welfare costs due to shocks and foregone profitable opportunities have been found
to be substantial, contributing to persistent poverty ((Dercon), (Murdoch, 2004)). Micro
insurance has the potential to reduce these welfare costs. By offering a payout when
an insured loss occurs, it avoids other costly ways of coping with the shock leaving
future income earning opportunities intact. Furthermore, the security linked to being
insured can be expected to allow the avoidance of costly risk-management strategies
with positive impacts on poverty reduction. Micro insurance, in conjunction with micro
savings and micro credit, can therefore go a long way in keeping this segment away
from the poverty trap and would truly be an integral component of financial inclusion.
Micro insurance should, therefore, provide greater economic and psychological security
to the poor as it reduces exposure to multiple risks and cushions the impact of a
disaster. Thus, insurance is fast emerging as a prepaid financing option for the risks
facing the poor.
Micro insurance is defined in line with (Churchill, 2006) as an insurance that
1. Operates by risk-pooling
2. Is financed through regular premiums
3. Is tailored to the poor who would otherwise not be able to take out insurance
To understand the impact of insurance initiatives, it is instructive to put it in the
context of how risk shapes the behaviour and decision outcomes of the poor.
According to (Dercon), it is necessary to link risk to its consequences in terms of
outcomes in various dimensions of welfare in the short - and long-run. Households,
communities, firms or societies as a whole, face a multitude of risks. Given their
options and characteristics, they will make risk management decisions, or at least
decisions with implications for risk management. Peoples responses or inability to
respond will again have implications for outcomes, both in the short - run and in the
long - run.
It is worth emphasizing that two distinct decision moments are considered: one when
there is still risk (i.e., a potentially large number of different possible events or
circumstances), and one when a shock (i.e., a realization of one of these possible
events or circumstances) has occurred. The decisions that need to be taken in the
face of risk (risk management or ex-ante strategies) are potentially very different
from those taken in the face of a shock (risk coping or ex-post strategies).
Nevertheless, they cannot be viewed independently, as risk management decisions
will have implications for the possible set of risk coping strategies, while risk coping
will have implications for the type of risk management decisions that can be taken in
the next period. These strategies have been widely acknowledged as a central part
of peoples livelihoods. Households have strategies to cope with ex-post risk, i.e.,
shocks, to smooth consumption and nutrition when shocks happen, even if formal

credit and insurance markets or social protection schemes are not available. They
may use savings, often in the form of live animals, built up as part of a precautionary
strategy against risk. They may develop personalized informal credit arrangements.
They also often engage in informal mutual support networks, for example, clan-or
neighbourhood-based associations, or even more formal groups such as funeral
societies. However, group-based systems cannot work effectively in the face of
covariant shocks, affecting the whole group, while the lack of good stores of wealth,
with limited risks, also means that building these buffer stocks is highly costly and
indeed not as effective as hoped. A well-known example of the latter is when
households in Northern Wollo in Ethiopia tried to use their standard smoothing device
selling small and large livestock to cope with the drought and famine in the mid-
1980s. Livestock prices collapsed due to oversupply and lack of demand, in the face
of high grain prices, providing a classic case of entitlement failures ((Sen, 1981). In
terms of risk management strategies, different forms of diversification are commonly
observed in crops, activities or assets. As long as the returns to these activities are
not perfectly covariate, there will be benefits from diversification.
FOCUS ON WOMEN
Seventy percent of the worlds poor are women. Yet traditionally women have been
disadvantaged in access to credit and other financial services. Commercial banks
often focus on men and formal businesses, neglecting the women who make up a
large and growing segment of the informal economy. Microfinance on the other hand
often targets women, in some cases exclusively. Female clients represent eighty-five
percent of the poorest microfinance clients reached. Therefore, targeting women
borrowers makes sense from a public policy standpoint. The business case for focusing
on female clients is substantial, as women clients register higher repayment rates.
They also contribute larger portions of their income to household consumption than
their male counterparts. There is thus a strong business and public policy case for
targeting female borrowers.
FEATURES OF WOMEN EMPOWERMENT

Women empowerment possesses certain characteristics. They are the following:
1. Women empowerment is giving power to women; it is making women better off
2. Women empowerment enables a greater degree of self-confidence and a sense
of independence among women
3. Women empowerment is a process of acquiring power for women in order to
understand her rights and to perform her responsibilities towards oneself and
others in a most effective way
4. Women empowerment gives the capacity or power to resist discrimination imposed
by the male dominated society
5. Women empowerment enables women to organize themselves to increase their
self- reliance
6. Women empowerment provides greater autonomy to women
7. Women empowerment means womens control over material assets, intellectual
resources and ideology
8. Women empowerment challenges traditional power equations and relations
9. Women empowerment abolishes all gender-based discriminations in all institutions
and structures of society
1. Women empowerment means participation of women in policy and decision making
process at domestic and public levels
11. Women empowerment means exposing the oppressive power of existing gender
and social relations
12. Empowerment of women makes them more powerful to face the challenges of
life, to overcome the disabilities, handicaps and inequalities
13. Empowerment of women enables women to realize their full identity and powers
in all spheres of life
14. Empowerment also means equal status to women
15. Empowerment also means providing greater access to knowledge and resources,
greater autonomy in decision making, greater ability to plan their lives and freedom
from the shackles imposed on them by custom belief and practice
16. Women empowerment occurs within sociological, psychological, political, cultural,
familial and economic spheres and at various levels such as individual, group
and community
17. Empowerment of women is an ongoing dynamic process which enhances womens
abilities to change the structures and ideologies that keep them subordinate
18. Women empowerment is a process of creating awareness and capacity building
19. Keeping these above points in mind, the following paper is designed to show
how micro insurance as poverty alleviation tool helps rural women to combat
against daily hardships
OBJECTIVES
l To study the awareness level of micro insurance among the rural people in both
the districts
l To assess the need of micro insurance product among the low-income people in
both the districts
l To identify the hindrances in the micro insurance policies as suggested by the
low-income people in both the districts
l To study the socio-economic profile of rural women
l To study the perception and understanding of micro insurance by the respondents
l To analyze the factors determining the demand for micro insurance
l To estimate the demand for different micro insurance products
l To explore the other risk mitigating mechanisms undertaken by the respondents
The present paper is empirical in nature. This study is empirical and exploratory in
nature. The study is based on primary data.

The data relating to the district-wise populations of the micro insured households
served by each of those 5 MFIs were collected from their offices, the details of which
are given below in parentheses.
After discussion with knowledgeable persons, it was identified the 5 MFIs key providers
of micro insurance in Birbhum district of West Bengal. The data relating to the MFI-
wise populations of the micro insured households served by each of those 5 MFIs
were collected from their offices, the details of which are given below in parentheses:
1. Gram Bikash Kendra [605,655]
2. Sarala Women Welfare Society (SWWS) [675,600]
3. Liberal Association for Movement of People [700,650]
4. Anjali Microfinance (AM) [550,570]
5. Sahara Utsarga Welfare Society (SUWS)
The researchers set a target of drawing a sample of 20% of those micro insured
households in a MFI-wise manner. However, in spite of repeated requests, the
researchers could get cooperation from only 390 micro insured households, the MFI-
wise break-up of which is given below. The percentages of micro insured households
which finally responded, i.e., the respondents, are given in Table 1 below, which vary
from 15% to 18%.
Therefore, in the true sense, real sampling of the micro insured households could not
be done.
Name of Micro insured Percentage Percentage Sample
MFI Household targeted sampled Size
BURDWAN BURDWAN BURDWAN BURDWAN
GBK 655 20% 11.45% 75
SWWS 600 20% 13.17% 79
LAMP 650 20% 13.08% 85
AM 570 20% 12.11% 69
SUWS 450 20% 18.22% 82
TOTAL 2420 - - 390
Table 1 : MFI WISE BREAK UP OF HOUSEHOLDS; Field Survey
Though the initial study was designed both for men and women, but the respondents
for this particular district was only women. Hence, in this paper we have tried to
highlight the importance of micro insurance for women.
BURDWAN DISTRICT AT A GLANCE

Barddhaman district with its varied tectonic elements and riverine features is a
transitional zone between the Jharkhand plateau which constitutes a portion of
peninsular shield in the west and Ganga-Brahmaputra alluvial plain in the north and
east. In general the Jharkhand plateau consists of the meta sedimentary rocks of
Precambrian age, Gondwana sedimentary rocks, Rajmahal basalts and upper tertiary
sediments. Laterite has developed on these older rocks as well as on early Quaternary

sediments. Towards south, the alluvial plain merges with Damodar-kasain-Subarnarekha
deltaic plains. The western half of the district resembles a promontory jutting out
from the hill ranges of Chotonagpur plateau and consists of barren, rocky and rolling
country with a laterite soil rising into rocky hillocks, the highest being 227 m. These
diversify the otherwise monotonous landscape and lend a special charm to the skyline
around Asansol subdivision.Ajoy-barakar divide is a convex plateau, the average
altitude being 150 m. The gradient is westerly to the west and to the east it is
northerly towards Ajay and southerly towards Damodar below the latitude. The Ajoy-
Damodar inter-stream tract is made up of several stows consisting of vales and low
convex spurs which run in almost all directions except north-east and thus lends a
very complicated character to local relief. The river system in Barddhaman includes
the Bhagirathi-Hooghly in the east, the Ajoy and its tributaries in the north and the
Dwarakeswar, the Damodar and its branches in the south-west. Besides, there are
innumerable Khals and old river beds all over the area.
The notable rivers and khals are Damodar, Bhagirathi, Barakar, Ajay, Dwarakeswar,
Nonia, Singaram, Tamla, Kukua, Kunur, Tumuni, Khari, Banka, Chanda-kankinala,
Behula, Gangur, Brahmani, Khandesvari, Karulianala, Dwaraka or Babla, Koiyanala,
Kandarkahal, Kanadamodar, Kananadi, Ghea, Kakinadi etc.
SOCIO-ECONOMIC PROFILE OF THE RESPONDENTS

Category Number of Respondents Percentage
Less than 25 26 6.36
26-35 97 24.55
36-45 150 39.09
More than 45 117 30
TOTAL 390 100
Table 2 : Age-Wise Distribution of Respondents; Field Survey
From the above table it is clear that majority of the respondents fall in the age group
of 41-50 where the earning capacity is the highest.
Illiterate 82 20.91
Primary Level 202 51.82
Secondary 60 15.45
Higher Secondary 35 9.09
Graduate 11 2.73
TOTAL 390 100
Table 3 : Education-wise Distribution of Respondents; Field Survey
Majority of the respondents have not even passed the primary level of education.
The illiteracy rate in this district is high signifying higher vulnerability to risk.

Married 333 85.46
Unmarried 25 6.36
Widow 32 8.18
TOTAL 390 100
Table 4 : Marital Status; Field Survey
Majority of the respondents were married with kids.
None 21 5.46
One 46 11.82
Two 206 52.73
Three and above 117 30
TOTAL 390 100
Table 5 : Number of Children; Field Survey
Number of children in most of the cases was above two. The respondents cited that
this was the main reason for taking up micro insurance policy.
Housewife 20 5.45
Agriculture 71 18.18
Animal Rearing 46 11.82
Casual Labour 214 54.55
Self-Employment 39 10
TOTAL 390 100
Table 6 : Occupational Status; Field Survey
Being a housewife was not out of choice of them, but due to social pressure they
had to remain in house.
Less than Rs.3000 294 75.45
Rs.3000-Rs.4000 46 11.82
Above Rs.4000 50 12.78
TOTAL 390 100
Table 7: Monthly Income; Field Survey
This does not give a good picture of the state of women in this district.
Co-operative Banks 28 7.27
Commercial Banks 14 3.64

Post office 82 20.91
Chits 32 8.18
NGOs 57 14.55
Insurance 152 39.09
No Savings 25 6.36
TOTAL 390 100
Table 8 : Savings Pattern of the Respondents; Field Survey
There are a lot of avenues where they can save, but as it came from the interviews
that the safest option was insurance followed by saving with post office.
Life Insurance 156 40
Health Insurance 123 31.43
Crop Insurance 37 9.52
Livestock Insurance 48 12.38
Asset Insurance 26 6.67
TOTAL 390 100
Table 9 : Awareness of Various types of Micro insurance Products; Field Survey
Though respondents wanted more risk specific products, but still the demand for life
micro insurance product was high.
To receive money in 127 32.56
case of death/accident
of family member
To receive money in 27 6.97
case of natural disaster
To save money for 45 11.63
education of children
To save money for 27 6.98
marriage of daughter
To receive a regular 27 6.98
pension when retired
To have access to 73 18.60
quality medical treatment
in case of sick
To receive money when 64 16.28
business suffers from an
unforeseen event (animal
dies, drought, fire, theft)
TOTAL 390 100
Table 10 : Motivational Factors to purchase Micro insurance Products; Field Survey

There were factors which drove them away from buying micro insurance like difficulty
in claim settlement, high premium etc.
Life Insurance 117 30
Health Insurance 82 21.02
Crop Insurance 30 7.69
Livestock Insurance 27 6.92
Asset Insurance 19 4.87
Not Interested 115 29.50
TOTAL 390 100
Table 11 : Willingness to buy Micro insurance products; Field Survey
Here again the demand for life insurance is the highest.

Do not have 90 23.08
enough information
The insurance agents 20 5.13
are too far from
the place I live
I think nothing 20 5.13
serious will happen
to my family or myself
Able to manage 30 7.69
risks by myself
Insurance is too 60 15.38
expensive for me
Frequency of premium 50 12.82
payment
Bad experience with 20 5.13
insurance companies
Heard it takes long 80 20.51
time to realise claim
No trust in 20 5.13
insurance companies
TOTAL 390 100
Table 12 : Reasons for not purchasing Micro insurance Policies; Field Survey

Since the competition among the MFIs has increased, every MFI in order to offer a
differentiated product is trying to cater to these difficulties and take it on its stride.
Neglecting the illness 35 9.09
depleting savings
Using own funds, 7 1.82
Reducing consumption 21 5.45
Getting additional jobs 14 3.64
Insurance 114 29.09
Pledging household 43 10.91
assets
Selling household asset 28 7.27
Selling animals 25 6.36
Borrowing from friends 18 4.55
and relatives
Borrowing from money 53 13.64
lenders with
higher interest
Borrowing from banks 7 1.82
Buying necessary 25 6.36
things on credit
TOTAL 390 100
Table 13 : Risk Coping Mechanism adopted by the Respondents; Field Survey
From the tables showing educational, occupational and monthly income status of the
rural women, it is clear that they are vulnerable. Before micro insurance they have
used the above mechanism to cope with unfortunate, uncertain situation.
CONCLUSION
It is evident that the micro insurance sector will soon cease to be influenced by the
rural and social sector obligations. It is fortunate that the insurers have innovated
products and distribution beyond the regulatory requirement to conduct business in
the low income segment. However the regulator needs to respond to the new realities
of the sector. Group based policies, alternative micro insurance products and
distribution innovations have to be brought under the regulation of micro insurance to
protect and accelerate the growth of micro insurance in India.
It is observed that till today the penetration of micro insurance for both life or non-life
is at very low level in India inspire of tremendous efforts from the LICI. Some insurers
are even dumping poorly serviced micro insurance products on clients solely to meet
their targets. As soon as their targets were met, they immediately stopped selling
micro insurance.
Although micro insurance sector has huge potential of growth, but till today insurance

companies are not willing in promoting various products of micro insurance like other
traditional insurance products.
Poor women face a range of potentially catastrophic risks. The traditional risk strategies
at their disposal are diverse but often inadequate. Micro insurance, when effectively
designed to meet the unique needs of poor women, can offer compelling benefits to
this target market and help them move out of poverty. Yet, with extensive demands
for comprehensive coverage, and pressures to keep costs low for MFIs, insurers and
poor women themselves, the execution of successful gender-sensitive micro insurance
programs represents a serious challenge. This paper has attempted to raise many of
the gender issues related to the provision of micro insurance, and proposes an urgent
call to action to donors, insurers, the research community, MFIs and other delivery
channels.
REFERENCES
Churchill, C. (2006). What is insurance for the poor? Protecting the poor, A microinsurance
compendium. International Labor Organisation, Geneva.
Dercon, S. (. (n.d.). Risk, Crop Choice and Savings: Evidence from Tanzania. Economic
Development and Cultural Change, 44(3): 385-514.
Murdoch, J. (2004). Microinsurance - The Next Revolution? In What Have We Learned About
Poverty? (Vols. in A. Banerjee, R. Benabou and D. Mookherjee (Eds.)). New York: Oxford
University Press.
Sen, A. K. (1981). Poverty and famines: An Essay on Entitlement and Deprivation. New York:
Clarendon Press.

Corporate Social Responsibility and Inclusive
Growth : An initiative by Bandhan
Sreyasi Ray* and Arpita Sil**
ABSTRACT
As far as India is concerned, in spite of a lot of developmental endeavor and optimistic projections,
growth and development of the country has really not been very inclusive. It has been found
out that government reforms have to be complemented with private sector through their Corporate
Social Responsibility (CSR) activities and hence, corporates have to play a proactive part to
achieve this inclusive growth by ensuring the prosperity of the poorer section of the population.
Bandhan (meaning togetherness) believes that Microfinance is not the last word for development
of the poor. Aspiring to holistic transformation in the lives of the deprived communities, Bandhan
offers development programmes in crucial fields of education, health, unemployment, livelihood,
renewable energy, market linkage, skill development and the like through its not-for profit entity.
Besides, Bandhan also has a program exclusively for the hard core poor. Bandhan started their
venture with social projects through Bandhan Konnagar and then spread its wings in the
commercial venture and created Bandhan Bank. This research can be helpful for the overall
economy of the country as encouragement of investment in CSR activities in the rural unorganized
sector would ultimately lead to an equitable development thereby reducing the disparity of wealth
distribution among the various strata of the society, leading to inclusive development.
Key Words : Corporate Social Responsibility, Inclusive Development, Unorganized Sector
INTRODUCTION
Concept and meaning
In a modern, democratic society, business must realize its wider social responsibility.
The time has come for the better off sections of our society-not just in the organized
industry but also in the unorganized sector and all walks in life-to understand the
need to make our growth processes more inclusive; to avoid conspicuous consumption;
to save more and waste less; to care for those who are less privileged and less well
off; to be role models of probity, moderation and charity. As far as India is concerned,
in spite of a lot of developmental endeavor and optimistic projections, growth and
development of the country has really not been very inclusive. To cater to an inclusive
growth of the country, it has been found out that government reforms have to be
complemented with private sector through their Corporate Social Responsibility activities
and hence, corporates have to play a proactive part to achieve this inclusive growth
by ensuring the prosperity of the poorer section of the population. (Athreya, 2009)
* Assistant Professor, The Heritage Academy, Maulana Abul Kalam Azad University of Technology, Kolkata;
Email: sreyasi.ray@gmail.com
** Assistant Professor, The Heritage Academy, Maulana Abul Kalam Azad University of Technology, Kolkata;
Email: arpita.sil@gmail.com

The World Business Council for Sustainable Development (WBCSD) defined CSR as
the continuing commitment of business to behave ethically and contribute to economic
development while improving the quality of life of their workforce and their families as
well as of the local community and society at large (WBCSD, 1999). Thus CSR
implies some sort of commitment, through corporate policies and action. The word
CSR has twofold meaning. On one hand, it exhibits responsibility towards its internal
and external stakeholders. On the other hand, it denotes the responsibility of an
organization towards the environment and society in which it operates. An ideal CSR
has both ethical and philosophical dimensions, particularly in India where there exists
a wide gap between sections of people in terms of income and standards as well as
socio economic status. But the challenge for development professionals and business
communities is to identify CSR priorities and the areas of interventions which are
meaningful in the context of rural development as major part of the population of our
country is somehow or the other related to rural sector. In spite of a good GDP
growth, India still has to create more just and fair distribution of its growth. The
struggle to ensure inclusive growth and development is compounded by diverse socio
cultural factors. This is where the corporate in India can play a proactive role by
participating in nation building through CSR. Profits can be earned in spite of being
ethical and socially driven. It is important to understand that CSR goes beyond
philanthropy; though that may be its beginning. It has to take into account integrity
and accountability in the long run process of sustainability and inclusive development.
CSR thus, involves a number of stakeholders which includes society at large with
unique demands of their own. (Athreya, 2009)
LITERATURE REVIEW
History of CSR in India
The history of CSR can be traced back to the description of the aim of the state
found in ancient Indian literature. Religion played a major role in encouraging charity.
Hindu scriptures highlighted the concept of using wealth for granting charity, performing
sacrifices, and discharging debts (Chatterji, 2014). Merchants donated wealth for social
causes like setting up educational institutions, hospitals, garden, charity homes,
orphanages, etc. Charitable activities were still on traditional lines, like donating to
educational and religious institutions (Chatterji, 2014). The political awakening in India,
on the lines of democratic and secular understanding of freedom, helped in creating
an atmosphere of social justice, equality, individual freedom, and universal brotherhood
(Chatterji, 2014). Mahatma Gandhis call for trusteeship, which promoted the idea of
voluntary renouncement of part of the wealth by the business community for the
good of the community, and also acting as trustee of that wealth to ensure proper
and fair implementation, appealed to the business community. Gandhi clearly
emphasized that trusteeship was neither charity nor philanthropy-it was to be a way
of life. The combined effects of political and socio-economic factors led to the
development of large-scale philanthropy, and famous families like Tata, Birla, Shri
Ram, Godrej, Dalpatbhai Lalbhai, Singhania, Modi, Murugappa Chettiar, Kuppuswamy
Naidu, Mafatlal, Mahindras, and others became the backbone of Indias economic
strength.

Slowly, the dawn of the era of social responsibility was being acknowledged by
business. The government also moved from closed economy to open economy policies.
The enlightened educated business leaders realized that government alone cannot
be held responsible for development and therefore a movement towards social
responsibility emerged. An important change was the industry acceptance of social
responsibility as part of the management of the enterprise itself. (Chatterji, 2014).
Stakeholders and CSR
In simple terms, stakeholders can be defined as individuals or groups who either get
advantage or are disadvantaged by corporate decision or action (Chatterji, 2014). In
other words, Stakeholder is any group or individual who can affect or is affected by
the organizations purpose, because that group may prevent accomplishment.
Stakeholders are those who benefit from or are harmed by and whose rights are
violated or respected by, corporate actions.
Evan and Freeman (1988) extend the concept of stakeholder to those who benefit
from one harmed by, and whose rights are violated or respected by, corporate actions.
According to Eden and Ackermann (1998) stakeholders are people or a small group
with the power to respond to, negotiate with, and change the strategic future of the
organization. A more convenient definition of stakeholder is provided in Wheeler and
Sillanpaas (1997) work. They have offered a very convenient classification by dividing
the stakeholders into categories.
Classification of Stakeholders
Primary social Secondary social Primary non social Secondary non social
stakeholders stakeholders stakeholders stakeholders
Investors Government and Natural environment Environmental
regulators pressure groups
Employees including Civic institutions Future generations Animal welfare
managers Organization
Local Communities Social pressure groups Non human species
Suppliers Media and academic
commentators
Other business partners Trade bodies
Competitors
Table 1 : Classification of Stakeholders (Corporate Social Responsibility) (Chatterji, 2014)
CSR for a sustainable inclusive growth in India

Sustainable development is development that meets the need of the present without
compromising the ability of future generation to meet their needs. The three pillars of
sustainable development are a wide variety of environmental, economic and social
pillars. ISO 26000, Triple Bottom Line (TBL) helps organization to incorporate the
concept of sustainability. ISO 26000 is a standardization tool offered to apply CSR.
TBL accounting attempts to describe the social and environmental impact of an
organizations activities, in a measurable way, to its economic performance, in order
to show improvement or to make evaluation more in depth. Triple Loop Learning

(TLL) is concerned with the concept of transformational changes in the domain of
knowledge, organization, and the individual. It goes beyond the domain of secular
rational knowledge and merges with wisdom and mystical spiritual understanding.
Without education, there can be no future talent pool. Without secure jobs and a far-
reaching breadth of financial services, India will have little chance of achieving
economic security. Societal growth and economic growth are intertwined, and must
develop simultaneously. If the people of a society are not benefitting or gaining access
to the growth of the country, the economic development will always be unsustainable
or short-lived.
United Nations (UN) studies and many others have underlined the fact that humankind
is using natural resources at a faster rate than they are being replenished. If this
continues, future generations will not have the resources they need for their
development. In this sense, much of current development is unsustainableit cant
be continued for both practical and moral reasons. If development becomes
unsustainable then business cant continue for certain.
To put the above context in perspective Corporate Social Responsibility (CSR),
Inclusive growth and Sustainability hence are essential aspects of the core strategy
and business practices for cutting edge organizations. Sustainable development and
CSR as an agenda, have matured rapidly, and is driven by demand for greater
accountability by corporates to society in India. Views on corporate responsibility have
contributed to mounting pressure on business to demonstrate its social accountability.

1. To throw light on the need for inclusiveness for the development of the country
and the various challenges posed by it
2. To examine the role that CSR can play in Inclusive Growth
3. To highlight in particular the analysis of the initiatives taken by the Bandhan
group at various levels for promoting inclusive growth
SCOPE OF THE STUDY

The paper, based on primary and secondary observation revolves around developing
an understanding of the concept of Corporate Social Responsibility and how it leads
to inclusive development taking the case study of Bandhan group which is well aware
of its corporate social responsibility and recognizes that good corporate governance
and corporate social responsibility leads to growth in the trust of all stakeholders.
The CSR is not only charity or donation but is a strong commitment to contribute to
social and environmental growth and prosperity. Bandhans CSR Policy has been
framed in accordance with Section 135 of the Companies Act 2013 and the Rules
framed there under and the applicable circulars issued by Reserve Bank of India.
METHODOLOGY
In this paper Exploratory research and Descriptive research design have been used.
Exploratory research is a type of research conducted for a problem that has not been
clearly defined. Exploratory research helps determine the best research design, data
collection method and selection of subjects. It should draw definitive conclusions only

with extreme caution. Exhaustive literature survey regarding the topic and related
concepts have been done. Primary data is collected through Questionnaires and
Secondary data from various sources including books, journals, research papers,
newspapers, magazines, websites and annual reports of the companies have been
collected and analyzed to come to a conclusion. Descriptive research includes surveys
and fact-finding enquiries of different kinds from different personnel and beneficiaries
of Bandhan Group. A special impetus has been provided to the beneficiary artisans
of the group in various regions of West Bengal.
CORPORATE CASE STUDY- BANDHAN

Company Profile
Bandhan (meaning togetherness) was born in 2001 under the leadership of Mr.
Chandra Shekhar Ghosh, a Senior Ashoka Fellow. Mr. Ghosh through his association
with the NGO BRAC started the first venture of Bandhan forming a separate NGO
called Bandhan Konnagar in November 2001. The NGO provided finance to small
and marginal women entrepreneurs in areas that are not assisted by Banks. The
main thrust of Bandhan was to work with women who are socially disadvantaged and
economically exploited. Bandhan works for their social upliftment and economic
emancipation. However the commercial changeover of Bandhan started when in 2009
Mr.Ghosh registered Bandhan as a NBFC (Non Banking Finance Company)
with Reserve Bank of India. In 2014 Reserve bank of India granted an approval
for banking license to Bandhan and Bandhan Bank came into operations. Bandhan
has been engaged in the delivery of microfinance service for the last 13 years. The
model followed by them is individual lending through self-help group formation. All
microfinance activities are carried under Bandhan Financial Services Limited (BFSL),
incorporated under the Companies Act, 1956. (www.bandhanmf.com)
Bandhans commitment towards triple bottom-line values is strongly asserted by its
intervention in development activities. It believes that Microfinance is not the last
word for development of the poor. Aspiring to holistic transformation in the lives of
the deprived communities, Bandhan offers development programmes in crucial fields
of education, health, unemployment, livelihood, renewable energy, market linkage,
skill development and the like through its not-for profit entity. Besides, Bandhan also
has a program exclusively for the hard core poor. (www.bandhan.org).
Over a short span of 14 years of operation, Bandhan has received various accolades
for the efforts it is taking towards women empowerment and poverty alleviation.
Bandhan also won the Economic Times Bengal Corporate (ETBC) Awards in
Association of Corporate Advisers & Executives (ACAE) on February 14, 2015.
Bandhan bagged this prestigious award in the category of Highest Job Creator.
(www.bandhan.org).
Bandhans CSR
The chief purpose of the Bandhans CSR philosophy is to develop the community in
which the Bandhan operates and makes a sustainable improvement in the lives of
economically, physically and socially challenged people living at the lower end of the
society and initiate or support programs that is aimed at creating conditions for better
livelihood in these communities. Bandhan also supports measures that are aimed at

preserving and enhancing the environment, health care and medical assistance and
natural resources. The CSR policy of Bandhan hence, acts as a mechanism for
regulating its various social activities and adheres to laws and regulation in force and
adopts best practices.
Aligned with the vision of Bandhan, which is giving maximum support to the poor, the
CSR initiatives continue to enhance value creation, improve the quality of life and
include those who are not adequately and effectively serviced by the formal financial
sector into the mainstream of the society, draw them in to the cycle of growth by
providing products and services and forming partnerships and alliances for the
fulfillment of its role in the society as a responsible corporate.
This policy applies to all projects, programs, donations and activities undertaken by
the Bandhan in fulfillment of its Corporate Social Responsibility and is reviewed and
updated from time to time with changes in the CSR rules and applicable laws and
regulations as and when required.
Bandhan aims to serve the disadvantaged sections of the society through interventions
which is multifaceted and helps improving their quality of life. Bandhan ensures that
its CSR projects are non discriminatory in nature and do not have any restrictive
political or religious affiliations. The programs/ projects are within the areas
recommended / listed by the CSR Committee and mentioned in the Policy. Bandhans
target group cover all sections of the population who are vulnerable which includes
low income group people, those who are disadvantaged either due to very low asset
base, physical or mental inadequacies, education, social status, or any other cause
without any discrimination based on caste, creed, religion, gender etc.
(www.bandhan.org).
Programmes of Bandhan leading to Inclusive Growth
Bandhan Bank undertakes various banking operations and also provides financial
assistance. Bandhan micro-finance engage itself in giving microfinance to various
self help group majorly to the women for the purpose of providing livelihood and
assistance to their entrepreneurial ability, Bandhan-Konnagar implements the various
developmental programmes and takes up the CSR activities of the group in total and
Bandhan Creations create the market linkage for various indigenous art and products
thereby creating an indirect source of employment to the artisans, a group of people
who mostly belong to the below poverty line section of the society . All these four are
involved directly or indirectly in creating trickledown effect thereby creating inclusive
growth of the country. Bandhan is the largest Micro Finance Industry in India with a
market share of over 20 per cent, loan portfolio of Rs.4,457 crore and borrower base
of nearly 50 lakh as on September 30, 2013. (www.bandhancreations.org).
The company has a strong presence in West Bengal and other eastern and north-
eastern states. Bandhan has received an in-principle approval from RBI for
commencement of banking business.
Besides its flagship microfinance program, Bandhan is actively engaged in the
development space since 2006. The organization believes that microfinance is not
the last word for development of the poor. There is scope for provision of myriad
support systems which enable their holistic development. Hence it adopted a credit

plus approach. Bandhans development wing is actively engaged in the fields of
education, health, livelihood promotion, market linkage, enterprise development,
employment generation and the like. Every year 5% of the surplus generated from
microfinance operations is utilized towards supporting these development activities.
The development programs are run by the not-for-profit entity of Bandhan named
Bandhan Konnagar and these cater to more than 4.6 lakhs households across 9
states.
The focus of the Bandhans CSR activities is healthcare, education, livelihood
development, food security and physical living conditions. New areas are planned to
be added as and when required with the approval of the CSR Committee of the
Board. The services provided under the programmes, could be free or subsidized as
per the requirements of the beneficiaries, and the nature of the program.
(www.bandhan.org).
l Bandhan Education Programme (BEP)
Education is the steady building block of any nation. Hence, Bandhan makes all
efforts to promote and spread education among the economically/socially/physically
challenged categories of the society. Within the scope of education, programmes
are aimed at bridging the skill gap and enabling the children to become job ready
professionals. Following initiatives are carried on in this endeavour:
l Vocational education and training
l Financial literacy
l Education for street children and the rural poor
l Special education for the physically challenged
l Skills training and Livelihood development
This particular programme ensures education of the underprivileged children through
their non formal primary schools and encourages a diverse age group of
underprivileged children to begin and sustain academics amidst a congenial
environment. In order to ensure that these underprivileged children are able to receive
quality education, Bandhan has adopted a unique low cost innovative model. The
program also ensures 100% attendance of the students enrolled to reduce their
dependence on private tuition, The programme however mainly reaches out to non-
school going and out of school children from economically constrained families with
special focus given on the girl child. Bandhan initiated a non-formal education program
in the year 2008 with 330 children. Today it has extended to 59,394 students (January,
2016) across 5 states and already mainstreamed 50% of them. Presently Bandhan is
also running 3 formal schools in West Bengal with 384 students. Hereby, this program
complements Govts effort for ensuring universal primary education. (www.bandhan.org).
l Bandhan Health Programme (BHP)
Heath care at its essential core is widely recognized to be a public good and Bandhan
takes up this public good through Bandhan Health Programme. The main aim of this
programme is preventing poor health and its consequences through increasing
awareness and affordable health services. Poverty and illiteracy relate to lack of health
awareness. The poorest section of the society experience high levels of child and

maternal mortality. The low awareness level of the poor coupled with limited access
to health services and lack of resources exposes them to various health issues like
infectious diseases, malnutrition, maternal and infant mortality. Gender inequality
contributes to poor health of women too. Health is an important economic asset to
most of the population in India as their livelihood is mostly dependent on physical
labour. Bandhans health initiative started with creating health awareness amongst
mother and child to enjoy better health. For spreading the awareness, underprivileged
women among the community who have the leadership qualities are selected to act
as volunteer to spread awareness under the guidance of trained health staff. Thus,
this programme creates employment to these underprivileged women volunteers also.
Health care covers not merely medical care but also all aspects of pro preventive
care too. This particular programme BHP reaches out to more than 777,871 households
(January, 2016) across 4 states of India. The programme was started in the district of
Howrah in West Bengal in the year 2007. Currently it has 3,489 community health
volunteers assisted by a team of 252 health staff spread across 128 field offices. In
addition for the purpose of preventive healthcare, Bandhan has initiated fully equipped
health service centers, community water treatment plant and a wide spread water-
sanitation programme.
To implement the programme, Bandhan through its volunteers engage in regular village
level health awareness forum on different issues such as maternal, adolescent, child,
family health etc. It provides regular technical assistance in accessing financial support
for setting up water connection and latrine, creates regular household level counseling,
creates community awareness initiative for behavioural change towards using sanitary
latrines. Bandhan also provides Bandhan Health Care with complete consultation,
diagnostics and pharmaceutical provisions. It has created water treatment plant and
distributed good quality seeds to improve nutritional status. Bandhan also lends its
support to various Government Polio vaccination centres. The collaborative project of
Bandhan and Eureka Forbes envisions to provide water fit for consumption at affordable
rates to the localities and in the process generates employment for local youth as
plant operators, delivery persons and moderator.
About 5,777 children were treated with polio vaccines in the district of Howrah in
2012 through this programme. In the year 2012, Bandhan also organized health camps
in the district of Birbhum treating patients affected by diabetes, asthma and worm
infestation.
Other than the above programmes, Bandhan through Bandhan Konnagar is involved
in myriad other activities for inclusive development of the society.
Bandhan recently has also started the concept of kitchen gardening with the aim of
augmenting nutrition in rural homes and fighting malnutrition amongst children. The
seed distribution programme prevents the deprived to get effected from the frequent
market price fluctuation. This indirectly also avoids adulteration in the vegetables.
The CSR activities of Bandhan Bank also focus on efforts to remove hunger and
enhance food security of the poor. Specific programs to that effect are designed by
the CSR team with the approval of the CSR Committee. In terms of donation this
particular programme of Bandhan is supported by the International Organization
Freedom From Hunger (FFH) (www.bandhan.org)

Targeting the Hardcore Poor (THP)
The programme started in 2006 with the help of donor partners named Consultative
Group to Assist the Poor (CGAP), The Ford Foundation, The Michael & Susan Dell
Foundation. The main aim of the programme was to grant extended support to uplift
and mainstream the destitute. This programme is absolutely tailor made for the poorest
of the poor to facilitate their ascent to a higher socio-economic plane. In August
2011, Axis Bank Foundation came forward to scale-up the program under the name
Axis Bank Bandhan Holistic Assistance (ABHA) to reach out to 50,000 people living
in the villages of Murshidabad and South 24 Parganas districts of West Bengal. The
core idea of the programme was to identify the poorest of the poor through Participatory
Rural Appraisal exercise and after identification, selecting the enterprise for the
beneficiaries and providing enterprise training by asset transfer. The whole purpose
was to generate income out of the asset and help the people to uplift themselves to
mainstream society after 24 months. Once they complete their graduation in their
respective enterprise, they can start accessing loan facilities from local institutions.
Bandhan through this unique initiative tries to offer integrated 360 degree assistance
through the provision of free asset, weekly consumption stipend, regular confidence
building, counseling, basic literacy and hand-holding support.
This project was piloted in the year 2006 with 300 households has scaled up to
reach 41,589 poorest households (January, 2016) in 8 states across India. The whole
objective of the programme is to bring in economic, social and inspirational changes
in the lives of the beneficiaries, thereby bringing about an increase in income and
productive assets. This programme also assists the beneficiaries in graduating them
to the mainstream society. This programme has formed a committee of village elites
who act as guardian for the excluded and marginalized families. This programme has
led to a stable living and provided the beneficiaries with two square meals. It has
also inculcated good social and behavioural practices among the people including
proper hygiene and sanitation, safe water, cleanliness, immunization etc. It has created
awareness of programmes like Indira Awas Yojana (IAY), Pensions, Antodaya Anna
Yojana (AAY), and usage of Ration Card among the people. It has also inculcated
the habit of savings and financial literacy among the beneficiaries. (www.bandhan.org)
Employing the Unemployed Programme (EUP)
The main aim of this programme of Bandhan is to create skill development courses
to make the youth eligible to find reasonable source of livelihood. Addressing the
problem of unemployment and disguised unemployment continues to be a daunting
task for development thinkers and policy makers. Bandhan launched this programme
to develop a skilled workforce relevant to emerging employment needs and ensure
equal access to skill development for the underprivileged youth hailing from
economically deprived families. Bandhan has set up its own vocational centres which
provides training on different domains namely Customer Relation and Sales, Hospitality,
Information Technology Enabled Services, Business Process Outsourcing,
Computerized Accounting, Refrigerator and Air Conditioning repair, Interior Designing
and similar fields through trained faculties in order to enhance the skill of young
people and make them employable. After adequate training the youth either gets self
employed or find reasonable employment outside.

The programme started in the year 2009 with 35 students and today it has reached
to 8,955 underprivileged youths (January, 2016) through 10 skill development centres.
Main objectives of the programme are to develop a high quality skilled workforce for
market needs, to identify and channelize unemployed youth into suitable skill
development program, to emphasize upon women empowerment, to follow up after
the course completion and provide guidance if required, to develop industry and
government specific course standard, infrastructure and faculty, to have various levels
of programmes to meet demands of various target groups as well as sector specific
methodologies, develop right mix of theory and practice: off the job and on the job
trainings and to provide placement support to all candidates through consultation, co-
ordination and suggestion of sector specific companies, industries, institutions,
organizations etc. To cater to these objectives Bandhan has created learning centres
at Howrah, North 24 Parganas, South 24 Parganas, Hooghly, Nadia, Darjeeling,
Burdwan, Bihar and Odisha.
HSBC has chosen Bandhan for support under Future First Special Cycle 2012. They
approved to grant facility which will be spread over 3 years i. e. 2013-2016. This
support will help to run the training centres for unemployed youth. (www.bandhan.org).
Market Linkage Programme (MLP)
This programme has been implemented by Bandhan through their new retail outlet
called Bandhan Creations. The store was unveiled in the year 2012 with 100 artisans,
and now is currently working with nearly 1,000 artisans (January, 2016). Bandhan
Creations is a retail store housing indigenous products made by rural artisans and
craftsmen. It is quite unknown to most of the people that handlooms and handicrafts
is the second largest employment generating sector in our country. Unfortunately this
is one area which has been neglected through ages and has hardly been covered as
a CSR topic for any corporate. This is an area which is entangled with issues of low
income, in-accessibility to finance, design deficiency, lack of modernization and lack
of market accessibility.
Bandhan is one such organization which has shown its concern to work in this much
neglected area. Bandhan takes up this market linkage programme with the setting up
of Bandhan Creations-a retail store aimed to help underprivileged artisans across the
country by providing them a platform to showcase their product and facilitate direct
market access by building a sustainable and empowering livelihood option through
inputs of design, skills and training. Bandhan Creation offers a varied collection of
garments, accessories, home furnishing, table top items, and kitchen and gift items
made by traditional craftsmen in contemporary design.
The main objective of this programme is to rejuvenate craft traditions and cultural
heritage, guarantee economic security of the artisan committee, build rewarding value
chain, scale up and diversify craft enterprise, facilitate a perfect blend of traditional
and contemporary skills, establish connection between customers and producers,
ensure cost effectiveness and simplicity.
Bandhan Creations has started working with the artisan communities of Bengal, Bihar,
Odisha and North East, some parts of Telengana. Other than these Bandhan Creations
also provide technical assistance to artisan groups and individuals, provide micro-

finance or financial assistance through their banking operations, provide marketing
assistance through specialized outlets, provide training on designs, productions and
marketing, act as interface and provide exposure and exhibition facilities.
We through our first hand study on Bandhan Creations and their beneficiaries found
that with a global demand of eco-friendly natural indigenous products, Bandhan
Creations also provide handcrafted products to various other clients, both domestic
and external like Bandhan Banks, Confederation of Indian Industry etc. The bulk
order from various clients indirectly creates a trickledown effect thereby creating
employment among the artisans engage in these craft making. Bandhan Creations
through their design expert has created a lot of innovation and transformation in the
look and utility of these indigenous products thereby making these products a lot
more user friendly and glamorous.
Bandhan Creations cater to two kinds of artisans-one who already belong to their list
of beneficiaries in terms of being the borrowers of their micro-finance and the second
group of artisans who are merely the supplier artisans of the various products displayed
in the store. Bandhan Creations though initially started its store in Salt Lake, because
of its growing demand with the help of the present Government has come up with its
second store in Eco-Park in Rajarhat. (www.bandhancreations.org)
Renewable Energy Programme (REP)
Main aim of this programme is to promote clean energy accessibility to the low income
families. Bandhan being a pioneer in serving the beneficiaries in abject poverty realized
that electricity is one main cause of social unwellness. Despite varied interventions in
electrification programmes and subsidies; it seems that many people especially in
the interior and remote rural areas have little access to reliable, regular and affordable
power. To cope with this energy poor state of the rural populace and to create
environmentally sustainable energy solutions, Bandhan started its Renewable Energy
Programme in April, 2014. In the year 2016, it has covered 17, 204 families (January,
2016). Bandhan in partnership with relevant technology and development partners
started providing solar units to individual families by assisting them with a loan support
initially at places in West Bengal and Bihar in 2014 and now intends to include
Odisha and Assam next year.
Other than the above mentioned programmes, Bandhan also indulges in programmes
like
Enterprise Development and Financial Literacy
Bandhan initiated enterprise development and financial literacy training as a part of
credit Plus program at Pakur, Jharkhand. This project in association with UNDP
capacitates socio economically disadvantaged micro credit borrowers to take informed
decisions while dealing with their enterprise and household finance, thereby placing
them on a sustainable livelihood trajectory. (www.bandhan.org)

FACTS AND GRAPHS
Particulars THP BHP BEP EUP

States 4 2 1 4
Beneficiaries/ 8706 3,82,500 8,697 515
households
Table 2 : Bandhan CSR Program Highlights in January, 2012
Particulars THP BHP BEP EUP
States 8 4 5 4
Beneficiaries/ 41,589 7,77,871 59,394 8,955
households
Table 3 : Bandhan CSR Program Highlights in January, 2016
Figure 1 : Comparison with respect of number of states covered by various

Bandhan Programmes in the year 2012 and 2016
Figure 2 : Comparison of Beneficiaries covered by various CSR Programmes of

Bandhan in the 2012 and 2016
FINDINGS AND ANALYSIS

From the above literature, facts and figures of Bandhan we can clearly make out that
Bandhans CRS activities have spread their wings in wide number of geographical
areas and cover a large number of beneficiaries at present than before. One of the
major programmes of Bandhan- Targetting the Hardcore Poor (THP) which covered 4
states in 2012, now covers 8 states in 2016 and has increased the no of beneficiaries
from 8706 to 41,589. In August 2011, with an additional impetus by Axis Bank
Foundation, the programme became all the more intensified in the villages of
Murshidabad and South 24 Parganas- the two districts of West Bengal. This particular
programme has helped Bandhan to increase their commercial venture too by identifying
all the more people as borrowers of their microfinance and targeting the people who
are interested in various savings and banking policies of their banks too. As huge
population of this poor segment includes artisans of various indigenous art and crafts,
this programme has also helped Bandhan Creations to identify various artisans, link
them to the market linkage programme, provide them the platform to supply products
for their retail store, provide technical training, transform designs and provide financial
impetus thereby creating a trickledown effect of creation of livelihood which is
nevertheless a very crucial part of inclusive development.
For any kind of livelihood, health being the most important wealth, impetus on the
sector of health has been hugely a matter of concern for Bandhan. Bandhan in
collaboration with Government and other international social organization has been
able to fight the need of food. Bandhan Health Programme (BHP) which in 2012
covered 2 states now covers 4 states and reaches out to maximum number of
beneficiaries 7,77,871 in 2016. Bandhan has addressed the problem of health from
the root and hence their programme also covers awareness of maternal health care
during pregnancy. The programme particularly highlights infant healthcare, fights
malnutrition, and takes care of vaccination to fight out epidemics, create awareness
of drinking pure water and usage of proper sanitary services. Healthy children create
healthy future of the country-this moto has been completely lived up to by this
programme.
Education, the next most important social factor to health is a statement known to all
the policy makers. Bandhan hence through its widespread Bandhan Education
Programme (BEP) has extended its operation from 1 state to 5 states and have
started many new informal schools targeting the population who are either first
generation learners or do not have access to formal schools for abject poverty. The
programmes main aim is to create literate India which can lead to greater awareness,
less exploitation, greater employment, more savings, just and fair distribution of wealth
thereby creating more national income and hence more financial and social inclusive.
The other programme Employing the Unemployed Programme (EUP) which has gained
strong foothold in 2016 aims to fight the social problems of unemployment disguised
and seasonal unemployment which still remains one of the biggest factors behind
under development of a country. This programme at present has created all the more
vocational centres which provide training on different domains at different areas and
presently cater to 8,955 benefices which is quite a huge from where they started.
The Market Linkage Programme (MLP) and Renewable Energy Programme (REP)
since have been started very recently, it still needs time to gain a strong foothold.
However, through our first hand study of the artisans of Bandhan Creations we found
that by creating a platform for their products Bandhan Creations have definitely created
a trickledown effect of provision of livelihood among the artisans. Most of the artisans
though are not very much aware of the term Corporate Social Responsibility, or

Bandhan Konnagar, all they know is that Bandhan Creation is a store which procures
their products in bulk amount, thereby creating employment for them and the artisans
working under them. However they are of the view that in case of the lives of the
artisans, it is still Government who is intervening and trying to improve their condition
the most than any private NGOs or corporate. Amidst this bleak scenario Bandhan
still remains to be one of the private corporates which is trying to interfere and better
off their conditions.
However this effort needs more in depth analysis of the conditions of the artisans as
most of the beneficiary artisans that they are catering to are in not so bad economic
condition. The programme needs to address the grass root artisans especially female
artisans who still comprises a huge percentage in this sector. Bandhan needs to
voice out their problems, issues which are specific to their gender in this profession.
The other aspect which Bandhan has to take care is its objective towards women
empowerment, though women form their centre of beneficiary borrowers of
microfinance. Through various first hand data it has been found out that women
though are the chief borrowers but it is the male head of the household, in most of
the cases their husbands who use this money for various personal purpose, thus
making the actual objective a failure.
For these reasons, a lot more in-depth analysis, supervision, monitoring and followup
is required for each programme on the part of Bandhan to make these programme a
real success and create holistic and inclusive development in the true sense of the
term. It is only then that their moto Service to the Poor will be a success and truth
in the real sense of the term.
LIMITATION OF THE STUDY

The drawbacks of the above research has been mentioned below
l A lot more beneficiaries need to be addressed to understand the impact of
Bandhans role in Inclusive Development
l Limitation of time and distance has also restricted the scope of research. A lot
more in depth analysis of the subject is required in future
l Lack of publication of Annual Report in the public site by the company has restricted
the accessibility of the data for the research
l Legal aspects of the CSR policy of the company need further explanation and
study.
l The last but not the least such a small size of sample hardly can give a clear
picture of the role of private companies in Corporate Social Responsibility in India
SIGNIFICANCE & FUTURE SCOPE

The above research might help the Policy makers to encourage Public Private
Partnership for promotion of Corporate Social Responsibility and encourage the donor
and sponsor companies to invest more to address major Indian social problems like
Child Labour, Health, Poverty, Unemployment, Illiteracy, Female Foeticide and
Infanticide, Dowry, Labour Exploitation, Provision of livelihood and various other
Infrastructural hazards so that development overall becomes more equitable thereby

leading to more sustainable and inclusive economic growth. It can also encourage
the policy makers in general and in particular of the company to change their myopic
view about CSR, take up various ignored sectors and consider CSR as an investment
rather than just an instrument of branding.
The above research will also help the company to analyze their activities in terms of
CSR and address social issues and problems, find out new areas of intervention and
in depth analysis to create further trickledown effect creating a sustainable social
situation and leading to more inclusive development of the country.
Finally the above research can be helpful for the overall economy of the country as
encouragement of investment in CSR activities in the rural unorganized sector would
ultimately lead to an equitable development thereby reducing the disparity of wealth
distribution among the various strata of the society, leading to inclusive development
creating a sustainable increase in the growth rate thereby making the nation a better
place to invest in and bettering the Human Development Index of the country. (Mandal,
2012)
CONCLUSION AND RECOMMENDATIONS

Through various CSR programmes, Bandhan has been able to fulfill all the four
objectives of inclusive growth by providing opportunity, capability, access and security
to the unorganized downtrodden people of the country thereby creating a just and fair
distribution of wealth and leading to a sustainable economy.
From the Indian perspective the new Companies Act has though made CSR a financial
obligation, but it still remains a secondary priority for the investors, policy makers and
the corporate. Funds have been allocated for social projects, but seldom out of social
conviction. It has been mostly done to please the political and bureaucratic leaders,
or to secure public support for specific project investments. Today, companies are not
engaged with the beneficiary community. They provide money to build toilets, but
they leave unaddressed the problem of locating the septic tank. They construct schools
but do little about enhancing the quality of education. They give money but have no
understanding of the sub-culture of poverty-the result being a limited impact of their
contribution.
However in case of Bandhan, the scenario shows a different picture all together.
They started their venture with social projects through Bandhan Konnagar and then
spread its wings in the commercial venture and created Bandhan Bank. They have a
strong foothold on every programme and have strict supervision and control. In case
of Bandhan Creations too, they have a strong quality control on the products. Hence
for them CSR is not just a platform for their officials to enhance their careers but a
true moto to provide service for the poor and bring them back to the mainstream,
creating more financial and social inclusion.
Concept of Corporate Social Responsibility overall should be a multidisciplinary concept,
involving well trained, qualified and experienced professionals from various disciplines
like Sociology, Social Work, Economics, Demographers, Psychologists, Management
Personnel should be engaged for better planning, implementation and evaluation of
CSR initiatives. Bandhan in their venture should also try to do the same. However
venture into the programmes based on felt need and a little more in depth analysis

of the current programmes and stricter follow-up is definitely appreciable.
The concept of private-public partnership (PPP) has also been lived up to by Bandhan.
They have been associated with various Government health care projects of vaccination
and currently with the help and partnership of the present Governmentt they are
planning to extend branches of their retail outlet Bandhan Creations at several places.
It is also suggested that Bandhan should be entrusted with the responsibility of
measuring and evaluating CSR activities through a more strict form and maintain
their sites with the latest annual report and data. Periodic review in the form of social
audit of their CSR activities from time to time should be conducted by a special team
nominated for this purpose to identify the pitfalls and the lacunae
Combination of expertise and domain knowledge of the different companies together
rather than singly can create a better and meaningful contribution in the various
social activities; Thus, Bandhan should focus in creating more partnerships and attract
more sponsors for their various programmes.
With these above recommendations Corporate Social Responsibility can really be a
meaningful endeavour by Bandhan in creating a true sustainable inclusive society,
thus taking India at its apex of development. Government in this regard should continue
to act as motivator and facilitator and support and award the good work done by the
organization. It is only then the moto of Bandhan-Service to the Poor will be a
reality
REFERENCES
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Athreya, M. (2009). Corporate Social Responsibility for Inclusive Growth. Indian Journal of
Industrial Relations , 44 (No.3), 347-354.
Chatterjee, D. (2010). Corporate Governance and Corporate Social Responsibility: The Case of
Three Indian Companies. International Journal of Innovation, Management and Technology,
1 (5), 507-510.
Chatterji, M. (2014). Corporate Social Responsibility. 5-94.
Gupta, N. (2014). Corporate Social Responsibility & Inclusive Growth. Global Journal of
Multidisciplinary Studies , 3 (4), 2348-0459.
https://www.pwc.in/assets/pdfs/publications/2013/handbook-on-corporate-social-responsibility-in-
india.pdf. (n.d.). Retrieved October 30, 2015, from www.pwc.in.
Mandal, B. (2012). Corporate Social Responsibility in India. New Delhi: Global Vision Publishing
House.
Shetty, J. Corporate Social Responsibility:A Means for Inclusive Growth. International Journal in
Multidisciplinary and Academic Research (SSIJMAR) , 1 (4).
www.bandhan.org. (n.d.). Retrieved April 20, 2016, from http://www.bandhan.org/report/
bk_mr_2012.pdf
www.bandhancreations.org. (n.d.). Retrieved April 20, 2016, from www.bandhancreations.org.
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www.bandhanmf.com/report/coca_2012.pdf. (n.d.). Retrieved April 27, 2016, from
www.bandhanmf.com.

An Empirical Study on the Effectiveness of CRM
in a Private College in West Bengal
Bratin Maiti*, Madhurima Banerjee** and Dipankar Das***
ABSTRACT
Customer Relationship Management is a management system which uses various tools,
technologies, means, methods, strategies, plans which can be both manual or software based
in nature, that helps a business organization to nurture customer relationship and understand
what the customer wants and gives an insight to the expectations of the customers. This
strengthens the position of the organization in the business.
Customer is the key to success for every business. Thus it is very important that customers be
given utmost importance in the business. This idea lays the foundation stone for the development
of CRM system in an organization.
Education sector is identified as an industry as well as a service sector. Students are the key
feature of education sector that paves the way for the success of the education sector.
The students get admitted to a college due to reputation of the college, but it is not assured
that the number of students who took admission would complete the course. There is a possibility
of losing student customers within the course tenure, which is a cause for the organization to
lose money. Thus the process of retention process of the students should be given equal
importance as the admission process.
This paper is a study to find what reasons might be possible for a student to leave a course mid
way and how manual CRM can help the education sector to retain students. What manual CRM
system can be used by the education sector? Further the study considers the students point of
view to find out whether the retention process used by the college would actually help them.
Key Words : Customer Relationship Management, Intervention, Education
INTRODUCTION
Customer Relationship Management has grabbed the spot light in the recent years,
especially in the retail sector contributing to a boost in the sales figures. Customer is
the key to survival for every business. In this cut throat competitive world of business,
the companies need to ensure and stabilize their customer base to establish their
power and existence in the market. John Keith in his work (2005) has sited that
Kotler and Fox in an electronic resource from Oracle Corporation, 2001 highly stated
The best organization in the world will be ineffective if the focus on customers is
lost. (Keith, 2005). Maintaining and nurturing customer relationship is a way to generate
loyal and devoted customers in turn ensuring strong roots in the market.
* Assistant Professor, The Heritage Academy, Kolkata; Ph: 9163861817; Email: bratin.maiti@heritageit.edu
** Assistant Professor, The Heritage Academy, Kolkata; Ph: 9230571998; Email: madhurima.banerjee@
heritageit.edu
*** Assistant Professor, The Heritage Academy, Kolkata; Ph: 9831592063; Email: dipankar.das@heritageit.edu

Customer relationship management refers to strategies and techniques used by
companies to align their resources to improve services provided to their customers
and place the customers as the focal point of every business.
In education sector, students are the most crucial and important customers. In
education field people find the term customers disturbing when referring to students.
Faculties may feel that interpreting students as customers might affect the core
essence of the student faculty relationship, however, colleges and universities are
covered under Consumer Protection Law. Education falls in the ambit of service of
Consumer protection Act and as such colleges and universities fall under the Consumer
Protection Law.
While expanding the scope of Consumer Law, National Commission stated that
imparting education falls within the ambit of service as defined under CPA. It was
held that fees are paid for services and thus by paying fees, any student becomes a
consumer when he attends an educational institution & hires the services of that
institution upon for attending classes and writing examinations. The educational Institute
becomes service provider on accepting the fees from him (VakilNo1).Thus, instructors
are frontline customer service deliverers to student customers. John Keith in his work
(2005) has cited that Kotler and Fox in an electronic resource from Oracle Corporation,
2001 highly stated First and foremost in education is the treatment of individual
students, alumni, parents, friends and each other (internal customers). Every contact
counts! (Keith, 2005).
The Hindu in July 29th, 2015 published a report on admission into Bengal Engineering
colleges where it cited Bhaskar Gupta, chairperson of West Bengal Joint Entrance
Examination Board (WBJEEB), who told The Hindu After final round of counselling
which ended on Monday, only 17,000 seats of 36,000 total seats available in the
State have been filled (Over 50% seats in Bengal engineering colleges vacant, 2015).
Considering engineering as one of the most sought after course in West Bengal in
the past decade, the declining admissions in the engineering colleges, is a matter of
concern not only for engineering colleges of West Bengal, but even for other non
engineering private colleges. Private colleges are in competition with one another to
attract students for admission.
Colleges are coming up with new strategies and ways besides advertising to attract
students for admission. Some colleges are using CRM system to increase their
admissions. In present day scenario, we do come across some of such examples:
Schools use CRM systems to track students from the admissions and application
process all the way to graduation. Below is a quote from Georgetown Universitys
Director of Executive Recruitment and Admissions at the McDonough School of
Business, Kirsten Sands, as she discusses Georgetowns implementation of Sales
force:
I am confident that the next cohort of executives we recruit will be the strongest we
have seen at the business school in the programs 20 year history because we have
been more effective at targeting who we are working with, weve elevated our level of
customer service, and we support every applicants unique interest to the program by
effectively managing relationships through Sales force. (Turner, 2013)

Lynn University in Florida, USA follows a method called Where everybody knows
your name. In this method, the emphasis is given on personalized campus tour,
where on arriving at the university campus, a prospective student is greeted by his or
her name by the security guard at the gate. Parking spots and admission office are
tagged with names of the prospective students. There the new students are given
student tour guides from their hometowns who is studying the same subject. Thus
the college is customizing campus admission tours for students (Turner, 2013).
California Polytechnic State University being a huge university, cannot give one-to-
one tour. More than two thousand students take self-guided tours every year, usually
because they cant make the schedule tours. Students who want to tour California
Polytechnic State University can visit its website and enter information about them to
create a personalized micro site. Administrators, with the help of the CRM system,
can use the information to send students tailored messages via email, video, instant
message, a broadcast phone message, and/or a chat session.
Students and their families can either pick up a GPS tour device from the admissions
office for personalized campus tour.
Thus, California Polytechnic State University has gone digital for campus tour (Turner,
2013).
University of California, Riverside uses two CRM systems to track prospective students
and to give them a campus tour. It merges personal data with tour specifics (Turner,
2013).
Therefore, CRM system during campus tour is helping the institutes to give a
personalized touch to the students which make them feel important and make them
feel comfortable. They start identifying themselves with the institute. A sense of
belongingness is created using the CRM system. The focus is on the requirement of
the individual students, rather than on the batch as a whole. Thus students get more
attracted towards the college. Reports state that this effort has increased the admission
figures in the colleges.
The CRM effort in education sector cannot stop at admission process because in a
graduation course which is of at least minimum three years in India, there is a chance
that students might leave college before completion of the course therefore imparting
a loss of a student from the college rolls which ultimately leads to a financial loss to
the institute. Thus equal focus should be given to student retention process. The rate
at which a student leaves a college without completing the course is called student
attrition. Thus it is important that factors leading to attrition should be identified and
addressed by the college authorities. Some reasons for attrition are:
l The student did not like the course and wanted to change the course
l The student did not like the college and wanted to change the college
l The student finds one of the subjects in the course difficult. One such subject
often narrows down to mathematics, as stated by Hussain and Khader, (2014)
(Hussain & Khader, 2014).
l Distance of the college from the students residing place was inconvenient.
l The student is unable to pay the fees of the course.

l Illness.
l Moving out of the city.
Kristopher Krost, Manager, United States in summary of CRM has stated:
The student attrition problem has become a major concern for both public and private
universities. According to the National Center for Education Statistics (NCES), about
59% of the first-time and full-time students seeking admission in four-year courses
finished their course in 6 years. The graduation rate of females was 61%, only
marginally higher than the 56% for males. Raising the graduation rates has become
a critical issue to be addressed to insure both student and institutional success.
According to his article, many institutions are referring to student data that include:
attendance, grade, assignment completion, class participation etc. To help staff
comprehend the pitfalls and intervene early using technology like early warning alert
system that is available in many higher education CRM systems. Many colleges and
institutions are experiencing the significance of utilizing technology to improve student
experience rather than just managing it to address the gaps. Campus staff is depending
heavily on comprehensive data of each student that is available through 360 degree
view feature available in higher education CRMs to personalize their communication
and pay special attention to students who are at-risk (Krost).
According to Kristopher Krost, The process of maximizing the success of enrolled
students can be summarized as the Three Is (Krost):
l Identify
l Intervene
l Improve
Illustrating and highlighting the above points:
The student who faces any one of the above reasons for attrition may be termed as
jeopardized student and college holds the risk of losing such student. The college
needs to develop a customer relationship management system: software based or
manual, as is convenient and effective, to monitor the students and identify such
jeopardized students.
The institution must design a method to identify the students with low performances.
The low performance can be attendance based, that is, the student remains absent
from the classes for elongated time period. Thus, attendance capturing process for
tracking absenteeism should be generated, or, the low performance can be study
oriented, that is, the student may not be performing well academically. Thus result of
every student must be compared and analyzed for low grades, or the low performance
can be due to some personal issues. Each student can be put under a mentor for
tracking behavioral changes in students, which may help us to identify whether the
student is facing any issues in personal life.
The identification process only helps the institute management to track jeopardized
students whom the college holds a risk of losing. Thus the identification technique
gives an opportunity to the institute to reduce the risk of attrition and to retain the
student rolls of the institute till the completion of the course. The process of retention
can be achieved using the second I of Kristopher Krosts theory that is Intervene.

The above data can be analyzed manually or using software based CRM to analyze
the available data like absenteeism or low grades. CRM applications cannot track
psychological and sociological changes in students like aloofness or sudden introvert
behavior or sudden change in body language and cadence. Thus a manual intervention
technique like Mentor-mentee customer relationship management or attentiveness of
the faculty members towards the behavioral pattern of the students can be used to
get an overview of a students mental state.
The management needs to develop a CRM system to intervene and solve the identified
problems faced by the admitted students.
The attendance of the students needs to be tracked at regular intervals to monitor
the absenteeism. The student with sudden drop in regularity can be tracked using
CRM software and the student can be contacted by the authority to check the criticality
of the situation. The results of the students can be analyzed using CRM software to
track students who are failing to achieve good marks or manually faculty members
can try to identify the student who has become irresponsive in class, or has become
absent minded or has become unruly in class. The mentors can speak to such students
to identify the cause of such change in the academic results.
The problem of student not liking the course, can be taken care by the college by
trying to make the course interesting for the student by giving the student extra
classes or giving more practical oriented approach to the topic. Same goes for if the
student does not like one of the subjects of the course.
If the student finds the distance of the college inconvenient, then the college may
arrange for a transport system for students or can address the problem by offering
good and comfortable accommodation to the students near the college.
If the student wants to leave the college because the student finds the college
unattractive, then the core reason for the same needs to be identified and the college
may address the issue if the cause is valid and can be rectified.
If the student is being unable to pay the fees of the college, then the college can
come up with a concession scheme.
Problems like illness of the student or moving out of the city may not be addressable
by the college authorities, but they can be considered as rear causes in the case of
attrition.
Effective intervention with at-risk students can increase course completion rates,
retention, academic performance, and overall student success. A CRM can help create
personalized intervention strategies for individual students. Outcomes from these
interventions can be tracked and documented for use with other students in similar
situations. And timeliness is important the earlier the intervention, the greater the
chance of success.
Improve: once the intervention phase is over, the management should keep on tracking
the student to understand whether the student has improved and has passed the
phase of jeopardy.
Apart from admission and retention process, the CRM system can also help to organize
alumni of the college and channelize and systematize the fund raising system of the
college.
LITERATURE REVIEW
According to Grant and Anderson, CRM is both a business strategy and a set of
discrete software tools and technologies, that aims at reducing costs, increasing
revenue, identifying new opportunities and channels for expansion, and improving
customer value, satisfaction, profitability, and retention (Grant & Anderson, 2002).
Savant and Mallya, (2013) studied how knowledge management can be an
indispensible resource for organizations. If it is neglected, it can pose a threat to
organizational development and excellence. Their study revealed that for education
industry competition is increasing at an extremely rapid rate in the present days. If
institutes want to survive, they have to maintain and enhance relationships with the
customers. In any case it can safely be termed as a service industry thriving on CRM
(Renuka S Savant & Mallaya, 2013).
Nair, Chan and Fang, (2007) examines the adoption factors for deployment of customer
relationship management (CRM) in higher education institutions. They identified four
groups of CRM users (Nair, Chan, & Fang, 2007).
l Strategic-Centralized
l Strategic-Decentralized
l Transactional-Centralized
l Transactional-Decentralized
Based on their case study, they have also postulated a CRM adoption model for the
higher education sector.
According to Seeman and OHara, (2006) Customer Relationship Management in
higher education stresses on: using information systems to improve the student-school
relationship. They have investigated Customer Relationship Management in a higher
education setting. They conclude that the benefits of implementing CRM in a college
setting include a student centric focus, improved customer data and process
management, increased student loyalty, retention and satisfaction with the colleges
programs and services (Seeman & OHara, 2006).
Keith, J., (2005) has illustrated the scenario of Ontario College and has concluded in
his work that people may refrain from considering students as customers in education
sector, but given the college funding crisis in Ontario College, a quality customer
service strategy would be wise step as marketing strategy. The actual term customer
service is not so important as compared to a function of college business.
Implementation of such strategies can help to increase enrolment, aid retention and
build a service excellence reputation. The creation of a customer service college
culture has farfetched benefits. The bottom line is, in the best sense of the metaphor,
that colleges must seize every opportunity to value their customers, potential
customers, and others by developing quality customer service college cultures that
embrace the ideals of empathy and other-centeredness (Keith, 2005).
Drea, C., (2004) illustrated how attrition rate and retention problems in Ontario College
has become concern for the governments and administrators since the mid-1970s
when attrition was estimated at 50 percent. She has stressed that to reduce attrition,
governments and institutions must work on increasing retention. She has suggested

through recommendations that close monitoring of the students are required for reduce
the attrition rate (Drea, 2004).
Hussain and Khader, (2014) has analyzed student attrition and retention in engineering
colleges of South India where they have tried to figure out the reasons for attrition in
South Indian engineering colleges. They have concluded that in engineering institution,
students are switching from engineering into a non-engineering major due to a lack
of interest in engineering programs and fear about the engineering mathematics subject
offered in our universities (Hussain & Khader, 2014).
Objectives of the study
1. Understanding the role of CRM in industry that imparts education as service
2. To study the effect of CRM on the student activities of the education sector
3. To understand how colleges can utilize CRM to lower attrition rate and retain the
student roll in a college and whether from students point of view it is a valid
system
This study started as an exploratory study that eventually led to the descriptive cross-
sectional study focusing on understanding education sector as industry, to study the
need for using CRM tools for increasing the number of student customers in the
institute.
The primary data has been collected using a questionnaire. For our research, we
have questioned 290 respondents, which include the students of an under graduate
private college in Kolkata, West Bengal.
Sampling Plan : The data has been collected from a under graduate private college
in Kolkata, West Bengal. The data has been collected through questionnaire from
290 respondents.
Sampling method : The respondents were the students of a private college and
they were selected by stratified sampling i.e., the students were separated into males
and females and sample is taken from each of these strata using simple random
sampling.
DATA ANALYSIS
In our study, we have used simple tabulations and pie charts for the data analysis
which are given below:
We have analyzed the respondents feedback on the question: Do you think this
intervention will help you to improve your performance in college?
Total Number of Students: 290
Number of Management Students: 107
Number of Technical Students: 183

Table 1: Frequency Table

Figure 1: Pie Chart Showing the Number of Students
Interpretation : 37% of the respondents belong to management discipline and 63% of
the respondents belong to technical discipline.
Do you think this intervention will help you to improve your performance in college?
Stream Number of Agree Number of Percentage of
Students Students Students
Stream-wise
Management 107 Yes 91 85
No 16 15
Technical 183 Yes 159 87
No 24 13
Table 2 : Stream wise Frequency Table
Figure 2 : Pie Chart Showing Stream wise Frequency-Management

Interpretation: 85% of the management respondents agree that intervention system
helps them to improve their performance in college, whereas 15% of the management
respondents feel that intervention system does not have any effect on their performance
in college.
Figure 3 : Pie Chart Showing Stream wise Frequency-Technical
Interpretation: 87% of the technical respondents agree that intervention system helps
them to improve their performance in college, whereas 13% of the technical
respondents feel that intervention system does not have any effect on their performance
in college.
Do you think this intervention will help you to improve your performance in college?
Gender Number of Agree Number of Percentage of
Students Students Students
Gender-wise
Female 113 Yes 107 95
No 6 5
Male 177 Yes 148 84
No 29 16
Table 3 : Gender wise Frequency Table
Figure 4 : Pie Chart Showing Gender wise Frequency - Female
Interpretation: 95% of the female respondents agree that intervention system helps
them to improve their performance in college, whereas 5% of the female respondents
feel that intervention system does not have any effect on their performance in college.
Figure 5 : Pie Chart Showing Gender wise Frequency - Male

Interpretation: 84% of the male respondents agree that intervention system helps
them to improve their performance in college, whereas 16% of the male respondents
feel that intervention system does not have any effect on their performance in college.
FINDINGS
From the above study we found that out of the 290 students who have given their
views regarding the intervention process of CRM system in college, 107 students
belong to management discipline while 183 students belong to technical discipline.
Out of these 107 management students, 91 students that is 85% of students agree
that the intervention system is helping them to improve their performance in the
college, while rest of the 16 students feel that the intervention system in the college
is not effecting their performance. Considering the 183 technical students, 159 students
that is 87% feel that the intervention system is affecting their performance in effectively
in the college, while 27 students, i.e., 13% feel that the intervention system has no
effect on their performance.
Thus, taking the whole sample into consideration, we derive that 85% of the mangemtn
students and 87% of the technical students agree that the intervention system is
affecting their performance in a positive manner.
Again, analysing the data from another angle, we find that, out of 290 respondents,
177 are boys and rest of the respondents are girls. Out of 177 boys, 148 boys i,e.,
83% of the boys agree that the intervention system is helping them to improve their
performance in college, which leads to the fact that only 17% of the boys feel that
the intervention system has no effect on their performance in college. Considering
the 113 girl students, 107 of the girl student i.e., 95% of the girls feel that the
intervention system is helping them to improve their performance in college, when
remaining 5% feel otherwise.
Thus 95% of the girl students think that intervention system has a positive impact on
their performance in college whereas a lesser percentage, 85%of male students feel
alike.
CONCLUSIONS
From our study, we can therefore conclude that the intervention process of the CRM
system is of utmost importance and it plays a vital role in affecting the performance
of both male and female students, belonging to either management or technical
discipline.
Again, the CRM system is affecting the girl students more than the boy students.
Thus it can be concluded that the second I of Kristopher Krosts success mantra
helps the college in helping the jeopardized students, that is, the students who
have low performance and those that college has a chance of losing.
Thus the colleges should sincerely develop and enhance their intervention system
and implement the system effectively so that the college can extend the effectiveness
of the intervention process of the CRM to the entire batch of students.
LIMITATIONS OF THE STUDY AND FUTURE RESEARCH SCOPE

The present study has a number of limitations which must be acknowledged. The
study is only confined to a under graduate private college of Kolkata in West Bengal,
India. Since the data used is primary, therefore it suffers from the limitations of primary
data. The sample size is small due to time constraint. Thus, sample size may not be
precisely practicable for the very large population of India. For the purpose of the
study, a stratified random sample of respondents was chosen. Consequently on the
basis of the results analyzed, a generalized inference cannot be drawn which may
depict that this result is applicable for whole of Indian education sector.
Secondly, the ratio of management students to technical students is uneven.
REFERENCES
Drea, C. (2004). Student Attrition And Retention In Ontarios Colleges. College Quaterly.
Grant, G. B., & Anderson, G. (2002). Customer Relationship Management:. In R. N. Katz, Web
Portals and Higher Education: Technologies to Make IT Personal (pp. 23-32). Jossey-Bass,
A Wiley Company.
Hussain, M., & Khader, P. S. (2014). ANALYZING STUDENT ATTRITION AND RETENTION IN
ENGINEERING. Singaporean Journal of Scientific Research , 213-218.
Keith, J. (2005). Customer Service in Ontarios Colleges. College Quarterly vol. 8 no. 4 .
Krost, K. (n.d.). Summary of Customer Relationship Management CRM. Retrieved from 12 Manage
The Executive Fast Track: http://www.12manage.com/forum.asp?TB=customer_relationship_
management&S=50
Nair, C., Chan, S., & Fang, X. (2007). A Case Study of CRM Adoption in Higher Education.
Managing Worldwide Operations and Communications with Information Technology (pp.
221 - 224). Vancouver, British Columbia, Canada: 2007 Information Resources Management
Association International Conference.
(2015). Over 50% seats in Bengal engineering colleges vacant. The Hindu.
Renuka S Savant, & Mallaya, R. S. (2013). Education - A Service Industry Thriving on CRM!!
National Conference on New Horizons in IT NCNHIT (pp. 108 - 111). Mumbai: MET
Institute of Computer Science.
Seeman, E. D., & OHara, M. (2006). Customer relationship management in higher education:
Using information systems to improve the student school relationship. International Journal
of Information and Learning Technology , 24 - 34.
Turner, M. L. (2013, June 25). Colleges customizing campus admissions tours for students.
Retrieved from www.universitybusiness.com: https://www.universitybusiness.com/article/
colleges-customizing-campus-admissions-tours-students
VakilNo1. (n.d.). Colleges and Universities covered under Consumer Protection Law. Retrieved
from VakilNo1.com: http://www.vakilno1.com/consumer-protection/colleges-and-universities-
covered-under-consumer-protection-law.html
Year Wise Impact of Rights Issue
Announcements on the Stock Prices
Dr Swati Mittal*
ABSTRACT
Rights issues takes place, when a company offers existing shareholders a right to purchase
additional shares of the company at a given price, which is at a discount to the prevailing
market price of the stock. There is need to study the significance of this emerging trend, its
signaling effect on share price and its impact on the wealth of the shareholders. The study aims
to check whether efficient market hypothesis holds for Indian stock market or not i.e., whether
there is any movement in share prices before or after the rights issue announcements. The
study includes Top 100 companies rated by Chartered Financial Analyst Survey 2008 and
informational efficiency for last ten calendar periods- January. 2006 to December 2015 has
been investigated. The results show that the Indian Capital Market is semi strong efficient as it
is using the information relevant for security valuation and for investment decision making. The
role of SEBI can be instrumental in preventing insider trading so that the confidence of the
investors is maintained and the stock market can become more vibrant and dynamic.
Key Words : Right Issue, Sensex, Market Efficiency
INTRODUCTION
The basic premise of carrying out rights offer is to raise additional capital. The company
raises money from its existing shareholders, who have seemingly posed their faith in
the company by virtue of being its shareholders, to invest in expanding capacities or
to explore other investment opportunities. This, in turn, provides the company better
leveraging opportunities. A higher equity capital base would assist the company to
raise higher debt. This is because a companys debt-to-equity ratio would stand
reduced, putting the company in a comfortable position to raise further debt from the
market. A rights issue can offer a quick fix for a troubled balance-sheet, but that
does not necessarily mean management will address the underlying problems that
weakened the balance-sheet in the first place.
REGULATORY FRAMEWORK OF RIGHTS ISSUE IN INDIA

Section 62 of the Companies Act, 2013 provides: where at any time a company
having a share capital proposes to increase its subscribed capital by issue of further
shares then:
1. Such shares shall be offered to the persons, who at the date of the offer, are
holders of the equity shares of the company proportionately to their equity holdings
on that date subject to the following conditions
* *Assistant Professor, S.D College For Women, Moga, Pin 142001; Email Id: swati_goyal08@rediffmail.com
(i) The offer shall be made by a notice specifying the number of shares offered
and limiting a time not being less than 15 days and not exceeding 30 days
from the date of the offer, with in which the offer, if not accepted, will be
deemed to have been declined.
(ii) Unless the Articles of Association of the company otherwise specify, the offer
shall be deemed to include a right exercisable by the person concerned to
renounce the shares offered to him or any of them in favor of any other
person; and the notice referred to in clause (i) shall contain a statement of
this right.
(iii) After the expiry of the time specify in the notice referred to the above, or on
receipt of earlier intimation from the person to whom such notice is given
that he declines to accept the shares offered, the Board of Directors may
proceed to dispose of such shares offered in such manner as they consider
most beneficial to the company.
2. To employees under a scheme of employees stock option, subject to special
resolution placed by a company and subject to such conditions as may be
prescribed; or
3. To any persons, if it is authorized by a special resolution, whether or not those
persons include the persons referred to in clause (a) or clause (b), either for cash
or for a consideration other than cash, if the price of such shares is determined
by the valuation report of a registered value subject to such conditions as may be
prescribed.
REVIEW OF LITERATURE
By employing market model to investigate the rights issues on the NYSE between
1926 and 1966, (Scholes) documented excess returns prior to the issues and a little
price drop in the month of issues, but no abnormal gains or losses thereafter.
(He, et al.)) evaluated the semi-strong form efficiency of Shenzhen Stock Market by
examining the stock price reactions to releases of restructuring information, financial
information and rights issues. Year-wise empirical results on restructuring information,
financial information and rights issues could not provide support for the semi-strong
form efficiency.
(Marisetty & Veeraraghavan, 2007) examined the securities price reaction to
announcements of rights issues by listed Indian firms during the period 1997
2005.They had documented a positive but statistically insignificant price reaction to
such announcements. The price reaction was significantly more negative for firms
with a family group affiliation compared to firms with no family group affiliation. They
had also found that a higher level of individual shareholding in the firm was associated
with a more positive price reaction to the announcement.
(Khan & Baker, 2007) examined the short-term stock price reactions to announcements
of equity rights offerings in Singapore between 1983 and 2003. They had investigated
whether economic factors lead to different price reactions. The results showed that
the cumulative abnormal returns (CARs) associated with rights issues differ significantly
across economic conditions at the time of issuance. The CARs vary positively with
Tobins q-ratios, which indicate the availability of positive net present value investment
opportunities of the firms issuing the rights.
(Thirumalvalavan & Sunitha, 2007) examined that the abnormal returns result from
the announcement of a rights issue of equity in Australia and it was the first study
outside the U.S. The determinants of the announcement effect were analyzed using
a two-stage approach to control for the end of heterogeneity of the price discount.
The discount was positively related to the offer size and negatively related to
underwriter quality, supporting underwriter certification models. Finally they had found
that announcements made by resource firms generate larger negative reactions than
other issuers.
NEED FOR THE STUDY

There is need to study the significance of this emerging trend, its signaling effect on
share price and its impact on the wealth of the shareholders. Further, it has been
argued that if the capital markets are efficient then they would react immediately to
various kinds of rights issue announcements. On the other hand, if the markets are
inefficient then such information already gets trickled to the markets much before it is
formally announced. This spreads rumors in the stock market which results in enhanced
trading volumes in the shares of companies. This may also lead to insider trading by
the management, the directors and the employees of the company. In such a scenario,
the market may not react at all when the information is finally made public. This is a
likely scenario in the case of emerging markets; as such markets are not believed to
be as efficient as the developed markets and are, therefore, not expected to respond
to new information about firms in the same way.

The study aims to check whether efficient market hypothesis holds for Indian stock
market or not i.e., whether there is any movement in share prices before or after the
right issue announcements. The objective of this chapter is to visualize the performance
of corporate announcements during different time intervals of the entire period. The
analysis has been made under the heading of Year-wise impact of rights issue
announcements on share prices.
RESEARCH DESIGN
The study includes Top 100 companies rated by Chartered Financial Analyst Survey
2008 and informational efficiency for last ten calendar periods- January. 2006 to
December 2015 has been investigated. The Analyst 500 companies have been ranked
on the basis of their Net Sales alone. Besides, Net Sales, other parameters, such as
like Profit after tax (PAT), Operating profit or Profit before depreciation and tax (PBDIT),
Operating Profit Margin and Market Capitalization have also been considered.
For the present study, secondary data has been used. For exploring the objectives of
this study, the information disclosure concerning the rights issue announcements have
been collected from BSE (Bombay Stock Exchange) website. Data regarding share
prices and Sensex has been taken from BSE (Bombay Stock Exchange) and NSE
(National Stock Exchange) websites. The data on daily closing values of market proxy
is obtained from Capitaline Database. Capitaline Database is maintained by Capital
Market Publishers India Private Limited.
Event Study methodology has been used for the purpose of analyzing the corporate
announcements effect. The event study methodology has been extensively used to
assess the impact of an announcement of a particular strategy on the firms stock
prices. This analytical approach is well accepted and has been widely used in various
disciplines such as Finance, Accounting, Marketing, Strategy, E-Commerce and Law.
(Lane & Jacobson, 1995).
The event study methodology has been used to estimate Cumulative Abnormal Returns
(CAR) for a 15 day window period. Market Model Method (Single factor Model) has
been used. The study endeavors to find the Cumulative Abnormal Return (CAR).
Market Model assumes that all inter-relationships among the returns on individuals
assets arise from a common market factor that affects the return on all assets, i.e.,
the expected return on individual assets. The event study methodology has been
extensively used to assess the impact of an announcement of a particular strategy of
the firms stock prices.
ANALYSIS AND INTERPRETATION

Rights issues takes place, when a company offers existing shareholders a right to
purchase additional shares of the company at a given price, which is at a discount to
the prevailing market price of the stock, to make the offer enticing for the shareholders
and to ensure that the rights offer is fully subscribed to. Rights issue announcement
dates for the period of January 2006 to December 2015 were collected using the
three data source Capitaline, BSE and NSE Websites. Rights issue announcements
have been collected fromwww.bseindia.com. Data regarding share prices and Sensex
has been taken from BSE and NSE websites. The data on daily closing values of
market proxy has been obtained from Capitaline Database.
This process revealed 21 observations that met the following criteria
l The rights announcement date is to be reported in any of the leading financial
dailies
l Daily closing price data for the company over the period from 200 days before to
15 days after the announcement dates is available from the databases
YEAR WISE SHARE PRICE RESPONSE TO RIGHT ISSUE ANNOUNCEMENTS

Table 1 gives data relating to the year wise movement of Average abnormal returns
(AARs) and cumulative average abnormal returns (CAARs) of right issue
announcements. A perusal of table 5.5 shows mostly negative average abnormal
returns on the announcement day. Year 2012 saw highest announcement day return
of 0.4262 which is statistically significant at 1 percent level. Year 2006 gave an
announcement return of only -1.2691 percent which is lowest in the entire period.
Further, a comparison of Average abnormal returns (AARs) prior to the date of an
announcement has been made. It has been noticed that the highest average abnormal
returns (AARs) prior to the date of an announcement is 2.2781 in 2010 on day 4,
whereas the highest average abnormal returns (AARs) after the date of an
announcement is 7.0778 in 2010 on day 6. The lowest average abnormal returns
(AARs) prior to the date of an announcement is -6.3160 in 2011 on day 4, whereas
the lowest average abnormal returns (AARs) after the date of an announcement is -
3.0860 in 2012 on day 12.
An analysis of movement in Cumulative Average abnormal returns (CAARs) over the
years indicates significant variation. On the announcement day a Cumulative Average
abnormal return (CAARs) of 3.5810 percent in 2010 was highest.
2006 2007
2008 2009
2010 2011
2012 2013
2014 2015
Figure 1 : Year wise average abnormal returns of right issue announcements
Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Days AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%)
-15 -0.1200 -0.3200 -0.0230 -0.6960 -0.8230 -0.0240 -2.3700 0.0924 -0.3450 -0.9920
-14 -0.2950 -0.4350 0.1005 -0.6110 -0.2510 0.0320 -0.3330 -0.2180 -0.5830 -0.8570
-13 -0.1490 -0.4440 -0.0480 -0.1550 -0.5240 -0.3560 -0.4700 0.0353 -0.6980 0.7010
-12 0.1842 -0.0920 -0.1650 -0.1960 -0.4840 -0.1530 0.0830 -0.1330 0.0730 -0.2340
-11 0.1854 -0.1820 0.4060 0.1850 -0.1450 -0.1250 -0.0840 -1.1760 0.1030 -1.3490
-10 -0.1834 -0.2690 0.4080 -0.1820 -0.4360 -0.1790 0.0800 -1.2840 0.0940 -0.3430
-9 0.1830 -0.2660 -0.7410 0.0990 -0.3930 -0.2370 1.0790 -0.3270 0.0390 0.3350
-8 0.1125 -0.2310 -0.7360 0.1240 -0.7070 0.2760 2.0790 -0.2990 0.0110 -2.3530
-7 0.1831 -0.2520 -0.5560 0.1200 -0.8910 -0.3150 0.7790 -0.3110 0.1330 -0.4160
-6 -0.1823 -0.4170 -0.7850 0.1490 -0.7220 -0.3610 0.0780 -3.2810 0.1340 -0.4660
-5 0.1816 -0.4570 -1.0200 0.0710 -0.6000 0.4030 0.0770 -0.2750 0.1070 0.5780
-4 0.2814 -0.5330 -1.2590 -0.0500 -0.8540 -0.4630 2.2780 -6.3160 -0.1100 -0.6580
-3 -0.1808 -0.6600 1.3010 -0.1400 -0.8160 -0.4610 0.0780 -0.3520 0.1880 -2.6350
-2 0.1901 -0.4720 1.1630 -0.2700 -0.8150 -0.3920 0.0760 -0.3870 0.2840 -0.5190
-1 0.1813 -0.3920 -1.1740 -0.0210 -0.9520 -0.3340 0.0750 -2.4170 0.3570 -0.4150
0 -0.1805 -0.3520 -1.2690 -0.1010 -0.8930 -0.3240 0.0760 -0.4160 0.4260 -0.3440
1 -0.3805 -0.2920 -1.2780 0.1470 -0.9770 -0.2990 4.0760 -0.4180 -0.2280 -0.3690
2 -0.1803 -0.3510 -1.4170 -0.1700 -1.0040 -0.3260 0.7500 -1.4110 -0.1290 -0.3470
Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Days AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%) AAR(%)
3 -0.1798 -0.3340 -1.7680 0.1530 -0.9750 -0.3120 0.0750 -0.4350 -0.0690 -0.3240
4 -0.1587 -0.3170 -1.9200 0.1560 -1.0850 -0.2680 1.0750 -1.4450 -0.0360 -2.3090
5 0.2785 -0.3100 -1.6040 -0.1620 -0.9630 -0.2310 0.0750 -0.3980 -0.0790 -0.3130
6 -0.1789 -0.2950 -1.5320 -0.1640 -0.8080 -0.2110 7.0770 -0.3470 -2.0740 -0.3240
7 0.1790 -0.2780 -1.6180 0.1600 -0.6580 -0.1820 0.0790 -1.3740 -0.0540 -0.3332
8 0.1793 -0.2940 -1.5690 0.1560 -0.6250 -0.1980 3.0800 -0.3910 -0.0530 -0.3510
9 0.1790 -0.3110 -1.4970 0.1520 -0.6870 -0.1980 0.0800 -0.4000 -0.0590 -2.3240
10 0.1287 -0.3050 -1.5690 0.1440 -0.6660 -0.1850 0.0800 -0.4270 -0.0640 -0.3020
11 0.1787 -0.3010 -1.7800 0.1500 -0.6500 -0.1710 6.0800 -0.4180 -0.0710 -0.3190
12 0.1793 -0.3000 -1.9960 0.1550 -0.6330 -0.1690 0.0810 -0.4030 -3.0860 -0.3370
13 -0.1180 0.0567 -0.0690 0.0435 0.1214 -0.3020 -0.0080 -0.0150 0.0580 0.0235
14 -0.2330 -0.5220 -0.0710 0.1589 -0.3090 -0.1630 -0.0790 0.0831 -0.6320 0.0351
15 -0.2280 -0.2710 -0.0790 0.1539 -0.4250 -0.0230 -0.0110 0.0906 -1.0470 -0.0180
Table 1 : Average abnormal returns (AARs) and cumulative average abnormal returns
(CAARs) of Right Issue announcements.
CONCLUSION
The stock market efficiency is one of the most important areas in finance that is
often researched. As no stock market can be efficient in the absolute sense,
researchers have categorized the stock market efficiency into weak, semi-strong and
strong forms. There is strong evidence in favor of Indian stock market being efficient
in the weak form. The limited number of studies on the strong form makes it difficult
to conclude either in favour or against the strong form. Numerous studies have
examined the semi-strong form of Efficient Market Hypothesis and come to conflicting
conclusions. In the light of this fact, this study investigates the semi-strong form of
Efficient Market Hypothesis. The results show that investors perceive the right issue
by the negatively, as the firm is distributing the shares to the existing shareholders
as against floating a new issue in the market. As signaling theory postulates, firms
actions convey some meaningful information to the investors. The values of Average
Abnormal Returns and Cumulative Average Abnormal Returns of all the samples are
equally significant at 95% degree of freedom which means that the share price reflects
the Rights Issue announcements.
RECOMMENDATIONS AND SUGGESTIONS

From the foregoing analysis, the following suggestions have been made to make
Indian capital market more efficient. It is a known fact that reliability of accounting
information is important. The regulation of accounting norms and audit practices will
improve the reliability of accounting information. The larger the number of analysts,
the more efficient will be the market. Thus, market efficiency depends upon the number
of investors in the market, particularly the institutional investors and number of analysts.
There is need to promote programmes that will produce professional analysts. The
more visible a company, the more perfect its market is likely to be Perfect implies
that most of the likely factors affecting the price of its securities are presumably
known to the market and vice versa. The existence of insider trading or information
leakage can erode the confidence of investors in the instrument and may be viewed
by them more as a tool to deceive than to benefit them. SEBI should mull over the
listing rules, and suitable amendments are the need of the hour to prevent such
practices.
LIMITATIONS OF THE STUDY

The results of the study could have further improved, provided the study had covered
even larger sample and longer time period. The study has conducted the analysis on
the daily stock returns. It is quite possible that the results could have been different
had the analysis been done on monthly or annual returns data. The closing share
prices have been taken from CAPITALINE database. The results may differ if it would
be collected from any other database. The non-availability of trading data reduced
the sample size for present study. The result would have been more comprehensive,
had the trading data relating to all announcements been available.
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REPORT
Demonetization in Emerging Markets :
Boon or Bane
Surajit Malakar* and Dr Ravi Chatterjee**
INTRODUCTION
The Indian economy is one of the worlds fastest growing economies which is
consistently maintaining a growth rate of around 7%. However the shadow economy
i.e. the black money economy is also growing at an alarming pace. Indian economy
is having this tall shadow economy for decades now. This has led to enormous
concentration of unaccounted money in hands of few which is leading to economic
disparity. The Government of India (GOI) is trying to increase penalties for tax evaders
and incentivize honest tax payers. The Government of India therefore introduced an
income declaration scheme whereby it gave tax evaders an opportunity to pay tax on
their unaccounted wealth and fall in line with the honest tax payers. Simultaneously
the Indian government under the leadership of Prime Minister Shri Narendra Modi
took a bold step of demonetizing currency notes of Rs. 500 and Rs. 1000 so as to
pull the noose around the neck of tax evaders. Demonetization is the act of stripping
a currency unit of its status as legal tender (Kumar Prakash, 2016). When any
Government withdraws the legal tender rights of any denomination of currency, it is
known as demonetization. Same was followed when the European Monetary Union
nations decided to adopt Euro as their currency. However, the old currencies were
allowed to convert into Euros for a period of time in order to ensure a smooth transition
through demonetization. Zimbabwe, Fiji, Singapore and Philippines were other countries
to have opted for currency demonetization.
The main intention of demonetization was to curb black money, crack the terror funding
and sever the supply of counterfeit currency notes. The declaration was made by the
Prime Minister himself and the nation immediately welcomed the move. The Prime
Minister asked for 50 days to set things right and the nation was more than willing to
give him that. But then every single person was asking only one question Will it be
good for the nation? Its a simple question with a complex answer. GOI firmly took a
step of demonetization to cut the supply of counterfeit currency notes. There ongoing
debate that terrorist mainly support the infrastructure that pumped fake currency notes
into the country in order to destabilize the Indian economy. Demonetization can render
the entire counterfeit money infrastructure useless in minutes. The question arises
that whether it is right time to force such cash less transaction when a country like
India is struggling to fight against cyber crime.
* Assistant Professor, Army Institute of Management, Kolkata; Email: msurajit@rediffmail.com; Ph:

9433056409
** Assistant Professor, Army Institute of Management, Kolkata; Email: ravic.aimk@gmail.com; Ph:
7044106607
Present report argues that demonetization is an initiative to fight against corruption.
This report tries to build upon the fundamentals that emerging country like India
should work upon technology front first and then should implement demonetization in
practice. Demonetization is seen as a long-term gain than short term pain. It has
been very clear that short term outcome of demonetization is shortage of cash for
purchasing necessitates but in long term it can lead to boosting the economy.
BACKGROUND OF THE STUDY

On 8th Nov 2016, the Indian Prime Minister Shri Narendra Modi scrapped Rs 500
and Rs 1000 notes and paved the way for stopping corruption, black money and
terrorism. These currency notes can be redeemed before the yearend or else it would
hold no value. 86 % of the total notes in circulation consist of these two high-value
notes. The whole drive is for a valid cause and the most important reason is to
eliminate black money that has been mostly used for illegal activities. It would also
greatly support in eradication poverty from the country (Times-News-Network, 2016).
It is very well known that black money give rise to tax evasion and also notoriously
funds political campaigns. People will now account for their cash if they want to
convert or deposit it. The second target is Pakistans terror networks are lubricated
by fake currency. It was estimated by the Reserve Bank of India (RBI) in the annual
report of 31 March 2016 stated that in terms of value total bank notes there is Rs.
16.42 lakh crore of Rs. 500 and Rs. 1000 banknotes in circulation. Greater financial
inclusion as banking will get a push e.g. 25.45 crore Jan Dhan Yojana accounts were
opened in which Rs. 45,637 crore was deposited by 09 Nov and has reached to Rs.
74,322 crore by 30 Nov 2016 (Times-News-Network, 2016).
The demonetization process is an effective way to make this country cashless. It
does not nudge the economy but push the economy in that direction. The
demonetization of currency is like to be disruptive in the short run but in the medium
to long run it will make economy more formal with significant gains in terms of demand
boost and investment activity. Increased Tax compliance will mean Tax to GDP ratio
will go up as higher public spending on infrastructure, better fiscal position will lead
to further lower interest rate. Very few people in India pay income tax e.g. Number of
tax returns in 2012-13 was 3.13 crore, 2013-14 was 3.61 crore and 2014-15 was
3.91 crore. The biggest benefit that will come from this will be that the black money
will return to banks and become part of formal economy. Money will go to poor as
they will have bank accounts and as people use proxies to launder black money, that
wont happen (Economic Times, 2016). Even though, the crisis of cash presents a
big opportunity for the country to adopt cashless transactions, but the question is that
is the country ready for this changeover? The slow and unstable internet, lack of
infrastructure to accept cards especially in rural areas and the mindset of the people
need to be rebooted. Number of ATMs and POS terminals is 2.2 lakh and 15 lakh
respectively. Debit Card usage at POS is 5.2% and ATMs is 94.8%. Growth between
2013 and 2015 for Debit Cards 64%, ATM 43% & POS Machine 28% (Economic
Times, 2016). All said and done, this highly ambitious plan has put people on lurch
as the ATMs are running dry and replacing cash has actually became logistical
nightmare. In the initial few days it was declared that at the Petrol pumps, medical
shops, hospitals the Rs 500 and Rs 1000 notes will be accepted. Many petrol pumps
stopped receiving Rs 500 notes for fuel below Rs 300 as they were unable to find
change (Times-City, 2016). There have been instances where parents were left with
dead infant as they could not pay medical bills, father of prospective bride died of a
heart attack brought on by a desperate lack of cash and senior citizens have died
standing in line of ATMs. When politicians fail the people become the opposition and
can cause worry for the government (Ghose, 2016).
Students studying outside their hometowns feel the cash heat as they receive pocket
money from their parents for their daily expenses, which has been disrupted due to
the cash crunch (Times-News-Network, 2016). November month end became Mayday
for many banks in the metro cities of India as anxious customers waited outside the
banks as the salaries got credited (Times-News-Network, 2016). The pensioners were
also in dire state as they were unable to withdraw money from the banks, ATMs and
post office has disrupted their daily lives (Chakroborty & Konar, 2016). On the other
hand E-wallets gain from shift to cashless economy, the digital payments industry
rejoiced but banks are staring at the nightmare of handling the currency system
reshuffle (Economic Times, 2016). Housing prices in 42 major cities across India
could drop by up to 30% over 6-12 months after the demonetisation of high-value
notes, wiping out over Rs 8 lakh crore worth market value of residential properties
sold and unsold by developers since 2008. Housing prices in 42 major cities across
India could drop by up to 30% over 6-12 months after the demonetisation of high-
value notes, wiping out over Rs 8 lakh crore worth market value of residential
properties sold and unsold by developers since 2008.
EFFECTS OF DEMONETISATION
Demonetization has made people insane as Rs 2k notes were being sold over eBay
for 1.5 lakh it was having religious number 786 and the smaller denomination notes
like Rs 20 and Rs 50 were being sold for Rs 900 and Rs 5000 respectively (Sarkar,
2016). The currency crunch has disrupted the entire supply chain. More than 45 lakh
trucks got stranded on highways from Nagaland to Maharashtra, Punjab to UP.
Transportation association from across the country reported that the business has
gone down by 40-50% across all regions which have adversely affected the supply
chain (Rai, 2016). In the state of Kolkata where fish is being eaten almost every day
and in almost all the households, vanished from the market due to the confusion
caused by demonetization. As money started trickling in, the prices for the perishable
products dipped drastically overnight. Overall the retailers and the shoppers both got
distressed in the process. This has specifically affected the wholesale market as the
daily transaction happens in cash and reaches in lakh. The wholesales rates have
come down but at the retailers level the rates are high and is really not helping the
end customers (Times-News-Network, 2016). The newspaper vendors need to by
newspapers from the supplier daily in cash on the other hand 60% of the customers
pay in cash on monthly basis. Due to cash crunch and shortage of lower denomination
notes, it is not only bringing difficulty making payments but also the daily purchase
from the newspapers vendors have come down by more than 50% (Sen, 2016).
The month of November has been the worst ever for the automobile industry, the
sale for the luxury cars has dipped drastically (Times-News-Network, 2016). The used
car market also sees a drop of 40% as stated by auto financers and organized used
car sellers as more than 70% of used vehicles sell on cash. The used car business
is largely unorganized and only 15-20% vehicles are financed. As a result, the currency
crunch has impacted it more than the new car market (Sengupta, 2016). At the time
of peak seasons the airfares goes up but due to demonetization the airlines are
forced to offer special discounts to fill up planes. In general the airlines are facing a
10% fall in the bookings but are very hopeful that the bookings for holidays in winters
will spike up (Sinha S. , 2016). The real estate sector will be severely hit by the
demonetization decision as the secondary market transactions where 60:40 ratio of
black money had become common (Sinha P. , 2016). The cash squeeze will wipe out
over Rs 8 lakh crore worth market value of residential properties sold and unsold by
developers since 2008 across 42 Indian cities (Times-News-Network, 2016).
Deaths have been reported across the country, after the process of Demonetization
many have lost their balance of mind as they are not able to withdraw cash from
ATMs and are not able to pay for the basic necessities (Times-News-Network, 2016).
Several clinical establishments in Kolkata, India have hiked various charges and
doctors fees after demonetization hit the country. Some of the clinics also plan to
discontinue taking fees in cash and would share their account details in which the
consultation charges can be paid at the end of the month. As this amount gets
accountable the income tax amount will have to be borne by the patients. In all this
new system will bring a hike of 15% in the existing rates (Mitra, 2016). The drug
stockiest see sales drop by 20% in the month of November and consumption at the
retail level was affected by 10%. Diagnostic and health care services experienced a
drop of 15 to 20% as many patients have deferred health checkups and wellness
test due to cash crunch (Mukherjee, 2016).
METHODS
To get view on adverse effect of demonetization and merits of demonetization, several
interviews were conducted. Interview method is particularly useful for drawing out the
outcome based on participants personal experience from some reference phenomena.
Open ended interview was conducted with 13 people. Out of 13 samples, 8 were
working professionals and the rest of the participants were students doing their post
graduation. Each interview was based on the central theme of merits and demerits of
demonetization. The interviews lasted for 50 minutes.
RESULTS FROM INTERVIEW

Majority of the respondents felt that demonetization has positive and negative effects
as it has short term pain and long term gain. The gain can be stoppage of the terrorist
activities and black money in this process. People will involve in e-payment modes
that will benefit them as it is easy and safe. It will be beneficial as the people who were
not paying taxes will start paying it. It will also help FDIs to come to our country.
The negative side to this would be that India being 60% village, and is not ready for
online payment systems. Black money is in the form of land and building and black
money is very limited in cash form, so this process has not been in a position to
eradicate black money to that extent. If the cash problem elongates there will be
huge problem in India, many people have lost their jobs and few of them have also
lost their lives.
Additionally a practicing chartered accountant shared his opinion on merits of
demonetization as under:
Demonetization coupled with implementation of GST and simultaneous reduction in
Income-tax rates can have a terrific impact on Indian economy. It would not only curb
the shadow economy but also prevent it from growing back. As there would not be
cascading effect of indirect taxes and income tax rates would be lower, businessmen
will lose incentive to do black marketing. However it should be backed by simple tax
processes and strict laws for tax evasion. Demonetization will cause a great surge in
deposits with banks. This will create a lending pressure on banks thereby reducing
lending rates. Lower lending rates will provide impetus to manufacturing sector and
thereby providing better employment opportunities to the youths of the nation. This
will improve purchasing power and in-turn fuel demand for goods and services. The
Government should however be cautious so that imported goods do not replace local
products thereby increase trade deficits.
Demonetization if implemented in the right spirit will result in higher tax collections
with lower rates of taxes. Higher tax collections will provide the financial might to the
Government to pursue its investment goals in basic infrastructure. With improved
infrastructure the people of the nation will get better public facilities, education and
medical facilities. This will improve the standard of living of the people and prosperity
of the nation.
RESPONSE ON DIFFICULTIES AND DEMERITS OF DEMONETISATION

The cash was not available in Rs 100 denominations in the ATMs and high
denomination notes became very difficult to be used for daily expenses. As people
could withdraw Rs 2000 notes only and the shopkeepers were not ready to take it,
so people had to overspend in-order to get changes. There was Cash flow shortage
due to which the promised amount of 24 k could not be received by the people.
Small denomination notes were not available, lot of time was wasted standing in the
ATM queue, and also the senior citizens were harassed in the process. Many people
had to face problem taking out money due to bank closers. People had to wait for
long time in queues for taking out money and wasted productive time. Rural people
have been affected as there are less ATM and do not have access to banks.
The preparation was not adequate as there was less circulation of notes. Cash could
have been made available in small denominations in large amount as it would have
helped the people in finding ease in spending it. The masses have not been educated
on how to identify the original notes. Small shops could have been given POS
machines so that they could facilitate the customers in paying through card. The
people who have been taking bribes will still take it and recirculation will be big
problem. It is also feared that Rs 2000 note being a very high denomination note it
will lead to black money again.
DISCUSSION
The effect of demonetization on economy depends greatly on the manner in which it
is implemented and on related rules and policies issued by the Government. Keeping
in view the demonetization policy of Indian Government, the probable adverse effects
are discussed below:
Because of restrictions on withdrawals from banks and limited supply of new currency
notes across the country, there would be liquidity crises. This would induce people to
spend only for the necessities and that also in small quantities. This would lead to
immediate fall in demand of food items and large scale wastage of perishable items
like vegetables. Reduced prices of food items would reduce the rates of commodities
thereby reducing the incomes of farmers. This will adversely affect the purchasing
power of farming community which still forms a major part of Indian economy. This
would result in overall fall in demand of goods across all sectors pushing the economy
towards depression. However the Government can avert this by quickly pumping in
new cash and removing the withdrawal limits along with promoting the use of plastic
money.
The cost of demonetization is unascertainable. Cost of demonetization does not mean
only cost of printing new notes and supplying it into the economy. It also takes in to
consideration the millions of productive man hours wasted in the process of
demonetization. This cost can be controlled only by finishing the demonetization
process in the shortest possible time span. Demonetization will cause a great surge
in deposits with banks. This will cause the banks to lower the deposit rates. Low
deposit rates mean lower interest income for pensioners and retired peoples thereby
forcing them to take jobs even after retirement. The Government should come out
with some kind of pension scheme for retired peoples to support them. Apart from
above it is resulting into inconvenience to general public till the process of
demonetization is completed.
REFERENCES
Chakroborty, A., & Konar, D. (2016, December 02). Long wait no money pensioner hit worst.
Times of India , p. 02.
Economic Times. (2016, November 09). Black to the Future by ET Bureau. Economic Times .
Economic Times. (2016, November 23). The Digital Switch by Pratik Bhakta and Saloni Shukla.
Economic Times .
Economic Times. (2016, November 10). Trumped. But will Make India White by ET Bureau.
Economic Times .
Ghose, S. (2016, November 20). Oppn may be pushover; but Modi souldnt take the people for
granted. Times of India , p. 16.
Kumar Prakash, R. (2016, November 09). What is demonetisation and why was it done. Economic
Times .
Mitra, P. (2016, November 27). As black goes out, docs fees and clinic charges shoot up.
Mukherjee, R. (2016, December 02). Drug stokiests sees sales drop by 20% in November.
Rai, P. (2016, November 20). 45 lakh trucks stranded oh highways. Times of India , p. 09.
Sarkar, J. (2016, November 17). Numbers game: Rs 2k notes sold for Rs 1.5 L on e-Bay. Ties
of India , p. 01.
Sen, S. (2016, December 05). Pay day blues for newspaper vendors. Times of India , p. 04.
Sengupta, N. (2016, November 30). Used car market sees 40% drop in demand. Times of India
, p. 19.
Sinha, P. (2016, November 09). Cash no longer king, reality prices may drop. Times of India ,
p. 07.
Sinha, S. (2016, November 17). In peak season, airlines in flyer hunt. Times of India , p. 02.
Times-City. (2016, Nov 09). Its raining big notes at petrol pumps, marts. Times of India , p. 2.
Times-News-Network. (2016, November 17). After distress sale, fish vanishes from markets.
Times-News-Network. (2016, November 09). Black out? 500,1000 Notes No longer valid. Times
of India , p. 1.
Times-News-Network. (2016, November 24). Demonetisation: Housing prices to drop up to 30%,
wiping Rs 8 lakh crore in value. Times of India .
Times-News-Network. (2016, November 17). Its economic anarchy, claims oppn; bold mpve,
insists govt. Times of India , p. 01.
Times-News-Network. (2016, November 17). Not a penny to spare, student faces cash heat.
Times-News-Network. (2016, November 30). Payday becomes mayday as banks battle shortage
of cash. Times of India , p. 01.
Times-News-Network. (2016, December 04). Rs 9.9L crore old notes back in system, may upset
govt plan. Times of India , p. 15.
STUDENT CONTRIBUTION
Study of Various Initiatives Taken by District
Panchayat, Ahmedabad
Saurav*
INTRODUCTION
THE DISTRICT PANCHAYAT, AHMEDABAD

District or Zila Panchayat, Ahmedabad is Panchayat at Apex or District Level in
Panchayat Raj Institutions (or PRIs). Members of the Zila Parishad are elected from
the district on the basis of adult franchise for a term of five years. Zila Parishad has
minimum of 50 and maximum of 75 members. There are seats reserved for Scheduled
Castes, Scheduled Tribes, Backward Classes and women. These members are
nominated by direct election from electoral divisions of the District. (District Councils
of India) The Chairmen of all the Panchayat Samitis under the district are the Ex-
Officio members of Zila Parishad. The Parishad is headed by a President and a
Vice-President. The Deputy Chief Executive Officer from General Administration
department at district level is ex-Officio Secretary of Zila Parishad. The Chief Executive
Officer, who is an IAS Officer or Senior State Service Officer heads the administrative
set up of the Zila Parishad. He supervises the divisions of the Parishad and is assisted
by Deputy CEOs and other Officials at district and block level officers. The District
Panchayat is headed District Development Officer (DDO) who is an IAS officer. The
District Development Officer (DDO) acts as the Chief executive Officer (CEO) of the
District panchayat. The District Development Officer (DDO also acts as the chairman
of the District Rural Development Agency (DRDA).
FUNCTIONS (Taluka and District Panchayats)

l Compilation of administration reports of Village Panchayat and preparation of Annual
Report for the District
l Planning and review of Agriculture, Land Development, Animal Husbandry, Dairy,
Poultry, Fisheries and Rural Industries etc
l Planning and review of rural housing programmes particularly housing for SC/STs
l Identification of major water supply schemes
l Provide essential services and facilities to the rural population and the planning
and execution of the development programmes for the district
l Supply improved seeds to farmers. Inform them of new techniques of training.
Undertake construction of small-scale irrigation projects and percolation tanks.
Maintain pastures and grazing lands
* *Student, MBA (2015 17 Batch), Army Institute of Management, Kolkata
l Execute plans for the development of the scheduled castes and tribes. Run
ashramshalas for adivasi children. Set up free hostels for scheduled caste students
l Encourage entrepreneurs to start small-scale industries like cottage industries,
handicraft, agriculture produce processing mills, dairy farms, etc. Implement rural
employment schemes
l Set up and run schools in villages. Execute programmes for adult literacy. Run
libraries
l Start Primary Health Centers and hospitals in villages. Start vaccination drives
against epidemics and family welfare campaigns
l Construct bridges and roads
l They even supply work for the poor people.(tribes, scheduled caste, lower caste)
OBJECTIVE OF THE STUDY

l To study the brand different initiatives taken by District Panchayat Ahmedabad
l To study the penetration of the different initiatives of District Panchayat Ahmedabad
at Rural Level across various sectors
l To study the delivery of the initiatives taken and their impact
l To compare the spread, awareness, penetration and impact of the different schemes
for social welfare taken up by District Panchayat, Ahmedabad. We find out the
several benefits of the schemes offered and the opportunity to increase the impact
of these schemes
l To study the role of various companies in different sectors like Health, Education,
Sanitation etc and the opportunity to encash the rural market with the help of
Government
LITERATURE REVIEW
India current population as per the latest estimate is 1.25 Billion which is equivalent
to 17.84% of the total world population making India number second in the list of
countries (and dependencies) by population. (Countries by Population) In the past
decade, the Indian healthcare system has achieved several changes. (Countries by
Population) In 2014, India was declared polio free nation. This is a monumental
achievement, for a nation which accounted for more than 50% of the worlds polio
cases in the year 2009. India has one of the largest private health sectors in the
world but still even today the public health services are very inadequate and lagging
behind. India is experiencing a resurgence of various communicable diseases including
Diarrhoeal Diseases, Cholera, Malaria, Encephalitis, Kala azar, Dengue and
Leptospirosis and there is a need to improve the existing health care facilities to
tackle this insurgency. In the year 1990, maternal mortality rate and infant mortality
rates were 47% and 40% above the international average. In 2012 the life expectancy
in India rose to 65 years from 32 years at the time of independence. Even then,
Indias infant mortality rate (50 deaths every 1000 births) remains among one of the
highest in the world, taking away the life of 2.2 million children every year. More than
half of the countrys children under the age of five are malnourished, and more than
a third of Indians aged between 15 to 49 are undernourished, as to Indias National
Family Health Survey. Diarrhoeal diseases kill 100,000 children under the age of 11
months in India each year, making water and food-borne infection the second-largest
killer of children after pneumonia. The Wall Street Journal investigation, 2011 into
Indias government-run healthcare system described public hospitals as out of date,
short-staffed and filthy. (Sanjana Govindan Jayadev) India healthcare essentially
comprises of three segments:
l Government sponsored public health system- government hospitals, Primary and
Secondary Health Centers, Nutrition related Centers such as Mid-Day Meal Centers
like Anganwadis etc
l High cost private sector healthcare
l The third are bridges between first and second. They are private in ownership but
are affordable, often at the cost of quality
For a society to be productive it must be healthy. Good healthcare, measured in Life
Expectancy, Maternal Infant and Mortality Rates, Malnourishment Percentage,
Vaccination Coverage and Health Awareness Schemes is critical parameter of a
nations well-being and its economic growth. Healthcare challenges are more at the
rural sectors or for the barefoot man representing the bas of the pyramid as the
chances for diseases to affect them is far higher. Hence, affordable and quality
healthcare is a major milestone to be achieved by the government.
Country/Region Share of Healthcare Healthcare expense Times the healthcare
expense (% of GDP) per capita (2012) expense per capita
PPP USD compared to India
India 4.05% 61 1
South Asia 3.97% 56 0.9
China 5.41% 321 5.3
Brazil 9.31% 1056 17.3
Russia 6.26% 886 14.5
USA 17.91% 8895 145.8
High Income Countries 12.22% 4635 76.0
Sub-Sahara 6.46% 96 1.6
World 10.19% 1030 16.9
Table 1 : Expenditure on Healthcare country wise (Singh, 2015)
From the statistics, mentioned in Table 1 above, India spend around 4% of the total
GDP for healthcare for both private and public, which is comparatively low. Also there
is a large gap in the healthcare systems in urban and rural areas. This inequity is
due to a lack of healthcare resources and infrastructure in the rural sector of the
economy. A major part of the Indian population lives in Rural areas(more than 70%)
which clearly indicates that only about a quarter of the countrys population has access
to quality healthcare services. Majority of the hospitals are privately owned and located
in cities making the healthcare services outreach difficult to the rural people. To meet
this challenge the Indian government has launched the National Urban Health Mission.
The principal objective of NUHM is to ensure adequate resources and to reduce
health issues for the urban poor. Under this mission, the government pays the
insurance premium for select individuals and works in conjunction with the private
sector. Also to provide rural healthcare amenities, National Rural Health Mission
(NRHM) was launched. NRHM also aims to help remove some of the burden on
healthcare facilities on healthcare systems in the cities. (Healthcare in India)
To meet Health related issues at both urban and rural levels, many initiatives and
schemes have been initiated by central government and state governments. Many
other schemes are designed and Implemented by local governing bodies at district
levels independently or by the help of some social organizations or CSR funds. Some
basic healthcare related schemes started by the Government are Rashtriya Bal
Swasthya Karyakram (RBSK),Janani Shishu Suraksha Karyakram (JSSK),Rashtriya
Bal Swasthya Karyakram (RBSK),Rashtriya Swasthya Bima Yojana and many more.
There are many schemes categorized by age groups like for the Infant, Child,
Adolescent Girls, Pregnant Women, TB etc. (Rashtriya Bal Swasthya Karyakram
(RBSK)) (MoH&FW, 2005)
Data collection for this study is done in context to schemes by the District Panchayat,
Ahmedabad and its impact on the rural masses. There is a data mix of primary and
secondary data. The data collected for various initiatives under the study shows the
development activities taken by District Panchayat Ahmedabad towards civil health
especially towards the young. Research design is descriptive in nature with survey
method being used to complete the study. The primary data collected was as per the
questionnaire set by the District Authorities and the data was provided form various
legal government sources. The sampling technique is convenience in style. The
secondary data is the exact figures observed and recorded with the concerned facilities.
FINDINGS
There are about twenty-three schemes of Central Government and State Government
which is delivered to the rural mass by District Panchayat, Ahmedabad along with
some of its local schemes. The data is collected at various levels for the schemes
and analyzed. Before discussing about the schemes, some data specific to Health
Department of State is collected such as Population, Economic classes, Health Centers
(CHC, PHC & SHC), Total number of doctors across various health centers and total
number of patients addressed across these health centers.
Total Rural Urban BPL SC/ST

Population Population Population Population Population
1459785* 1017161 442624 173869 SC-145978, ST-19269

(70%)* (30%) (15%)* Total- 165248 (11%)
Table 2 : Demographic Details of Ahmedabad District (India, 2011)
Total Revenue Villages in District Health Centres
461 CHC-10
PHC-37
SC-214
DH-1
Table 3 : Table 3- Health Center details of Ahmedabad District (District, 2015)
The number of public health care facilities in Ahmedabad district

Type of Hospital SCs PHCs CHCs MC
Ahmedabad district 238 43 12 5
Table 4 : Number of Public Healthcare facilities in Ahmedabad District
(Commissionerate of Health)
The Schemes taken into consideration for the study are discussed below along with
the data collected with respect to the various sectors they target.
CHIRANJIVI YOJANA
Started in 2005 by the state government, the scheme aims to provide free and safe
delivery in private hospital under Chiranjivi Yojana. In order to avail this scheme, the
pregnant mother should register her name with local nurse, at an earliest with the
Female Health Workers.
Taluka wise average population served by SCs,PHCs& CHCs , 2013-14

Sr. No. Talukas SCs PHCs CHCs
1 Daskroi 4061 26683 93391
2 Viramgam 5977 34366 137462
3 Mandal 5025 23448 70346
4 Detroj 4622 27733 83199
5 Sanand 4175 23659 141955
6 Bavla 5511 28933 57867
7 Dholka 5449 28151 168907
8 Dhandhuka 4177 28194 112777
9 Barwala 4836 19345 58035
10 Ranpur 6332 25327 75982
District average 4274 23655 84763
Table 5 : Taluka wise average population served by various healthcare centers

(Commissionerate of Health M. S.)
2013-2014
Number of Total Institutional Deliveries Proportions of CY
Name of Taluka doctors enrolled deliveries under CY deliveries of total
institutional deliveries
Dascroi 3 10040 453 5
Viramgam
Mandal
Detroj 4 9109 672 7
Sanand 2 5654 17 0
Dholka 3 6786 613 9
Bavla 5 3825 38 1
Dhandhuka 1 4095 115 3
Barwala
Ranpur 3 3809 210 6
Total 21 43318 2118 5
Table 6 : Chiranjivi Yojna data for 2013-2014 (CHDO, 2010-2014)

BAL SAKHA YOJNA
Initiated in the year 2009, Bal Sakha Yojana as an integral part of the Chiranjeevi
Yojana. Under the scheme, arrangement will be made for proper checkup of newborns
and infants by pediatricians. The main aim of the scheme is to bring down the Infant
Mortality Rate (IMR) and the Maternal Mortality Rate (MMR).
BAL SEVA KENDRA

Started in the year 2008 by Govt.of India, The Child Malnutrition Treatment Center as
Bal Sewa Kendra at PHC/CHC/ Sub District level looked after malnourished children
needing some medical care in the age group 0-5. 0-5yrs children are checked for normal
physical health on Mamta Diwas and under nourished children are referred to CMTC.
BAL SANJEEVANI KENDRA (NUTRITION REHABILITATION CENTER)

Bal Sanjeevani Kendra is setup by the Government of India in the year 2008-09 to
work at District Hospital/ Medical College for malnourished children in the age group
0-5 years seeking significant medical attention and care.
MISSION BALAM SUKHAM KARYKRAM

Mission Balam Sukham was officially launched on 18th September 2012 through the
Chief Minister of Gujarat state with an aim to combat malnutrition across the state.
First stage of Bal Shakti Kendra or Anganwadi Kendra for available to age group 0-
5yrs. Under this programme, the children are admitted for 30 days and a special diet
is given to them and they are monitored.
SHALA AAROGYA KARYKRAM

Started in 1997 by Govt. of Gujarat, this scheme is for newborn, Primary, Secondary
and higher secondary school students. Facilities under this scheme are:
l Health check up
l Physical Checkup and medication
l Free spectacles distribution
l Free medication for diseases like Cancer, health and kidney related issues
RASHITRIYA BAL SWASTHA KARYAKRAM
Started by the State government in 2013, the scheme is for youngsters of age group
of 18 years or more Rashtriya Bal Swasthya Karyakram (RBSK) is an important
initiative aiming at early identification and early intervention in healthcare for children
in the age group 0-18 years to cover 4 Ds viz.-Defects at birth, Deficiencies, Diseases,
Development delays including disability.
Coverage of Vitamin A first dose in Gujarat and Ahmedabad District (2013-14)
Vitamin A 1st dose achievement Percentage Against Live Birth
Ahmedabad district
42387 95.55
AMC
72357 67.68
Gujarat
1078384 93.65
Table 7 : Vitamin A first dose coverage in Ahmedabad district (Commissionerate
of Health M. S., Vitamin A first dose coverage in Ahmedabad district, 2013-14)
Children Treated on Children Children provided Children provided
examined the spot identified for referral free
referral services spectacles
For Ahmedabad district (excluding AMC)
444817 34179 3212 3212 5038
For AMC
1073143 129748 25424 25424 27765
Referral services provided under school health program, 2013-14
Paediatrician Ophthalmic surgeon Dental specialist Skin specialist ENT surgeon Others
829 1126 426 324 332 175
For AMC
7557 3786 6373 5151 2557 0
Children treated by diseases under school health program, 2013-14
Anemia Worm infestation Ear discharge Skin disease Vision problem Dental
problem
9806 10006 1948 1726 2958 2967
For AMC
81035 16586 2409 12671 27233 10071
Table 8 : Child healthcare data (Commissionerate of Health M. S.)
Proportion (%) of children aged 6 months to 6 years who were weighed
at AWCs in Ahmedabad district and found to be underweight (2010-2015)
Region 2010 2011 2012 2013 2014 2015
Ahmedabad district 48.21 35.14 31.15 26.13 17.48 8.74
including AMC
Daskroi 54.33 40.19 38.84 16.83 13.34 3.57
Viramgam 55.77 39.78 30.04 28.44 10.55 4.03
Mandal 57.35 37.62 36.46 38.57 11.54 6.46
Detroj 60.25 48.26 38.37 41.65 19.32 9.76
Sanand 54.2 37.57 28.55 18.85 11.03 5.39
Bavla 48.97 36.64 28.87 21.44 10.57 4.47
Dholka 47.91 28.71 26.45 20.27 10.73 3.86
Dhandhuka 52.72 35.92 32.14 18.52 7.74 2.75
Barwala 54.24 31.75 21.48 20.86 6.21 1.86
Ranpur 53.98 17.37 24.97 23.27 14.45 2.04
Ahmedabad Municipal 43.52 35.5 31.78 29.21 23.25 13.19
Area (AMC)
Ahmedabad district 52.94 34.77 30.44 22.77 11.22 4.22
excluding AMC
Table 9 : Underweight Children data (data, 2010-2015)
The data collected for various initiatives were recorded as mentioned in the findings
and compared with the previous year data. The performance of the organization was
realized using the comparison method and this helped the team to develop new
strategies for better outreach making inferences form the data.
CONCLUSION AND RECOMMENDATION

The findings of the report are descriptive and explanatory in nature. Various initiatives
have been taken by the health authorities to tackle the health issues at both Urban
and Rural levels. Analyzing the health conditions in Ahmedabad has been a major
challenge mainly due to the paucity of informative data. Greater attention needs to
be paid on collecting reliable data on health outcomes, and not just on health service
access for instance, data on incidence of pregnancy complications and birth weight
of babies born and not just institutional delivery or not Health data need to reflect not
just burden of disease but also extent of health disparities. Data on social determinants
of health such as gender, religion and other socially relevant markers need to be
collected and made available when performing analysis of health service uptake and
burden of disease.
Although Ahmedabad sores high on the availability of health services, utilization seems
rather poor. Ahmedabad fares poorly in some health indicators. Emphasis should be
laid on understanding the reasons behind the poor performance through surveys and
in depth interviews of people and health workers in Anganwadis, SCs, and PHCs.
Studies need to be commissioned to analyze how well health center data represent
the population. Such studies will enable scientists to provide an estimate of how
closely the health data represent the health of the population that the public health
system faithfully serves. The existing strengths of the public health system can be
leveraged to gather more data that are helpful in accurately assessing performance,
revising existing programs and introducing new ones. Partnership with the private
sector can be extended to NGOs and research institutions to design ways to monitor
health care provision in real-time and help to make data driven decisions. The presence
of several reputable NGOs and academic institutions working on health can be
leveraged to fill the gap in service provision (such as lack of specialists at CHCs) as
well as explore ways to strengthen the public health system in general.
(The suggestions considered confidential as per concerned authorities have not been
mentioned in the report as per government policies.)
GLOSSARY
l PHC : Primary Health Centre
l CHC : Community Health Centre
l NGO : Non Government Organization
REFERENCES
CHDO, A. ( 2010-2014). Chiranjivi Yojna Data. Ahmedabad.
Commissionerate of Health, M. S. Child healthcare data-Source: Health Statistics. Gandhinagar.
Commissionerate of Health, M. S. Number of Public Healthcare facilities in Ahmedabad District.
Gandhinagar.
Commissionerate of Health, M. S. Taluka wise average population served by various healthcare
centers. Gandinagar.
Commissionerate of Health, M. S. (2013-14). Vitamin A first dose coverage in Ahmedabad district.
Gandhinagar.
Countries by Population, 2. (n.d.). Worldometers.info. Retrieved from http://www.worldometers.info/
world-population/population-by-country/.
data, I. p. (2010-2015). Underweight Children data. Ahmedabad.
District, H. C. (2015). Compiled from the data of CDHO, Commissionerate of Health, Medical
Services, Medical Education and Research. Gandhinagar.
India, C. (2011). Retrieved from http://censusindia.gov.in/
MoH&FW. (2005).
Sanjana Govindan Jayadev, C. H. (n.d.). 3 ways to crack healthcare challenges in India. Retrieved
from World Economic Forum.
Singh, D. A. (2015). Advantage India. Harper Collins.
BOOK REVIEW
Book Review
By Dr Swapna Datta Khan, Assistant Professor, Army Institute of Management,

Kolkata; Email : captsdk@gmail.com, Ph: 9836289444
Title : Operations Research: Problems and Solutions
Edition : 3
Publisher : Macmillian Publishers India Ltd.
ISBN10 : 023063659-4
ISBN13 : 978-0230-63659-0
Profile of Author
Dr. J. K. Sharma, M.Sc., Ph.D., had been teaching at the Faculty of Management
Studies, University of Delhi, since 1985. He has had over 25 years of teaching
experience in Operations Research, Business Statistics, mathematics and Logistics
Management. He was awarded the Gold Medal for securing First-Class-First rank
in his M.Sc. (Mathematics) examination. He has taught as a Visiting Professor at
Group ESSEC (a Graduate School of Management) in France. He has authored
16 books and over 100 research papers and/or case studies and is actively
involved in guiding students for their doctoral work. (http://www.pearsoned.co.in/
web/authors/1396/J-K_Sharma.aspx)
Review
This book is meant for the study of Operations Research Techniques applicable
to Business Decision Making. It is apt for students of MBA, PGDM and M Com.
Spread over 26 chapters, it covers the conceptual applications of Linear
Programming methods, including the Simplex Method, Revised Simplex Method,
Dual Simplex Method, Duality, Integer Programming, Sensitivity Analysis, Parametric
Linear Programming, and Transportation Problem. It also covers Decision Theory,
Game Theory, Queuing Theory, Inventory Control, Simulation and Markov Chains.
Each chapter initially explains the algorithms in utmost simplistic terms and follows
up the same with very many Worked-Out Examples and Solved Case lets. The
Case lets are quite realistic and can relate to pragmatic real-life Business
Management issues. Chapters end with Self-Practice problems and Review
Questions that are further sub divided based on the application area of Business
Management. However, the mathematical derivations of results and formulae are
ignored. This book, thus it is an excellent supporter tool for the student studying
the subject on his own and for the faculty trying to get the mathematical subject
of Operations Research to an academically diverse section of students.
In a vastly digital era, it would be wishful to have a PowerPoint accompaniment to
such a renowned text book. In spite of the same it continues to be a delight for
the teaching fraternity of Operations Research.
Book Review
By Dr Malini Majumdar, Associate Professor, Army Institute of Management, Kolkata;

Email: malini_majumdar@hotmail.com, Ph: 9831204773
Title : The New Community Rules : Marketing on the Social Web
Publisher : OReilly Media, Inc, Sebastopol, CA 95472 (2009)
Distributed in India by : Shroff Publishers & Distributors Pvt Ltd (SPD)
ISBN: 978-81-8404-871-1
Author : Tamar Weinberg
Review
Social media marketing has come long way ahead of being only a marketing
buzzword. We, as consumers, as social animals, are interacting online more
socially. This has forced marketers to leverage the social through the media
tools. Thus, how to effectively use the social networking platforms to the best
advantage of the marketer has become the most crucial issue. With this book, it
will be easier to traverse through the vast ocean of how social web technologies
work, and how to reach its frequent users more efficiently.
The author, Tamar Weinberg is one of those few experts who can cut through the
clutter of jargons and hypes to show how to use the social web as a voice. A
marketer has to listen to the voice, how and on what people are conversing about
and is bound to respond.
The book is divided into twelve chapters, starting with an introduction to social
media marketing and ending with putting all the pieces together. It covers all major
social networking platforms in between, like Twitter, Facebook, LinkedIn,
bookmarking sites, and podcasts, and explains how to use them for marketing
gain. There are a large number of case studies and examples that reinforce the
concepts better and endnotes that supplement the study. There is also a list of
recommended reading for the eager learner. Overall, the book is an educating
yet interesting read.
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KINDLER

THE JOURNAL OF ARMY INSTITUTE OF MANAGEMENT KOLKATA

VOLUME XVI q NUMBER 1&2 q ISSN 0973-0486 q JANUARY-JUNE 2016

A Comparative Analysis: The Impact of NPA on Profitability of SBI& ICICI 721

Dr Swapna Datta Khan

l Dr Rajesh W. Vaidya, Assistant Professor at Shri Ramdeobaba College

l Dr Abhay Kumar, Assistant Professor (Finance), NMIMS University, Mumbai.

l Dr Sonali Gadekar, Head of Department, Mumbai Educational Trusts MET

l Dr Arvind Kumar, Guest Faculty, DTU (Delhi Technological University) and

l Prof Pramit Sengupta, ex Faculty of Army Institute of Management,

l Prof Arundhati Chatterjee, Former Head, Operations and Marketing

l Dr Ravi Chatterjee, Area : Marketing;

l Dr Ayan Chattopadhyay, Area : Marketing;

l Prof Rajib Bhattacharya, Area : Finance

l Prof Sougata Majumder, Area : HR & OB

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DATA ANALYSIS AND INTERPRETATION

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Figure 1 : The graphical representation of Table 3 is presented below for

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Figure 3 : Graphical representation of Table 4 is presented below for

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Figure 5 : The graphical representation of Table 5 is presented below for

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Figure 9 : Computation of ICICIS Gross NPA/Total Advance

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Figure 11 : The graphical representation of Table 8 is presented below for

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Figure 13 : The graphical representation of Table 9 is presented below for

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Figure 15 : The graphical representation of table 10 is presented below for

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RELATIONSHIP BETWEEN NET NPA AND NET PROFITS OF SBI

Table 14 : Comparision between SBI and ICICI

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WORLDWIDE REPRESENTATION OF WOMEN IN BOARDROOMS

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OBJECTIVES OF THE STUDY

RESEARCH METHODOLOGY AND DATA COLLECTION

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Table 1 : The key differences

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Table 2 : Furniture & Fixtures

Beginning WDV Depreciation WDV Depreciation WDV Depreciation WDV Depreciation

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