ORISSA JOURNAL OF COMMERCE

Orissa Commerce AssociationJournal’s website: www.ojcoca.org

E-mail id: [email protected]

A Publication of

ISSN-0974-8482

ORISSA JOURNAL OF COMMERCEU.G.C. CARE Listed, Group- I, A peer Reviewed and Referred Journal

VOLUME - XXXXI JANUARY-MARCH 2020 ISSUE No. - I

The

ORISSA COMMERCE ASSOCIATION

President : Prof. Sasmita Rani Samanta, KIIT University,Bhubaneswar

Vice-President : Prof. Kishore Chandra Raut, Former Professor,Berhampur University, Berhampur

Gen. Secretary : Major Dr. S. A. Taher, Principal, VyasanagarAutonomous College, Jajpur

Joint Gen. Secretary : Dr. Arta Bandhu Jena, F. M. University, BalasoreTreasurer : Dr. Bhagabat Behera, Ravenshaw University, CuttackManaging Editor : Prof. Malay Kumar Mohanty, Former President, OCA(OJC and OCA Dean, Com and Manageement Sambalpur UniversityNews Letter) Registrar and Ravenshaw University, CuttackConference Secretary : Mr. Narendra Kumar Panda, L. N. College, JharsugudaExecutive Members :Bhubaneswar : Dr. Sabat kumar Digal, Ramadevi Women’s

University, BhubaneswarCuttack, Jagatsinghpur : Dr. Tushar Kanta Pany, Ravenshaw University,

CuttackPuri, Khordha, Nayagarh : Dr. (Mrs.) Elina Kanungo, SCS College, PuriGanjam, Gajapati Sri Sakti Ranjan Dash, Berhampur University,

BerhampurKoraput, Rayagada, : Dr. Ranjan Kumar Swain, Malkangiri College,Malkangiri, Nabarangapur MalkangiriKalahandi, Nuapada, : Dr. Kishore Ch. Sahu, Dungurupalli College, SonepurBalangir, Subarnapur,Sambalpur, Bargarh, : Dr. Biswa Mohan Jena, NSB College, SambalpurDeogarhSundergarh, Jharsuguda : Sri. Samir Ranjan Nayak, Brajaraj Nagar college,

BrajanagarKendujhar, Mayurbhanj : Dr. Smruti Ranjan Das, Faculty of Mgt., North Orissa

University, BaripadaAngul, Dhenkanal, : Mr. Rajanikant Kuntia, Dhenkanal AutonomousBoudh, Kandhamal College, DhenkanalBalasore, Bhadrak : Dr. Durga Madhab Mahapatra, Fakir Mohan

Autonomous College, BalasoreJajpur, Kendrapara : Mr. Sanjib Kumar Das, Pattamundai CollegeEx-Officio Executive All Past PresidentsMembers

EXECUTIVE COMMITTEE-2020-21

Contents

1. Awareness of Financial Products Among Households in Darjeeling District, West Bengal 1

Pramesh Chettri & S.S. Mahapatra2. Swachh Bharat Abhiyan: Awareness, Perception and Practice Among Urban

Population of Jaipur City 19Devika & Abha Jain Nagawat

3. Inflation Impact on Industrial Credit Disbursement by ScheduledCommercial Bank in India 32

Arvind R. Gajakosh4. Green Efforts and Sustainable Development: An Overview of India and the

World Scenario 43Minesh Kumar Srivastava & Garima Gupta

5. Non -Timber Forest Products and Tribals' Depandency on Forest: An Empirical Analysis 55

Rajib Lochan Achary & Prabodha Kumar Hota6. Direct Tax Reform in India: An Impact Analysis with Special Reference to

Goverment Revenue 67Priyabrata Panda, Kishore Kumar Das & Malay kumar Mohanty

7. Corporate Social Responsibility and Environment: The Emerging Discourse in India 87

Bishnuprasan Mohapatra8. Perceived Impacts of Goods and Services Tax (GST) and Growth of Micro,

Small & Medium Enteprises (MSMEs) in Sikkim 96Krishna Murari & Smirti Chettri

9. An Empirical Study on Sustainable Entrepreneurship-A Special Reference to Tribes of Madhya Pradesh 118

Prashant Kumar Mishra & S.K. Baral10. Corporate Social Responsibility (CSR) Corporate Ethics 129

Sunil Kumar Padhi & Vinayak Pattanaik

ORISSA JOURNAL OF COMMERCEU.G.C. CARE Listed Group-I, A peer Reviewed and Referred Journal

ISSN-0974-8482

EDITORIALThe rebuilding momentum of India is the Union Budget 2020,

which emphasising on capacity building and empowerment ofmarginalised sections of the society. While protecting the wealth creators,Ms. Nirmala Sitharaman said this budget will boost income andpurchasing power of the people.

Moreover, India continues to face global headwinds due to policyuncertainties, falling growth and trade volumes, and technologicalchanges across the world. Geopolitical tensions leading to oil pricefluctuations may add to economic woes. The Union Budget 2020-21has been presented amid an economic slowdown, coupled with risingfood inflation. The Finance Minister has placed significant emphasison agriculture, wellness and education. These three areas have hugepotential to impact the lives of a large part of the population.Accordingly, the 16-point agenda for the agriculture sector, viabilitygap funding for PPP hospitals and the new education policy withlikely changes in the FDI rules are the key ingredients of the budgetthat would facilitate job creation and skill development.

The Global GDP growth may be adversely impacted due to outbreakof coronavirus attack in China and elsewhere. However, India is facingan economic slowdown with GDP growth estimated at 5% in FY20 ascompared to 6.1% in FY19. GDP growth has fallen for six consecutivequarters, since Q1 FY19, and is at 4.5% in Q2 FY20. According to theConsumer Confidence Survey released by the RBI.

The changing business scenario of the VUCA (Volatile, Uncertain,Complex and Ambiguous) world and globalization are putting morechallenges not only world. India is no exception. Hence, the countryis more attentive on top Leadership and organizational strategies forfuture success.

Prof. Malay Kumar Mohanty(Managing Editor)

Awareness of Financial Products AmongHouseholds in Darjeeling District, West Bengal

Dr. Pramesh Chettri* & Prof. S.S. Mahapatra**

ABSTRACTIn the context of global financial crisis and financial inclusion, the concept of financial literacy has become

a subject of considerable interest to researchers, policy formulators, academicians, international bodies,Governments & their agencies and other stakeholders. Financial Literacy of an individual is a function of his/her Knowledge, Attitude, Behaviour, Skill and Awareness towards financial products. Finance is the nervecentre and life-blood of any nation and it is very important for smooth running of the economy. The presentstudy is focus to examine the level of awareness and investment in respect of available financial products inDarjeeling District. The financial products are divided into different group’s namely-banking financial products,Govt. Sponsored financial products, Social security’s financial products and Capital Market financial products.The study is an attempt to fill a gap in the research of financial literacy by analysing the associations betweenfinancial literacy and financial experience across socio-economic/demographic variables in Darjeeling District.The hypotheses have been tested to find out the association between investment preference and social economicvariables. The data for the present study was collected via structured questionnaires of financial literacydistributed to 200 household’s respondents of Darjeeling district, West Bengal. The study also focuses on thefactors affecting investment decisions through the source of financial information.

Keywords: Financial Literacy, Financial Inclusion, Darjeeling District

IntroductionThis paper describes in detail the analysis and interpretation of the data collected from the head of

the household respondents in Darjeeling district concerning to the awareness level and investmentavenues in respect of existing financial products. This study is an humble attempt to focus on financialliteracy level among the households of Darjeeling district and how the level of literacy gets affectedby socio-economic variables i.e. gender, marital status, education, level of income etc. In recent yearswith the emergence of liberalization and globalization of financial services industry, large range ofvarious financial products have been emerged through participation of foreign and private entities andpublic sector enterprises. This has led to rising competition and challenges among clients throughintroduction of innovative and attractive new financial products. In the global world the introduction

* Assistant Professor, Department of Humanities & Social Sciences, Sikkim Manipal University, Gangtok, Sikkim, IndiaEmail id- [email protected] Contact No: 9547454211

** Professor & Head, Department of Commerce, Sikkim University, Gangtok, India Email id- [email protected] No: 9434864303

2 Orissa Journal of Commerce, Volume XXXXI, January-March-2020, Issue No-I

and innovation of different financial products has increased the scope of the financial literacy to a verylarge extent. In Darjeeling district, the tea plantation workers, marginal farmers in various rural sectors,workers in various unorganized sectors, landless labourers, migrants workers, ethnic minoritiesand other socially excluded groups have been generally debarred from financial inclusion. Thefinancial behavior of the marginalized people is much different from the financial behavior of the elitegroup. The level of financial literacy of rural marginalized women is extreme low (Mathivathani andVelumani, 2014).

The majority of countries in the world have faced financial literacy as one of the major challenge.Financial literacy as a combination of knowledge, attitude, behaviour, skill and awareness necessary tomake sound financial decisions and to achieve individual financial wellbeing. Financial literacyempowers the people to make changes for the betterment and improvement of their social,cultural, economic and environmental conditions. Financial literacy often leads to decisions makingprocess pertaining to certain personal finance areas like investing in products, household saving,budgeting, securities market, housing loan, real estate, Unit Linked Investment Plans (ULIPs), creditcard, tax planning, pension and retirement security etc.

Financial literacy plays a vital role for the developing country like India to engage the people infinancial inclusion and to prevent them from financial malpractices and fraudulent activities. In mostof the cases, the rural and urban poor, underprivileged / disadvantaged, illiterates, marginalised people,women, children, migrants and disabled are those who are being excluded. The biggest deprivation offinancial inclusion is lack of knowledge of finance and in recent time, financial literacy has becomepublicized as an explicit goal of Government as well as other major banks. The need of financial literacyfelt due to the increasing number and complexity of financial services. The demand for various bankingservices will substantially increase by the financial literacy and educations (Singh,2014).

There are numbers of financial services benefits scheme provided by the Govt. of India but morepeople are deprived due to unawareness of these schemes. So, the financial literacy becomes inevitablefor the larger interest of the country. In the era of liberalization, privatization and globalization as financialmarkets have become very complicated and as there is financial literacy information gap betweenfinancial markets and the common person, making correct financial decision is a challenging task.Financial literacy gives the necessary knowledge and skill to assess the suitability of various existingfinancial products and investments available in the global financial market. According to the WorldBank Report, India remains the fastest growing economy in the world - economic fundamentals arestrong, and reform momentum continues at least for some years.1 Despite this, a large section of Indianrural population still remains unbanked and lack in access to even basic financial services like savings,credit and insurance facilities etc. Financial literacy plays an important role for the promotion of financialinclusion and maintaining the balance for financial stability in the economy. In developing countriesthe vast majority of individual are excluded from access to basic financial services and knowledge thatare essential for progress (Kafela G. T., 2010). Financial literacy is a tool for financial inclusion. Indiais a country having saving habits among the people. The culture of India is different than the culture ofother developed or developing countries. But the culture and habit of people could not make the financialviability. In order to be financial well-being as the people must have to know well about investment,saving, borrowing, lending etc. Then only, they can make sound financial decision. According to CRISIL

3

financial inclusion index shows that India has only 42 per cent financial inclusion. Although the figuremakes clear that in India 58 percent are out of banking inclusion.2 India has a good saving habit ascompared to other countries, but they do not have adequate knowledge about the intricacies of financialproducts. So, the importance of financial literacy is very crucial in a developing country like India.

Objectives

1. To examine the level of awareness about the various existing financial products.2. To identify and examine the investment preferences among the households of Darjeeling District.3. To find out the association between Investment preferences and socio-economic

factors.4. To identify the factors that influences the investment decision.

MethodologyThe Present study is diagnostic cum analytical in approach. It covers in detail the nature of study,

sources of data, sampling design, method of data collection and statistical tools used for analysis in thestudy. For the purpose of the present study, Darjeeling district is considered as an area of study. Out ofthe five municipalities and twelve blocks in Darjeeling district, two municipalities and six blocks havebeen selected purposefully for the study.

Figure 1 Selection process of samples for the study.

Source: Census of India, 2011The respondents in the sample are distributed equally for each municipality and block. For selecting therespondents of the study a stratified random sampling method has been used. The selected sample size forthe purpose of the study across the districts are given in Table 1.

Awareness of Financial Products Among Households in Darjeeling District, West Bengal


Table-1: Sample Size Distribution across the Districts of Darjeeling Region

Sl. No. Name of Municipalities Sample Size

1 Darjeeling Sadar 252 Siliguri (M.Corp.) 25

Sample Size1 Darjeeling Pulbazar 25

2 RangliRangliot 253 Jourbunglow/Sukhiapokri 25

9 Matigara 2510 Naxalbari 2511 Phansidewa 25

200

Name of Blocks

Total

Source: Census of India,2011

(Rural PCA-C.D. blocks wise Village Primary Census Abstract and Urban PCA-Town wisePrimary Census Abstract)The sample size for the study is 200 respondents. From each municipality and block two wards/grampanchyat have been selected purposively on the basis of some perceptible characters, having highshare of BPL House Holds(HHs)and APL House Holds (HHs) (Information collected from theMunicipalities and Blocks offices of Darjeeling District).For selecting the sample respondents fromeach ward and gram panchayat, the Below Poverty Line (BPL) and Above Poverty Line (APL) listavailable with the municipality and block offices in the respective area formed the base. Table 2 and 3shows the details of wards/GP selected for the study.

Table-2: Sample Wards Selected for the study

Selected Wards/Villages

Urban 32 8 and 15 25Darjeeling Urban 47 1 and 12 25Siliguri

District Nature of Geographical Area

Municipalities Total Wards

Number of Respondents

Darjeeling Sadar

Source: Compiled from municipality and block offices, Darjeeling District, 2016-17.

5

Table-3: Sample Gram Panchayat Unit Selected for the study

District Nature ofGeographical Area

Blocks Total No.of GP

Selected G.P/Villages

Number ofRespondents

(i) Goke-II (BPL)(ii) Lebong Valley-I (APL)

(i) Labdah (BPL)(ii) Pubang- Rampuria (APL)

(i) Plungdung (BPL)

Darjeeling (ii)Pokhriabong- III (APL)(i) Patharghata (BPL)

(ii) Matigara-I (APL)(i) Maniram (BPL)(ii) Upper Bagdogra (APL)

(i)Chathat Bansgaon Kismat(BPL)(ii) Bidhan Nagar II(APL)

Rural Naxalbari 6 25

Rural Phansidewa 7 25

Rural Jourbunglow/Sukhiapokri

16 25

Rural Matigara 5 25

Rural Darjeeling Pulbazar

23 25

Rural Rangli Rangliot

11 25

Source: Compiled from the Rural Household Survey 2005, Department of Panchayats & Rural Development, Govt. of West Bengal.All the households in a particular ward/village/G.P. are listed with some basic features like education,income, occupation and family status of the head of the household. On the basis of such features, thestrata were formed and sample size was allocated. The samples are drawn in random numbers to cooperatewith the study, so as to get the representative’s sample of the target population. A primary data surveywas conducted by providing a structured questionnaire to 200 households in Darjeeling District. Asimple random sampling method was used as it was not economically feasible to survey all therespondents of the target population.



Statistical Tools used for AnalysisFor analyzing and testing the hypotheses of the research data, Chi-square test (÷2), The analysis ofresearch data has been carried out with the help of statistical softwareSPSS 20.00 and Microsoft Excel.

Sample DescriptionAmong the 200 sample respondents, the socio- economic profile of the sample respondents for thepresent study has been discussed. Out of 200 respondents,of (72.5%) male and (27.5%) female, withmajority of them (35.7%) in the age group 35-44 years. The respondents under the age group of 18-34and 45- 60 categories accounted for 30.75% and 933.5%) of the sample respectively. Of the totalrespondents, 78.5 percent were married, 21.5 percent were unmarried and divorcee, live in nuclearfamilies (78%) as against joint families (22%). To measure Financial awareness of the existing financialproducts among the households of Darjeeling District, the constructs were fully developed by theresearchers as unidimensional variable. With regard to the educational attainment, majority (25.5%) ofthe respondents attended a primary education followed by 32% of respondents with M.E level education,29.5% was found having a H.S. and 13% of the respondents was found having graduation and abovequalification. Similarly, in case of the income, (41%) of the respondents consisted up to the incomegroup level of ¹ 10,000, (25.5%) of the respondents belongs to the income group between ¹ 10,000 and¹ 20,000, (14.5%) belongs to the income group between¹ 20,000 and¹ 30,000, (9.5%) of the respondentsbelongs to the income group between ¹ 30,000 and ¹ 40,000 and Lastly (9%) of the respondents belongsto the income group between ¹ 40,000 and above.

Results and DiscussionThe level of awareness the various existing financial products available in the markets given responsesby the respondents are measured in a 5 point Likert Scale, assigning 5 to ‘very high’ awareness leveland 1 to ‘very low ‘awareness level. From the responses given by the respondents the weighted meanfor each financial products were measured (Table 4). Weights are given in progressive order of 5,4,3,2,and 1 to various responses of respondents from very high to very low. Frequency level of awarenessfor various financial products are multiplied with the respective weight to get the weighted averagescore. In order to get the mean score, the summated weighted average score is divided by total frequency(samples). Based on the weighted mean score, the rank for each financial product have been given.From the given analysis of the Table 4 and Figure 1, it can be observed that Saving account have thehigh awareness level followed by the Debit Card, Bank Fixed Deposits, Life Insurance, GeneralInsurance, Self Help Group(SHG), Public Provident Funds, Credit Card, Housing and Consumer Loan,Micro Finance, Pension Scheme, Mutual Funds, National Saving Certificate(NSC), and Shares. It canbe clearly highlighted that respondents are more aware of Low risk financial products than the highrisk financial products. It makes more clear that the low risk financial products are risk averse and it isrelated to the traditional and the safe financial products whereas the awareness level for the high riskfinancial products are new age financial products. The awareness of capital market financial instrumentslike shares and mutual funds among the households is lesser as compared to the other available financialproducts.

7

Table- 4: Awareness Level of Financial Product

Financial Products

4 17 57 67 55-2 -8.5 -28.25 -33.5 -27.526 28 36 60 50-13 -14 -18 -30 -2570 33 33 36 28-35 -16.5 -16.5 -18 -1418 16 30 69 67-9 -8 -15 -34.5 -33.551 68 27 39 15

-25.5 -34 -13.5 -19.5 -7.546 55 48 33 18-23 -27.5 -24 -16.5 -970 47 46 25 12-35 -23.5 -23 -12.5 -6100 38 38 19 5-50 -19 -19 -9.5 -2.525 22 61 48 44

-12.5 -11 -30.5 -24 -2243 42 45 55 15

-21.5 -21 -22.5 -27.5 -7.552 49 40 37 22-26 -24.5 -20 -18.5 -1166 50 46 21 17-33 -25 -23 -10.5 -8.599 47 36 12 6

-49.5 -23.5 -18 -6 -386 39 51 14 10-43 -19.5 -25.5 -7 -5

Microfinance 2.36 10

Cap

ital

Mar

ket

Shares 1.89 14

Mutual Funds 2.12 12

Soci

al S

ecur

ity

Sche

mes

Life Insurance 3.32 4

General Insurance 2.78 5

SHG 2.64 6

Gov

ernm

ent

Sche

mes

Public Provident Fund 2.61 7

Pension schemes 2.31 11

National Saving Certificate

1.95 13

Ban

king

Ser

vice

s

Saving Account 3.76 1

Bank Fixed Deposits 3.4 3

Credit Card 2.59 8

Debit Card 3.75 2

Housing and Consumer Loan etc.

2.49 9

Mean Rank

Cou

nt

Cou

nt

Cou

nt

Cou

nt

Cou

nt

Very High 5Very Low 1 Low 2 Neutral 3 High 4

Source: Primary Data, 2017Note: figure in bracket shows percentage of the total respondents.



3.76

3.40

2.59

3.75

2.49

2.61

2.31

1.96

3.32

2.79

2.64

2.37

1.89

2.12

0.000.501.001.502.002.503.003.504.00Mean Awareness Level

Fig:1 Awareness Level of Financial Products

Investment PreferencesInvestment means a current commitment of funds for a period of time towards one’s future life. In thepresent study the respondents have been asked to provide information about various financial productsin which they have invested their money in recent years. From the give Table 5, it can be clearly seenthat the majority of respondents preference towards financial products fall in traditional and safeinvestment preferences that thesaving accounts followed by the Life Insurance, General Insurance,Public Provident Fund, Bank Fixed deposit, Mutual Funds, Housing and Consumer Loan, Micro Finance,Pension Scheme, National Savings Certificate (NSC) and shares. From the given responses, the majorityof household respondents (94.5%) preferred more in the savings accounts and it has been seen that therespondents have low preferences in the new financial products of capital markets; people are notmuch aware of such type of financial products’ features and they are losing the high returns goodopportunities facilities. Table 5 and Figure 2, results show that the the 57 respondents (28.5%) preferredfor public provident fund and it can be perceived that the most of the respondents less preferred fortheir retirements because of low liquidity and this not the healthy sign. In the given Table 5, it can beclearly seen that the investments in shares showed as 4 percent and such type of the preference aremostly less preference comparing to other nature of financial products given in the Table 5.So it can beconcluded that the low level of investments in the products like share is not because of the unfamiliarityof new products in the markets but if the more awareness level can be spread like the initiatives takenby the chit funds schemes than it could be more preferred by the respondents towards other new typeof the financial products .

9

Table-5: Investment Preference in Financial Products

Financial Products Frequency Percent of cases

Saving Account 189 94.5Bank Fixed Deposits 39 19.5Housing and Consumer Loan etc. 35 17.5Public Provident Fund 57 28.5Pension schemes 24 12National Saving Certificate 9 4.5Life Insurance 142 71General Insurance 58 29Microfinance 34 17 Shares 8 4Mutual Funds 38 19Total Respondents 200

Source: Compiled from the Field Survey, 2017Note: One respondents can have more than one avenues of investment preference in financialproducts at a time.

Relationship Between Investment Preference and Socio-Demographic FactorsIn order to know the relationship between investment preferences of household respondents based onsocio-economic factors, cross tabulation of investment preferences with various socio-demographicfactors have been carried out and results were analysed. For this purpose, the following null (Ho) andalternative (Ha) hypotheses have been proposed. The hypotheses had been tested with the Pearson’sChi-square test at 5 % significance level.



HypothesesHo1: Investment preference for various financial instruments is independent of gender.Ho2: Investment Preference of various financial instruments is independent of marital status.Ho3: Investment Preference of various financial instruments is independent of education.Ho4: Investment Preference of various financial instruments is independent of income.

Cross Tabulation Between Gender and Investment PreferencesTable 6 reveals that preference for banking services products such as savings account, housing and consumerloan are almost same for male and female respondents. TheGovernment schemes products showed highpreference by the male respondents as compared to the female respondents . For the social security’sschemes products such as life and general insurance products, female respondents showed high preferencesas comparatively to the male respondents. For micro finance, male respondents showed less preferencesas comparatively to the female respondents (20%). Highest preference for shares was shown by malerespondents as compared to female respondents. It is inferred that males go for the high risk instrumentsand it points out to the fact that males are risk takers and female are risk averse. Females believed thatmanaging money affected their future more than males, but males felt more confident making moneydecisions (Danes & Haberman, 2007). The value of chi- square ÷2 came out to be 2.633 at 10 degrees offreedom (Table 6), which is insignificant at 5% level. Thus Ho1 (null hypothesis- Investment preferencefor various financial products is independent of gender gets accepted and it can be said that gender has nosignificant effect on investment preferences for various financial products.

Table- 6: Cross Tabulation between Gender and Investment Preference

Source: Compiled from the Field Survey, 2017

Male FemaleFrequency Frequency

137 52-94.48 -94.54

25 11-17.24 -20

24 10-16.55 -18.18

43 14 χ2=2.633-29.65 -25.45

20 4 Df=10-13.79 -7.27

7 2 0.989>0.05-4.82 -3.63 Not Significant100 41

-68.96 -74.5442 16

-28.96 -29.0923 11

-15.86 -206 2

-4.13 -3.6326 10

-17.93 -18.18145 55 626

Financial Products Gender Total Statistical Inference

Ban

king

Services

Saving Account 189

Bank Fixed Deposits 36


34

Gov

ernm

ent

Sche

mes

Public Provident Fund 57

Pension schemes 24

National Saving Certificate

9

Total Respondents

Social Security

Sche

mes

Life Insurance 141

General Insurance 58

Microfinance 34

Capital

Marke

t

Shares 8

Mutual Funds 36

11

Note: One respondents can have more than one avenues of investment preference in financialproducts at a time, figure in bracket shows percentage.

Cross Tabulation Between Marital Status and Investment PreferenceIt is evident from the given Table 7 and Figure 4, it has been observed that the marriedrespondents showed high preferences in all types of financial scheme products except inNational Saving Certificates(NSCs). For National Saving Certificates (NSCs) financialproducts, more preference was shown by unmarried respondents (4.65%) as compared tomarried respondents (4.46%). From the above observation, it can be concluded that themarried respondents have high financial responsibilities as compared to the unmarriedrespondents and this might be the valid reason of preferring high in investment by the malerespondents. The value of chi- square χ2 is16.023 at 10 degrees of freedom (Table 7), thesignificance value is more than at 0.05 level. Thus Ho2(null hypothesis)- Investmentpreference for various financial products is independent of marital status gets accepted andit can be said that gender has no significant effect on investment preferences for variousfinancial products.



Table- 7: Cross Tabulation Between Marital Status and Investment Preference

Source: Compiled from the Field Survey, 2017Note: One respondents can have more than one avenues of investment preference in financialproducts at a time, figure in bracket shows percentage.

Married UnmarriedFrequency Frequency

151 38-96.17 -88.37

31 5-19.75 -11.62

32 2 χ2=16.023-20.38 -4.65

51 6 Df=10-32.48 -13.95

21 3 0.099>0.05-13.37 -6.97 Not Significant

7 2-4.46 -4.65130 11

-82.8 -25.5852 6

-33.12 -13.9531 3

-19.74 -6.977 1

-4.45 -2.3229 7

-18.47 -16.27157 43 626

Cap

ital

Mar

ket

Shares 8

Mutual Funds 36

Total Respondents

Soci

al S

ecur

ity

Sche

mes

Life Insurance 141

General Insurance 58

Microfinance 34

34

Gov

ernm

ent

Sche

mes

Public Provident Fund 57

Pension schemes 24

National Saving Certificate 9

Financial Products Marital Status Total Statistical Inference

Ban

king

Ser

vice

s Saving Account 189

Bank Fixed Deposits 36


13

Cross Tabulation Between Education and Investment PreferenceFrom the Table 8 and Figure 5, it is observed that preference for saving accounts was almost same forrespondents i.e. range between 94.12 % to 100%. Investment Preference for the fixed deposit wasshown high by the respondents having post graduate and above degree.Higher preference for the productslike provident funds, pension schemes and National Saving Certificates(NSCs) was shown by the highereducation level respondents. Both life and general insurance, micro financewere preferred at themaximum by the respondents having post graduate and above degrees and less by the respondentshaving low level education.It was also observed that the financial instruments like shares and mutualfunds are highly preferred by respondents having post graduate and above degrees. Table 8 reveals thatthe value of Chi-square (÷2) is 56.864 at 40 degree of freedom which is significant at 5% level. It isconcluded that Ho3 (null hypothesis) of Hypothesis 3- Investment preference for various financialproducts is independent of Education gets rejected and it can be said that education has significanteffect on investment preferences for various financial products.

Table-8: Cross Tabulation Between Education and Investment Preference.


Primary 10th

(Matriculation)10+2 Graduatin P.G and

AboveFrequency Frequency Frequency Frequency Frequency

48 61 56 16 9-94.12 -95.31 -94.91 -94.12 -100

7 5 8 6 9 χ2=-13.7 -7.81 -13.55 -35.29 -100 56.864

9 8 10 4 3-17.65 -12.5 -16.94 -23.53 -33.33 Df=

6 17 18 9 7 40-11.76 -26.54 -30.51 -52.94 -77.77

6 6 5 3 40.04<0.0

5-11.76 -9.37 -8.47 -17.64 -44.44

0 2 2 1 4Significa

nt0 -3.12 -3.38 -5.88 -44.44

28 50 39 15 9-54.9 -78.12 -66.1 -88.23 -100

8 16 18 9 7-15.68 -25 -30.5 -52.94 -77.77

3 11 13 3 4-5.88 -17.18 -22.03 -17.64 -44.44

1 2 2 1 2-1.96 -3.12 -3.38 -5.88 -22.22

5 10 12 4 5-9.8 -15.63 -20.33 -23.53 -55.55

Total Respondents 51 64 59 17 9 626

Capi

tal

Mar

ket

Shares8

Mutual Funds36

Soci

al S

ecur

ity

Sche

mes

Life Insurance141

General Insurance58

Microfinance34

34

Gov

ernm

ent S

chem

es

Public Provident Fund57

Pension schemes

24National Saving Certificate

9

Financial Products Education Total Statistical inference

Ban

king

Ser

vice

s Saving Account189

Bank Fixed Deposits36




Cross Tabulation Between Income and the Investment PreferenceFrom the analysis of given Table 9 and Figure 6, it can be observed that preference for savings accountwas almost same in all income categories of the respondents range between 93.90% to 100 % .Respondents earning monthly income ¹ 40,000 and above showed more preference for housing andconsumer loan, Public provident funds, life insurance, National Saving Certificate(NSC), shares andmutual funds. Micro finance is highly preferred by those level of respondents whose income lies between¹30,000 to ¹ 40,000. It observed that the bank deposits and insurance are the most preferred investmentand relatively preferred investment instruments respectively for all the income groups (Das,2012).The value of chi- square(÷2) came out to be 101.034 at 40 degrees of freedom(Table 9), which issignificant at 5% level. Thus Ho4(null hypothesis) of Hypothesis 4- Investment preference for variousfinancial products is independent of Incomes gets rejected and it can be said that income level hassignificant effect on investment preferences for various financial product.

15

Table-9: Cross Tabulation Between Incomeand Investment Preference


20,000 to

30,000

77 48 28 18 18-93.9 -94.12 -96.55 -94.74 -100

5 8 9 7 7-6.09 -15.68 -31.03 -36.84 -38.88

5 9 4 7 9-6.09 -17.64 -13.79 -36.84 -50

14 12 10 10 11-17.07 -23.53 -34.48 -52.63 -61.11

3 2 5 8 6-3.66 -3.92 -17.24 -42.12 -33.33

2 2 1 2 2-2.44 -3.92 -3.45 -10.53 -11.11

68 31 16 10 16-82.93 -60.78 -55.17 -52.63 -88.88

12 18 12 9 7-14.63 -35.29 -41.38 -47.36 -38.88

6 20 3 3 2-7.32 -39.23 -10.34 -15.79 -11.11

1 2 1 1 3-1.23 -3.92 -3.85 -5.26 -16.66

20 4 4 2 4-24.39 -7.84 -13.79 -10.53 -22.22

19 18 626

Capi

tal

Mar

ket

Shares8

Mutual Funds34

Total Respondents

82 51 29

9

Soci

al S

ecur

ity

Sche

mes

Life Insurance141

General Insurance58

Microfinance34

Bank Fixed Deposits 36Housing and Consumer Loan etc. 34

Gov

ernm

ent S

chem

es Public Provident Fund 57New Pension schemes 24National Saving Certificate

Significant

χ2=101.034

Df=40

0.000<0.05

Frequency Frequency Frequency

Bank

ing

Serv

ices

Saving Account

189

Financial Products Incomes Total Statistical inferenceUpto

10,000 10,000 to 20,000

30000 to 40000

40000 and above

Frequency Frequency



Table-10: Factors Influencing the Investment Decisions

Particulars9 18 16 49 108

-4.5 -9 -8 -24.5 -5411 20 57 74 37

-5.5 -10 -28.5 -37 -18.520 20 29 71 60-10 -10 -14.5 -35.5 -3029 52 56 37 26

-14.5 -26 -28 -18.5 -13

26 44 48 62 20-13 -22 -24 -31 -1023 37 78 49 13

-11.5 -18.5 -39 -24.5 -6.5

12 18 46 77 47-6 -9 -23 -38.5 -23.5

Background Information

3.6425 3

Easy Accessibility 3.0275 5

Diversity 2.9475 6

Return 3.6475 2

Tax Benefits 2.8875 7

Rank

Safety 4.155 1

Liquidity 3.5275 4

Not all important

Less Important

Not sure Important Most Important

Mean

Source: Compiled from the Field Survey,2017Note: figure in bracket shows percentage.The respondent’s opinion is important to determine their perception of the investment. In the abovegive analysis of Table 10, the factors/choice which affect the respondents investment decision in agiven financial product responses were collected on five point likert scale assigning 1 to ‘not at allimportant’ and 5 to “most important”. The responses of the above parameters were analyzed by usingthe weighted mean score of various factors and it was ranked on the basis of the weighted mean. Fromthe above Table 10 and Figure 7, it was observed that the respondents are decided their investmentbased on the following order of influencing given the high preference to the safety followed by return,background information, liquidity, easy accessibility, diversity and tax benefits.

17

ConclusionsIt is clear from the above discussion that the respondents are much aware of the low risk old andtraditional financial products. Respondents are more risk averse and they prefer low financial riskproducts. It was also found that the savings habits as the respondents prefer more in banking relatedfinancial services schemes. The most important factors affecting the investment decision is safetyassociated with the investment. After careful analysis and interpretation, the study finds that the peoplemust be properly educated about new and existing financial products available in the global market.So, they can reap the benefits of earning higher returns. Perhaps, they will not be part of victims offrauds and somebody will not take credit for clients entitled to get.

References:

1. Danes, S. M., & Haberman, H. R. (2007). Teen Financial Knowledge, Self-Efficacy, and Behavior:A GenderedView . Financial Counseling and Planning, 18 (2).

2. Das, S. K. (2012). Investment Behaviour of Middle Class Households: An Empirical Analysis. Asian Journalof Management , 3 (3).

3. Kefela, G. T. (2010). Promoting access to finance by empowering customer’s financial literacy in developingcountries. AcademicJournal, EducationalResearch, 86-8

4. Mathivathani, V., & Velumani, M. (2014). A study on financial literacy among rural women in tamilnadu.Indian Journal of Applied Research, 4 (12), 60-72.

5. Mitchell, O., & Lusardi, A. (2011). Financial literacy around the world. Journal of Financial Economics,102(2), 449-472.

6. Singh, U. (2014). Financial literacy and financial stability are two aspects of efficient economy. Journal ofFinance, Accounting and Management (5(2)), 59-76.

7. www.oecd.org/daf/fin/financial-education/49319977

8. RBI report April 03,2008.

9. www.worldbank.org/.../india-economic-fundamentals-remain-strong-investment-pick-

www.crisil.com,June 2014



* Post-Doctoral Fellowship, ICSSR, New Delhi, Contact No: 7073528084, Email ID- [email protected]** Head, Department. of EAFM, University of Rajasthan, Contact No: 9414344788, Email ID- [email protected]

Swachh Bharat Abhiyan: Awareness, Perceptionand Practice Among Urban Population of JaipurCity

Dr. Devika* & Dr. Abha Jain Nagawat**

ABSTRACTRapid socio-economic growth has been threatening our environment and impacting human lives since

decades. Increasing piles of garbage and proliferation of unsecured landfills has accelerated greenhousegas emissions and causingglobal warming. According to Solid Waste Management report of the World Bank,the global municipal waste generation by cities was 2.01 billion tonnes in 2016 which is expected to aggrandizeupto 3.40 billion tonnes by 2050.(1) Visualising the instantaneous need of Municipal Solid Waste managementand behavioural change, Government of India launched Swachh Bharat Abhiyan(SBA)on 2nd October, 2014to check open defecation, construction of toilets, spread awareness towards cleanliness and personal hygiene.

This study tries to analyse awareness,perception and practice of the SBA among target population withcleanliness parametersand createdscore on a scale of 0-10 to measure cleanliness, giving way to further in-depth analysis of Urban SBAthrough rigorous research over a period.

Keywords: Swachh Bharat Abhiyan (SBA), Cleanliness, Municipal Solid Waste Management,Biodegradable & Non-biodegradable Waste

IntroductionFather of our Nation, Mahatma Gandhi, realised the importance of sanitation at an early stage and

said, “Sanitation is far more important than independence”. Unhygienic conditions, impropermanagement of Municipal Solid Waste and open defecation have been the key factors of environmentalconcern and health hazards around the globe. These problems not just add up to polluting environment,solid municipal waste emits greenhouse gases and lead to global warming. According to 2011 census,31% of the total Indian Population resides in cities and towns, out of which around 8 million householdsdo not have access to toilets and defecatein open. (2)Poor Sanitation, open garbage dumped aroundcommunities and untreated sewage lead to pollution of water and spread helminthic and diarrhoealdiseases. Sanitation issue needs to be addressed at war footing because poor health and hygiene isinstrumental in the reduction of Gross Domestic Product and increase in Health care cost. The efficiencyand employability potential too faces a setback. Cleanliness and sanitation in the places of tourist interest

19

is all the more essential to attract tourists from around the globe.Keeping in view all this, SwachhBharat Abhiyan(SBA)was launched on 2nd October, 2014 to address the problem of open defecationand management of Municipal Waste through city level sanitation plans, capacity building, constructionof toilets and behavioural change strategies.(3)Apart from Centre and State allocation of funds towardsthe mission, the government imposed Swachh Bharat Abhiyaan cess implemented in 2015 which laterwas abolished in July 2017 and a total amount of ¹ 20,632.91 crore was collected from 2015-2018.(4).Swachh Bharat Abhiyan aimed to cover 1.04 crore households by providing 2.5 lakh communitytoilets, 2.6 lakh public toilets and formulating city wise Municipal solid waste management program.Community participation and PPP funding is also included in the mission. (5)

The key strategy of this mission was to bring out behavioural change among citizens, for whichvarious campaigns were run, engaging citizens as well as public and private institutions across thecountry. Major hoarding and advertisements were run forCommunity engagement toachieve the desiredresults, motivate citizens towards cleanliness and bridge the gap between what the government offersand the citizens require. Jaipur stood 44th in SwachhtaSurvekshan Ranking in 2019.(6) There are 91wards in Jaipur Municipal Corporation which are divided into 8 zones. As per Census 2011, the totalpopulation of Jaipur City is 3,046,163 out of which 323,400 people are living in slums, which amountto around 10.62%.In this light, a study has been conducted in Jaipur study to access the perception andpractice of the citizens towards Swachh Bharat Abhiyan.

Objectives1. Analyse awareness and perception of SBA among the target population with the help of

cleanliness parameters.2. Identify the level of adherence and practice of SBA among the target population.3. Identify the association between awareness, usefulness and active participation in SBA by target

population.4. Create a score on a scale of 0-10 to measure cleanliness.5. Compare SBA perception and practice score across the demography of respondents

HypothesisH0 - The target Population is not aware of SBA, neither find it useful not actively participate.H1 - The target population is well aware of SBA, find it useful and actively participate.H0 –There is no correlation between perception and practice of SBA and demography of respondents.H1 – There is a correlation between perception and practice of SBA and demography of respondents

MethodologyThis study is based on primary research conducted in Jaipur city through sample survey using

structured questionnaire. The data was collected using two stage sampling method. At first stage theauthors selected 3 Slum areas (Transport Nagar, JhalanaDoongri and Chandpole) and 3 organisedresidential colonies (VidhyadharNagar, Malviya Nagar and Mansarovar) were selected using simplerandom sampling. At second stage, the respondents from these selected areas were chosen usingConvenience Sampling Method. The sample size was 288 respondents from cross-sections of the society

Swachh Bharat Abhiyan: Awareness, Perception and Practice Among Urban Population of Jaipur City


(n=288) including different age groups, gender and socio-economic status.The SBA awareness,perception and practice score was developed on the basis of 10 SBA Cleanliness parameters rangingbetween 0 and 10. Comparison analysis of SBA awareness, perception and practicescore was conductedusing two independent sample t-tests and one way ANOVA. Association analysis using Fisher’s ExactTest was done for 2X2 table of attributes. The significance of results was tested on 5% level ofsignificance. Data analysis was conducted using SPSS PASW 22.0 trial version.

Results and DiscussionSample ProfileOut of the respondents from the Jaipur city, 46.5% were males and rest were femalesfrom which

24% fell under the category of teenagers (15-18 years), 68.8% were adults (19-60 years) and 7.3%were old. Out of thetotal respondents, 19.8% were found illiterates while 10.8%were registered underthe category of 0-5 class education. 49.3% fell under the category of above 10th grade. 92.6% of thetotal respondents were Hindus and rest belonged to other religions. As per Modified BG PrasadCriteria,(9) the respondents majorly belonged to lower class and middle class; however the respondentsbelonging to upper middle class and upper class were found insufficient. As per the sample collected,52.8% were from lower class, 44.1% to the middle class and only 3.1% were from upper class.

Table-1: Study of Demographic Distribution of the respondents from Jaipur City

Variable Frequency Percentage

Teenagers (15-18) 69 24Adults (19-60) 198 68.8Old (above 60) 21 7.3

Male 134 46.5Female 154 53.5

Hindu 267 92.7Muslim 16 5.6Sikh 3 1Christian 1 0.3Jain 1 0.3

Illiterate 57 19.8Class1-5 31 10.8Above class 5 21 7.3Above Class 8 37 12.8Class 10+2 40 13.9Graduate 102 35.4

Lower Class 152 52.8Middle Class 127 44.1Upper Middle class 9 3.1

Age in Years

Gender

Religion

Literacy Level

Socio-Economic Status

21

Awareness, Perception and PracticeThe overwhelming result of 95.1% respondents knowing about Swachh Bharat Abhiyan and its

objectives showcase the hard sell of the mission all around Jaipur especially through television, Radioand Newspaper. The analysis portray that 78.1% people came to know about the mission throughtelevision advertisements, 53.1% through Newspapers and 44.8 through local radio channels. The dataanalysis reveals that the health workers and local leaders are not propagating the Clean India Missionenough among the citizens of Jaipur. Only 13.2% respondentsacknowledged the spread of cleanlinessawareness by the Local Leaders while 10.8% accepted the contribution of health workers. The studyreveals a positive relationship betweenthe aware respondents and their perception and practice towardsthe cleanliness mission. Out of the aware population, 83.7% find this program important for the societyand 75.7% actively participate.

Table 2: The respondents who are aware of the program are the ones who find it useful andare actively participating to achieve its goal. This can be seen through the following table –

Awareness Variable Frequency Percentage

Know about SBA

Yes No

274 14

95.1 4.9

Channels of Information about SBA

Television Radio Newspaper Hoarding Health Worker Local Leader Peer Group

255 129 153 48 31 38 19

78.1 44.8 53.1 16.7 10.8 13.2 6.6

Usefulness of SBA

Yes No

241 47

83.7 16.3

Active Participation in SBA

Yes No

218 70

75.7 24.3



The Bar Graph shows the awareness, usefulness and active participation level ofthe respondents in SBA. It also portrays the channels for spreading this awareness.

Awareness and Usefulness

SBA Awareness

Usefulness of program

Total

Fisher's Exact Test

Useful Not

useful P value Aware Count 240 34 274

0.000

% of Total

83.33% 11.81% 95.14%

Not aware Count 1 13 14 % of Total

0.35% 4.51% 4.86%

Total Count 241 47 288 % of Total

83.68% 16.32% 100.00%

The above table shows the association between awareness about the SBA program and perceptionof usefulness was found significantly associated (P < 0.05).The well aware respondents were the oneswho found the SBA program useful. These respondents were well aware of the objectives of SBA andconsideredthe cleanliness mission useful for the environment, human health society at society at large.

23

Awareness and Participation

SBA Programmes Awareness

Participation in the program

Total

Fisher's Exact Test

Participation No

participation P value

SBA Programmes Awareness

Aware Count 217 57 274 .000

% of Total

75.35% 19.79% 95.14%

Not aware

Count 1 13 14

% of Total

0.35% 4.51% 4.86%

Total Count 218 70 288

% of Total

75.69% 24.31% 100.00%

The association between awareness about the SBA program and participation was significantlyassociated (P < 0.05) in the above table. The well aware respondents understood the importance of theprogram well and actively participated to make SBA successful. They are the ones who are not defecatingin open and using toilets. Personal hygiene is well followed by these respondents.

The above bar graphs confirm the relationship between awareness, perception of usefulness andparticipation of the respondents in SBA program. The respondents who were not aware neitherparticipated nor found the program useful. Out of the aware respondents 83.33% found SBA useful and73.35% actively participated.



Table 3.The following table shows the respondent’s practice towards personal hygiene andavailability of toilets at home:

Practice Frequency Percentage

Respondents using Liquid Soap and water to wash hands

105 36.5

Respondents using Soap and water to wash hands

160 55.6

Respondents using Mud and water to wash hands

22 7.6

Respondents having toilet at home

242 84

Respondents defecate in open or use public toilets on daily basis

30 10.4

Table 4: Distribution of respondent’s perception towards usage and cleanliness of Public Toiletsin Jaipur City

Practice/ Perception Frequency Percentage

Respondents using public toilets occasionally

236 81.9

Respondents using Public toilets on daily basis

30 10.4

Respondents who perceive public toilets as clean

209 72.6

Respondents who perceive public toilets as dirty and unhygienic

79 27.4

Table 5:The table portraying respondent’s behaviour towards garbage disposal and practiceof Municipal Solid Waste Management

Practice Frequency Percentage Selling waste to Kabadiwala (scrap dealer)

243 84.4

Proper Segregation of waste 12 4.2

Availability of community dustbins in the locality

165 57.3

Regular visits of Municipal Dumpers to pick up solid waste

276 95.8

The qualitative analysis of the study revealed that only 4.2% respondents claim to be doing propersegregation of biodegradable and non-biodegradablemunicipal waste. However, as seen from the Table4, 84.4% people across income strata are segregating newspapers and plastic to earn monetary incentives

25

through sale of such waste to “Kabadiwalas” (Scrap Dealers). Easy access to community dustbins isproving to be all the more hazardous as the respondents are dumping mixed and inert municipal wastein open community bins, as evident from the data that they are not segregating municipal waste atsource. Thus, 94.8%of Municipal solid waste is a mixture of biodegradable and non-biodegradable. Itisbeing picked by municipal dumpers at a regular interval but ending up in unsecured dump yardsandlandfills left for poisonous greenhouse gases emission and global warming. The three major opendumping sites for Jaipur Municipal solid waste are Mathura das pura, Langadiyawas andSewapura.(7)These open landfills are the breading ground of many diseases and foul smell.

Comparison of SBA perception and practice score across the demography ofrespondents

The SBA perception and practice score was measured on scale of 0 to 10, 0 being the least and 10being the highest and was compared across demography.

3.1 Gender: The difference in mean scores of males and females was found statisticallysignificant (P<0.05) and it was found more in females.

Comparison on the basis of Gender

SBA practice score

Gender N Mean Std. Deviation

Std. Error Mean

t df P value

Male 134 6.43 1.479 .128 3.569 286 .000

Female 154 6.98 1.157 .093 3.2 Age: The difference in mean scores across different age groups was not found statistically

significant (P=0.085 > 0.05) and it was found almost equal in all the age groups.

SBA practice score

Age N Mean Std. Deviation

Std. Error

ANOVA F P value

Teenagers 69 6.88 1.378 .166

2.481 .085 Adults 198 6.73 1.253 .089

Old (+60) 21 6.14 1.878 .410 Total 288 6.72 1.343 .079

3.3 Education: The difference in SBA practice mean scores across education levels was found

statistically significant (P<0.05) and it was found maximum in highly educated respondents andleast in Illiterates.



SBA practice score

Education N Mean Std. Deviation

Std. Error

ANOVA F P value

Illiterate 57 6.05 1.575 .209

11.779 .000

1 to 5 31 5.81 1.558 .280 Above 5 21 6.33 1.592 .347 Above 8 37 6.86 1.159 .190

10+2 40 7.23 .768 .121 Graduate 102 7.21 .968 .096

Total 288 6.72 1.343 .079

3.4 Income: The difference in mean scores across income levels was found statisticallysignificant (P < 0.05) and it was found maximum in middle class respondents and least in lower

class.

SBA practice score Socio-Economic

Status N Mean Std. Deviation

Std. Error

ANOVA F P value

Low-Class 152 6.26 1.477 .120

21.537 .000 middle class 127 7.24 .949 .084

Upper Middle Class 9 7.11 .928 .309

Total 288 6.72 1.343 .079 Comparison of SBA practice score across the Aware respondents, respondents who found themission Usefulness and respondents who are active Participants

27

4.1 Awareness: The difference in SBA practice mean scores of aware and not awarerespondents was found statistically significant (P<0.05) and it was found more in aware respondents.

SBA practice score

Awareness N Mean Std. Deviation

Std. Error Mean

T df P value

Aware 274 6.83 1.212 .073 6.650 286 .000

Not aware 14 4.46 1.984 .550

4.2 Usefulness: The difference in SBA Practice mean scores of the respondents who perceived

SBA useful was found statistically significant (P<0.05) and it was found more respondents perceivedit useful.

SBA practice score Usefulness

of program

N Mean Std. Deviation

Std. Error Mean

t df P value

Useful 241 6.83 1.224 .079 3.252 286 .001

Not useful 47 6.15 1.744 .254

4.3 Participation: The difference in SBA Practice mean scores of respondents who participated

in SBA was found statistically significant (P<0.05) and it was found more in respondents whoactivelyparticipated.

SBA practice score

Participation in the program N Mean Std.

Deviation

Std. Error Mean

t df P value

Participation 218 6.95 1.074 .073 5.303 286 .000 No

participation 70 6.01 1.790 .214



SuggestionsFrom the in-depth analysis of awareness, perception and practice SBA by the sample target,

following suggestions have come to light1. Major problem sighted in the analysis of SBA awareness, perception and practice among the

target sample was of segregation of Municipal solid waste (MSW) at source. Out of the total respondentsonly 4% were found to be segregating wet and recyclable waste at source making the municipal wastemoist and inert. It further aggravates the problem of its disposal as well as conversion of waste toenergy, expensive. Hence it is vital to design an extensive outreach program to spread awareness aboutproper segregation at source.

2.Television was found to be the most impactful medium of spreading awareness of SBA amongthe respondents. Hence, this medium may further be exploited to propagate the importance of segregationof MSW at source. The segregation program may be run in a campaign mode and can be an extensionof SBA.

3. Cartoon films for children and motivational movies may be made based on the importance ofSBA as well as segregation of MSW. Inspirational success stories can be told in the form of documentarieson television to inspire and motivate the target group towards segregation ofMSW at source.

4. Local leaders and Health workers like ANM, Nurses, Anganwadi workers etc. have not beentoo influential in spreading SBA. State and Local Governments should give targets to the health workersand local leaders in enhancing the reach of the program especially among illiterates and urban poorliving in slum areas. The study revealed a direct linkage between of SBA and education as well associo-economic status of the respondents. Face to face interaction with the local influencers can bemore effective in educating this target group about cleanliness and hygiene.

5. Greater involvement of other stakeholders like school teachers, hospitals, NGOsand other socialorganisations in spreading awareness of SBA and segregation of MSW can be helpful.

6. The research showcased the immense importance Scrap Dealers (Kabadiwalas) who are motivating84.4% respondents to segregate waste at source as well as relieving the MSW management burden ofthe municipalities to a greater extent. Small Scrap Dealers and Rag Pickers are the unorganised groupwho are to be channelized and organised to improve their economic status.

7. Kabadiwalas are a further example of respondent’s willingness to segregate at source for monetaryincentives. Thus government should organise these Scrap Dealers with the help of social organisationsand NGOs and further motivate the target group to segregate MSW at source for which monetaryincentives can be paid.

8. Government may further impose some penalties or fines for littering in public places or notsegregating MSW at source for which a separate task force may be employed under PPP mode.

9. Table 3.3 shows statistical significance in SBA practice mean scores at different education levels.Highly educated respondents seemed to positively perceiving and practising SBA compared to theilliterates. Thus, there should be more focus on spreading adult education and increasing enrolment ofchildren in schools.

29

10. Cleanliness and Hygiene lessons should be incorporated in the academic curriculum at primaryand middle school levels so that our younger generation can become aware about the importance ofSBA as well as educate their families about the same.

11. Each school should for “Swachta Club” where students can become members to spread SBAawareness and run campaigns in their community. These clubs can organise Cleanliness and HygieneQuiz Competitions and “NukkadNatak” (Street Play) based on the importance of cleanliness and hygiene.

12. Table 5 shows that only 57.3% respondents acknowledged the availability of community dustbinsin their area. The non-availability of proper dustbins also seems to be a cause of litter aroundcommunities. The local bodies should install separate community dustbins for wet, plastic and paperwaste in the vicinity so that it becomes convenient and approachable for all. As specified earlier heavyfine should be imposed for non-segregation and litter on residential societies, communities, marketassociations and individuals.

13. Local governments can also organise area wise cleanliness contest on the basis of city cleanlinessindex parameters and felicitate the residents of most clean areas of the city.

14. Separate dumpers should to be employed for door to door collection of segregated waste sothat the MSW does not get mixed and moist. This segregation will be instrumental in easier and viablewaste to energy conversion.

ConclusionSwachh Bharat Abhiyan is a practice and not a onetime project. Cleanliness should be made a way

of life which is only possible through continuous promotion and behavioural change. Education andeconomy are directly related to hygiene and health care, hence the government should have greateremphasis on education, employment and socio-economic upliftment of the masses. Cleanliness programsand segregation of MSW should be done on a campaign mode and involvement of various stakeholdersfrom public as well as private sector is equally important.

AbbreviationsSwachh Bharat Abhiyan - SBAMunicipal Solid Waste - MSWPublic Private Partnership – PPPNon-Governmental Organisations - NGO

References1. The World Bank, September,23, 2019, “Solid Waste management”, Website- https://www.worldbank.org/en/

topic/urbandevelopment/brief/solid-waste-management # target Text = Health %20 and %20 safety %3A %20The %20 World, and%20 preventing %20 crime %20 and%20 violence.

2. Kishore Yadav, Navya K. Naidu, Sreeharshika D., Harikrishna B., Malhotra V., 5 Aug, 2018, “Study to accessknowledge, perception and practices regarding Swachh Bharat Abhiyan among rural people of Nalgondadistrict in Telengana State”, International Journal of Community Medicine and Public Health, pISSN 2394-6032/eISSN 2394-6040

3. Ministry of Housing and Urban Affairs, “Guide lines for Swachh Bharat Abhiyaan-Urban, Revised as on 5th

Oct, 2019”, 5th Oct, 2017



4. Press Information Bureau, Government of India, Ministry of Housing & Urban Affairs, “Implementation ofSwachh Bharat Mission in urban areas totally decentralized”, 26-December-2014

5. ParulKulshreshta, May7, 2012, Times of India,Jaipur Website: https:// timesofindia.indiatimes.com/city/jaipur/jaipurs-swachh-ranking-in-2019-falls-by-5-places-to-44th-position/articleshow/68295730.cms

6. ENVIS Centre on Hygiene, Sanitation, Sewage Treatment Systems and Technology, last updated on 29th

June, 2019 Website: http://sulabhenvis.nic.in/Database/ SwachhBharatAbhiyan_7101.aspx7. Census 2011 and 2001, Website: https://www.census2011.co.in/census/city/77-jaipur.html8. Rahul Nandwana and R C Chhipa, August, 2014, “Impact of Solid Waste Disposal on Ground Water Quality

in Different Disposal Site at Jaipur, India”, International Journal Of Engineering Sciences & ResearchTechnology, ISSN : 2277-9655

9. Vivek Kumar Pandey , PradeepAggarwal , RakeshKakkar, Jan - Mar 2018, “Modified BG Prasad’s Socio-economic Classification-2018: The need of an update in the present scenario”, Indian Journal Of CommunityHealth / Vol 30 / Issue NO 01

10. Supreeta Desai, Prof. Sudeshna Roy, “A Review of Cleanliness Mission “Swachh Bharat Abhiyan”-A Surveydone for Thane District, International Journal of Trends in Scientific Research and Development,International Open Access Journal, ISSN No: 2456-6470, Vol.-2, Issue – 4, website- www.ijtsrd

11. Choudhary MP, Gupta H., 2015, Swachh Bharat Mission: A Step towards Environmental Protection. ResearchGate - https://www.researchgate.net/ publication/279201808

12. Evne K.2014, Mission Swachh Bharat Mission and dalit community development in India, InternationalJournal of Creative Research Thoughts, http://ijcrt.net/Uploaded Article/ 151. pdf

13. Jangra B, Majra JP, Singh M. Swachh Bharat Abhiyan (clean India mission): SWOT analysis. InternationalJournal of Community Medicine and Public Health; 2016; 3(12):=3285-3290 http:/www.ijcmph.com/index.php/ijcmph/article/download/79/77

14. Jain D, Malaiya S, Jain A, 2016, 2(10),”Studied that impacts of Swachh Bharat Abhiyan in India”, InternationalJournal of Humanities and Social Science Research, ISSN: 2455-2070; Impact Factor: RJIF 5.22

15. BibekDebroy, AnirbanGanguly, Kishore Desai, 2019, “Making of New India- Transformation under ModiGovernment”, Wisdom Tree, ISBN 978-81-8328-531-5, [email protected]

16. Singh M.K., 2017, “Swachh Bharat Abhiyan”, Solar Books, New Delhi, ISBN 978-93-85289-20-017. Obani Pedi Chiemena, 2018, “Strengthening the Human Rights to Sanitation as an Instrument for Inclusive

Development”, CRC Press/ Balkema, Netherlands, ISBN 978-1-138-61848-0

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* Assistant. Professor, Department of Business Management HNBGU (A Central University) ,Uttarkhand PIN: 249161Contact No: 09690054245, E-Mail: [email protected]

Inflation Impact on Industrial CreditDisbursement by Scheduled Commercial Bank inIndia

Dr. Arvind R. Gajakosh*

ABSTRACTWhether the growing trend of industrial credit disbursement by commercial banks is really growing in

the last ten years? Is there any significant difference of industrial credit disbursement among theregions?Industrial credit is one of the most important creditsgiven by the commercial banks for the developmentof industries. This credit will be used for the creation of capital asset, for the setting up a new business, forthe continuation of business, etc. Industrial development leads to employment opportunities which in turncreate a large number of jobs. Jobs will give the earning income which would stimulus in the economy byconsuming goods and services. In total, industrial development will contribute the rise of nations’ GrossDomestic Product. Scheduled commercial banks play a bigger role of credit disbursement in the Indianeconomy due to their vast presence across the nation. The study focuses on the analysis of industrial creditdisbursement by scheduled commercial banks in India for the period between FY 2008-09 and FY 2017-18by adjusting the inflation rates. Region wise industrial credit analysis is done and also compared the industrialcredit with total credit. Data collated is in secondary form. The Reserve Bank of India website and otheronline sources are used to retrieve the data for the study purpose. It is found that there is a significant meandifference of industrial credit between the regions. Study concludes that there is a continuous growth of thereal industrial credit disbursement took place between FY 2008-09 and FY 2013-14, and thereafter it showsa declining trend for the following financial years except FY 2016-17.

Keywords: Industrial credit, Commercial Banks, Inflation Rate, Region, ANOVA test.

IntroductionFinancing to the industries is the most crucial element of economic growth. Without an adequate

amount of finance it is difficult to see industrial development. Industries need long term, medium termand short term finance for meeting their fixed capital expenditure, operational expenditures and workingcapital management. Commercial banks playa pivotal role in sanctioning of industrial credit.Thecommercial bank offers industrial credit in the form of term loan, advance loan, cash credit, overdraft,etc. This credit will be used for the creation of capital asset, for the setting up new business, for the


continuation of the business, etc. Industrial development leads to employment opportunities which inturn create a large number of jobs. Jobs will give the earning income which will stimulate the economyby consuming goods and services. In totality, it will contribute the rise of nations’ Gross DomesticProduct (GDP). In India various financial institutions play a significant role of financing in the form ofissuing shares, debentures, and lending term loans, etc. Non-banking financial companies, developmentfinancial institutions, and commercial banks are playing the role of intermediaries between industryand finance.(Das, 2015)Post-independence Government of India has taken several initiatives to set updevelopment based financial institutions such asIndustrial Finance Corporation of India (1948), IndustrialCredit and Investment Corporation of India (1955), Industrial Development Bank of India (1964) forthe development of industries. After liberalisation, many private banks also entered into the financialsystem along with nationalised banks to facilitate industrial finance. (RBI Bulletin, 2019) Industrieshave faced dominance of the Government in the allocation of credit and on the implication of lendingrates until the period of 1980s. Many changes have come in terms of the reduction in statutory restrictions;deregulations of interest rates on lending and new private banks are allowed to compete with nationalisedbanks due to liberalisation.

The study discusses on the analysis of industrial credit disbursement by scheduled commercialbanks in India for the period between FY 2008-09 and FY 2017-18. The first part of the studyanalysesthe comparison of the industrial credit disbursement among the regions by using ANOVA test. Thesecond part followsthe analysis of inflation impact on industrial credit values by calculating its realvalues.

Literature Review of Related StudiesBell & Rousseau (2001) have done a research study on the role of a financial system in the evolution

of industrialisation during post-independence India. They opined that the financial sector was played apivotal role in promoting investment and industrial output.Das &Khasnobis(2007)studied how thetransmission mechanism took place from the financial mediation to economic development through theprotraction of both a long term and short term credit. They analysed the relationships between financialdevelopment& credit allocation, and an economic growth &credit system. Sherawat&Giri (2015) haveassessed the role of financial development on the growth of all Indian states for the period between1993 and 2012. In their study, it is found that there is a two way dimensional relationship exists betweenper capita deposits and credit. They concluded that there is a relation between per capita deposits,credit and economic growth. Das (2015) has done study on the role of commercial banks and its functionon industrial finance in India by choosing pre-liberalisation period. Author has found that commercialbanks in India had extended their area of operations beyond the general banking by facilitating merchantbanking services as well. Singh et al. (2016)havedone detailed analysis to understand the relationshipbetween credit and growth of Indian economy. Various metrics for credit and output is used to find outthe relationship betweensectorial and overall level. They found that there is strong relationship existsbetween credit expansion and economic development. Das (2015) has done a research study on industrialfinance in the background of financial liberalisation in India. Author has explored the linkages betweenthe financial and industrial sectors. He concluded by suggesting suitable financial policies need to bebrought to resolve the issues of financial constraints in India. He has collated financial data for theperiod of up-to FY 2014-15. Bandlamudi&Taidala (2017) have analysed the role of commercial banks

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in the development of Indian economy. This study explores the impact of banks’ credit on the GDP andthe growth of economic level. Dudhe(2017) has attempted to investigate the role of Indian commercialbanks on a capital establishment and economic development. Author has analysed abank credit fluctuationof various industries such as textiles, chemical, metal and infrastructure etc. between 2008 and 2016.

Need of the StudyFrom the literature review, it is found that several research studies have been carried related to

industrial finance, the role of commercial banks in terms of industrial credit, relationship between creditand the growth of economy etc. From the literature review it is found that no study is done with referencetothe inflation impact on industrial credit disbursement by scheduled commercial banks for the periodbetween FY 2008-09 and FY 2017-18. Hence the researcher felt there is a need of conducting thisstudy.

Objective of the Study To compare the region-wise industrial credit distribution by scheduled commercial banks

between FY 2008-09 and FY 2017-18 using one way ANOVA test.

To examine the region-wise industrial credit distribution by scheduled commercial banksbetween FY 2008-09 and FY 2017-18 by adjusting the inflation rates.

Research MethodologyThe descriptive type of research design is used in this study.Secondary data has been collated mainly

from theReserve Bank of India website and other online sources are being used such as news articles,research papers, etc. The industrial credit disbursement data between FY 2008-09 and FY 2017-18 isused for achieving the objectives of the study.To achieve the first objective of the study, region-wisecomparison of the industrial credit disbursement is donein SPSSby using ANOVA test.

The inflation rates are used to adjust the values of industrial credit disbursement for discountingthemand calculated the real values by using the Present Value formula. These values are analysed toattain the second objective of the study. Consumer Inflation Index (CII) values are used for inflationrates.

Scope of StudyThe carried study focuses only on industrial credit sanctioned by scheduled commercial banks in

total. The period for the study is selected between FY 2008-09 and FY 2017-18 based on availabledata. The results of the study will be helpful for those researchers, analysts, financial expertswho wantto analyse a similar type of study or continue the study in this context.

Limitation of Study Since the study is carried out based on secondary data, which is amply on secondary sources,

the accuracy of data is depending on the available data.

Detailed study is limited to industrial credit sanctioned by scheduled commercial banks inIndia.

The study period is between FY 2008-09 and FY 2017-18 only.

Inflation Impact on Industrial Credit Disbursement by Scheduled Commercial Bank...


Data Analysis & InterpretationsTable-1

Total Commercial Banks’ Credit vs. Industrial Credit (Amounts are in INR Billion)

Financial Year

Total Credit

Industrial Credit

Percentage of Industrial Credit to Total Credit

2008-09 28,477 11,344 39.84 2009-10 33,452 13,552 40.51 2010-11 40,756 16,121 39.55 2011-12 48,033 19,420 40.43 2012-13 55,253 23,160 41.92 2013-14 62,821 26,162 41.65 2014-15 68,785 26,361 38.32 2015-16 75,226 27,606 36.70 2016-17 79,179 29,825 37.67 2017-18 87,670 30,387 34.66 Total 5,79,652 2,23,938 38.63

Source: Author’s Calculation by using data from the Reserve Bank of India(https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=18919&https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=18921)

Table 1: comprises the values of total credit and industrial credit disbursed by commercial banksbetween FY 2008-09 and FY 2017-18.

The value of total credit has increased with Compounding Annual Growth Rate (CAGR) of11.90 percent during the study period (FY 2008-09 to FY 2017-18), whereas of industrial creditvalue has raised with a CAGR of 10.35 percent. An average percentage of industrial credit tototal credit is 39.12 percent.

During the FY 2008-09 & FY 2009-10 values of industrial credit were INR 11,344 billion &INR 13,552 respectively and shares 39.84 percent, 40.51 percent of total credit disbursementvalues.

During the FY 2010-11 & FY 2011-12 values of industrial credit were INR 16,121 billion &INR 19,420 respectively and shares 39.55 percent, 40.43 percent of the total credit disbursementvalues.




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Table2Region wise Industrial Credit sanctioned by Commercial Banks(Amounts are in

INR Billion)

Financial Year

Northern Region

North-Eastern Region

Eastern Region

Central Region

Western Region

Southern Region

All India

2008-09 2,818 46 836 631 4,275 2,738 11,344 2009-10 3,277 56 1,096 790 5,068 3,266 13,552 2010-11 4,039 61 1,241 974 5,759 4,046 16,121 2011-12 5,183 74 1,539 1,154 6,766 4,702 19,420 2012-13 6,279 96 1,853 1,456 8,097 5,379 23,160 2013-14 7,290 88 2,032 1,522 9,292 5,939 26,162 2014-15 7,751 94 2,225 1,711 9,949 6,400 26,361 2015-16 7,793 91 2,257 1,673 11,027 4,765 27,606 2016-17 7,822 117 2,294 1,582 11,205 6,805 29,825 2017-18 8,288 123 2,270 1,652 10,950 7,104 30,387 Total 60,540 846 17,643 13,145 82,388 51,144 2,23,938

Source: Author’s Calculation by using data from the Reserve Bank of India(https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=18921)

One Way Anova Test

Table 3: Homogeneous Subsets of Industry Credit

Tukey HSD Regions N Subset for alpha = 0.05

1 2 3 North-eastern Region

10 84.60

Central Region 10 1314.50 Eastern Region 10 1764.30 Southern Region 10 5114.40 North Region 10 6054.00 Western Region 10 8238.80 Sig. .150 .736 1.000

Source: Author’s Calculation by using SPSS, *Significant at 5 percent level of significance

Table 3: shows the homogeneous subsets of industry credit by using Turkey Honestly SignificantDifference(HSD) method in one way ANOVA test.



The North-eastern region, Central region and Eastern region are falling in the first subset. The calculatedp value is 0.150 which is more than 5 percent and hence there is no significant difference between thesethree regions. Southern region and North region are coming under second subset. The calculated p valueis 0.736 which is more than 5 percent and hence there is no significant difference between these tworegions. Western region is included in the third subset since the calculated p value is 1.0.

Table 4 One way ANOVA Calculation of Region-wise Industrial Credit

Sum of Squares df Mean Square F Sig. Between Groups 506283199.733 5 101256639.947 43.916 0.000* Within Groups 124507189.000 54 2305688.685 Total 630790388.733 59

Source: Author’s Calculation by using SPSS, *Significant at 5 percent level of significance

(I) Region (J) Region Mean Difference (I-J) Std. Error Sig.

Northern Region

North-eastern Region 5969.400* 679.071 0.000* Eastern Region 4289.700* 679.071 0.000* Central Region 4739.500* 679.071 0.000* Western Region -2184.800* 679.071 0.025 Southern Region 939.600 679.071 0.736

North-eastern Region

Northern Region -5969.400* 679.071 0.000* Eastern Region -1679.700 679.071 0.150 Central Region -1229.900 679.071 0.467 Western Region -8154.200* 679.071 0.000* Southern Region -5029.800* 679.071 0.000*

Eastern Region

Northern Region -4289.700* 679.071 0.000* North-eastern Region 1679.700 679.071 0.150 Central Region 449.800 679.071 0.985 Western Region -6474.500* 679.071 0.000* Southern Region -3350.100* 679.071 0.000*

Central Region

Northern Region -4739.500* 679.071 0.000* North-eastern Region 1229.900 679.071 0.467 Eastern Region -449.800 679.071 0.985 Western Region -6924.300* 679.071 0.000* Southern Region -3799.900* 679.071 0.000*

Western Region

Northern Region 2184.800* 679.071 0.025* North-eastern Region 8154.200* 679.071 0.000* Eastern Region 6474.500* 679.071 0.000* Central Region 6924.300* 679.071 0.000* Southern Region 3124.400* 679.071 0.000*

Southern Region

Northern Region -939.600 679.071 0.736 North-eastern Region 5029.800* 679.071 0.000* Eastern Region 3350.100* 679.071 0.000* Central Region 3799.900* 679.071 0.000* Western Region -3124.400* 679.071 0.000*

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HypothesisH0: There is no significant mean difference of industrial credit at least between two regionsHa: There is a significant difference mean of industrial credit at least between two regions.Table 4: describes the calculation of ANOVA test for understanding the mean difference of industrial

credit between the regions. The ANOVA test result is significant since the calculated ‘p value’ is lessthan 5 percent.

In case of comparing Northern region with other regions it is found that there is no significantmean difference of industrial credit with the North-eastern region, Eastern region, Centralregion and Western region since the ‘p value’ in these cases is less than 5 percent. There issignificant means difference of industrial credit between North region and Southern regionsince the ‘p value’ is 0.736.

When comparing North-eastern region with other regions it is found that there is no significantmean difference of industrial credit with Northern region, Western region, and Southern regionand since the ‘p value’ in cases is less than 5 percent. There is a significant means difference ofindustrial credit between North-eastern region & Eastern region and also between Eastern region& Central region since the ‘p value’ is 0.150 and 0.467 respectively.

While comparing Eastern region with other regions it is found that there is no significant meandifference of industrial credit with Northern region, Western region, and Southern region andsince the ‘p value’ in cases is less than 5 percent. There is a significant means difference ofindustrial credit between North-eastern region & Eastern region and also between North-easternregion & Central region since the ‘p value’ is 0.150 and 0.985 respectively.

In case of comparing Central region with other regions it is found that there is no significantmean difference of industrial credit with Northern region, Western region, and Southern regionand since the ‘p value’ in cases is less than 5 percent. There is a significant means difference ofindustrial credit between North-eastern region & Eastern region and also between North-easternregion & Eastern region since the ‘p value’ is 0.467 and 0.985 respectively.

When comparing Western region with other regions it is found that there is no significantmean difference of industrial credit with all other regions since the ‘p value’ in these cases isless than 5 percent.

While comparing Southern region with other regions it is found that there is no significantmean difference of industrial credit with North-eastern region, Eastern region, Central regionand Western region since the ‘p value’ in these cases is less than 5 percent. There is a significantmeans difference of industrial credit between North region and Northern region since the ‘pvalue’ is 0.736.

From the above analysis null hypothesis will be rejected and alternative hypothesis will beaccepted and hence one way ANOVA test concludes that there is a significant mean differenceof industrial credit at least between two regions (more than two groups).



Table 5Calculation of Industrial Credit values by adjusting Inflation rate

Financial Year

Industrial Credit-IC in INR Billion

Cost Inflation Index (CII)

Year on Year CII-Hike

Real Value = IC (1+i)n

[IC Industrial Credit i inflation rate, n year]

Industrial Credit after adjusting Inflation Rate

2008-09 11,344 137 - Considered as Base Year for the study

11,344

2009-10 13,552 148 8.03% 13552 (1.0803)

12,544

2010-11 16,121 167 6.08% 16121

(1.0803)(1.0680) 13,973

2011-12 19,420 184 10.18% 19420 (1.1537)(1.1018)

15,278

2012-13 23,160 200 8.69% 23160

(1.2711)(1.0869) 16,764

2013-14 26,162 220 10.00% 26162 (1.3815)(1.1000)

17,216

2014-15 26,361 240 9.09% 26361

(1.5196)(1.0909) 15,902

2015-16 27,606 254 5.83% 27606 (1.6577)(1.0583)

15,705

2016-17 29,825 264 3.93% 29825

(1.7543)(1.0393) 16,358

2017-18 30,387 272 3.03% 30387 (1.8232)(1.0294)

16,190

Total 2,23,938 1,51,274

Source: Author’s Calculation, CII data used from Income Tax Department (https://www.incometaxindia.gov.in/Charts%20%20Tables/Cost-Inflation-Index.htm)

Table 5: shows the detailed calculation of industrial credit values by discounting with theinflationrates. The following observations are made from the above analysis.

The total amount of nominal industrial credit disbursement during the study period (FY2008-09 to FY 2017-18) is INR 2,23,938 billion whereas in real, it is worth of INR 1,51,274billion for the same period.

Compounding Annual Growth Rate (CAGR) of nominal industrial credit disbursement is10.35 percent during the study period, whereas CAGR of industrial credit disbursement inreal is only 3.63 percent after discounting with inflation rates for the same period.

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Table 6Percentage Change in Nominal and Real Industrial Credit

Financial Year

Industrial Credit (Nominal)

Percentage Change in Nominal Industrial Credit

Industrial Credit (Real)

Percentage Change in Real Industrial Credit

2008-09 11,344 - 11,344 - 2009-10 13,552 19.46 12,544 10.58 2010-11 16,121 18.96 13,973 11.39 2011-12 19,420 20.46 15,278 9.34 2012-13 23,160 19.26 16,764 9.73 2013-14 26,162 12.96 17,216 2.70 2014-15 26,361 0.76 15,902 -7.63 2015-16 27,606 4.72 15,705 -1.24 2016-17 29,825 8.04 16,358 4.16 2017-18 30,387 1.88 16,190 -1.03 Total 2,23,938 1,51,274

Source: Author’s Calculation

Table 6: displays the percentage change in nominal and real industrial credit sanctioned by thecommercial banks during the study period (FY 2008-09 to FY 2017-18).

In case of Nominal Industrial Credit all the percentage change values are in positive with anaverage of 11.83 percent during the study period.

In case of Real Industrial Credit, the percentage change values between FY 2009-10 and FY2013-14 are in positive, whereas from FY 2014-15 to FY 2017-18 values are in negative withan average of only 4.22 percent.

During FY 2017-18, it is found that there is around one percent fall in real industrial credit ascompared to FY 2016-17.

During FY 2008-09, INR 11,344 billion amount of industrial credit was disbursed and thisfinancial year is considered as base year for the study purpose. During FY 2009-10, INR 13,552billion amount of nominal industrial credit was allocated which was actually worth of INR12,544 billion in real.

During FY 2010-11, INR 16,121 billion amount of nominal industrial credit was apportionedwhich was actually worth of INR 13,973 billion in real. During FY 2011-12, INR 19,420 billionamount of nominal industrial credit was allocated which was actually worth of INR 15,278billion in real.



During FY 2012-13, INR 23,160 billion amount of nominal industrial credit was disbursedwhich was actually worth of INR 16,764 billion in real. During FY 2013-14, INR 26,162 billionamount of nominal industrial credit was allocated which was actually worth of INR 17,216billion in real.

During FY 2014-15, INR 26,361 billion amount of nominal industrial credit was apportionedwhich was actually worth of INR 15,902 billion in real. During FY 2015-16, INR 27,606 billionamount of nominal industrial credit was disbursed which was actually worth of INR 15,705billion in real.

During FY 2016-17, INR 29,825 billion amount of nominal industrial credit was allocatedwhich was actually worth of INR 16,358 billion in real. During FY 2017-18, INR 30,387 billionamount of nominal industrial credit was disbursed which was actually worth of INR 16,190billion in real.

From the analysis of calculating the industrial credit real values it is found that there is acontinuous growth of the credit disbursement between FY 2008-09 and FY 2013-14, thereafterit shows a declining trend for next two financial years.

There is a 4.16 percentage rise in real industrial credit during FY 2016-17 comparing to theprevious financial year.

Graph1Percentage Change in Nominal and Real Values of Industrial Credit

Graph 1depicts the curve of percentage change in nominal and real values of industrialcredit disbursement between FY 2008-09 and FY 2017-18. The real values of an industrial creditcurve showing a declining position after the FY 2013-14.

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ConclusionAfter going through detailed analysis it is found that the highest amount of industrial credit is

given to the western region in the last ten years and hence it has reflected on the economic developmentof this region. The second highest amount of industrial credit is given to the north region. The southregionsecured by the third position in getting industrial credit. The eastern regionand the central regionare in the position of fourth and fifth rank.The north-eastern region is in the last position and a very lessamount of industrial credit is gone to this region as compared to other regions in the last ten years.There could be various reasons for declining the real industrial credit disbursement between FY 2014-15 and FY 2015-16 such as Government policies, change in economic conditions due to demonetisation,GST implementation, etc. It can be observed that the declining trend started especially after formingthe new Government in 2014. This study concludes that overall industrial credit disbursement in real isshowing a declining trend after FY 2013-14, though in nominal industrial credit disbursement is showingan overall growing trend during the study period. The present scenario, the whole world’s economy hasgot impacted due to the Corona virus spread including Indian economy. To resilient the Indian economyGovernment has announced financial packages for various stakeholders including the industries. Hopingto see “slowly but surely” recovery of the Indian economy along with the global economy would takeplace in the upcoming times.

References1. Bandlamudi, K. &Taidala, V. R. (2017). “Role of commercial banks in the economicdevelopment of India.”

International Journal of Management and Applied Science, 3(4): pp 1-4. Retrieved from http://www.iraj.in/journal/journal_file/journal_pdf/14-358-14982087631-4.pdf

2. Bell, C. & Rousseau, P. L. (2001). “Post-independence India: a case of finance-led industrialization?”Journalof Development Economics, 41: pp 153-175.

3. Das, P. K. and Khasnobis, B. G. (2007).”Finance and Growth: An Empirical Assessment ofthe Indian Economy.”United Nations University – World Institute for DevelopmentEconomics Research, Research Paper No. 2007/13.

4. Das S. (2015). “Commercial banks and industrial finance in India: the pre-liberalisation scenario.”BusinessStudies 35 & 36, 1-23. Retrieved from https://www.caluniv.ac.in/dj/BS-Journal/vol-35-36/i.%20Commercial_Banks.pdf

5. Das S. K. (2015). “Industrial Finance in the era of financial liberalisation in India: Exploring some structuralissues.” Institute for Studies in Industrial Development, Working Paper, pp1-34. Retrieved from http://isid.org.in/pdf/WP186.pdf

6. Dudhe C. (2017). “Role of Indian commercial banks in economy development. Faculty of Economics andBusiness,” University of Debrecen, Hungary. Retrieved fromhttps://www.researchgate.net/publication/316627916_ROLE_OF_INDIAN_COMMERCIAL_BANKS_IN_ECONOMY_DEVELOPMENT/link/59088a2caca272f658f6c41c/download

7. Notified Cost Inflation Index under Section 48 (2019). Retrieved March 23, 2020, fromhttps://www.incometaxindia.gov.in/Charts%20%20Tables/Cost-Inflation-Index.htm

8. Sectoral Deployment of Bank Credit in India (2019). Retrieved February 13, 2019 from https://m.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=18056

9. Sehrawat, M. and Giri A. K. (2015). “The role of financial development in economic growth: Empiricalevidence from Indian states.” International Journal of Emerging Markets,10(4): pp 765-780.

10. Singh C., Pemmaraju S. B., Das R. (2016).”Economic growth and banking credit in India.” Indian Instituteof Management Bengaluru, Working Paper,pp 1-19. Retrieved from https://www.iimb.ac.in/sites/default/files/2018-07/WP%20No.%20531.pdf



* PhD Scholar, Faculty of Management Studies, University of Delhi Email: [email protected], Contact No. +91-888-251-0840** Associate Professor, Faculty of Management Studies, University of Delhi and Corresponding Author

Email:[email protected], Contact No. +91-986-803-6298

Green Efforts and Sustainable Development: AnOverview of India and the World Scenario

Minesh Kumar Srivastava * & Dr. Garima Gupta**

ABSTRACTEnvironmental degradation is on the rise and a dedicated commitment from all stakeholders across the

globe is required to respond to this problem and its related consequences. While consumers have startedexhibiting greater preference and demand for green or ecologically safe product and service offerings,businesses feel compelled to act responsibly and take active steps to reduce their carbon footprints andwaste generation. It is in this context that the present paper provides an extensive review of the green andsustainable efforts undertaken by India and other countries all over the world. Using graphs and statistics,the paper discusses the problems, initiatives as well as the performance of different economies (G-7, OECDand BRICS)in achieving the goal of sustainable development. The review provides useful suggestions in thisregard and re-emphasizes the need for accelerated efforts on the part of all concerned to control environmentaldegradation.

Keywords: Environment Degradation, Carbon Footprints, Green Efforts, Sustainable Development

IntroductionThe accelerated pace of carbon dioxide emission has raised concern all over the world about the

global warming. With a sharp jump in the global carbon dioxide emission after the introduction ofindustrialization (see Figure 1), attaining the target set up in Paris Agreement (2015) of keeping theglobal average temperature well below 2 degree Celsius above pre industrialization period is a toughtask.Over dependency on fossil fuels for various economic activities such as power generation, transport,and manufacturing have resulted in massive emission of Green House Gasses in the atmosphere. As perthe report of Earth Policy Institute, World Energy Outlook (2018), power generation contributes maximumpercentage (43.7%) of global carbon dioxide emissions from fossil fuel burning, followed bytransportation (20.3%), industry (17%), building (9%) and other sectors (9.3%). The worst thing is thatIndia is one of the top five nations contributing the largest share of global emission (Figure 2). Not onlythe country features in having high number of environment-related deaths; it also has rising levels ofair pollution and urban population. Some of the specific states encountering problem include Delhi thathas the most important and largest landfill site at Ghazipur, occupying 29 acres of land. The garbage

43

mountain is just eight metres shorter than the QutubMinar. Although, the site has already been declared‘oversaturated’ in 2002, yet 2,500 tonnes of solid waste is still dumped there every day. Another exampleof mounting environment problem is evident in the case of Chennai. The city faced drought in the year2017- the worst in last 140 years. According to Metrowater, the city receives rain in the month ofNovember and December and the four lakes that supply water to the entire city runs out of water in themonth of February every year. The largest lake ‘Bellandur’ at Bengaluru too is now frothed up in whitefoam and often catches fire. The foam is the result of domestic and industrial wastes which is disposed-off in the lake. A study by the Centre for Study of Science, Technology and Policy has concluded thatthe city’s air will be 74% more polluted than the present level by the year 2030. All these examplespoint out towards an urgent need to address environment concern.

In realization of the aforesaid, efforts are being made all around the world to mitigate and adapt tothe changing climate and investments are being channelized for reducing the overall impact of globalwarming. Numerous international treaties, frameworks, and conventions such as Ocean Dumping 1972,Biological and Toxic Weapons 1972, Endangered Species (CITES) 1973,World Cultural and NaturalHeritage 1972, Migratory Species 1979, and Kyoto Protocol 1997 are in operation to protect the globalenvironment. Even consumers have started exhibiting a greater consciousness towards environment.According to Rejikumar (2016), such green consumers show pro-environment behaviour and activelyengage in eco-friendly activities. They believe that green products will reduce the speed of environmentaldegradation and so have willingness to pay a higher price for them.

However, despite the efforts, there has not been much control over environmental degradation.One of the reasons is the presence of multitude of factors which pose a challenge to government, policymakers, civil engineers and environmental planners of big cities to undertake steps in this direction.For example, the rapid increase in the urban population has resulted in serious environmental andeconomic problems that have become very tough to handle. In addition, problems related to long trafficjams, huge amount of waste generation, poor quality of air, severe health problems, poor sanitation,and lack of green cover are some of the major problems in front of the city municipalities. As depictedin Table 1, the situation is all the more alarming for developing countries like China, India and SouthAfrica where the population living in urban areas is growing at a faster pace, thus making the situationalmost unmanageable. The second contributory factor to the problem is that any single country or asmall group of countries cannot solve the issues related to climate change, ozone depletion, andenvironmental pollution. It rather requires joint initiatives by all the nations and the concernedstakeholders. These hurdles thus, present an emergent and imperative need for nations and businessfirms to move in the direction of sustainable technology development so as to not only tackle the problemsrelated to environment and ecological balance, but to also make these efforts more effective andsustainable in nature.

Green Efforts and Sustainable Development: An Overview of India and the World Scenario


Figure 1:Global Carbon Dioxide Emissions till 2018

Source: Earth Policy Institute - www.earthpolicy.org, World Energy Outlook Report, 2018

Figure 2: Carbon Dioxide Emissions in Top Five Countries (till 2018)

Source: Earth Policy Institute - www.earthpolicy.org, World Energy Outlook Report, 2018

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Table 1: Country-Wise %age of Population in Metropolitan Areas

Country Name 1990 2017 %age

Change

G-7

Canada 39.60 45.74 15.49 United States 42.15 45.90 8.89 Italy 18.97 18.63 -1.80 Japan 58.22 64.36 10.55 Germany 9.10 9.55 4.90 European Union 17.30 18.57 7.35 France 22.38 22.60 0.94 United Kingdom 25.55 26.73 4.62

OECD members 33.32 36.78 10.36

BRICS

Brazil 35.96 41.38 15.10 China 10.33 27.27 164.03 India 11.07 15.17 37.04 South Africa 23.58 35.05 48.66 Russian Federation 19.39 22.97 18.45

Source: United Nations, World Urbanization Prospects Report, 2018

Rationale of the StudyIt is in the context of the aforesaid discussion that the present review paper makes an attempt to

provide an overview of the efforts been undertaken by some of the G-7 and OECD group of developedcountries towards implementing sustainable measures to reduce waste and carbon footprint, promoteenvironmental awareness among the people, and efficiently utilize resources to save the planet. Thesedeveloped economies have enough resources as well as technologies and hence are not only capable ofaddressing this global phenomenon but are actually more responsible for the cause of environmentaldegradation. In addition, the paper contributes to the existing literature in this regard by also bringingto the fore, the efforts of fast growing BRICS countries (Brazil, Russia, India, China and South Africa)which are more focused towards the economic growth rather than the environmental sustainability butare currently the most polluted ones. The paper does not include the other poor nations suffering fromvarious socio-economic problems as it will be unfair to expect from them to work towards globalenvironmental problems against their capabilities.

Review of LiteratureSustainable development is possible only through green efforts. Green efforts include eco-friendly

technologies of production, marketing, disposal, policies of government, initiatives by corporate houses,awareness of the consumer etc. The ensuing section of the paper deals with these aspects in two parts.While the first part focuses on the discussion about the major green efforts made by the government,



firms and consumers to save the environment; the second part presents an overview of sustainabilityand sustainable development scenario in India and across the world.

Green Efforts: Implementation and BenefitsThe world is ‘going green’, at least on paper. Governments, corporate houses, NGOs, scientists

and individuals all are being aware of importance and need of adopting green initiatives. The term‘greening’ is basically associated with offsetting and reducing emissions of harmful gasses, and toxicwaste materials resulting mainly due to industrial operations. Peattie (2001) suggested three phases ofthe evolution of green marketing including ‘ecological’, ‘environmental’, and ‘sustainable’ marketing.While ‘ecological’ green marketing was intended to mitigate environmental problems through adoptingeco-friendly marketing activities; ‘environmental’ green marketing emphasized on designing ofinnovative technology to reduce environmental pollutions. The third phase lay emphasis on ‘sustainable’green marketing efforts.

According to Sarkar (2012), the implementation of green marketing strategies actually started fromEurope in the early 1980s when firms started selling products (such as detergents, batteries, and disposablediapers) that did not harm the environment. Soon the other firms, scholars and researchers all round theworld started putting their weight behind green efforts.

As a result, numerous studies are been carried on so as to find out ways to implement green initiativesat individual, local, regional, national and international level and highlight the benefits of such effortsfor all concerned. For instance, while the study by Trott (2013)has suggested that ‘going green’ is oneof the best ways of cultivating brand differentiation, Hart (1995) has mentioned about the linkage betweena firm’s green initiatives like pollution control, product stewardship and eco-friendly technology withcompetitive advantage in Natural-Resource-Based View (NRBV). The work explained productstewardship as a method of mitigating the adverse effect of the firm’s existing products on environmentat every stage of its lifecycle – i.e. from production to consumption and disposition. This strategy reducesharmful impact on environment by decreasing the use of scarce resources and promoting recycling.The study further mentions that by using NRBV framework, a firm can reap benefits of cost reduction,increased market share, and productivity. In addition to these tangible outcomes, a firm also enjoysintangible benefits in the form of improved product quality, corporate image and legitimacy.

In another work, Masoumik, Rashid, & Olugu (2015) revealed various competitive benefits thatcould be derived by adopting clean environmental initiative by the manufacturers and suggested thatthe producers should give more importance to the implementation of ‘product stewardship’ and adoptionof cleaner technology.

Explaining the relevance of organizational values in adopting eco-friendly strategies, Berkhout &Rowlands (2007)discussed about four types of values namely- ‘sustaining values’, ‘altruistic values’,‘proactive values’, and ‘efficiency values’. While the ‘sustaining values’aim to promote ecologicalsustainability, ‘altruistic values’ influence industry participation in environmental practices because itis right thing to do. ‘Proactive values’help in becoming a leader in promoting eco-friendly practicesand ‘efficiency values’ are used to increase efficiency and reduce costs.

Examining firm’s green strategies, environmental performance and competitive benefits, Masoumik,Rashid, & Olugu (2015) found a significant relationship between these construct. The study reported

47

that green strategy adoption by firm not only helps it to reduce the total costs in the long run but alsoenables it to generate more revenue and earn a good reputation of a trusted brand which further contributesto the firm’s competitiveness. However, although green technology adoption has significant importancein generating competitive benefits, firms do not assign it proper considerationmainly due to the longpayback time and high cost of adoption.

Green Efforts to Sustainable Development Efforts: Mapping the JourneySimply put, sustainability can be understood as a balance between the economic, environmental

and social aspects concerning people, nation as well as planet. This means that the firm acknowledgesthe broader perspective including social and environmental concerns. According to The Triple BottomLine model (TBL) given by Elkington (1998), it is important to understand the inter-linkages betweenthe social, environmental and economic aspects. Greater emphasis laid on the economic aspect ofsustainability measures in comparison to the environmental or social one, results in a trade-off betweeneconomic and environmental/social goals of the firms.

The unfavorable climatic variations in the recent times have also raised the alarm and are pushingthe firms to adopt the broader perspective of sustainability. Accordingly, studies have provided variouscategorizations of sustainability that can be incorporated by businesses. For instance, Trianni, Cagno,& Neri (2017) have talked about corporate sustainability (sustainability at strategic level), manufacturingsustainability (i.e. about the production system level) and industrial sustainability (that relates to all theaspects in production). Similarly, Luukkanen et al. (2019) classified sustainability into weak sustainabilityand strong sustainability. While weak sustainability means no addition in the carbon emissions intensityof the manufacturing firms, strong sustainability implies no rise in absolute carbon emissions of theeconomy. Mentioning about the pillars of sustainability, Liu & Evans (2018) listed five critical elementsfor the effective functioning of the big cities that are not well prepared to provide basic facilities likehousing, health care, and proper sanitation. These five pillars are energy, water, material, waste, andecology and each of them is essential for long term sustainable development of the cities.Researchersfurther suggest that firms should embed sustainability into their brand image. This shift is necessary ascustomers now are aware of the climatic changes, thereby requiring that the firms reflect suchcharacteristics in their brands. As a result, sustainability today is linked with brand differentiation andhas become an important factor for brand selection by customers. It is in line with this view that Erdila(2013) has talked about sustainability as a major factor for brand orientation that helps firms in creatinga strong brand image and gain sustainable competitive advantage.

At the same time, it is the closer analysis of sustainable development efforts in India and across theWorld that can help firms, government and other stakeholders to determine the magnitude of gap betweenwhere we are and where we ought to be and take active initiatives to bridge the same. It is with thisobjective that the ensuing section of the paper provides a discussion of the sustainable developmentefforts undertaken across the globe.

Sustainable DevelopmentEfforts: India and the World ScenarioIn so far as India’s position is concerned, many firms are implementing green initiatives into their

processes owing to increasing consumer concern, government norms and social responsibilities of thefirms towards environment. India is now focusing on renewable source of energy and has framed various



policies and set numerous targets to achieve sustainable development. Some examples include theInternational solar alliance, BS norms, lead-free fuels, installation of solar power plants and wind powerplants at various locations. Government of India has also planned to convert the on-road vehicles intoelectric vehicles under FAME project and invest in green infrastructures such as green highway projectsand solar roof tops installation on official buildings and railway stations.Various states also have comeup with plans to apply ban on single use plastic to fight plastic pollution and incentive plans have beenproposed for household and firms to adopt green and clean energy. For example, Sikkim has becomethe first organic state in India. In addition, CSR activities are now specially planned by corporate forenvironment protection.Green bonds, clean India initiatives, open defecation free nation, clean riversproject and various other policy measures such as testing of aircrafts to fly on bio-fuels (ethanol andbiodiesels), setting target to generate 221 GW of energy from renewable sources by Ministry of Newand Renewable Resources, installation of solar pumps for agriculture, connecting villages to local gridsystem, replacement of street lights with LED lights, odd-even vehicle formula for Delhi, SupremeCourt verdict on green crackers etc. are some of the measures that provide evidence of government’scommitment towards environment protection and sustainable development.

On the World front, Sarkar (2012) has given examples of the green and sustainable initiatives takenby European firms since early 1980s. For instance, a leading car manufacturing company in Italy recycles80% of its factory waste and is pioneer in producing green cars that runs on lead-free fuel since 1970s.Another example is that of Germany where firmshad introduced ‘Blue Angel’ eco-label in 1978 due togrowing consumer demand for eco-friendly goods. Germany also has the strictest green marketing lawsin the World. Similar consciousness for environment has been exhibited by Denmark and Netherlands.While former has authorized the soft drinks companies to sell the beverages in glass bottles only toavoid use of plastic bottles; the concept of green consumer first appeared in Netherlands when it boycottedaerosol which contains CFCs. This country further ensures that old or broken electronic appliances aregiven back to the manufacturers for recycling.

The aspect of Green Schools has been talked about by Iwan, Rao, & Poon (2018). The EnvironmentalCampaign Committee of Hong Kong has defined it as “a place built or renovated as per LEED ratingscale which promotes environmental awareness, develops environment-friendly attitudes and encouragesgreen practices among school students and their parents, teachers and school staffs”. Thus, the mottoof establishing green school is to promote sustainable development and provide healthy environmentthat encourage learning while saving energy and resources. The concept of green school is very popularin the US, China, and Indonesia and these countries have adopted various approaches to createenvironmental awareness among the people.

In another recent study, Luukkanen et al. (2019)studied the impact of direct and indirect factors onadoption of eco-friendly measures in least developed countries like Lao People’s Democratic Republicand found that their sustainability efforts will help in transiting towards green economic developmentwhich they defined as greening the consumption, production, business and markets.

In addition, countries have been taking initiatives to maintain proper forest cover. Forests, alsocalled ‘carbon sinks’, absorb carbon dioxide from the atmosphere for photosynthesis and release oxygenand so are important to reduce excessive CO2emissions.However,only few countries have been able toachieve or maintain a proper forest cover. For example, Japan and Canada have been successful in

49

maintaining their forest area due to tough environmental laws (see Figure 3). OECD countries havealso shown a constant increase in the forest cover (Figure 4). On the other hand, Brazil - the home ofAmazon forests or ‘the lungs of the earth’ is constantly seeing a decline in its forest cover (Figure 5).For India, The National Forest Policy (1986) has set a target of achieving 33% of forest cover of thetotal geographical area. At present, the cover in India is around 24%, which is well below the set target.

Figure 3: G-7 Forest Area (% of land area)

Source: Food and Agriculture Organization, World Development Indicators Report, 2018

Figure 4: OECD Forest Area (% of land area)




Figure 5: BRICS Forest Area (% of land area)


On similar lines, Dadzie, Runeson, & Ding (2018)have posited that the existing buildingsinfrastructure is having adverse impact on the environment due to various kinds of defects andworkmanship shortfalls. The poor design of buildings result in heat loss, corrosion of steel components,and high energy consumption. As reported by this study, ‘globalenergy consumption of existing buildingsis 40% and is expected to rise to 50% of total energy generated by the end of 2020’. Hence, sustainableup-gradation is required in terms of factors (such as building size, age of building, design and materialused in external wall and ceilings, area, size and position of windows) that affect the energy efficiencyof buildings. The case in point is Australia where this figure is low at only 19%, mainly due to the useof sustainable infrastructure planning.

Further, electricity consumption is an indicator of development and is directly correlated witheconomic growth of a country. Accordingly, the per capita electricity consumption of developed countriessuch as the USA and Canada is very high and reflects the high standard of living of their citizens.Similarly, an increase in the rate of electricity consumption in countries like India and China,too is anindication of the speed of economic progress of these nations (see Table 2).

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Table 2: Electricity Consumption across Countries

Source: IEA Statistics OECD/IEA 2014 (http://www.iea.org/stats/index.asp)

However, on the flip side, there is a cost association with this progress- in terms of environmentaldegradation associated with power generation. As of now, the major source of power generation in theworld are coal-based thermal power plants and ecologically unstable big hydro project which havedevastating effects in the regions. Nuclear power reactors are being used in many developed countriesfor electricity generation which also poses a challenge of disposal of nuclear waste. Renewable sources,on the other hand, are clean and environmental friendly source of power generation. Realizing theiradvantages, many countries are making huge investment on building technologies and infrastructure toharness the power from renewable sources (Table 2).

In all, though the sustainable development efforts by countries around the world provide motivationto continue with active measures, the current activities are not sufficient. As posited by Harris, Anderson,& Shafron (2000), factors such as high initial cost, inadequate capital, and long payback time are someinhibitors of implementation of such measures that need to be overcome.

Country Name

Electric power consumption (kWh per capita)

Electricity production from renewable sources excluding

hydroelectric (% of total)

1990 2014 %age

Change 1990 2015 %age

Change

G-7

United States 11713.33 12984.33 10.85 3.00 7.39 146.22 Italy 4144.91 5002.41 20.69 1.54 22.51 1362.96 Japan 6805.54 7819.71 14.90 1.30 7.76 498.24 Canada 16109.28 15545.54 -3.50 0.82 6.27 664.06 Germany 6639.73 7035.48 5.96 0.30 26.27 8530.69 European Union 5157.48 5908.36 14.56 0.73 18.56 2436.16 France 5940.75 6939.52 16.81 0.46 6.20 1251.38 United Kingdom 5356.58 5129.53 -4.24 0.19 22.97 11984.32

OECD members 6680.76 7984.60 19.52 1.83 10.26 461.64

BRICS

Brazil 1457.35 2601.37 78.50 1.73 12.12 599.72 South Africa 4152.98 4198.40 1.09 0.01 1.93 19204.03 China 510.62 3927.04 669.07 0.01 4.86 44275.02 Russian Federation 6673.18 6602.66 -1.06 0.01 0.09 1415.46 India 273.05 805.60 195.04 0.01 5.36 48941.86



ConclusionThe world is facing serious environmental threat due to rising pollution, population, reducing size of

forest cover, and unsustainable economic activities. With an endeavour to find solution to the problem ofglobal warming and environment degradation, all stakeholders across the globe have been moving activelytowards green and sustainable development. Various strategies, plans and mechanisms have been formulatedto speed up the sustainable development in form of measures such as adoption of energy efficientenvironmental friendly technologies, formulation of norms and regulations regarding energy standards,and harnessing of renewable sources. United Nations, World Bank, International Solar Alliance, ClimateSummits and Protocols and many other inter-governmental organizations all over the world are committedto save our planet. Countries like Australia, Germany, and Netherlands have set up examples of howsustainable development can be achieved. Due to increasing government norms, firms in the developingcountries like India and China too are shifting towards green marketing and are making it a part of theirCSR activity. Greening has also proved to be a first mover advantage for many firms, helping them toincrease their market share.There is increasing number of efforts to develop new technologies to curbenvironment pollution and fight social, economical and environmental problems. Further, awareness amongthe people is spread by observing World Population Day, World Water Day, and Earth Day.

However, despite all the efforts, the pace of change is very slow. On the basis of the review, thepresent work provides few suggestions that can be implemented by firms across the world, and specificallyin India, in this regard. First, firms need to review the ultimate result of their adoption of a pro-environmentalstrategy. For instance, clean technology adoption should be analyzed in terms of its impact on theconsumption of material and energy, material utilization, recycling, handling of waste and emissions.Second, efforts should be made to move ahead towards generation of sustainable energy. This meansusing renewable sources to generate energy to reduce the carbon footprint. These sources are eco-friendlyand has zero-carbon emission hence becomes very significant for the sustainable development. Anapplication of this can be seen in the form of photovoltaic (PV) cells and solar rooftops which are nowbeing installed everywhere to generate energy. Third, cities around the world are facing the problems ofwaste disposal, traffic jams, and rising air and noise pollution impacting the public health. There is, thus, aneed to completely change the model of civic administration and work in the direction of having sustainablewaste management (promoting well-designed landfill system, recycling and energy generation from thewaste), sustainable transportation system (using high capacity, low cost and low carbon emission mode oftransport system), sustainable water management (e.g. removing contamination and improving the waterconsumption efficiency through monitoring and using nano-technology filtration process), and sustainableinfrastructure (reuse, rehabilitation, and optimization of the existing facilities). Fourth, there is a rise inthe number of consumers who prefer to buy goods that are free of toxins and are produced with minimumharm to the environment. Firms should therefore focus more on the production of green products, use ofeco-labels, eco-certification, and green logos to add value to their products and send signal of their greencredentials. Such green marketing efforts will not only help in arresting environment degradation butwould also provide economic gains and competitive advantage to the firms taking a lead. Above all,countries should have more stringent environmental laws and the citizens should act more responsiblyand lend collective efforts to combat environment degradation.

The limitations of this review paper can be addressed by future researchers by assessing thequantitative data of various countries and conducting a comparative analysis of their sustainable efforts.

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Including the efforts made by smaller countries,especially the island nations, which are worst affecteddue to global warming and sea level rise may yield further useful insights.

References1. Berkhout, T., & Rowlands, I. H. (2007). The Voluntary Adoption of Green Electricity by Ontario-Based

Companies. SAGE Publications, 281-303.2. Cooremans, C. (2012). Investment in Energy Efficiency: Do the Characteristics of Investments matter? Energy

Efficiency, 497-518.

3. Dadzie, J., Runeson, G., & Ding, G. (2018). Determinants of Sustainable Upgrade for Energy Efficiency: TheCase of Existing Buildings in Australia. 5th International Conference on Energy and Environment Research,ICEER (pp. 284-289). Elsevier.

4. Davis, A. (2017). Failures in Adopting Green Technology Under Perfect Pollution Pricing and Monopoly.International Review of Economics Education, 9-13.

5. Elkington, J. (1998). Accounting for the Triple Bottom Line. Measuring Business Excellence, 18-22.6. Erdila, T. S. (2013). Strategic Brand Management based on Sustainable-Oriented View: An Evaluation in

Turkish Home Appliance Industry . Science Direct, 122-132.7. Hammond, G. P., Iddendena, T., & Wildblood, J. (2017). Environmental and Resource Burdens Associated

with an Urban Community and its Surrounding Bioregion. Science Direct, 481-486.8. Harris, J., Anderson, J., & Shafron, W. (2000). Investent in Energy Efficiency: A Survey of Australian Firms.

Energy Policy, 867-876.

9. Hart, S. L. (1995). A Natural Resource Based View of the Firm. Academy of Management Review, 986-1014.10. Iwan, A., Rao, N., & Poon, K. K. (2018). Characteristics of Green Schools: Observations of Award-winning

Green Preschools in Bali, Berkeley and Hong Kong. SAGE Publications, 140-159.11. Li, J., & Just, R. E. (2018). Modeling Household Energy Consumption and Adoption of Energy Efficient

Technology. Energy Economics.12. Liu, W., & Evans, S. (2018). A Study of Resource-efficient Technologies for Cities of the Future to be

Sustainable. Science Direct, 830-837.13. Liu, Y., & Cirillo, C. (2018). A Generalized Dynamic Discrete Choice Model for Green Vehicle Adoption .

Transportation Research Part A.

14. Luukkanen, J., Kaivo-oja, J., N., V., O’Mahony, T., Korkeakoski, M., Panula-Ontto, J., . . . Hogarth, N.(2019). Green economic development in Lao PDR: A sustainability Window Analysis of Green GrowthProductivity and the Efficiency Gap. Journal of Cleaner Production, 818-829.

15. Masoumik, S. M., Rashid, S. H., & Olugu, E. U. (2015). Importance-Performance Analysis of Green StrategyAdoption within the Malaysian Manufacturing Industry. Science Direct, 646-652.

16. Peattie, K. (2001). Golden Goose or Wild Goose? The Hunt for the Green Consumer. Business Strategy andthe Environment, 187-199.

17. Rejikumar, G. (2016). Antecedents of Green Purchase Behaviour: An Examination of Moderating Role ofGreen Wash Fear. Global Business Review , 332-350.

18. Sarkar, A. N. (2012). Green Branding and Eco-innovations for Evolving a Sustainable Green MarketingStrategy. Asia-Pacific Journal of Management Research and Innovation , 39-58.

19. Srinivasan, R. (2019, January 27). The Municipal Model is Broken. The Hindu BusinessLine.

20. Trianni, A., Cagno, E., & Neri, A. (2017). Modelling Barriers to the Adoption of Industrial SustainabilityMeasures. Journal of Cleaner Production, 1482-1504.

21. Trott, S. (2013). The Impact of Green Core Competencies on Green Image and Green Innovation-An IndianPerspective. Paradigm, 81-87.



* Head, Department of Commerce Barbil College, Odisha** Professor and Head, PG Department of Commerce, Utkal University, Bhubaneswar, Emial: [email protected]

Contact No: 9861243258, 9439168453

Non -Timber Forest Products and Tribals'Depandency on Forest: An Empirical Analysis

Rajib Lochan Achary* & Prof. Prabodha Kumar Hota**

ABSTRACTAll forest products excluding timber come under the category of non-timber forest products (NTFP).

From time immemorial, millions of people, tribals in particular, have been staying in and around forestareas.NTFP constitutes a major and important source of livelihood for millions of people across the world.Impact of NTFPs is reflected in the socio-economic and cultural life of the forest-dependent communitiesinhabiting in wide ecological geo-climatic conditions throughout the country. Moreover the present studyreveals that there are many other socio-economic factors at the household level such as number of membersin the household and total value of household implements that are significantly correlated with NTFP income.Qualitative data were gathered through field observations. The present research work recommendsconsideration of the needs of the forest-dependent communities, by the stakeholders and policy-makers. Whilemaking policy analysis on NTFP conservation measures. The role of tribal in the management of forestresources should also be recognized because they depend primarily on NTFPs to meet their subsistence andincome needs.

Key Words:- NTFP, Tribal Development

IntroductionNon-timber forest products (NTFP) refer to a wide variety of economic and subsistence materials

that come from forests, excluding timber. It plays an important role in the life and economy of peopleliving in and around forests. NTFPs serves as the safety-net during periods of stress, hence most of thepoor people depend on it.NTFPs are also termed as non-wood, minor and secondary forest products(FAO, 1992). Belcher (2003) defines NTFPs as all goods of biological origin derived from forests orany other land under similar use and exclude timber of all forms. Non-timber Forest Products (NTFPs)provide subsistence, income and employment option in both the forested areas and non-forested areas.

Non-timber forest products (NTFPs) are any product or service other than timber that produced inforests. They include fruits and nuts, vegetables, fish and game, medicinal plants, resins, essences anda range of barks and fibres such as bamboo, rattans, and a host of other palms and grasses.

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However, different users define NTFPs differently, keeping in view their interests and objectives.At CIFOR (Centre For International Forestry Research), emphasis is given on how people use forestresources and on helping to improve the contribution, these resources make to the livelihoods of theworld’s poor. Hence, CIFOR uses an inclusive definition of NTFPs -one that even encompasses woodproducts, such as those used for wood-carving and fuel. Since the early 1990s the role of non-timberforest products (NTFPs) for sustainable forest use and poverty alleviation has received increased attention.Starting with the (in)famous article by Peters et al. (1989) – which has since been widely criticized (seeSheil and Wunder, 2002) – the original idea on the potential of NTFP exploitation as a way to sustainableforest management was primarily based on the assumption that the commercial extraction of NTFPsfrom natural forests could simultaneously serve the goals of biodiversity conservation and povertyalleviation (Anderson, 1990; De Beer and McDermott, 1989; Nepstad and Schwartzman, 1992;Panayotou and Ashton, 1992; Plotkin and Famolare, 1992; Ros-Tonen et al., 1995; Ruíz Pérez, 1996).Proponents of the ‘NTFP-strategy’ pointed to important benefits of NTFP exploitation for localcommunities, such as goods (food, fodder, fuel, medicine, construction material and small wood fortools and handicrafts), income and employment. Compared to timber, the harvesting of NTFPs seemedto be possible without major damage to the forest and its environmental services and biological diversity.In sum, NTFPs were expected to offer a model of forest use which could serve as an economicallycompetitive and sustainable alternative to logging.

Over the last two decades, in order to boost the income of the poor people in the tropics and toencourage forest conservation, the government including conservation and developmental agencies andnon-government organizations have been encouraging the marketing and sale of NTFPs.

Tribal’s Dependence on ForestTribals comprising 22.13% of total population of Odisha (census 2011), have been depending on

forest for their survival because of their socio-economic status. Primarily they dependent on forest forfood, fuel, housing, medicine,recreation, social, religion and cultural identities.

The food pattern of tribal communities mainly consists of forest products. It is a general phenomenathat people try to fulfill their food and other requirements from the natural resources available in andaround them. Since tribal inhabitant in and around forest areas, they collect various fruits like, mango.Tamarind, jack-fruit, blackberry, Bhatia, Podoy, different types of berries etc and also among the rootsthey collect Kanda, soft bamboo shoots etc. they also use varies leaves, flowers, and mushrooms. Thisargument is supported by R. N. Pati in his study on “Food AndNutrition Situation” in Koraput District.

Shifting cultivation is an age-old practice among different tribes in Odisha, Lanjia Saoras buildingnice terrace on hills slops for shifting cultivation is still found now also. It has became an inevitablepart of their culture and way of life. Economic backwardness and lack of consciousness are the mainreason of shifting cultivation. The rituals practice, social organization, and the recreational activitiesare interlinked with this practice of this cultivation - which is too difficult to separate to their culture.Extensive fertile lands are also not available in areas where the primitive tribes live. They usually liveat the tops or slopes of hills and exploit the surrounding areas by burning the wilds plants for cultivation.

The shifting cultivation has beenpractised among many tribes in Orissa. TheKondha, Saura,Koya, Paraja, Didayi, Dharu and Banda of Southern Orissa and Juanga and Bhuiyan of Northern

Non -Timber Forest Products and Tribals' Depandency on Forest: An Empirical Analysis


Orissa are engaged in this practice known as Podu.Saura. Kondha and Gadaba tribes construct terracesin hill areas to conserve soil and water through stone and boulder packing. Of course the shiftingcultivation has resulted in the destruction of forest. But, in reality the tribal people destroy the forest inorder to meettheir survival needs.

The socio-cultural practices of the tribals have been closely linked with the forest. Tribals worshipnature and their festivals as well as religious activities are connected with land and forest. They worshipthe nature to fulfill all their needs. The tribals call their forest god in different name like the Bhinjalsand Parajas called “Dangar Devata” Bandas “Uga and Remngbori “, Kolha (Mundas) “Bura Bonga“, Kondhs as‘Luipenu’. Thecommunal hunting is another integral part of tribal culture. Mostly thetribal people go for annual communal hunting after the “Chaitra Parab” in the month of March-April.The tribals begin the journey of hunting after a ritual of worship and the villagers have to strictlyadhere to rules and norms of hunting. The tribes like Santa!, Parajas. Koyas.Bhuyans, Siauras keep tothis practice.

The above argument is backed by Upali Aparajita in her study on Dongria Kondha in Orissa.Aparajita discussed that, the rituals play a major role in the Dongria psyche. They always worship themother Earth to make their society live in plenty &;d prosperity. Their symbiotic relationship with theforest also has a ritual base in their practice of the ritual hunting expedition. Hunting for the Dongriaswas not the indiscriminate killing of animals, but only a symbolic act of killing to maintain balancedecosystem.

Non-timber Forest Products (NTFPs) constitute an important source of livelihood for millions ofpeople from forest fringe communities throughout the world. In India also NTFPs are associated withthe socio–economic and cultural life of forest dependent communities inhabiting in wide ecologicaland geo-climatic conditions. More than 275 million poor rural people in India depend on NTFPs for asubstantial part of their subsistence and cash livelihoods. It also serves as a vital livelihood safety net intimes of hardship. Extraction of NTFPs has multiplier effects in the economic generating employmentand income in downstream processing and trading activities. However, indiscriminate exploitation, de-forestation and forest degradation in one hand and increase in population of forest dependent peoplehave become major issues of concern for they have resulted in decrease of NTFP resources. Hence,effort should be made to protect and develop forest resources; else it will affect the NTFP based livelihood.

Objectives of the study:The specific objectives of the study are:• To study the NTF products and tribal dependence on it,• To analyze the income of tribal from NTF products and the problems faced by the tribal during

collection.

Data sourcePrimary survey is conductedthrough a structured questionnaire using random sampling method in

Keonjhar district from 406 numbers of respondents.

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Tools and Techniques usedChi-square test used because of the non-parametric nature of populations. Besides, Chi-square tests,

bar diagrams have also been used.

Analysis of the StudyThe sample under consideration for the present study is from the data collected from the primary

sources. The analyses have been made of Keonjhar district of Odisha. Data has been collected from therespondents is analyzed with regard to distribution of demographic variables such as age, education,and type of the family, family size, agriculture income and income from NTFP’s and other sources.Data has also been collected taking into consideration of NTFP collections, family member involved incollection, no of days engaged in NTFP collection, distance travelled and NTFP collection in terms ofunits collected. Again, NTFP’s marketing details are collected from the represented with respect tohoney, Tree-mass, Tamarind, Amla, Mahua, Mahua-nut Groom-grass,honey, gum etc,. The marketingdetails are elaborately formulated to assess the quantity sold, the average price set, awareness related toprice and awareness about other facilities received, problem associated with the marketing of NTFP’s

Data Analysis and ResultsTable –1: General Information: Keonjhar Distt.

Primary Survey



Diagram No. 1 (without %)

Diagram No. 2 (with %)

The above table-1 explains the distribution of age, sex, marital status and year of works as thedemographical variable of Keonjhar district among the NTFP collectors. It is observed from the abovetable that almost 99.80% respondents are married in Keonjhar district. Since the schedule caste peoplebelong to Adivasi category and as per their culture, usually they get marry at an early stage of life.Actually from NTFP – collection point of view the children from more than 6 years of age means theyhelp their parents so far collection is concerned. The data collected from the respondents doesn’t mean

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the income made by the respondent only rather it should be construed as the income of his family. Morethe hands more are the collection of NTFP and more in the income.

The above table also reveals the experience of the respondent in collection, processing and marketingof the NTFPs. It is a normal human tendency to procure income from the sources available around him.For example: people leaving in hilly areas generate their income mostly from forests where as the plainarea people get income from rivers, sea etc., besides cultivation. It is observed, since the people areliving in and around forest areas from their very childhood, they help their parents in the collection /procurement of NTFPs. Hence most of them are found to have experience of more than 5 years. Only afew respondents are found with experience of less than 5 years.

Table-2: Chi-Square Tests( working age & gender)

Value Df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 27.335a 6 .001

F Likelihood Ratio 11.460 6 .075

Linear-by-Linear Association 3.587 1 .058

N of Valid Cases 406

a. 5 cells (41.7%) have expected N less than 5. The minimum expected N is

.04.

In the table-2 we are interested in the results of the “Pearson Chi-Square” row. It can be seenhere that ÷(1) = 27.335, p = 0.001. This tells us that there is statistically significant association betweenage and sex, marital status and year of works; that is, all the age groups equally prefer to earn irrespectiveof sex, marital status and years of experience for the purpose of selling of NTFP products.

Table- 3 :Sources of Income

Selling of NTFP % Agriculture % Business % Other % Total %

10-18 N 1 0.20% 0 0.00% 0 0.00% 0 0.00% 1 0.20%

18-30 N 13 3.20% 7 1.70% 0 0.00% 0 0.00% 20 4.90%

30-50 N 67 16.50% 49 12.10% 7 1.70% 1 0.20% 124 30.50%

50-70 N 136 33.50% 117 28.80% 8 2.00% 0 0.00% 261 64.30%

N 217 53.40% 173 42.60% 15 3.70% 1 0.20% 406 100.00%Total

Age

Source of Income



Digrm No. 3 (without %)

Digrm No. 4 (with%)

61

Table-4: Chi-Square Tests(age & source of income)

Value df Asymp. Sig. (2-sided)


Likelihood Ratio 7.927 9 .541

Linear-by-Linear Association .336 1 .562


a. 9 cells (56.3%) have expected N less than 5. The minimum expected N is .00.

This table finds the results of the “Pearson Chi-Square” row. We can see here that ÷ (1) = 6.885, p =0.649. This tells us that there is no statistically significant association between age and sources ofincome; that is, all the respondents of Keonjhar districts prefer to earn through selling of NTFP productsirrespective of the age group.

Table-5: Prpblem in Collection of NTFPS

Yes % No % Total

389 95.8 17 4.2 406

Source: Primary Survey

Diagram No. 5



The above table-5 revels that more than 94% of the respondents are facing problem while collectingthe NTF products. Majority o the forest in both the district found in hilly areas, where the surface is notplain. Till date most of them collect NTFPs in bare foot i.e., without shoes, maximum they carry a stickor an axe with a bamboo basket or plastic bag while collecting NTFPs.

They often face wild animals like bears, elephants and snakes. In order to collect easily they incertain cases burn the areas under the trees for example – mahua. This fire spreads and sometimes asubstantial portion of forest is destroyed by fire.

It is also found that they use fire wood for cooking purpose. The most painful thing noted is that inorder to protect their kitchen garden they make fence of woods valuing lakhs of rupees. Similarly,collecting NTFPs from deep forest is sometime not feasible. Usually they collect NTFPs within a rangeof 2 to 10 Kilometers from their house.

Table- 6: Chi-Square Tests




Linear-by-Linear Association 0.000 1 .998



Table- 7: Kind of Problem in Collection of NTFPS

Rough

surface

area

%

Inaccessibility

to deep forest

% Threat

of wild

animals

%

Transportation

problem

%

Total

257 64.3

38 9.

8 36

6.7 75

19.3 406

Source: Primary Survey

63

Diagram No. 7 (With%)



The above table-7 shows the kind of problems faced by the tribals during the collection of NTFproducts. The tribal’s while collecting NTFPs face all the problems mentioned above. Hilly areas containrough surfaces. And it is very difficult to penetrate into deep forest. Threat of wild animals particularlybear, elephant and snake is very prone. Very often it is found that the collectors are attacked by suchanimals.

Besides the above transportation of NTFPs is a big problem. Because of this problem in manycases it doesn’t become feasible or viable to collect and sell the NTFPs.

Table- 8: Chi-Square Tests9( economy and market)




Linear-by-Linear

Association 1.885 1 .170



These are the broad areas where challenges are major, and interventions are necessary for the overalldevelopment of the NTFP sector in order to properly utilize its vast potential in socio-economicdevelopment of the disadvantaged people and areas. Volatile market is one of the major challenges butthe government is not supposed to totally control the market as that would be unsustainable in manyways. However, the government can create enabling mechanisms that reduce this volatility at least forsome species, and enhance the resilience of the primary collectors and their institutions to withstandthe adverse impacts of market dynamics.

Conclusion This study attempts to outline the problems faced by the tribal of Keonjhor district during the

collection of NTF products. The problems such as inaccessibility to deep forest, threat of wild animals,transportation problem, etc., has been identified as the major issues for tribal in the Keonjhar districts.Challenges and strategies of NTFP management which will be useful in solving the problems of tribalcan be resolved by providing sustainable development of resources vis-a-vis provide livelihoodopportunities to the poorest section of society have been discussed. Moreover, the tribals should beencouraged to have diversified income source like goatery, poultry, apiculture, floriculture etc., so as toensure their economic development and restrict the dependence and over-exploitation of forest resources.

65

References:1. Acharya, G. K. (2013). An economic analysis of collection, primary processing and marketing of non-timber

forest products in Bastar district of Chhattisgarh. M.Sc. (Ag.)Thesis, IGKV, Raipur (C.G.).

2. Acharya, S. and S. Alam. 2009. Livelihood opportunities in tasar sericulture. PRADAN Publisher, 3, NitiBagh, New Delhi – 110049, India. Anon., 2010a. Livelihood promotion through Non-Timber Forest Produces(NTFPs) inWest Singhbhum, Jharkhand State Livelihood Promotion Society (JSLPS),Rural DevelopmentDepartment, Ranchi, Jharkhand.

3. Basavaraj, L.T., Raguprasad, K.P. and D. Ragupathi. 2004. Awareness of the Tibetan

settlers about agroforestry practices in comparison with native farmers. My Forest, 40 (2): 157-161.

4. Gharai, A.K. and S. Chakrabarti. 2009. A Study on NTFP-related livelihood dependency and people’s perceptionof the commercialization potential of selected NTFP s in selected locations of Gumla, Hazaribagh & Simdegadistricts of Jharkhand,

5. Govt.,of Odisha (2011-12) (2012-2013), Economic Survey of Odisha, Govt., of Odisha, Bhubaneswar.

6 Govt., of India 2011, Census of India, Ministry of Home Affairs District profile, Keonjhar, govt., of Odisha.

Centre for People’s Forestry, Hyderabad.

7. M. Behera, Income and Expenditure of particularly vulnerable tribal groups of Odisha: A ComparativeAnalysis, Journal of Economic and Social Development, Vol – xii No. 1. June -2016 .

8. Pandey, A.K. 1999. Socio-economic profile of tribal and non-tribal farmers in the tribalsetting of Bihar.RuralIndia, October, 1999, pp. 67-72.

9. Surayya, T., Mishra, M. and R.P. Mishra. 2003. Marketing of selected NTFPs: A case study of Koraput,Malkangiri and Rayagada districts, Orissa state. Journal of Non-Timber Forest Products, 10 (3/4): 186-194.

10. Tejaswi, P. B. (2007-2008). Non-timber forest products (NTFPs)for food and livelihood security: An economicstudy oftribal economy in Western Ghats of Karnataka, India.

11. International Master of Science in Rural Development,Ghent University, Belgium.



* Assistant Professor, School of Commerce, Gangadhar Meher University, Sambalpur, Email: [email protected] No: 7978123683, 9090569357

** Associate Professor and Head , School of Commerce, Ravenshaw University, Cuttack, Emial : [email protected] No: 9437154470

*** Professor and Registrar (Retd), Ravenshaw University, Cuttack, Email: [email protected],Contact No: 9437002827

Direct Tax Reform in India: An Impact Analysiswith Special Reference to Goverment Revenue

Dr. Priyabrata Panda*, Dr. Kishore Kumar Das** & Prof. Malay Kumar Mohanty***

ABSTRACTThe Direct Tax regime has witnessed many changes every year since its inception. The proposed change

or reform in tax policy has manifold objectives. The impact of such reform should be judged in regard to itscontribution to government treasury which is the primary purpose of tax reform. This research work dissectsthe impact of direct tax policy reform, direct tax administrative reform and economic policy reform on directtax revenue and total revenue. Notable research work in the similar field is reviewed and gap is traced out.Anova and regression is applied to assess such impact.

Keywords: Direct Tax, Reform, Impact, Policy.

Introduction.The great Sepoy revolt was considered as force factor for the emergence of tax structure of India.

The Sepoy Mutiny in 1857 broke down the financial strength of British India Government. The militaryexpenditure increased to 32 crores in 1858-59 from just 17 crores in 1856-57. To overcome this acutefinancial crisis, the British Government introduced first Income Tax Act in February, 1860. The Act isnumbered as Act no XXXI of 1860 which was passed by legislative council of India and received theassent of the Governor General on 24th July 1860. James Wilson introduced this Act who later became(British) India’s first finance member. The first Income Tax of India came to force. British governmentexperimented with different reforms to pour their treasury and succeeded to some extent also. Britishundertook tax reforms to generate revenue not for economic development but for generation of revenue.Independent India made radical change in Income Tax structure with the introduction of Income TaxAct 1961. Government then appointed different committees and made systematic reforms in time intervalsto form a comprehensive tax structure.

The Direct Tax Code which is in pipe line shall be the major reform in direct tax regime after 1961.Many changes have been carried on in Income Tax Act every year since 1961. Hotel Receipt Tax,Fringe Benefit Tax, Security Transaction Tax, Gift Tax etc has levied in different period of time to

67

widen the tax base. Different schemes like voluntary disclosure scheme, presumption tax scheme,compulsory deposit schemes etc has been introduced and also repealed in time and again to increasethe direct tax revenue. Whether such schemes helped government in generation of revenue or createdthe burden of cost of administration for the policy makers?

Thus, the impact of such change should be judged in regard to its contribution to governmenttreasury and balance economic development.Nidesh (2010) highlighted that the tax reform should aimat broadening the tax base to realise more revenues which in turn foster sustainable growth and fiscaladjustment.

Problem StatementThe direct tax regime has undergone several changes since inception. Different policies are framed

and withdrawn in trial basis. Many researchers concerned about many weaknesses of India’s tax structurelike tax evasion, narrow tax base low compliance etc. Pillarisetti (1995) 1 opined that Indian direct taxreform failed to neutralise non-compliance and tax evasion and India’s approximately 50% legalreportable income is untaxed. Similar opinion is also delivered by Bhalla (2004)2. Bernardi and Fraschini(2005)observed that directtaxes still are in an infant state, both as weight as well as structure. Thus, taxreforms should be quantitatively matched toits objectives.

Importance of the StudyTax policy must be resulted to pouring of treasury in particular and fostering economic development

in general. Policy makers are eager to know the viability of the policy which has rolled out. This studyfocalizes to dissect the quantitative impact of direct tax policy reform and direct tax administrationreform and economic policy reform on direct tax revenue and total revenue. It is the need of the time tostudy the impact of such policy.

This research can give an insight view of earlier reforms, and based on which policy makers maymake required changes in fiscal policy. The current study can help government in designing tax structure.It will also helpful for researchers to conduct extensive studies in this subject.

Review of LiteratureGupta, Lahiri and Mookharjee (1995) made an empirical analysis on income tax compliance in

India from 1965-55 to 1992-93. They found that low tax rates, plethora of exemptions significantlyaffect the revenue collection. Sharma (1997) dissected the revenue potential of MAT and AMT bytaking 4352 companies. The author found that that government would collect net additional revenue of2625 crores of rupees from this measure (MAT) from 3178 zero tax companies.Gupta & Gang (2000)proposed a method for evaluating the impact of tax structure changes on tax revenue.They believedthat revenue loss is the sum of tax rate effect, statutory base effect and evasion effect. Chattopadhyay,Das-Gupta (2002), in their article empirically studied the reaction of tax payers in respect to taxavoidance, compliance, tax planning, tax saving etc in India.They have concluded thatlegal compliancecosts effect tax collection positivelyand tax evasion negatively. Bhalla (2004)glossed up the impact ofstructure of income tax rates on compliance, and tax revenue.The paper concluded that the tax cuts, taxreform, reduction in tax rates and removal of exemptions would lead to a significant increase in directtax revenues. Rao (2005) canvassed the structure and operation of Indian tax system. The author

Direct Tax Reform in India: An Impact Analysis with Special Reference to Goverment...


stunningly concluded that some progressive tax reforms have helped to enhance tax-gdp ratio.Bernardiand Fraschini (2005) theoretically studiedabout tax system and tax reform in India. The authorssuggested that tax reforms of India should reduce both tax evasion and costs of compliance, and shouldeliminate most of the distorted behaviour coming from tax avoidance.Pandey (2006) conducted a studyon policy initiative of direct tax reform by taking on both primary and secondary data.The authoradvocated about elimination of tax incentives, widening of tax base, strengthening of tax collectionmachinery, encouragement of voluntary compliance, reform in tax administration etc.Tsakumis,Curatola&Porcano (2007) opined that the nidus of deficit tax revenue is tax evasion. Further taxavoidance not only depends upon audit failure or policy failure but also attributable to nationalculture.Singh (2008) extensively studied how evasion and corruption cause significant loss toGovernment tax revenue. The author analysed the nexus between tax payer and tax auditor which resultstax evasion.Nidesh(2010)made an insight view on direct tax reforms process from 1970s to New DirectTax Code and opined that a major simplification and rationalization initiative came in 1985-86, whenthe number of tax brackets was reduced from eight to four, the highest marginal tax rate was broughtdown to 50 percent and wealth tax rates came down to 2.5 percent.Vazquez & Timofeev (2010)opinedthatmaximisation of revenue and lowering of administration cost and compliance cost be kept in mindwhen tax reforms are carried on.Palande (2011)emphasised on the simplification of tax structure whichultimately accelerate tax compliance, widening of tax base to increase tax revenue, improving of taxadministration to strengthen tax system, minimising compliance cost as an austerity measure.

Prakash & Sindhu (2011) made a comparative study of direct tax reforms in India in pre and postliberalisation period. They have concluded that substantial changes have taken place in the overall taxstructure and its composition in India during the post-reform period.Lucotte (2012) made an empiricalstudy on inflation targeting and tax revenue performance in 59 emerging countries.The paper concludesthat adoption of monetary policy framework by maintaining inflation low levels encourages thegovernment to improve collection of domestic tax revenue.Bagchi (2013) made a theoretical study onpriorities of a tax programme, pointed that the objective of maximising the yield of direct tax raisingtax rate, widening tax base and curve evasion. The focus of a tax reform must suggest the means fortalking problems of black money, tax evasion and tax arrears as well.Sharma&Singh (2017) canvassedincome tax responsiveness of India in post liberalisation period from 1991 to 2015.It is derived fromthe paper that “The tax elasticity coefficient for the study period (1991-2015) has been 0.53, thus depictingthe low magnitude of automatic responsiveness for income tax collections vis-à-vis variations ineconomic growth post the reforms era”

Research GapThe above research articles stressed on attributes like tax rate, exemption, avoidance, corruption

etc. These authors did splendid work in their sphere of research. Bur little scholarly attention has beendiverted to measure the quantitative impact of direct tax reform on direct tax revenue and total revenue.Further researchers had not identified a specific reform and its overall impact. No research workcategorised the direct tax reform to policy reform and administrative reform. In addition, the previousstudies are limited to assess the impact of economic policy reform on direct tax revenue and totalrevenue.The present research paper tries to measure the impact of direct tax policy reform, direct taxadministrative reform and economic policy reform on direct tax revenue and total revenue.

69

Objective of the StudyThe study is conducted with following objectives.

1. To measure the impact of economic policy reform on total revenue and direct tax revenue.2. To assess the impact of direct tax policy reform on total revenue and direct tax revenue.3. To analyse the direct tax administration reform on total revenue and direct tax revenue.

Hypothesis of the StudyThe following hypothesises are designed in accordance with the objectives.

1. HO1: There is no significant impact of economic reform on direct tax revenue and total revenueof government.

2. HO2: Direct tax policy reform has no significant impact on total revenue and direct tax revenue.3. HO3: Direct tax administration reform has no significant impact on total revenue, and direct tax

revenue.

Research MethodologyThis segment covers selection of data and its source, variable, statistical tools etc.

Data Period.Data from 1960-61 to 2016-17 is processed under this research work. The total period is grouped

on the basis of Economic Policy Reform, Direct Tax Administrative Reform and Direct Tax PolicyReform which are as follows.

Table 1: Description of Groups.

Category Criteria Category Category Name N

Economic Policy

Reform

1 1961-1978 16

2 1978-1991 11

3 1991-2017 26

Direct Tax

AdministrativeReform

1 1961-1972 12

2 1972-1987 12

3 1987-2007 19

4 2007-2017 10

Direct Tax Policy

Reform

1 1961-1978 15

2 1978-1997 18

3 1997-2017 20

Source: Compiled results.



Justification of Grouping.The Data Points are grouped into three categories according to economic policy reform, direct tax

administrative reform and direct tax policy reform. The first break point in the economic policy reformis 1978 when for the first-time demonetisation policy was adopted in independent India. Major economicreform took place in 1991which is the second break point for such group.Prakash & Sindhu (2011)3 hasalso taken 1991 as a break point to study the revenue behaviour in pre and post reform period

Administrative Reforms can be annotated as creation, abolition and redesignationof posts ordirectorates, implementation of an administrative policy, scheme or tool like PAN, Assessment, TAXNET,and TRACES etc. Direct Tax Policy Reform can be explicated as change in tax rate, deduction andexemption etc.

The study period is segmented to four groups on the basis of administration reforms. The groupsare 1961-1972, 1972-1987, 1987-2007 and 2007 to 2017. The justification of such segmentation isgiven in the following tables.

Table 2: Important Administrative Events of 1972 and Its Possible Impact.

Events Possible Impact

Creation of Special Cell To regulate the issues of big industrial

houses.

Creation of a new cadre post known

as IAC

To check tax evasion on transfer of

immovable property.

Directorate of O & M (Income- tax) For better governance.

Creation of post of I.T.O. (Internal

Audit) For maintaining transparency

PAN Introduced. Effective assesses management

More Power for valuation officers

under Income Tax Act and wealth

Tax Act.

Accelerating Search and Seizure.

Source: www.incometaxindia.gov.in.

The reform of 1972 had emphasized on governance, transparency, checking on evasion etc.It isexpected that such events would have fostered the growth of direct tax revenue and total revenue aswell.

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The table below portrays the important administrative reforms in 1987 and its possible impact.Concept of uniform previous year, simplification of laws and procedures, developing of comprehensivedispute settlement mechanism etc are the important events of 1987 which could have helped governmentin generation of more tax revenue

Table 3: Important Administrative Events occurred in 1987 and Its Possible Impact.


Introduction of uniform previous year Systematic collection and assessment

Office of Directorate General (Tax

Exemption) Better Governance

Three new benches of Settlement

Commission was set up Easy Dispute Settlement

The Direct Tax Law(Amendment) Act 1987

Introduced

Simplification of procedures and

redesignation of different officers.


Table 4: Important Administrative Events occurred in 2007 and Its Possible Impact.


Sevottam Scheme Standardize service delivery to the taxpayers

AayakarSeva Kendra Centralized receipt and registration of income tax returns

TAXNET Assesses Management

ITDMS Recording 360° taxpayer profile


Many measures like above are undertaken in each year from 1961 to 2017. But importantadministrative reform is chosen only after a rigorous theoretical analysis and rational thinking as thereis unavailability of adequate literature in regard to this.

Important direct tax policy events for the concerned years are selected by applying same principle.Theyear 1972 was experienced with above administrative changes which impact is studied with the techniqueof anova and regression



Assumption Checking.Normality is one of the important assumptions for metric variable when parametric tests are applied.

The results of normality test of different variables are shown below.

Table 5: Result of Normality Test.

Variables Kolmogorov-Smirnov Result

Statistics N Sig.

Total Revenue .096 53 .200 Normal

Direct Tax Revenue .114 53 .081 Normal

Indirect Tax Revenue .103 53 .200 Normal

Non Tax Revenue .124 53 .061 Normal

Personal Tax Revenue .162 53 .001 Not Normal

Corporate Tax Revenue .096 53 .200 Normal

Source: Data Processed in SPSS software.

The null hypothesis of normality is data is normal which is accepted for all variables shown aboveexcept Personal Tax Revenue with the application of Kolmogorov-Smirnov test.

The assumption of homogeneity should be satisfied for application of Anova. The result ofhomogeneity is shown below.

Table 6: Levene’s Test of Homogeneity

Variables F df1 df2 Sig.

Total Revenue .993 7 45 .448

Direct Tax Revenue 1.915 7 45 .089

Source: Data Processed in SPSS software.

The null hypothesis for homogeneity is similar like normality i.e. there is homogeneity among thegroups which is accepted for the two dependent variables shown in above table.

Checking Outliers and Missing Values.There should not be any outliers which are the extreme values. If the standardised values are within +-3,

it is considered that the data has no outliers. It is also important to check missing values in the data set.Both of these requirements are fulfilled by the help of SPSS software.

73

Statistical Tools.Manova and Multiple Regression are applied to test hypothesis. The result of both the test

iscompared.

Data Analysis and Hypothesis TestingApplication of Manova.

Manova is a member of Anova family. Unlike factorial anova, manova considered more than twodependent variables. The following table shows the result of manova.

Table 7: Result of Manova. (Dependent Variable:TR and DTR)

Source VariableSum of Squares df

Mean Square F Sig.

TR 269.244a 7 38.46 247.55 0DTR 351.175b 7 50.16 274.44 0TR 4387.673 1 4387.67 28239.3 0

DTR 3027.547 1 3027.54 16562.4 0TR 1.164 2 0.58 3.74 0.03

DTR 2.364 2 1.18 6.46 0TR 14.799 3 4.93 31.74 0

DTR 21.22 3 7.07 38.69 0TR 3.578 2 1.78 11.51 0

DTR 9.777 2 4.88 26.74 0TR 6.992 45 0.155

DTR 8.226 45 0.183TR 6730.56 53

DTR 4938.375 53TR 276.236 52

DTR 359.401 52

Total

Corrected Total

Corrected Model

InterceptEconomic Policy ReformDirect Tax Administrative Direct Tax Policy ReformError


a. R Squared = .975 (Adjusted R Squared = .971)b. R Squared = .977 (Adjusted R Squared = .974)TR: Total Revenue, DTR: Direct Tax Revenue.

The adjusted R square which measures the degree of explanation made by the variables about themodelis well satisfactory for both the variables. The application of manova rejects the entire threehypotheses. Economic reform has significant impact on Total Revenue and Direct Tax Revenue. Thusdemonetisation of 1978 and major economic policy reform in 1991 has significant impact on direct taxrevenue. Similarly direct tax administrative reforms and Direct tax policy reform in the in the concernedyears have significant impact on both Direct Tax Revenue and Total Revenue of government.



Application of Multiple Regression Technique.Multiple Regression Technique explains how much increase of dependent variable with every one

unit increase or decrease of independent variable. Six regression models are designed for the applicationof regression technique. The assumptions(Chan, 2001)4 of such technique are strictly followed. Thetable below explains certain criteria of regression analysis.

Table 8: Regression Assumptions.

Model No

R Square

Adjusted R

Square

Std. Error of

the Estimate

Durbin Watson

Statistics

Anova F Stat, (P

Value)

Residual Statistics

Mean Standard Deviation

10.2.1 .944 .941 .42 1.715 384.521(.000) 0 .979

10.2.2 .972 .944 .43 2.059 190.102(.000) 0 .958

10.2.3 .985 .970 .31 1.810 347.267(.000) 0 .957

10.2.4 .946 .943 .42 1.705 269.254(.000) 0 .969

10.2.5 .992 .992 .12 1.556 1964.726(.000) 0 .970

10.2.6 .587 .512 .63 1.827 7.908(.000) 0 .921


The R square and adjusted R square measures the degree of explanation made by the variablesabout the model. It explains the closeness of the data to fit regression line.It shows the percentage ofvariation in Y variable which is explained by all X variables together. Both the R square and adjusted Rvalue is acceptable for all the above models.

Durbin and Watson (1951) for the first time used such statistics to the residuals in least squareregression analysis. They developed null hypothesis that the errors are serially uncorrelated at lag 1.Thevalue of such result varies from 0 to 4. But a rule of thumb is that test statistic values in the range of1.5 to 2.5 are relatively normal.

The anova value represents the linear relationship between variables which is one of the importantpre-conditions of linear regression analysis. The result is drawn in Anova table with F statistics. Thehypothesis for such test is mentioned below.

H0 = There is no linear relationship between two variables.Here above the null hypothesis is rejected at 1 % level of significance.The residual statistics signifies mean and standard deviation of residuals. Normal distribution of

residuals is one of the pre conditions of linear regression analysis. The mean value should be zero and

75

there should be uniformity in deviation. In the above table, mean of standardised residuals of all modelsare zero and standard deviation is nearer to one. It can be deduced that errors are normally distributed.

Exhibit 1: Normality of Residuals through P P Plot.

Source: Data Compiled with the help of SPSS.

Model : 10.2.1 Model : 10.2.2

Model : 10.2.3 Model :10.2.4

Model :10.2.5 Model :10.2.6



The above picture shows the P P Plot which advocates normality of residuals graphically. If thedata points are nearer to the straight line in P-P Plot, the data is said to be normally distributed. The P PPlot of all the six models are not scattered over the picture rather nearer to the line. Thus it can beinferred that errors are normally distributed.

Exhibit 2: Constant Variance of Residuals

Source: Data Compiled with the help of SPSS.

Model : 10.2.1 Model : 10.2.2

Model : 10.2.3 Model :10.2.4

Model :10.2.5 Model :10.2.6

77

Regression analysis carries one of the important assumption i.e. there must be constant varianceamong residuals. If the plots is scattered all over the area, it is said that there is constant variance ofresiduals. The above picture shows constant variance among residuals.

Application of Regression by Taking Direct Tax Revenue as Dependent Variable.The theoretical regression model may be as follows.Growth of Direct Tax Revenue

= +

All variables are measured in log natural form and growths of all variables are taken.This model took direct tax revenue as dependent variable which is processed with eight independent

variables. The independent variables are described as follows.CT: Corporate Tax, PT: Personal Tax, WT: Wealth Tax, ODTR: Other Direct Tax Revenue, GNI:

Gross National Income, GDS: Gross domestic saving, GCF: Gross Capital Formation.

Table 9: Regression Coefficients

B SE Tolerance VIF(Constant) 0.051 0.091 0.554 0.582Corporate TaxRevenue 0.673 0.032 0.745 21.013 0 0.975 1.026Personal TaxRevenue 0.208 0.014 0.516 14.554 0 0.975 1.02610.2.1

ModelUnstandardized Standardized

Coefficients t Sig.Collinearity


The model considers the significant impact of both Corporate Tax Revenue and Personal TaxRevenue on Direct Tax Revenue at 1% level of significance as P value is 0.00. The variables likegrowth of wealth tax, other direct tax revenue, gross national income, gross domestic product, grossdomestic saving and gross capital formation has no significant impact on the growth of direct tax revenue.

The above table replicates that every one unit increase in direct tax revenue; corporate tax revenueis increased by .747. Similarly personal tax revenue is increased by .516. Here the tolerance is nearer to1 which is more that the desired level i.e., 0.6 and Variance Inflation Factor is also within the limit aswell. The regression equation is as follows.

Direct Tax Revenue = .673*Corporate Tax Revenue + .208 of Personal Tax Revenue.Application of Regression by Taking Direct Tax Revenue as Dependent Variable with various

Reforms as Dummy Variables.The theoretical regression model may be as follows.



Direct Tax Revenue

=+

= +

Here above the dummy variables are direct tax administrative reforms, economic reforms and directtax policy reforms.

Following are the regression results.


B SE Tolerance VIFCorporate

Tax Revenue 0.66 0.033 0.713 19.749 0 0.951 1.051Personal

Tax Revenue 0.215 0.015 0.523 14.378 0 0.937 1.067

Direct Tax Policy Reform -2.742 0.363 -0.308 -7.552 0 0.747 1.338

Economic Policy Reform 1.113 0.359 0.125 3.097 0.003 0.763 1.3110.2.2

ModelUnstandardized Standardized

Coefficients t Sig.Collinearity


a. Dependent Variable: Direct Tax RevenueModel 10.2.2 reveals the following equation.Direct Tax Revenue =.660* Corporate Tax Revenue +.215* Personal Tax Revenue -2.742* Direct

Tax Policy Reform +1.113* Economic Policy Reform.The above model predicts Direct Tax Revenue with four independent variables viz. Corporate Tax

Revenue, Personal Tax Revenue, Policy Reform and Economic Reform. Direct Tax AdministrativeReform has no impact on the growth of Direct Tax Revenue. The direct tax policy reform is predictingthe direct tax revenue negatively. With one unit of increase of growth of Direct Tax Revenue, growth ofCorporate Tax Revenue is increased by .660 times. Similarly, Personal Tax Revenue influences by .215times and Policy Reform by -2.742 times and Economic Reform by 1.113 times.

79

Application of Regression by Taking Direct Tax Revenue as Dependent Variable withIntroduction of Various Direct Tax Acts as Dummy Variables.

Direct Tax Revenue

= +

Here above the dummy variables are introduction of Hotel Receipt Tax Act, Interest Tax Act, FringeBenefit Tax Act, Security Transaction Tax Act and Banking Cash Transaction Tax Act and Gift Tax Act.

Hotel Receipt Tax Act was introduced w.e.f 01.04.1981, Interest Tax Act 1974 was revived in 1991,Fringe Benefit Tax Act and Security Transaction Tax Act was come to force in 2004, Banking CashTransaction Tax Act was in operation in 2005 and Gift Tax Act was in force from 31.05.1990.

Following are the regression results.


B SE(Constant) 0.221 0.09 2.462 0.018Corporate

Tax revenue 0.739 0.028 0.756 26.79 0 0.877 1.141Personal Tax

Revenue 0.201 0.011 0.495 17.928 0 0.917 1.09

Gross Capital Formation -0.204 0.053 -0.106 -3.821 0 0.909 1.1

Interest Tax 0.545 0.232 0.063 2.351 0.023 0.975 1.02610.2.3

Model

Unstandardized Coefficients Standardized

Coefficients t Sig.

Collinearity Toleranc

e VIF


Model reveals following regression equation.

Direct Tax Revenue =.739* Corporate Tax Revenue +.201* Personal Tax Revenue -.204* GrossCapital Formation+.545* Interest Act.

All the above predictors affecting the predictand at 1% level of significance. In the above model,Gross Capital Formation negatively affects the dependent variable. Interest Tax Act influences thedependent variable by .545.

Application of Regression by Taking Direct Tax Revenue as Dependent Variable with MAT,CDS, VDS, Gift Tax Act and BCCT as Dummy Variables.



The theoretical model for the application of regression analysis is as follows.Direct Tax Revenue

= +

The dummy variables are introduction of Minimum Alternative Act, Compulsory Deposit Scheme,Voluntary Disclosure Scheme, Gift Tax Act and Banking Cash Transaction Tax Act. Minimum AlternativeAct was introduced in 1997; Compulsory Deposit Scheme Act 1974 was introduced in 1974 anddiscontinued in 1982.

Moreover,Voluntary Disclosure Scheme was introduced in 1951, operational in 1965, was applicableto income and wealth in 1975 and again introduced in 1997; Gift Tax Act was come in force with effectfrom 31.05.1990 and abolished in 1998 and Banking Cash Transaction Tax Act was effective from01.06.2015.

The table below explains the regression coefficients. The variables which significantly affect thedependent variables are shown in this table. The regression equation is as follows.

Direct Tax Revenue = .673*Corporate Tax Revenue +.208 *Personal Tax Revenue -3.395.MAT.

Table 12: Regression Coefficients.

Model Unstandardized

Coefficients Standardized Coefficients t Sig.

Collinearity Statistics

Tolerance VIF B SE

10.2.4

(Constant) .051 .091 .554 .582

Corporate Tax

Revenue .673 .032 .728 21.013 .000 .975 1.026

Personal Tax

Revenue .208 .014 .508 14.554 .000 .962 1.040

MAT -3.395 .430 -.272 -7.899 .000 .986 1.014


Corporate Tax Revenue and Personal Tax Revenue affect the Direct tax Revenue at 1% level ofsignificance in the above model. Here above Minimum Alternative Tax negatively affects the DirectTax Revenue.

Application of Regression by Taking Total Revenue as Dependent Variable.The model took Total Revenue as dependent variable and Direct Tax Revenue, Indirect Tax Revenue

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and Non-Tax Revenue as independent variable. The impact of these dependent variables on Total Revenueis studied.

The theoretical regression model is as follows.

Total Revenue = +

DTR: Direct Tax Revenue, ITR: Indirect Tax Revenue, NTR: Non Tax Revenue, E: ErrorFollowing are the regression results.



Coefficients Standardized Coefficients t Sig.


Tolerance VIF B SE

10.2.5

(Constant) .088 .033 2.683 .010

Non Tax Revenue .278 .005 .765 53.524 .000 .825 1.212

Indirect Tax

Revenue .431 .021 .302 20.114 .000 .748 1.337

Direct Tax

Revenue .132 .013 .164 10.531 .000 .696 1.437


The regression equation is as follows. All the variables are significant at 1% level of confidencealong with the constant.

Total Revenue = .088+.278*Non Tax Revenue + .431*Indirect Tax Revenue + .132* Direct TaxRevenue.

With one unit increase in Total Revenue, Indirect Tax Revenue, Direct Tax Revenue and Non TaxRevenue is increased by .431, .132 and .278 respectively.

Application of Regression by Taking Total Revenue as Dependent Variable and DifferentReforms as Independent Variable.

This model studied the impact of micro economic factors and direct tax reforms on Total Revenueof Government. The theoretical model is explained below.

Total Revenue = +

dtr: direct tax revenue, gds: gross domestic savings, gni : gross national income, gcf : gross capitalformation, er: economic reform, dtadt: direct tax administration reform, dtpr:direct tax policy reform.



The above model is specifically designed to study the impact economic reform, administrativereform and direct tax policy reform on total revenue of the government.

Thus, these variables are taken as dummy variables.The table below shows the regression coefficient with the significant value. Direct tax revenue

only significantly affects the total revenue. No other variables affect the predictand.Economic reform, direct tax policy reform and direct tax administrative reform have no impact on

total revenue. Other economic indicators also have no impact on total revenue.




Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

10.2.6

(Constant) .025 .299 .085 .933

Gross Capital Formation -.063 .260 -.058 -.241 .810

Gross National Income .502 .321 .211 1.562 .126

Gross Domestic Saving .199 .287 .158 .693 .492

Economic Reform -.208 .561 -.047 -.371 .712

Direct Tax Revenue .374 .056 .693 6.648 .000

Policy Reform -.148 .523 -.033 -.282 .779

Administrative Reform -.364 .412 -.099 -.883 .383


Major Findings of the StudyData, in the form of different variables, from 1960-61 to 2016-17 is processed under anova and

regression technique. The major findings are summarised below.1. The economic policy reform viz. The first demonetisation of independent India in1978 and the

major economic policy reform in 1991 has significant impact on direct tax revenue and total tax revenue.Such structured and comprehensive economic policy changes have been fostering the revenue generationpotential of India.

2. Direct tax administrative reforms in 1987 and 2007 have significant impact on total tax revenueand total revenue. Reforms like creation of new directorates, introduction of schemes like sevottamscheme, taxnetetc influences the revenue when anova is applied but regression results replicate that

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these administrative amendments have no impact on direct tax revenue and total revenue. The regressionresults can be firmly accepted than anova results.

3. Direct tax policy reform has significant impact on direct tax revenue when both anova andregression is applied. Thus, it can be deduced that direct tax policy reform of 1978 and 1997 hassignificantly influenced direct tax revenue. But its impact on total revenue is surmised when regressionis applied.

4. Corporate tax revenue and personal tax revenue has significant impact on direct tax revenue.The impact of corporate tax revenue on direct tax revenue is three times more than the impact of personaltax revenue. Gross national income, gross domestic savings and gross capital formation has no impacton direct tax revenue.

5. Introduction of interest tax has significant impact on direct tax revenue. FBT, STT, BCTT andGift tax has no significant impact on direct tax revenue.

6. MAT has significant impact on direct tax revenue but CDS, VDS has no impact on the growth ofdirect tax revenue.

7. The impact of indirect tax revenue on total revenue is more than the direct tax revenue and otherdirect tax revenue.

Policy Suggestion.Following are the noteworthy policy suggestions which are based on the above findings1.The study shows that administrative reforms of 1972, 1987 and 2007 have no impact on tax

revenue. But such reforms have simplified tax compliance procedure hence should be continued in thedemand of time. Specifically measures like presumption scheme, award to tax payers, digitalisation ofservice delivery mechanism, decentralisation of directorates, delegation of more power wherevernecessary etc should be reshaped, revived and reconsidered.

2. Demonetisation has no impact on direct tax revenue. But the major economic policy reforminfluences direct tax revenue positively. Thus, reforms like liberalisation in legislation, further openingof economy may be initiated time to time.

3. Direct tax policy reform in the relevant years are not strong enough to influence that tax revenue.4. The revenue generation potential of MAT is lamented in this study. MAT is negatively

influencing direct tax revenue.5. Bank cash transaction tax and Security transaction tax have no significant impact on direct tax

revenue because of its marginal contribution to revenue. Such types of taxes are pertinently wideningthe tax base also adding implementing cost, cost of administration and collection. If such cost is morethan the revenue such tax may be merged with any other tax like wealth tax.

6.Compulsory deposit scheme should not be implemented again. Many researchers also criticisedsuch scheme as it violates the fundamental rights of citizens. This study shows that such scheme has noimpact on direct tax revenue.

7. Voluntary disclosure scheme is an unfair mean to generate tax revenue. It should not beimplemented any more.



ConclusionThere is no iota of doubt that comprehensive, organised and structured changes can help in achieving

tax reform objectives. Deduction or exemption may slow down the revenue growth for a while but inlong run it can accelerate the revenue growth potential of a country. Though egalitarian utopia cannotbe created overnight but an equitable tax policy can morph the dystopia in long run. Tax revenue is notthe only result of tax policy reform. Both monetary policy and fiscal policy can generate tax revenuefor the country. Thus, policy makers of an economy like India should bring out a composite model oftax reform. The model tax model should comprise of integrated and connected by administrative reform,economic reform and tax policy reform.

References1. Bagchi, A. (1973). Priorities for a Tax Programme. Economic & Political Weekly, 8(8), 435,437-439,441-443.

2. Bernardi L and Fraschini A (2005):Tax System and Tax Reforms in India, Working paper n. 51, Departmentof Public Policy and Public Choice, University of Pavia and University of Eastern Piedmont , Italy

3. Bhalla, S. S. (2004): Tax Rates, Tax Compliance and Tax Revenues: India, 1988-2004, Book published byOxus Research & Investments, June 2004.

4. Chan, Y.H.. (2004) Biostatistics 201: Linear Regression Analysis. Singapore Med J; 45 (2), pp 55- 61.

5. Chattopadhyay, S., & Das-Gupta, A. (2002): The Personal Income Tax in India: Compliance Costs andCompliance Behaviour of Taxpayers, Project Report, National Institute of Public Finance and Policy, NewDelhi.

6. Gupta, A., Lahiri, R., &Mookherjee, D. (1995). Income Tax Compliance in India: An Empirical Analysis.Word Development, 23(12), 2051–2064.

7. Gupta, A., & Gang, I. N. (2000). Decomposing Revenue Effects of Tax Evasion and Tax Structure Changes.International Tax and Public Finance, 7(2), 177–194. https://doi.org/10.1023/A:1008704520816

8. Lucotte Y (2012): Adoption of inflation targeting and tax revenue performance in emerging market economies:An empirical investigation, Economic Systems, 36 (2012) pp 609–628

9. Nideesh, K. B. (2010). Direct Tax Reform in India/ : A Road Ahead. Advances in Management, 3(1), 5–7.

10. Rao, M. G. (2005). Tax system reform in India: Achievements and challenges ahead. Journal of AsianEconomics, 16(6), 993–1011. https://doi.org/10.1016/j.asieco.2005.10.003

11. Palande S. A. (2011): Income Tax Problems & Recommendation, Indian Streams Research Vol. 1, Issue II /March 2011, pp.168-171

12. Pandey M. (2006): Direct Tax Reforms in India- Policy Initiatives and Directions, Master Degree ThesisSubmitted to University of Ljubljana.

13. Pillarisetti, J. R. (1995): Direct Tax Reform in Privatise Economies, A comparative study of India and LatinAmerican Countries, International Journal of Social Economics, Vol 22 No 8 pp 22-33

14. Prakash, O. & Sindhu, A. S. (2011): Direct Tax Reforms in India: A Comparative Study of Pre and Post-liberalization Periods, The IUP Journal of Public Finance, Vol. IX, No. 1.

15. Singh K J (2008): On Tax Evaders and Corrupt Auditors, The Journal of International Trade & EconomicDevelopment: An International and Comparative Review, 17:1, 37-67

16. Sharma, K. C. (1997). Corporate Tax Policy/ : Issues and Options Corporate Tax Policy/ : Issues and Options.Economic and Political Weekly, 32(8), pp.417–421.

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17. Sharma A & Singh J (2017). Estimating the Income Tax Responsiveness in India: A Post Liberalization EraAnalysis, International Journal of Applied Business and Economic Research, Vol 15, No 9, pp 315-323.

18. Tsakumis G T, Cutatola A P &Porcano T M (2007): The Relation between National Cultural Dimensions andTax evasion, Journal of International Accounting, Auditing and Taxation, 16 (2007) pp 131–147

19. Vazquez J M & Timofeev A (2010): Choosing between Centralized and Decentralized Models of TaxAdministration, International Journal of Public Administration, 33:12-13, pp.601-619.

(Footnotes)1. The author also annotated that prevalence of extreme high rate of tax over several years resulted in institutionalised

corruption and tax evasion in India in 1980s and 1990s.

2. The author related in his the book

Tax rates, Tax compliance and Tax revenues: India, 1988-2004" ,

among consumption, distribution, per capita income, number of tax payers, number of return filled and taxrevenues from the year 1988 to 2004. The author also studied the elast

icity of compliance and revenue and found that there is low level of compliance of Income Tax in India.

3. Prakash, O. & Sindhu, A. S. (2011): Direct Tax Reforms in India: A Comparative Study of Pre and Post-liberalization Periods

4. Chan, Y. H. (2004). Biostatistics 201/ :, 45(2), pp.55–61.



* Ph.D. Scholar, Department. of Sociology, Utkal University, Odisha –751004 Email: [email protected] No:9778861106

Corporate Social Responsibility andEnvironment: The Emerging Discourse in India

Bishnuprasan Mohapatra*

ABSTRACTThe rapid industrialization is the prime cause behind the changing climatic situation through

environmental degradation and which is exacerbated through the process of Liberalisation, Privatisationand Globalisation model of development. Looking into the matter of environmental concern, the Paris climatedeal (2015) has planned to keep the rising of earth’s temperature to two degrees from the pre-industrial levelthrough the multi stakeholder approach. From a stakeholder perspective it becomes a moral and ethicalresponsibility of corporate houses to protect society from the environment risk. Recently, to mitigate theclimate change and environmental hazards particularly corporate houses engaged with the environmentalactivities within the sphere Corporate Social Responsibility (CSR). In the above context present paper notonly makes a holistic analysis of CSR initiatives towards environmental protection in India particularly, butalso tries to find out the missing-links in-between them. The paper concludes with considering the urgency offighting environmental risk and climate change, CER have a crucial roles to play in turning our country intosustainable future.

Keywords: Corporate Social Responsibility (CSR), Environmental, Sustainability, Corporate, India

IntroductionIn the world, environmental risk is considered as the biggest challenge in present development

hegemony. The development hegemony is based on globalization, privatisation, and liberalization ofthe market economy nationwide. These processes have marked with growth of modern industries andrise of the urban space nationwide and specifically in the resource rich and backward regions of thecountry. The emerging modern industries have faced serious challenges not only from communitiesresides nearby resource rich and backward regions, but also from the nationwide – civil society, activists,voluntary organizations and others, over the adverse impact on the local environment and communities.These adverse impacts have been provided a space for civil society not only to unite for environmentalconservation but also raise question over the present model of development – that create environmentalrisk in the society. Today, as a result of environmental risk, the earth was marked with climate change,resource depletion, environmental degradation, loss of biodiversity, deforestation, raise of pollution

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and waste, and many more environmental concerns. The concern over ‘environmental risk and justice’issues has been continuously raised and discussed by different thinkers, activists, civil society and otherorganizations in their writings, conferences, and movements in different time to time. Whether it isRachel Carson’s Silent Spring (1962), or Chipko Movement (1973) or Silent Vally Movement (1978)or Narmada Banchao Andoloan (1985) or Our Common Future (1987) or Anthony Giddens Consequencesof Modernity(1990) or Ulrich Beck Risk Society (1992), had always placed the environmental concernand warned the stakeholders to create the balance between environment and development in the worldfor a sustainable future.

Looking into the environmental concern worldwide United National Framework Convention onClimate Change (UNFCCC) was established in 1992 in association with different parties. Based onUNFCCC framework, United Nation Climate Change Conference (UNCCC) held yearly with UNFCCCparties from 1995 to access the progress achieved and future action plan in dealing with climate changeworldwide. After the five years of first UNCCC, the Millennium Summit of United Nation (2000) adoptedeight international Millennium Development Goals (MDGs) for the year 2015, and ‘environmentalsustainability’ was one among them. Though worldwide concern over environmental crisis has beenaddressed through MDGs goal seven, different CoP’s, and different states individually, still theenvironmental risk continuously has been marked through global warming and climate change. Furtherin 2015, 17 global goals adopted by UN General Assembly named Sustainable Development Goals(SDG’s) and CoP’s 21 took place in Paris, France. The former one has enlisted different environmentalissues – clean water, sanitation, climate action, sustainable cities and communities, clean energy, lifebelow water, and life on land, to achieve it by 2030. The later one has planned to keep the rising ofearth’s temperature to two degrees from the pre-industrial level. Besides their level of engagement,both focused on multi-stakeholder approach to address the concerned issues. But unfortunately, theworld is hotter than ever before and global sea level highest ever in 2019 warned by World MetrologicalOrganisation’s, as most of the countries have been failed to fulfill their commitment of CoP’s 21 atParis. From a stakeholder perspective, it becomes a moral and ethical responsibility of different countries,states, corporate houses, voluntary organizations, and civil society to protect society from the environmentrisk and to make a balance between environment and economic development.

In the above context, the present study focused on the corporate initiatives (as a stakeholder) forenvironmental preservation and cleaning up pollutions after adaptation of Corporate Social Responsibilitypolicy through Companies Act 2013 in India. The paper has been divided into four parts. The first partdiscusses the state of India’s environment and major environmental problems. The second part exploreswhat is CSR and it’s compliances towards environmental protection and risk minimization. Third partanalyses the missing-links between CSR compliances and the environment. Lastly, the paper concludeswith looking at the need and urgency of environmental justice in the present development hegemony,corporate have a crucial role to play in turning our country into a sustainable one. The paper used andanalyzed last four financial year (2014-15 to 2017-18) CSR data from national CSR portal governmentof India. To make the paper both qualitative and quantitative, the researcher used filed observations assupplements to support quantitative data. The field work was conducted in the adopted/priority villagesof National Aluminum Company Limited and Hindustan Aeronautics Limited for CSR activities at theKoraput district of Odisha.

Corporate Social Responsibility and Environment: The Emerging Discourse in India


State of India’s EnvironmentThe State of Global Climate (2019) report of WMO has pointed out that among six global cyclones

in the world; India has affected by two major cyclones named Bulbul and Fani in 2019. These twocyclones had adversely affected the lives and livelihoods of people in the affected areas. Further, it hasmarked that India has ranked 14th place in the last of Global Climate Risk Index of United Nation andalso placed second in the most affected country for extreme weather related causality in 2017(D’Ambiogio 2019). At the same time, India ranked among the last three countries in the EnvironmentalPerformance Index (ranked 177 out of 180 countries in 2018) and placed 110th rank in SustainableDevelopment Index out of 149 countries in 2016. So from the above ranks and positions of India in theenvironment sector clearly shows the country precarious situation in environmental protection,preservation, and mitigation of risks. It can be argued here that country performances are very bad onall the metrics of the environment – whether it is air, water, soil, temperature, waste, energy, climate,forest, wildlife, and others.

According to the World Health Organization (WHO) pollution database (2018) report revealed thatair pollution is the most epidemic in the current industrial edge. The data further pointed out that, 70percent world’s most polluted cities are from India, and out of 15 most polluted cities 14 are situated inIndia. The deterioration of air quality not only affects the ecosystem but also the quality of individuallife. Down to Earth in their State of India’s Environment (SoE, 2019) report reveals that 12.5 percent ofall death occurred in India is due to air pollution. The report further adds that 86 water bodies in thecountry are severally polluted and contaminated. Overexploitation of ground water, lack of propermanagement in water distribution and unsustainable increase in deep tube wells leads India under stressfor both surface and groundwater. In the Niti Aayoga report of Composite Water Management Index(2018), highlights depleted in the clean water reserves, worst water crisis in history, lack of access tosafe drinking water, 70 percent water bodies contaminated, and India placed 120th rank out of 122nations in Water Quality Index in the world (D’Ambiogio 2019). At the same time, deforestation isanother major concern for India. Because, Niti Aayog admitted that currently forest cover is just under22 percent as against 33 percent, (Betigiri 2019) and India State of Forest Report (2017), highlightsthe over degradation of forest in the nationwide. Further with the rise of population and rapid urbanization,India is going to face serious challenges in managing waste materials. Currently 75 percent of wastedumped by municipal garbage without processing in India (D’Ambiogio 2019), at the same time Indiais among the top five e-west producers in the world without proper managing mechanism (Betigiri2019). It has also been found that increases in the greenhouse gas emissions, raise of extreme weatherinvents, rise of environmental crimes, animal species were poached, poor public transport system,diversion of forest land to mining and industries, and dismal use of renewable energy in the nationwidefurther add concern over bringing environmental justice. The voice over environmental risk and justicein India have been raised by different civil society and voluntary sectors from time to time in differentconcerned areas, whether it is deforestation, air pollution, environmental crimes or any otherenvironmental hazards.

The decade witness protests like Tuticoric protest over air and water pollution of Vendant Sterliteplant at Thoothukudi, Save Aarey protest at Mumbai and Save Jhinkargadi Forest protest at Odisha fordeforestation and other environmental protests lead by activists, environmentalist, civil society, voluntary

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organizations as well as women associations in the nationwide. The decade was also witnessedgovernment initiatives towards environmental protection and preservation through establishing newguidelines, rules, regulations, and programs. In 2008 first National Plan on Climate Change was releasedby Prime Minister’s Council on Climate Change, followed by National Green Tribunal in 2010 to handleenvironmental protection and conservation related cases in India. India also launched different programsto minimize environmental risk and natural resource preservation through promotion of renewable energy,National Clean Air Programme, Pradhan Mantri Ujwala Yojana, Swachh Bharat Mission, OpenDefecation Free Villages, Clean Ganga, and Smart Cities Mission in nationwide. These environmentrelated flagship projects and programs are not only supported and implemented by the government ofIndia but also by corporate houses. The corporate houses not only allocates budget from their CorporateSocial Responsibility (CSR) funds for the government environmental flagship programmes but alsoadopted and implemented different plans and programs by their own or through different agencies forenvironmental protection and natural resources preservation through their CSR activities.

Though today Corporate in general and Mineral and Material Industries in particular,r have beenengaged in pro environmental activities, still they are the major sources of environmental risk in ourearth. Biodiversity loss to deforestation, emission of air pollutants, release of polluted and untreatedwater and sewerage to open field and water bodies, soil contamination due to iron dust, fly ash, coaldust, and untreated waste, are some of the major the environmental risks of industries. However, therise of pro-environment concerns by the industry is due to pressure received from activists,environmentalists, government, international organizations, civil society, voluntary organizations, andwidespread protests over environmental risks and its adverse impacts on the earth. So in this context,corporate as a stakeholder has equal responsibility like government and other stakeholders to protectenvironmental hazards and preservation of natural resources through their CSR and business activities.

Corporate, Social Responsibility and EnvironmentThe concept ‘CSR’ is not at all a new one in the present development model. What is meant by

CSR today has been influenced by enormous factors like our economic and social system, evolution ofmodern capitalism and corporations and the emergence of corporate responsibility theories itself(Blowfield and Murray 2008). The antecedents of CSR also embodied in religious manuscripts andsocio-cultural conventions which point to an exact obligation of human beings who are well capableand endowed in society (Moon 2014). From centuries the role of commerce and well-endowed people’scontribution towards society is often defined as charitable, philanthropic and paternalistic activities(Moon 2014). In India, the concept of CSR is not only a new phenomenon rather it has its roots fromancient times as dynastic charity or voluntary donations.

Despite corporate sectors, voluntary involvement in community and periphery development activitiesfrom the tradition, but the last decade witness emergence of the concept and the development of stateinvolvement in framing guidelines and policy to mandate and regulate the voluntary activities ofcompanies through CSR banner. Till date, one can see two major regulations implemented/recommendedby the state. The first one is Guidelines on CSR only applicable for Central Public Sector Enterprises(2010) in India. The second is the Companies’ Act (2013), which mandates Corporate SocialResponsibility activities in India. This act mandates corporate houses (Both Private and Public), thosehaving a net worth of rupees five hundred crores or more, or turnover of one thousand crores or more,



or net profit of rupees five crores or more during a financial year for CSR activities. The act mandatesthese above corporate houses to spend a minimum 2 percent of their average net profit of the last threeconsecutive financial years towards CSR activities, and those failed to do so have to provide validreasons for not spending the amount. Schedule VII of the Act encompasses diverse CSR activities i.e.education, health, environment, rural development, skill development, gender development, slum areadevelopment, promotion of sports, protecting national heritage, and contribution to relief funds, throughthe plan, policy, and programs. These activities were mostly carried out by companies since the financialyear 2014-15 in collaboration with different NGOs, with their own foundations and trusts, with stateand central government, or by using resources of its own and from other companies.

The last five financial years witnessed both negative and positive impacts of the Act on the CSRplan, policy, programmes and actions. The both positive and negative impacts also witnessed in theenvironmental programmes of the corporate through their CSR actions. The positive thing is that, afterthe enactment corporate houses have been started implementing different environment projects andprogrammes through CSR activities, not only by themselves but also through partnership with state andother agencies. They have addressed the environmental issues beyond their strategic necessity andperiphery areas for mitigating environmental risk. They have also started disclosure of their environmentalactivities through annual or CSR reports. Whereas the negative thing is that corporate houses are lessfocused on environment programmes than other sector like – health, education and others. Further, it isfound that environment sectors are receiving less than 10 percent of total annual CSR expenditure ofthe country. In above context, it is necessary to explore and analysis the corporate engagement forenvironmental sustainability in India after the mandate of CSR activities.

Table 01: List of CSR Activities in Environment Sectors

CSR Sector Listed Activities of Engagement

Environment and Natural Resources

Conservation

Community and Avenue Plantation, Watershed Development, Natural Resource Management andConservation, Urban Plantation, Distribution of Sapling, Water Harvesting, Waste Management,Environment Protection and Awareness Programme, Promoting Agro Forestry, Solar Street LightInstallation, Clean Lighting and Dust Suppression, Cleaning Water Reservoirs (Pond, River, andLake), Swacha Bharat Kosh, Pradhan Mantri Ujwala Yojana, Swachh Bharat Mission, OpenDefecation Free Villages, Animal Welfare, and Donations to National Relief Funds.

Source: National CSR Portal, Corporate Websites, Corporate Officials and from Field.

Corporate engagement in environmental activities has been witnessed in diverse fields (See thetable no 01). These diverse fields can be subdivided into three major dominant actors and their actions.The first action includes Corporate Programmes and Intervention. Second is the Community Programmeand Corporate Interventions, and third is the Corporate Intervention in Government Programmes. Allthe programs in the first action are designed and implemented by the corporate house or its associatedorganizations – State, Voluntary Organizations, Non-Governmental Organizations, Self Help Groups,or its foundation, any other association or groups, according to programs.

These environment programs include Plantation and Distribution of Sapling, Environmental Protectionand Awareness Programmes, Solar Street Light Installation, Clean Lighting, Dust Suppression, Animal

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Welfare, Water Harvesting and Adoption of Modern Machineries for Environmental Protection. In secondaction, community plays a dominant role in design and implementing the environmental programmes,and corporate provides monetary supports. Sometimes in these actions corporate design the programmeand community implement and regulate the programmes. These programmes include Community andAvenue Plantation, Watershed Development, Natural Resource Management and Conservation, Promotionof Agro Forest, and Cleaning Water Reserves. Whereas in third action state design the programme, locationand the beneficiaries, and corporate plays a minimal role only by donating fund or implementing theprogrames in the field. These programes include Clean Ganga Fund, Swacha Bharat Kosh, Pradhan MantriUjwala Yojana, Swachh Bharat Mission, Open Defecation Free Villages, and Donations to National ReliefFunds, these are the areas where government recently lunched different programes. In all the environmentalactivities corporate responsibility can be divided into two parts. In the first part corporate actively involvedin the whole process of programe implementation and its assessment.

Whereas in the second part corporate withdraws its responsibility and distribute the fund to otheragencies to carry out the programe. In both, the responsibilities and actions corporate houses allocatefunds to carry out the programes. The budgetary allocation, expenditure, and accountability have markeda change in the form of discloser after mandatory CSR through Companies Act 2013.Environmental sector expenditure under CSR in India has received less attention than other sectors. Ithas marked a slight increase to 17 percent in the financial year 2017-18 since 2014-15, but the averageexpenditure on environment is only 11 percentages during these financial years (Table No. 02). As aresult environmental expenditure is lag behind other sectors. Though, industries are the major reasonfor environmental risks but given less attention to environment activities. So it is high time for industriesto give back the environment through their social responsibility activities.

The case of environmental expenditures of the corporation not only lower among the differentsectors but also the situation same among the top CSR expenditure corporate houses, top CSRexpenditure states, and evening with states with highly polluting industries. Bihar is the only state smarked nearly 40 percent expenditure in environmental sector, followed by Karnataka (20.26 %), Jammuand Kashmir (19.34 %), Arunachal Pradesh (18.54%), and Lakshadweep (18.14 %). No other state hascrossed 15 percentage of their expenditure on environment in the last four financial years. Even amongthe top 10 CSR expenditure states, only two state environmental expenditure has crossed above 10percent namely Karnataka and Andhra Pradesh, and others expenditure marked five percent or belowin last financial year. The data further shows that states with top polluting industries has also markedwith less environmental expenditure through CSR activities (Table 05). However, CSR expenditure ofcorporate on environment sector is found very low than other sectors in different states of India, whetherit is the highest CSR expenditure state or a state with highest CSR expenditure on environment or statewith large number of polluting industries. One thing is clear from this data is that corporate from thedifferent states has less involved in the environment project and programes than other sector engagement.So the question arises why environment sector less attracted to the corporate than other sector? Or whycorporate less involved in the environmental programe? The less engagement may be due to need forlong term investment, less visibility, and short term gain. Still, the reason for the lower involvement ofcorporate in environment sector is a gray area for the researchers and is the question of further research.



Table: 02:CSR Expenditure in Environment Sectors in India (In Cr.)

Environment Sectors 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY Total Total %

Environment, Animal Welfare, Conservation Of

Resources

Agro Forestry 18.12 57.86 43.45 12.17 131.6 2.48 Animal Welfare 17.29 66.66 78.64 59.55 222.14 4.18 Conservation of

Natural Resources 44.6 49.84 119.1 212.78 426.32 8.03

Environmental Sustainability 773.99 796.72 1,076.46 1,076.60 3723.77 70.13

Clean Ganga Fund 5.47 32.82 24.37 2.11 64.77 1.22 Swachh Bhart Kosh 113.86 325.19 183.83 118.69 741.57 13.97

Total Environmental Expenditure 973.33 1329.09 1525.85 1481.9 5310.17 100.00 Total CSR Expenditure 10065.87 14527.52 14242.34 8365.31 47201.04 11.25

Total Percentage of Environment Expenditure 9.67 9.15 10.71 17.71 11.25

Source : Data Collected and Compiled from the National CSR Portal (http://www.csr.gov.in/CSR/) (Date ofAccessed 26/12/2019)

Table- 03:Top Corporate Environmental Expenditure State (2014 -18)

Sl. No. State TPCEX 1 Bihar 37.6 2 Karnataka 20.26 3 Jammu And Kashmir 19.34 4 Arunachal Pradesh 18.54 5 Lakshadweep 18.14 6 Punjab 14.71 7 Tripura 14.60 8 Himachal Pradesh 13.54 9 Meghalaya 11.75

10 Andhra Pradesh 10.56

Source: Data collected and compiled from the National CSR Portal (http://www.csr.gov.in/CSR/) (Date ofAccessed 06/01/2020) TPCEX: Total percentage of Corporate Environmental Expenditure

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Table: 04:Top CSR Expenditure State and their Environmental Expenditure 2014-18 (In Cr.)

Sl. No. State TCSRE TCEX TPCEX 1 Maharashtra 8514.09 479.93 5.64 2 Karnataka 3025.77 612.88 20.26 3 Andhra Pradesh 2731.07 288.48 10.56 4 Gujarat 2504.99 97.53 3.89 5 Tamil Nadu 2343.31 107.4 4.58 6 Delhi 1792.56 99.46 5.55 7 Odisha 1662.24 49.94 3.00 8 Rajasthan 1391.59 115.88 8.33 9 Haryana 1214.74 75.97 6.25 10 Uttar Pradesh 1198.79 100.58 8.39

Source: Data Collected and Compiled from the National CSR Portal Portal (http://www.csr.gov.in/CSR/)(Date of Accessed 06/01/2020)

TCSRE: Total Corporate Social Responsibility ExpenditureTCEX: Total Corporate Environmental ExpenditureTPCEX: Total percentage of Corporate Environmental Expenditure

Table : 05:State with Highest Polluting Industries and their Corporate Environment

Expenditure

State Number of Polluting Industries TPCEX 2014-18

Maharashtra 520 5.64

Uttar Pradesh 403 8.39

Andhra Pradesh 472 10.56

Gujarat 317 3.89

Karnataka 231 20.26

Source: Data Collected and Compiled from the National CSR Portal (http://www.csr.gov.in/CSR/) (Date ofAccessed 20/03/2018) and Lok Sabha Unstarred Question no 216- 9/7/2014



TPCEX: Total percentage of Corporate Environmental ExpenditureThe Missing-links: Corporate and Environment ResponsibilityEnvironment sector is one among the other sector for CSR activities of corporate houses. As the

above data shows corporate houses are never serious and less concerned about the environmental issues,though they are the major sources of environmental pollution. The less engagement with the environmentis a serious concern now for all. Though there is no direct evidence why they have less attention onenvironmental aspects, but the ‘missing-links’ can be established as a hypothetical proposition to findout the causes. First, the above data shows that someone forcing corporate to incorporate the environmentin their CSR activities without its interest. The interest of corporations came after the enactment of act;from there they started to engage with environmental activities and disclose the data over its compliances.If there is no mandatory provision for corporate welfare activities it will be very difficult to findenvironmental issues within their scope of activities. So it is clear, it is the act which compels them toact, but not by its interest. Then how can we think about environmental responsible corporate withoutits sole interest. Further, it is the state, not only enacted the act for mandatory CSR expenditure but alsohas the power to direct where to invest or not. As a result, most of the environmental flagship programof the government has been carried out by CSR funds, like - Clean Ganga Fund, Swacha Bharat Kosh,Pradhan Mantri Ujwala Yojana, Swachh Bharat Mission, Open Defecation Free Villages. So it lookslike a state forcing corporate for CSR engagement rather than corporate actions of its own. The maximumstate regulation in CSR engagement minimizes the corporate freedom of action. Instead of maximumregulation, minimum regulation needs to impose on corporate by the state.

That minimum regulation should be focused on the quality of work, evaluation, and accountabilityof CSR programs, so that regular check-ups can be carried out for better and sustainable programs.Second, the results or benefits of environmental programs are always long-term, implicit and latent. Asmost of the corporate houses are more concerned about their brand image, as a result, they can showup, and strategically implemented different CSR activities which can give them quick results. Further,for this quick result they mostly engaged with ad-hoc programs than long term strategy. It can be furtherargued here that, as every eligible corporate need to spend the allocated amount, and submit the annualCSR activity report in a given financial year, it resulted more concerned towards the expenditure ofallocated money through short term programs. The fine example is the investment in government flagshipprograms, distribution of saplings, installation of solar street lights, distribution of solar lamps andothers. These are the one time expenditures or activities of corporate, where corporate withdraw itsresponsibility from the whole program, neither have they maintained nor they assess the implementedprograms. For example, installation of solar street lights in the adopted villages. Once it was installed,neither they follow-up for the statuesque nor do they repair damaged lights or batteries. It was observedthat in HAL and NALCO adopted villages most of the street solar lights are not functional. Whileinteracting with communities, they said that companies never looked back after instillation of the lightscompleted. So, they are more engaged with strategic advantage than the strategic necessity. So to eradicatethis type of missing link corporate houses need to be more focused on long term strategic necessitywith responsibility.

This long term strategy could be achieved when state has a minimal role and directive over thecorporate.The third missing-link is that the lowest corporate environmental expenditure in the states

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with the highest polluting industries. The expenditure over environment will be raised when all thepolluting industries will more be engaged with environmental activity than their strategic advantage. Itwas observed that in NALCO mines periphery villages water, air and soil adversely affected and not asingle step has been taken by NALCO to address the issues after continuous protest, said by communitymembers. Here state can be played a greater role by mandating polluting industries for moreenvironmental expenditure over other CSR expenditures. The polluting corporate houses need to concernover more on the environment in their internal production processes. When the polluting corporate willmore involve in the environmental activity it not only the earth in long term but also local communitiesin the industry periphery areas. Fourth, lack of multi-stakeholder co-operation in implementingenvironmental programs by corporate through CSR. In the three major dominant actors and their actionsin corporate environmental responsibility, state dominates in all the forms than corporate and community.Here corporate looks like funding or resources fulfilling agency for the state programs and communitynever been communicated before implementing any environmental programs by the corporate, whetherit is distribution of sapling or any other program. It will be the logical context where we can claim thatmulti-stakeholder cooperation not only bridges the gap by bringing natural resource conservation butalso can help in building sustainable environment for future.

ConclusionThe future Indian CSR needs to go beyond these rules and regulations to attain an equitable

sustainable development of society in partnership with other agencies. Companies need to think as achanging agent of environmental sustainability than only responsible for social activities. They have togo beyond responsibility to positive impact assessment. For the sustainability of CSR project companiesshould make a partnership with people and beneficiaries, and different agents to create a positive impacton society. So, if they failed in bringing positive impact, they can’t be responsible, and if they can’tresponsible, they can’t bring social or environmental justice in society, and finally sustainabledevelopment. The environmental justice in society can be achieved only by a positive impact on society,responsibility activity, bottom of approach, and finally with a good partnership. From a stakeholderperspective, it becomes a moral and ethical responsibility of corporate houses to protect society fromthe environmental risks. Looking at the need and urgency of environmental justice in the presentdevelopment hegemony, corporate has a crucial role to play in turning our country into a sustainableone.

References1. Aiyar, SA (2019, August 18): “CSR spends no guarantee of corporate ethics”, The Times of India,. Retrieved

from URL: https://timesofindia.indiatimes.com/blogs/Swaminomics/csr-spends-are-no-guarantee-of-corporate-ethics/

2. Basu, Jayanta (2019) Climate Emergency Cop 25: World is hotter than ever before, says WMO. Down ToEarth , Retrieved from URL: https://www.downtoearth.org.in/author/jayanta-basu-820 , Accessed on 4th December2019.

3. Betigeri, A. (2019, January 10) Choking point: India’s environmental crisis, Retrieved from URL: https://www.lowyinstitute.org/the-interpreter/choking-point-india-environment-crisis) Accessed on 12th December 2019

4. Blowfield, M., & Murray, A. (2008). The meaning and the origins of corporate responsibility. Corporateresponsibility: a critical introduction,, New York : Oxford University Press



5. Business Today (2016, October 10 ) These are the 5 most industrialized states in India, Retrieved from URL:https://www.businesstoday.in/storyprint/238337 , Accessed on 28th February 2019

6. D’Ambiogio, E. (2019) India: Environmental Issues, European Parliamentary Research Service, April, 2019

7. Government of India (2013): “The Companies Act, 2013”, Ministry of Corporate Affairs, New Delhi.

8. India Today (2018, May 02) 14 of the world’s most polluted 15 cities in India, Kanpur tops WHO report,Retrieved from URL: https://www.indiatoday.in/education-today/gk-current-affairs/story/14-worlds-most-polluted-15-cities-india-kanpur-tops-who-list-1224730-2018-05-02 Accessed on 28th February 2019

9. Moon, Jeremy (2014) ‘Corporate Social Responsibility: A very Short Introduction’, Oxford University Press,United Kingdom

10. Narain, S., Bhushan, C., Kavarana, G., Sareen, R., & Somvanshi, A. (2016). State of India’s Environment. Centrefor Science and Environment, New Delhi

11. Thacker, Hency (2019, June 05), CSR: State of India’s Environment, The CSR Journal. Retrieved from URL:https://thecsrjournal.in/csr-state-of-indias-environment/ , Accessed on 12/12/2019

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* Associate Professor& Head,Dept. of Management, Sikkim University (A Central University),Gangtok, Sikkim-737102 Email:[email protected] Contact No.-+91-9800940695

* MBA Final year Student, Dept. of Management, Sikkim University (A Central University),Gangtok, Sikkim-737102

Perceived Impacts of Goods and Services Tax(GST) and Growth of Micro, Small & MediumEnteprises (MSMEs) in Sikkim

Dr. Krishna Murari* & Ms. Smirti Chettri**

ABSTRACTThe role of Micro, Small and Medium Enterprises (MSMEs) in creating employment and promoting

regional growth cannot be ignored in the states like Sikkim where hilly terrain and geography becomes theconstraints for the big industrial set up. The implementation of Goods & Services Tax (GST) with an approachof ‘one nation-one tax’ led instigated many concerns among the MSMEs across the countries. The impactresulted in positive as well as negative perceptions in manufacturing and service sectors of MSMEs. Thisstudy tries to find out the impact of such perceived impacts on the growth opportunities of MSMEs in thestate of Sikkim. Using a data of 400 MSMEs from East, West and South districts of Sikkim, we conclude thatperceived impact of GST on MSMEs is significantly associated with the type of enterprise i.e. manufacturingsector perceived the adverse impact on GST on its business operations while service sector MSMEs do notperceive it significantly. It is found that perceived impact of GST does not differ significantly across thebusiness sizes (i.e. the level of investment) in manufacturing sector but it does in service sector.Lastly, thegrowth of the manufacturing sector MSMEs is significantly affected by perceptions of ease of doing businessand awareness & knowledge related to GST; while in service sector MSMEs, additional two perceptionsviz.transparency and reorganisation of purchase & supply chain, are significantly affecting the growth orexpansions of business as the perceived impacts caused by the GST in Sikkim.

Keywords: Goods & Services Tax (GST), Micro, Small & Medium Enterprises (MSMEs), PerceivedImpact, Transparency, Ease of doing Business, Awareness & Knowledge

IntroductionMicro, Small and Medium Enterprises (MSMEs) play a significant role in economic development

and growth of the economy by providing employment opportunities, promoting balanced regionaldevelopment by assuring more equitable distribution of income and wealth, by setting manufacturingunits in backward areas, exporting, wide network, emerging with new innovations and providingopportunities for new investment. The MSMEs have been defined under MSME Act, 2006 which states


that MSMEs can be broadly classified as manufacturing and service enterprises. Manufacturingenterprises include those enterprises that make and employ the resources for making value addition tothe final product having a distinct name or character or use. The micro enterprises in manufacturingsector include those businesses whose investment does not exceeds Rs 25 Lakhs; small enterpriseswhose investment are more than Rs 25 Lakhs but does not exceeds Rs 5 Crores and medium enterpriseswhose investment are more than Rs 5 Crores but does not exceeds Rs 10 Crores. On the other hand,Service sector enterprises invest in equipment for rendering services. Further, micro enterprises in thissector include those business whose investment does not exceeds Rs 10 Lakhs; small enterprises whoseinvestment is more than Rs 10 Lakhs but does not exceeds Rs 2 Crores and medium enterprises whoseinvestment are more than Rs 2 Crores but does not exceeds Rs 5 Crores. The various types of enterprisesunder service sector include small road and water transport operators, retail traders,small businessandprofessional and self-employed persons.

Sikkim is a small state with population of only 7 lakhs, its economy mainly depends on primarysector. Till 1990’s agriculture and allied activities were the centrepiece of Sikkim’s economy. Afterindustrialization since 1996 the State Government enacted the “Sikkim Industrial Promotion and IncentiveAct, 2000”. Sikkim now has 100 large industries but MSMEs have lagged behind because industrialdevelopment focused mainly on large industries. MSMEs contribute 37.5% of GDP to the Indian economyand more than 45% accounts for the total industrial production. Since Sikkim is a hilly terrain state andspace is a hindrance for doing business, so MSMEs are more suitable in comparison to large industriesin terms of generating employment as well considering Sikkim having the second highest unemploymentrate in the country with 136 unemployed per 1000 people in the age bracket of above 15 years(Departmentof Commerce and Industries Department, 2019).

The introduction of Goods and Services tax (GST) on July 1, 2017 is considered to be one of themajor reforms in Indian taxation system, it is termed as one nation one tax i.e. single tax which islevied on supply of goods and services. GST is a destination-based tax which is levied only on a valueaddition at each stage because credits of input taxes paid at procurement of inputs will be available.Thus, the final consumer bears only the GST charged by the last dealer in the supply chain, with set-offbenefits at all the previous stages.After implementation of GST there has been a paradigm shift indoing business in India. GST has forced MSME’s to renew their strategies, supply chains, costing andsystems to meet the quality standards and thereby increasing compliance costs for MSME’s. All thecompliance procedures under GST are carried through online portals. Thus, it has led to digitalisationto the core of Indian business (in a sense) where every transaction is done on centralized platform ofGST Network. GST was introduced on a positive note for the benefit of all the stakeholders, whichincludes MSMEs as well but every reform is faced with certain problems and limitations. As per thevarious studies conducted in India after the launch of GST, the positive and negative impacts of GSTfaced by MSMEs are mentioned below:

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Table 1: Positive and Negative Impacts Perceived by MSMEs

Positive Impacts Negative Impacts Ease of doing a new business Market Expansion Reduction in logistical overhead and Time Unified market Benefits of Input Tax Credit Transparency in transaction Better cash flows Reduced Tax burden on Businesses Improved competitiveness Transparent online compliance procedures

Burden of threshold limit Dual Control Reverse charge mechanism Reorganisation of purchase and supply chain Exemption of Petroleum and alcohol products High tax burden for service providers High compliance cost Excess working capital Requirement Increase in cost of product for businesses Lack of proper digital knowledge Registration mandatory for e-commerce

Given the above positive and negative impacts of implementation of GST on MSMEs, this studytries to find the answers to the following research questions:

1. How does the perceived impacts of GST affect the MSMEs?2. Does the perceived impact of GST on MSMEsinfluenced by the size of the business size?3. Do the perceived impacts affect the business expansion plans of MSMEs?The empirical study has been conducted in the state of Sikkim to find the answers of the above

questions. the remainder of the paper is organised as under: Section 2 provides the glimpse of theliterature reviewed and framing of research hypothesis. Section 3 highlights the data and methodologyfollowed by results and discussion in section 4. Conclusion about findings and implication is given insection 5.

Review of LiteratureImpact of GST on Indian Economy

Implementation of GST depends on its horizontal route in the states, agreement on rates, exclusionlists, applicability boundaries, principles of supply, special provisions to certain states, and a host ofother rules and regulations (Ashokan & Jayakodi, 2018). All sectors and sections of economy will haveto bear impact of GST the taxation burden by increasing the tax base and minimising exemptions, itwill be divided equitably between manufacturing and services through a lower tax rate (Rekha & Karan,2018), it would help maintain simplicity and transparency by treating all goods and services as equalwithout giving special treatment to some goods or services. This will reduce litigation on classificationissues (Shaik, Sameera, & Firoz, 2015) and GST is expected to bring foreign investment making Indianmarket more competitive and will increase the taxpayer base bringing the unorganized sector under itspurview. Individually some industries or sectors will be benefitted while others can face losses (Jain &Aggarwal, 2017) Overall GST will play a dynamic role in the growth and development of our country(Kour, Chaudhary, Singh, & Kaur, 2016).

Perceived Impacts of Goods and Services Tax (GST) and Growth of Micro, Small...


GST strengthens the tax system of India and will impact various industries in a positive manner byremoving the complexities of earlier indirect tax system (Mussaiyib, 2016). GST results in loweringcost of doing business that will make the domestic products more competitive in local and internationalmarket and can be used as an effective tool for fiscal policy management (Bhattacharya, 2017; Gupta,Sarita, Singh, Komal, & Kumawat, 2017), further it helps to eliminate economic distortions in taxationamongst states and also helps in free movement of goods, minimizing the complexity of taxation, allpolicy barriers will be removed (Mishra, 2018; Vani & Mujalde, 2017) which will make the products ofbasic need much cheaper than earlier thus making it accessible for poor section of the society (Yadav &Kumar, 2018), it is also expected to provide relief to producers as well as consumers by providing wideand comprehensive coverage of input tax credit set-off, service tax set off and subsuming the severaltaxes (Khurana & Sharma, 2016), it is also beneficial for individuals as price will decrease resulting inincrease in consumption and directly increase the GDP, increase in FDIs, increase in employmentopportunity and encourage new businesses and entrepreneurs to engage in service and manufacturingsector (Mishra, 2018) therefore benefitting industries, consumers and economy as a whole (Kankipati,2017).

GST system is to get rid of deformity of indirect taxation and it promises to reduce the complianceburden and there will be no distinction between imported and Indian goods and their tax rate would besame (Kour, Chaudhary, Singh, & Kaur, 2016) so India will enjoy an International standard in taxation,Managerial and corporate law and can create a benchmark for other nation (Kumar, 2018)

The Goods and Services Tax is expected in making industry more competitive by reducing the costof production and is expected to pave way for better E-Commerce (Rekha & Karan, 2018) and it willbe beneficial for auto cement and organised sectors, will be neutral for property, electricity, telecom,pharmaceutical and fertilizer sectors but will have negative input on oil, gas and SME (Siddiq & Prasad,2017) continuing cost of manufacturing of goods, cost of consumer goods will reduce. Sectors likepharmaceutical, infrastructure, textile, IT, food industry, transport and real estate industry will bebenefitted (Yadav A. , 2017) . Further it will reduce cascading effect providing relief to producers aswell as consumers and manufacturer, wholesaler and retailer can recover input taxes in form of taxcredits which leads to commercial benefit (Nath, 2017) and widening the tax base would result in morerevenue and decrease in fiscal deficit (Visalaksh & Raju, 2017) thus GST is a guide for collective gainfor industry, trade, agriculture and common consumers as well as for the Central Government and theState Government (Shaik, Sameera, & Firoz, 2015)

After implementation of GST GDP growth showed improvement from 5.7% to 6.3%, a rise of0.6% (Chakrborty, 2018) as it was expected to lead an efficient allocation of dimensions of productionthus leading to gains in GDP and exports, which would translate into enhanced economic welfare andreturns to the dimensions of production, viz. land, labour and capital (Bedi & Sharma, 2017) and that itwill boost India’s economic development by improving tax collection. Through input tax credit setoff,service tax set off and subsuming several taxes it will provide relief to producers and consumers (YadavA. , 2017) thus it will benefit in the long run as it eradicates the unbiased tax structure by neutralizingthe exemptions levied by the States to attract business in their geographical location (Mehrotra & Kalra,2018) and will have a positive impact on various sectors, industry and economy as a whole as it willlead to resource and revenue gain for both Centre and States majorly through widening of tax base and

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improvement in tax compliance (Khurana & Sharma, 2016). Thus, implementation of GST impacts anation both ways, positively and negatively (Dash, 2017).

Kankipati (2017) argued that GST will evade cascading effectwith better revenue resilience andconformity. Preferably GST or VAT must be adopted by every economy at national level to attractforeign investors. Implementation of GST in India will help in removing economic biases caused bycomplex tax structure and common national market to progress. Through GST, the developing economylike India can accomplish sustainable and balanced development.Vasanthagopal (2011) discussed thatthe positive impacts of GST in India depend upon on a neutral and rational design of the GST, balancingthe conflicting interests of various stakeholders and full political commitment for a fundamental taxreform with a constitutional amendment. The switchover to a flawless GST is a big leap in the indirecttaxation system and also give a new impetus to India’s economic change.

Impact of GST on MSMEsGST is a simplified version of old tax structure where the entire process of filing of returns and

procedures for paying tax are transparent and paperless. By unifying the Indian market, it will increasethe competition between SME’s and if corrective measures are taken by government proactively it canminimize the potential negative effects, then it will be boom for Indian industry and MSME in particular(Sonami, 2018). It’s implementation lead to higher compliance cost due to maintenance of records,documents, hiring new staff and training the existing one (Gautami, 2018; Kaushal, Karki, & Singhal,2019), further there arises a need to reorganize MSMEs strategies, supply chain and costing to meetinternational standards which will be cumbersome but will benefit in the long period (Ashtekar, 2019)and in a positive way it eliminates the cascading effect of taxes, simplified indirect tax system,transparency in system, reduces tax burden, ease tax filing and improving competitiveness (Kaushal,Karki, & Singhal, 2019; Naskar, 2019). So, the impact of GST on the Indian SME sector can go bothpositive and negative way(Awasthi, 2018).

The main purpose for implementation of GST is to increase the taxpayer base i.e. to put SMEs into itsscope which will increase a burden of compliance and associated costs to them (Jayalakshmi & Venkateswarlu,2018) as a result the unorganized MSMEs which were growing fast than the organized ones because of thetax avoidance, those entities are liable for tax payment (Geeta S. D., et al., 2019). GST was created with anintention to ease the tax filing, ease of doing business in other states, reduction in the prices of goods, relievingthe burden of logistic overhead from small enterprises. On the contrary, it has increased the technologydependency of every enterprise, as every transaction is made online (Verma, Khandelwal, & Raj, 2018). Dueto which unorganised MSME faces problem as most of them are located in rural area and they don’t havegood IT infrastructure (Naskar, 2019).

The impact of GST can go positive as well as negative ways on Indian MSME sector and there is a needfor MSME entrepreneurs to improve the GST network (Geeta, Subramanian, & Maruthu, 2019). FurtherGST gives benefit of Input Tax Credit which is helpful in reducing tax burden of both producers and endusers which is helpful in balanced growth of economy through federal distribution (Sharma, 2017).

Initially there was huge chaos regarding the enactment of GST, but many successful business personssupported it and considered it as a boon for the long-term development of the nation (Geeta S. D., et al.,2019). Mohan & Ali (2018) concluded that there is a positive relationship between awareness of GST



structure and profitability of firms, which would motivate MSME owners to invest time and effort tounderstand the GST not just for compliance but for better returns to their business. And also, there is aneed of training and awareness activities for MSME to enhance tax revenue and better compliance.Further the size of the business is positively related to the awareness of GST where businesses whoseannual gross turnover is more than 1.5 crore are more likely to be more aware about the issues andproblems that they may face (Gautami, 2018). Successful implementation of GST depends to a greatextent on how quickly businesses adapt to the digital format of taxation it is known as behaviouralchange (shift from traditional tax regime to GST). MSMEs will need to have the courage to complywith the tax laws & ultimately contribute towards the growth of the nation (Pandit, 2017).

That GST have positive implications for the agricultural sector as a whole but would also makesmall and marginal farmer’s pocket lighter (Singha, Bisneb, Venkatesh, & Aditya, 2018). Further retailsector will have positive impact by reducing indirect tax, benefits of input tax credit, complexitiesreduce, increase in distribution and increase in supply chain efficiency. GST further reduces thetransportation cost which leads to manufacturing cost reduction; simplifying the availability of inputtax credit and helping retailers retrieve high margins (Sridevi, 2018), continuing input diminution wouldbe a major boost for promoting the export of textile product. Eating house service suppliers and hotelierswill face high burden of taxation on outward supplies (Sindhu & Kirubagaran, 2018)thus plays a dynamicrole in the growth and economic progress of a country. The impact varies depending on the governance,compliance cost and economic distortion.

Perspectives of MSMEs towards GSTNot all the MSMEs saw the GST framework as being sensibly basic or straightforward but large

portion of the MSMEs were trying endeavours to get to know the new duty system since beginning.The issues MSME faced were not being able to finish on schedule. Most extreme MSMEs concededthat they had wrong observation about GST. In appropriate observations were spread because of sharingof false data by individuals who were not skilful enough to remark on GST. The preparation gave to theofficials to GST, has not been given at ideal time (Vaitinadane, Solyappan, & Shankar, 2019), furthertraining plays a crucial role in the implementation of GST. There are number of stakeholders to betrained in functional areas in both central and state level, who are to be trained by government agenciesand third-party trainers. This would be redesign of supply network because of GST which will play animportant role in the growth of India Economy (Anubuthambi & Chandrasekaran, 2017) continuing(Jalaja, 2017) suggested that anti-profiteering measures be kept in abeyance for 2 years to enable easeof understanding for all the assesses, for interested assesses training and understanding of GSTN systemsshould be provided, for traders in remote parts some relaxation to be provided as there is a constraint ofaccessibility to internet for filing of returns, seminars and interactive sessions to be taken up by thegovernment to elaborate and explain the processes and procedures under GST. Lastly to gain themaximum advantage of GST an appropriate action plan should be drawn up for a comparative analysisof the previous tax system and the GST tax legislation should be analysed (Rai, 2018)

Theoretical FrameworkThough there have been studies on the impact of GST on MSME but no study has been conducted

in the state of Sikkim. Therefore, this study tries to fill this gap.

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Objectives of the Study

1. To study the impact of GST on various categories of MSMEs in Sikkim

2. To study the role of business size on perceived impact of GST on MSMEs

3. To identify the significant dimensions of perceived impact of GST on Business Expansion

probability among manufacturing and service sector

Hypotheses Formulation

H01

: Perceived impacts of GST do not differ significantly across business size in manufacturing

sector of MSMEs.

H02

: Perceived impacts of GST do not differ significantly across business size in Service sector

of MSMEs.

H03

: Perceived impacts of GST don’t have significant effect on growth of business in

manufacturing sector of MSME.

H04

: Perceived impacts of GST don’t have significant effect on growth of business in service

sector of MSME.

Data & Methodology

Scope of the study

The scope of study is extended to understand the concept of GST, its impact and implementation in

the State of Sikkim. This study covers the three districts of Sikkim namely East, West and South. In

East district, most significant areas from where samples were collected for the study are Gangtok, Tadong,

Ranipool and Singtam; in South, Namchi and Jorethang; and in West Geyzing. The north district of

Sikkim was excluded because of non-accessibility and limited resources.

Research Design

Research design refers to a blue print for conducting a study with maximum control over dimensions

that may interfere with the validity of findings. The research design adopted for the study is descriptive

a structured approach which is quantitative and empirical in nature.

1. Ease of doing business (EODB)

2. Procedural & Compliance Impact (PROC)

3. Impact on business operations (BO)

4. Transparency (TRSP)

5. Help in Business expansion (BE)

6. Reorganisation of purchase and supply chain(ROPSC)

7. Increased Operational cost (OC)

8. Awareness &knowledge (AK)

Growth of MSME

Dependent variable

Independent variable



Source of DataThe study is mainly based on the primary data collected directly from respondents using data

collection methods like questionnaires, direct observation and secondary data collected through variousjournal, article, and websites are used for reviewing purpose.

Population of the StudyThe universe of the study comprised of all the registered and unregistered MSMEs situated in the

East, West and South districts of Sikkim

Sample SizeThe sample size for the study consists of 400 MSME’s from East, West and South districts of

Sikkim. The size is sufficient enough to generalises the findings with 95% confidence level and 5%confidence interval for the population of MSMEs.

Sampling MethodThe sampling method used for the study is convenience sampling, a type of non-probability sampling

technique where respondents are those people or units that are most conveniently available. The MSMEsfrom the main markets of each district were chosen based on the accessibility of the field investigatorfor collecting the data.

Method of data collectionA structured questionnaire was used as an instrument for data collection from the respondents. The

questions were mostly close ended and divided into two sections. Section A consisted of demographicvariables such as name of the registered business, name, age, gender, educational qualification andannual income of the enterprise. Section B was designed to know in which categories business fall on,whether they are registered under GST and Likert scale items to know the perceived impact of GST onthe business of the respondents. The perceived impact was recorded on 5-pointLikert scale of 1-5,where1-Strongly Disagree and 5-Strongly Agree.

Tools for analysisThe statistical tools used in the study are Descriptive statistics like mean, standard deviation, one-

way ANOVA; Tukey’s Post Hoc multiple comparison test, Pearson Correlation and linear Regression.

Results & DiscussionProfile of MSMEs Surveyed

Among the 400 MSMEs surveyed, there were 27 Manufacturing firms out of which 48.1% fallunder the Small category (investment size between 25 lakhs – 5 crores)followed by40.7% micro enterprise(investment size less than 25 Lakhs) and 11.1% Medium enterprises with investment size more than 5crores but less than 10 crores as shown in Table 2. Similarly, among the total 373 service sector MSMEssurveyed, 36.7% were from micro, 49.6% from small and 13.7% from medium enterprises category ofMSMEs as per the definition under MSME Act 2006.

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Table 2: Investment Size wise coverage of MSMEs under the Study

Total investment in Plant and Machinery Manufacturing Sector Count N %

Less than 25 lakhs (Micro) 11 40.7% 25 lakhs - 5 crore (Small) 13 48.1% 5 crore - 10 crore (Medium) 3 11.1% Total 27 100% Total Investment in Equipment Service Sector Less than 10 lakhs (Micro) 137 36.7% 10 lakhs - 2 crore (Small) 185 49.6% 2 crore - 5 crore (Medium) 51 13.7% Total 373 100%

Impact of GST on MSMEs in SikkimThe mean scores on various dimensions of perceived impact of GST were calculated and results

are presented in table 3. The mean scores more than 3 indicates that a specific factor of perceivedimpact was considered as important by the MSMEs.

Table 3: Perceived Impacts of GST by Type of MSMEs in Sikkim

Dimensions of Impact of GST Manufacturing Sector Service Sector

Mean Std. Dev. Mean Std. Dev. EODB Ease of Doing Business 3.83 1.02 3.75 1.09 PROC Compliance & Procedural Impact 4.12 .64 3.95 1.07 BO impact on Business operations 3.01 .69 2.71 .83 TRSP Transparency 3.81 1.13 3.68 1.01 BE Help in Business Expansion 3.53 .87 3.42 .84 ROPSC Reorganisation of purchase and supply chain

2.42 .96 2.42 1.14

OC Impact on Operational cost 3.72 .73 3.40 .85 AK Awareness & knowledge about GST 2.89 1.15 3.00 .91

The dimensions of perceived impact on manufacturing sector include ease of doing business,compliance & procedural impact, business operations, transparency, business expansion and operationalcost. Reorganisation of purchase and supply chain and awareness & knowledge related to GST was notperceived as important factor by manufacturing enterprises. The service sector enterprises did not perceive



the impact of GST on their business operations and awareness and knowledge about GST as important(Table 3).

Role of Business Size on the Perceived Impact of GST on MSMEsManufacturing Sector

In order to answer the research question whether the perceived impact of GST on MSMEs isinfluenced by the size of the business, the results of the analysis are presented in Table 4. Heremanufacturing sector includes Micro-with investment in plant and machinery to less that Rs 25 Lakhs;Small-with investment size between Rs 25 lakhs to 5 crores and Medium enterprises whose investmentsize is between Rs 5 crores to 10 crores. So, it is observed that perceived impacts in terms of ease ofdoing business, compliance & procedural impact, transparency, help in business expansion and impactof operational costs are considered to be important by all three categories of manufacturing sector ofMSMEs i.e. by micro, small and medium enterprises as reflected by the mean score (>3). Impact onbusiness operations is perceived by medium size enterprises and awareness & knowledge about GSTare important to the small sized manufacturing enterprises. All categories of MSMEs in manufacturingsector do not consider reorganisation of purchase & supply chain as important (mean Score <3) perceivedimpact of GST.

Table 4: Investment Size and Perceived Impact in Manufacturing Sector

Dimensions of Impact of GST Micro Small Medium

Mean Std. Dev. Mean Std. Dev. Mean Std. Dev. Ease of Doing Business 3.42 1.19 4.15 .88 3.89 .51 Compliance & Procedural Impact 4.00 .73 4.26 .63 4.00 .33 Impact on Business operations 2.97 .81 2.95 .57 3.44 .84 Transparency 3.23 1.15 4.23 1.03 4.17 .58 Help in Business Expansion 3.00 .98 3.82 .55 4.22 .69 Reorganisation of purchase and supply chain 2.58 .98 2.21 1.01 2.78 .69 Impact on Operational cost 3.91 .60 3.56 .88 3.67 .33 Awareness & knowledge 2.32 1.29 3.21 .96 3.58 .52

Testing of HypothesisIn order to test our first null hypothesis of the significant mean difference in the perceived impact

of GST across the business size of MSMEs in manufacturing sector, one-way ANOVA and Tukey posthoc test has been performed at 5% level of significance.

H01: Perceived impacts of GST do not differ significantly across business size in manufacturingsector of MSMEs.

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Table 5: Investment Size wise Perceived Impacts of GST in Manufacturing Sector

Dimensions of Impact of GST Sum of Squares Df Mean Square F Sig.

BEHelp in Business Expansion 5.625 2 2.812 4.750 .018 AKAwareness & knowledge 6.383 2 3.191 2.720 .086 EODBEase of Doing Business 3.185 2 1.592 1.592 .224 PROCCompliance & Procedural Impact .443 2 .222 .519 .602 BOImpact on Business operations .633 2 .316 .637 .538 TRSPTransparency 6.418 2 3.209 2.889 .075 ROPSCReorganisation of purchase and supply chain 1.251 2 .626 .656 .528

OCImpact on Operational cost .717 2 .359 .662 .525

The results of one-way ANOVA for testing the significant mean difference in perceived impacts ofGST across business size is presented in Table 5. Since F value of Ease of doing business (EODB),compliance & procedural Impact (PROC), Business operations (BO), Transparency (TRSP),Reorganisation of purchase and supply chain (ROPSC), Increased Operational cost (OC) and Awareness&knowledge about GST related issues (AK) is not statistically significant (p value>0.05), we failed toreject the null hypothesis. Hence, we conclude that perceived impact of GST does not differ significantlyacross business size in manufacturing sector as shown in Table 5. But the perceived impact of GSTabout business expansion differ significantly (p value <0.05) across business size in manufacturingsector.

Table 6: Tukey HSD for business expansion and business size in manufacturingsector

Dependent Variable (I) (J) Mean Difference (I-J) Std. Error Sig.

BEHelp in Business Expansion

Micro Small -.82051* .31524 .040 Medium -1.22222 .50120 .057

Small Micro .82051* .31524 .040 Medium -.40171 .49287 .698

Medium Micro 1.22222 .50120 .057 Small .40171 .49287 .698

The perceived impact of GST towards help in business expansion significantly differ between microand small categories of manufacturing sector of MSMEs in Sikkim as shown by post hoc Tukey HSDtest in Table 6.



Service SectorAmong the service sector enterprises of MSMEs, the amount of investment in equipment determines

their size. Micro enterprises are with Investment less than Rs 10 lakhs, Small with investment betweenRs 10 lakhs to 2 crores and medium enterprises are with investment between Rs 2 crore to 5 crores.

Table 7:Investment Size wise comparison of Perceived Impact of GST on ServiceSector

Dimensions of Impact of GST Micro Small Medium

Mean Std. Dev Mean Std. Dev Mean Std. Dev Ease of Doing Business 3.48 1.05 3.86 1.09 4.05 1.08 Compliance & Procedural Impact 3.73 1.29 3.98 .91 4.42 .71 impact on Business operations 2.95 .81 2.63 .82 2.36 .77 Transparency 3.49 .93 3.73 1.03 4.00 1.10 Help in Business Expansion 3.28 .83 3.49 .81 3.57 .92 Reorganisation of purchase and supply chain

2.67 .96 2.29 1.26 2.26 1.03

Impact on Operational cost 3.45 .83 3.38 .83 3.35 1.03 Awareness & knowledge 3.00 .94 3.02 .93 2.96 .76

It can be observed from the Table 7 that awareness & knowledge about GST is not considered asimportant perceived impact by medium enterprises and impact on business operations and reorganisationof purchase & supply chain by all MSMEs in service sector (mean score <3). However, ease of doingbusiness compliance and procedural impact, transparency, help in business expansion and impact onoperational cost are considered as important perceived impacts by micro, small and medium enterprises(mean scores>3).

Testing of HypothesisIn order to test our second null hypothesis of the significant mean difference in the perceived impact

of GST across the business size of MSMEs in service sector, one-way ANOVA and multiple comparisonof means has been performed at 5% level of significance.

H02: Perceived impacts of GST do not differ significantly across business size in Service sector ofMSMEs.

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Table 8:Investment size wise Comparison of perceived impact of GST on Servicesector

Dimensions of Impact of GST Sum of Squares Df Mean Square F Sig. Ease of Doing Business 17.241 2 8.621 7.489 .001 Compliance & Procedural Impact 17.987 2 8.994 8.234 .000 impact on Business operations 15.413 2 7.707 11.763 .000 Transparency 10.623 2 5.312 5.287 .005 Help in Business Expansion 4.491 2 2.245 3.229 .041 Reorganisation of purchase and supply chain

12.733 2 6.366 5.005 .007

Impact on Operational cost .453 2 .227 .309 .735 Awareness & knowledge .170 2 .085 .103 .902

As per the results of ANOVA in Table 8, the F value of ease of doing business, compliance &procedural impact, business operations, transparency, help in business expansion and reorganisation ofpurchase and supply chain is statistically significant (p value <0.05), we may reject the null hypothesisin favour of alternate hypothesis at 5% level of significance and conclude that theperceived impact ofGST differ significantly across business size in Service sector as shown in Table 8. However, the meanscores of perceived impacts of increased operational cost and Awareness &knowledge about GST doesnot differ significantly (p value >0.05) across business size in the service sector enterprises of MSMEs.

Table 9: Significance of Perceived Impacts of GST across Business Size in ServiceSector

Dimensions of Impact of GST Micro (A) Small (B) Medium (C)

Mean Mean Mean EODB Ease of Doing Business 3.48 3.86 (A) 4.05 (A) PROC Compliance & Procedural Impact 3.73 3.98 4.42 (A B) BO impact on Business operations 2.95 (B C) 2.63 2.36 TRSP Transparency 3.49 3.73 4.00 (A) BE Help in Business Expansion 3.28 3.49 3.57 ROPSC Reorganisation of purchase and supply chain 2.67 (B) 2.29 2.26

Results are based on two-sided tests assuming equal variances. For each significant pair, the key ofthe smaller category appears in the category with the larger mean. Significance level for upper caseletters (A, B, C): .05. Tests are adjusted for all pairwise comparisons within a row of each innermostsub-table using the Bonferroni correction.

In order to know which categories of service sector differ significantly for the perceived impacts ofGST, the results are summarised in Table 9. The table includes only those perceived impacts for whichthe F value was significant in Table 8.



Effect of Perceived Impacts of GST on Business Expansion among MSMEsIn order to answer the third research question about effect of perceived impacts of GST on growth/

business expansion plans of MSME, we perform a correlation and linear regression analysis formanufacturing and service sector separately. Table 10 shows that there is significant correlation betweendependent variable BE (perceived impact on business expansion) and other perceived impacts of GSTon manufacturing sector of MSMEs in Sikkim except compliance and procedural impact (PROC) andimpact on business operations (BO).

Table 10: Correlation Matrix for Perceived impacts of GST in ManufacturingSector

BE EODB TR SP ROPSC AK P ROC BO OC B E 1 .666* * .492 ** -.198 .504* * .216 .053 -.193 EODB .666* * 1 .492 ** -.311 ** .396* * .174 -.029 -.316* * TR SP .492* * .492* * 1 -.067 .582* * .215 .007 -.152

R OPSC -.198 -.311 ** -.067 1 .078 -.011 .262* .363 **

AK .504* * .396* * .582 ** .078 1 .119 .119 -.175 P ROC .216 .174 .215 -.011 .119 1 -.004 -.107

B O .053 -.029 .007 .262* .119 -.004 1 .320 ** OC -.193 -.316 ** -.152 .363* * -.175 -.107 .320* * 1 **. Correlation is significant at the 0.01 level (2-tailed). * . C orrelat ion is s ign ificant at the 0 .05 level (2 -tailed ).

The model summary suggests that perceived impact of ease of doing business (EODB) and awareness& knowledge (AK) together account for 49.7% of variation in the perceived impact of GST on businessexpansion (BE) as shown in Table 11. Other perceived impacts of GST such as transparency (TRSP),reorganisation of purchase & supply chain (ROPSC) and impact on operational cost (OC) were notincluded in the model because of their non-significant impact on dependent variable.

Table 11: Regression Model Summary for Manufacturing Sector

Model R R Square Adjusted R Square

Std. Error of the Estimate

Durbin-Watson

1 .666a .443 .435 .61792 2 .715b .512 .497 .58278 2.057 a. Predictors: (Constant), EODB b. Predictors: (Constant), EODB, AK c. Dependent Variable: BE

111

There is no serial autocorrelation in residuals as shown in model 2 by the Durbin Watson statistics,hence the model 2 is a good fit. It can be said that Ease of doing business and Awareness &knowledgeabout GST related have significant impact on business expansion of MSMEs.

Testing of HypothesisIn order to test our third null hypothesis as shown below, Table 12 presents the coefficients of

independent variables as identified in model 2 of Table 11.H03: Perceived impacts of GST don’t have significant effect on growth of business in manufacturing

sector of MSME.There isa significant (as shown by t statistics) influence of the two (EODB and AK) perceived

impacts of GST on business expansion/ growth of MSME in manufacturing sector, hence we reject thenull hypothesis in favour of alternate hypothesis at 5% level of significance. Thus, we conclude that thecoefficients of perceived impact of GST towards ease of doing business (EODB) and awareness &knowledge (AK) are significant in explaining the variance in the dependent variable BE. In model 2the stepwise regression analysis as shown in Table 12, there is no issue of multicollinearity as well(VIF<10) among independent variables. Here it is important to note that except EODB and AK, othercoefficients of perceived impact of GST were not significant.

Table 12: Coefficientsaof regression analysis

Model Unstandardized Coefficients

Standardized Coefficients T Sig. Collinearity Statistics

B Std. Error Beta Tolerance VIF

1 (Constant) 1.575 .270 5.840 .000 EODB .528 .071 .666 7.409 .000 1.000 1.000

2 (Constant) 1.168 .286 4.080 .000 EODB .439 .073 .553 5.991 .000 .844 1.185 AK .234 .076 .285 3.094 .003 .844 1.185

a. Dependent Variable: BE

The results in table 12 imply that keeping other variables constant - For every 1 unit increase inease of doing business and awareness & knowledge about GST related issue, business expansion increasesby 0.439 units and 0.234 units respectively.

For the service sector of MSMEs, the correlation analysis is presented in the Table 13. It can beobserved that impact on growth/ business expansion of GST is significantly corelated with other perceivedimpacts of GST, though strength of correlation varies from weak to strong among the pairs of variables.



Table 13: Correlation matrix for perceived impacts of GST in Service Sector ofMSMEs

BE EODB TRSP ROPSC AK PROC BO OCBE 1 .490** .297** -.243** .205** .316** -0.054 -0.092EODB .490** 1 .211** -.383** 0.071 .426** -.174** -.164**

TRSP .297** .211** 1 -0.069 .254** .205** -0.065 -0.03ROPSC -.243** -.383** -0.069 1 .226** -.292** .302** .248**

AK .205** 0.071 .254** .226** 1 0.069 .155** -.113*

PROC .316** .426** .205** -.292** 0.069 1 -.129* -0.054BO -0.054 -.174** -0.065 .302** .155** -.129* 1 .133**

OC -0.092 -.164** -0.03 .248** -.113* -0.054 .133** 1**. Correlation is significant at the 0.01 level (2-tailed).*. Correlation is significant at the 0.05 level (2-tailed).

The model summary results of stepwise regression analysis for identifying the significant dimensionsof perceived impact of GST to predict the Business Expansion (BE) in service sector of MSMEs arepresented in Table 14. Model 4 includes four independent variables viz EODB, TRSP, AK and ROPSCas significant predictors which all together explain 29.8% of variance in the dependent variable (BE).

Table 14: Model Summaryefor Service Sector of MSMEs

Model R R SquareAdjusted R Square

Std. Error of the Estimate

Durbin-Watson

1 .490a 0.24 0.238 0.732212 .528b 0.279 0.275 0.714123 .543c 0.295 0.289 0.707134 .553d 0.306 0.298 0.70287 1.875

a. Predictors: (Constant), EODBb. Predictors: (Constant), EODB, TRSPc. Predictors: (Constant), EODB, TRSP, AKd. Predictors: (Constant), EODB, TRSP, AK, ROPSCe. Dependent Variable: BE

There is absence of serial autocorrelation in residuals as shown in model 4 by the Durbin Watsonstatistics, hence the model 4 is a good fit. It can be said that Ease of doing business, Transparency,Awareness &knowledge about GST related issues and Reorganisation of purchase and supply chainhave significant impact on business expansion of MSMEs.

113

Testing of HypothesisIn order to test our fourth null hypothesis as shown below, Table 15 presents the coefficients of

independent variables as identified in model 4 of Table 14.H03: Perceived impacts of GST don’t have significant effect on growth of business in service sector

of MSME.There is a significant (as shown by t statistics) influence of thefour (EODB, TRSP, AK and ROPSC)

perceived impacts of GST on business expansion/ growth of MSME in manufacturing sector, hence wereject the null hypothesis in favour of alternate hypothesis at 5% level of significance. Thus, we concludethat the coefficients of perceived impact of GST towards ease of doing business (EODB), transparency(TRSP), awareness & knowledge (AK) and reorganisation of purchase and supply chain (ROPSC) aresignificant in explaining the variance in the dependent variable BE. In model 4 the stepwise regressionanalysis as shown in Table 12, there is no issue of multicollinearity as well (VIF<10) among independentvariables. Here it is important to note that in service sector of MSMEs, the perceived impact on businessoperation (BO) and operational costs (OC) were not significant, hence excluded from the model.

Table 15: Coefficientsa of step wise regression analysis for Service sector of MSMEs

Standardized Coefficients

B Std. Error Beta Tolerance VIF(Constant) 1.532 0.223 6.883 0EODB 0.308 0.037 0.4 8.268 0 0.806 1.241TRSP 0.135 0.038 0.163 3.556 0 0.895 1.117AK 0.149 0.043 0.161 3.447 0.001 0.862 1.16ROPSC -0.085 0.036 -0.115 -2.343 0.02 0.786 1.272

a. Dependent Variable: BE

Model

Unstandardized Coefficients

T Sig.


4

The results of Table 15 imply that with an increase of 1 unit in ease of doing business, transparencyand awareness &knowledge about GST related issues, the level of business expansion increases by0.308, 0.135 and 0.149 keeping other dimensions constant. However, ROPSC is negatively influencingthe BE and an increase of 1 unit in reorganisation of purchase and supply chain (ROPSC), the level ofbusiness expansion decreases by 0.85 units keeping other dimensions constant.

Conclusion & ImplicationsTaxation plays an important role in the economy. A good taxation system is beneficial to both the

government as well as the businesses. Government generates revenue and there is an equitable incomedistribution in the economy. The findings of the study reveal that the implementation of GST in July2017 was perceived positively as well as negatively by MSMEs in Sikkim. The perceived impacts ofGST on MSME’s are associated with the types of enterprise i.e. manufacturing & service sector. The



manufacturing sector perceived the significant impact in terms of ease of doing business, compliance& procedural impact, business operations, transparency, business expansion and operational cost. Onthe other hand, the service sector enterprises did not perceive the impact of GST on their businessoperations and awareness and knowledge about GST as important dimension. The perceived impactsof GST also vary across the size of MSMEs. There is significant difference in perceived impact of GSTtowards help in business expansion between the micro and small categories of manufacturing sector ofMSMEs in Sikkim. On the other hand, there is significant difference in the perceived impact of GST interms of ease of doing business, compliance & procedural impact, business operations and reorganisationof purchase & supply chain across micro, small and medium categories of MSMEs in Sikkim. Further,it is found that perceived impacts of GST have significant effect on growth/ business expansion ofMSMEs. For manufacturing sector, ease of doing business and awareness & knowledge are two importantdimensions of perceived impact that affect their business expansion plans; while for service sectortransparency and reorganisation of purchase & supply chain are the two additional important dimensionsin explaining their growth.

The findings of this study have implications for MSME owners, researchers as well as the policymakers.Primarily, the study provides better understandings of the issues faced by MSMEs especially inSikkim in terms of their perceptions about GST and its impacts on their business.The perceived impactsof GST by MSMEs may be addressed by the policy makers to facilitate their growth in the region.Besides this, the policymakers may specifically make a note of the need and importance of training andawareness activities related to GST which will lead to better compliance to the procedural aspects ofGST.

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* Research Scholar, Dept. of Commerce, Faculty of Commerce & Management, Indira Gandhi National Tribal University,(Central University) Amarkantak, Madhya Pradesh, India E-Mail: [email protected] Mob: 9124393942

** Professor, Department of Commerce, Faculty of Commerce &Management, Indira Gandhi National Tribal University,(Central University) Amarkantak, Madhya Pradesh, India E-Mail: [email protected] Mob: 9437163942,

An Empirical Study on SustainableEntrepreneurship - A Special Reference to Tribesof Madhya Pradesh

Prashant Kumar Mishra* & Prof. S.K. Baral**

ABSTRACTTribal people constitute the weakest section of India’s population. The sustainable socio-economic

development of the tribal people can be accelerated through development of entrepreneurship amongst them.Entrepreneurship development can only be possible if the adequate support facilities are provided to themfrom various sources. The Schedule tribes are most indigenous people, have their own unique language,Culture and Social system mostly they are used isolated geographical region for residence and they also poorin socio-economic parameter. because of that they still outside from the scope of growth for decades. Uponindependence, Central Government of India prepared the special tribal groups for their growth and securityin the Constitution, as with the Schedule Cast. There are almost 650 Schedule Tribe classes in India, withSeventy-five of the STs in India being most backwards and the largest tribal groups. Most of the hill andundulating plateau areas is hilly and inaccessible. In the tribal areas of education, highways, pharmacy,communication, drinking water, sanitation, and other areas the services for utilities and development aretherefore lagging behind, which have long resulted in a wider range of growth laggards between the tribesand the population as a whole. The present study has been undertaken where large-scale migration of tribesincluding tribal takes place. This paper aims to find out some inputs of migration of tribal and try find out itsremedy for their sustainable socio-economic effects with in major areas in India including a special referenceto Madhya Pradesh state with the help of secondary data.

Keywords: Entrepreneurship Development, Tribes, Migration, Sustainable Socio-Economic,Challenges.Introduction

The 1971 census reported 36,408,515 population of scheduled tribes in India, rising to 104,545,717people in the 2011 census. The increase in the population of the Scheduled Tribes in this time is 187.1%.Most of the population of the Scheduled Tribes lives in rural areas. In 1971, the proportion of ruralorganized tribes fell to 96,48, down to 90% in 2011. By 1971 very small proportion (3.52% of the


population of organized tribes lived by urban areas, up to 10% in 2011. It shows the tribals relocate forwork in urban areas. In contrast, 4,940,260 members of the different Scheduled Tribes in Madhya Pradeshwere 13.57% of the entire population of the Indian Tribals of 1971. In 2011, the population of theScheduled Tribes reached 15,316,784 and increased by 210 % over the four decades. The populationfrom Scheduled Tribes in rural areas declined to 93% from 98% 0f 1971. In 2011 almost ten timesincreased of Scheduled Tribes in urban areas from 1971 to 2011.

Scheduled Tribes Population - Madhya Pradesh: 1971-2011

1971 1981 1991 2001 2011Total 4,940,258 7,345,930 9,681,930 12,233,580 15,316,800Rural 4,841,700 7,042,820 9,164,390 11,446,449 14,276,880Urban 98,558 303,110 517,540 787,130 1,039,920

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1971 1981 1991 2001 2011

Total

Rural

Urban

( Source: censusmp.nic.in)

Tribal Migration Scenario in M.PMigrants are those people who are enumerated at other city/ village from their original birth place .A person shall be treated as a migrant at the last residence if the location in which he is mentioned

is not his place of immediate last residence during the census.

119An Empirical Study on Sustainable Entrepreneurship-A Special Reference to Tribes...


Literature Review:The following related literature were reviewed during study the topic. Bedabati Mohanty and

TrilochanTripathy’s (2005) Research seek to illustrate and explain the reasons for the differences inearnings between men and women who work in the education sector. The degree of disparities is due tohuman capital, while decomposition analyzes have measured the amount attributed to mere genderdiscrimination. The researchers further discuss women’s role in the community and the possiblerelationship between work and women’s status. Gupta M.L. and Namita Gupta (2006) consider in theirresearch that SHG’s are one of the most important tools of participatory economic empowermentstrategies for women. It is an important institution in order to improve women’s lives on different sociallevels. SHG consists of very poor individuals with no access to established financial institutions. Thishelps its members to work in teams and work together. The women who engaged in these SHGs raisedthe earnings of their families.Valsamma Anthony (2006) endeavored to focus light on education as onebasic factor that plays the most crucial role in empowering women. In order to bring women to thecenter stage of development and thereby ensuring better participation in the developmental efforts ofthe nation and enabling them to take a lead role in the social and economic system women shouldthat of the community.

Anil Kumar Thakur, Kamini Jha and Vipin Prasad Singh’s (2006)study analysed that in India evenafter five decades of development of women still are deprived section of the society. Not only thebenefits of development have eluded women as a category, in some ways development processhas enhanced male domination over women and added to their deprivation. Opportunities for educationhave increased but the rate of female literacy and enrolment in educational institutions is much lessthan men. Women’s labour at home is not recognized at all. They perform many activities at home andoutside whose economic value goes unnoticed and unrecognized. Even they are subjected to otherform of discrimination such as compulsory low wages, longer working hours and restricted careerprospects. Baij Nath Singh’s (2007) study presents social economic condition of rural women which ison very low grade. Rural women, especially those belonging to weaker section, have limited access toresources on employment opportunities that would make them meet bare minimum consumption needs.However, the research illustrated microfinance in which rural women have lowered poverty levels byincreasing their earning income, raising their social status, making decisions, empowering womeneconomically and empowering them in education and healthcare.

Objectives of the StudyThe main objectives of the present study are as follows:1. To study specific factors responsible for migration of tribal from the tribal areas.2. To study the Sustainable entrepreneurial development of Tribal.3. To Make Suggestion for reducing migration and sustainable Tribal entrepreneurship.

Justification of the StudyA large number of skilled and untrained tribes have migrated to various regions of the country and

metropolis, such as Delhi, Mumbai, and Kolkata have been shown to be their key destinations forseeking income or leisure work in the unorganized sector and as household servants for their livelihoods.

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They have been noted... The reasons for their migration should be investigated in depth, given thenumerous development programs such as the National Rural Employment Guarantee Act (NREGA),Jawahar Rojgar Yojana (JRY), Employment Assurance System (EAS), Food for Work Program (FFW).The plan seeks to find reasons for their migration to demonstrate how and where they migrate, whatthey live before migration and where they live, how they think about their future and if they understandthe development programs they adopt to their benefit.

Limitation of the Study :This research is purely based on Secondary data obtained from mostlyGovernment Sites and Census reports of Country, So current Situation may be Slightly differ fromActual results , due to time and other relevant constraints.

Education:In 1961, basic ST literacy was almost 8.6%, which is rising to 38.4% in 2001. In 2001, the effective

rate of literacy of STs amounted to 47.2% in 2011, it was 29.6% in 1991 up to 17.5% increased in thelast decade. Gross registration of ST students in the last decade rose more rapidly than all classes, andprimary (123%), upper-primary (69%), secondary / senior high school (37.0%) and high-school (4.6%)levels remained significantly low during 2003-04, especially in secondary and higher schooling.

Health:The mortality rates are higher for STs in all Indian states compared to the total mortal rates and the

mortalities of other persons (54), infant mortality (85), child mortality (46) and under-five mortality(127). For these safety factors, the difference between STs and the general population is over 28%.Such data represent the state of health of the very weak tribal.

An Empirical Study on Sustainable Entrepreneurship-A Special Reference to Tribes...


WPR (Madhya Pradesh)Research by Scheduled Tribes of India and Madhya Pradeš of jobs and employee participation

reveals that in 2001 and 2011, the percentage of total and rural workers has dropped, but urban workershave risen over this same period. The ratio of workers from total, rural and urban tribes is lower thanthe proportional percentage of workers in Madhya Pradesh.

2001 2011 2001 2011 2001 2011Total 12,233,474 15,316,784 6,173,431 7,640,148 50.5 49.9Rural 11,446,448 14,276,874 5,898,922 7,248,796 51.5 50.8Urban 787,026 1,039,910 274,509 391,352 34.9 37.6

Scheduled TribesPopulation

Workers ofScheduled Tribes

Work ParticipationRate

Access of Amenities:Access of required basic amenities are very less compared to non tribal, even Drinking water (10.7)

percent, Sanitation 25%, Availability Standard Fuel (LPG) (25%), Electricity (30%). Unavailability ofbasic requirements leads to Migration among tribes.


entrepreneurs shared that and their experience and achievement and tell that how these entrepreneurialdevelopments helpful in stop migration and helpful Socio-economicdevelopment.

Tribal Entrepreneurial Opportunities in M.PThere is lot of Entrepreneurial opportunities in Madhya Pradesh for Indigenous people which may

play a crucial role in reducingmigration, empowering tribal communities, creating job opportunitiesalso helpful in protecting their Culture. Some leading Business opportunities Are as follows:

1. Herbal Medicines& Indigenous techniques of healing: There are many herbal plants whichis found in forest and having rich medicinal quality and used in treatment of many disease likeGulbakawali, Tulsi, Bhringraaj, Bhoi Neem,DahimanLakdi etc. Indigenous techniques of healing isalso have good entrepreneurial capacity like modern days Spa.

2. Branding Of Tribal Paintings&Tatoo: Branding, promoting and marketing of tribal paintingalso may also provide good opportunities of employment like BaigaPaintings&tatoo, Gond paintings,Agaria paintings, Sharia paintings etc.

3. Selling of Indigenous Grains: Indigenous product are very rich sources of required minerals ofhuman body they are organic so they prevent us from many disease like Sugar, Blood pressure, strokes,and increase immune power, eye sight etc. production and marketing of these product able upliftmentof society and make nation healthy these grains are Kodo, Kutki, jwar, bazra, makka, etc.

4. Forest Product: forest product like Honey, Chiranugi ,baans ,Chandan ,Katira, kaosum, Tenduetcare mostly forest product and these are able to provide big employment opportunities in his local areathat may reduce the migration of tribals.

5. Tribal Tourism& entertainment: Promotion tribal tourism and developing tribal entertainment industry may aware the rest of people

with tribal community and tribal socio-economic upliftment are also possible employment opportunitiesis also there.

6. Manufacturing of IndigenousProduct: Indigenous manufacturing like leaf plate(pattals), woodplate, bone china product, wood buckets, etcare very useful in reducing pollution which is solution ofplastic product pollution these products have lot of business opportunities in future.Problems With Tribal Entrepreneurs:

Tribal entrepreneurs have capacity to solve the major problems of Indigenous people like Migrationis one of them, Socio economic development, Literacy, health related problems. But tribal entrepreneuralso faces several problems like;

1. Human resources related Problems:Mostly tribal are illiterate or semi literate due to this theydo not have proper training, learning and education which leads the major problems in efficiency ofwork place and product they need proper education and training.

2. Lack of adequate fund: Fund is also major problems for there is fewer financial services availableand financial literacy among tribes are very low, so for establishing venture there is aneed of some fundbut their Scarcity of that so this hamper the development of tribal entrepreneurship.

3. Marketing Issues:Due to lack of awareness about indigenous product and their benefits modernSociety avoid that products so the target market of that product is very less, marketing and Advertisementof these products are strongly recommended for the promotion and expansion of market area.

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4. Certification Issues: Tribal Products locally produced by indigenous in people in natural premisesand sell in local market because of that there is no Scientific certification of product about their productsand their ingredients, in these products no labeling so people do not have required information becauseof also these things mainstream society avoid to purchase them.

5. Transportation Problems:Tribal people are generally living in forest or hilly areas and therealso products produced there for these area transportationsis a major problem because of lacktransportation and lack of marketing facility producers or entrepreneurs are selling their products tomiddleman on very less price and middleman enjoy huge profits by selling these products in outsidemarkets.

Governments Initiative Regarding Entrepreneur Development:Pradhan Mantri Kaushal Vikas Yojana (PMKVY): The Flagship Program of the MSDE, initiated

by the National Skill Development agency, is Pradhan Mantri Kaushal Vikas Yojana (PMKVY). Thegoal of this Skill Certification Scheme is to provide many Indian youth with industry-relevant skillstraining to help them ensure a better livelihood. Persons with previous training and expertise will alsobe tested and accredited under Previous Learning Recognition (PLR).

Pradhan Mantri Rojgar Gurantee Yojana: Pradhan Mantri Protsahan Yojana (PMRPY) Programhas been designed to encourage businesses to produce new jobs where the Government of India is topay full employer EPF & EPS contributions, both w.e.f.01.04.2018 (previous profit was only availableto employer EPS contributions) for new jobs. This program has two advantages: firstly, it allows themanager to extend the job bases of workers at the company’s establishment, and secondly, a substantialnumber of employees find employment in these services. The main advantage of these jobs is that theywill have access to structured security benefits

Startup India: In his 15 August 2015 Red Fort speech, Indian First Minister Narendra Modi launchedthe project in New Delhi.[1] This initiative’s action plan builds upon three pillars: consistency andhelp.

Help of funding and benefits.Partnership and Incubation for industry and academia.The other aimof this initiative is to scrap restrictive government policies within this region, such as the Raj license,Land permits, Proposals for Foreign Investment and Environmental Clearances. The Department ofIndustry and Internal Trade (DPI&IT) has been organized.

Stand up India: The Indian Government unveiled Standup India on 5 April 2016 to support andSC & ST entrepreneurship. It is like Startup India, but different. The other main government projects,including Make It India, Industrial Corridor, Dedicated Carridor, Sagarmala, Bharatmala, UDAN-RCS,Smart India, BharatNet and UMAN GmbH, are both enabler and beneficiary.

The program provides bank lending to planned castes and scheduled tribes, and to setting up newundertakings outside of the agriculture sector of € 140,000 (140,000 USD) and € 11,000 (140,000U.S.) to the state.

Center for Entrepreneurship Development of Madhya PardeshSeat reservation in ITI: In all ITIs, 21% of seats will be reserved for scheduled tribal candidates,

15% for scheduled castes, and 14% for socially and economically backward groups



Eklavya ITIs: Specially for ST boys and girls such ITIs has been built.There are four such government in Madhya Pradesh, 8 of which 50% are reserved for STs in these

ITIs. The other 50% of the seats are subject to quotas, that is 21% for ST, 15% for SC and 14% for theback-up groups, according to another ITIs. The program has also made arrangements for scholarships($1,000/month) and food services in these ITIs for ST students.

Tribal Cooperative Marketing Development Federation of India Ltd. (TRIFED): Supportingorganizations for the execution of the above programs, better facilities, construction of projects,distribution of information on prices and agencies to support people of the field of production, productdevelopment, conservation of indigenous heritage and benefit for both forest and agricultural products.

National Scheduled Tribes Finance and Development Corporation (NSTFDC)/State Scheduled TribesFinance and Development Corporations (STFDCs)

Identification of economic activities that are important for the Scheduled Tribes to produce andincrease their income. To improve their skills and processes, both through administrative and worklearning. to create current State / UT Scheduled Tribes Finance and Development Corporations andother developmental bodies, which are engaged in economic development for the Scheduled Tribes m;

Mechanism for Marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP)and Development of Value Chain for MFP: as a measure of social safety for MFP gatherers (CentrallySponsored Scheme) From 2013-13 this Department has introduced, as a measure of social security forMFP gatherers mainly in Scheduled Tribes and other traditional forest residents whose livelihood relieson collection and selling, a centrally funded scheme for the ‘ Mechanism for Marketing Minor ForestProduct (MFP) via MSP and Value Chain for MFP ‘

Initiative from Other Sources:Local Government Authorities: Local Government Authorities like District administration may also

provide Education and training Directly and also help in from Of SHG they can provide lot of legal,Scientific, and marketing assistance to local public and local existing entrepreneurs for their developmentFor Example Anuppur District Magistrate take many initiative like Establishment of Cowshed throughSHG, Establishment of Training center about refining and marketing Strategies to SHG for their localproducts, also established a free coaching center for deprived section students.

University and Corporate organizations: Many Central Universities Like BHU, Delhi university,IGNTU, introducing short term certificate or Diploma Program for providing Knowledge Skillenhancement auto Mobile training, Diploma In Journalism, Diploma in foreign Language, Diploma forelectrician etc. like Universities Big Corporate Organization (HAL, SAIL, GAIL, Reliance, AdaniGroups etc.) are also provide proper training and certificate through His CSR project in many areas forenhancing entrepreneurial activities among society which is leads to Socio economic Development ofSociety.

ConclusionTribal are most older and Indigenous inhabitants of earth, They are basically found in Hilly and

forest area with unique and beautiful culture they are mostly depends nature apart from mainstreamsociety because of that they lived in serious condition and their socio economic condition is still very

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poor, So Migration is Big problem Among the tribe the tribal Most of the tribal migrant abuse is performedby the intermediaries who bring them better emoluments, good selection and working conditions andwho are exploited when taken to work. The main events of the position of job placement agency arethe territorial migrant of the particular cases of abuse by the landowner or company. Throughout urbanareas, the migrant tribal and women suffer from poor housing. Most have their houses in poor conditionsin slum districts. More than 50 million still stay in rented houses for migrant tribals and women. It hasalso been researched how they move to cities because of poverty is the major reason (49%), followedby poverty (41%). Sustainable Entrepreneurial Development may reduce the many problems of tribePoverty, illiteracy, Employment, education etc which leads this society for their socio-economicdevelopment and protect their culture and self-respect.

Study had found that Central as well as state government of Madhya Pradesh continuously workon it launched many program and schemes for them like Startup India, Standup India, Pradhan MantriKaushal Vikas Yojana (PMKVY), TRIFED etc. apart from Governments other Responsible bodies ofsociety is also acknowledgeable work for their Sustainable Entrepreneurial Development.

References1. Census of India 2001, 2011 from Government of India website.

2. Census, 2001, NFHS, 1998-99, 61stRound NSSO report.

3. Datt Tara, (2001), Tribal Development in India, Gyan Publishing House, New Delhi.

4. Deshingkar et.al (2006), Livestock and Poverty Reduction in India, Discussion Paper-8, Targeting and Innovation,International Livestock Research Institute.

5. Mohan, Rakesh (2001), Agricultural Credit in India Status, Issues and future agenda. Economic and Politicalweekly, 41, 1013-1O2l.

6. Mohapatra Prafulla Chandra (1987), Economic Development of Tribal India, Ashish Publication House,New Delhi.

7. Moni, M. (2001), Impact of economic reforms on Indian Agricultural Sector: Application ofGeometricsTechnology to reduce Marginalization and Vulnerability of Small Farmers in India, New Delhi: AgricultureInformatics Division.

8. National Sample Survey, 1999, 2000.

9. Olubiyo S.0. (2003), Beyond the Risk Factor: Bank Lending to Small-Scale Peasant Farms in Nigeria: Journalof African Review of Money Banking and Finance.

10. Padhi Kishore.C (2000), The Challenges of Tribal Development, Swarup & Sons, New Delhi.



* Reader in Economics, P.G. Department. of Social Science, Fakir Mohan University, Balasore-89,Email: [email protected]

** Director Institute of Legal Studies, Indore, M.P.

Corporate Social Responsibility (CSR) CorporateEthics

Dr. Sunil Kumar Padhi* & Dr. Vinayak Pattanaik**

ABSTRACTUntil recently, in business practice, there was a belief that companies were operating solely for the

profit of their owners. Few companies have recognized the need to combine their activities with ethics, andin particular with their obligations toward society or the environment. However, the perception of ethicalissues has changed radically in business over the last 20 years. If a company wants to be perceived as areliable business partner and a respected member of the business sector, it should demonstrate a high levelof institutionalization of business ethics principles and practices, and it must practice outstanding ethicalbehavior. This is exceptionally true in some controversial industries. The purpose of our study is to identifythe scale and scope of the use of these principles and practices in general.

Key Word: CSR, Corporate ethics, Ethical behavior, Legal framework.

IntroductionCorporate Social Responsibility is associated with variegated synonymous terms like corporate

conscience, corporate citizenship, sustainable responsible business, corporate social performance, etc.The term Corporate Social Responsibility came into common use during late 1960s and early 1970sonly after many multinational corporations formed the term stake holder meaning those on whom theactivities of organizations have an impact. CSR is a form of self-regulation which is integrated andsynthesized into a business model. The CSR policy functions as a self-regulating mechanism by whicha business monitors and ensures its compliance and compatibility with the letter and spirit of law andethical standards. CSR is a process with an aim to take the responsibility for the actions of the companyand initiate and encourage a positive impact through its activities on different aspects namelyenvironment, consumers, employees, communities and other stake holders and other members of thepublic who may also be considered as stake holders. CSR stands as a symbol to help an organization’smission as well as a guide to what the company stands for and will uphold to its consumers.ISO 26000is the recognized international standard for CSR. CSR is the continuing commitment by business tobehave ethically and contribute to economic development, while improving the quality of life theworkforce, local community and society at large. It builds a meaningful relationship between the corporate

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sector and the rest of the society. The business practices have to adopt those practices that ensure ethical,legal, commercial and public expectations. Accountability and transparency, behavior in conformitywith laws, business ethics, good work place and good working conditions and labour relation practices,positive actions, customers’ loyalty and satisfaction, involvement of company with community,environmental benefits are few essential components of CSR. Primarily, the CSR is the deliberateinclusion of public interest into corporate decision making and conforms to triple bottom line- People,Planet and Profit. There are several influencing factors for corporation to adopt CSR. The primaryfactor is to give respect to stake holder priority who expect from corporations to address the social andcommunity issues which are relevant to them. The government also ensures that the corporations followthe rules not to harm the social goodness of the people, the environment and thus the companies adoptCSR policies to help people, society and environment. In order to attend the popularity the corporationsgo for ethics training inside corporation where CSR is the main issue. Share holders and investors alsowish the corporate sector to behave responsibly through social investment. Global competition is alsoone of the drivers to put particular pressure on multinational corporations to examine both labor practicesas well as supply sources from CSR point of view.

Corporate EthicsEthics means a set of moral principles and values, a system of philosophy of conduct, the professional

ethics to distinguish good from bad. Ethics is based on goodness. It is order and action born out ofgoodness. Goodness in action form is ethics and it is very essential in the corporate world. One’scommitment for corporate excellence is rooted in work ethics only. Company being a legal person, likea person its body must not be abused because abusing the body is unethical. The physical health of thecompany can be well maintained by doing right things and keeping it vibrant. The emotional health ofthe company can be attained by positive thinking and enthusiasm. The intellectual health can be achievedby being part of a solution but not victim to a problem. The spiritual health of the company involvesworking on right values. Right values entail operating in a Team i.e. working together, with self disciplineand utmost love to the company. The relation between law and ethics is that while the former controlsthe external conduct the later controls internal behaviour. Ethics helps to make relationship mutuallyacceptable and productive. It inculcates a sense of harmonious relation among members and a sense ofbelongingness to organization in particular and society in general.

Ethics is essential in an organization to define acceptable behavior, to promote excellent standardsof practice, to provide a parameter for self evaluation, to establish a framework for professional conductand accountability. Ethics is essential, as a mark of professional identity and maturity. The code ofethics aims at integrity and inspiration rather than complain and enforcement, gives emphasis onmotivation rather than punishment. The transition of ethics has been from secretive to openness fromdirective to educational. The various facets of ethical command are written code of ethics, employeetraining and commitment, discipline process, full disclosure, expectation building and conflictmanagement. The formal code of business ethics should be signed and adhered to by all the employees.Management of conflict of interest, protection of company’s confidential information, proper use ofassets, obligations under securities law, prohibition of exploitation of corporate opportunities,responsibilities to customers and stake holders are certain basic tenets for a model ethics code. Theintimate link between CSR & Corporate Ethics (CE) mandates to answer one simple question whatkind of ethical parameter will be capable of extending strong support for CSR. While discussing this

Corporate Social Responsibility (CSR) Corporate Ethics


relationship some important factors which always dilute the relation between the two should be takenin to account. Sometimes CSR helps as a protection and savior to those immoral corporate sectors whotry to escape from competition and try to eliminate their rivalry in the name of CSR. The critics alsoassume the danger that a firm may appear to be socially responsible but within that camouflage therelies a dangerous tradeoff between moral commitment and social commitment. Cynical companies cancover – up the absence of morality showing compassionate behavior momentarily by distributing theproduced wealth. The rationality of corporate sector is to pursue and maximize the objective but it canbe assured that in the process the result may not necessarily achieve both profit vis-à-vis CSR under allcircumstances. The fact is that there is a critical starting point to reach the level of CSR and belowwhich it is not possible to achieve the CSR. However, it can be affirmed that a rational behavior in acorporate sector can accept socially responsible behavior only in a long term basis.

Few Popular Ethical Theories for CSR.A decision in a corporate sector can be considered as good if the said decision conforms to two rules:

the ‘Proximate Rule’, i.e. ‘Conscience’ and the ‘Remote Rule’ i.e. ‘Law’ and it is necessary to harmonizethe two rules; ‘The law and the conscience’. In this connection the old saying ‘A good business is a goodethics’5 is worth quoting where both act as well as the intention are good. Andrew Carnegie, in his book“The Gospel of Wealth” said “ Wealth Concentrated in the hands of the one man alone is the result of thelabor of the entire community and must go back to that community in one way or the other.” This sayingof Carnegie holds good even now in business methodology. Thus the resultant behavior of corporatesector must be divided in to two functions acquisition as well as distribution. Sometimes the ethical theoryalso insists upon in direct effect of an action because such effect of an action is an integral part of ethicalbehavior. For example investing money in a financial institution to get good return is a just action, but ifthe same institution invests the same money in an immoral way then the said action is subject to censuring.It cannot be denied that good ethics is good business. But simultaneously one should be careful of the factthat ethics should be a guide line for any economic action but it should not be the consequence or byproduct of economic success and it is better to adopt an economic strategy that will meet the need ofsocial response than to adhere to too many moral scruples.

For example it is better to use child labor with reasonable restrictions than to see people starvingwithout food or dying of hunger. While studying CSR in the context of ethics the stake holder model asenunciated by Weber and consequently by Jonas are quit noteworthy. According to Weber “The ethicsof responsibility” cannot that responsibility means the “Willingness to respond to the foreseeableconsequences of one’s actions”. To add to it Jonas further states about the “Possible consequences ofhis actions” Jonas emphasizes “to act in such a way that effects of your actions are compatible with thecontinuation of an authentically human life”. Conforming to Kantian view it can be said that “you canbecause you must” gives place to “you must because you can”. This stake holder theory envisages thateach group of stake holders has a claim not to be used as a means to achieve some end but has the rightto participate in the determination of the future line of action of the firm. From this stake holder theoryit can be deduced that the objective of the firm is not the profit maximization as implicit in the shareholder theory where the share holder remains responsible for the ultimate destiny of the firm and stakethe claim for a different consideration than other stake holders. The present stake holder theorypronounces that the “authentic objective of the firm …… is that of operating as a vehicle for co-ordinating

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the interests of the stake holders”. The primary task of management is therefore to operate to achieve“balancing of different interests” the theory which is in tune with the theory of the social jurist RoscoePound “the social engineering theory” which lays importance on balancing of conflicting interests”.Thus the primary objective of stake holder theory is to co-ordinate the interests of all stake holders andmove in a particular direction to achieve the desired objective of the firm i.e. creation of ‘value but notconflict of value’. To achieve this present stake holder theory it is necessary to identify a bargainingequilibrium acceptable to each stake holder by contractualism (Social Contract) as enunciated by Rawlsso that each stake holder co-operate voluntarily to achieve moral equality which will ultimately resultin creation of value putting an end to the conflict of value. But some time a question arises, can it bepossible on the part of the stake holders to carry out the obligations of the social contract, on the face ofthe fiduciary obligations fixed by the company for stake holders. On the event of violation of socialcontract, the end result is improvement of economic performance of the firm as visualized by the stakeholders. One should always remember that the ethical norms of contractualism is often visualized asrational constraint and there is possibility of violating the norms without, however, changing thereputation of the firm. At this juncture the ethical theory “ ethics of virtures” as propounded by AdamSmith, comes into play. According to this theory the enforceability of ethical norms is linked withmoral infrastructure of the individual- an internal motivational structure where the stake holder valuesthe fact that the firm follows equity and works to preserve the dignity of people not withstanding thematerial advantages and in this situation the ethical code is respected even in the absence of mechanismsof reputation of the firm.

For example – the relation between company and its employees can take the shape of “socialexchange” or “ market exchange”. It is well evident that the “social exchange” always values loyalty,honesty and involvement in the mission whereas, the market exchange always passes through the gateof “optimal” incentive scheme. Obviously the employee will accept to enter into “social exchange”rather than “market exchange” provided the firm appears to him a moral entity which puts into practicethe principle of reciprocity. The focus is on the ethics of virtues which gives emphasis on the capacityto resolve the conflict between altruism and egoism and go for interest for others rather than self interest.Moreover, a virtuous life is always desired which is not only good for us but good to others, and this isthe idea of common good which means the good of being in common, where every stake holder isinserted into structure of “common action” which is the stand point of every firm. Common action,according to Viola, is the intentional coming together of many subjects and inters subjective relationsthat lead to unification of efforts and the final result bears the character of joint product, where it is notpossible to determine the specific contribution of each stake holder. In this situation the end is realizedthrough common action that is based on the principle of both co-operation and co-ordination i.e. co-operation of the stake holders and the co-ordination of contracts. The theory of Aristotle, the pioneer ofethics of virtues gives us the message that good is something that happens which is realized throughactivities. According to Lutz the most serious problem with various business ethics is that those theoriesare not capable of offering reasons for “being ethical”. The debate is if it is not good to be “ethical”then why to follow the recommendations of ethics. On the other hand if it is good for us to “be ethical”then why it becomes necessary to give incentives to managers for doing that what they are supposed todo. The solution of the problem of moral motivation lies not in providing incentives for acting againsttheir self interest, but to offer them a more complete understanding of their well-being. In conclusion it



can be said that only when ethics becomes part of the objective –function of all stake holders thenmoral motivation ceases to be a problem because we are motivated to do that which ultimately webelieve is best for us. So ultimately civic virtues of the firm is an inevitable task not only for a citizenbut also for CSR. The theory of utility or utilitarianism as founded by Jeremy Bentham speaks aboutgreatest happiness of the greatest numbers. His theory focuses on pain and pleasure philosophy. Accordingto this theory an action or law is deemed as good if it gives maximum happiness or pleasure to themaximum people in the society avoiding pain. Utilitarianism believes in the result of the action or law.So this theory can be made applicable for the individual, for the society and for the corporate sectors aswell. The Indian philosophy believes in “Duty”. Duty is God and Duty is “Dharma”. The concept of“Duty” manifests in itself both ethics as well as social responsibility. Immanuel Kant, a deontologist,also believes that ethical actions emanate from doing once duties one can realize his duties by rationalthinking6. Kant therefore says that all human being may not be equal in every respect but they are equalbefore ‘God’ and ‘Duty’. The basic principle of equality is that any particular action or law should beuniversalized, that should be fair to all concerned not just for one. According to the theory of deontologyduty, rational act and moral weightage should be the innate quality of all human beings. Sometimes onethinks that a bit of lie or breaking the promise may have minimum harm but the truth is this cannot beuniversalized. So the universal rule for all including corporate sectors is “do your duty and do untoothers as you would have others to do unto you”. Social contract theory by Thomas Hobbes believesthat people would always choose to have a government, a social contract between government andpeople where people give some rights to the government and in return get security and benefit.

This kind of social contract between corporation and society i.e. in exchange for perpetual existenceand limited liability the corporations also have some corporate duty towards the society. Thus the peopleultimately possess certen rights which come from social contract, the contract with corporations. Ifcorporations have some right according to law they have also duty according to ethics. Aristotle, thegreat Greek philosopher is of the opinion that the basis of law is reason and for all purposes reason canbe the foundation stone of an individual, society and corporate as well. The use of reason leads toexcellence and virtue and excellence go together. Aristotle propounded fourteen virtues and the ethicalvalue present in those virtues and if practiced, can lead to excellence and happiness. The companiesbesides following the three bottom line principles (People, Planet, Profit) should also follow this virtuewhich will satisfy all the stake holders of the company. Aristotle is of the view that the practice ofvalues of virtues to the point where virtues become a habit by the stake holders of the corporate canreach the level of excellence including CSR. The universal message is good business means attentionto ethics. A discussion on ethics along the lines of utilitarianism, deontology, social justice, social contracttheory and virtues theory, teaches us one lesson i.e. ethics is inevitable – the practice of ethics shouldbe the objective functions and habit of all the stake holders in a company. This practice of the values ofethics inside the company can take the business to the level of excellence and clear the way for attainingprofit and fulfilling CSR.

Law & EthicsLaw is a body or rules, which is codified, published and accepted by all and usually enforced.

Ethics is defined as what is good for the individual and for the society. It establishes the nature of dutieswhich people apply to themselves and to others in the society.

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While differentiating law and ethics one primarily realizes that the law prescribes minimum ofmorality but does not provide the goal of the company which will meaningfully provide and excellentservices to customers, clients and other stake holders of the company7. Business adheres to a minimumstandard of justice. Broadly speaking the corporate ethics works to fulfil the redefined corporate lawsin the following lines:

1- Liberalizing India’s capital market and disclosure of conflict between dominant and minorityshare holders.

2- Implement more robust bankruptcy laws and allow unpaid creditors to seize the insolventdebtor’s assets and recover at least part of their investment.

3- Increase share holder activism which means examining and informing the rights of minorityshare holders.

4- Cultivation of a positive corporate culture by Board of Directors.5- Formation of minority share holder group.6- Making corporate governance as an integral and indispensable part of India’s corporate culture.7- Expanding the legal rights of the whistle blowers.

MessageDoing good business requires attention of ethics as well as law. A firm that has purpose beyond

profitability is best poised to meet the needs of diverse stakeholders.

References:-1. Bansal, P., R. Roth (2000). “Why Companies go Green: A Model of Ecological Responsiveness”. The

Academy of Management Journal, Vol. 43, No. 4, pp. 717-736.

2. Brand Strategy (2007). “10 key things to know about CSR.” London.pg.47.

3. Catalyst Consortium (2002). “What is Corporate Social Responsibility”?

4. Evan, W., Freeman R.E. (1988), Ethical theory and business, Prentice Hall, Englewood Cliffs (NJ).

5. Freeman, R. Strategic management : a stakeholder approach. Pitman, 1984.

6. Friedman, Milton (1970-09-13). “The Social Responsibility of Business is to Increase its Profits”. The NewYork Times Magazine.

7. Good Paster, K. (1998), “Business ethics and stakeholder analysis”, in AA.VV., Corporation, persons andmorality, Free Press, New York.

8. Gray,R.H., D.L. Owen & K.T. Maunders, Corporate Social Reporting: Accounting and Accountability (HemelHempstead: Prentice Hall, 1987)p. IX.

9. Habisch, Andre; Jan Jonker, Martina Wegner & R. Schmidpeter (eds.) (2005). Corporate Social Responsibilityacross the Europe. Heidelberg: Springer.

10. Malloy, D.C. (2003). “Understanding the Nature of Ethics, and Purposes of Business Health Care and Law”.The Sport We Want. Canadian Centre for Ethics in Sport. Pp. 59-79.

11. Orlitzky, Marc, Frank L. Schmidt, Sara L. Rynes (2003). “Corporate Social and Financial Performance; AMeta Analysis -Organization Studies (London: SAGE Publications) 24 (3) : 403-441.

??



INCUMBENCY CHART OF OFFICE BEARERSOrissa Commerce Association (OCA) started in 1970 in G. M. College Sambalpur, which was thefirst College to have B. Com. as an under Graduate course in Orissa. The pioneering foundingmembers of OCA are:

1. Prof. Paresh Chandra Ray2. Prof. Suryakanta Das3. Prof. Batakrushna Mohanty4. Prof. Durga Prasad Nayak

Year Venue President Secretary

1 1970 G.M. College, Sambalpur Sri Harihar Patel, Ministry of Industires, Govt. of Orissa

* * *

2 1971 Khalikote College, Berhampur Prof. P.C.Ray, Secretary, Board of Secondary Education, Orissa

* * *

3 1973 Ravenshaw College, Cuttack Prof. P.C.Ray, Secretary, Board of Secondary Education, Orissa

* * *

4 1974 G.M. College, Sambalpur Prof. (Dr) Surya Kant Das Professor of Commerce, Utkal University, Bhubaneswar

Prof. Batakrushna Mohanty, Prof. of Commere, G. M. College, Sambalpur

Dr. Abhaya Kumar, Reader, Department of Commerce, Utkal University

One Issue

5 1976 Utkal University, Bhubaneswar Mr. M.P. Modi, I.A.S. Managing Director, IDC

* * *

6 1977 Bhadrak College, Bhadrak Prof. (Dr) Surya Kant Das Professor of Commerce, Utkal University, Bhubaneswar

* * *

7 1978 S.C.S. College, Puri Prof. Batakrushna Mohanty, Principal, G.M. College, Sambalpur

* * *

8 1980 Berhampur University, Bhanja Vihar, Berhampur

Prof. Batakrushna Mohanty, Principal, G.M. College, Sambalpur

* * *

9 1981 K.S.U.B. College, Bhanjanagar Prof. Ganga Prasad Panda, Principal Lingaraj Law College, Berhampur

* * *

10 1982 Dhenkanal College, Dhenkanal Shri Durga Prasad Nayak, Principal, Sonepur College, Sonepur.

Dr. Girija Prasad Acharya Dr. Pramod Ku. Sahu, Berhampur University

One Issue

11 1983 Ispast College, Rourkela Prof. Bijay Narayan Pattnaik, Utkal University, Bhubaneswar

Dr. Girija Prasad Acharya * *

12 1985 F.M. College, Balasore Prof. (Dr.) J.J. Rao, Ravenshaw College, Cuttack

Dr. Girija Prasad Acharya * *

Sl. No Managing Editor of Orissa Journal of Commerce

Number of Issues

Published

135

13 1986 Ganjam College, Ganjam Prof. (Dr) Ramakanta Jena, Dean, Faculty of Commerce, Utkal University, Bhubaneswar

Dr. Girija Prasad Acharya Dr. Ghanashyam Panda, Berhampur University

One Issue

14 1987 L.N.College, Jharsuguda Prof. (Dr) Pramod Ku. Sahu, Professor , Berhampur University, Berhampur

* Dr. Ghanashyam Panda, Berhampur University

One Issue

15 1988 Dhenkanal College, Dhenkanal Prof. Sambhu Prasad Mishra, Professor of Commerce, G.M. College, Sambalpur

* Dr. Ghanashyam Panda, Berhampur University

One Issue

16 1990 Dept. of Commerce, Berhampur University

Sri S.C. Patro, Head, P.G. Department of Commerce, Khalikote College

Dr. Swaroop Ch. Sahoo Dr. Gunanidhi Sahoo, Principal, Khalikote, Berhampur

One Issue

17 1994 Bhadrak College, Bhadrak Prof. (Dr) Gunanidhi Sahu, Principal, Khalikote College, Berhampur

Dr. Jagannath Panda Dr. Swaroop Ch. Sahoo One Issue

18 1995 S.C.S. College, Puri Prof. (Dr) Girija Prasad Acharya, Professor of Commerce, Ravenshaw College, Cuttack

Dr. Bidhu Bhusan Panigrahi, Prof. Pramod Ku. Sahu, Berhampur University

One Issue

19 1997 Womens’ College, Jharsuguda Shri Ayodhya P. Nayak, BJB College, Bhubaneswar

Dr. Damodar Biswal, S.C.S. College, Puri

Prof. Pramod Ku. Sahu, Berhampur University

One Issue

20 1998 Prananath College, Khurda Prof. (Dr.) Pradeep Chandra Tripathy, Professor , Utkal University, Bhubaneswar

Prof. Tahalu Sahoo, Principal Womens College, Jharsugara


One Issue

21 1999 Khalikote (Auto) College, Berhampur

Prof. (Dr) R.P. Choudhury, Principal, Khalikote College (Auto), Berhampur

Malay Kumar Mohanty, Ravenshaw College (Auto)


One Issue

22 2000 Ispat College, Rourkela Prof. Minaketan Mohapatra Principal, Dehenkanal College

Malay Kumar Mohanty, Ravenshaw College (Auto)


One Issue

23 2001 Maharshi College of Natural Law, Bhubaneswar

Prof. (Dr) Damodar. Biswal, Professor, Ravenshaw College (Auto), Cuttack

Malay Kumar Mohanty, Ravenshaw College (Auto), Cuttack


24 2004 Kendrapara College, Kendrapara

Prof. (Dr) Jagannath Panda Professor Berhampur University, Berhampur

Prof. Ranjan Kumar Bal, Utkal University


One Issue

25 2005 V.N.College, Jajpur Road Prof. (Dr) Umesh Ch. Pattnaik Professor Berhampur University, Berhampur


Prof. Jagannath Panda, Berhampur University

One Issue

26 2006 Rayagada College, Raygada Prof. Tahalu Sahu, Principal Belpahar College, Belpahar



One Issue

27 2007 P.G. Department of Commerce Utkal University, Bhubaneswar

Prof (Dr) Samson Moharana Professor Utkal University, Bhubaneswar

Prof. Kishore Ch. Rout,Berhampur University


One Issue

28 2008 Fakir Mohan Autonomous College, Balasore

Dr. Arun Kumar Barik, Head, Department of Commerce, Vyasanagar College, Jajpur Road



One Issue

29 2009 Govt. Autonomous College, Angul

Maj (Dr.) Abhay Kumar Panda, Principal, Fakir Mohan Autonomous College, Balasore.



One Issue

30 2010 Department of Commerce, Ravenshaw University

Shri Baladev Kar, Principal, Govt. College (Auto), Angul

Dr. Kshiti Bhusan Das, Utkal University


One Issue


* Information not available: People concerned are requested to provide the above missing informationwith proper references. If any error has crept in the above incumbency chart inadvertently, persons arerequested to intimate the correction with the required documentation.

31 2011 P. G. Department of Commerce, Berhampur University

Prof. Malay Kumar Mohanty, Former Registrar, Ravenshaw University, Professor G. M. College, Dean Sambalpur University



One Issue

32 2012 P. G. Department of Commerce, Utkal University

Prof. P. K. Biswasray, Professor , Berhampur University



One Issue

33 2013 Choudwar College, Choudwar Prof. Prasant Kumar Sahu, Vice- Chancellor, Utkal University

Prof. Kshiti Bhusan Das, Utkal University

Prof. Malay Kumar Mohanty One Issue

34 2014 P. N. (Auto) College, Khurda Prof. Ranjan Kumar Bal, Professor, Utkal University

Prof. Kshiti Bhusan Das, Utkal University

Prof. Malay Kumar Mohanty Two Issue

35 2014-15 Kendrapada (Auto) College Prof. Kshiti Bhusan Das, Professor, Utkal University

Dr. G. K. Panigrahi Prof. Malay Kumar Mohanty Two Issues

36 2016 Belpahar College, Belpahar Prof. Girish Ku. Patra, Kendrapada (Auto) College

Dr. G. K. Panigrahi Prof. Malay Kumar Mohanty Two Issues

37 2017 F. M. University, Balasore Prof. Jayanta Kumar Parida, Professor,Utkal University

Dr. G. K. Panigrahi Prof. Malay Kumar Mohanty Three Issues

38 2018 Ravenshaw University, Cuttack Prof. Bhagaban Das, Professor, F. M. University

Major (Dr) S. A. Taher Prof. Malay Kumar Mohanty Four Issues

39 2019 P. G. Department of Commerce, Utkal University

Prof. Sanjay Kumar Satapathy, Professor, Ravenshaw University

Major (Dr) S. A. Taher Prof. Malay Kumar Mohanty Four Issues

40 2019-20 KIIT, Deemed to be University, Prof. P. K. Hota, Major (Dr) S. A.Taher Prof. Malay Kumar Mohanty Four Issues

41 2020-21 L.N.College, Jharsuguda Prof.Sasmita Samanta, Pro-Vice Chancellor, KIIT University, Bhubaneswar

Major (Dr) S. A.Taher Prof. Malay Kumar Mohanty Two Issues

Documents

ORISSA JOURNAL OF COMMERCE