International Journal of Business Managementdeshbhagatuniversity.in/Journalupload/22e19240-b676-4625-8d6f-a0… · Kiran Preet Kaur, Dr. Harmaninder Jit Singh & Dr. Sawtantar Singh

International Journal of Business Management

&

Research

(A Bi-Annual Journal)

ISSN: 2249-2143

Volume 8, No. 2, July-Dec, 2018

-

An official publication of

University School of Business Management Desh Bhagat University

Amloh Road, Mandi Gobindgarh Fategarh Sahib-

147301 Punjab, INDIA

Year of Publication: 2018

© Desh Bhagat University

Disclaimer:

The views & opinions expressed and interpretaions made in the Journal are solely of respective authors and should not be attributed to Desh Bhagat University. The editor disclaim all for any responsibility injury to persons or property resulting from any ideas or product or practices referred in papers published in the Journal . All effects have been made to ensure accuracy, but the editors or DBU not be held responsible for any remaining inaccuracies or omissions.

International Journal of Business Management & Research

EDITORIAL BOARD

Patron Editor-in-Chief Dr. Zora Singh Dr. Payal Bassi Chancellor, Desh Bhagat University Associate Director University School of Management Desh Bhagat University

ASSOCIATE EDITORS

Dr. Rajni Saluja Mr. Rajinder Kumar Associate Professor, Assistant Professor University School of Management, University School of Management Desh Bhagat University Desh Bhagat University

ADIVSORY BOARD Prof. (Dr.) R.K Uppal Prof. (Dr.) Deepak Tandon Professor, Professor of Finance, Department of Economics, Lal Bahadhur Institute of Mgt. & Technology DAV College, Malout, Punjab New Delhi

Prof. (Dr.) Bishnu Priya Mishra Prof. (Dr.) Pardeep Singh Walia

Professor of Finance, Professor, Department of Commerce, Uttkal University, Bhubaneswar, Post Graduate Government College for Girls, Odisha Chandigarh Prof. (Dr.) Navkiranjit Kaur Dhaliwal Professor, Department of Commerce, Punjabi University, Patiala

INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT & RESEARCH – A BI-ANNUAL JOURNAL (ISSN 2249-2143)

Contents Page No.

1. E-Governance System: A New Approach of Punjab Residents

Kiran Preet Kaur, Dr. Harmaninder Jit Singh & Dr. Sawtantar Singh Khurmi ---------1

2. Employment Generation Dynamism of Foreign Direct Investment in India Dr. Rajni Saluja & Dr. Payal Bassi ---------8

3. Impact of E-commerce on Digital Divide Seema Rani ---------16

4. Service Quality Dimensions- A Gap Score Analysis of Public & Private Sector Banks in Punjab Navneet Mittal & Dr. Payal Bassi ---------21

5. Understanding the Growth of Organic Food Industry in India Harleen Kaur & Chhavi Kiran ---------35

6. A Comparative Analysis to Assess Internet Banking Service Quality in India Munish Gupta ---------47

7. A Study of Impact of FDI and Investment by FII on Economic Growth of India Rajni Verma & Dr. Rajni Saluja ----------54

8. Corporate Social Responsibility: A case Study of Maruti Udyog Limited Neenu Sharma ---------62

INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT & RESEARCH (ISSN 2249-2143)

IJBMR, Vol. 8, No. 2 (July-Dec), 2018 Page 1

E-Governance System: A New Approach of Punjab Residents

*Kiran Preet Kaur **Harmaninder Jit Singh ***Sawtantar Singh Khurmi

* Research Scholar, Department of Computer Science, Desh Bhagat University, Mandi Gobindgarh **Assistant Professor, Department of Computer Science, Desh Bhagat University, Mandi Gobindgarh ***Professor, Department of Computer Science, Desh Bhagat University, Mandi Gobindgarh

Abstract

In the recent times, online services have taken control over the traditional rigid norms of availing facilities served by the government or private sectors. One of this facility is e-Governance that has become an easy and citizen-friendly service. The hurdles occured during personal visits are now curbed into an online interface where every facility provisioned by the government is available to each and every citizen. On considering State of Punjab, various urban and rural areas are equipped with e-governance but the citizen approach towards e-governance is yet to be analysed. In this paper, an attempt is made to understand citizen outlook. Keywords: Electrical-Governance, e-Governance, ICT, ICT Growth, Rural Punjab

Introduction E-governance can be defined as “a government structure, which is efficient and effective and is duly controlled by citizens”. In other words e-governance means “exploiting the power of

information and communications technology to help transform the accessibility, quality and cost-effectiveness of public services”. The topic of e-government and e-governance has become increasingly acknowledged over the last few years, and many governments desire for online services. However developing countries are disadvantaged due to lack of capital and knowledge of the internet and Information Technology. E-governance also relates to the relationship between citizens and those in power. To increase accountability and empowerment, the use of e-government is vital, in order to achieve citizen participation. According to Al Shihi (2006), ICT offers three processes to promote governance:

1. Automation: It is computerization of clerical functions 2. Informatisation: It means using information systems to support decision making and to enhance communications 3. Transformation: It is implementing new ICT-based information processes and process engineering. All over the world governments are using e communication that is e-governance which is used to govern the public and private activities in which Punjab is one of them. Governments are using tools of Information & Communication Technologies to provide various services efficiently. This is the fastest and easiest way of communicating information. E-Government means different things for different people. Small towns and rural areas were left behind for availing such services due to long distances. However, ICT makes it possible to reach to faraway places easily. This creates transparency and minimizes the cost of availing the services. E-Governance minimizes the time as well as corruption while availing the services. As a result this helps in improving the social and economic development. SUWIDHA center in Punjab is the live example of E-Governance; SUWIDHA has been conceived to facilitate citizen by capturing the



input at a single point, defining a specified delivery date depending upon the type of service and accepting cash at the counter itself.

Literature Review

Estevez and Janowski (2013) researchers reported that Centre for Electronic Governance, United Nations University International Electronic Governance (EGOV) research studied the use of Information and Communication Technologies to improve governance processes. Sustainable Development (SD) research studies possible development routes that satisfy the needs of the present generation without compromising the ability of the future generations to meet their own needs. The main contribution of the paper was establishing a foundation for Electronic Sustainment Development research. Pathak and Singh (2014) stated that information technology has brought a revolution changes in the working of whole world. Today, government has full trust in e-Governance. Government provides the services to the citizens, business and local government through information technology. E-Governance was adopted by many developed countries like USA, UK, Brazil and India. Government provides web based services to the citizens according their needs like online payment of bills, taxes and so on. Kaur and Singh (2015) researchers gave an overview of state of Punjab in the present paper which includes economy overview, status of ICT and e-Governance in the state. In state of Punjab, where IT literacy rate was very low and large segment of population was living below the poverty line, also there is unawareness among the people regarding the usage and benefits of e-Governance services. Hence, there existed a number of barriers to execute e-Governance service. Khan et.al., (2015) stated that government and public sector organizations around the world are facing to reform their public administration organizations, deliver more efficient and cost effective services as well as better information/knowledge to their users. In developing countries like India, where literacy level is very low and most are living below poverty line, people were not even aware about the benefits of e-Governance activities and people do not use ICT much, there existed a number of problems to implement e-Governance activities. Developments in e-Governance provided opportunities to harness the power of ICT making the business of governance inexpensive, qualitatively responsive and truly encompassing. Research Objectives The objective of e-governance is to focus on exploring the priorities of the citizens to adopt e-governance services and perspectives as well as strategies for integration of e-governance services. Analysis of this objective is an on-going procedure in the present research. Research Methodology A survey questionnaire was used as it is inexpensive, less time consuming and has the ability to provide both quantitative as well as qualitative data from a research sample. Questions are



compiled from information technology adoption literature to represent the construct proposed research model and wording of the questionnaire has been modified to fit the research context/background of information collected. Analysis Priorities of Citizens to avail e-Governance services 1. Dependability

The degree to which a service is able to perform the promised service in a dependable and accurate manner. E-governance is able to perform or execute the promised service in a dependable way. E-governance service is accurate The people of both regions do not recognise the dependable parameter and partially accept the accuracy parameter of dependability. However, various demographic classes do not differ in their opinion.

2. Personalization The degree to which website or application gives personal attention or can be customized for specific needs and communicate or can be customized for the users directly with the language they understand. In e-governance, the service is presented to the citizens directly in a clear and simple language and E-governance service gives citizen personal attention. The opinion regarding personal attention has been recorded alike in all the demographic categories (age, gender, education and occupation). Thus, for the t-statistics and F-statistics are insignificant. So far direct provision of service is recognised differently by different age groups. It can be concluded from the foregoing discussion that direct provision of service is partially recognised by Punjab and Chandigarh people. The personal attention is acknowledged by the people of both the regions.

3. Believability The information is trustworthy if the information is from a credible source.The believability attribute of information quality is partially approved by the residents of Punjab. The table shows that 37.8 % of the respondents in Punjab could not give their clear mandate regarding the trustworthy parameter while 26.5 % did not approve this parameter of believability. Similar are results for the ‘information from the credible source’. The people of different demographic

groups do not hold different opinion. Thus, none of the test statistic (t-statistics and F-statistics) turned out to be significant. The opinion manifested by the Chandigarh is relatively different. The overall average rating is biased towards the acceptability of parameter. Around 48 % of the respondents approved the ‘information from credible sources’ parameter. Approximately 40 % sampled individuals agreed

to the trustworthiness of the information but 31.7 % did not give their clear opinion. These results are truthful across the gender, age, occupation and education levels due to insignificant values of t-statistics and F-statistics.



Thus, the believability is accepted partially by the people of Punjab regardless of their demographic class. However, such attribute is better approved by the people of Chandigarh.

Perspective of Citizens to avail e-Governance services

1. Assurance The degree to which E-governance service is assured as well as reliable. The response towards service quality in the form of assurance is mixed. 46 %of the respondents do not approve the assured service but 34 % answered in affirmative. The overall average rating is in the category of ‘disagreement’. So far the reliability parameter of assurance attribute of service quality is

concerned, results are again partially accepted. 30 % did not accept the reliability but 42 % approved the reliability. Surprisingly, 28.2 % could not give decisive answer. Opinion displayed for reliability and service with assurance does not vary among the demographic classes. So, t-statistics and F-statistics are far from being significant. The forgoing discussion leads to the result that reliability is doubted and service with assurance is accepted in the state of Punjab irrespective of the demographic classes. This is in relatively lesser strength in Chandigarh, though its demographic classes do not differ.

2. Useful The extent to which information is beneficial, helpful and provides advantages from its use. The information is useful and meets the need for the task. The attribute of usefulness of information is accepted by the people of Punjab with reservations. Thus, the reaction of respondents is spread over all the rating classes. Even large number (23.2 %) of sampled people could not give clear mandate. Either they are unable to answer or they have both the bad and good experiences. These results are truthful in both the parameters case. All the demographic groups do not hold different opinions regarding these parameters. It is due to insignificant values of t-statistics and F-statistics. The results are not different for the Chandigarh. They have also approved the usefulness with some reservations. The people who have shown their neutrality are also very large (23.5 % and 29.5 % approximately). The people of different gender recognise the first parameter differently due to significant value of t-statistic. However, all other demographic groups do not differ in their opinion regarding usefulness of the information quality. Hence, all the other t-statistics and F-statistics are recorded as insignificant.

3. Responsive

The degrees to which employee’s concerned are willing to provide service. It involves timeliness of service. In e-governance, there is no delay in responding to citizens and also shows sincere interest in resolving any problems. The delaying in the provision of service is partially accepted by the people of Punjab. Only 27 % of the respondents gave their verdict in 'no delay' in service. However, 39.5 have out rightly rejected the parameter of ‘no delay’ and rest of them are not clear in their opinion. The sincerity of the governance system is relatively less doubted. While 47 % of the respondents did not doubt the sincerity but 23 % are neutral in response.



The overall average rating is also tilted towards ‘agreed’ segment of rating. The people of Punjab belonging to different categories of their demography manifested the same opinion without any difference for not delaying parameter. The tests t-statistics and F-statistics turned out to be insignificant for all the demographic classes. However, opinion regarding sincerity was different for different education groups. The results displayed by the people of Chandigarh are not considerably different. About 39 % of the respondents have clearly given their verdict against the ‘no delay’ parameter. Rest of them were either indecisive or agreed with this parameter. So the

no delay parameter of responsiveness attribute has been basically rejected. So far the sincerity parameter of responsiveness attribute is concerned; it has been accepted with some reservations. About 49 % people accepted the sincerity of the e-governance system but 24 % could not give their clear mandate. All demographic groups think alike so far as the delay is concerned except for age groups. The F-statistic obtained from the ANOVA is significant for all age groups. So far the sincerity parameter is concerned; it has a similar thinking among the different demographic groups.

The people of Punjab and Chandigarh accused the e-governance for delay in service. However, the sincerity is relatively less doubted.

Attending the service needs of the citizens is vital for better quality service of e-governance. They need to provide information directly and personal attention should also be given. This attribute has been assessed through two parameters. They have been asked to record their opinion on direct access of service to the citizens. Although, their opinion has also been required on personal attention.

Strategies for integration of E-Governance 1. Regularity

Regularity refers to the conformance and compliance to the rules, laws, standards and specifications. E-governance service conforms to the rules and laws and E-governance service is in compliance to the standards. The overall average rating is also skewed towards the ‘agreed’ segment of rating. There are also

large amount of people did not give their decisive opinions (22 % in second parameter and 29 % in first parameter). This may be due to the fact that people are unaware about the laws and rules. Moreover, they may not be efficient enough to understand the compliance of standards. Different genders and people of different age groups are similar in their opinion regarding both the parameters. While people of different occupations and education levels do not think differently. So, the t-statistics and F-statistics turned out to be insignificant.

2. Transaction The degree to which a service should provide a full transaction or process with consistency and durability for smooth execution, integrity and good result assurance. E-governance introduces a full process. The result of the transaction or process is satisfactory. The transaction or process is executed smoothly. It can be inferred from the foregoing discussion that transaction attribute of



e-governance is partially accepted by the people of Punjab and Chandigarh regardless of their demographic class. Findings & Conclusions The following findings are listed on the basis of data collected in the questionnaire:

1. The people of Punjab and Chandigarh do not recognize the dependable parameter leading to partially accept the accuracy parameter of dependability. Also, various demographic classes do not differ in their opinion.

2. It is concluded from the foregoing discussion that direct provision of service is partially recognized by Punjab and Chandigarh people. The personal attention is acknowledged by the people of both the regions.

3. Thus, the believability is accepted partially by the people of Punjab regardless of their demographic class. However, such attribute is better approved by the people of Chandigarh.

4. The foregoing discussion leads to the result that reliability is doubted and service with assurance is accepted in the state of Punjab irrespective of the demographic classes. This assurance is in relatively lesser strength in Chandigarh, though its demographic classes do not differ.

5. The usefulness of the e-governance system is better approved by the people of Chandigarh than Punjab. Different age and occupation groups approve certain parameters of usefulness attribute differently

6. The people of Punjab and Chandigarh accuse the e-governance for the delay in service. However, the sincerity in execution of service is relatively less doubted.

7. The regulations in the context of e-governance are well provided regardless of the regions and demographic classes.

8. It is inferred from the foregoing discussion that transaction attribute of e-governance is partially accepted by the people of Punjab and Chandigarh regardless of their demographic class. References AlShihi, H. (2006). “Critical Factors in the Adoption and Diffusion of E-government

Initiatives in Oman”, Thesis of Ph.D. Centre of Public Policy, (2002) "Global E- Government Report", Brown University. Estevez, E., Janowski, T (2013). "Electronic Governance for Sustainable Development -

Conceptual Framework and State of Research", Elsevier, Government Information, Quaterly, Vol. 30, pp. 84-109, 2013.

Kaur, M., Singh, A (2015). "E-Government: Challenges for Acceptance and Adoption in State of Punjab", International Journal of Computer Applications, Vol. 109, No. 15, pp. 20-23.



Khan, I., Khan, N., Nazia (2015). "E-Governance Reforms In India: Issues, Challenges and Strategies - An Overview", IJCSI International Journal of Computer Science Issues, Vol. 12, Issue 1, No 2, pp. 42-53.

Pathak, M., Kaur, G (2014). "Impact of E-Governance on Public Sector Services", International Journal of Emerging Research in Management & Technology, Vol. 3, Issue 4, pp. 100 - 103.

Perri (2004). “e-Governance Styles of Political Judgment in the Information Age”,

Palgrave Macmillan, London. Singh, C., Kumar (2011). “E-Governance in Development of Rural Economy”,

International Journal of Computer Science and Technology, Vol. 2, Issue 4. http://www.suwidha.nic.in http://punjab.gov.in

http://www.suwidha.nic.in/

http://punjab.gov.in/



Employment Generation Dynamism of Foreign Direct Investment in India

*Rajni Saluja **Payal Bassi

*Associate Professor, University School of Management, Desh Bhagat University, Mandi Gobindgarh. **Associate Director, University School of Management, Desh Bhagat University, Mandi Gobindgarh.

Abstract FDI is one of contributory factor in economic growth of the host countries. It strengthens nation domestically as well as internationally. In India, post the 1991 economic reforms, the regulatory environment in terms of foreign direct investment has been consistently eased to make it more and more investor friendly and to supplement domestic capital, technology and skills. Recent FDI policy pronouncements in various sectors of the economy are expected to attract chunk of investments and create additional jobs as well as induce employment and spur up the make in India program. The objective of the research paper is to study the impact of FDI in employment generation in India. The study also observes relationship between FDI and GDP. The study is descriptive and analytical in nature. The study is secondary data based and is taken from the data base of the Reserve Bank of India, Ministry of Labour and Employment, India and World Bank. The time period taken for the study is 2006-07 to 2016-17. Statistical and mathematical techniques such as simple growth rate, compound growth rate, correlation and regression is used. It is observed that there exists positive correlation relationship between FDI and employment, FDI and GDP. But the impact of FDI on total employment is not significant. It is observed that pro-active reforms oriented decisions taken by the government particularly for easing of FDI rules in various sectors of the economy are going to push employment generation, youth empowerment and boost overall economic growth in the coming years. Keywords: Foreign Direct Investment, Employment Generation, Economic Growth

Introduction

In today’s wealth driven world, capital is the powerhouse of economic growth of a country.

Countries, especially developing ones, strive to generate capital through various sources, that is, by exporting their output (raw material) to industrialized countries, receiving foreign aid, raising loans from foreign banks, etc. But in a reversal of trend in recent years, the tendency to generate capital by means of routes as mentioned above are steadily declining and Foreign Direct Investment (FDI) has gained importance as a preferred source. FDI has proven to be an ‘engine of growth’ of a country in the modern era. In today’s liberalized

and globalized world economy, a growing number of countries have received significant capital flows, mainly in form of FDI. Foreign Direct Investment can be defined basically as an investment of foreign assets into domestic structure, equipment and organization. In exchange for this ownership, the investing company usually transfers some of its financial, technical, managerial, trademark and other relevant resources to the recipient country. A Foreign Direct Investment (FDI) is an investment made by a company or entity based in one country, into a company or entity based in another country. FDI is distinguished from portfolio foreign investment, a passive investment in the securities of another country such as public stocks and bonds by the element of control. Entities making direct investments typically have a



significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies.

Table 1: FDI Inflows in India (Rs. Crore)

Year FDI Inflows Growth Rate 2006-07 56390 - 2007-08 98642 74.93 2008-09 142829 44.79 2009-10 123120 -13.80 2010-11 97320 -20.95 2011-12 165146 69.69 2012-13 121907 -26.18 2013-14 147518 21.01 2014-15 189107 28.19 2015-16 262322 38.71 2016-17 291696 11.19

CAGR (%) 16.11% Source: Various issues of Economic Survey, RBI Bulletin

Table 1 shows that compound annual growth rate of FDI Inflows in India over a period of time (2006-07 to 2016-17) is 16.11 percent

Table 2: Gross Domestic Product at Factor Cost in India (Rs. Billion)

Year GDP at Factor Cost Growth Rate (%) 2006-07 39532.76 - 2007-08 45820.86 15.90 2008-09 53035.67 15.74 2009-10 61089.03 15.18 2010-11 72488.60 18.66 2011-12 839161.91 15.76 2012-13 99440.13 11.88 2013-14 112335.22 11.54 2014-15 124451.28 10.78 2015-16 136820.35 9.94 2016-17 151837.09 10.97 CAGR (%) 13.01%

Source: Various issues of Economic Survey, RBI Bulletin.

Table 2 indicates that compound annual growth rate for GDP at factor cost over a period of time (2006-07 to 2016-17) is 13.01 percent.



Current Employment Scenario in India

Employment Generation is the first priority for Govt. of India. After going through a decade of jobless growth our Govt. is working on a comprehensive strategy to bring employment to the core of development strategy, promoting industrial activity through Make in India, enhancing employability through Skill India and encouraging innovation and entrepreneurship through Start up India are a few examples of transformative initiative that the Govt. has taken in last 2 years. It is well known that policy makers in India attach a high priority to the objective of employment. In pursuing that objective, a number of programmes (including the nationwide programme of guaranteeing 100 days of employment per family per year) have been and are being implemented.

India’s economy grew by 8.0 percent in fiscal year 2016, the fastest pace since 2011-12. However, in 2016-17 the GDP growth rate slowed down to 7.1 percent mostly on account of deceleration in gross fixed capital formation. On the employment front, the challenge continues to be to ensure that economic growth translates into better labour market conditions. The vast majority of workers in India are in informal jobs. Although there has been a shift out of agriculture, construction has absorbed more workers than other sectors in recent years. India has the world’s largest youth population, with 354.4 million people aged between 15 and

29, representing a population share of 27 per cent. In order to reap the demographic dividend this offers, the education and skills of youth are vital so that they can maximise their productive contribution.

What is more concerning is that, most of the new jobs being created in the formal sector are actually informal because the workers do not have access to employment benefits or social security. In addition, notable disparities in the labour force participation rates of men and women persist.

Table 3: Indian Labour Market Indicators

Labour Market 2004-05

2009-10

2011-12

2013-14

Employment (million) 457.9 459.0 472.9 NA Unemployment (million) 113 9.8 10.8 NA Labour force participation rate (%) Male Female

63.7 57.1 55.9 55.6 84.0 80.6 79.8 75.7 42.7 32.6 31.2 31.1

Unemployment rate (%) Male Female

2.3 2.0 2.1 3.4 2.1 1.9 2.1 2.9 2.6 2.3 2.3 4.9

Share of employment in manufacturing (%) 11.6 11.0 12.5 10.7



Male Female

12.0 11.1 12.2 10.7 11.0 10.8 13.2 10.6

Share of regular wage and salaried workers (%) Male Female

14.4 15.7 17.9 15.4 17.3 17.8 19.9 16.5 8.4 10.2 12.8 12.1

Working poverty rate (%) < US$ 1.90 per day 35.3 28.4 17.9 NA >=US$ 1.90 &<US$ 3.10 per day 36.5 37.5 35.0 NA Average real daily wage index (2004-05= 100) Rural 100.0 111.7 122.8 NA Urban 100.0 129.4 NA NA Source: wcms_496510.pdf. www.ilo.org

The Employment Challenge In order to form an idea about the employment challenge faced by an economy, it would be necessary to estimate the number of jobs that would need to be created in order to absorb all new additions to the labour force as well as the backlog of unemployment. However, in an economy like that of India, the incomes of a large number of the employed population fall below poverty line and they are usually referred to as working poor. It would be important to find ways and means of transferring such workers to more productive and remunerative employment and that has to be regarded as part of the employment challenge. India has witnessed an impressive and steady economic growth in last few years. Prospects of a continuation of such growth in the coming years are promising and yet, the challenge of employment, especially of productive employment in the formal segments of the economy, remains formidable. Table 4: Employment in Public and Organised Private Sectors (In Million)

Year Public Sector (end-March)

Private Sector (end- March)

Total (Public & Private Sector)

Number of Persons on the live register (end-

December) 2006-07 18.00 9.24 27.24 39.97 2007-08 17.67 9.88 27.55 39.11 2008-09 17.80 10.38 28.18 38.15 2009-10 17.86 10.85 28.71 38.83 2010-11 17.55 11.45 29.00 40.17 2011-12 17.61 12.04 29.65 44.49 2012-13 NA NA NA 46.80 2013-14 NA NA NA 48.26 2014-15 NA NA NA NA 2015-16* NA NA NA 44.85 2016-17 NA NA NA NA

*As on September 30, 2015 (Provisional)

Source: www.rbi.org.in Data base on Indian Economy. 2017

http://www.ilo.org/

http://www.rbi.org.in/



Employment Generation Capacity of FDI Foreign direct investments are long run programs initiated by multinational companies; they seek simple incentives such as markets, comparative advantage of labour in a country, cheaper raw material etc. but how does it increase employment? There are basically two kinds of investment 1) Brown field investment—when a company purchases existing production facilities. 2) Green field investment—when a company builds a new production facility. Either way there is bound to be increase in employment due to investments made. But the extent of the employment generation depends on the nature of business these firms want to do, with entry of new firms in the country there must be increase in competition in the domestic markets, this gives diversity to the consumers, other positive implication of FDI is the improvement of technology and knowledge.

In India most of the sector-wise distribution of FDI has been in service sector (Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier). Most of these industries are capital intensive in nature and we should not expect much growth in labour employment

Objectives of the Study

To study the impact of Foreign direct investment on gross domestic product in India To study the impact of Foreign direct investment on employment in India

Hypothesis of the Study

H01: Foreign Direct Investment does not have a statistically significant impact on Gross Domestic Product. H11: Foreign Direct Investment has a statistically significant impact on Gross Domestic Product. H02: Foreign Direct Investment does not have a statistically significant impact on Total Employment. H12: Foreign Direct Investment has a statistical impact on Total Employment

Database & Methodology

The study is descriptive and analytical in nature. The study is secondary data based and is taken from the data base of the Reserve Bank of India, Ministry of Labour and Employment, India and World Bank. The time period taken for the study is 2006-07 to 2016-17. Statistical and mathematical techniques such as simple growth rate, compound growth rate, correlation and regression is used.



Results & Discussions

A. Correlation Analysis

Correlation is observed between foreign direct investment, gross domestic product and employment. Table 5 indicates significant correlation between gross domestic product and employment (r=.990, p= .000). There is significant correlation between gross domestic product and employment (r=.737, p= .010). There exists direct and positive relationship between foreign direct investment and employment (r=.747, p>.01). It is observed that foreign direct investment affects employment generation indirectly through economic growth. Economic growth is indicated through proxy variable gross domestic product.

Table 5: Correlation Matrix Indicators FDI GDP EMPL

FDI Pearson Correlation Sig. (2-tailed)

N

1

11

.737** .010 11

.747

.088 6

GDP Pearson Correlation Sig. (2- tailed)

N

.737** .010 11

1

11

.990** .000

6

B. Regression Analysis

Regression Analysis is done to see the impact of FDI on GDP. Table 6: Regression Coefficient of FDI on GDP Model Unstandardized Coefficients

B Std Error. T- Statistic Sig.

Constant 5.497E6 834807.040 6.585 .000 FDI 2.242 .686 3.271 .010

Dependent Variable: GDP

R square .543 F Statistic 10.698 Adjusted R square .492 Sig. .010

Table 6 shows that the model is a relatively weak one having 49.2% (Adjusted R2) of the data being explained by the regression equation. Since the result shows that the f –statistic is within the significance level of 5%, the null hypothesis is rejected and the alternate hypothesis is accepted. This means that Foreign Direct Investment does have a significant impact on dependent variable Gross Domestic Product.



Null Hypothesis for is rejected as the slope of the coefficient is significantly different from 0 and has a value of 2.242 which is observed to be completely significant. Table 7: Regression Coefficient of FDI on Employment

Model Unstandardized Coefficients B Std Error.

T- Statistic Sig.

Constant 26.373 .939 28.082 .000 FDI 1.769E-5 .000 2.245 .088

Dependent Variable: EMPLY

R square .558 F Statistic 5.042 Adjusted R square .447 Sig. .088

Table 7 shows that the model is a relatively weak one having 44.7% (Adjusted R2) of the data being explained by the regression equation. The f –statistic results show that the model falls outside the significance level of 5%, hence, accepting the null hypothesis and rejecting the alternate hypothesis. This means that Foreign Direct Investment does not have a significant impact on dependent variable Total Employment. Conclusions

India certainly can be considered as an emerging economic power and FDI has contributed to its growth in multidimensional way to it, but as far as the employment generation is considered there is yet to be methodology developed to establish a concrete relation between the two. Govt. should concentrate on other measures besides FDI to increase employment opportunities and enhance economic growth of the country. The results obtained on the impact of foreign direct investment on total employment are not very satisfactory. There is negligible amount of employment generated in both public and private sector, even though there is a large amount of FDI inflows in the economy.

With over 10 million people expected to enter the labour force each year for the next few years, it is recognized that not only could the rate of output growth be higher, but it could be more employment-intensive as well. Indeed, the challenge of translating the benefits of high rate of economic growth into a faster pace of poverty reduction through the generation of productive employment and decent work remains formidable

References

Factsheet on FDI various issues by Reserve Bank of India, Mumbai. Government of India, Ministry of Labour& Employment, Labour Bureau, Chandigarh,

Report on Employment-Unemployment Survey, Volume I, 2013-14.



Government of India, Ministry of Labour& Employment, Labour Bureau, Chandigarh, Report on Youth Employment-Unemployment Scenario, Volume II, 2013-14.

Government of India, Ministry of Labour& Employment, Labour Bureau, Chandigarh, Education, Skill, Development and Labour Force, Volume III, 2013-14.

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Impact of E-Commerce on Digital Divide

Seema Rani Assistant Professor, Department of Commerce, D.A.V College Bathinda

Abstract As indicator of growth of any country are Gross Domestic Product,literacy rate ,digital litracy etc. Govt of

India has been trying to increase digital litracy by increasing litracy level by following many measures. Govt is successful in increasing litracy rate but the pace is very slow,but with the intervention of internet and with that E-commerce portals and apps.,Digital Divide has been reduced to a great extent although

litracy rate is not improved at same pace.E-Commerce has increased digital litracy indirectly for which

govt has not expected. I just try to explain in simple words how E- commerce has done this and still

doing. Key Words: Gross Domestic Product,litracy rate,digital divide,e-commerce.

Introduction

The measurement of a country’s status worldwide is defined through the digital presence of the

population of the country as per the new regulations of United Nations. The Gross Domestic Product (GDP), the literacy level of population measures for categorizing countries in Developed, Developing or Under-Developed. The term Digital Divide states that the gap between the people who have information and those who do not have information. Globally it is right of every individual to be aware of all the information local or global for better living on the earth, continent, city, village or any location. Every citizen must be well aware of its surroundings and environment and benefits provided by its government.

Asian continent has two major populated countries China and India. As far as GDP is concerned, the figures published by the Chinese authorities are always in doubt. Of course population wise India is second largest populated country after China. The literacy level of country is nowadays measured through net presence of the population and is named as digital literacy also. The Chinese population is digitally more literate but the level of international language usage is much lower than that of Indian population. It can be said that India is far ahead in digital literacy indicators when compared with China.

What can be the reasons that have been helpful in bridging the digital divide?

One of the biggest challenges which Indian education face is the number of drop outs at the under graduate level. In order to overcome the digital divide it is necessary that the information technology aspect should be introduced to the students right from their school level and the need for the same is been identified by the Indian government recently. The government has introduced the Information technology in the syllabus right from 1st standard so that the students can have an access to the technology and will come to know various strategies of searching the Internet.



The government of India adopted E-governance in the last decade. This lacunae worked but the involvement of general public in e-governance was very small, because of two main reasons, a) the services were for the people of the age from 35 to 90 years and this group of population is weak in English language that is the language of information and communication technology tools, (computers, internet et).

GDP vs. Tele density

Tele density is commonly used to measure the level of development in telecommunication. Telecom development is viewed as a major pre-requisite for the economic integration in this globalized world. There exists a wide gap between the tele density of developing and developed countries. In some countries tele density surpasses 100 per cent which means that some people subscribe to more than one telephone line .In the decade of 1990s, massive research was conducted in telecom sector and many studies showed positive relationship between telecom growth and economic development. GDP increased due to telecom density, the trends are worldwide.

Telecom and ICT Services

(Service providers, Tele density, Voice and Data, Urban, Rural)

In 1999 first telecom policy was drafted which invited private companies and multinationals in telecom sector. In terms of telecommunication penetration, Asian economies are taking lead and expanding rapidly. Transfer of latest technology is no more a hurdle for the growth of telecom as telecom giants of the world are taking over the sector in developing countries in collaboration with local investors or some time having solo flights.

In 2010, BSNL was top telecom service provider followed by AIRTEL. But after the entry of RELIANCE JIO in ICT services, they are on top and all others are struggling to survive in market by adopting mergers and acquisitions. By providing free sim, free data, and also 3G/4G mobiles at very affordable prices they penetrate even in the urban areas which were at saturation points, people started using jio services.

Internet Access

All this led to increased number of internet service providers, companies started transfer of social information publishing towards commercial portals. Voice and data and commercial portals grew side by side; when urban areas reached their saturation point in tele density because every household has at least one connection. Then service providers moved towards rural areas where although literacy level was still low but popularity of social networking sites as Facebook, Twitter, Instagram, etc. lead to growth of internet uses .Entry of Reliance Jio as a service provider increased digital literacy many fold of which govt has never expected.



E-commerce Portals and Mobile Apps

E-commerce or electronic commerce is the buying and selling of products or service over the internet or any other electronic media. It includes electronic fund transfer, internet marketing, online transaction processing etc. Modern e-commerce is typically bound to the internet. Though it may encompass many other methods like telephonic booking, it uses the internet at least in one point of time. E-commerce, the idea of online shopping was first put forth by Micheal Aldrich in 1979.He had connected a modified domestic TV to a real-time transaction processing computer via a domestic telephone line. Later in 1990, when Tim Berners-Lee invented the World Wide Web, e-commerce has got a scope to expand itself. Amazon.com which was first launched in 1995 by Jeff Bezos is the first online shopping site open 24*7. Today, there are umpteen number of e-commerce sites. While some are pure click websites like amazon, clear trip, flip kart etc., some are termed as brick & click websites. A pure click site is one that is established online directly without a base firm. Sites like e-bay, amazon are some of the examples. There are also few firms which obtain name & fame and then launch an e-commerce site to avail online facilities to the customers. E- Commerce portals which are most popular as

Amazon India. Flip kart. Snap deal. Alibaba. EBay India. Jabong. Amazon. Paytm Uber Walmart

And many more exists .E-commerce portals started their advertising through social networking sites may it be Facebook, twitter, Instragram, and T.V. specially music channels and news channels and on line shopping channels as HOMESHOP 18, Naaptol etc. These E-commerce portals started their apps.

All this growth of E-commerce reduced the digital divide to a remarkable extent. Govt was adopting measures to reduce literacy through education by providing service centers to the illiterate peoples to fulfill their requirements of billing services ,banking services etc. but E-commerce portals and apps made all people whether rural or urban made self-sufficient to fulfill their needs . E-commerce providers provides benefits to the customers by giving discounts, free bias, free deliveries, coupons ,easy payment and east returns etc. Increase of internet presence of people and ecommerce is a two way benefit process.



E-commerce thus reduces digital divide indirectly. Average life expectancy is about 70 years.60% of population is between 20-50 years of age. Internet uses are not limited only to this age group, people belonging to every age group are now using internet in one way or other, even it is said that today’s child is born with internet knowledge.

Role of Government

Although digital divide is reduced to great extent but now its govt.’s initiatives to support e

commerce by taking appropriative measures. Indian Government must have to play a significant role in the promotion and growth of E-commerce. Government must have to support rapid deployment of necessary infrastructure by providing various educational and skills development resources. Plan for the development of MSME’s on a national and global scale. Ensuring equity in the availability of opportunities and benefits for the overall development of the rural community.

Government has to adopt some specific e-commerce laws. Digital India, Make India, skill India etc. are some good steps taken by the government for this purpose. It will definitely enhance the economy of our country. Many efforts can be seen in Indian for bridging digital divide. All these efforts are reflected from the various initiatives taken from the government, private sectors and also through the libraries. Many libraries and information centres apart from keeping separate terminals in the libraries for users are with the growing competition in the e-commerce market, players who are able to adapt and innovate quality products will gain profit and enhance the economy of the country. Both electronic learning and mobile learning enhances the access of the good educational institutions in remote areas. The rise of online sales in the developing markets will encourage retailers to go online for global expansion. E-marketplaces are working well in India due to high fragmentation on the supply side. Mobile banking reduces the transaction cost of banks which increases access to financial services through rapidly growing mobile market. Rural areas which are too costly or unprofitable for business development might be a focus of investment and market expansion, and also for building corporate offices. Providing training to the users so that they can access information though Internet. Many libraries have developed digital and institutional repository to make the literature free accessible to the users.

On the other hand Government of India has taken several measures to improve the literacy rate in villages and towns of India. State Governments has been directed to ensure and improve literacy rate in districts and villages where people are very poor. There has been a good improvement in literacy rate of India in last 10 years but there is still a long way to go. Going by previous growth rate, India will be able to achieve its universal literate target not before 2060.

Steps taken by Government of India to improve Literacy Rate in India

Free education programs to poor people living in villages and towns. Setting up of new schools and colleges at district and state levels.



Several committees have been formed to ensure proper utilization of funds allotted to improve literacy rate.

Beti Bachao, Beti Padhao is the latest initiative taken by Government of India to save and educate the girl child in India.

State literacy campaigns are launched at several times to conduct door to door survey to examine overall literacy scenario in the districts

Conclusions

After taking a complete view of the industry trends, it is seen e-commerce is emerging as an important tool to certify exploding growth of Indian economy by reducing the digital divide through digital literacy. It has the scope to lead India into an Economic superpower. With a rapidly growing internet penetration e-commerce offers an attractive option for the retailers, consumers, students, etc. to grow and to reduce digital divide. To achieve this, there should be more investments in supporting infrastructure and innovative and supportive efforts of Govt. to implement stringent and effective laws to increase e commerce penetration and also to protect people from negative consequences of internet uses .All this will certainly lead to reduction of digital divide or enhancement of digital literacy that will ultimately lead India towards development.

References

Anjum Bimal, Tiwari Rajesh (2011). ‘Economic and social Impacts of E-Commerce,’

CFA International Journal of Computing and Corporate Research, Vol. 1, Issue. 3. ISSN: 2249-054X

KPMG report authored by Doger Kritika and Tanwar Prahlad available at www.kpmg.com www.wikipedia.com

Rebirth of E-commercial in India, report by Ernst & Young LLP available at www.ey.com

E-Commence Evolution in India: Creating the bricks behind the clicks, Designed by Corporate Communications, India available at www.pwc.in

Future of e-Commerce: Uncovering Innovation, available at www.deloitte.com/in

http://www.wikipedia.com/

http://www.ey.com/

http://www.pwc.in/



Service Quality Dimensions- A Gap Score Analysis of Public Sector & Private Sector Banks in Punjab

*Navneet Mittal **Payal Bassi *Research Scholar, University School of Management, Desh Bhagat University, Mandi Gobindgarh **Associate Professor, University School of Management, Desh Bhagat University, Mandi Gobindgarh

Abstract Today, banks have become from mere agent between borrowers and lenders to providers of customer centric services. Intensified competition, educated customers and increased living standards are compelling banks to review their consumer service strategy. The objective of the present study is to assess the gap between quality of services provided by public vis-a- vis private banks to their customers. Two private bank branches (ICICI Bank & HDFC Bank) and two public bank branches (SBI & PNB) are selected. Structured questionnaire were used to gather relevant data for the study. The services of the banks were defined on popular SERVQUAL model: Tangibles, Assurance, Responsiveness, Empathy and Reliability, to determine the level of gaps and satisfaction derived from the services. The analysis of collected data is done by calculating mean score gaps and paired sample t-test. The study concludes that there is significant gap in service quality of public and private sector banks. Keywords: Service Quality, Gap Score Analysis, Public Sector Banks & Private Sector Banks

Introduction

It is a known fact that no business can exist in isolation. It needs customers for its existence.

Similarly, banking industry has to deal with customers and render various types of services to

customers. Banks act as a backbone of economic development and an effective customer service

serves as a centre to all the business activities. Banks inculcate the habit of saving and

investments amongst its customers. Like many other financial service industries, banking is also

facing numerous challenges ranging from fierce competition, economic uncertainties, changing

market, new technologies, and educative customer demanding many facilities. Banking, being

customer oriented industry, has to take many creative steps to satisfy its customers. Changing

customer needs and expectations has resulted in change in the banking industry. This has

resulted in the advancement in the operations of banks with the introduction of ATMs, phone

banking, internet banking etc. Banks aim at providing all kinds of products and services under

one roof and serve its customer in a better and effective manner. With the emergence of

economic reforms in world in general and in India in particular, today’s banks have come up in a

big way with prime emphasis on technical and customer focused issues. Customer satisfaction, a

business term, is a measure of how products and services supplied by a company meet or surpass

customer expectation. It is seen as a key performance indicator within business. In a competitive



marketplace where businesses compete for customers, customer satisfaction is seen as a key

differentiator and increasingly has become a key element of business strategy.

Review of Literature

Ananda and Sonal (2017) The purpose of the study is to examine the level of customer satisfaction on service quality in the perception of retail banking customers in Oman. The service quality of the banks is assessed under five dimensions with 25 different attributes. The primary data were collected through a structured questionnaire from 152 respondents chosen using the ‘snowball’ method. The research design is quantitative and the five-dimensional SERVQUAL model was used to examine the service quality gaps between customers’ expectation and perception. The effect of service quality dimensions on customer satisfaction was estimated using descriptive statistics, one sample t-tests, and correlation and regression analysis techniques. The results of the study revealed that expectation of customers was higher than their perception under all five service quality dimensions. The highest and the least service quality gap was found in the dimension of ‘empathy’ and ‘tangibility’, respectively. The findings indicate that all five

service quality dimensions of the study exert a positively significant effect on customer satisfaction. Kumar (2017) This study deals with to know the service quality gaps in Rohtak city Haryana. This study is also suggested that what the factors responsible for the gaps and how to fill this gap. In this study researcher has taken one hundred respondents from State bank of India in Rohtak district Haryana. The sample of one hundred customers is taken randomly. The score of perception shows that what is the existing status of customer in Rohtak district and expectation shows that what are the needs or what the customer are expecting from banks. The result suggests that what ways to overcome the problems. Sai and Vinay (2015) This paper attempted to make a comparative analysis of level of customer satisfaction towards the services provided by YES Bank and UCO bank. The study has been conducted in Warangal city based on questionnaire method and a sample of each 30 customers and employees of respective banks has been selected using convenient sampling method. The servqual model analysis is conducted with its all five service dimensions and Gap analysis. This study concludes that private sector banks are more preferred by majority of the customer as they emphasize more upon relationship building with their clients and are better equipped with modern infrastructure as compared to public sector banks. Qadri (2015) The study was carried with the objective of understanding the level of gap exists between expectation (excellent bank) and perception (experience bank) among the banking customer in Pakistan in the content of service quality. This study is measuring service quality by using SERVQUAL- a perceived service quality questionnaire methodology. SERVQUAL examines five dimensions of service quality, responsiveness, assurance, empathy, tangible and Reliability. For each dimension of service quality measures both the perception and expectation of the service on a scale of 1 to 7, total questions in the questionnaire are 22. Through Gap



analysis Gap score is calculated by subtracting the perception score from expectation score. A negative Gap indicates that the actual service is less than what was expected and the GAP is highlighted area for improvement. Convenience sample of 250 public and private bank’s account

holders in Pakistan was used to collect the data. The finding of this study showed there is very huge Gap exists between excellent bank (expectation) and account holder experience (perception) bank in Pakistan with the regards of service quality. Finding of this study is help to minimize the GAP that was exist between excellent bank and account holder experience bank in Pakistan. This study used the word excellent bank because no bank in Pakistan up to the expectation of the account holders. Rathee et.al. (2014)This study dealt with service quality gaps in banks as after nationalisation of several commercial banks competition was restricted but with the entry of new generation tech-savvy private banks the banking sector has become too competitive. For comparative purposes, five service quality dimensions are used i.e. tangibility, reliability, assurance, responsiveness and empathy. The 22 items SERVQUAL scale based on gap model proposed by Parasuraman, Zeithmal and Berry was used. A sample size of 100 was taken using quota sampling. Gap analysis was applied to find the gaps between expected and performed service in private banks of NCR using SPSS version 20 to find difference between male and female perception and expectation. The study provided an insight into which attributes of service quality in private bank were most important in providing satisfaction to customers and areas where significant gaps existed. It is concluded that the highest gap was found in the dimension of reliability and empathy and few suggestions have been provided to improve on these factors. Devi et.al. (2014) The aim of this paper is to assess the service quality of the products in the Mauritian Banking Sector. A sample of 110 respondents from different areas was used for this project. The SERVQUAL Model was used to carry out the analysis. The study focused on five service quality dimensions, namely; tangibility, reliability, responsiveness, assurance and empathy. The results show that expectations of customers are higher than perceptions indicating that in general customers are disappointed with service quality level. Reliability and empathy were the two factors having the highest gap. Further it was observed that tangibility had the lowest gap showing that customers are mostly satisfied with the way staffs are dressed, appearance and facilities of the banks. It was found that Self Employed respondents and respondents earning 0-8000 were satisfied of bank’s staffs approach to answer questions, and

speed of which problems are dealt. However respondents in higher income groups are unsatisfied with banks’ services. This paper contributes to the existing literature on service quality in the Mauritian banking sector. Ananth et.al. (2011) The present study evaluates the customer perceptions of service quality in selected private sector banks. Data was collected from 200 customers of Private Sector Banks using structured questionnaire. Gap analysis and Multi regression were used for analysis of data. The result shows that the dimension of service quality such as Empathy and Accessibility has more gap, as the customer expectations are high to their perceived service. The result also indicates that Empathy-Reliability-Assurance positively influences the service quality. The study



implies that bank should reduce the service gap to deliver superior quality of service to retain existing customers as well as to attract new customers. Kumbhar (2011) The aim of this paper was to provide a preliminary comparative investigation of the customer satisfaction in ATM service of public and private sector banks in India. For this investigation primary data was collected from 150 respondents of public and private sector banks through a structured questionnaire. Collected data was analyzed according to the objectives of the present research and result of the statistical analysis indicates that private sector banks are providing more satisfactory ATM service as compared to public sector banks. Empirical evidences indicates that customers perception about Efficiency, Security and Responsiveness, Cost Effectiveness, Problem Handling and Compensation and Contact service related to ATM service is low in both public and privates sector banks (ranging between 3.00 to 3.50). Therefore both types of banks should aware about these aspects of ATM service to enhance customers’

satisfaction Sudesh (2007) The study revealed that poor service quality in public sector banks is mainly because of deficiency in tangibility, lack of responsiveness and empathy. Private sector banks, on the other hand, were found to be more reformed in this regards. Above all, the foreign banks were relatively close to the expectations of their customers with regard to various dimensions of service quality. Further, the study revealed that there existed service quality variation across demographic variables and suggested that management of banks should pay attention to potential failure points and should be responsive to customer problems. Research Methodology

“SERVQUAL” is a method which is widely used to assess the service quality of the

organisation. It helps to identify the gaps between what customers expected from an excellent product or service provider and what they perceive the service to be from their current suppliers of that product and service. The SERVQUAL is first used by the well-known author Parasuraman et.al, (1988) to understand the gaps between perceived and expected quality of service organisations. The questionnaire as used by Parasuraman et. al., (1988) has been modified and used here with 22 statements under 5 dimensions. After the careful reviewing the literature, a five service quality dimensions questionnaire was developed to measure service quality of Public sector Banks (State Bank of India and Punjab National Bank) and Private sector banks (ICICI and HDFC bank). Each question was based on a 5-point Likert scale as shown below:

1 = Strongly Agree, 2 = Agree, 3 = Neutral, 4= Disagree, 5 = Strongly Disagree

In order to measure the level of service delivery, the five scale dimension was selected. It includes: tangibles, empathy, responsiveness, reliability and assurance (Parasuraman et. al., 1988). The performance of the services delivered was measured by the customer’s expectation

and perception of the SERVQUAL dimensions. Descriptive statistics were used on the responses from the customers to undertake the needed measurements. The quality gap according to



Parasuraman et.al., (1988) is the difference between perception (P) and expectation (E). (Q= P-E). When Q is positive it implies customers are satisfied and when negative dissatisfied

Results & Discussions Tangibility Dimension Tangibility includes appearance of physical facilities, equipment, appearance of personnel, and communication materials, descriptive statistics were taken based on the expectation and the perception of the customers of the bank.

Table: 1 Service Dimension Gap for Tangibility Perception Expectation P-E

Tangibility P (Private

banks)

P

(Public

banks)

Tangibility E Gap Score

Private

Gap

Score

Public

Does the bank

have modern

looking

equipment

8.15 4.77 Excellent banking

companies will

have modern

looking equipment

8.18 -0.03 -3.41

Are the Bank’s

physical facilities

visually appealing

7.73 4.56 The physical

facilities at

excellent banks are

visually appealing

8.34 -0.61 -3.78

Are the Bank’s

reception desk

employees neat

and professionally

appearing

4.94 4.59 Employees at

excellent banks

will be neat and

professionally

appearing

4.61 0.33 -0.02

Are the physical

facilities

associated with

the service (such

as pamphlets or

statements)

visually appealing

6.91 4.67 Physical facilities

associated with the

service (such as

pamphlets or

statements) will be

visually appealing

at an excellent

bank

6.74 0.17 -2.07

Average 6.93 4.65 6.97 -0.04 -2.32

Source: Primary Survey, 2017



From Table 1 the average scores (mean) are moderate in relation to the scale of measurement of public sector banks (State Bank of India and Punjab National Bank) while the average scores is relatively high of private sector banks (ICICI bank and HDFC bank). This means that customers consider visually appealing physical facilities; efficient equipment and personnel communication are relatively higher between in private sector banks as compared to public sector banks. Furthermore, it is interesting to note that the mean value of private sector banks is higher than public sector banks. It means that the gap between perceived and expected service quality is very low and negative in case of private sector banks as compared to public sector. Customers are very much interested in the modern looking equipment, neat and professionally dressed reception desk employees, physical facilities of private banks as compared to public sector banks

Clearly, it has been shown from Figure 1 that, in terms of tangibility, as the customers were expecting the bank to provide a service quality level of 6. 97 while the perceived service quality is lower in both private and public sector banks. However, private sector banks are performing better than public sector banks in terms of tangibility of their services.

Reliability Dimension

Reliability dimension is one of most important parameter while assessing service quality of any organization. It refers to the ability of the organization to perform the promised service dependably and accurately to its customers. On the issue of reliability of the services delivered by public and private banks were measured at five items.

The mean scores of the items are explained in the table 2 for both expectation and perception. It shows that private banks are performing better than public banks on various parameters such as promises, sympathetic, service at right time and error free services. Out of five items private sector banks fulfil their promises on time and their average score is8.62, which is the best score. While private banks are good in providing error free services to their customers and scored 9.19. However, it is pertinent to note that the gap between perceived and expected service quality in reliability parameter is low in private banks in comparison to public sector banks. This indicates that there is ample scope for improvement for public banks in case of reliability.

Table: 2 Service Dimension Gap on Reliability

P (Private banks) P( Public banks) Reliability E Gap Score Private banks

Gap Score Public banks

When the bank promises to do something by a certain time, it does so

8.89 4.61 When excellent banks promise to do something by a certain time, they do

8.89 0.00 -4.28



When you have a problem your bank shows a sincere interest in solving it

9.15 4.68 When a customer has a problem, excellent banks will be sympathetic and reassuring

9.18 -0.03 -4.50

Does the bank performs the service right the first time

8.98 4.63 Excellent banks will perform the service right the first time

9.08 -0.1 -4.45

Does the bank provide its service at the time it promises to do so

6.88 4.78 Excellent banks will provide the service at the time they promise to do so

3.38 3.50 1.40

Does the bank insist on error free records

9.19 4.75 Excellent banks will insist on error free records

4.61 4.58 0.14

Average 8.62 4.69 7.03 1.59 -2.34


As shown in figure 2, as customers were expecting a service quality level of 7.03, the public and

private bank was rather delivering a service quality level of 8.62 and 4.69 respectively. Private

Banks are exceeding expectations of their customers and this indicates that, service delivery is

satisfactory particularly in case private banks on important dimension of reliability. On the other

hand in case of public sector banks expectations are falling short of perceived service quality

indicating that service delivery is unsatisfactory. In the context, Hussar (2000) stated that the

increasing rate of technology growth, has affected the expectations of customers from their

service providers thereby affecting service quality.

Responsiveness Dimension

Responsiveness is defined as the willingness or readiness of employees to provide service. It

involves timeliness of services (Parasuraman et al., 1985). It includes a wide range of things such

as needs and wants of the customers, convenient operating hours, individual attention given by

the staff, attention to problems and customers‟ safety in their transaction. The average mean

score for private banks is 4.65 and 2.30 for public banks. It is lower than expected mean score of

4.63 in case of public banks and higher in case of private banks. However, it is relevant to note



that private banks are doing well in terms their performance on responsiveness to their

customers.

Table: 3 Service Dimension Gap on Responsiveness

Responsiveness P (Private

banks)

P( Public

banks)

Responsiveness E Gap Score Private

banks

Gap Score Public

Banks

Do the Employees in the bank tell you exactly when services will be performed

4.63 2.28 Employees of excellent banks will tell customers exactly when services will be performed

4.59 0.04 -2.31

Do the Employees in the bank give you prompt service

4.59 2.30 Employees of excellent banks will give prompt service to customers

4.54 0.05 -2.24

Are employees in the bank always willing to help you

4.59 2.31 Employees of excellent banks will always be willing to help customers

4.59 0.00 -2.28

Employees in the bank are never too busy to respond to your request

4.49 2.27 Employees of excellent banks will never be too busy to respond to customer’s

requests

4.48 0.01 -2.21

Does the behaviour of employees in your bank will instil confidence in you

4.95 2.34 The behavior of employees of excellent banks instill confidence in customer

4.93 2.61 -2.59

Average 4.65 2.30

4.63 0.02 -2.33




By and large, it is clear that the public sector banks are failed to meet the expectation of the customers as shown in figure 3. Private sector banks are able to meet the expectation to greater extent. The increasing difference in expectation and perceived value of responsiveness is matter of great concern for public sector banks in changing globalised scenarios. The increasing competition in banking industry may create further pressure on public sector banks to improve their performance.

Assurance Dimension Parasuraman et. al., (1985) defined assurance as knowledge and courtesy of employees and their ability to inspire trust and confidence. It is an important dimension of service quality and it also helps us in understanding the knowledge and courtesy of employees and their ability to inspire trust and confidence. The descriptive statistics on the assurance shows that perception value is lower than expectation value. Private Banks are able to perform slightly well as compared to public sector banks. The average of private and public sector banks is 3.69 and 2.34 respectively. In specific items such as courtesy and knowledge, private banks are doing well as compared to public sector banks.

Table 4: Service Dimension Gap on Assurance

Assurance P (Private banks)

P( Public banks)

Assurance E Gap Score Private Banks


Do you feel safe in your transactions with the bank

4.60 2.38 Customers of excellent banks will feel safe in transaction

4.56 0.04 2.22

Do Employees in your bank are consistently courteous with you

4.54 2.32 Employees of excellent banks will be courteous with you

4.53 0.01 -2.21

Do the employees in the bank have the knowledge to answer your questions

4.55 2.34 Employees of excellent banks will have the knowledge to answer customers‟

questions

4.57 -0.02 -2.23

Do your bank gives you individual

2.37 2.40 Employees of excellent banks give

4.46 -2.09 -2.06



attention

individual attention

Do your bank has employees who give you personal attention

2.37 2.28 Employees of excellent banks give personal attention

4.45 -2.08 -2.17

Average 3.68 2.34 4.51 -0.83 -2.17


On the gap analysis, respondents were expecting a service quality level of 4.51 per cent they were of the opinion that, they were receiving a service quality of 2.34 (public sector banks) and 3.68 (private sector banks). The service quality gaps of -0.83 and -2.17 in both private and public sector banks. This shows a general dissatisfaction on the assurance dimension.

Empathy Dimension

It is defined as caring, individualised attention the firm gives to its customers. It includes giving customers individual attention and employees who understand the needs and expectation of their customers. For empathy dimension, seven items were analysed. Results indicate that private banks are able to perform much better than public banks. The average mean score for private and public banks was 9.06 and 2.99 and the average mean score for expectation is 4.47. This indicates that private banks concentrate more empathy dimension vis a vis public banks.

Table 5: Service Dimension gap on Empathy

Empathy P (Private banks) P( Public banks) Empathy E Gap Score Private banks


Do the employees of the bank understand your specific needs

9.04 2.31 The employees of excellent banks will understand the specific needs of their customers

4.47 6.73 -2.16

Does the bank have your best interest at heart

9.12 2.29 Excellent banks will have their customer’s best

interests at

4.53 4.59 -2.30



heart

Does the bank have convenient banking hours

9.01 4.37

Excellent banks will have convenient banking hours

4.42

4.59 -0.05

Average 9.06 2.99

4.47 4.59 -1.60


As indicated in Figure 5 as customers were expecting a service quality level of 4.47 public sector banks are giving a service quality level of 2.99 falling short of -1.60 of their expectations. Average score in case of private banks is 9.06 highly exceeding the expectations by 4.59 therefore providing satisfactory services.

Table 6: Paired Samples t-test for Private Sector Banks

Paired Differences Mean Std.

deviation Std. Error Mean

t-value d.f. p-value(two tailed test)

Pair 1 PBs Tangibles P PBs Tangibles E

-0.35

2.295

0.163

-2.16

198

.829

Pair 2 PBs Reliability P PBs Reliability E

.015

1.679

.119

.126

199

.900

Pair 3 PBs Responsiveness P PBs Responsiveness E

.100

1.534

.108

.922

199

.358

Pair 4 PBs Assurance P PBs Assurance E

-4.42

2.438

.172

-25.613

199

0.000

Pair 5 PBs Empathy P PBs Empathy E

-.090

1.131

.080 -1.126

199

.262

Source: Calculated Values

For t-test if p-value (significance) value is less than 0.05, alternative hypothesis is accepted. For Private sector banks, value for assurance is less than 0.05, so alternative hypothesis is accepted for these dimensions that there is significant service quality gap for tangibility, reliability, responsiveness and empathy. Moreover service quality gap is negative for tangibility, assurance and empathy that service quality perception is less than the quality expected. P-value in case of private sector banks is greater than 0.05 in case of tangibility, reliability, responsiveness and empathy. It means that there is no significant service quality gap for these dimensions



Table 7: Paired Samples t-test for Public Sector Banks

Paired Differences Mean Std.

deviation Std. Error Mean

t-value d.f. p-value(two tailed test)

Pair 1 PSBs Tangibles P PSBs Tangibles E

-4.653 2.249 1.59 29.193 198 .000

Pair 2 PSBs Reliability P PSBs Reliability E

-9.864 2.445 1.73 56.921 198 .000

Pair 3 PSBs Responsiveness P PSBs Responsiveness E

-11.684 2.361 1.67 69.608 198 .000

Pair 4 PSBs Assurance P PSBs Assurance E

-11.11 2.794 1.98 56.098 198 .000

Pair 5 PSBs Empathy P PSBs Empathy E

-4.774 1.656 .117 40.672 198 .000

Source: Calculated Values

As indicated in table 7, for Public sector banks, p-value for all dimensions of service quality is

less than 0.05. Therefore, alternative hypothesis is accepted for all the dimensions. It means

there are significant service quality gaps for all the dimensions.

From the mean analysis and hypothesis testing, service quality for Public sector banks is

negative for all the dimensions namely tangibility, reliability, responsiveness, assurance,

empathy that means service quality perception is less than the quality expected.

Comparison of Overall Service Delivery Gaps of Service Quality

To achieve one of important objective for the study, the overall comparison is important to

understand the gaps of service quality in public and private banks. It helps in understanding the

trends of the gap analysis for each of service quality dimensions. It is worth noting that the

service delivery gaps for perception and expectation are significant in both public and private

sector banks as given in pictorial representation.



Figure 1: Comparison of Overall Service Delivery Gaps of Service Quality


As shown in Figure 1, the gap for tangibility, reliability, responsiveness, assurance and empathy significant in case of public banks. The performance on these indictors brings important insights about the service quality delivered by banks to their customers. The data raises serious concerns on the performance of public banks while competing with private sector banks. In changing global economic scenario, it is important for banks to work proactively on their service quality dimension for their long run sustainability. Otherwise, they will be out of the market in the highly competitive world.

References

Ananda, S and Sonal, Devesh (2017). Service quality dimensions and customer satisfaction: empirical evidence from retail banking sector in Oman. Total Quality Management & Business Excellence, DOI: 10.1080/14783363.2017.1393330

Ananth, A., Ramesh, R., and Prabaharan, B (2011). Service Quality Gap Analysis in Private Sector Banks- A Customers Perspective. Indian Journal of Commerce & Management Studies, Vol. II, Issue.1. ISSN – 2229-5674. Available on: www.scholarshub.net

6.93

8.62

4.65

3.68

9.06

4.65 4.69

2.3 2.34

2.99

6.97 7.03

4.63 4.51 4.47

0

1

2

3

4

5

6

7

8

9

10

Perceived (Private)

Perceived(Public)

Expectation (Private and Public)

https://doi.org/10.1080/14783363.2017.1393330

http://www.scholarshub.net/



Devi Ramlugun Vidisha, Kumar Heman and Singh Ramburuth (2014). Assessing Service Quality in the Mauritian Banking Sector Using SERVQUAL. Prestige International Journal of Management & IT-Sanchayan, Vol.1, Issue.1, pp.115-126. ISSN(P): 2277-1689

Kumar Rajesh (2017). Service Quality Expectations and Perception Gaps of State Bank of India, Rohtak Haryana (India).International Journal of Management and Applied Science, Vol.3, Issue.2. ISSN: 2394-7926.

Kumbhar, Vijay M (2011). Customers’ Satisfaction and GAP Analysis: A Study of ATM

Service of Public and Private Sector Banks in India. Rathee Rupa, Deveshwar Aarti and Rajain Pallavi (2014). To Identify Service Quality

Gaps in Banking Sector: A Study of Private Banks. International Journal of Emerging Research in Management &Technology, Vol. 3, Issue.7. ISSN: 2278-9359

Sai Akhilesh, P and Vinay, C.V (2015). Service Quality Gap Analysis: Comparative Analysis of Public and Private Sector Banks in India. Journal of Accounting & Marketing, Vol.4, Issue. 2.

Sudesh (2007). Service quality in banks-A study in Haryana and Chandigarh. NICE Journal of Business, Vol.2, Issue.1, pp.55-65.

Qadri, Usman Ahmad (2015). Measuring Service Quality Expectation and Perception Using SERVQUAL: A Gap Analysis. Business and Economics Journal, Vol.6. doi:10.4172/2151-6219.1000162



Understanding the Growth of Organic Food Industry in India

*Harleen Kaur **Chhavi Kiran

* Assistant Professor, University School of Business, Chandigarh University, Gharuan, Punjab **Assistant Professor, Department of Commerce, S.D. College (Lahore), Ambala Cantt, Haryana.

Abstract This paper attempts to outline the growth of organic food industry in India. It explores the need for the organic food and trace path of organic agriculture to modern times. There are various compelling reasons such as environmental degradation, pet resistance, pollution and poverty among small farmers that have contributed to shift towards organic agriculture. Also health consciousness and higher disposable incomes of consumers have contributed to the growth of organic food industry in India. Government of India with its policy framework and support of organic agriculture has provided the required thrust in this area. There are several Indian ventures that provide certified organic products in domestic as well as international markets. So the scenario for organic food industry in India is not only promising but also much need of the hour. Keywords: Organic, Pesticides, Neurotoxin, Carcinogenic, Fertilizers, Pesticides.

Introduction: Organic Agriculture in India

Agriculture contributes to 17.8% to India’s GDP and still provides livelihood to 56.7% of total employments (World Bank, 2015). India with 52.8% of arable land is the second largest producer of agricultural products. Organic farming and its systematic evidence first finds mention in the Vedas of the “Later Vedic Period”, 1000 BC to 600 BC (Randhawa, 1986 and Pereira, 1993). To live in partnership with nature is at the heart of this philosophy. The “Vrkshayurveda” (Science of plants), the “Krishisastra” (Science of agriculture) and the

“Mrgayurveda” (Animal Science) are the main works, (Mahale and Soree1999). In the English speaking world, Sir Albert Howard a botanist is considered as a pioneer of organic farming. He came to observe and later support the traditional Indian agriculture practices. He also was president of 13th session of the Indian Science Congress in 1926.

Organic agriculture received its first Centre in 1983 that was set up in Pondicherry under a project called Agriculture, Man and Ecology (AME).This project was put into operation by Educational Training Consultants, Leusden, Netherlands and financed by the Government of the Netherlands. The following year the first conference on organic farming was organized in October 1984, in Wardha for the propagation of indigenous genetic resources. In 1992, the Rajasthan College of agriculture organized a national seminar on natural farming. In the same year, the first known study on ecological agriculture in South India was published (Van der Werf and de Jager 1992). Since then, numerous farmers turned organic and important networks, such as ARISE (Agricultural Renewal in India for a Sustainable Environment), were established.



Chemicals based agriculture is recent phenomena in India. It was promoted in 1960-70 by the government as a part of green revolution. The green revolution brought forth crops that were higher in yield but also required more water and pesticides. Indian government subsidized the fertilizers and pesticides and consequently India became largest producer and consumer of fertilizers and pesticides. The failures of chemical based agriculture included resistance of pests, pollution of waterways, loss of biodiversity, smaller and less productive farms and increased farmer debt. This pattern of agriculture with costly inputs combined with smaller land holding of farmers and their high indebtedness became unsustainable. During such times the option of organic agriculture had become an attractive option for the farmers.

According to Codex Alimentarius (FAO/ WHO), organic agriculture is a holistic production management system which promotes and enhances agro ecosystem health, including biodiversity, biological cycles and soil biological activity.

Organic agriculture is a holistic production management system which promotes and enhances agro-ecosystem health, including biodiversity, biological cycles, and soil biological activity. It emphasizes the use of management practices in preference to the use of off-farm inputs, taking into account that regional conditions require locally adapted systems. This is accomplished by using, where possible, agronomic, biological, and mechanical methods, as opposed to using synthetic materials, to fulfill any specific function within the system." (FAO/WHO Codex Alimentarius Commission, 1999).

Figure 1: Area under Organic Farming

Source: Annual Report 2014-15, Ministry of Agriculture, India

Organic agriculture has seen an unprecedented surge in India from 2003 to 2010 and the area under certified organic agriculture has increased manifold. Today India houses the largest number of organic farmers in the world (Sapna E. Thottathil, 2014). The 10th five year plan of Indian government aimed to promote organic farming systems with special focus on rural-urban

4.425.55 5.04

7.23

012345678

2010-11 2011-12 2012-13 2013-14

LA

KH

HE

CT

AR

ES

YEARS



compost, crop residue utilization, and use of bio-fertilizers and bio-control of insect pests and diseases. Focus was increased on growing organic food, technology transfer and certification (Chandrasekhar, 2010). In the world wide rankings amongst top countries with land under organic certification, India ranks 10th. India s certified area includes 15% cultivable area spanning 0.72 million Hectares and 85% (3.99 million Hectare) under the forest for obtaining the minor forest produce. The total area under organic certification is 4.72 million hectares. Figure 1 shows the area under organic farming in different years in India. It shows that there is trend of increase in area of organic farming. From 4.42 lakh hectares in 2010-11, it has increased to 7.23 lakh hectares in 2013-14) (APEDA)

Objectives

To analyse the growth of Organic food industry in India To analyze the reasons for growth of Organic food industry in India To study the challenges faced by the Organic food industry.

Methodology

The paper is based on secondary data which has been procured from published sources like the websites of Ministry of Agriculture, International Federation of Organic Farming Movements (IFOAM), research papers, books and periodicals and newspaper reports.

Indian Organic Food Market

In 2014, the size of the organic food market, which is highly unorganized, was $0.36 billion, and

organic pulses and food grains took the lion's share of the market (TechSci Research 2014). The

size of the market for organic foods in India in 2012 was about Rs 1,000 crores (YES Bank

Report, 2013). India organic food and beverages market can be segmented on the basis of

domestic and exports market, different types of products such as tea, pulses, wheat, oil and

others. Additionally, the market is segmented on the basis of geography as to which major cities

consuming organic products and major distribution channels along with online market of organic

food and beverage products (Ken Research Report, 2015). Currently over 300 products in the

organic category are available in some 20 product categories: from tea, spices, fruit, rice, corn

and vegetables to finished products and organic cotton. More than 40% of the products are

exported to Europe, and other trading partners are Canada, the USA, Australia, New Zealand,

Japan, Switzerland, Korea and countries in the Middle East and Southeast Asia. (YES Bank

Report, 2013). Exports is the mainstay of organic marketing with realization around 403 million



US $ including 183 US $ organic textiles registering a 7.73% in the year2013-14 (APEDA 2013-

14)

Figure 2: Market Size of Packed Organic Food and Beverages (in INR million)

Source: Euro Monitor International

Growth of Indian Food Market

According to India Organic Food Market Forecast & Opportunities 2020, the organic food market revenues in India are expected to grow at a CAGR of around 25% during 2014-19 (PR Newswire report, 2015).To ensure the quality standards of organic products INDOCERT a nationally and internationally recognized certification body was introduced by Government of India, under National Programme for Organic Production (NPOP). Organic certification can be obtained at any step in the whole value chain; food production can be certified, including seed suppliers, farmers, food processors, retailers and restaurants. Factors contributing to the rapid growth of the Indian organic food market include a rising health-consciousness among Indian consumers, rising disposable income due to globalization of markets, and an expanding middle class in the nation of 100 crore plus people. (Pandey et al, 2019). The market for organic food is nascent in India at present, with very few active brands and low penetration even among urban consumers. Figure 3 shows the market size of organic products in 2012 and market size in the year 2017.While the Market size of organic fruits and dairy products in 2012 was US$ 80 million and US$ 20 million respectively. Organic fruits and dairy products are expected to grow at a CAGR of 13-14% and 10-11% respectively over the next five to six years. Market for Organic Produce is increasingly preferred by developed countries and major urban centers in India. The global trade of organic produce is currently USD 60 billion (Rs. 3, 60,000 crore) and may touch USD 100 billion (Rs. 6, 00,000 crore).Trade in India may reach Rs. 5000- 6000 crore, which is about 1% of the global trade.

100160

300

380

460520

0

100

200

300

400

500

600

2011 2012 2013 2014 2015 2016



Figure 3: Market Size of Organic Food Market (US $ Million)

Source: Organic Food Market in India 2011-12 (TECHNOPARK)

Figure 4: Export of Organic Products in FY 2016

Source: APEDA

Need for Organic Products

Organic Products are environment friendly and also safe for the health of the consumers. Growing organic products is a labor intensive work hence it can generate more employment opportunities and better economic conditions for farmers especially the women farmers. They have high export potential and thus they can lead to economic growth and prosperity. Table 1 summarizes the benefits obtained from the organic products.

PULSES2%

SPECIES1% TEA

2%DRY FRUITS

1%OTHER

2%

CEREALS AND MILLETS

17%OILSEEDS

50%

PROCESSED FOODS

25%

020406080

100120140160

2012 2017

US$

MIL

LIO

N

organic fruits

organic dairy products



Table 1: Benefits of Organic Products

Source: Singh (2009), Stoll (2002), Crucefic (1998)

Organic products are nutritionally better. The organic products have a higher dry matter and

lower nitrate content and contain less pesticide residues. They also have higher vitamin C

content (Muthukumaran, 2006).The study found that organic orange juice was perceived as

tasting better than conventional orange juice; however, no differences were found between

organic and conventional milk.

Health and Environment concerns are the most significant motivations for buying organic

products. Studies done in UK show more than half of organic shoppers cite healthy eating (55%)

and avoiding chemical residues (53%) as reasons to purchase. Nearly half are motivated by care

for the environment and nature (44%), while around a third mentions the taste of organic food

(35%) and animal welfare (31%).Organic foods promote sustainable ecology and is quite

suitable for delicate ecosystems of North East India.

New consumer lifestyle trend has emerged regarding attitude of consuming organic food. There

is rise in consumer awareness about natural, clean and good healthy food Consumers try to avoid

foods with unsafe additives, preservatives, flavour and coloring. Study indicates that in case of

organic food, a consumers’ perceived value and level of health consciousness strongly affects the

purchase intention. Additional variables such as freshness, presentation, taste and innovativeness

of organic food need to be further explored. (Shaharudin et al, 2010, Paul and Rana, 2012).

Parameter Potential benefits

Agriculture Increased diversity, long-term soil fertility, high food quality,

reduced disease, self-reliant production system, stable production

Environment Reduced pollution, protection of wildlife, less dependence on

non-renewable resources, enhanced compatibility between

environment and production

Social conditions Better education, increased employment, improved health status,

gender equality

Economic conditions Stronger local economy, lower risks, improved returns.



Trends for Organic Products Globally

Figure 5 shows the list of top 10 countries having largest number of organic products with India

being highlighted as the top having 6, 50,000 organic product producers. Along with it figure 6

shows that in terms of area under organic agricultural land, India is behind Argentina, China,



Uruguay and Brazil. This highlights that with the increase in number of producers, the

agricultural land used for organic farming needs to be increased. We have seen in figure 1 earlier

also that there is substantial increase in the area under organic farming in year 2013-14 as

compared to year 2010-11.

Trends for Organic Products in India

In 2014, the size of the organic food market, which is highly unorganized, was $0.36 billion, and

organic pulses and food grains took the lion's share of the market (Assocham and TechSci

Research, 2015). The size of the market for organic foods in India in 2012 was about INR 1,000

crores. (YES Bank Report, 2013)

Figure 7: Percentage Consumption of HNWI of Organic Food, By Product Type (%)

Source: TechSci Research (2012-13)

The market for organic food is still in embryonic stage in India .There are few active brands and

the penertaition of products amongst consumers is quite low. Figure 8 shows the market size of

organic products in 2012 and projected market size in the year 2017.Estimated Market size of

organic fruits and dairy products in 2012 is US$ 80 million and US$ 20 million respectively.

Organic fruits and dairy products are expected to grow at a CAGR of 13-14% and 10-11%

respectively over the next five to six years. (Technopark 2011-12).

Market for Organic Produce Organic produce is increasingly preferred by developed countries

and major urban centers in India. The global trade is currently USD 60 billion (Rs. 3, 60,000

crore) and may touch USD 100 billion (Rs. 6, 00,000 crore).

010203040506070

Milk Fruit Juices Pulses Food Grains Fruits Vegetables

Consumption(%)



Figure 8: Market Size- Current and Projected (US$ Million)

Source: Organic Food Market in India 2011-12 (TECHNOPARK)

Major players in Organic Food Market in India

Conscious Foods Founded in 1990, Conscious Foods offers a wide variety of organic products like cereals and pulses, beverages, sweeteners, spices and power snacks. The products of the company are procured from small organic farm and small farming communities across India. A rigorous check is maintained on quality from the farm to the Conscious Food workshop in Mumbai, and from there on to the retail outlets. Their products are certified by ECOCERT. Eco Farms Eco Farms (India) Ltd. was founded in 1995 with an objective to build up and endorse organic techniques of sustainable farming. In the area of certified organic cotton, it is rated as one of the largest producer of fiber output. A duvet cover manufactured by Eco Farms for a UK based client got nominated to the finalist list for Best Organic Textile Product 2009, "The Natural and Organic Awards 2009" (UK). 24 Mantra It was formed in 1992, by Raj Seelam in response to high chemical and pesticide use and farmer indebtedness that he observed around his during his stint as an employee at an agricultural company. 24 Mantra organic food brand is available across India and abroad in more than 1500 outlets and their own stores. Under their sustainable farming initiative, they have 20,000 farmers working in 30 plus projects over an area of 1, 20,000 acres. Morarka Morarka Organic boasts of organic food brand called Down to Earth. Beginning with just a few cereals, pulses, oil seeds and seed spices, today Morarka Organic has expanded to over 170

80

150

2035

020406080

100120140160

2012 2017organic fruits organic dairy products



different products. This organization has more than 12 years of organic food research behind it and boasts of the most stringent organic certification in the industry. Organic India It is a multi-national company instituted in 1990s based in Lucknow, India that produces Organic herbal and Ayurveda health products. This company is well known for its range of organically grown tulsi teas that popular in the markets in India, the US, Canada and the UK. Organic India also has a retail store in Maharashtra, India. Organic India works directly with marginal or disadvantaged farmers in small tribal villages, providing them with seeds, fertilizers, and organic certification. The risk of crop failure is also covered by the company itself. Originating from Uttar Pradesh, they have more than 50,000 acres (200 km2) of arable land in U.P., Rajasthan, Gujarat, and Madhya Pradesh.

Figure 9: Leading Brands of Organic Products

Source: The Indian Organic Food Market Yes Bank 2012

Challenges Although the interest in organic products is increasing rapidly, there are several hurdles to be crossed before organic food industry becomes an attractive market both from producers and the consumers. (K. Muthukumaran, 2006). However, the main challenges identified are:

Supply Side Factors

Low level of market Information among the farmers regarding the Organic products Conventional Agricultural Inputs are considered more effective than the bio-inputs. Time is taken to convert the conventional farming methods into biological methods

Morarka, 75

Organic India, 175

FabIndia, 20

Navdanya, 25

Conscious Foods, 120

24 letter Mantra, 65Ecofarms India, 85

others, 435

https://en.wikipedia.org/wiki/Lucknow

https://en.wikipedia.org/wiki/India

https://en.wikipedia.org/wiki/Organic_food

https://en.wikipedia.org/wiki/Tulsi

https://en.wikipedia.org/wiki/Maharashtra

https://en.wikipedia.org/wiki/India

https://en.wikipedia.org/wiki/Uttar_Pradesh

https://en.wikipedia.org/wiki/Rajasthan

https://en.wikipedia.org/wiki/Gujarat

https://en.wikipedia.org/wiki/Madhya_Pradesh



Limited government support Underdeveloped domestic market Underdeveloped infrastructure and marketing channels Low levels of interaction among farmers and other stakeholders

Demand Side factors

Low level of awareness regarding the organic products Lack of Knowledge about organic certifications. Products not widely available. Products are costlier.

Conclusions

As the awareness and the demand for organic products rise globally organic markets in India cannot remain isolated. The organic products and their consumption will show strong upwards trends in near future. Growing demand of organic products along with increased purchasing power of Indian consumers will give ample thrust to the organic farmers engaging inorganic agriculture. However markets can only flourish if proper support, infrastructure and awareness is provided to the producers and suppliers.

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Laurence Fillion, Stacey Arazi (2002), Does organic food taste better? A claim substantiation approach, Nutrition & Food Science, 32(4), pp. 153-157.

M. Huber, E. Rembiałkowska , D. Srednicka , S. Bügel , Van de Vijver (2011) Organic

food and impact on human health: Assessing the status quo and prospects of research , Wageningen Journal of Life Sciences, 58, pp. 103–109

Pandey, D., Kakkar, A., Farhan, M., & Khan, T. A. (2019). Factors influencing organic foods purchase intention of Indian customers. Organic Agriculture, 1-8.

Paul, J., & Rana, J. (2012). Consumer behavior and purchase intention for organic food. Journal of consumer Marketing, 29(6), 412-422.

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Crucefix D. (1998) Organic Agriculture and sustainable rural livelihoods in Developing countries, Department for International Developmental Natural Resources, Advisors Conference, UK.

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bane-115082800513_1.html http://apeda.gov.in/apedawebsite/organic/Organic_Products.htm http://www.prnewswire.com/news-releases/india-organic-food-market-forecast-and-

opportunities-2020-300153237.html

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A Comparative Analysis to Assess Internet Banking Service Quality in India

Munish Gupta

Assistant Professor, Department of Commerce, St. Soldier College (Co-Ed) Jalandhar

Abstract

The Indian banking sector has seen phenomenal development alongside momentous enhancement in its nature of assets and productivity since monetary progression started in the mid 1990sWith the quick development of electronic business, the financial sector which has been propelled itself for example banking sector bringing forth web banking. From giving plain vanilla banking administrations, banks have progressively changed themselves into universal banks. ATMs, Internet banking, portable banking and social banking have made "whenever anyplace banking" the standard at this point. Internet banking has pulled in consideration of numerous monetary segments like security merchants, insurance agencies and administrators in nation like India. In any case, it has raised numerous open arrangement issues before the banking controllers and government organizations. Curiously, dependable and methodical data on the extent of Internet banking in Indian setting is as yet not adequate, especially what it intends to the buyers and the bankers The paper displays the information, drawn from a review of Internet banking consumers about and the services providers (banks) that offer Internet banking. Keywords: Internet Banking, Service Quality, Reliability, privacy customer perception

Introduction The pioneers to investigate the versatility of internet applications in India in giving internet banking services are private banks. It was evident to them that the best way to remain connected to the clients at wherever and whenever is by method for internet applications. They utilized the internet applications as a weapon of upper hand against significant banks like State Bank of India, Punjab National Bank and Indian Bank. The development of electronic banking (e-Banking) began with the utilization of programmed teller machines (ATMs) and has included phone banking, coordinate bill payments, electronic funds transfer exchange and web based banking. As indicated by a few, the future course of e-banking is the acknowledgment of mobile phone (WAP-empowered) banking and smart TV banking. In any case, it has been figure by numerous that web based banking will keep on being the most prevalent technique for future electronic monetary transections. The cardholder pulls back funds from their accounts, for example from an ATM Deposit, where a cardholder deposits funds to their very own record (regularly at an ATM). Inter-account exchange, exchanging assets between connected records having a place with a similar cardholder Inquiry: an exchange without money related effect, for example balance request, accessible supports request or demand for an announcement of ongoing exchanges on the record. Administrative: this covers an assortment of non-monetary exchanges including Personal Identification Number (PIN) change EFT exchanges require approval and a strategy to confirm the card and the cardholder. While a trader may physically check the card holder's mark, EFT exchanges require the card holder's PIN to be sent online in an encoded frame for approval by the card backer. Other data might be incorporated into the exchange, some



of which isn't unmistakable to the card holder (for example attractive stripe information), and some of which might be asked for from the card holder (for example the card holder's location or the CVV2 security esteem imprinted on the card).India's banking division has far to go before it can contend internationally. Data innovation in India is intended to rival data innovation on the planet. Bank, with the correct innovation to give convenient data to expand profitability and subsequently observe an upper hand. Contend in the economy, which has been opened, it is unquestionably the Indian banks to follow the most recent innovation and adjust to its environment. Then again, actually the banks require much enhanced utilization of innovation to client cordial, proficient and aggressive in the present experts and organizations, they additionally require the innovation to more up to date items and more up to date types of administration and the undeniably unique worldwide condition to offer. Data innovation enables banks to fabricate new frameworks, which nibble the necessities of numerous clients that can't be viewed as today. Banks are expanding their innovation based administration choices to create supportable upper hand and this expansion in innovation selection has brought about: decreased costs, the making of significant worth included administrations for client, the assistance of their workers' occupations and at last, the arrangement of self-benefit alternatives for clients Objective of the Study Overall objective of this study is to trace out customer perception about Service quality assessment in internet banking. Thus main objective of the study is:

To examine the impact of Internet banking service quality dimensions on customer satisfaction

To analyze the impact of Overall Internet Banking Service Quality on customer satisfaction

Research Methodology The relevant data has been obtained from primary sources. Primary data is collected by the way of questionnaire. A survey is conducted to gather primary data from the customers. Here the main emphasis is given on the customers to gather information, as customers are the ones who use the service of Internet Banking and they are different from each other on various aspects. Only the customers who use Internet banking are taken into consideration for study. Service quality in e-banking is determined by the original SERVQUAL scale. Source of Data Final questionnaire is prepared in order to know the service quality of internet banking. Questionnaire method is used to get response of internet banking users by survey method. Beside this, the information regarding weight assignment to all five dimensions, Reliability, Accessibility, Privacy Efficiency and Responsiveness‟ which are the key factors which determines customer satisfaction is collected from 10 internet banking users and bank managers of two leading banks i.e. State bank of India (public sector bank) and ICICI bank (private sector



bank).Total 100 internet banking users are surveyed with questionnaire specially designed with 15 questions. Out of 100 internet banking users, 50 are taken form private sector bank and 50 are taken from public sector banks. Questionnaire is prepared in two parts. First part contains ‘Demographic profile of respondent of questionnaire with 10 questions. Second part represents

the response of internet banking users about the quality of service and contained 15 questions. This part is designed with two options i.e. 1 for satisfactory and 2 for unsatisfactory. Analysis and Findings The collected data is subjected to statistical technique of central tendency weighted average mean (table 1).Weights to variable are assigned with detail discussion with internet banking users and two bank managers in which highest weight is assigned to highest priority variable and vice versa. Table 1: Weight assignment

Variable No. Variables Wight X1 Reliability 3 X2 Accessibility 2 X3 Privacy 3 X4 Efficiency 2 X5 Responsiveness 1

Table 2: Variable definition Response sheet S. No.

Variable Definition Variables Satisfacto

ry (in %age)

Unsatisfactory (in %age)

1 Information provide is accurate

Rel

iabi

lity 0.65 0.35

2 Information content and text are easy to understand 0.52 0.48 3 Links are problem free, accurate and the page

downloads quickly 0.35 0.65

4 Bank’s site has unrestricted access to all financial

information

Acc

essi

bilit

y 0.24 0.76

5 The bank provides the updated technology regularly. 0.41 0.59 6 Bank is easy to operate and contact 0.37 0.63 7 You can rely upon bank for not misusing your

information.

Priv

acy

0.60 0.40

8. You can rely on the personal information remaining in the register.

0.29 0.71

9. the bank provides financial security and confidentiality

0.35 0.65

10. The speed of login to your account is fast

Effic

ienc

y 0.79 0.21 11. The speed of logout to your account is fast 0.75 0.25



12. The bank site is easy to use 0.52 0.48 13. Knowledge and skill of contact personnel.

Res

pons

iven

ess 0.25 0.75.

14. The bank is willing to help customers for providing appropriate information and quick service

0.37 0.63

15. The bank site provides a confirmation of service ordered quickly.

0.47 0.53

Source: Primary Survey, 2017 The questionnaire is grouped in five substantial variables i.e. Reliability, Accessibility, Privacy, Efficiency, Responsiveness (Table 2) and average mean for each enquiry of sample of is taken. After computing average mean of each enquiry, group mean is extracted. The finding shows that internet baking users are quite satisfied in terms of efficiency variable but very low level of satisfaction in terms of accessibility of service in term of lacking of infrastructure facility, network and availability of material information. However blow data is assigned with preferred weight and overall satisfactory level is quite blow than expectation represented by table (Table 3) Table 3: Weighted Average of Variables Variables

Weights Satisfactory (in %age)

Unsatisfactory (in %age)

Grouping Average of satisfactory Variables

Weight Average satisfactory Variables

Reliability 3 0.65 0.35

0.506667

0.470606

0.52 0.48 0.35 0.65

Accessibility 2

0.24 0.76 0.34000 0.41 0.59

0.37 0.63

Privacy 3 0.60 0.40

0.413333 0.29 0.71

0.35 0.65

Efficiency 2 0.79 0.21

0.686667 0.75 0.25

0.52 0.48

Responsiveness 1 0.25 0.75.

0.363333 0.37 0.63

0.47 0.53 Source: Primary Survey, 2017



Conclusions and Recommendations The paper investigates the administration nature of I-banking agent in India from client's viewpoint. As Shown in outline 1, Reliability and Efficiency scores 51% and 68% of fulfilment level which can be considered great. Anyway different measurements, for example, Accessibility, Privacy, and Responsiveness scores 34%, 41%and 36% separately which implies there is substantially more need of enhancement. By and large weighted normal is likewise beneath half for example 47% which indicates web banking needs to yet enhance a great deal numerous angles to enhance benefit nature of banks. It is seen that clients are happy with the Reliability of the administrations given by the banks and Efficiency of web banking administrations however are not especially happy with measurement i.e. Accessibility, Privacy and Responsiveness. The internet banking will be exceptionally pivotal for India, having expanding level of more youthful age populace with computer education. The restriction of this examination is that the outcome ought not to be summed up, as the administration nature of I-banking has been tried in urban India. Moreover, a little example may not be the agent of the entire populace and consequently, in future, the exploration can be directed by taking an expansive example to encourage a powerful examination of the service quality of the net banking. References

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A Study of Impact of FDI and Investment by FII

on Economic Growth of India

*Rajni Verma ** Rajni Saluja

*Research Scholar, University School of Management, Desh Bhagat University, Mandi Gobindgarh **Associate Professor, University School of Management, Desh Bhagat University,Mandi Gobindgarh

Abstract The role of investment in promoting economic growth has received considerable attention in India since independence. India opened up to investments from abroad gradually over the past two decades, especially since the landmark economic liberalization of 1991. Apart from helping in creating additional economic activity and generating employment, foreign investment also facilitates flow of technology into the country and helps the industry to become more competitive. FDI and FII are equally connected to investment in a foreign country. FDI or Foreign Direct Investment is an investment that a parent company builds in a foreign nation. On the different, FII or Foreign Institutional Investor is an investment prepared by an investor in the markets of a foreign country. The objective of this research paper is to study the impact of FDI and investment by FII on economic growth of India and also give the recommendations for improving FDI inflows and investment by FII in India. Keywords: Foreign Direct Investment Inflows in India, investment by Foreign Institutional Investors Inflows in India, Correlation, Regression.

Introduction

In today’s wealth driven world, capital is the powerhouse of economic growth of a country.

Countries, especially developing ones, strive to generate capital through various sources, that is, by exporting their output (raw material) to industrialized countries, receiving foreign aid, raising loans from foreign banks, etc. But in a reversal of trend in recent years, the tendency to generate capital by means of routes as mentioned above are steadily declining and Foreign Direct Investment (FDI) has gained importance as a preferred source.

FDI has proven to be an ‘engine of growth’ of a country in the modern era. In today’s liberalized

and globalized world economy, a growing number of countries have received significant capital flows, mainly in form of FDI. Foreign Direct Investment can be defined basically as an investment of foreign assets into domestic structure, equipment and organization. In exchange for this ownership, the investing company usually transfers some of its financial, technical, managerial, trademark and other relevant resources to the recipient country.

A Foreign Direct Investment (FDI) is an investment made by a company or entity based in one country, into a company or entity based in another country. FDI is distinguished from portfolio foreign investment, a passive investment in the securities of another country such as public stocks and bonds by the element of control. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made.



Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies.

Objectives of the Study

To study the impact of FDI and investment by FII on economic growth of India. To give the recommendations for improving FDI inflows and investment FII by in

India.

Research Hypotheses

The study has been taken up for the period 1991-2015 with the following hypotheses:

H01: The association between total FDI and investment by FII in India is insignificant. H11: The association between total FDI and investment by FII in India is significant. H02: Regression coefficient of investment by FII in India on total FDI is insignificant. H12: Regression coefficient of investment by FII in India on total FDI is significant.

Data base and Research Methodology

The study is descriptive and analytical in nature. Various statistical and mathematical techniques such as Correlation, Regression, Trend analysis, simple growth rate, compound growth rate have been used in the research paper to provide analytical results of the data. The study is secondary based.

Analysis and Interpretation

Foreign Direct Investment (FDI)

A Foreign Direct Investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. FDIs are commonly made in open economies, as opposed to tightly regulated economies, that offer a skilled workforce. It frequently involves more than just a capital investment and it may include provision of management or technology as well.

Investment by Foreign Institutional Investors (FII)

An investment by foreign institutional investors is an investment fund by an investor registered in a country outside of the one in which it is investing. Institutional investors most notably include hedge funds, insurance companies, pension funds and mutual funds. The term is used most commonly in India and refers to outside companies investing in the financial markets of India. Market regulator SEBI has over 1450 foreign institutional investors registered with it.



Foreign Direct Investment in India

Economies like India, looks at FDI as a source of filling the savings, foreign exchange reserves, revenue, trade deficit, management and technological gaps. FDI is considered as an instrument of international economic integration as it brings a package of assets including capital, technological, capacity and access to foreign markets. As a result, FDI has a wide range of impact on the country’s economic policy.

India, today, is a vibrant economy and is recognized as a leader among the emergent countries with a huge potential for growth. FDI in India is the main source for the economic development in India. Foreign companies invest in India to take advantage of relatively lower wages, special investment privileges such as tax exemptions, etc. For a country where foreign investments are being made, it also means achieving technical know-how and generating employment. India has been ranked among the top 10 attractive destinations for inbound investments. Since 1991, the regulatory environment in terms of foreign investment has been consistently eased to make it investor-friendly.

Investment by Foreign Institutional Investors in India

Economies like India, which offer relatively higher growth than the developed economies, have gained favour among investors as attractive investment destinations for foreign institutional investors. All Investments by Foreign Institutional Investors are allowed to invest in India’s

primary and secondary capital markets only through the country’s portfolio investment scheme

(PIS). This scheme allows FIIs to purchase shares and debentures of Indian companies on the normal public exchanges in India.

Countries with the highest volume of investments by foreign institutional investors are those that have developing economies. These types of economies provide investors with higher growth potential than in mature economies. This is why these investors are most commonly found in India, all of which must register with the securities and exchange board of India to participate in the market. Ever since FIIs allowed investing in Indian financial markets since September 1992, there have been extensive deliberations on the impact of such flows. It has said that portfolio flows from FIIs inject global liquidity into the capital markets, raise the price-to-earnings ratios, thereby reducing the cost of capital. This, in turn, leads to further issues of equity capital and stimulates investment growth in the host economy, apart from bringing in best international corporate governance practices.

Impact of FDI on Indian Economy

FDI creates the employment opportunity for domestic country and it is also impacts the modern technology. FDI provides the goods and services at best suitable price. Through FDI government earns in the form of licenses fees, registration fees, taxes which is spend for public expenditure



and backward area can be developed. FDI is also creating good capital market in India and creates the competition among the domestic company and MNC in this way domestic company can increase their efficiency. FDI aids to maintain a proper balance amongst the factors of production by the supply of scarce resources thereby accelerating economic growth.

Impact of FII on Indian Economy

FIIs promote financial innovation and development of hedging instruments. FIIs not only enhance competition in financial markets, but also improve the alignment of asset prices to fundamentals. By increasing the availability of riskier long term capital for projects, and increasing firm’s incentives to supply more information about them, the FIIs can help in the

process of economic development. FIIs can help in supplementing the domestic savings for the purpose of development projects like building economic and social infrastructure and also help in growth of rate of investment; it boosts the production, employment and income of the host country.

Analysis and Interpretation of FDI and FII Inflows in Indian Economy

Foreign Direct Investment in India (FDI): FDI refers to foreign direct investment. Economic growth has a profound effect on the domestic market as countries with expanding domestic markets should attract higher levels of FDI inflows.

The generous inflow of FDI (Table-1 and Chart-1) is playing a significant and contributory role in the economic growth of the country. In 2008-09, India’s FDI touched Rs. 142829 crore against Rs. 98642 crore in 2007-08 and FDI touched a new high of Rs. 189107 crore in 2014-15. As a result, growth rate of India’s FDI inflows has averaged 28.19 % during 2015 over 2014. During

1991-2015 the compound annual growth rate was 30.36 %.

Investment by Foreign Institutional Investors in India (FII)

FII refers to foreign institutional investment by an investor. A Foreign Institutional Investment is an investment in securities, real property and other investment assets by one country in another country. Investment by Foreign Institutional Investors helps in promoting good governance and improving accounting.

The foreign institutional investment in India (Table-2 and Chart-2) is playing a significant

and contributory role in the economic growth of the country. In 2010-11, India’s FII touched

US$ 29422 million against US$ 29048 million in 2009-10 and FII touched a new high of US$

40923 million in 2014-15. As a result, growth rate of India’s FII inflows has averaged 716.99 %

during 2015 over 2014. During 1991-2015 the compound annual growth rate was 55.66 %.



Table 1: FDI Inflow in India (Rs. Crore)

Years FDI Inflow in India Growth Rate (%) 1991-92 326 --- 1992-93 1713 425.46 1993-94 13026 660.42 1994-95 16133 23.85 1995-96 16364 1.43 1996-97 21773 33.05 1997-98 20014 -8.079 1998-99 10101 -49.53 1999-00 22450 122.25 2000-01 10733 -52.19 2001-02 18654 73.8 2002-03 12871 -31.001 2003-04 10064 -21.81 2004-05 14653 45.60 2005-06 24584 67.77 2006-07 56390 129.38 2007-08 98642 74.93 2008-09 142829 44.79 2009-10 123120 -13.80 2010-11 97320 -20.95 2011-12 165146 69.69 2012-13 121907 -26.18 2013-14 147518 21.009 2014-15 189107 28.19

CAGR (%) --- 30.36 % Source: Various issues of Economic Survey, RBI Bulletin.

Chart1: FDI Inflow in India (1991-92 to 2014-15


020000400006000080000

100000120000140000160000180000200000

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

Rs.

cror

es

FDI Inflow



Table 2: FII in India (US$ million)

Year Investment by Foreign Institutional Investor

Growth Rate (%)

1991-92 --- --- 1992-93 1 --- 1993-94 1665 166400 1994-95 1503 -9.73 1995-96 2009 33.67 1996-97 1926 -4.13 1997-98 979 -49.17 1998-99 -390 -139.84 1999-00 2135 -647.44 2000-01 1847 -13.49 2001-02 1505 -18.52 2002-03 377 -74.95 2003-04 10918 2796.02 2004-05 8686 -20.44 2005-06 9926 14.28 2006-07 3225 -67.51 2007-08 20328 530.33 2008-09 -15017 -173.87 2009-10 29048 -293.43 2010-11 29422 1.29 2011-12 16812 -42.86 2012-13 27582 64.06 2013-14 5009 -81.84 2014-15 40923 716.99

CAGR (%) --- 55.66 Source: Various issues of Economic Survey, RBI Bulletin.

Chart 2: FII Inflow in India (1991-92 to 2014-15)


-20000

-10000

0

10000

20000

30000

40000

50000

US$

mill

ion

FII Inflow



Testing of Hypothesis

Association between FDI and Investment by FII

H01: The association between total FDI and investment by FII in India is insignificant. H11: The association between total FDI and investment by FII in India is significant. H02: Regression coefficient of investment by FII in India on total FDI is insignificant. H22: Regression coefficient of investment by FII in India on total FDI is significant.

Table 3: Correlation coefficient between FDI and Investment by FIIs

FDI Investment by FII FDI Pearson Correlation Sig. (2-tailed) N

1 24

0.579 0.004 23

FII Pearson Correlation Sig. (2-tailed) N

0.579 0.004 23

1 23

Correlation is significant at the 0.01 level (2-tailed) Source: Calculated values

Table 3 shows that Karl Pearson coefficient of correlation between total FDI and investment by FII in India is 0.579 which is moderate but positive. Since significant value 0.004 for two tailed is less than the level of significance 0.01, therefore, null hypothesis no.1 is rejected which means there is significant relationship between total FDI and investment by FIIs in India.

Table 4: Regression coefficient of Investment by FIIs on total FDI

Unstandardized Coefficients

Standardized Coefficients

t

R Square

Sig. B Std. Error Beta

Constant Investment by FII

1477.407 0.123

3164.772 0.38

0.579

0.467 3.250

0.335 0.645 0.004

Source: Calculated values

Table 4 clearly shows that the regression equation of investment by FII in India is Y = 1477.407 + 0.123X and the regression coefficient of investment by FII on total FDI in India is also significant because the significant value is 0.004 which is less than the level of significance 0.01, therefore, null hypothesis no.2 is rejected which means the dependence of investment by FII on total FDI in India is significant. Clearly R square is 0.335 which is using more indicating that around 34 % of the changes in investment by FII in India are due to changes in total FDI in India and rest 66 % changes are due to some other factors. Thus, there is significant relationship between total FDI and investment by FII in India. Hence investment by FII does not only depend



upon FDI, rather, it depends upon so many other economic factors including interest rate, savings, inflation rate, governance etc.

Conclusions

From the above analysis, the study concluded that both Foreign Direct Investment and Investment by Foreign Institutional Investors play an important role in the economic development of the country. There is significant relationship between Foreign Direct Investment and investment by Foreign Institutional Investors. The forms of foreign investment both Foreign Direct Investment and Investment by Foreign Institutional Investors are also different from one another and both impact the Indian economy. But Foreign Direct Investment is considered better than Investment by Foreign Institutional Investors. Investment by Foreign Institutional Investors also plays a very crucial role in any country’s economy. Market trend moves upward when any

foreign company invests or buys securities, and similarly, it goes down if it withdraws the investment made by it.

Recommendations

Government should open doors to foreign companies in the export-oriented services which could increase the demand of unskilled workers and low skilled services and also increases the wage level in these services.

It recommends that government must also control over inefficient bureaucracy, red-tapes, and the corruption, so that investor’s confidence can be maintained for attracting more FDI

inflows to India.

References

Factsheet on FDI various issues by Reserve Bank of India, Mumbai. Jain Mamta, Meena Priyanka Laxmi, Mathur T. N (2013), “Role of Foreign Direct

Investment and Foreign Institutional Investment in Indian Economy’’, Asian Journal of

Multidimensional Research, Volume 2, Issue 3, ISSN 2278-4853. Kumar Shailendra (2016), “Pattern of FDI in Economic Development of India’’, Pristine

International Journal of Management Research, Volume 1, Issue 1, ISSN XXXX-XXXX. RBI monthly bulletin, Reserve Bank of India, Mumbai, various issues.



Corporate Social Responsibility: A case Study of Maruti Udyog Limited

Neenu Sharma PG Department of Commerce, SDAM College, Dinanagar, Punjab

Abstract

Corporate Social Responsibility (CSR) is a concept that suggests that it is the responsibility of the corporations operating within society to contribute towards economic, social and environmental development that creates positive impact on society at large. As per as Corporate Social Responsibility is concerned, the Companies Act, 2013 is a landmark legislation that made India the first country to mandate and quantify CSR expenditure. A detailed survey of the available literature on 'corporate social responsibility' is undertaken for the theoretical underpinnings on the subject. Maruti Suzuki India Limited (‘Company’) has developed its Corporate Social Responsibility Policy (‘Policy’) in accordance with

section 135 of the Companies Law 2013 and the rules made there under. The concept of corporate social responsibility has gained prominence from all avenues. So the Organizations must realize that government alone will not be able to get success in its endeavour to uplift the downtrodden of society Keywords: Corporate Social Responsibility, Company Law, Maruti Udyog Introduction The role of business in society has been debated in economic literature since long. Society grant two very special rights to business houses to enable them to perform efficiently and effectively. The first right is 'potential immortality' and the second one is 'limited liability'. Business houses can justifiably take advantage of these rights if it fulfils its duties as a good corporate citizen. Economic development and an improved quality of human life are the main motives of business and industry. This is what Corporate Social Responsibility is all about.

Corporate Social Responsibility (CSR) is a concept that suggests that it is the responsibility of the corporations operating within society to contribute towards economic, social and environmental development that creates positive impact on society at large. Although there is no fixed definition, however the concept revolves around that fact the corporations needs to focus beyond earning just profits. The term became popular in the 1960s and now is formidable part of business operations. According to Organisation for Economic Co-operation and Development (OECD) “Corporate responsibility involves the search for an effective ‘fit’ between businesses

and the societies in which they operate”. According to United Nations “Corporate responsibility

is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders”

Like other concepts, CSR also came to India from the western economies and has been evolving in due course of time. The concept differs from basic philanthropy and charity where there is not much accountability or responsibility attached. Whereas CSR activities quite simply suggests that businesses cannot succeed in isolation.



Review of Literature Windsor (2001) article examined the future of Corporate Social Responsibility or the relationship between business and society in long run. The researcher tried to find out that whether the organization and society will come closer to each other in future or not and what will be the changing phase of CSR. Nigel Sarbutts (2003) the paper explored the way of doing CSR by small and medium sized companies. The research depicted that a structured approach to managing corporate reputation and profit maximization of SMEs through CSR. The societal activity of small and medium sized companies is based on their Cost Benefit Analysis. Small Corporation always struggle for more reputation and minimization of risk. In such a situation, CSR comes as hope for these companies. Large companies have so many resources for implementing CSR activities but SMEs have less resource. It can be a barrier for them to stay in the market. So, in that situation by imparting much information, proper utilization of resources, doing well for businesses, SMEs can minimize their risk and manage CSR. Moon (2004) paper examined the role of government in driving corporate social responsibility among the corporate. The study explained that the drivers of CSR are related with business and society. Business includes its reputation, corporation itself, employee’s relation knowledge, goals

etc. further, the study cleared that government is driver of CSR by making this relationship true and fair through making policies and regulations. Samuel O. Idowu (2007) with their study of twenty companies in U.K., propounded that the U.K. companies has now become ethical in the content of social responsibility as companies disclose its CSR activities because the companies think that stakeholders of twenty first century are better educated. Truscott, Bartlett, Trwoniak (2009) paper “The reputation of Corporate Social Responsibility

industry in Australia in Australian marketing journal, based on case study methodology. On the basis of the interview of key persons of industries in Australia, the term CSR has been explained. The industrialist revealed that CSR increasingly has become significant. They shared their views of CSR in economic, legal and ethical roles of business in society. Beside this, the industrialist viewed CSR as a model of corporate reputation. Shah, Bhaskar (2010) has taken a case study of public sector undertaking i.e. Bharat Petroleum Corporation Ltd. in their research work. The research has discussed that there is a broad relationship between the organization and society. Organization has its existence only with the society. Organization used the resources/inputs of the society like material and human etc. Borogonovi, Veronica (2011) article in knowledge@ Wharton, stated that today, CSR has different meaning for different companies. Some termed CSR in the sense of social issues while other for environmental issues. But there are not any mandatory guidelines for CSR so that the problem of areas of CSR can be sort out. The Economic Times (11 Jan.2013), news highlighted about the company Dell’s strategy of motivating its employees in initializing CSR. The news discussed that company’s employees are



the power that forced the company to do more for the society. Company with its employees has engaged in social responsibility activities in the areas of education, environment and employees welfare. Beside Dell Company, the news also discussed about other companies like Maruti and Godrej that these companies also provide induction training to its employees for preparing them for community services. Maruti Company run a program named e- parivartan for a group of employees to make them aware about community problem and their solution. Need of CSR CSR is responsible for generating a lot of goodwill to companies either directly or indirectly. These include

Making employees more loyal and help companies retain them in the long run. Make companies more legitimate and help them in accessing a greater market share. Since companies act ethically, they face less legal hurdles. Bolster the goodwill of companies amongst the general public and help in strengthening

their “brand value”. Help in the stabilization of stock markets in both the short and long run Help in limiting state’s involvement in corporate affairs as companies self-regulate and

act as most ethical.

The Companies Act, 2013

As per as Corporate Social Responsibility is concerned, the Companies Act, 2013 is a landmark

legislation that made India the first country to mandate and quantify CSR expenditure. The

inclusion of CSR is an attempt by the government to engage the businesses with the national

development agenda. The detail on corporate social responsibility is mentioned in the Section

135 of the Companies Act, 2013. The Act came into force from April 1, 2014, every company,

private limited or public limited, which either has

Net worth of Rs 500 crore or

Turnover of Rs 1,000 crore or

Net profit of Rs 5 crore

needs to spend at least 2% of its average net profit for the immediately preceding three financial

years on corporate social responsibility activities. The corporations are required to setup a CSR

committee which designs a CSR policy which is approved by the board and encompasses the

CSR activities that corporations are willing to undertake. The act also has penal provisions for

corporations and individuals for failure to abide by the norms. The details of the same are

highlighted in the act.

http://www.fiinovation.co.in/blog/csr-activities/



Scope of Work The work will involve the reviewing and studying the corporate social responsibility (CSR) initiatives of Maruti Udyog Limited with a view to understand the current thinking of the corporate and the activities undertaken by it in this regard. The study would help other small and medium sized companies, to actualise their CSR interventions. Methodology & Sources of Data A detailed survey of the available literature on 'corporate social responsibility' is undertaken for the theoretical underpinnings on the subject. Available information /data about the CSR activities is taken out from the annual reports and web site of Maruti Udyog Limited. CSR – Endeavours of Maruti Udyog Limited Maruti Suzuki strives to be a people’s company. Not only is it completely dedicated to the

customers, but also to the communities around. Their CSR programmes tackle social issues at both local and national level in order to develop impactful and sustainable social programmes that leave a visible impact for the future generations. Maruti Suzuki India Limited (‘Company’) has developed its Corporate Social Responsibility

Policy (‘Policy’) in accordance with section 135 of the Companies Law 2013 and the rules made there under. Some of the Initiatives of the company are: PehniKya? (Use of seat belts) As per the Road Accident data revealed by the Ministry of Road Transport and Highways (MoRTH) 5,638 people who lost their lives in 2016 were not wearing seat belts. According to World Health Organization (WHO), use of seat belts, the primary restraint system, can reduce the risk of fatality by 45-60% that means more lives can be saved with a simple act of buckling up. PehniKya is a pan-India social campaign by Maruti Suzuki to create awareness about the benefits of wearing a seat belt, attack misconceptions and negative attitudes around seat belts and persuade families to ensure seat belt usage at all times in the car. The 360-degree campaign is active across all the platforms including print, television, and radio digital and on ground events.

Maruti Suzuki understands the importance of making Indian roads safer. That is why; the company runs a nationwide road safety programme to promote safe driving habits via various initiatives. The two most important initiatives among these are:

Institutes of Driving and Traffic Research (IDTRs) These institutes, spread over almost 10 acres each, work in close association with a number of state governments. The main focus of the IDTRs is to train passenger and commercial vehicle drivers with the help of world-class training infrastructure and qualified trainers. The use of scientifically designed training tracks and simulators keep the training environment in these IDTRs very close to the experience of actually driving on Indian roads. Over the years, IDTR



have built a reputation of being among the finest driving and road safety training facilities in India.

Maruti Driving Schools (MDSs) Established in partnership with authorised Maruti dealers, the 417 MDSs aim at nurturing a safe driving culture through special theoretical sessions, test tracks, and driving classes on the road. These schools are credited with having introduced advanced driving training simulators for better judgement, and also with familiarising drivers with the concept of route maps for a more holistic on-road practice. Apart from Institutes of Driving and Traffic Research and Maruti Driving Schools, the company also has several other initiatives such as Train the Trainer Programme, Road Safety for Truck Drivers and various city specific road safety programmes which focus on addressing the issue of road safety. The Road Safety Knowledge Centres (RSKCs) were established in partnership with the Haryana Traffic Police. The company signed a MoU with the National Minorities Development and Finance Corporation in 2013-2014 under which it has trained over 92000 existing and new young drivers from the economically weaker sections of India’s minority communities between 2014 and 2017.To ensure that the drivers transporting Maruti Suzuki vehicles follow the best driving practices, the company offers them road safety training.

Under Jagriti programme, star commercial vehicle drivers who transport Maruti Suzuki vehicles are rewarded for having an excellent track record of damage-free and timely delivery of cars. Training millions of new and existing drivers, Maruti Suzuki continuously strives to make Indian roads safer with the help of these initiatives. With more than half of its total economic output coming from the service sector alone, maintaining and constantly expanding the size of its skilled labour force is imperative for India. Keeping this in mind, Maruti Suzuki has partnered with a number of state governments to adopt several Industrial Training Institutes (ITIs). With this initiative, the company aims to make a large section of the youth employable by the automobile industry.

Skill Development Maruti Suzuki's Skill Development programme consists of three key elements: Up gradation of Government ITIs In partnership with state governments, the Company is adopting ITIs and through its various interventions upgrading physical infrastructure and workshops, training faculty, and providing exposure to students on Japanese shop floor practices,

Faculty Development Maruti Suzuki works in close association with the faculty at the ITIs to improve teaching skills and methodologies. Working on varied aspects of faculty skill development, such as behaviour,



work culture, and teaching techniques, the company assists the teachers in preparing students for the growing demands of the automobile industry.

Student Development Under this arm of the skill development initiative, students are tutored by Maruti Suzuki trainers in areas related to car service, repair, and maintenance. This is independent of their regular curriculum at the ITIs. To further the company’s holistic approach, students are also trained in

various soft skills such as discipline, personal grooming, and interpersonal communication skills.

Industry Connect Maruti Suzuki also arranges for industrial outreach programmes where experts from the automobile industry are brought in as guest speakers to the ITIs. These interactions with the experts not only help the students get industry-specific training, but they also enable them to upgrade their skills. Apart from this, the company often invites students and faculty for factory visits so they can familiarise themselves further with the demands of an industrial environment. The Skill Development initiative is working closely with 141 ITIs across 27 Indian states as of 31st March 2017.

Skill Enhancement in Automobile Trade To help workers adapt to the changing demands of the industry, the Company has set up Automobile Skill Enhancement Centres (ASEC) at 60 ITIs. Each of these centres is equipped with a model workshop on which practical training is imparted by full time trainers provided by the Company.

Japan India Institute for Manufacturing In 2016-17, the Governments of Japan and India signed an agreement to create a pool of skilled manpower for manufacturing in India. To translate the vision of this partnership, the Company embarked on setting up the first Japan-India Institute for Manufacturing (JIM) at AS Patel (Pvt.) ITI, in Ganpat University, Mehsana, Gujarat.

Up gradation of Government ITIs consists of the following: Environmental Policy In order to pass on to the next generation a clean environment and a bountiful society, Maruti Suzuki realize that the actions of each and every one of us have a great effect on our earth's future, so we must make every effort to preserve our environment and as such Maruti Suzuki India Limited, manufacturer of passenger cars and utility vehicles at its plants in Gurgaon & Manesar and R & D Centre in Rohtak is committed to:

Protect the environment including prevention of pollution, sustainable use of natural resources and climate change mitigation from its activities, products and services.

Maintain and continually improve Environmental Management System to enhance environmental performance.



Working collaboratively with customers, suppliers and the surrounding community for environmental issues.

Strictly observing environmental laws. CSR Governance Structure of Maruti Company

Conclusions Maruti Udyog Limited is working tremendously in the field of corporate social responsibility. The initiatives taken up by the company will definitely bring improvement to make our society a better place to live in. The concept of corporate social responsibility has gained prominence from all avenues. So the Organizations must realize that government alone will not be able to get success in its endeavour to uplift the downtrodden of society. The present societal marketing concept of companies is constantly evolving and has given rise to a new concept-Corporate Social Responsibility. Many of the leading corporations across the world had realized the importance of being associated with socially relevant causes as a means of promoting their brands. It stems from the desire to do well and get self-satisfaction in return as well as societal obligation of business.



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http://indiacsr.in/20-increase-in-actual-csr-spend-in-fy-2017/ Windsor, Duane (2001). "The future of corporate social responsibility". International

Journal of Organizational Analysis. Vol. 9. No.3. pp.225 – 256. https://www.marutisuzuki.com/corporate/about-us/csr

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http://economictimes.indiatimes.com/news/company/corporate-trends/460-companies-spent-%20rs-6337-crore-for-csr-in-fy15-fm-arun-jaitley/articleshow/51208051.cms

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International Journal of Business Managementdeshbhagatuniversity.in/Journalupload/22e19240-b676-4625-8d6f-a0… · Kiran Preet Kaur, Dr. Harmaninder Jit Singh & Dr. Sawtantar Singh

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