Volume 10 / Issue 1 January - June 2018

Mr. Partho Pratim Seal

Dr. P. Senthil Kumaran A Conceptual Framework for Barrier Free Hotels in Smart Cities

Rhitabrata Kumar
An Analysis of the Rise of E-Commerce in India
Dr. Asha Nagendra

Dr. Prabhjot Kaur Mahal Organizational Factors Affecting Job Outcomes: An Empirical Study of Hotel Industry

Dr.Reena Agrawal An Investigation into the Recent Surge of Women Being Chosen as Successor in Family Businesses:
A Study of the World's Fastest Growing Economy

B. Suhasini
Dr. Santhosh Kumar N
Digital India – Transforming Customer Relationship Management in Higher Education

Dr. Beena John Jiby Growth in Indian Railways' Sector with Make in India Initiative

Dr. Renuka Deshmukh Wood and Paper Products and Carbon Storage: CDM as an Effective Tool

Shyam Ji Mehrotra
Rashmi Chaudhary The Banking Opportunity in Micro and Small Enterprise Sector
Hemendra Gupta

SYMBIOSIS
INSTITUTE OF MANAGEMENT STUDIES, PUNE
Symbiosis International (Deemed University)
Established under Section 3 of the UGC Act 1956
Re-accredited by NAAC with A grade (3.58)/4) | Awarded Category-I by UGC
(For Defence Personnel and their Dependents)

Indexed at:
 Mission
-To inculcate the spirit of ‘Vasudhaiva
Kutumbakam’ (the world is one family)
-To contribute towards knowledge generation and dissemination -To
impart ethical and value-based learning
-To foster the spirit of national development - To
cultivate cross-cultural sensitivities
-To develop global competencies amongst students
- To nurture creativity and encourage entrepreneurship
-To enhance employability and contribute to human resource development
-To promote health and wellness amongst students, staff and
community
-To instill sensitivity towards the community and
environmental concerns
-To produce-thought provoking leaders for society

The Editorial Board

Prof. Subrata Chakraborty
Former Dean & Director-in-Charge, Indian Institute of Management, Lucknow (India)
Former Director, Jaipuria Institute of management, Lucknow (India)

Dr. Kuldeep Kumar

Professor, Department of Economics and Statistics,
Bond Business School, Bond University,
Gold Coast, Queensland (Australia)

Dr. Renu Luthra

Pro Vice Chancellor, Galgotia University, Greater Noida (India)

Dr. Shailja Agarwal

Associate Professor and Area-Chairperson - Business Communication Area, Institute of Management Technology, Ghazia-bad (India)
Former Assistant Professor, IIM, Rohtak (India)

Dr. Sanjay Rastogi

Associate Professor, Indian Institute of Foreign Trade, New Delhi (India)

Dr. Athar Mahmood

Assistant Professor, Editor-Management Dynamics, Jaipuria Institute of Management, Lucknow (India)

Dr. Mohd. Irfan

Assistant Professor, Department of Management Studies, Indian School of Mines, Dhanbad, (India)

Mr. Santosh Bhave

Senior Vice President (HR, IR and Administration), Bharat Forge Limited, Pune (India)

Vishwas Padhnis,
Technical Adviser, Rotex Wheels Pvt. Ltd., Pune (India)

Dr. Yogesh Patil

Head –Research & Publications, Symbiosis Centre for Research & Innovation, Symbiosis International University, Pune (India)

Dr. Rameshwar Dubey

Associate Professor, Montpellier Business School, Montpellier Research in Management, Montpellier France
 FOREWORD
We are glad to present Journal of Applied Management-Jidnyasa, Volume 10, Issue 1, 2018.
This issue is a compilation of eight research papers.

First paper, “A conceptual Framework for Barriers Free hotels in Smart Cities”
authored by Mr. Partho Pratim Seal and co-authored by Dr.P.Senthil Kumaran talks
about Cities as an important key for business, Job creation, and the growth of society. The
Government of India planned to develop smart cities which are sustainable, inclusive and act
as a reference for other aspiring cities. Smart cities in India will work on four principles such
as wellbeing of habitants, equity, foresight and efficiency. Existing laws and design
principles can act as a hurdle in achieving the four principles laid down. The principles of
Universal Design (UD) are user centric, work on the social goals of inclusion, equality and
independence. Thus, by adopting comprehensive universal design principles in the hotels in
smart city will help the planners to realise equity, quality of life, social inclusion and
environmental sustainability.

Second paper, “An Analysis of The Rise of E-Commerce in India” authored by Mr.
Rhitabrata Kumar and co-authored by Dr. Asha Nagendra discusses about change in
digitalization in Indian economy since last decade and how this has given a rise to fresh
business opportunities by evolving business models. The purpose of their research is to
understand how E-Commerce as a sector boomed and brought a change in the preferences of
the consumer thus touching each of their lives. E-Commerce has lived up to expectations by
not only providing quality service but through various other deals and offers sufficient to
attract consumers. Consumer behaviour changes from time to time and E-Commerce fulfilled
the necessities.

Third paper, “Organizational Factors Affecting Job Outcomes: An Empirical Study Of

Hotel Industry” authored by Dr. Prabhjot Kaur Mahal talks about the influence of
organizational factors on job outcomes of employees of Hotel Industry in India. The research
has been conducted on 284 employees employed in Indian Hotel Industry through a
structured questionnaire. Results indicate that the dimensions of organizational factors
(excluding, perceived organizational support and transactional contract) are significant
predictors of job outcomes and have the expected positive relation.
Fourth paper, “An Investigation into the Recent Surge of Women Being Chosen as
Successor in Family Businesses: A Study of the World’s Fastest Growing Economy”
authored by Dr. Reena Agrawal analyses the perception of the veterans in the family
businesses in India towards handing over the reins of their business to the female child and
also explores the latest trend. The study concluded that family business owners in India have
discarded the orthodox primogeniture principle and have involved and groomed the children
in the family irrespective of their gender, to take up the daunting task ahead, to ensure
continual existence and sustainable growth of their family businesses.
Fifth paper, Digital India – “Transforming Customer Relationship Management in
Higher Education” authored by B. Suhasini and Dr. Santhosh Kumar N discusses Digital
marketing and communication as the key to build the long term relationships with customers
and effective service delivery. The customer interaction has increased rapidly with enhanced
multi touch points communication through Customer Relationship Management (CRM)
applications for better customers connect. CRM adopts true multi-channel communication
strategies integrating various social networking tools for wider reach in the market to increase
visibility, business outcome and to enhance the brand value of the organizations.

Sixth paper, “Growth in Indian Railways Sector with Make in India Initiative” authored
by Dr. Beena John Jiby discusses about India's manufacturing sector and its growth over the
years through several stages. The new National manufacturing policies intend at increasing
the manufacturing GDP‟s share to twenty five percent and create a hundred million jobs in a
decade. With „Make in India‟ initiative the government has envisioned it, one of the major
focus areas for the government is Railways. Indian Railways (IR) transport network connects
the whole country and is fourth largest transportation and logistics network in the world. The
paper studies an overview of what has been done so far and what more needs to be done in
Indian Railways. It shows that it needs FDI in order to compete with other transport modes
like airways, road and water ways. There is a huge difference in the growth of GDP
contribution and growth of Indian railways before and after Make in India initiative.
Seventh paper, “Wood and Paper Products and Carbon Storage: CDM as an Effective
Tool” authored by Dr. Renuka Deshmukh, provides historical estimates and projections of
U.S. carbon sequestered in wood and paper products and compares them to amounts
sequestered in U.S. forests. Since 1910, an estimated 2.7 Pg (petagrams; × 109 metric tons)
of carbon have accumulated and currently reside in wood and paper products in use and in
dumps and landfills, including net imports.
Eight paper, “The Banking Opportunity in Micro and Small Enterprise Sector”
authored by Shyam Ji Mehrotra and co-authored by Rashmi Chaudhary and Hemendra
Gupta discusses Micro and Small Enterprise (MSE) as an engine of growth in emerging
markets. They play a major role in creating jobs and generating income in the economy.
Despite various initiatives taken by GOI for growth of the sector, YOY growth of MSE credit
has been faltering over the years and have touched below 10% as on March 31, 2016. This
paper attempts to understand the current opportunities for banks in MSE financing, identify
issues and challenges that need to be addressed for creating an enabling environment and
finally draw strategy to help the banks to create an eco-system friendly to MSE.

Dr. Jaya Chitranshi

Ms. Preeti Kamboj
 CONTENTS

A Conceptual Framework for Barrier Free Hotels in Smart Cities………………...………...1

An Analysis of the Rise of E-Commerce in India……………………………………………..12
Organizational Factors Affecting Job Outcomes: An Empirical Study of Hotel
Industry……………………………………………………………………………………..21
An Investigation into the Recent Surge of Women Being Chosen as Successor in Family
Businesses: A Study of the World’s Fastest Growing Economy………………………….....38
Digital India – Transforming Customer Relationship Management in Higher Education
……………………………………………………………………………………………............51
Growth in Indian Railways Sector with Make in India Initiative…………………….…60
Wood and Paper Products and Carbon Storage: CDM as an Effective Tool…………..75
The Banking Opportunity in Micro and Small Enterprise Sector………………………92
 A CONCEPTUAL FRAMEWORK FOR BARRIER FREE HOTELS IN
SMART CITIES
1
Partho Pratim Seal
2
Dr.P.Senthil Kumaran
Abstract
Cities are key for business, Job creation, and the growth of society. The Government of India
planned to develop smart cities which are sustainable, inclusive and act as a reference for
other aspiring cities. Smart cities in India will work on four principles such as wellbeing of
habitants, equity, foresight and efficiency. Existing laws and design principles can act as a
hurdle in achieving the four principles laid down. The principles of Universal Design (UD)
are user centric, work on the social goals of inclusion, equality and independence. Universal
Design India Principle (UDIP) is a set of design principles that focus on a country centric
approach which considers culture, caste, poverty, class, and religion. There is an
overwhelming need for environmentally sustainable designs for hospitality services.
Considering the current requirements, a conceptual framework „Comprehensive Universal
Design (CUD)‟ has been proposed which includes principles of UD, UDIP and
environmental sustainability. Adopting comprehensive universal design principles in the
hotels in smart city will help the planners to realise equity, quality of life, social inclusion and
environmental sustainability.
Keywords: Universal Design, Smart City, Hotels, India

“Persons with disabilities have a significant positive impact on society, and their
contributions can be even greater if we remove barriers to their participation. With more
than one billion of persons with disabilities in our world today, this is more important than
ever.”
Ban Ki-Moon, United Nations Secretary-General
Introduction
City is a word that reflects the evolution of human beings. Cities have a vital role in the
social, economic, environmental and anthropological development of mankind (Mori &
Christodoulou, 2012). Cities are key for business, the creation of jobs, and growth of society
(World Urban Campaign, 2016). Cities are the habitats of people of diversified culture,
religion, socio-economic status, and abilities. There is an upsurge of urban growth. It took
only 200 years to reach the total population of 7.5 billion, where as it took hundreds of
thousand years to reach 1 billion. As per the data, half of the world's population lives in
towns and cities and also it is predicted that about 5 billion will live by the year 2030 (UNPF,
2017). Urbanisation is indispensable for socioeconomic growth, creating wealth,
development and the prosperity of the community (UN-Habitat, 2016). There is a need for
creation of new cities considering the social and economic needs of people (KPMG

1 Assistant Professor, Welcomgroup, Graduate School of Hotel Administration,

Manipal University, Manipal. Email- partho.seal@manipal.edu
2 Associate Professor, Welcomgroup, Graduate School of Hotel Administration,
Manipal University, Manipal. Email- senthil.kumaranp@manipal.edu
1
International, 2016). Wealth creation, employment generation and expanding housing needs
of the urban population will be addressed by formation new cities (New Cities Foundation,
2015).
Cities to be planned that must address the needs of habitants by providing sufficient services
and facilities (La Rocca, 2014) (Asian Development Bank, 2009). Cities are the place that
witnesses stronger inequalities with in the habitants. Cities, if not well planned could generate
more problems which may be difficult to manage due to an undesirable increase in size and
complexity. There is a more possibility of negative effects crossing over the positive effects if
the cities are not managed properly (Monzon, 2015). There is a phenomenal change in how
the cities have formed, shaped and the way it functions. This transformation has been either
for better or the worst. So, the emerging cities have to be well planned and designed to
manage the urbanisation in future that supports quality of life, environmental sustainability,
equity and social inclusion (Liu & Wang, 2013). Equity and equal access to residents and
also promoting diversity must be the objective of governance (United Nations,
2009).Transforming from traditional approach to design of the city into smart design is
essential to achieve sustainability which ensures economic, social and the environmental
aspects that meet the requirement for present and future generations (Bouskela, Bassi, &
Luca, 2016).
There is no consensus on the definition of the smart city as each school of thought have a
different perspective based on their specialisation. (Monzon, 2015) Observed that there are
two different schools of thought in defining smart cities, where one school of thought
emphasis more on technology or ecology, mostly monotopic in nature. Another school of
thought emphasised on the interconnecting of all urban facets. He noted that all definitions
have a central theme of interconnection between infrastructure and technology. (Albino,
Berardi, & Dangelico, 2015) Analysed different definitions on the smart city, and found a
missing component “people”. The people are the protagonist, who shape the smart city by
their continuous interaction and creating a relationship amongst each other. A city enabled
with advancements in accessibility for all is an inviting development (Popiel, 2014).
Hotels in Smart City
Tourism is a major contributor to the economy of India which helps in employment
generation and foreign exchange earnings. It has been estimated that in the year 2017, the
tourism industry in India will generate about 13.45 million jobs of which 10.49 million will
be in the restaurants, 2.3 million in hotels and 0.66 million in travel and tour operations
(Piramanayagam & Seal, 2017). UNWTO Global Code of Ethics for Tourism committed for
accessible tourism, since it has been declared as fundamental rights. The accessible
environment is a basic right of a traveller, which should not be hampered by the physical
design of tourism and hospitality related service infrastructure (Poria, Reichel, & Brandt,
2011). To achieve the goal of accessible tourism, the tourism destination and support service
can be made in the way that helps everyone equally regardless of their abilities (UNWTO,
2016).
Hotels are an integral part of the tourism sector in a country as travellers require
accommodations. Accommodations have to be made considering the needs of all travellers. A
recent report of UNWTO states that approximately 1 billion people, about 15% of the world‟s
population have one or other form of disability. All human at different stages of life will have
some form of disability which creates an urge to develop tourism services, products and
infrastructure that addresses specific access needs (UNWTO, 2016; Rahim & Samad, 2010) .
The tourism industry must design and deliver services that are suitable for all users by

2
removing physical and organisational barriers that may prevent the visitation of the users
(Michopoulou, Darcy, Ambrose, & Buhalis, 2015). Across the world there is a need for
accessible rooms. The demand for accessible hotel room in London, estimated as 4% in 2010
and is likely to rise to 7.5% by 2030 which presently is quite low at around 2% of the total
number of rooms. In Germany, though each states have their own building regulations and
codes, states like Berlin should have at least 10% of room in hotels to be „barrier free. In
Netherlands, the mandatory requirement of barrier free in the premises over 500 sqm, 40 per
cent of the building (London Development Agency, 2010). The present day hotels around the
world have advanced how people have lived in cities. The need of the current guest in hotel is
not just sleep but a total experience by design, amenities and comfort. A smart hotel features
all this with the help of present day technology and also reduces energy consumption and
increase the sustainability. Smart hotels concept is a quiet new and is there is no consensus on
it (Janet, 2016). It is predicted that smart hotels will be remote controlled one, by which all
the devices in the hotel room could be operated and controlled upon which enables less
human interference and ease in operation form a single point by the user (Seal, 2013). The
smart room in hotels though technology friendly should also be friendly for all users
including differentially abled. Merely emphasising more on technology will not add much
value when competing with other hotels. Competitive advantage can be attained based on
intellect not by assets and capital. Hotels have to reinvent themselves by giving better
personalised service and value for all guests (Olsen & Connolly, 2000).
The hotel industry in India is currently facing many challenges from both domestic and
international players. Hotels have to diversify and find new clientele to sustain their
operations by adding a new segment „inclusive tourism‟. The tourism market of people with
differently abled is approximately valued at $ 75 billion. People with disabilities, their
relatives and guardians is a large pool consumer for tourism and hotel industry (Bernett &
Baker, 2001). India, as a tourism destination is not favoured by disabled as it is weak on
universal design of hotels and tourism attractions (Khatri, 2014). Countries like United
Arab Emirates, Australia, United States and Singapore have enforced Universal Design
in all hospitality related services (Building and Construction Authority of Singapore,
2006); (Australian Government, 2013); (Rossetti, 2009). Singapore government’s Build
Environment Code on Accessibility, 2013 mandates at least one guest room for every 50
guest room for elderly and additionally a room for every 200 guest rooms for person
with differently abled. But it advises and encourages service providers and the hotels
owners to have additional rooms over the obligatory minimum number of guest rooms
for differently abled. It also mandates to provide at least one table for disabled for each
ten tables in a restaurant with fixed seating (Building and Construction Authority of
Singapore, 2014).
Existing guidelines of Hotel and Restaurant Approval and Classification Committee
(HRACC), a division under Ministry of Tourism, Government of India, states that a hotel
st
must have at least one room for the disabled that hotels which have been approved after 1
September, 2010. The guidelines of HRACC has inadequately addressed the needs of people
with different abilities considering the UD of hotels in developed countries to India. At this
juncture, the Government of India (GOI) proposed a model for creating 100 smart cities in
the country with the aim of developing new cities which are sustainable, inclusive and act as
a reference for other aspiring cities. The GOI postulates that smart cities will provide a
sustainable and clean environment that ensure a decent quality of life for its citizens (MOUD,
2017). The charter for smart cities in India is developed considering the four principles,
wellbeing, equity, foresight and efficiency. While preparing the charter of smart cities, the
GOI has included various core and supportive infrastructure to ensure inclusiveness and

3
sustainability. The charter emphasis more about older adults, children, women, poor and
downtrodden but undermines the need of the people of varied abilities. If, the proposed hotels
in smart cities also follow the existing guidelines of HRACC, it will defy the objectives of
equity and wellbeing of its citizens in creating smart cities.

Objective of the study

 To propose a conceptual framework that supports designing barrier free hotels in smart
cities by which inclusiveness can be achieved.
Methodology
To achieve the objective laid down in the research, existing design principles such as
Universal Design (UD) and the principles of India specific Universal Design India Principles
(UDIP) are analysed for their applicability in hotels. Considering the customisation
requirement of hotels, a conceptual frame work named Comprehensive Universal Design,
specific to Indian context is been proposed combining the essence of both.
Universal Design of Hotels
Universal Design (UD) is a concept that caters to the requirements of people with varied
abilities. United Nations defines Universal Design as “the design of products, environments,
programmes and services to be usable by all people, to the greatest extent possible, without
the need for adaptation or specialized design”. The word “inclusive design”, “accessible
design”, “barrier free design” and “universal design” are used interchangeably. Universal
design includes other than people with varied abilities infants, children, elderly, physically
injured, expectant mothers and people with temporary disability. The need of UD was
conceptualised considering the priorities of user centered design and the social goals of
inclusion, equality and independence. UD also defined as a thought process of a barrier free
designs that is accessible, and user friendly for all (Rains, 2009). UD is an inclusive approach
that intent to serve the total population rather than focusing on a targeted group. The core
idea of UD is to remove the barriers to access that ensures equality between citizens and
people with different abilities. The different barriers that give us disabilities are barriers of
movement, access, communication, expression, perception, space and time (Steinfield &
Maisel, 2012). Disability Act 2016 states that UD is a design that can be accessed by all
people irrespective of their age, size, ability or disability in a composition of the environment
(Ministry of Law and Justice, 2016).
A hotel designed with UD augments the tourist destination and business organisations
competitiveness. It also adds upon that UD principles can be used in developing tourism
environment and services that offer foundations for sustainable community and business.
Adopting UD helps the tourism service providers to widen their target market and also to
deliver a pleasant experience to customers (Michopoulou, Darcy, Ambrose, & Buhalis,
2015). Research finding suggests that people with mobility related disabilities are loyal to the
organisations which support and are aware of their specific requirements (Bernett & Baker,
2001). Guest with disability return to the same establishment as a repeat guest, if they are
satisfied and supported with the relevant infrastructure (Tandawy, Kim, & Pyo, 2004). The
guest has a positive attitude towards the hotel and intent to revisit the same property which
understands and satisfy their need is called true loyalty (Pritchard & Howard, 1997). Guest
satisfaction has a direct influence on guest loyalty which has a positive relationship

4
with the profitability, increased patronage, and positive word of mouth (Bowen & Chen.S,
2001) (Dutta, Parsa, Rahul, & Bujisic, 2014).
However, in current scenario a build infrastructure has a substantial influence on the
environment. Adopting environmentally sustainable design will reduce operation cost in the
future which may compensate the initial additional cost incurred in adapting universal design
(DPCD, 2017). Intelligently planned and built infrastructure would provide us with the best
anticipated sustainable future which can resist climate change and to prevent environmental
degradation (KPMG, 2012). Today guest in of hotel is environmentally conscious, willing to
buy the environmentally friendly product and services and willing to pay a premium for it
(Kim, Palakuthi, & Hancer, 2012) (Litaa, Suryaa, Maruf, & Syahrul, 2014).
Principles of Universal Design
In the year 1997, a group of American architects, product designers, engineers and
environment design researchers led by Late Ronald Mace conceptualised a set of seven
principles of UD (Ostroff.E, 2001). The seven principles are made as a standard to evaluate
existing designs, guiding new design, educate designers, and the users of the product and the
environment. The seven principles of UD are “Equitable Use (PUD1)”, “Flexibility in use
(PUD2)”, “Simple and intuitive use (PUD 3)”, “Perceptible information (PUD 4)”, “
Tolerance for error(PUD 5)”, “Low physical effort(PUD 6)”, and “Size and space for
approach and use(PUD 7)”.
The word equitable usage denotes the design must consider all users with varied abilities. The
term flexibility in usage means the design accommodates the extensive user preferences and
aptitudes. Simple and intuitive use narrate the design that is easy to interpret irrespective of
users‟ knowhow, familiarity and language skill. Perceptible information means that design
should include different communication modes such as verbal, tangible and pictorial
regardless of users‟ sensory capability and the ambient condition. The term tolerance for
error assumes that design diminishes hazard and errors when accidently used or operated
upon. Low physical efforts communicate that design is comfortable and efficient that requires
minimum physical effort by the user.
The seven principles of UD are followed across the world as a point of reference for barrier
free designing to build environment (Raheja & Suryawanshi, 2014). The principles of design
which are followed in major developing countries cannot be followed in India considering its
economical, socio –cultural and physical nature which are diverse as compared to other
countries (UDAD, 2015). In this context, there was a need for UD that address the diversified
regional requirements, cultural and socio-economic strata of our country. A group of
architects and designers of interdisciplinary in nature developed Universal Design India
Principles (UDIP) that is relevant to the Indian context (Mullick, et al., 2011). UDIP focus
upon a country centric approach which considers poverty, caste, class, religion, background-
both rural and urban. The five principles of UDIP are “Equitable / Samaan (UDIP1)”,
“Usable/Sahaj (UDIP2)”, “Cultural/ Sanskritik (UDIP3)”, “Economic/Sastha (UDIP4)”,
and “Aesthetic /Sundar (UDIP 5). The first two UDIP principles „Samaan‟ and „Sahaj‟
includes the existing seven principles of UD. The principle „Sanskritik‟ denotes the social
and traditional qualities which include the past and the contemporary cultural scenario of
India. The ideology „Sastha‟ emphasis on affordability and diversity in the design. The
principle „Sundar‟ means the aesthetics and social integration of design that has a universal
appeal. Uniting the virtues of both UD and UDIP, a Combined Universal Design has been
developed that embraces the extract of UD and the essence of the diversity of the country.
The combined universal design model is presented in Figure 1.

5
 Figure 1. Combined Universal Design

However, sustainability is becoming an important practice which is adopted by hotels to

reduce consumption of resources, and its negative impact on environment. The topic of
environmental sustainability in hotels gained its prominence during 2014 to 2015 among the
researchers (Rosa & Silva, 2017). Hotels are now continuously putting efforts to be
sustainable that helps them in controlling cost and being environment friendly (Smith, Choy,
Chong, & Verma, 2015). Various drivers that encouraged hotels to focus more on
environmental sustainability are fiscal and economic incentives offered by the government,
increased regulatory pressures, better marketing / brand image, to provide excellent guest
experience, creation of a positive corporate culture and to meet investor requirements. It is
essential for hotel industry to embrace sustainable environmental practices to reduce cost,
increase efficiency, enrich customer satisfaction, to boost the employee morale and the brand
image (Goldstein & Primlani, 2012). Considering the importance environmental
sustainability, a new principle on environment sustainability (Sandharan Paryavaran), is
included in the combined universal design. This model is named as Comprehensive Universal
Design. The conceptualised model is presented in Figure 2.

6
 Figure 2. Conceptual Model of Comprehensive Universal Design (CUD)

Discussion and Conclusion

The city should be for all. Diversity should be considered while in designing a smart city.
The definition of the smart city rests only in two dimensions: smartness in technology and
governance. The missing link in the definition of „Smart city‟ is its citizens, who are the
primary stakeholders of the smart city. The planners of the newly proposed „smart city‟
should also consider the philosophy of „people first‟ as they will the core element of the
society, diverse in nature with varied needs. The city is a physical location where the tourist
needs and the residents‟ demands meet, so a city should fulfil the different demands by
providing appropriate services. A hotel provides accommodation, food and recreational
services to the travellers and the residents of the city. The build infrastructure of the hotel
should satisfy the needs of all its users by its sensible design. Generally, the hotels are
designed focused on a wheel chair, blind and hearing impaired guests. The disabilities of the
guest may be varied, a generalisation of disability is to be avoided as each disability has own
specific need, which has to be addressed (Poria, Reichel, & Brandt, 2011).Today the
disability is widespread that goes beyond just the physical disability: people with overweight,
women in pregnancy, aged people, and children are also considered disabled. Mostly the
disability arises due to the planners‟ ignorance on wider needs of the users. UD is the
philosophy that guides the planners to build a physical infrastructure of a hotel that considers
of extensive needs of its user. UDIP is a culturally sensitive design principles that add values
to the UD in terms of economic, socio cultural and aesthetical aspect of the context. CUD is a
hybrid concept which combines the totality of UD and the context specificity of UDIP. CUD
will help to develop the build infrastructure which accomplishes universal access, culture
specificity and environmental sustainability.
By adopting CUD, a „smart city‟ could be a model to other aspiring cities. This will
help in realising the goals of smart cities which include equity, quality of life, social inclusion
and the environmental sustainability. When a hotel throws open its gate for all individuals
make their service environment barrier free will lead to increase in its customer base and
exponentially expands its‟ profitability.

7
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11
 AN ANALYSIS OF THE RISE OF E-COMMERCE IN INDIA
3
Rhitabrata Kumar
4
Dr. Asha Nagendra
Abstract
India has witnessed a change in digitalization in the last decade and this has given a rise to fresh
business opportunities by evolving business models. The purpose of this research is to understand
how E-Commerce as a sector boomed and brought a change in the preferences of the consumer
thus touching each of their lives. E-Commerce has lived up to expectations by not only providing
quality service but through various other deals and offers sufficient to attract consumers.
Consumer behaviour changes from time to time and E-Commerce fulfilled the necessities. The
study was conducted by collection of secondary data from various sources and with the help of a
questionnaire circulated among 56 respondents across India. The study encompasses the views and
preferences of consumers which covered respondents belonging to different parts of India with all
background and age grouped into various professions and income groups. The findings revealed
that E-Commerce in the last five years has grown by a significant margin and technology has
assisted in its growth. Consumer behaviour changed as consumers started purchasing from e-
commerce websites rather than visiting traditional retail stores primarily due to convenience
caused by home delivery service. Quality is another factor which is to be considered. The E-
Commerce is also expected to further grow in the future generating employment and contributing
to India‟s GDP.
Keywords: E-Commerce, Consumer Behaviour, Online Shopping
Introduction
The rise of the Indian economy has not given millions of Indians the privilege of technology
but also enabled them to utilize the internet in a way to have a great shopping experience.
The world seems to be watching on excitedly as India fast becomes a major e-commerce
player. There is everything to play for in this industry, but many brands are in need of a little
guidance. E-Commerce has changed the lives of people around the world and its growth in
India is not showing any signs of slowing down. The year 1991 noted a new chapter in the
history of the online world where e-commerce became a hot choice amongst the commercial
use of the internet. At that time nobody would have even thought that the buying and selling
online or say the online trading will become a trend in the world and India will also share a
good proportion of this success. India first came into interaction with the online E-Commerce
via the IRCTC. The government of India experimented this online strategy to make it
convenient for its public to book the train tickets. The acceptance of the ecommerce on a
large scale by the Indian people influenced other business players also to try this technique
for their E-businesses and gain high profits. It gained popularity only with deep discount
model of Flipkart. E-Commerce has become almost indispensable for Indian consumers and
is expected to have a greater impact in the future.

3
PGPM Student, Symbiosis Institute of Management Studies, Pune. Email-
rhitabrata.kumarpgpm1718@sims.edu
4
Professor, Symbiosis Institute of Management Studies, Pune. Email-
asha.nagendra@sims.edu

12
This research is conducted on the rise of E-Commerce in India in the last few years and have
been done after careful analysis. E-Commerce has grown by a substantial margin and brought
a transformation in the world of retail. The service of the E-Commerce companies has
become indispensable for Indian companies too. All the necessary facts and figures have
been provided to give a clear picture.
Objectives
i. To highlight the growth of E-Commerce in India in the last five years.
ii. To study the impact of E-Commerce on Indian consumers and the Indian
Economy.

Limitations
i. Data has been selected for the last 5 years only.
ii. Research has been restricted to Indian consumers and Indian economy
Review of Literature
E-Commerce’s massive growth in India
Hernandez (2014) analyses that India’s Market Goes Online and emphasizes the fact that
E-commerce, as an industry, has gained prominence in the past 10 years. The online retail industry
in India is leading the E-commerce growth as they cash in on the increasing number of internet
users. According to the latest available figures, India has 243 million Internet users, which is more
than the US but less than China. One of the primary reasons for growth is a rise in the number of
Indian internet users. Even banking transactions have become simpler as a result of the
introduction of applications and digital platforms by the banks. E-Commerce is also attracting a lot
of talent due to improved salaries and work practices. The author explains that funding human
capital is going to be the next big differentiator. With increased funding, e-commerce companies
are investing it in their people, the same people who bring in more innovation and in turn get more
capital. This is a formula that other companies would do well to use.
Maheshwari (2016) concluded that Indian ecommerce market to grow fastest globally over 3
years. The study informs us that India received $6.6 billion in venture capital and private equity
investment in 2015, a 50% increase from the previous year. This probably has contributed to a
substantial growth for the E-commerce companies. The GMV of the country's top three
ecommerce companies exceeded that of the top 10 offline retailers in 2015. Since the Indian
market has huge potential, the opportunities got created. Per capita incomes are likely to double by
2025 and this should drive higher aspirations of the Indian consumer.
Browntape (2017) talks about What sells most in the Indian Ecommerce market?He says that
according to a study by Google India, E-Commerce is growing in India at a massive rate. The
number of online buyers in 2014 was 35 million as compared to the meagre 8 million in 2012.E-
Commerce is a sector that become a phenomenon in India and something no one could ignore.
Electronics attracted maximum attraction online from the consumers while Apparel and
Accessories topped the sales charts.
Das and Ara (2015) after conducting a study on Growth of E-Commerce in India mentioned
about the growth of logistics industry and explained this was inter-connected with E-Commerce.
Third party logistics companies benefit from increase in sales as these companies earn revenue
with every delivery.Indian logistics companies need to reach out to places beyond major cities. A

13
lot of international companies operate with the help of their logistics department and this scenario
is needed in India too.
Biswas (2015) in his study Growth and Opportunities of E-Commerce in India highlighted that
rural users of internet are increasing day by day because of the demographic profiles of the
customers and increase in usage of smartphones. According to the data analysis the contribution of
E commerce is going to be 4% in the GDP of India by 2020. NASSCOM report stated that IT-
BPO sector is going to contribute 10% in GDP of India whereas that of telecommunication will be
15%.First time Entrepreneurs contribute 63% as they face no obstacle.
Benefits to Indian Consumers
Das (2012) explains Growing Trends of E-Commerce and its role in consumers' buying
pattern through his research. He discovered that E-Commerce will contribute to cost reduction,
improvement in quality and speedy delivery of goods. Time is a valuable thing for every customer
and so online shopping will definitely help to save not only time but also money are there are
lucrative offers.
Khosla (2017) explains why E-Commerce Boom in India: Why online shopping is here to stay.
The study conducted on the retail market in India says that the growing popularity of online
shopping is affecting offline retailers since online companies are offering better prices and have
attractive promotional strategies. It is also easy to reach the consumers online. The online channel
gives consumers the opportunity to shop anytime anywhere with the help of the internet and this is
motivating the retail chains to get into the online business.
ET Retail (2015) predicted that E-commerce will help empower women. The article said that E-
Commerce will not only contribute to growth in jobs but also empower women. E-Commerce is
an important to remove social inequalities as E-commerce had become an indispensable part of the
lives of the people.
Bansal (2012) gave his opinions on E-commerce in India – Present and Future which clearly
proves that E-Commerce has made a difference by introducing cash on delivery. It has been
observed majority of the Indians do not rely on credit cards and so cash on delivery has turned out
to be a convenient option. .Consequently the companies have gained a lot of trust. It was also told
that Cash on Delivery‟s cultural affinity and will be a major part of payment mechanisms for at
least the next four to five years.
Kamath (2017) says GST to benefit e-commerce the most as he believes Goods and Services
Tax(GST) will eliminate supply chain issues which are important from E-Commerce perspective.
There will be less documentation in case of shipments and return of goods. Efficiency in supply
chain is the key to quicker deliveries and GST is expected to play a role. Companies will also be
able to execute more efficient supply chain strategies, with warehousing based on strategy rather
than tax requirements (like Octroi).More importantly goods can be priced and margins can be
calculated properly.
Challenges and Concerns
Nayyar (2015) asked to be Beware of India's E-Commerce Bubble. After an analysis of the
Indian economy, it is understood that there is uncertainty surrounding Government‟s foreign direct
investment in E-Commerce. A clear tax policy on E-Commerce is absent and some of these
companies as a result of having high valuations may welcome scrutiny. Infrastructure may affect
the growth too.

14
Rajasekar and Agarwal (2016) reveals their study on impact of India's e-commerce on India's
commerce. As a result of their research, it is evident that growth of e-commerce depends to a
great extent on effective IT security systems for which necessary technological and legal
provisions need to be put in place and strengthened constantly. While many companies,
organizations, and communities in India are beginning to take advantage of the potential of e-
commerce, critical challenges remain to be overcome before e-commerce would become an asset
for common people.
Mitra (2013) conducted a study on E-Commerce in India. The study considers logistics to be an
obstacle to E-Commerce‟s prospects. The companies will have the responsibility of delivering the
products to the right person at the right time and failure may have implications. The service of the
post/courier services is not satisfactory. Vendor will have to come down and deal in an inefficient
system for inventory management. This will slow down drastically. Most of them won't carry any
digital data for their products. No nice looking photographs, no digital data sheet, no mechanism
to check for daily prices, availability to keep your site updated.
Shettar (2016) conducted an empirical study on Emerging trends of E-Commerce in India and
discloses the threat the wholesalers in India might face. The producers may no longer need to
depend on the wholesalers as a channel of distribution as producers may directly see their products
to the consumers with the help of E-Commerce. On the other hand, the retailer can save his
existence by linking with online distribution. The retailers can provide additional information to
the consumers, meet electronic orders and be in touch with consumers.
Research Methodology
The research topic was selected to understand how E-Commerce emerged as a new sector in the
Indian Economy and brought several benefits to the Indian consumers across cities who explored a
new medium of purchasing. An organised and logical approach has been followed to conduct the
research. First the objectives were decided and as result of the literature review, the impact and
growth of E-Commerce was gauged. A questionnaire was also used to know the consumer
preferences and to what extent E-Commerce had made a difference. In addition to this secondary
data was also collected from various sources. The selected sample was a group of 56 random
individuals. Primary data was collected with the help of a questionnaire. Secondary data sources
are online articles, journals and research papers. The data collected was tabulated and discussed in
the form of tables & graphs. Appropriate statistical tool has been used for analysis and testing for
hypothesis.
Alternative Hypothesis
Consumers will prefer to buy from e-commerce websites in the future because it is reliable.
Null Hypothesis
Consumers will not prefer to buy from e-commerce websites because it is not reliable.

Dependent Variable Independent Variable Multiple R P-value

Purchase of Consumers Reliability of E-Commerce 0.978354781 2.56902E-39

As per the regression analysis, R value is 0.978 which states that is a strong correlation
between purchase of consumers and reliability of e-commerce.

15
Conclusion: It is understood that consumers will prefer to buy from e-commerce websites in
the future. Purchase of consumers and reliability of E-Commerce is highly correlated and P-
value/level of significance is 2.56902E-39 which supports the alternative hypothesis hence
Null Hypothesis which states that “Consumers will not prefer to buy from e-commerce
websites because it is not reliable ” is rejected and alternative hypothesis is which states that
“ Consumers will prefer to buy from e-commerce websites in the future because it is
reliable” is accepted.

Findings
The following are the findings of the study-

Series 1
40

30

20

10

0
2009 2011 2014 2015 2016

Series 1

Table 1: Online retail sales in India from 2009 to 2016 (in billion US dollars)
Source: ASSOCHAM various sources (The Hindu), Statista 2017
Discussion: There has been nearly 600% increase in online retail sales from 2011 to 2016
which indicates the figures have grown by leaps and bounds and contributed to the growth of
the E-Commerce industry. Several factors like technology and increase in usage of mobile
phones and laptops are responsible for the increase in growth.

Series 1
600

400

200

0
2013 2015 2018 2020

Series 1

Table 2: Average spend per online shopper in India (In USD)

Source: Euromonitor, Deloitte Analysis

16
Discussion Online shopping is increasing its share in the total internet usage in India and has
increased by a significant margin. Improved data connectivity in both urban and rural parts of
India, will further boost this trend. Across the globe the E-commerce industry is a force
which continues to grow, which investors cannot afford to ignore. This is especially true in
India where there are so many opportunities. For example, just focusing on B2B e-commerce,
the market is both large and broad which provides the potential for amazing innovations.
Prime Minister Modi‟s vision for India and the „Make in India‟ and „Invest India‟ initiatives
have swayed the world‟s attention on the opportunities provided in the sub-continent. This
has been very healthy for the Indian Economy.
A study was conducted with the help of a questionnaire circulated among 56 respondents
across India. The study encompasses the views and preferences of consumers which covered
respondents belonging to different parts of India with all background and age group into
various professions and income groups. From the questionnaire we can draw the following
primary inferences.
Usage of E-Commerce websites for No. of respondents
SNo. Purchase (n=56) Percentage
1 Yes 55 98.2
2 No 1 1.8
Total 56 100

Table 3: Usage of E-Commerce

Discussion: Majority of the respondents – 98.2% have agreed that they use E-Commerce
website which indicates that Indian consumers do depend on E-Commerce.
The above statistics support the claim of Hernandez (2014) who also found that the online
retail industry in India is leading the E- commerce growth as they cash in on the increasing
number of internet users.

Start of Usage

Before 2012 After 2012 Never

Figure 1 – Start of usage before and after 2012

Discussion: It can be inferred from the above data that the that E-Commerce users have
increased substantially in the last 5 years and is backed by the data that 69.6% respondents
started visiting E-Commerce websites after 2012 and the rest 28.6% were already using
before 2012.1.8% of the respondents never used.

17
 45
40
35
30
25
20
15
10
5
0 High Medium Low
Preference Impact Reliability

Figure 2 - Responsiveness in terms of Preference, Impact and Reliability.

Discussion: A majority of respondents will prefer buying on E-commerce websites but a
certain section will hesitate. Majority of the respondents consider that E-Commerce had a
significant impact on Indian Consumers.39 out of 56 respondents consider the websites
highly reliable while 17 contradict this.
Conclusion and Recommendations
With the emergence of technology, Economies around the world have benefitted and new
ideas have been implemented to reach out to consumers. India is no different and so
embraced a phenomenon named E-Commerce to such an extent that is significant for the
economy and organizations to thrive these days. E-Commerce has brought a massive change
to the consumers and is responsible for growth and employment as well.
This research has completely focused on how E-Commerce has evolved during the last 5
years and made a contribution. About a decade back, the success of E-Commerce was
unthinkable but the impact it created in the last decade was something that couldn‟t have
been easily estimated. The research explores how E-Commerce as an industry has grown
over the years, developed and brought consumer benefits. The study also reveals the extent of
significance of E-Commerce for the Indian economy and talks about future growth. We
studied consumer behaviour and understood how it has changed. A survey was conducted to
know the perception and extent of acceptability of E-Commerce among consumers.
Maximum responses turned out to be favourable.
Over the years after witnessing the success, new players have come out in the market.
Competition has led to upgrade of the quality of service of different brands and there has
been a surge in the consumer satisfaction level as well. E-Commerce has also been a platform
for launch for various new products as various companies seek to grab the attentions in the
form of special offers not only to boost sales but increase brand awareness. The study also
understands that E-Commerce has scored high on convenience and reliability as E-Commerce
has made shopping much easier backed by impressive customer care service. Consumers no
longer are dependent on traditional retail stores as a result of this revolution.
Companies always look for innovation to attract consumers and lack of innovation may affect
survival of any business organization. Until and unless an industry caters to the needs of its
consumers, the industry can never thrive. E-Commerce provided a new option to consumers
to purchase at will just at the click of a button with the opportunity to avoid visiting the

18
market and time consumption for anything like clothes, electronic goods, grocery, medicine,
jewellery etc .The quality of the products and services has generated dependence among the
consumers and the credit goes to the internet and logistics for establishing reliability.
Companies are also dependent on the internet for maximising sales. E-Commerce has grown
by leaps and bounds in the last five years and its further growth is imminent as more
companies will come in the picture in the future.
Consumers should also develop awareness as each brand may not able to provide quality
service with more companies getting into the business. Success of all companies is not
guaranteed as the competition is only expected to get extensive and a few notable brands is
expected to survive having already developed a huge customer base. Companies will have to
adopt unique strategies for survival.
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19
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at 9:00 pm.

20
 ORGANIZATIONAL FACTORS AFFECTING JOB OUTCOMES: AN
EMPIRICAL STUDY OF HOTEL INDUSTRY
5
Dr. Prabhjot Kaur Mahal
Abstract
The present study is pertained to investigate the influence of organizational factors on job
outcomes of employees of Hotel Industry in India. The research has been conducted on 284
employees employed in Indian Hotel Industry through a structured questionnaire. The
selection of the hotels was as per the convenience of the researcher. Results indicate that the
dimensions of organizational factors (excluding, perceived organizational support and
transactional contract) are significant predictors of job outcomes and have the expected
positive relation.
Keywords: organizational commitment, employee engagement, perceived organizational
support, transactional contract
Introduction
Hotel industry has been considered as one of the key sector of the Indian economy, plays a
significant role in the growth of the country and contributing 12.4 percent of the total
employment to the country. According to department of industrial policy and promotion
(DIPP) from April 2000-November 2014, this sector involved around US$7661.6 million of
FDI. The market is expected to reach US$ 30 billion by 2015. Hence, government of India
have been instrumental in providing the essential boost to the Indian tourism and hotel
industry and fascinating more and more foreign tourists every year. The appearance of low
cost airlines and the associated price wars have given domestic tourists a host of options.
Employees in hotels play a substantial role because they are significant to the development of
the hotel. Therefore, success in the hotels depends on managing and retaining employees.
Retaining highly skilled staff is becoming a chief challenge for the hotel industry (Walsh and
Taylor (2007) and this is a global widespread (Hinkin and Tracey, 2000). Studies indicates
that employee turnover rates of hotel managers in various countries are very critical globally,
studies reported that employee turnover 29.5% in the USA (Iverson and Deery, 1997), 86%
in Hong Kong (Lam and Baum, 2001), 57.6% in Japan and Singapore (Khatri and Budhwar,
2001) and 66% in Malaysia (Hemdi and Nasurdin, 2005). Hotel industry is a human-based
industry; high staff turnover in hotels is a major factor affecting workplace efficiency,
productivity and hotel cost structure (Deeryand Shaw, 1997).
The long-documented problem of high attrition in hotel sector is an outcome of casual
employment, seasonal demand, job resentment, unpleasant working situation, stress, long
working hours with minimal pays and lack training programs (Kuria et al., 2012) and to
reduce attrition rate in hotel industry, senior managers should provide greater opportunity for
promotion, organizational justice and providing greater security of employment (Deery
(2002).
Literature indicates that factors prevails in hotel industry i.e. working environment, Growth
and possibility of growth; work itself, are as antecedents of employee turnover and job
satisfaction (Ronra and Chaisawat, 2010). Lee (1988) used Mobley model which could be
used effectively in hotel industry and shows different levels of turnover process from initially
5
Associate Professor, Chandigarh Group of colleges‟ Technical Campus, Punjab
Technical University. Email- prabhjotkaurmahal@gmail.com
21
Thinking about quitting as a result of job dissatisfaction to the intention to quit and ultimate
employee turnover (Mobley, 1982; Robinson and Beesley, 2010). However, only handful of
research has been found in which some statistical relationship between the organizational
factors and job outcomes of this sector has been worked out. Overall, the extant literature
highlights a strong paucity of research on the antecedents and consequents of high attrition
rate in hotel industry in India.
Carbery et al., (2003) in their study obtain a more complete picture of organizational factors
and their impact on different measures of job outcomes such as intention to quit, customer
satisfaction, job satisfaction, commitment, productivity, and overall performance of
organization and their correlation to hotel‟s performance with more rigorous statistical
analysis. Therefore, it is not highly surprising that organizational factors are often found to be
a great indicator of job outcomes in the hotel sector. This has led researchers to emphasize
the importance of reviewing the organizational factors that influence employee‟s job
satisfaction, organizational commitment with an organization (Lumley 2010), employee
engagement and employee turnover. To fill this research gap, the present study explored the
relationship of organizational factors with job outcomes. The research has the following
objectives:
 To carry an in detail literature framework in the area of organizational factors and job
 outcomes in the hotel sector.
 To evaluate whether the organizational factors and job outcomes of employees differ
 across the demographic profile in the hotel sector.
 To determine the relationship between organizational factors and job outcomes in the
 hotel sector.
 To propose significant guidelines and implication for improving job outcomes of
employees in the hotel sector.

Literature Review
Outcomes pertaining to employee’s job in a Hotel sector
Organizational commitment
Organizational commitment is an extensively researched subject in the field of organizational
behavior, as it refers to the strength of an individual‟s feelings of attachment to, recognition
with an obligation to the organization (Allen and Meyer, 1990). Commitment measures the
force that binds an employee to a course of action of significance to one or more targets
(Cohen, 2003).
Research indicates that male and female employees have different psychological traits that
prompt them to different levels of organizational commitment (Block, 1976). Research shows
that female employees exhibited higher organizational commitment levels than comparable
male employees (Lincoln and Kalleberg, 1990), and they are ready to overcome obstacles to
achieve their positions within the organization (Loscocco, 1990; Mowday et al., 1982).
If an organization give an appropriate environment to their employees in make their career, it
may help to maintain a positive relationship among them (Tsui et. al., 1997), promote
organizational commitment, (Weng et. al., 2010), organizational support (Meyer and Allen,
1997; Mottaz, 1988; Reyes, 1992), psychological contract (Guest, Conway, Briner and
Dickman, 1996) and reduce organizational cynicism (Wanous et al., 2000; Sethi et al., 1999)
among employees.

22
Work engagement

Work engagement refers to the harnessing of organizational employees with their work roles
(Kahn, 1990). Work engagement measures the extent to which an employee oblige
physically, emotionally and cognitively to his / her organization (Kahn, 1990).Maceyand
Schneider, (2008) discussed that work engagement is a comparatively stable phenomenon
because of the constant presence of specific job and organizational characteristics. Literature
have also repeatedly shown that job resources such as social support from colleagues and
supervisors, performance feedback, skill variety, autonomy, and learning opportunities are
positively connected with work engagement (Bakker and Demerouti, 2008), as engaged and
attached employees exhibit a better psychological contract with their organization and highly
motivated to contribute to organizational effectiveness (Zhao et al., 2007)
De Villiers, (2009) discusses that males and females employees are significantly different
concerning their levels of work engagement. Lee, Hourquet and MacDermid, (2002)
postulates that the organization which supports their female employees in work–life balance,
it will lead to engage them in the organizational task (Mauno et al., 2007). Organization‟s
initiatives, like, reduced workload and opportunities to balance work help to work more
efficiently and creatively in an organization (Lee et al., 2002). Seijts and Crim (2006) in his
research shows that 84% engaged employees can positively influence the product quality of
their organization. Previous research indicates that work engagement has a relationship with
customer satisfaction (Coffman, 2000), reduce organizational cynicism (Baron, 1988;
Anderrsson, 1996 and Abraham, 2000), increase organizational support and psychological
contract (Saks and Rotman, 2006).

Job satisfaction
Job satisfaction becomes a significant research topic in literature as it is a subject that affects
both the employee as well as the organization. Hulin and Judge (2003) discussed that job
satisfaction is a multidimensional psychological reactions to one's job, and that such reactions
have cognitive (evaluative) affective (or emotional), and behavioral mechanisms. This three-
way conceptualization of job satisfaction fits well with usual conceptualizations of social
attitudes (Eagley and. Chaiken, 1993) and displays a significant influence on job outcomes
such as absenteeism, turnover, and productivity (Cranny, Smith and Stone, 1992) among the
employees.
Female employees display more satisfaction as compare to the male employees (Clark, 1997;
Sloane and Williams, 2000) across most work (Jinnett and Alexander, 1999). Job satisfaction
has strong ties with organizational cynicism, opportunity for growth, perceived
organizational support, and psychological contract (Fried and Ferris, 1987; Abraham, 2000).
Turnover intention
Turnover intention indicates the desire of a person to leave an organization (Tettand Meyer,
1993), describes employee‟s attitudinal (thinking of quitting), decisional (intention to leave),
and behavioral (searching for a new job) processes proceeding deliberate turnover (Sager et
al., 1998).
Lyness and Judiesch, (2001) and Light and Ureta, (1992) indicates that female employees
have higher average turnover rates than male employees due to their personal or family-
related reasons. Rehamn et al, (2012) studied that employee turnover is high when employees
display lack of satisfaction, trust and intrinsic motivation (Sinha, 2012; Barak et al., 2001;

23
Mobley et al., 1978). Moreover, employee turnover may be susceptible by organizational
cynicism because employees want to quit the organization. (Shahzada nd Mehmood, 2012).
In order to reduce turnover intentions, organizational support like flexibility in the workplace,
positive work environment, plentiful opportunity for growth, transparency about
compensation and better relationship plays an important role (Tymon, 2011), aswhen
employee perceive that their organization fulfills its obligations is more likely to become
more engaged and is less likely to leave the organization (Rousseau, 1995).
Factors Influencing Job Outcomes of Hotel Employees
Organizational cynicism
Organizational cynicism is an attitude and negative expectancy of an employee (Tesluk, Farr,
Mathieu and Vance, 1995; Andersson, 1996; Andersson and Bateman, 1997) in connection
with his/her organization and thought of organization deprives morality and truthfulness
(Dean et al., 1998).Dean et al., (1998) has given three dimensions to describe organizational
cynicism, comprising negative attitudes referred on the description of organizational
cynicism are hypothesized in form of a conviction that organizations lacks integrity, a
negative affect toward the organization and, propensities to disapproving and critical
behaviors against organization. Researchers determined that organizational cynicism and
negative affectivity are two distinct constructs (Wanous, Reichers, and Austin, 1994), but
others have accomplished that organizational cynicism is an attitude and not a constant
personality characteristic (Andersson, 1996) of an individual.
Judge and Larsen, (2001) demonstrated that dispositional variables such as negative
affectivity plays an important role in the formation of organizational cynicism attitudes.
Altınöz et al. (2011) revealed that organizational cynicism is enthused by indiscreet efforts of
transformation, stress and workload, unfulfilled personal and organizational expectations,
lack of social support, insufficient promotional policies, conflict of objectives, organizational
confusion, lack of communication, violations of psychological agreement, dismissal.
Therefore, Cynicism consequences are negative for an employee as well as for organization,
as cynicism employees are hopeless, less committed with their work and less satisfied, poor
performer, ready to quit their organisation (Nair and Kamalanabhan, 2010), low
organizational commitment (Abraham, 2000), negative effect on the loyalty and motivation
of personnel and endurance of team spirit (Karadağ et al. 2014).
Hence, while measuring the outcomes of hotel employees, organizational cynicism becomes
an important factor. Based on the review of literature cited above, it is posited that

H01: Organizational cynicism has a significant impact on organizational commitment, job

satisfaction, and employee engagement and employee turnover

Opportunity for growth

There has been excellent progress in the literature on opportunity for growth in the current
years. Opportunity for growth is a part of performance evaluation process whereby
employees are iven a chance to grow and develop according to his or her abilities,
knowledge, skills and job. Employee, who perceives that he/she will be given opportunities
for growth by their organization, has an inclination to develop and endure common
associations with their organizations. Many organizations have unsuccessful to realize that
incentives, employee involvement, rewards and recognition are the key parameters of today‟s

24
motivation programs as these bind the success factor with the employees‟ performance. In
addition, when employees experience that they were given prospect for growth by their
company, they were likely to hold more commitment, trust, satisfaction, and control empathy
than when they perceived that they lack opportunities. Enhanced growth prospects triggers
attitudinal variables such as job satisfaction (Schneider, Gunnarson, and Wheeler, 1992;),
employee commitment (Weng et al., 2010), career satisfaction and subsequently less
intention to leave the organization (Galetta 2011). Therefore, the resulting hypothesis is:
H02: Opportunity for growth has a significant impact on job satisfaction, organizational
commitment, and work engagement and employee turnover.
Perceived Organizational support
Organizational support is consider as an important for both employee as well as an
organization, as it pledges assistance delivered by the organization to deal with the
demanding conditions, and to carry out ones job efficiently and effectively (George, Reed,
Ballard, Colin and Fielding, 1993). Employees who show higher levels of POS are likely to
be more committed and possibly more willing to engage in extra role and organizational
citizenship behaviors (Organ, 1988). More interestingly, psychologists, academicians and
scholars have endeavored to explain this phenomenon with the help of organizational support
theory and social exchange theory. Organizational support theory is a norm of reciprocity
(Gouldner, 1960), which inferences that if employees receive favorable treatment, such as
high level of perceived organizational support, they would likely to improve more positive
attitudes towards their organization (Eiesnberger et al, 1986) and feel a responsibility to help
those who helped them (Gouldner, 1960; cited in Allen et al., 2003). Social exchange theory
is a framework to analyze different social contacts, has been defined as a process in which
two parties are involved in activities directed towards one another with the belief of the
exchange of valuable resources (Dwyer, Schurr and Oh, 1987), indicated that when an
employee perceives organizational support, it develops his/her job performance
(Eisenbergeretal., 1986), offer constructive suggestions for organizational improvement, and
affective organizational commitment (Eisenbergeret al., 1990; Currie and Dollery, 2006).
In this pursuit, earlier research shows that POS is correlated positively to organizational
commitment (Shore and Wayne, 1993), long-term obligations, organizational identification
among employees, loyalty (Rhoades and Eisenberger, 2002), in-role performance
(Eisenberger et al., 1986, 1990), trust in organizations (Chen et al., 2005), organizational
citizenship behavior (Moorman et al., 1998), job satisfaction (Burke and Greenglass, 2001),
intent to remain (Stamper and Johlke, 2003), reinforce his/her cognitive and emotional
appraisal of his/her job and organization (Byrne and Hochwarter, 2008), negatively to
absenteeism (Eisenberger et al., 1986) and withdrawal of the employees (Allen et al., 2003).
Certainly, POS not only promises employees of extrinsic resources such as pay and fringe
benefits but also confirms organizational endorsement, reliance, regard, and position (Blau,
1964).
In view of this dyadic interaction between employees and their organization, it may be
postulated that higher levels of POS permit employees to have a positive attitude towards his/
her job or organization. Once employees perceive such attitude, they are also able to make
better sense of their job involvement and show a better organizational obligation. POS is still
credence in the employees that they have the essential physical, perceptive, and responsive
reserves to fulfill their role-related obligations. Consequently, employees feel motivated to be
a part of the organization and captivate themselves into their job. Given these theoretical
claims and findings of previous studies, following hypothesis was suggested:

25
H03: perceived organizational support has a significant impact on organizational
commitment, work engagement, job satisfaction and employee turnover.
Psychological contract
A Psychological contract has been defined as the employee‟s beliefs about reciprocal and
promissory obligations between himself and the organization (Morrison and Robinson, 1997)
about tangible and intangible items that are to be exchanged in the context of a dyadic
relationship. Psychological contract signifies a behavior and attitudes of the individuals who
hold them, influenced quite significantly by an individual‟s perception of his obligations, and
perceptions of how well the other party‟s obligations have been fulfilled (Morrison and
Robinson, 2005; Robinson, 1996; Shore and Tetrick, 1994; Tekleab and Taylor, 2003).
Favorable psychological contract increase employee engagement, organizational
effectiveness, organizational commitment and decrease employee turnover in an organization
(Raja et al., 2004). Additionally, Rousseau, (1995); Zhao, Wayne, Glibkowski, and Bravo,
(2007) have shown that Psychological contracts outline an opportunity for improving the
understanding of job attitudes and work behaviours. Rousseau, (1989) argue that the lack of
fulfillment of aspects of the psychological contract leads to a violation of the contract, with a
change in attitudes and of behavior as a consequence.
The transactional-relational has dominated the psychological contract content literature
(Rousseau, 1990, 1995). Relational contracts are based on socio emotional components like
commitment, loyalty and trust (Raja et al., 2004), positively related to organizational
commitment, job satisfaction and negatively related to employee turnover (Raja et al., 2004),
while transactional contract shows negative relationship with job satisfaction (Millward and
Hopkin 1998) and exhibit high turnover intention (Morrison and Robinson, 1997). On the
basis of literature, we can propose the following hypothesis:
H04: Relational contract has a significant impact on Commitment, work engagement, job
satisfaction and negatively related to employee turnover
H05: Transactional has a significant impact on Commitment, work engagement, job
satisfaction and negatively related to employee turnover
After a rigorous review of various studies discussed above, following hypothesis can also be
formulated to determine the influence of demographic variables (gender, marital status, and
parental status) on the job outcomes
H06: job outcomes in three level of hotel sector under study differs significantly

Research Methodology
Scope of the study

This research was dedicated to assess organizational factors and job outcomes among
employees working in hotel sector of Northern India. The study included the employees
working at all the three levels of the hotels, i.e. senior, middle, and operational level to
present a widespread picture of job outcomes with respect to the particular industry. The
selection of the organizations was as per the convenience of the researcher.

Data Collection

For the study, data was collected from 284 employees from the Hotels located in north India;
all respondents received an accompanying cover letter assuring confidentiality. Of the 300
questionnaires given to managers to be handed out to volunteers, 284 were returned (9 of

26
which was useless), representing a response rate of 94.66%. The participating organizations
were drawn from a variety of industry sectors as shown in Table 1.

Industry Number of participants Percentage

Five stars hotels 74 26.05
Four stars 119 41.90
Three stars 91 32.04
Table No. 1 Industry participation and response rates
Note: Numbers in brackets indicate number of participating organizations.

Sources of Data

The present research being empirical in nature depends on both on primary and secondary
source of data. Primary data was gathered through structured questionnaire and discussions
with employees. On the other hand, secondary data was collected through newspaper,
articles, magazines, journals, reports, websites of the respective companies, and other related
service sector web sites.

Measures

Data were collected through the questionnaire from the employees of the hotel sector for
studying the organizational factors and job outcomes. The questionnaire comprised of two
sections. First section included demographic profile and second section includes descriptions
of the measures. Demographic profile had personal information of the respondents, i.e. age,
qualification, gender, marital status, experience in the present organization, total experience,
and level of management.

Independent variables

Perceived organizational support was measured by using the scale given by Eisenberger et
al.‟s (1986), which involved selection of six highest loading items of the 36 items of the
original scale. The chronbach alpha of the scale was .76. The items in this scale were
modified slightly as per the requirement of the present research, as the original scale was
designed for teaching profession. Responses were operationalized using a 5-point scale (1=
strongly disagree to 5= strongly agree) and included statement such as „my organization
really cares about my opinions‟. Rhoades and Eisenberger (2002) studied that the use of
shorter versions of the POS scale is not problematic because the original scale is
unidimensional and has high internal reliability. Organizational cynicism was assessed via 12
items scale developed by Dean et al., (1998), Brandes, et al., (1999) and Kalağan (2009),
comprised of the three dimensions of affect (4 statements), cognition (4 statements) and
behavior (4 statements). The items in this scale were modified slightly as per the requirement
of the present research. Respondents indicates the extent of agreement with each statement on
5-point scale (1= never to 5= always) and high scores on all statements indicate high
organizational cynicism. The scale includes a statement such as „I believe that my
organization says one thing and does another‟. Psychological contract inventory (PCI) was
measured via 20 items scale developed by Rousseau (2000). The two dimensions of relational
and transactional contracts were measured using 10 items for each contract type. Respondents
indicates the extent of agreement with each statement on 5-point scale ranging from 1=
„strongly disagree‟ to 5= „strongly agree‟. The sample item for relational contract is, “Is
responsive to employee concerns and well-being “and for transactional contract it is, “pay

27
Me” only specific duties I perform”. The alpha reliabilities for relational contract is (.92) and
for transactional contract it is (a =.91). Job satisfaction was measured using the five items
scale developed by Brayfield and Rothe (1951).Previous studies involving diverse
occupations and organizations indicated a high reliability of the job satisfaction Survey
(Judge, Bono. and Locke, 2000). Respondents indicated their level of satisfaction to each
statement on a5 point scale ranging from “strongly agree” (1) to “strongly disagree” (5). The
Cronbach alpha coefficient of the scale was .85. The sample items of the scale was „I like my
job better than the average worker does‟.

Dependent variables

Organizational commitment was measured by six items adopted from the scale developed by
Mowday, Porter, Steers (1982).in keeping with the suggestions of Mathieu and Zajac (1990),
researcher included only those items which she felt to be covered as per the requirement of
the research. Responses to each item are measured on a 5-point Likert scale ranging from (1)
strongly disagree to (5) agree. The most widely used and validated instrument for the
measurement of employee engagement Utrecht Work Engagement Scale (UWES) developed
by Schaufeli, Martinez, Marques, Salanova, Bakker, (2002), which involved selection of five
highest loading items of the 9 items of the original scale. Cronbach‟s alpha coefficients of
this scale were estimates ranging from .90 to .92 (Schaufeli and Bakker, 2004). Respondents
indicates the extent of agreement with each statement on 7-point scale (1= never to 5=
always) and high scores on all statements indicate high work engagement. The sample items
of the scale „at my job, I feel strong and vigorous‟. Turnover intention was measured with by
using a five-item scale adapted from the 15-item scale initially developed by Roodt (2004).
Martin (2007) and Martin and Roodt (2008) in their study reported a Cronbach alpha
coefficient of 0.90 for a 13-item version of the scale. Respondents indicates the extent of
agreement with each statement on 5-point scale (1= strongly disagree to 5= strongly agree).

Data Analysis

Quantitative statistical methods were used to conduct analyses on the data collected for the
present study. The tools, which were used to test the hypothesis for analysis includes,
descriptive analysis, correlation, t-test, analysis of variance (ANOVA), and regression
analysis. The results of organizational factors and job outcomes were tabulated for each
variable being studied separately for three levels among Hotel employees. The results of the
analysis through SPSS are explained below.

28
 Sr. Variables Mean SD 1 2 3 4 5 6 7 8 9
No.
1 OC 19.06 3.28 1
2 WE 20.08 3.36 .94** 1
3 JS 38.34 6.38 .92** .95** 1
4 TI 10.65 3.33 -.13* - -.11** 1
.16**
5 OCY 6.95 1.64 -.05 -.10* .075
-.07 1
6 OFG 37.31 5.39 .63** .65** .61**
-.12** - 1
.197**
7 POS 37.25 5.51 .58** .62** .60** -.16** -.17** .91** 1
8 RC 18.66 3.80 .25** .24** .22** -.50** - .48** .42** 1
.168**
9 TC 13.38 5.06 .07 .12 -.06 -.08** -.77** .08 .08 .23** 1
Table No. 2 Means, Standard Deviation and intercorrelation among variables

Note:- n=230, *significant at **p<0.01, *p<0.05 (two-tailed); OC= Organizational

Commitment, WE= Work Engagement, JS= Job Satisfaction, TI= Turnover intention,
OCY= Organizational Cynicism, OFG= Opportunity for growth, POS= Perceived
Organizational Support, RC= Relational Contract, TC= Transactional Contract

The Pearson Product Moment Correlation Coefficients calculated to determine the

relationships between organizational factors and job outcomes were shown in Table 2.The
descriptive analysis results revealed mean value for organizational commitment 19.06
(SD=3.28), the mean value for work engagement 20.08 (SD=3.36) and 38.34 (SD=6.38) for
job satisfaction. Job satisfaction and work engagement confirmed a strong positive
relationship (r=.95, p<0.01). The correlation value between job satisfaction and turnover was
(r=-.16, p<0.01). The mean value for relational contract was 18.66 (SD=3.80) and for
transactional contract 13.38 (SD=5.06). The correlation value between opportunity for growth
and job satisfaction was (r=.61, p<0.01). Study found strong significant support for all main
effect hypothesis from correlation matrix reported in Table 2.

Demographic N OC WE JS ET
variable
Mean SD t Mean SD t Mean SD t Mean SD t
Male 182 19.18 3.07 1.17 20.12 3.33 .36 38.24 6.33 -.46 10.75 3.26 .94
Female 47 18.88 4.02 19.91 3.55 38.72 6.67 10.23 3.63
Un married 118 19.64 4.13 2.83** 20.64 4.16 2.65** 39.55 7.70 2.99** 2.15 .198 -3.9**
Married 112 18.43 1.85 19.48 2.08 37.07 4.25 4.07 .384
No child 128 17.75 2.50 -7.49** 18.93 2.48 -6.23** 36.09 4.86 -6.51** 11.07 3.98 2.149*
Child 102 20.68 3.42 21.50 3.75 41.16 6.92 10.12 2.17
Table No. 3 T-test results for dependent variables on gender differences

Demographic Profile and the Constructs

Table No. 3 shows the results of T-tests used to display the effect of demographic variables,
e.g., gender, marital status, and parental status on the different dimensions of job outcomes.

29
 As far as the relationship between gender and job outcomes; Independent-Sample T-Test,
which describe the shape of the sampling distribution to compare means of two groups have
been performed in order to find out any differences in opinion on all dimensions of job
outcomes between male and female employees working in hotel industry. The results of an
Independent-Sample T-Test which is shown in Table 3 indicate that overall job outcomes are
not related to the gender of the employees at the 0.05 level. As shown in table 3, the results
indicate a weak relationship between respondent‟s gender and facets of job outcomes. It
means that there is no significant difference of perception between male and female
employees. In terms of job outcomes and marital status, the mean score of organizational
commitment (19.64), work engagement (20.64) and job satisfaction (39.55) for unmarried
employees was higher than the married employees. This suggests that unmarried employees
exhibit higher levels of organizational commitment, employee engagement and job
satisfaction as compared to married employees. One of the critical components of
demographic profile is parental status. The mean score for organizational commitment was
higher among the employees enjoying parental status (20.68) compared to the without child
status employees. Results shows that mean score of the child status employees exhibits more
employee engagement and job satisfaction as compare the employees with no child. Results
also show that employee having the child show less employee turnover.

Step Dimensions Standardized Coefficients t Significance

(Beta)
Constant
1 O Cy .200 2.430 .016
2 OFG .689 5.293 .000
3 POS .074 .591 .555
4 RC -.253 -4.270 .000
5 TC .147 1.790 .075
2
Adjusted R .405
Durbin Watson 2.213
F 40.041
Sig.: - 000
Table no. 4 Stepwise regression analysis: organizational outcomes

 Beta co-efficient is the standardized regression coefficient, which allows

comparison of the relatives on the dependent variable of each independent
 variable.
 T-statistics assist to find out the relative importance of each variable in the
model.
To examine the fit of the regression model and to identify the best predictors of job outcomes,
a stepwise regression was used with dimensions of organizational factors as predictors. In this
model, five dimensions of organizational factors that initially comprised of 40 items served as
independent variables and job outcomes as the dependent variable. Preliminary analysis
revealed no violation of the postulation about sample size, multicollinearity, and outliers. The
Regression model summary as shown in Table 4 shows the strength of the relationship
between the model and the dependent variable. Results show that there is a significant
medium-level relationship between organizational factors and job outcomes. Results display
adjusted R2 and the Durbin Watson test of independence of errors. In the Table 9 regression
model explained 40.041 percent of the variance in the job outcomes and to test first-order
autocorrelation among the error terms, Durbin-Watson statistics is used.

30
Durbin-Watson value of 2.213 indicates that error terms are serially independent. Table 4
also summarizes the results of an Analysis of Variance. The significance value of F statistic
is less than 0.05, which means that the dissimilarity explained by the model is not due to
coincidental. It can be seen that dimensions of organizational factors fits the data well
(Adjusted R2=0.405). All the explanatory variables excepting perceived organizational
support and transactional analysis were found to be significant that recommends that in the
Hotel sector; job outcomes is determined by a number of dimensions of organizational
factors.
Hypothesis Testing

From the results, it can be concluded from the results that Hypotheses H01, H02, H04 are
supported whereas H03 and H05, i.e. perceived organizational support and transactional
contract, have a significant influence on job outcomes, are not supported. Further, Table 9
suggests that the dimensions (excluding, perceived organizational support and transactional
contract) associated with organizational factors are significant predictors of overall job
outcomes and have the probable positive relation. Thus, the findings support the results of
Walder, 1995, whereas for transactional contract, our findings do not support the results of
Raja et al., (2004).
The results failed to support the relationship perceived organizational support and
transactional contract with job outcomes. The explanation for this interesting finding is not
understandable and demands further research in the same sector. Generally it can be specified
that employees in the hotel sector are particularly sensitive to three dimensions of
organizational factors, viz. organizational cynicism, opportunity for growth and relational
contract. Thus, more the hotel employees perceive higher level of these organizational
factors, more favorable will they be able to give job outcomes to their organizations.
Furthermore, the research fails to show the impact of demographic variables on job outcomes
of the hotel employees.

Implication and Limitation

The main purpose of the present research was to recognize the organizational factors
influencing the job outcomes of employees working in various hotels (organizational
commitment, work engagement, job satisfaction, and employee turnover). The results show
high levels of support for numerous study hypotheses.
Results show that favorable organizational factors give positive job outcomes (organizational
commitment, job satisfaction and work engagement). The present research provides a clear
and comprehensive picture of the relationship among dimensions of organizational factors
and job outcomes, particularly in the hotel sector. The study is to some extent restricted by its
sample, design, and technique. Responses with respect to organizational factors and job
outcomes were solicited from the employees of hotels working in Northern India. However,
being the first such study, it was relevant in the context of the region. Another area of
concern is the nature of scales used, which were based upon the perceptions of the
participating employees. Hence, the probable for data incorrectness due to item
misunderstanding or disposition to certain response on the part of the applicant as well as
social appeal effects does exist. So, this limitation should be measured while comprehend the
findings.
Results reveal that there is no significant difference in job outcomes, organizational
commitment, work engagement, job satisfaction and employee turnover, regardless of the
gender, whereas organizational commitment, work engagement and job satisfaction is more

31
in senior level employees as compare to middle and operational level employees in the hotel
sector. This implies that senior level employees of hotel sector give better job outcomes as
compare to other employees.
Organizational factors play an important role in job outcomes indicating the 40.5 percent
variance. Step wise regression reveals specifically five dimensions of organizational factors,
viz. organizational cynicism, perceived organizational support, relational contract and
transactional contract which predicted the job outcomes of employees working in North
Indian hotels. But results failed to support the relationship between perceived organizational
support and transactional with job outcomes.
Effective job outcomes are not likely to achieve unless HR is highly dedicated to
organizational factors. The role of HR is very crucial as human resources in the hotel sector.
HR manager should be willing to invest in developing workforce in order to get long term
and visible results. HR manager should have persistence and a sensitivity to listen and solve
the problems of the employees. It is needless to say that if suitable interference relating to
organizational factors to improve job outcomes is executed enthusiastically, it would not only
lead to improve job outcomes but also help in retaining the employees in the hotel sector.

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37
 AN INVESTIGATION INTO THE RECENT SURGE OF WOMEN
BEING CHOSEN AS SUCCESSOR IN FAMILY BUSINESSES: A
STUDY OF THE WORLD`S FASTEST GROWING ECONOMY
6
Reena Agrawal
Abstract

The purpose of this study was to analyze the perception of the veterans in the family
businesses in India towards handing over the reins of their business to the female child and
also explore the latest trend. To achieve this objective we first reviewed the existing literature
on influence of gender in succession in family business, we then investigated twenty three
family businesses in India who have recently announced their succession plan and we tried to
capture the latest trend and also analyzed the implications. We found that the traditional
barriers regarding women not being considered as successors in family business, are
gradually being dismantled. We found evidences of a paradigm shift in the perception of the
owner-managers of the family businesses in India. It was found that family business owners
in India have discarded the orthodox primogeniture principle and have involved and groomed
the children in the family irrespective of their gender, to take up the daunting task ahead, to
ensure continual existence and sustainable growth of their family businesses.

Keywords: family business, family values, succession, predecessors,

successors. Introduction
Family bonds, values and customs profoundly influence the family businesses. Generally
females did not have official titles or roles in family business and their hard work and
contribution are often neither acknowledged nor rewarded. As the boundaries between the
family and the firm tend to be blurred, women in family businesses encountered issues such
as conflict in roles, family relations, individual identity, faithfulness etc. One of the key
hurdles encountered by women in family businesses was that they were not taken seriously.
In India an important milestone was achieved when an amendment was made to the Hindu
Succession Act, which approved that the daughters were legally 'equal' to the sons and they
too shall have the equal rights to claim their share in the family's wealth. This has
transformed forever, the conventional patriarchal line of succession in the Indian society.
Some experts feel that this development may be one of the factors that have led to the recent
spurt of women taking up leadership roles in the family businesses in India.

Objective of the Study

The purpose of this study was to explore and understand the acceptance and role of women in
the family businesses in India. The aim was also to analyze the perception of the veterans in
the family businesses in India towards the handing over the succession to the female child
and also find out the latest trend. To achieve this objective we (i) reviewed the existing
literature on influence of gender in succession in family business (ii) investigated twenty

6
Assistant Professor, Jaipuria Institute of Management, Lucknow, Uttar Pradesh, India-
226010, Email: reena.agarwal@jaipuria.ac.in

38
three family businesses in India who have recently announced their succession plan (iii)
captured the latest trend and (iv) also analyzed the implications. Some of the primary
research questions were:
 Whether the daughters and the sons given equal opportunity to participate in the
 family business?
 Whether gender of child was a prominent criteria considered by the owners of the
 family business, while choosing a successor in the family business?
 What implications did the change in trend is expected to have on the survival and
sustainability of the family businesses?

Research Implications

It is most likely that findings of the current study will stimulate the other traditional business
families towards the issue of succession. It would help them realize that if succession is not
handled with sensitively, it may hamper the growth and expansion of the enterprises owned
by their family. It is also expected that the findings would uncover valued insights, which
may be used by the various stakeholders in the family business such as the family, business,
predecessor and successor. It would help them to: (i) resolve the prevailing problems, (ii)
promote facilitating atmosphere for the identification, training and grooming of the potential
successor and (iii) develop systematic and transparent procedure for the transmission of
management and control of the family business in the hands of the younger generations in the
family.

Research Methodology

This study was based on secondary research. The details about the twenty three family
businesses in India were collected from large number of publically available sources such as
research articles in academic journals, newspaper articles, the company websites and other
online resources.

Overview of Literature

The succession process is fundamental to the longevity of the family business and thus it
stays at the heart of family business dynamics. It comprises of a set of indivisible systems and
sub-systems such as: family, business, predecessor, descendant, and external environment
(Cadieux et al., 2000; (Fattoum & Fayolle, 2005). According to Sharma (2004) the
succession process was affected at different levels: at individual level there may be influence
of different groups of stakeholders, at inter-personal level among different generations, at
organizational level through corporate culture and tactical management and at societal level
by way of linkages with the external environment. The different sources of influence or
resistance on the succession process in family businesses have been documented at each level
(Cadieux et. al., 2000; Fattoum & Fayolle, 2005; De Freyman et. al., 2006).
The role of daughters in family business is profoundly influenced by the societal framework
that relates to the expectations and role of women in the business and the family. According
to Allen & Langowitz, (2003) and Miller et. al., (2003) there was sex-based partiality that
preferred sons over daughters as management inheritors irrespective of their capability or
personality to lead. As a result, daughters have been comparatively deprived of attaining
necessary training, practical experience, and collective support to take up the top role
(Astrachan & Whiteside, 1990; Nelton, 1998; Cromie & O‟Sullivan, 1999; Martin, 2001;

39
Estess, 2001; Sherman, 2002 and Haberman & Danes, 2007). Rosemblatt et al., (1985) stated
that the female offspring did not receive the equal backing, chance and education as the male
offspring, and that prevented the daughters from moving toward decision-making position in
the family business. Pyromalis et. al., (2004) also found in their research that there existed
noticeable bias against women in the succession process in the family businesses.
Kealting and Little (1997) found that gender was as a key factor in the successor election
process. Many family businesses used the primogeniture principle, where the eldest male
child would inherit the family business, thus relieving the fathers from the unpleasant task of
choosing between their children. A preference for male successors was unequivocal in the
family-business literature irrespective of suitability (Dumas, 1992; Kealting & Little, 1997;
Stavrou, 1999; Miller, et. al., 2003). According to (Kealting & Little, 1997; Stavrou, 1999)
traditionally daughters were not considered for succession into top executive positions in the
family businesses. Stavrou (1999) found that, even if the daughter was the primogenitor, she
was not considered to run the family business. The irony was that some owners even
preferred to sell the business, instead of allowing their daughters to lead it. Francis (1999)
stated that primogeniture continued to dominate the value system of family businesses, where
a son was expected to join the family business, but a daughter was given a choice or rather
not invited. Daughters were not considered as managers, despite the strength of their
credentials, unless a critical need got created by an unforeseen crisis. There were evidences
of daughters entering the family business because of a crisis in the family in the form of
illness of the incumbent or there being no sons in the family. In contrast to sons, the problem
of ambiguity was more complex in case of daughters, as they were not considered as future
successors (Barnes, 1988; Salganicoff, 1990; Dumas, 1992, 1998; Cabrera Suárez, 1997;
Curimbaba, 2002).

Dumas, (1992) and Miller et al., (2003) discovered in their research that most often fathers
had tacit expectations that their sons would take over the family firm and therefore
“groomed” their sons for the role. The sons were nurtured with an implicit understanding that
they would take over the reins of the business once they were grown up, while the daughters
lacked such opportunities. The studies showed that fathers did not see women as having the
capacity and experience necessary for running a business. It was also found that fathers did
not consider their daughters as viable successors, even after daughters entered the family firm
and proved their competence over a period of years (Hollander and Bukowitz, 1990; Dumas,
1992). While the sons knew that they would inherit their father`s business and the non-family
stakeholder were prepared for the imminent outcome, the daughters tend to be „invisible
successors‟ and if they tried to proclaim their rights and take up position in top management,
they were seen as violating the family hierarchy (Dumas, 1992). Daughters found themselves
in exceptionally difficult position since they regarded themselves as protectors of family
unity, they avoided conflict and their succession process was inhibited (Hollander and
Bukowitz, 1990).

Aronoff (1998) and Martínez (2009) noticed the change in recent years, with women´s
growing involvement and contribution in family businesses. Studies have suggested that
western firms, who in the past, had followed the principle of primogeniture while transferring
control in family enterprise (Levinson, 1971; Dumas, 1989) increasingly considered gender
neutrality and team leadership (Aronoff, 1999); however, Indian firms continued to follow
the principle of primogeniture very strictly and did not allow women to play a significant role
in the business (Dutta, 1997; Sharma and Rao, 2000).

40
Vera and Dean, (2005) in their study brought out the positive aspects such as opportunities
and advantages that women can offer on joining the family business. Danes, Haberman
McTavish, (2005) and Dumas, (1989) indicated in their research that as females were
socialized differently within both families and business systems, they had better capability of
communicating and solving problems differently than their males counterparts. According to
Alimo-Mecalfe, (2002) women were found to be more fascinating, influential and
transformative leader in comparison to men and were to be able to intellectually stimulate
others. Vera and Dean, (2005) found in their research that in comparison to men women were
less mistrustful, more peacemaking, less dictate, more focused, more sympathetic, more
malleable, more poise, cooperative, compassionate, sought opinion of others and took
unbiased and rational decisions, attended to both business and family well-being. Pyromalis
et al., (2004) found out that women outperformed men on the “satisfaction with the
succession” dimension, while men outperformed women on the “effectiveness of the
succession” dimension.

Findings

More and more daughters were taking over the family business from their fathers, not
because they inherited the empire by virtue of their birth, but because they proved that they
are qualified and competent to take charge of corporate affairs. While some had just joined
and were still helping the business grow, the climb to the top for most others had been tricky.
It was evident that the predecessors had broken the psychological block that a son and not a
daughter can become potential successor. These women successors infused their
entrepreneurial energy in to their family business and helped the firm stay ahead of the curve,
while taking on ever greater responsibilities on key accounts. As, women continued to
expand their role in the business world and displayed that they were as capable as men, the
parents were giving key positions to their daughters in their family businesses.
1. Apollo Hospital: Prathap Reddy, Chairman Apollo Hospitals announced that his eldest
daughter Preetha Reddy would manage the group after retirement. He said that all
his daughters have made valuable contribution in his enterprise and the ownership
shares of the Apollo Hospitals is divided equally. Preetha Reddy, his eldest daughter
would work as Managing Director Apollo Hospitals', while Suneeta Reddy who
worked as Executive Director (Finance) has been re-designated as Managing Director
and Sangita Reddy who worked as Executive Director (Operations) has been re-
designated as Joint Managing Director. Preetha had formally joined Apollo Hospitals
as Joint Managing Director in 1989 and proved her metal when she was still a recruit,
she helped in resolving a strike called by the employees. She is known for has an
exceptional ability to bring people together and is regarded as easy to work with. She
avoided being bossy and always gave opportunity to people and nurtured their talent.

2. TVS Motor: Lakshmi Venu, daughter of Venu Srinivasan, the Chairman and
Managing Director of TVS Motor and Mallika Srinivasan, was inducted as a Director
on the board of auto-component maker Sundaram Clayton Ltd, TVS Motors' holding
company. This move was viewed as a succession plan for TVS Motor, India's third-
largest two-wheeler manufacturer by sales. Lakshmi has impressive educational
credentials. The school topper, Lakshmi graduated in Economics from Yale and
completed Doctorate Degree from the University of Warwick in the United Kingdom.
Lakshmi joined TVS Motor's Hosur, a manufacturing unit, as a management trainee.

41
 She spent three years as a management trainee. She then worked in the areas of
product design and sales, corporate affairs, business strategy, and marketing at TVS
Motor. Her brother also joined the board of Sundaram-Clayton. Her cousins Arathi
Krishna and Arundathi Krishna, daughters of Suresh Krishna, Chairman and
Managing Director of Sundram Fasteners, also joined the company as Executive
Director and Additional Director respectively to manage the USD 4 billion.
3. Kinetic Motor Company: Sulajja Firodia Motwani is the Joint Managing Director of
two-wheeler firm Kinetic Motor Company, a position she inherited from her father.
Being at the helm of Kinetic, she faced the challenge of leading a company after their
joint venture partner, Honda, moved out. She had to deal with the market when
scooters were not in fashion and motorcycles were the rave. Kinetic had to make its
debut in the motorcycle business and tied up with overseas manufacturers to bring in
modern scooters to lure back customers. Sulajja coped with this difficult part, made
her parents proud and paved way for her siblings. Sulajja did her MBA from Carnegie
Melon and worked in California for a couple of years before heading back home to
join the family business. Her sister, Vismaya Firodia, also joined the company as
vice-president, marketing support services and HR. Vismaya did her operations
research at Princeton and worked for three-and-a-half years at a New York-based
consultancy firm before joining the business. Their brother also joined the family
business and handled the marketing function. Though born in „Marwari‟ family the
children were brought up in a liberal atmosphere.
4. HCL Corporation: Roshni Nadar, the only daughter of tech billionaire Shiv Nadar,
took over as Executive Director and CEO of HCL Corporation at the age of 27. This
young heiress did her MBA in Social Enterprise Management and Strategy from the
Kellogg Graduate School of Management. She majored in radio, television and film
and did internships with CNBC and CNN before she went to pursue a career in
management. After completing her education and she headed back home to join HCL
Corporation, holding company of HCL Tech and HCL Info as CEO in 2009.She
looked after the treasury operations including investment decisions, business
development, brand building and social initiatives of HCL. Roshni was involved only
in the investment company HCL Corp, and not in either HCL Infosystems or HCL
Technologies - both managed by a group of professionals. Interestingly, this young
lady had her interests in media and had changed her major from Economics to film.
HCL is the fifth largest IT company in the country with a market capitalization of
around Rs 12,500 crore.
5. Thermax: Another great example is Meher Pudumjee. She took the chair once occupied
by Thermax founder and her grandfather AS Bhathena, nurtured by her father Rohinton
Aga and preserved by her mother Anu Aga. Meher joined Thermax as a trainee engineer
in August 1990. In a year's time, she was given the responsibility to manage the
company's overseas operations in the UK. She returned to India in 1996 and became a
member of the Board of Directors. After her stints with the treasury and working capital
management functions, she moved to corporate strategic planning. In 2001, Meher was
appointed Non-Executive Director of Thermax and became Vice-Chairperson in 2002.
She learned the ins and outs of the business for fourteen long years and lived up to the
expectations of her family, before succeeding her mother in 2004. A post graduate in
chemical engineering from the Imperial College of Science & Technology, London, she
was awarded the Business Standard CEO for 2007-08. Since Meher took over, the
company's turnover has grown from Rs 880 crore to Rs

42
 3,300 crore. She has given the green focus of the company a new impetus and has
used logic to support her decisions. She steered and enhanced her company's green
portfolio to make it a global player in the energy space. She learnt the art of
perseverance from her father and the expertise of human resource management from
her mother.
6. Venkateshwara Hatcheries Group: Although Anuradha Desai may have inherited her
father's empire by virtue of her birth, she strived hard to expand into newer areas of
poultry business and survived bird flu outbreaks. Daughter of late BV Rao, pioneer of
organized poultry business in India, leads the Venkateshwara Hatcheries Group.
Anuradha perfected the vision she inherited from her father and is today the voice of
the Indian poultry industry. She has increased the turnover of her father's business
manifold. When her classmates were busy playing in their house, she was engrossed
in feeding the birds and acquainting herself with the nuances of poultry hygiene.
From there Anuradha came a long way as she now oversees a multi-activity business
including eggs, egg powder, poultry feed, animal feed, vaccines, biotech, R&D and
now even wine distribution and entertainment, with husband and her two brothers
along her side. She also added the export initiative of Venky's Chicken to her success
story.
7. Hero Corporate: Shefali Munjal was inducted into father Sunil Kant Munjal's Hero
Corporate to explore the company's greenfield projects. Where others failed, she kept
the IT and ITeS businesses afloat, and added new ones to the portfolio. Besides these
projects, she has been an integral part of the business development and strategic
decision making team at Hero Corporate. Shefali was actively involved in strategic
reviewing of operations and was team player. She completed Senior Management
Program from Harvard Business School and right after her college she joined the
family business and launched an IT initiative in a group that was a huge challenge.
Her induction programme was based on bottom up approach – she began from the
shop floor and gradually moved up the ladder to the top management. After having
sharpened skills in the fields of consultancy, implementation and support services for
enterprise resource planning, supply chain management and customer relationship
management, this third generation Hero Group is aspiring for more.
8. DLF Group: Pia Singh manages her father's entertainment venture. Daughter of KP
Singh, Chairman DLF Group, heads DLF's entertainment venture, Digital Talkies
Cinema as well as handles the group's retail business as its managing director. This
multi-tasking persona worked with GE Capital in risk underwriting before joining the
group. Interestingly, Pia's inclination towards films was not newfound. During her
academic days she pursued a short term film-making course from New York
University after graduating from the Wharton School, University of Pennsylvania
with a major in Finance.
9. Apeejay Surrendra Park Hotels: Priya Paul took the reins of Apeejay Surrendra Park
Hotels after the untimely death of her father Surrendra Paul. Younger sister Priti Paul
looked after the shipping business of the Apeejay Surrendra Group. Priya gave a new
dimension to the Park Hotel chain. Priti took over the creative side, and looked after
the Oxford bookstore, the Cha Bar chain and the real estate division. Priya is a
Bachelor of Economics from Wellesley College, USA, while Priti is a Master in
Design Studies, from Harvard University and a Bachelor of Science in Architecture,
minor in Economics from Massachusetts Institute of Technology, Cambridge, USA.
Brother Karan Paul has joined Chairman and handles other businesses.

43
 10. Godrej Group: For Godrej daughters it was tough, the kids had to join as interns,
prove themselves, and move ahead. Adi Godrej's daughter Tanya Dubash is now
president, marketing and executive director in Godrej Industries and younger daughter
Nisha is Chair Godrej Industries and is also on the board of Godrej Agrovet. When
Pirojsha, started work at Godrej properties after a three-week induction programme
like all others, all his father had to say was that Pirojsha career would depend solely
on his performance, as it would for any new entrant in the group. "I have always
considered them equal and anyone from the family who wanted to join the business
was free to join if they were qualified," said Adi Godrej.
11. Hindustan Construction Company: Shalaka Gulabchand, daughter of Ajit
Gulabchand, Chairman and Managing Director of Hindustan Construction Company,
and the man behind Bandra -Worli sea link, joined the company in September 2000 as
an executive planning and business development. There was no time frame for the
only daughter as to when she will be part of the board. It was performance based. In
December 2007, Shalaka was appointed Vice President-Business Development.
Shalaka holds a Bachelor's Degree in International Relations from Boston University.
12. Jindal SAW: Sminu Jindal, daughter of Prithviraj Jindal and granddaughter of OP
Jindal, joined the family business as a trainee in her teens in Swastik Foils, a unit of
Jindal SAW. She was responsible for the profitable turnaround of a financially sick
unit, in the maiden year in the family business. She could do this by introducing the
manufacturing of ultra-thin gauge steel that was not heard of during those days. She
then got trained at Jindal SAW and eventually joined the helm of affairs as the
Managing Director. She initiated environment protection steps like effluent treatment
plants and environment friendly processes much before the government regulatory
authorities' drive. Jindal SAW Ltd was one of the very first companies to be awarded
all environmental clearances.
13. Parle Agro: Prakash Chauhan's three little stars were groomed to join the Parle Agro
business from the very beginning. The eldest, Schauna Chauhan did her B-schooling
and joined the Parle Agro in 1999 and by 2002 she was running the business. She is
now the CEO, while daddy remains the Chairman. Alisha Chauhan was passionate
about fitness and opened 'V3' a chain of health and fitness centres. She diversified the
business through this venture. Meanwhile, the youngest, Nadia Chauhan, started to
attend marketing meetings with her dad at the age of 11. Officially though, she joined
the business in 2002.
14. MBD Group: For publishing major Ashok Malhotra succession planning was never an
issue. His daughters Monica Malhotra Kandhari and Sonica Malhotra took over
the reins very early. A commerce graduate, Monica explored her passion for
publishing by joining the family business as a trainee in the MBD group's publishing
and printing wing at the age of 16. She is now the senior executive director of MBD.
Meanwhile, Sonica, an MBA in finance from International Management Institute
France, was executive director at MBD and handled key projects in hospitality and
real estate sector, right from project planning to execution and is also responsible for
branding, positioning and assisting in expansion plans of the group.
15. Radison Communication: Lara Balsara, joined her father Sam Balsara's Radison
Communication at the age of 26. Lara did her BA from St. Xaviers College in
Mumbai and went to the UK to pursue her masters in marketing from Bristol
University. She came back and joined Madison as a trainee in 2003. She diversified

44
 the business further and was responsible for the success of Madison Teamworks and
Entertainment, Madison Retail Paradigm and Madison RKD retail. When Lara started
working at Madison, she received no special privileges and had to work hard from
executive level to top level. Her father`s philosophy, integrity and conduct inspired
her to take tough decisions as her role and responsibility increased. The company has
grown 300 percent since Lara joined in 2003 and is now one of the biggest media
conglomerates with an international footprint in Srilanka and Thailand.
16. Pritish Nandy Communications: Rangita Nandy joined father Pritish Nandy's PNC in
August 1999 as Executive Producer and has progressed to Creative Head of the
company. She has been a producer of Bollywood Films. Prior to joining PNC very
early in age, she was trained in advertising and marketing at Ogilvy & Mather and
Percept Advertising. When she joined PNC she designed and managed the production
of its television shows and events. She also prepared the essential groundwork for
PNC's foray into the motion picture business. She headed PNC's creative functions,
supervised and managed the in-house production team, greenlights its cinematic
projects and oversees strategic PR and marketing for it and its products. She has been
working as a full time Director of Pritish Nandy Communications Ltd., since 2005.
She served as Director of PNC Productions Ltd., PNC Sippy Media Ltd., Ideas.com
India Private Ltd., Sarvakala India Private Ltd and Studio PNC Private Ltd. An
alumnus of HR College of Commerce and Economics, Mumbai and she had
specialized in advertising, sales management and sales marketing.
17. Mukta Arts: Meghna Puri has been a part of dad Subhash Ghai's Mukta Arts from the
age of 16. She helped her father fulfil his dream of setting up an institute to teach film
making. Today, she is the President of the Institute--Whistling Woods International.
She did her Business Management from King's College in London. In 2001, she
returned home and laid the foundation stone of Whistling Woods International
(WWI), a film school. After that Meghna along with the core team did a lot of
research, visited several universities, colleges and film schools all over the world not
just to develop the curriculum, but to develop the architecture, rules to be set in the
school, understand administration works. Started with a batch of seventy students, the
WWI campus now has four hundred students and over a thousand have graduated and
are working in the industry. WWI was also named among the Top 10 Film schools in
the world by „The Hollywood Reporter‟ in its August 2013 edition.
18. Zenith Computers: Devita Saraf joined her father's Zenith Computers while she was a
student. From the age of 16 she started working in various departments of the company to
learn the ropes of running a firm. Devita pursued an undergraduate programme in
Business at University of Southern California. But while her classmates were applying for
jobs at consulting firms, Devita was clear that she wanted to run her own company
eventually. She realized that coming back to join her father‟s firm would be the best
place. She joined Zenith as its marketing director at the age of 21. It was around this time,
in the early 2000s, that Intel and contemporaries were developing high-end personal
computers. Devita, who was involved with product development, realized that Zenith‟s
existing distribution channel would not be able to accommodate the high-priced personal
computers. She spearheaded Vu Technologies, the pioneer in the concept of 'Luxury in
Technology' and launched luxury lifestyle brand VU TV in 2006 which she started selling
from her own stores and multi-brand stores. The Topper Laptop, Power of Seven Laptop
range, Infotainer

45
 II, Multiply and the Topper Desktop are some of Zenith's products launched under her
leadership.
19. Future Group: The first woman in the family to enter the business, Ashni Biyani,
daughter of Future Group CEO Kishore Biyani, started involving in the innovation
and incubation division of Future Group at an age of 22. Ashni graduated as a textile
designer and has attended courses on scenario planning at New York's Parsons School
of Design and the Summer Institute of General Management at Graduate School of
Business, Stanford. Ashni mentored Big Baazar and Family Centre, the new format of
the value retailing. Ashni has been appointed as Director of Future Ideas and leads the
incubation team while her cousin Vivek is Director of Home Solutions Retail, the
group's fastest growing segment. The other children in the family are expected to join
family business once they completed the education though there is no compulsion for
anyone to join family business. The next generation of Biyanis are being groomed to
take on the role of mentors to guide the different segments of business. The family
has created a family office which has seven family members. The objective is to give
the group business a strategic direction while separating family and business interests.
Frequent meetings are held to share ideas and discuss future possibilities. The seniors
in the family impart tacit knowledge to the next generation.
20. Lupin: The siblings Vinita and Nilesh Gupta are in charge of Lupin, the Rs 11,086-
crore pharma conglomerate. The Chairman and Founder Desh Bandhu Gupta, handed
over the company's rein to his children. Vinita, a pharma graduate and an MBA from
Kellogg Graduate School of Management, was appointed as the CEO, and her role
and responsibility was to concentrate on the Lupin`s business in the US, Europe and
Japan. Nilesh was appointed as Managing Director, and is responsible for the research
and manufacturing. The sibling underwent efficient training and grooming by their
father and Kamal K. Sharma, Vice Chairman, before they were given the
responsibility to lead the one of the biggest pharma conglomerate.
21. Max India: At 23, Tara Singh Vachani, daughter of Max India Founder Analjit Singh,
came up with an innovative idea for the health care and insurance addressing the
needs of 60 years and above age group. She started Antara Senior Living a residential
project for people above 60 in Dehradun. She had to carve out her territory and her
own charter. The basic traits that helped her scale new heights were her strong
emotional quotient, her ability to do multi-tasking and her sensitivity towards issues
and organization. Besides taking care of her core project, Tara also plays a key role in
the group's decisions. She is a member of the group's CEO council that includes the
leadership teams of all businesses and meets four to five times a year. She has helped
the group grow manifold.

22. Piramal Enterprises: At 31 Nandini Piramal , daughter of Ajay and Dr. Swati Piramal,
leads 'operational excellence' at Piramal Enterprises which has a market
capitalization, of Rs 11,606-crore, owned by her parents. She has strong conviction
that quality should be the top priority and all should make it happen. She put in place
a system of surprise audits. After the U.S. Food and Drug Administration raised the
bar, these audits were made more stringent. This gave enough reason to her parents, to
have made her to join the family business as a general manager of the operational
excellence department in 2006. A graduate from Oxford University and MBA from
Stanford Graduate School of Business she worked at McKinsey before joining the
family business. Even as a child she loved walking around manufacturing units and

46
 she would often point out areas that needed improvements," says Swati. She keeps a
watchful eye on 11 such manufacturing plants, of which six make USFDA-approved
drugs, leads the HR vertical that takes cares of the 7,000-odd employees, strategizes
the Over-The-Counter business. World Economic Forum chose her as one of the
Young Global Leaders. Her brother who loved design and architecture concentrated
on Piramal Realty. The Piramals feel that their children have brought multifarious
strengths to business.

23. Emami Group: As a kind Priti Sureka escorted her dad Mr. R.S. Agarwal, Co-Founder
and Joint Chairman of the Rs 7,000-crore Emami Group, to his work place. Priti had
shown inclination toward the business ever since she was in fourth standard. Her
passion was to develop new products. She also looked after strategy, promotion, R&D
and brand building. She is the only woman on the sixteen member board of the Rs
1,800-crore flagship company Emami Ltd. She said that she could leverage her
strengths due to the supervision of her father and the support of family members
involved in the business.

Discussion
The current study undertook the investigation of twenty three family-run businesses who have
adopted gender equality in their family and business. In some cases the children were
oriented towards the family businesses in the early age, in some cases children had natural
inclination towards their parents business and in some families children had freedom to
choose their career and there was no binding on them to join the family business. It has also
been observed that these parents were not prejudiced towards their sons, they provided equal
opportunity to the sons and the daughters in the family to participate in their business, and
were determined to let their children prove their worth for the business and choose the most
competent one to lead the business. These findings were in contradiction to the work done by
(Allen & Langowitz, 2003 and Miller et al. 2003) who said that the family business is
profoundly influenced by the societal framework and there was a sex-based partiality that
preferred sons over daughters as management inheritors irrespective of their capability or
personality to lead. Our finding were also inconsistent with the finding of the (Astrachan &
Whiteside, 1990; Nelton, 1997; Cromie & O‟Sullivan, 1999; Martin, 2001; Estess, 2001;
Sherman, 2002 and Haberman & Danes, 2007; Rosemblatt et al.,1985) who said that
daughters have been comparatively deprived of attaining necessary training, practical
experience, and collective support to take up the highest role as they matured and further
stated that the female offspring did not receive the equal backing, chance, and education as
the male offspring, and that prevented the daughters from moving toward a decision-making
position in the family business.
We found that in most of the cases the daughters were given the responsibility to lead the
business and in some cases sons were also working alongside daughters in the family
business. This was in incongruity to the findings of Pyromalis, et.al., 2004; Kealting and
Little (1997) Dumas, 1992; Kealting & Little, 1997; Stavrou, 1999; Miller et al., 2003,
(Miller, et all., 2003) who found that there existed a noticeable bias against women in the
succession process in the family businesses and even found out that, even if the daughter was
the primogenitor, she was not considered to run the family business. This was also in
contradiction to the finding of Hollander and Bukowitz, (1990); Dumas, (1992) who found in
their study that fathers do not see women as having the capacity and experience necessary for

47
running a business even after daughters entered the family firm and proved their competence
over a period of years.
The owner manager of the twenty three family businesses which were studied recently
announced that their daughters would take the lead role their businesses. Our findings are in
congruence to the study done by Aronoff (1998; 1999) and Martínez, (2009) who said there
is growing involvement of women in family businesses; increasingly considered gender
neutrality and team leadership. We found that the women who had inherited their parent‟s
family business had helped their companies to grow using their intellect, tact, passion and
commitment. These finding were in accordance to in the study by Vera and Dean, (2005)
which brought out that women brought new opportunities and advantages on joining the
family business. The young female successors were appreciated for their maturity and
empathy with which they handled the issues and problems in the organization and were less
dictatorial in approach. The proactiveness with which they took innovative initiatives, the
courage with which they coped up the unimaginable challenges, the tact with which they
handled people related issues, the vision with which they spearheaded the organization to
new directions and new heights hold testimony to the fact that women are equally competent
to take up the leadership roles and in many cases may prove to be better than men. These
results were in accordance with the (Dumas, 1989; Alimo-Mecalfe, 2002; Danes, Haberman
McTavish, 2003) who in their research indicated that as females are socialized differently
within both families and business systems, they had the capability of communicating and
solving problems differently than their males counterparts women were more fascinating,
influential and transformative leader in comparison to men and were able to intellectually
stimulate others. Our findings were also in agreement the research of Vera and Dean, (2005)
who found that in comparison to men women were less mistrustful, more peacemaking, less
dictate, more focused, more sympathetic, more malleable, more poise, cooperative,
compassionate, sought opinion of others and took unbiased and rational decisions, attended to
both business and family well-being. Finally it was also observed that the daughter broke the
traditional barriers and entered the world of business ownership at an unprecedented pace,
shared the family values, took pride in furthering the family traditions, had a desire to make
their family business grow, worked hard to earn respect in the family business, proved their
professional expertise and live up to the expectations of their parents.

Conclusion
Although, earlier in the succession process of family businesses, there was discrimination
based on sex, in this research we have found that there are families that give the same
opportunities to their offspring independently of their gender. As more and more firms are
headed by women, it is likely that many of the traditional barriers regarding women as
successors in family business will be totally dismantled. With globalization and fast moving
business environment creating unpredictable challenges the family businesses, there is an
urgent need for the predecessors in the small and medium sized family businesses to discard
their orthodox mindset. They need to involve and groom the children in the family
irrespective of their gender, to take up the daunting task ahead and hand over the baton of the
business in the most competent hands to ensure incessant existence and sustainable growth of
the family business.

Limitations and Future Research Agenda

This study is restricted to investigating a handful of age old family businesses in India. A
similar study can be replicated in the other developing countries across the world of the

48
country to get a better perspective. Further research can be taken up to understand how
aspects culture, technological disruption, globalization, increased competition etc. affects the
succession in the family businesses, measures taken by women successors to manage the
survival and growth of their family businesses in today`s era uncertainty and economic
slowdown across the globe. A mix of qualitative and quantitative and techniques to would be
much helpful in deriving realistic conclusions.
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prédécesseur/successeur sur le déroulement du processus de succession dans les
entreprises familiales, 41 Congrès de l'Académie de l'Entrepreneuriat, Paris, France.

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 19. Francis, A.E. (1999). The Daughter Also Rises: How Women Overcome Obstacles
and Advance in the Family-Owned Business, Ridi Publishing, San Francisco, U.S.A.
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(4), 513-531.
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50
 DIGITAL INDIA – TRANSFORMING CUSTOMER RELATIONSHIP
MANAGEMENT IN HIGHER EDUCATION
7
B. Suhasini
8
Dr. Santhosh Kumar N
Abstract
Digital marketing and communication is the key to build the long term relationships with
customers and effective service delivery. The customer interaction has increased rapidly with
enhanced multi touch points communication through Customer Relationship Management
(CRM) applications for better customers connect. CRM adopts true multi-channel
communication strategies integrating various social networking tools for wider reach in the
market to increase visibility, business outcome and to enhance the brand value of the
organizations. The Government of India‟s active promotion and various projects initiation
from them have set as an example and trend across all the business and social sectors in India
to work towards the digitization of various services that they intend to provide to its
customers quick and ease of use services. The Higher education sector is one playing major
role and catching up with all latest trends of digital initiatives in terms of customer reach
activities during admission and enrollment, course delivery for teaching and learning, skill
development etc. The data points and leads generated from various social media sites such as
–Whatsapp, Twitter, Facebook, LinkedIn, Blogs, YouTube, Pinterest, Google+ etc. that have
been linked up with CRM communication systems, are adding value in Customer services
delivery. The article is further intended to analyse various benefits of these digital
transformation using CRM in higher education.
Keywords: Digital marketing, Social Media, CRM, Multi-Channel Communication, Data
Analytics, Higher education
Introduction: Digital Marketing and Communication
The information sharing by the individual/organizations became easy and it is available
easily to access by the customers at fast rate through use of digital communication. Internet
being the essential service, many users found to be using various digital forms – SMS,
Emails, YouTube, Facebook, twitter, Whatsup etc as a common medium for any interactions
required with any individual or organizations. The choice of the customer has scaled up with
use of social networking than before. The digital path between the marketing firms and its
customer became effective with the ease of access to technology, any time and any place. The
digital communication plans at various stages of customer interaction has built the strong
customer relationship. With the use of social media, the engagement between the customer
and organizations have taken a new path in digital marketing communication and customer
relationship building.
In the era of social networking, the choice of the customer has changed drastically than ever
before. Every organization is working towards leveraging the potential of its people, process
and technology for better social collaboration and customer connect activities through multi-
channel digital communication. Apart from regular one to one personal presentations, retail
outlets for service demonstration to customers, the organizations also interact with their
customers through many channels like traditional telephone to advanced CRM integrated

7 Research scholar, School of Management, SRM University, Kattankulathur.

Email-suhasini.b@srmuniv.ac.in
8 Assistant Professor, School of Management, SRM University, Kattankulathur.
51
digital call centres equipped with well-trained Business Process Outsourcing Executives,
Television displays to interactive information kiosks for Customer self-navigation, Paper
pamphlets to paperless bulk emailing, website portals, simple mobile SMS text to animated
digital brochure through 4G technology. These Integrated digital communication services
provides opportunity for better customer experience, ensuring the communications and
services that the customer being provided through different channels are well coordinated,
meeting the customer expectation and their area of interests.
The customer relationship orientation have advanced with technology advancement,
increased competition in the markets, growing demand for service sectors, and adoption of
quality management programs. Organizations have moved carefully towards customer centric
with the advancement of technology in terms of Social Media, Cloud technology, mobility,
business Analytics etc. which are affordable, easy to use and available. In India, the Markets
have opened up after liberalization, initially the share of the service sector is low, but now the
service sector contributes more than 60% of Indian economy. The firms belonging to
Airlines, Banking, Hospitality, telecom etc. are the early adopter of CRM, where the
customer interaction is key for providing their services. The quality moment is another
critical factor in CRM, where the customer experience and satisfaction are monitored and
reviewed for process and service improvement by the organization. The digital marketing
plays a crucial role in initial part of customer journey in attracting and satisfying their need,
whereas CRM focuses towards retaining and enhancing customer relationship. Thus the
digital marketing and CRM complement each other in entire customer journey in any
organization.

With increased competitiveness, and various digital initiative mandates, policies devised by
Government of India for quality service delivery, The Higher education sector is one
constantly working out its strategies to catching up with all latest trends of digital initiatives
in terms of customer reach activities during admission and enrollment, course delivery for
teaching and learning, skill development etc using various medium of digital communication
technologies. The data points and leads generated from various social media sites such as –
WhatsApp, Twitter, Facebook, LinkedIn, Blogs, YouTube, Pinterest, Google+ etc that are
been linked up with CRM communication systems are adding value in Customer services
delivery. The article is further intended to analyse various benefits of digital transformation
using CRM in higher education.

Customer Relationship Management – Understanding and Literature review

Many practitioners and industry consultants viewed CRM as technology enabled processes
for customer interaction and relationship building, where as the academic community termed
as relationship marketing. CRM system is one of the key technologies that is been
prominently adopted by various industry sectors for establishing multi-channel
communication. A CRM system was defined by Payne and Frown, 2005, as a way to unite
the potential of relationship marketing strategies and Information Technology to create
profitable, long-term relationships with customers and other key stakeholders. It involves
using technology to synchronize interactions with sales, marketing, customer service, and IT
support (Shaw 1991). According to Boulding et al. (2005), the CRM is reviewed as: "a
strategy, managing the dual-creation or value, the intelligent use of data and technology, the
acquisition of customer knowledge and the diffusion of this knowledge to the appropriate
stakeholders, the development of appropriate (long-term) relationships with specific

52
customers and/or customer groups, and the integration of processes across the many areas of
the firm and across the network of firms that collaborate to generate customer value".
The organizations focus on CRM as a strategic business approach has increased due to shift
in business approach from transactional marketing to relationship building, transformation of
organizational structures, business functions to process orientation, benefit of using
consolidated customer needs/interests as proactive information than reactive in providing
various customer insight service offerings. The organization could perceive this shift only by
leveraging cost effective cutting edge technology.
It is recommended to look at the four critical elements such as CRM readiness assessment;
CRM change management; CRM project management; and employee engagement for
implementation of any CRM system. As mentioned by Payne and Frow 2005, it is worth
reviewing the five core CRM processes such as Strategy development process; Value
creation process; the multi-channel integration process; The Information Management
process and the performance assessment processes by any organization as conceptual model
before developing the CRM strategy and implementation plan of the any CRM solution.
Customer connect and Identification of Touch points
A customer touch point is represented by an action, tactic, or strategy initiated by the
business organizations to reach its customer or stakeholder to establish the contact between
them for further exchange of information or service. The interactions that happen between
customer and service providers or business organizations is called as touch point or point of
contact or contact point, which brings customer experience and satisfaction. According to
Davis and Dunn, these touch points may be identified in three stages during the customer
journey, 1. Pre-service or purchase, 2. During Service or Purchase, and 3. Post Service
delivery or Purchase.
CRM is widely used by the organization in marketing, sales, communication, and service
operations. The customer care approach of any organizations are intended to identify its
customers, create a relationship between its customers and organization through various
touch point services, that continues throughout the customer journey over many interaction,
transactions, and manage the relationship to the benefit of both the customers and the
business progression of the organization.
The Organizations should constantly identify and do a value based segmentation of its
customer base into relevant groups, according to their customer service needs and area of
interest. Increasingly, organizations focus should work on deploying their resources on those
customers, who are most worth to them, or on to those customers, whom they feel that they
can influence further increasing their business. This is seen notably in most of the service
sectors like Banking, Airlines, Hospitality etc., where the exclusive relationship manager
been assigned by the organization to interact and stay in touch to take care of their high net
worth and premium customers.
Multi-Channel communication and its relevance
Customer Relationship Management adopts true multi-channel communication strategies
integrating various social networking tools for wider reach in the market to increase visibility,
business outcome and to enhance the brand value of the organizations. The Multi-Channel
Integration Process involves decisions about the best combination of channels for customer
segmentation, value propositions development and lifetime value creation. This will help
organizations to understand how value should be created for the customer, how to bring in a

53
superior customer experience within and across all the multi-channels in which the company
interacts with customers. As per McKinsey & Co, 56% of all customer interactions happen
during multi event and 38% of all customer journeys involve more than one channel of
interaction. The Customer journey using multi-touch, multi-channel and cross functional
communication brings the moment of truth and gives highly positive customer experiences,
when the Customers interact with organizations cut across various individual touch points –
products, marketings, online, call centre.

According to Telecom Regulatory Authority of India (TRAI), India had 936 million active
mobile connections in March 2016. Of these, 220 million are smartphone users. This number
is estimated to reach to about 300 million. By 2019, it has been estimated that there will be 2
billion users of smartphones in the world. India will continue to be a major contributor to
smartphones market. As of today, almost 35% of Indians are internet users. India‟s share of
internet users in the world is 14%. With the increased penetration of Internet, Smartphones
and various other Smart Gadgets in developing countries like ours, have given ways and
means for developing new education models apart from formal education system that are
relevant and meaningful to reach out to larger audience, even in remote areas. In order to
promote such digital courses that are beneficial for various user groups, the Education
institutions have to work on their multi-channel communication for better reach. Hence, the
Digital and Mobile internet today are playing major role making the education system in the
country far more effective.
In Higher education, the seamless integration of administrative systems with institutional
computing and communications systems, database systems have let to quality service support
to any customer at any time. Establishing the strong customer base become the prime focus
for any Higher education institutions to initiate and promote any teaching and learning
service packages. The CRM tools with multi-channel capability provides easy access to
information and provides seamless services delivery to Students, alumni, faculty members,
and staff members through various web enabled portals, anywhere in the world. The business
and academic transactions will become smooth and quick with well-defined and integrated
business rules, business process workflows in the applications platforms to a single
organization wide database of student, alumni, staff, finance, and human resource systems.
Digital Initiatives and Governing bodies
The public sector has also seen importance of CRM and seems to be no less in following the
disciplines of direct and relationship marketing along with other industry sectors. The CRM,
is even widely accepted and being used across all the public sector firms for their service
interactions, pertaining to their governance requirements and service delivery to reach out to
their citizens. In many countries, central and local governments and other public bodies are

54
focusing on open government, establishing improved electronic access and communication to
its citizens, and enhancing the service quality in delivering various social welfare
programmes and schemes, yet retaining the strong traditional focus of government on cost-
effectiveness. The digital technology and communication channels have given opportunity to
various governing bodies at central, state, local government and other public agencies to
transform themselves and come out with various initiatives of e-governance for benefit of
society at large.
Digital campaigns were initiated by Government of India to its citizens of all kinds with a
vision to make the country empowered digitally in the field of technology in par with any
other nations in the world. The steps were taken by the various Government sectors divisions
to provide their services to common mankind electronically any time seamlessly using online
infrastructure. The acceptance and awareness of the technology has led the transformation
smooth, also with the increased internet connectivity through multiple competitive service
provider ensured the service availability and uptime reasonably better than earlier days.
Education industry is no longer less competitive as compared to any industry adopting and
using various digital platforms for delivering various services in academic and research.
Educational institutions, at every level – primary, secondary and higher, are run like any
other corporate organizations. Educational institutions are targeting the same pool of
audience, in any country. The institutions are required to define various quality parameters,
for their academic and administrative functions, to ensure that their growth is consistent, and
they also to retain their customers – students, faculty and society at large.
Almost all the educational institutions, in India or abroad, have a framework, and defined quality
parameters that ensure good governance. Regulatory bodies of national repute such as NAAC
(National Assessment and Accreditation Council, MHRD (Ministry of Human Resources
Department), or UGC (University Grants Commission) give various directions to the Governance
of various institutions of Higher education. NAAC was constituted in 1994 to address the issues
related to quality of education. NAAC has worked out the strong strategic plans and came out
with various educational policies, including establishing an independent national accreditation
body. NAAC seven criteria for grading the institutions in terms of

  Promotion of Research
 Resource Mobilization for Research
 Research Facilities
 Research Publications and Awards
 Consultancy
 Extension Activities and Institutional Social Responsibility
 Collaborations
Accreditation agencies review various parameters before accrediting a program or an
institution including the use of digital technology. They also have regular review mechanism
to monitor the ongoing academic and administrative activities of the institution to ensure that
the quality of the teaching, learning and research is not impacted. Innovative trends in
teaching, technology adoption in teaching, online courses, e-learning, etc are introduced
through the well-integrated learning Management system platforms such as SWAYAM,
Coursera etc., to enhance the overall student learning experience with any time access,
quality content. This has helped a lot to improve collaboration among students and
teachers/faculty members, especially beneficial to students, who are unable to have formal
regular higher education, to have continuous learning on their own pace while at work.

55
Few of the institutions also have come forward to introduce the skill based training programs
to improve the employability of the graduating students using various digital mode delivery.
Some institutions have established the entrepreneurship hub and incubation centers to
motivate entrepreneurial mindsets among students in developing various relevant apps for the
benefit of society. National Institutional Ranking Framework has been introduced by
Ministry of Human Resources Department in 2014. The framework is designed and
developed using the scientific methodology and follows several parameters like resources,
research and stakeholder perception for ranking purposes. Such innovative techniques are
always encouraged by the accreditation bodies and ranking agencies while they accredit and
rank the institutions. Government of India has always come forward and introduced many
quality measures such as NIRF to ensure that the teaching and research in higher education
institutions using digital technology are recognized and rewarded suitably.
Digital Learning Platforms
Technology has also disrupted learning models. These disruptive models are impacting the
education landscape. Student engagement has today assumed a different meaning. No longer
is it restricted to the classroom engagement only. It increasingly goes beyond and often
stretches into the personal time of the faculty. MOOCS, Khan Academy, Learning
Management Systems like Blackboard and Moodle today challenge faculty‟s ingenuity in the
classroom. In order to reach out to a larger segment of engineering students, IITs have
created a Digital Learning Platform. Similarly, Government of India has created a platform
(SWAYAM – India's version of MOOCS) to upload the course contents and the faculty
lectures, so that the students anywhere in the country can access and learn. Such digital
models, whether supported by the government or otherwise, challenge the faculty to
creatively integrate them in the classroom. This can make learning process far more enriched.
In a country like India, where the number of mobile connections exceeds 1 billion, offering
education programmes on the mobile phones is the way forward.
These technology developments present a new world of competition to the formal education
system. As mentioned earlier, MOOCS and therefore platforms like Coursera, Udemy and
Edcast are challenging education delivery models. Likewise, the videos on YouTube, Google,
Wikipedia, Facebook etc, challenges the conventional models of course design, delivery and
student engagement. The future developments in this area will be in regional languages too.
Khan Academy for example offers tutorials in 23 languages in the world which includes
Hindi, Bangla, Arabic, and Urdu, besides English. Google is available in nine major Indian
languages. This helps in connecting with the local population for whom English still
continues to remain an alien language.
The stakeholders – students, faculty, parents and society at large, have always looked up to
the institutions who are accredited by the various national and international accreditation
bodies and ranking agencies of national and international repute. It is highly critical for the
institutions to get accredited to deliver the qualitative program delivery, consistently without
using such cutting edge technology for their administrative and education delivery systems.
Quality of faculty, infrastructure, teaching aids and learning resources, campus life, students
diversity, connect with various industries and corporates, employability, skill development,
certification courses, alumni involvement in institutional building activities, etc define the
success of the institutions. Hence, it is equally important for the institutions to ensure that the
stakeholders‟ involvement in overall strategy and institutional building activities is taken care
with utmost attention. The active participation from the stakeholders, especially students,
parents, alumni, industrial and corporate bodies gives the fresh perspectives to the institution

56
and creates an institution that is socially responsible and caters to emerging trends in
education and research.
Benefits of digital transformation in higher education and CRM Stakeholders
The changing phenomena of socio-political environment has made the Higher education
institutions and the universities to be more responsible, accountable and cost-effective. The
service quality has become an important parameter all time to be considered in the education
section, specially the Higher education. The five dimensions such as reliability,
responsiveness, assurance, empathy and tangible are required to be reviewed by the Higher
Education Institutions from time to time. With these parameters, the services offered by the
institutions need to be checked periodically, if they are providing the reliable and correct
services to its constituents like students, faculty, staff etc., as promised, whether the defined
services been delivered to their constituents as per the commitment, within agreed response
timelines and delivering the service with willingness, trust and confidence.
The CRM process should support various stakeholder of Higher education and setup truly
robust institutional processes bringing entire institution together to single gateway of service
delivery. The focus of higher education should be towards knowledge creation, providing
excellent academic services to this stakeholders along with robust administrative systems and
processes in place. The key constituent service points like
Students – The technology became integral part of any learning environment. The demand
for anytime and anywhere access to information among the student constituents have brought
high standards for various learning platforms, application portals that provide access to
student community for their academic and administrative transactions. The communication
channels between student services and faculty community are made more virtual and instant
than earlier days. The student‟s progression in entire student life cycle from prospect to admit
to alumni involves complex interaction through cutting edge technology at each stage.
Particularly, students being technology-savvy, who are inclined towards more of self-learning
these days, expect the self-driven learning platforms and communication channels. They
intend to choose the institutions that meet their area of interest on their own terms, meeting
their learning schedules. These are achieved only when the effective digital learning tools and
support systems are in place.
Faculty Members – In the changing learning environment, the faculty and student services
should have close access link, enabling dynamic information resource sharing for student
learning, academic performance and tracking. The institution should identify if there is any
disconnect between student services and educational programme delivery and work towards
seamless computing platforms for academic learning. A system that is dynamically linked
with students, faculty curriculum planners etc gives a different student learning experience
than formal way of teaching. In many countries, Internet-based online instructional delivery is
now the fastest growing in higher education. Massive Open Online Courses (MOOCs)
technology platforms provided opportunity to faculty community across top universities to
teach their advanced courses to many number of students and professionals. Integration of
digital technology in research collaboration and exchange of subject matters with industry
experts will enhanced the research outcome of the faculty community. The active
participation by the faculty members in various digital initiatives, social networking forum
and contribution to various digital technology platforms helps in knowledge sharing.
Administrators – A CRM business strategy for a college or universities management intend
to introduce a true self-service system that empowers the administrative team to carry out the
administrative activities efficiently. This helps the administrative staff focusing on more

57
productive, rewarding, and customer satisfying activities. This helps them to complete all
business processes, such as making personal connections with students, faculty and staff,
external academic experts, maintain their information from time to time, providing secured
access to vital information as and when business transaction is needed.For colleges and
universities, such well-defined systems and processes in place by the administrators increases
business revenue through improved enrollment, recruitment and retention. This also helps
reduce recruitment costs and improves customer services.
Conclusion
The academic institutions are working to enhance the value and effectiveness of their existing
customer relationships with changing scenario of economic, technological, and cultural
environment. As institutions moving ahead with e-business and e-learning technologies, as
the driving forces makes their CRM system stronger and effective. The important aspect is to
recognize the students, alumni, faculty members, and staff members as key “Customers or
Constituents”. This will help the higher education institutions to further identify, differentiate
and trigger the communication to attract, retain, and serve its customers of all types from time
to time, through various digital campaigns. Universities have started various innovative
initiatives to identity, connect and continuously engaged with their customers to create wow
experience by deploying various technology tools and solutions including CRM. Thus CRM
is one of the many powerful technology system facilitators emerged to handle both internal
and external customer activities to acquire, generate, capture the knowledge for, knowledge
from, knowledge about the customer.
This paper touch based with a theoretical background of digital initiatives of Government,
followed by a literature review of CRM, its implications for universities and others
institutions of higher education as well as its reinvention. CRM Success is highly dependent
on well-defined processes and user adoption in place. The organizations can deploy effective
resources in terms of Technological CRM resources that are used for carrying the external
and internal operations with customers and facilitating the organizations the collaborative,
operational and analytical operations for better results with improved use of all
communication channels. At the same time, the organizations should also focus on the
infrastructural CRM resources including Human CRM resource for seamless understanding
of CRM processes across the organization and to stay relevant with changing technology.
The adoption of digital technology with well integrated social networking communication
tools and CRM system will enhances the performance of the institutions to sustain the
business competition, improve the brand value and visibility across the local, national and
global knowledge economy space.
References
1. The Marketing Book by Michael Baker, Susan Hart.Customer Relationship
Management: from Strategy to Implementation, Adrian Payne and Pennie Frow,
Journal of Marketing Management, 2006, 22,135-168
2. Direct and database marketing and customer relationship management in recruiting
students for higher education, Alan Tapp, Keith Hicks, 2004, International Journal of
Nonprofit and Voluntary Sector Marketing Volume 9 Number 4
3. A process-oriented perspective on customer relationship management and
organizational performance: An empirical Investigation, Abbas Keramati and Hamed
Mehrabi, March 2010, Industrial Marketing Management

58
 4. Understanding Customer Experience throughout the Customer Journey, Lemon,
Katherine N and Verhoef, Peter C Peter C, Journal of Marketing. Nov2016, Vol. 80
Issue 6, p69-96. 28p.
5. The Reinvention of the Constituent Relationship Management (CRM) System in
Higher Education in Africa, Mboungou Mouyabi SEKE, International Journal on
Communications (IJC) Volume 4, 2015
6. Organizational factors influencing effective use of CRM solution, Urban Šebjana,*,
Samo Bobeka, Polona Tomin, Procedia Technology 16 (2014) 459 – 470
7. Customer Relationship Management: A Vision for Higher Education, Gary B. Grant
and Greg Anderson, A Publication of EDUCAUSE and NACUBO
8. Social Media for Higher Education: Prof (Ms) Vasudha Kamat
9. http://www.qswownews.com/2017/05/30/indian-higher-education-opportunities-
transformation/

59
 GROWTH IN INDIAN RAILWAYS SECTOR WITH MAKE IN INDIA
INITIATIVE
9
Dr. Beena John Jiby
Abstract

India is urbanizing at a rapid pace. India's manufacturing sector has over the years evolved
through several stages. The new National manufacturing policies intend at increasing the
manufacturing GDP‟s share to twenty five percent and create a hundred million jobs in a
decade. With „Make in India‟ initiative the government has envisioned it. One of the major
focus areas for the government is Railways. Indian Railways (IR) transport network connects
the whole country and is fourth largest transportation and logistics network in the world.
Modernization of Railway infrastructure is a main concern and Rail Budget has invested
immense sum for next successive five years, and FDI play an extremely crucial role. Greater
stress on FDI influx has been planned by permitting one hundred per cent FDI in Indian
railways. This paper provides an overview of what has been done so far and what more needs
to be done in Indian Railways. It shows that it needs FDI in order to compete with other
transport modes like airways, road and water ways. There is a huge difference in the growth
of GDP contribution and growth of Indian railways before and after Make in India initiative.
It also studies the investment inflows in railways pre and post make in India campaign and
the growth of Indian railways.

Keywords: Make in India, Indian Railways, FDI,

GDP Introduction

The improvement of manufacturing sector has been a main objective of India‟s economic
policy that Started in 1956 with second five year plans. In September, 2014, Prime Minister
Narendra Modi, launched „Make in India‟, initiative to make India a worldwide
manufacturing hub as it is the economic backbone for a growing emerging market.
(Chattopadhyay, 2015). Different studies show the role of industrial growth in a countries
economic development. Indian economy which was earlier agriculture based, is now turning
towards manufacturing (Cashin & Sahay, 1996). Manufacturing sector contributes around
Sixteen percent of India‟s Gross Domestic product and to be increased to twenty five percent
in next few years. The aim is to initiate reforms in key sectors as transport plays a very vital
role in the country‟s economic development, overall productivity and economic growth.

A.T.Kearney‟s 2007, report on Global Services Locations Index, ranks India in terms of FDI
attractiveness as a -liked destination in World .The government intend to advance India‟s
ranking in World Bank‟s Ease of Doing Business Index from 132 (among 185 economies) to
50 in three years, and govt. has planned twenty five key sectors and one main sector is
railways.

9 Associate Professor, Saibalaji Education Society, Pune-33. Email- beenajohn7@gmail.com

60
Introduction to Indian railways

Indian railways started its initial fifty three kilometre journey between Mumbai and Thane
on calendar month April 16, 1853, is said as „Indian economy lifeline”. Its world‟s fourth
largest rail network, second largest managed by one management, world's largest passenger
traveller carrier and fourth largest freight carrier. (Bogart,2013, N. Kumar and N.
Kumari,2012).Indian Railways carried 8221 Million Passenger in 2016-17 and carried 923
million tons of freight. (Indian Railways, 2016). Railway infrastructure
Modernization is a main concern (Pradhan & Bagchi,2013) Rail Budget 2015-16 has
projected an investment of Rs. 8,56,020 crore for next 5 years, with FDI taking a
significant role. It includes stronger track with scientific metallurgical superior
rails, progressive state-of-the-art electric and diesel locomotives with higher horse
power, modular lightweight high speed traveler coaches, with higher payload. Other plans
are block proving by axle shaft counters, solid state inter-locking ,centralized electronic
interlocking, universal emergency communication for signalling and safety, optic fibre and
digital microwave in communication, twin voltage three-phase electrical Multiple Units for
suburban services , Diesel Multiple Units (DMUs) and Main Line Electric Multiple Units
(MEMUs) for mass intra-urban and suburban traffic. (Indian Railways,2016, J. S.
Mundrey,2009).The Indian Railways is planning with Public Private Partnership (PPP) model
renovation of railway stations with higher traveller facilities and use data technology in
railway management and operations to improve efficiency, cut cost, and safety along with
doubling/tripling/quadrupling works for capacity improvement. The Goods sheds
strengthened and Workshops capacity enhanced to accommodate larger volume, wagons and
coaches‟ maintenance, electrification and signalling of telecom works. (Indian Railways,
Singh and Kathuria, 2016).
The Government of India is also building Industrial Corridors for increased global investment
with objective of increasing manufacturing share GDP with smart sustainable cities.
Modernization of Indian railways may contribute an added 1.5% to 2% GDP growth.
(National Transport Development Policy Committee (2016), N. Kumar and N. Kumari,
2012).

Indian Railways Production Services

Railways have their major business in long-distance freight and passenger‟s transportation,
making it important to establish active cooperation with state governments may build
railways as a speedy mass-transit system with effective superior value, user friendly
transportation. (Ram Chandra Acharya, 2000, Ajita Mattoo,2000).
Indian Railways manufactures most of its heavy engineering elements and rolling vehicle
stock from its ten Production manufacturing plants as rail technology has matured in the past
century and a half and is very costly (J. S. Mundrey, 2009) .
The Indian government is introducing metro railway line across several cities in next 10
years and is already operational in NCR, Jaipur, Bangalore, Kolkata, Kochi, Mumbai,
Chennai, Hyderabad and in initial execution/planning stage at Ahmedabad, Pune, Lucknow.
Many cities also comprise their own suburban networks to cater to commuters and operates
in Kolkata (Calcutta), Delhi, Mumbai (Bombay), Pune, Chennai (Madras) and Hyderabad.
Pune and Hyderabad lack separate suburban tracks and share it with long distance trains.(
Singh. P, Kathuria, R. and Shuji ,2016)
Ministry of Indian Railways is planning self-propelled train sets, which travel at the speed of
160 KMPH and Integral Coach Factory has taken up the project. Earlier train compartments

61
were imported; now the latest compartments are made in India at Chennai and train sets with
3-phase propulsion manufactured at two-third cost manufactured in international market.
Countries with high-productivity turn out obtain more growth compared to lower-
productivity countries. It's not the number of exports, but the technological content and
category of exports that matters for growth and potential export performance (Anand et al
(2012), and higher export sophistication is additionally related to higher growth. Mishra et al
(2011). India is well-positioned to profit from its current railway component exports however
it requires, bigger infrastructure investment, skills to increase the standard. India has exported
metro trains‟ compartments to France and Australia last year. With expansion of existing
metro and mainline rail networks there is a huge business offered by India. Also, as per the
reports, there will be a demand of 2000 metro trains in India in the coming 5 years with new
Railway lines.

Literature Review

India at present has become the land of opportunities to explore experiment and understand
with Make In India initiative.
India's transport crisis has been aggravated by the extraordinarily rise of large cities due to
restricted obsolete transport infrastructure, suburban sprawl, increased car possession,
deteriorating bus services with many differing transport modes along with inadequate
uncoordinated transport planning design. (John Pucher. et al., (2008), Ananya Roy, 2009, S
Uchikawa, 2016). The rapid growth in suburban cities expansion led to increased distance to
be travelled for jobs and basic services (Kahn et al., (2007).The urban population grew nearly
thirteen times in proportion to overall population and railways a sought after mode of
transport though they account for twenty percent of the overall passenger/km carried by
Indian Railways (Ram Chandra Acharya, 2000). In mega cities with over ten million
populations, average travel distances have risen up to 9-12 kilometre. Cities with 2-5 million
populations like Surat, Pune ,Kanpur, etc. have a median trip distance of around six
kilometres with high NMT share of forty to fifty per cent and in cities with population
between 1- 2 million this share increases to sixty to seventy per cent (Roychowdhury,2013).

Indian railways infrastructure suffers from chronic under-investment, and its potential mostly
untapped hence scope for FDI in Indian railways. India is 2nd largest country by population
but consumers are not happy with services provided. Government has increased its scope, and
provides maintenance and other such supporting roles. (Rastogi Ankit (2012).

Railways have a high level of efficiency however when run by management or government;
it's comparatively inefficient and Indian railways is also one. The study brought proof for
why efficiency gaps exist (Regulations, laws and infrastructure constraints, like laws relating
to freight train length, have a serious impact). Freight traffic moves on tracks around the
same schedules as of passenger trains and efforts are also required to boost efficiency from a
monetary perspective. Beck Arne et al., (2013), According to IMF report 2010, Indian GDP
(10.6%) grew quicker than China (10.4%) in 2010. and its GDP increasing share contribution
has drawn worldwide attention. According to them there should be FDI in railways. In 1950-
60, the share of Indian railways to service sector was 4.7% and the share in GDP was 1.4%
but had considerably decreased and in 2000-10, the share of Indian railways to services is
2.1% and share in GDP was 1.1%. (Mukherjee, 2012)

Since 2009, manufacturing sector of India is showing reverse trend with its share of GDP
falling from 2.2 to 2.0. FDI is allowed in Railway sector as well. The earlier public sector is

62
now working on a Public Private Partnership model with new technology and development to
increase growth rate. (Bhati Sonam et al. (2014), Shah.H, 2013).

India FDI Policy for Railways

FDI is allowed in many sectors in India and they opine that FDI to be allowed in Indian
railways to satisfy the existing demand of travellers and freight. (Dwivedi Priya et al. (2013)
To attract FDI in manufacturing, government started Make in India campaign despite
macroeconomic doubts and financial risks. The FDI increase is to a great extent more than
the rest of developing Asia, which had a growth of 15 percent across 40 economies according
to UNCTAD Report.
Government of India as per Vide Notification No. S.O.2113 (E) dated August 22, 2014, has
spread out the ensuing activities of Indian Railways for 100 percent FDI under automatic
route subject to laws, regulations and certain conditions.

1. Through PPP suburban corridor projects relating to Construction, operation and

maintenance
2. High speed trains.
3. Committed freight corridors.
4. Railway electrification.
5. Signal systems.
6. Freight terminals.
7. Passenger terminals.
8. Industrial parks Infrastructure concerning railway line/siding together with electrified
railways lines connected to main line.
9. Mass Rapid Transport Systems (MRTS)
10. Rolling stock together with train sets, and locomotives / coaches production with
maintenance facilities.

Problem statement

The main challenge facing Indian Railways is its inability to satisfy customers demand
(freight and passenger). In spite of huge investment, quality delivery with capacity constraint
is a difficulty faced. Indian Railways has suffered from continual under-investment, as a
result network enlargement and modernization has not happened at the required pace
resulting in less share of freight and passenger traffic. There‟s an apparent identification of
the fact that for serving as a national lifeline and for country‟s growth, it has to become
operationally and financially sound as there's a relationship between economic growth and
transport infrastructure investment. (Sahu& Raza, 2015)

Scope of the Study

The scope of the study is limited to the Indian Railways. All The required data are selected
from this area.

63
Research Gap

FDI focus on examining the effects of FDI. While there's important information that similar
studies have opined, a crucial research gap in Indian context has emerged by not evaluating
any predictive relationships between FDI and economic growth after make in India initiative.
This study attempts to find out if there is an impact of Make in India on Railway sector.
There‟s little or no academic information offered regarding Indian railways sector growth
with make in India initiative. It is with this background that the present research was
conducted to appraise GDP growth, (FDI) Inflows and challenges involved.

Significance of Study

In the manufacturing sector over the decades when major reforms and policies were
introduced, India was behind compared to similar developing countries. Make in India‟
initiative aims at making a world manufacturing hub with entrepreneurship spirit for added
inclusive skills growth with manufacturing technological depth for global competitiveness
and sustainable growth. The government has created positive efforts to provide it by
digitization and process generalization. This study takes a glance at what has been done to
this point and what additional must be done to help Railway manufacturing sector.

Objectives

1. To understand Urbanization in India and transport sector projections.

2. To study the growth in railway sector with Make in India scheme.
3. To study the FDI and GDP growth in railways, pre and post make In India Initiative.
4. To study the GDP Share in Transport Sector (%) pre and post make in India initiative.
5. To understand the challenges faced by the sector.

Hypothesis Testing

H1: There is significant association between FDI inflows and growth rate of Indian railways
H2: There is a significant effect between GDP contribution & FDI inflows in Indian railways.

Research Design and Methodology

The study aims to determine the facts as it helps to look at the problem in both analytical and
empirical manner. For this study data is collected from the secondary sources of Publications
from RBI Reports, Planning Commission, Government of India, World Population
Prospects, Ministry of Commerce , CSO, financial websites , official web site and annual
report of Indian railways, Transport Year Book, , Ministry of Heavy Industries and Public
Enterprises (www.india.gov.in), Ministry of Statistics & Programme Implementation , DIPP
and various Journal articles, . To analyze Performance of Indian Railways by FDI Inflows,
data from 2010-16 has been analyzed and future Urbanization Trends studied.

64
Data Analysis and Interpretation

Table: 1- Projected India Urbanization

Source: World Population Prospects, Population Division of the United Nations
Secretariat
Discussion
The pace of progress has changed the transport sector and to meet the urban transport
increasing needs, the Twelfth Five Year Plan recommendation for railways are
1) Rail transport at the rate of ten Km per million populations starting with cities having over
two millionpopulation.
2) Increasing rail transit in existing mega cities (with population over four million) during
next 5 years at therate10kmperyear.
3) In urban agglomerations (population over four million) provide suburban rail services.

14000
11710 11421
12000
10000 8868
8150
8000
2012-13
6000
2016-17
4000
2000
144 269
0
Railway Passengers Road Passengers Civil Aviation
(Million) (Million) Passengers (Million)

Figure-1: Passenger Traffic projection in Twelfth Five Year Plan

Source: Planning Commission
Discussion
The Planning Commission project the transport sector capacity to double per annum, hence
huge investments needed for capacity creation. In the Twelfth Plan it is projected that the

65
infrastructure sector needs vast investment, and the foremost share is going to be in transport
sector.

Figure-2: Gross revenue for Indian Railways in US $ Billion,

Source: Vision 2020, Ministry of Railways.
Note: Compound Annual Growth Rate (CAGR), (April-March)- FY
Discussion

Indian Railways Revenue growth is increasing over the years. Throughout FY 07-15,
revenues grew at a (CAGR) compound annual rate of growth of 7.9 per cent to achieve US$
25.2 billion in FY16. Revenues measure is expected to expand at a CAGR of 13.4 per cent
throughout FY07–20E and revenues have expanded in last eight years. Indian Railways plays
a key role in reviving economic growth and railway investment has a huge multiplier
outcome.

Figure-3: Projected Transport Sector emission decrease by 2020

Source: Planning Commission, Low Carbon Growth Strategy Committee
Discussion

The evaluation Reports of Intergovernmental Panel on Climate Change reveal India is

exposed to climatic changes and transport sector requires technological investment to
increase rail transport share to promote environment-friendly and sustainable public
transport. (Kumar Solanki et al,2016, Eric Lytton et al,2016). Consistent with this along with

66
 other BRICS nations India is also planning. Accessible literature suggests that redirecting
investment to green transport choices will offer similar mobility needs with vital reduced
societal and environment impacts in less cost (UNEP, 2011, Bose, 1998; Vasconcellos, 2001;
Padam and Singh, 2001; Sibel and Sachdeva,2001).
In Copenhagen COP-15 concerning climate change, India guaranteed 20-25% reduction in
emission intensity by 2020. The Planning Commission of India, a professional group was
constituted to recommend a roadmap to fulfill these targets and National Transport Sector
Development Policy Committee (NTDPC) and environment& housekeeping management.
NTDPC created to advise long term complete, sustainable transport infrastructure in the
country. Environment & housekeeping management created to propose relating to Water
audit, rain water harvest, and water recycle plants, energy audit, waste management and
alternate fuel use. The potential for rail transport sector emissions reduction is between 14-22
million tons of CO2 gas for economic growth8% and at economic growth 9% between 15-25
million tons of CO2.

14
12 Overall Transport %
10
8
Railways
6
4
Road transport
2
0
Water transport

Figure-4: Overall GDP Share in Transport Sector (%) at Factor

Cost Source: www.morth.nic.in; (Transport Year Book) Discussion

It is an undisputed fact that country‟s Transport sector is a major driving force. The Overall
Transport sector growth has gone up from 6.9 per cent in 2008-09 to 11.9 per cent in 2015-
16. The Railways sector growth has gone up from 0.9 per cent in 2008-09 to 2.6 per cent in
2015-16; this considerable rise has been due to expansion and acceleration in Railways
sector.
Owing to transport interdependency it will play a key task for India to continue its growth
necessitating demanding investment. Among the various Transportation sectors in the context
of FDI, the railways have great potential and opportunities.

Grand Total 11 6.1 17.1

Airports 0.15 0.56 0.71 Public Investment
Ports 0.22 1.39 1.61 Private Investment
Railways (incl. MRTS) 4.37 1.21 5.58
Total Investment
Roads & Bridges 6.26 2.94 9.2
0% 50% 100%

67
Figure-5: Investment requirements in Infrastructure during Twelfth Five Year Plan (at 2011-
12 prices Rs. lakh crore)
Source: Planning Commission
Discussion

Infrastructure Investment in Twelfth Five Year Plans justifies transports Sector emissions to
encourage sustainable growth. Public transport is to be used to increase efficiency, avoid
overcrowding, reduced emissions and uncomplicated transportation. With growing progress
and growth it may happen to be costly due to increasing environmental cost and energy
dependence hence proper planning required.

Foreign Collaborator Country Indian Company FDI Inflow

(in USD
million)
ALSTOM Transport Netherlands ALSTOM Transport 85.20
Holdings B.V. India Ltd
BOMBARDIER Singapore BOMBARDIER 39.50
Transportation Transportation India Pvt
Holdings Ltd
ANSALDO STS Australia ANSALDOSTS 21.52
Australia Pty Ltd Transportation Systems
India
GE Capital Mauritius TITAGARH WAGONS 14.73
International LTD
INVERSIONESEN Spain CAF India Pvt Ltd 11.57
Concessions
Table-2: Direct Investment (FDI) Inflows in Indian Railways

Discussion

India‟s top investing countries are Netherlands, Singapore, Australia, Mauritius, and Spain.
The government of India has also provided various incentives to foreign investors like
income tax exemption for increasing FDI Inflows to Indian Railway Related Components
industry. The major investments are in manufacturing of railway coaches, wagons, safety and
traffic control systems, electro & mechanical signalling system.

68
 Pre Make In India Post Make In India
Initiative Initiative
FDI INFLOW IN TRANSPORT SECTOR

Year 2010- 2013 2014-17

(In Rs (In US$ (In Rs (In US$

crore) million) crore) million)

Air Transport 659.38 140.76 3,678.63 557.61

(Including Air
Freight)

Sea Transport 1940.36 412.5 9869.43 1515.92

Railway Related 1208.02 241.33 2816.8 447.29

Components

Table-3: FDI Inflow in Transport Sector

Source: Department of Industrial Policy and Promotion data
Discussion
India is not behind in global race for attracting foreign investment. Table 3 shows FDI
inflows in Railways sector, for the period from 2010 to 2016. The FDI inflows are not
constant and are fluctuated in most of the years. It is noticed that the FDI inflows grew
rapidly after make in India policy Implementation.

Correlations

FDI GDP
*
FDI Pearson Correlation 1 .815

Sig. (2-tailed) .025

N 7 7
*
GDP Pearson Correlation .815 1
Sig. (2-tailed) .025

N 7 7

69
Correlations

FDI GDP
*
FDI Pearson Correlation 1 .815

Sig. (2-tailed) .025

N 7 7
*
GDP Pearson Correlation .815 1
Sig. (2-tailed) .025

N 7 7

*. Correlation is significant at the 0.05 level (2-tailed).

Table 4: Correlation Table between FDI Inflows in Railway Related
Components & GDP contributed by Railway

Discussion

Based on the Table 4 results, FDI and GDP include a statistically significant linear
association (p < .05).Hence the alternate hypothesis (H1) accepted, which states that there is
significant association between FDI inflows with growth rate of Indian railways. The course
of the association is positive (i.e., FDI and GDP are correlated positively), signifying that
these variables tend to raise together .The magnitude, or strength, of the association is high.
Therefore it could be stated that increasing FDI flow induces railways economic growth.

Model R R Square Adjusted R Square Std. Error of the Estimate

a
1 .815 .665 .598 .40062
a. Predictors: (Constant), FDI
b. Dependent Variable: GDP

Table 5 : Results

70
Discussion

Regression analysis is a significant statistical technique for the analysis as it allows

identification and description of association between the factors. In Table 5 regression
statistics model (GDP and FDI). The R-Square result of 0.665 can be accepted for further
regression analysis. The above R-square model suggests that just 33.5 % variation is
unexplained whereas the remaining deviation of this model is explained by FDI. The Table
shows that the on the whole the model is significant as there is a positive and considerable
significant relationship among FDI and GDP contribution in Indian Railways.

Sum of
Model Squares df Mean Square F Sig.
a
1 Regression 1.592 1 1.592 9.918 .025
Residual .802 5 .160
Total 2.394 6
a. Predictors: (Constant), FDI
b. Dependent Variable: GDP
b
Table 6: Anova

Discussion

The table 6, explain that the independent variables statistically significantly calculate the
dependent variable, F(1, 6) = 9.918 p < .05 .Thus, the regression model of the data is a good
fit. The table 5 result confirm that FDI , predictor variable considerably impact GDP.
Therefore the alternate hypothesis is accepted which say that there is a significant effect
between GDP & FDI inflows in Indian railways. It is clear that there is upward trend in the
flow of FDI during 2010 to 2016.

Implication of Findings

All explanatory variables were significantly independent and predictors of GDP. This implies
that Indian Railways FDI inflows are positively related and significant to GDP.

Challenges Faced by the Sector

There are many challenges that hinder smooth progress of the sector which in turn adversely
affect the „Make in India‟ campaign. Some of them are listed below:
1. Ease of doing business is the major obstacle to the growth of the sector. The World Bank‟s
nd
“Ease of doing Business 2015 report” has ranked India at 142 out of 189 countries for its
ease of doing business. :( Gupta, H., Kapoor, T. & Asudani, J., 2015)
2. Infrastructure: The World Economic Forum‟s (2015-16),Global Competitiveness Report
st
has given India 81 rank amongst 140 countries for its deficiency in infrastructure and
railways department projects suffer from even longer delays as compared to road sector.

71
Also, rail transport is 70% more expensive in India as compared to the United States which
makes it inefficient and efficiency is low (Joumard, Sila, &Morgavi, 2015)..
3. Employee skill: Indian Railways is the world‟s 8th largest employer in the world with a 1.4
million work force. The Ministry of Railways, under Skill India initiative has been setting up
training centers. Out of 53 locations identified for setting up training centers, 12 have started
training through training partners to skill the employees. In India just 3.5 million workforce
are undertaking skill courses per year, in contrast with 90 million in China(Nam &Vishnoi,
2014,).The countries with high skilled labour perform better than others. Although India has
improved there is a skill gap and competitors are much ahead in this area (“Skill
Development,” 2006,).
4. Research and Development: Indian R&D sector is still under explored as India lags behind
in infrastructural and technological development. Therefore it poses a big challenge to
investors to progress further in skill and standardization issues. (Bhattacharya, A., Bruce, A.,
& Mukherjee, A., 2014).
In a nation with more than 800 million citizens less than 35 years of age with a median
population of around 26 years, „Startup India‟ and „Skill India‟ initiative would definitely
provide sufficient opportunities but to plug the gap of 50 million quality jobs in the next 10
years, need right execution.
5. MSME: The Micro, Small and Medium Enterprises of India play an important role in
providing employment and contributing considerably. These sector manufacturing outputs
contributes almost 45% with entire country 40% exports and employs approximately 69
million people in more than 29 million units all through the country. Despite such a big
contribution from MSMEs there are various challenges still suffered by them. (Bhattacharya,
Bruce, & Mukherjee, 2014)
Budgetary focus on technology up gradation and IT will provide entrepreneurial
opportunities for youth and give a boost to MSME in Railway sector with Make in India
Initiative.
6. Environment Clearance and green growth: “Go Green” initiative requires businesses to be
environmentally sustainable and is challenging for those who use obsolete and inefficient
technologies. Greening of the Indian railway sector needs a holistic approach that involves
planned involvement to promote low carbon increase, resource efficiency and comprehensive
development for the long term. This needs a blend of interventions to promote incorporated
green growth of the sector beside specific measures in subsectors.

Limitations of the study

FDI has a positive impact on economic growth of the country but sector evidences requires
further research.

Findings

India is constantly ranked by international bodies, World Bank, UN (UN) report, UNCTAD
survey among the world investment destinations at top three for the period 2015-
17. International competitiveness in manufacturing sector promotes efficiency, growth and
employment. Railways components are being manufactured now in India where different
investors are willing to invest. It is a positive signal for the nation to take different initiatives
which proved fruitful. FDI has had a positive impact contributing to growth of Indian
Railways. Make in India initiative got to relook India‟s ability to develop its train
manufacturing sector to the point where it can revolutionize world industry business.

72
Conclusion

Make in India‟ is a policy program with aims to boost investment, encourage business in a
credit friendly environment and transform India into a manufacturing super power. Indian
Railways has a famous past, a bright future with potential to participate in a key role for
India. A targeted policy of removing bottlenecks can end in big dividends in the form of
advanced growth and exports, which can assist for elevated economic growth level. Indian
Railways has made a determined five years action map. By 2020, Indian Railways looks
forward to becoming a multi-modal integrator; dependable world class service provider
making journey reasonable, with convenience and becoming self-sustainable. Initiatives like
Make in India have been very successful as FDI inflows have increased at a tremendous rate.
Though there are considerable challenges for Indian manufacturing to penetrate the global
market. It is apparent that Indian economy to be successful, railways manufacturing will
require several significant changes for productivity increase like global competitive
manufacturing operations plan, and increased plant levels quality integrated into global
supply chains. The right blend of strong dedication from the government and the sector can
put this together in actual. Indian Railways will rise to scale new heights with these initiatives
as it has plenty of opportunities that have not been fully tapped.

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74
WOOD AND PAPER PRODUCTS AND CARBON STORAGE: CDM AS
AN EFFECTIVE TOOL
10
Dr. Renuka Deshmukh

Abstract
This study provides historical estimates and projections of U.S. carbon sequestered in wood
and paper products and compares them to amounts sequestered in U.S. forests. There are
large pools of carbon in forests, in wood and paper products in use, and in dumps and
landfills. The size of these carbon pools is increasing. Since 1910, an estimated 2.7 Pg
(petagrams; × 109 metric tons) of carbon have accumulated and currently reside in wood and
paper products in use and in dumps and landfills, including net imports. This is notable
compared with the current inventory of carbon in forest trees (13.8 Pg) and forest soils (24.7
Pg). On a yearly basis, net sequestration of carbon in U.S. wood and paper products
(additions including net imports, minus emissions from decay and burning each year) is
projected to increase from 61 Tg/year in 1990 to 74 Tg/year by 2040, while net additions
(sequestration) in forests is projected to decrease from 274 to 161 Tg/year. Net sequestration
is increasing in products and landfills because of an increase in wood consumption and a
decrease in decay in landfills compared with phased-out dumps. If the total projected amount
of products required is regarded as fixed, the net carbon sequestration in products and
landfills can be increased by 1) shifting product mix to a greater proportion of lignin-
containing products, which decay less in landfills; 2) increasing product recycling; 3)
increasing product use-life; and 4) increasing landfill CH4 burning in place of fossil fuels.

Keywords: IRR, mitigation, carbon dioxide, greenhouse gases, adaptation

Introduction

Research into reducing global carbon emissions and increasing carbon sequestration has been
spurred by recognition that increasing levels of CO2 in the atmosphere will affect the global
climate. The main nonhuman sources of atmospheric CO2 are animal respiration and decay of
biomass (16). However, increases in atmospheric levels are attributed mainly to fossil fuel
burning and deforestation. While efforts to hold down emissions of CO2 continue, increases
in CO2 emissions can also be offset, to a degree, by accumulation in carbon sinks such as
plant biomass and oceans. It is therefore prudent to focus research efforts both on increasing
carbon in sinks and reducing carbon emissions. To this end, at the United Nations Conference
on Environment and Development in 1992, the United States joined other nations in signing
the Framework Convention on Climate Change, an international agreement to address the
problems of global climate change. To implement the agreement, the President developed the
Climate Change Action Plan (3), which set the objective of returning U.S. greenhouse gas
emissions to 1990 levels by the year 2000. The plan set a goal to hold down growth of U.S.
carbon emissions by 100 Tg1 between 1990 and 2000 (3). The 1997 Kyoto Conference of the
Parties to the United Nations Framework Convention would, if ratified by the U.S. Senate,
commit the U.S. to reducing carbon emissions to 7 percent less than the 1990 level (14). In
1992, U.S. wood consumption was 19 × 109 ft.3 or 147 Tg carbon (5).

10 Assistant Professor, MIT Pune. Email- renuka.deshmukh@mitcoe.edu.in

75
In 1990, U.S. CO2 emissions were 1,367 Tg carbon equivalent (3). Wood and paper products
play an important role in mitigating these emissions by sequestering carbon, which helps to
mitigate carbon buildup in the atmosphere. There are currently large pools of carbon in
forests, in wood and paper products in use, and in dumps and landfills. The size of these
carbon pools is increasing. The
analysis presented in this study estimates that, currently, additions to wood and paper in
products in use and in landfills sequester ~61 Tg/year after deducting for CO2 and CH4
emissions from burning or decay. These sequestration contributions are substantial compared
with the additional sequestration in U.S. forests each year. We use the term sequestration to
refer to the net additions, for a period of time, to a stock or pool of carbon: carbon in forests,
carbon in forest products in use (including net imports), or carbon in forest products in
landfills. This expands the use of the term beyond its common use referring to net additions
of carbon to forests. We also use the term additions to imply net additions in this study. In
recent years, net addition or sequestration of carbon in U.S. forests has averaged 250 Tg/year,
including trees, understory plants, forest floor, and soils on all U.S. forest land (6). By 2040,
the annual sequestration in forests is projected to decline to ~160 Tg/year (6) while our
analysis estimates sequestration of carbon in wood and paper products in use and in landfills
is projected to increase to -74 Tg/year. Wood and paper products contribute to CO2 and CH4
emissions to the atmosphere when they are burned or decay in landfills. In 1990, ~74 Tg of
carbon were emitted, largely as CO2, by burning products for energy. About 10 Tg were
emitted as CO2 and CH4 by decay and burning without energy recovery.

Carbon sequestration in wood and paper products has been assessed in several other studies.
Some studies assess carbon sequestration for a range of hypothetical conditions of forest
growth, harvest, end use, and disposal (13). Other studies, similar to this one, estimate the
actual stocks and flows of carbon from U.S. forests to products in use, to dumps or landfills,
to burning and emissions from decay including reconstruction of historical flows and
projections (7,12). This study presents similar results with three improvements: 1) use of
greater detail in the changing composition of end uses of wood and paper products; 2)
inclusion of net imports of wood and paper products in carbon sequestration estimates; and 3)
use of new, much lower decay estimates for wood and paper in landfills including separate
estimates of CO2 and CH4 portions.

These improvements help provide a clearer understanding of how sequestration in products

may change. We compare our results in detail to those of Heath et al. (7).

The purpose of this study is to show an in-depth method of providing historical estimates and
projections of U.S. carbon sequestration in wood and paper products and compare those
estimates to amounts sequestered in U.S. forests. We also use this method to explain how
several factors have changed, and will continue to change, the pattern and amounts of carbon
sequestered. These factors include the relative shift from production of solid wood products
to paper products and the shift from disposal in dumps to use of landfills and more recycling.
We compare our results to another study that made similar estimates (7).

This analysis is unlike analyses that specify certain limited or hypothetical forest areas that
have a certain pattern of growth, removals, product use, product disposal, and decay (13).
Such analyses
arc valuable in evaluating the dynamics of limited areas but are not designed to cover actual
events encompassing all U.S. forests.

76
For our historical estimates (post 1910) and projections, we track carbon added to, and
emitted from, stocks of wood and paper products in the United States. Additions to U.S.
carbon sinks come from wood in trees harvested in the United States and from net imports
(imports minus exports) of logs and wood and paper products. Historical harvest and product
use data are needed to estimate future emissions from products that were manufactured in the
past. Carbon contained in harvested timber and net imports is tracked through primary
processing into products and end uses (Fig. 1) (adapted from Row and Phelps (12).

Figure 1.–Cycling of carbon through wood and paper products.

Wood or paper residues are generated at all phases of processing and are either reused in a
product, burned with or without energy, or dumped (historically) or landfilled (currently).
Wood and paper products are tracked to various end uses where they have a limited life span
and are retired from use and sent to landfills or burned. The fate of logging residues is not
considered in this model, since decay and emissions from these residues are modeled as part
of the forest ecosystem (6).
Objectives of the study

1. To examine historical estimates and projections of U.S. carbon sequestration to wood

and paper products.
2. To study the impact of changes in the use of wood on the carbon sequestered.
3. To evaluate the impact on the profitability of the companies associated as private
entities with the CDM projects in India (by calculating net profit with and without
CDM revenue) applying suitable tools of financial analysis.

77
CDM

The Clean Development Mechanism (CDM) is one of the flexibility mechanisms defined in
the Kyoto Protocol that provides for emissions reduction projects which generate Certified
Emission Reduction units which may be traded in emissions trading schemes.

Methods

Historical data and long-range projections are used to track round wood and carbon
disposition through to end uses. To track carbon beyond end uses to waste products, burning,
disposal, and decay, estimates are made for waste generated in use of primary products and
for rates of product disposal, decay, and burning.

Historical data on wood harvest and end use from 1909 through 1986 are from U.S.
Department of Agriculture, Forest Service surveys and estimates (17- 24,26). Historical wood
harvest, through 1986, was tracked from primary products to end uses to dumps or landfills
(10). Projections were made of wood harvest and primary product production using the
models that were used for the U.S. Department of Agriculture, Forest Service 1993 Resource
Planning Act (RPA) Assessment Update (5,8). These projections were made by the North
American Pulp and Paper (NAPAP) model and Timber Assessment Market
(TAMM)/ATLAS forest sector models. Historical information and projections from NAPAP
and TAMM/ATLAS were processed by the WOODCARB mode1 to estimate the following,
through 2040: 1) net carbon sequestered in products in use each year; 2) net carbon
sequestered in landfills or dumps each year; 3) carbon released by burning where usable
energy was produced each year; and 4) carbon released by decay or burning without energy
produced each year.

The NAPAP model simulates operation of markets and projects consumption of pulpwood,
use and change of processing technology, and consumption of pulp and paper. It projects
consumption of hardwood and softwood pulpwood, 4 categories of recycled paper, and
production and trade of 13 categories of pulp and paper. The TAMM model and the ATLAS
timber inventory projection model simulate the operation of solid wood markets and project
consumption of timber, production of lumber and panel products, and end use of lumber and
panels in construction, manufacturing, shipping, and other applications. The TAMM model
also tracks imports and exports of logs, lumber, and panels. The ATLAS model uses NAPAP
and TAMM calculations of timber removals to project U.S. forest inventory. The
WOODCARB model is an addition to the TAMM model that tracks carbon in all timber
removed from U.S. land plus carbon in net imports of logs and wood and paper products.
The following sections explain the methods used to track the flow of carbon in wood from
forests, through products and end uses, to landfills and emission by decay or burning.

Carbon Transfer

From forests to harvested round wood. –The carbon in wood harvested each year was
estimated through 2040, beginning with wood harvested in 1909 and following each year‟s
wood harvest through to its final disposition. Carbon in wood residue left on harvest sites is
not included. Cubic feet of round wood removed in each of nine U.S. regions is converted to
weight of carbon using factors shown in Table 1 (1). Carbon in logs imported is added to the

78
round wood sources, and carbon in logs exported is deducted. The distribution of uses of
imported logs is assumed to be the same as the distribution of uses for domestic saw logs.

Source: https://cdm.unfccc.int ›

From round wood to primary products and residue. –Annual historical estimates and
projections of detailed product production from the NAPAP and TAMM models were used to
divide round wood consumed into primary product, wood mill residue, and pulp mill residue
categories (Table 2). In most areas, solid wood residues are used almost entirely as raw
materials for other processes or arc burned for energy. Only a small portion of residues is left
to decay or is burned without energy (11). Carbon in imports of primary solid wood and
paper products is added to each product category, and carbon in exports is deducted.

From primary to end-use products and disposal. – Carbon in solid wood products is
estimated for a number of end-use categories (Table 3) to estimate the time carbon remains
sequestered in those products. The TAMM projections are used to divide products into these
categories.

79
Source: https://cdm.unfccc.int ›

Paper and paperboard products are not tracked to their final end uses, but the time in use is
estimated directly for the various primary products listed in Table 3. When products are
placed in end uses, such as house construction for solid wood and magazine production for
paper, some wood or paper is discarded. We assume 8 percent loss for solid wood products
and 5 percent for paper and paperboard products as they are placed into end uses such as
construction or publications.

80
Source: https://cdm.unfccc.int ›

Lost or discarded wood or paper is tracked to recycling, disposal in landfills or dumps, or

emission by burning. We estimate~24 percent of paper and paperboard waste (after
recycling) was burned in 1993; this percentage increases to 26 percent for the year 2000 and
thereafter (25).

We adapted an equation used by Row and Phelps to estimate the fraction of carbon remaining
in end use for each year after the product was placed in use (12, p. 37). The key parameter in
the equation is the half-life for carbon in each end use (Table 4). The half-life is the time
after which half the carbon placed in use is no longer in use. Disposition of carbon after use
includes recycling, disposal in landfill or dump, or emission to the atmosphere by burning
(with or without energy produced).

Source: https://cdm.unfccc.int ›

81
The rate of retirement of wood from end uses is constant for a period, then accelerates for a
while near the median life, and finally slows down after the median life. Some wood or paper
items are expected to have very long lives in uses such as historical buildings, books in
libraries, and antiques. Retirement of paper products from use is very fast; the half-life is 1
year or less, except for paper in long-lived publications (free sheet paper), which has a half-
life of 6 years.

Carbon Disposal in Dumps and Landfills

The length of time wood, as opposed to paper, remains in end uses may have only a minor
effect on the net amount of carbon sequestered in products in the long run. If, when taken out
of use, products are disposed of in a modem landfill, the literature indicates that they will stay
there indefinitely with almost no decay (9). What may be more important for carbon
sequestration or emissions is how much waste wood from discarded wood products or
demolition is burned (emitting carbon with or without energy) or how much is recycled
(reducing harvest from forests).

Wood and paper sent to landfills (or dumps prior to 1986) includes residue from solid wood
mills (in very limited amounts), construction and demolition waste, and discarded paper,
paperboard, and solid wood products. These same materials are sometimes burned with or
without energy. Prior to 1972, most materials were placed in dumps, where a proportion was
burned and contents were more exposed to oxygen and decayed more completely. Legislation
then required that dumps be phased out by 1986.

Since then, materials have been placed in landfills. Materials in landfills are periodically
sealed, which prevents oxygen from entering. For dumps, we estimate that 6.5 percent of
waste was burned. We assume the remaining waste decayed evenly during a 96-year period,
with a greater proportion of carbon being released as CO2 than as CH4 because of a greater
mix of oxygen with the materials.

The pattern of landfill decay is markedly different for wood than for paper. A relatively short
time after material is placed in a landfill, the material is covered and oxygen is prevented
from entering the landfill. While oxygen is available, white-rot fungus can decay lignin to a
limited extent. However, the oxygen is consumed rapidly. After the oxygen is gone, only
anaerobic bacteria remain.
These organisms cannot break down lignin, but they can break down exposed cellulose and
hemicellulose. However, anaerobic bacteria cannot reach cellulose or hemicellulose that is
enclosed in lignin (4,27). This means that very little decay of solid wood occurs. Newsprint,
which has a lignin content of 20 to 27 percent, is also very resistant to decay.

Other papers with less lignin are somewhat more subject to decay. In general, much less than
half of the carbon in wood or paper is ever converted to CO2 or CH4 (Table 5) (9).

82
Source: https://cdm.unfccc.int ›

Not only is the decay of wood and paper highly limited in landfills, but the proportion of
carbon emitted as CO2 is limited to ~40 percent, versus ~60 percent as CH4, due to the
limitation of oxygen and the greater production of CH4 by anaerobic bacteria. Half of the
total CO2 is emitted in ~3 years, while half the total CH4 is emitted in ~20 years (9).

The shift to greater CH4 production in landfills compared with that in dumps is important
because CH4 is 25 times more effective than CO2 as a heat-trapping greenhouse gas. In our
tracking of CH4 production, we assume 10 percent of the CH4 is converted to CO2 by
microorganisms as it moves out of the landfill. We assume that the proportion of landfill CH4
that is burned will increase from the current 15 percent level to 58 percent by 2040.

Results

Several key factors determine the pattern of historical and projected carbon sequestration and
emissions from wood and paper products. The carbon contained in annual domestic round
wood harvest plus net product imports declined between 1910 and the mid-1960s (from 124
to 74 Tg/year) in part as a result of steadily decreasing fuel wood use (10,17-24). However,
the amount of carbon in round wood doubled from the mid-1960s (74 Tg/year) to 1995 (150
Tg/year) and is projected to increase to 210 Tg/year by 2040 in our Base Case projections

83
Source: https://cdm.unfccc.int ›

Figure 2. – Base Case scenario – Annual net carbon additions to products and landfills, and
annual emissions from burning with energy and decay and other burning.

The distribution of round wood into primary products has shifted from a mix of primarily
solid wood products and fuel wood to a mix that includes an increasing proportion of paper
products and more burning of residue and black liquor. Carbon in solid wood products is
projected to double between 1950 and 2040 (30 to 60 Tg), while pulpwood used in paper
production will increase 600 percent (to 81 Tg) by 2040. Pulpwood use was at 15 percent of
the level of lumber use in the 1920s and 1930s, but pulpwood use was 27 percent greater than
that of solid wood by 1990 and is projected to be 35 percent greater by 2040.

84
Burned residue and black liquor also increased relative to solid wood uses, from 1 Tg in 1910
to 21 Tg in 1990 and will be 31 Tg in 2040. Fuel wood, reaching a low of 3 Tg in 1970, is
projected to surpass its 1920 level by 2040 and remain slightly higher than burned residue
and black liquor

Many more sources of wood carbon are being burned for energy now than in the past. These
include round wood fuel wood; wood and bark residues from sawmills, veneer mills, and
pulp mills; black liquor from pulp mills; paper and wood in municipal solid waste; and CH4
from landfills. Sanitary landfills have replaced open dumps, which were characterized by
open burning and higher decay rates.

RPA Base Case Projections

For the RPA Base Case, the annual rate of carbon additions to forest trees and soil is
projected to decline from 274 Tg in 1990 to 161 Tg in 2040 (Table 7) (2). This trend reflects
a slowdown in the rate of accumulation in the North as forests reach an age of slower tree
growth and soil carbon increases, increased management intensity in the South where
accumulation is balanced by removals, and reduced harvest on public land in the West along
with more intensively managed areas of former old growth (2).

The annual rate of carbon accumulation in landfills or dumps and products is projected to
increase from 59 Tg in 1990 to 75 Tg in 2040. This is due entirely to the increasing rate of
accumulation in
Landfills. The net annual addition to products in use actually decreases slightly from 26 Tg in
1990 to 23 Tg in 2040.

This decline is due in part to the increasing proportion of wood that is used in paper products,
which have a shorter use life than do solid wood products. Carbon emissions from burning
with energy produced increase as a result of notable increases in burning of black liquor and
round wood (directly from forests) for fuel. Black liquor and round wood carbon emissions
increase from 54 to 92 Tg between 1990 and 2040. Burning of mill residue and other wood or
paper waste increases emissions from 20 to 27 Tg during the same period.

Comparative analysis with previous studies

A previous study by Heath et al. (7) made similar historical estimates and projections of
wood carbon flux (additions to stocks and emissions) and disposition. They prepared separate
historical estimates and separate projections of carbon sequestration, although their
projections are based on the same RPA Base Case. Each historical reconstruction required
conversions from raw data in board feet of timber and products to cubic volumes. Their
projections made exogenous assumptions about the distribution of wood harvested to various
end uses (12) while ours used product distribution output of the TAMM/ATLAS and NAPAP
models directly.

Their historical estimate of total harvest for 1910 is 20 percent higher than ours but moves to
match ours by 1990. Historical estimates could differ, in part, because of different factors used to
convert board foot data and different factors used to convert volume to carbon weight.

85
Their projection of harvest is -10 percent lower than our projection of harvest plus net
imports by 2040. Projections could differ due to our addition of net imports and to different
factors used to convert volume to weight of carbon.

Carbon fluxes. – Our historical estimates and projections of sequestration (or net additions)
of carbon into products, landfills, burning with energy, and emissions are shown in Figure 4.
During the historical period, we estimate lower additions to products, landfills, and higher
burning emissions for energy than Heath et al. (7). Our additions to products in 1910 (24
Tg/year) is much lower compared to Heath et al. (65 Tg/year). Their very high additions to
products in 1910 results in higher additions to landfills and higher emissions from dumps and
landfills in subsequent years. Our estimate of emissions from wood burning for energy is
larger in early years and may include more mill residue and black liquor used for fuel. By
1990, their wood burning for energy estimate appears to exclude black liquor from pulping,
because they show only 32 percent of harvest going for fuel.

We estimated 51 percent, which is in accord with other estimates (15). Reasons for
differences in projections between the two studies are relatively clear. Our projected total for
carbon in wood harvested in 2040 is higher than that in Heath et al. due to different
conversion and decay factors and our inclusion of net imports. Our projection of additions to
products is slightly lower in 2040, 20.6 compared with 22.9 Tg/year.

The difference is due to our use of the distribution of wood to primary products and end uses
from TAMM/ATLAS and NAPAP compared with their use of exogenous estimates. Our
additions to landfills is double their rate, 50.8 compared with 25.3 Tg/year in 2040, due to
our very low landfill decay rates for wood and paper. Low decay partially explains our much
lower emission rate in 2040, 17.5 compared with 74.1 Tg/year.

Our emissions are also lower due to our assumed increase in CH4 burning for energy. Our
wood burning for energy is higher since we include black liquor and CH4 burning, 119
compared with 68.2 Tg in 2040.

Carbon pools. – Our estimates of the cumulative fate of carbon in the United States since
1910 are shown in Figure 5. Heath et al. (7) begin their cumulative estimates in 1900. We
compare their estimates to our figures, which begin in 1910. We estimate total carbon use at
7.8 Pg for the period 1910 to 1990; their estimate is 10.7 Pg for 1900 to 1990. We estimate
less accumulation in products and landfills (2.1 compared with 3.7 Pg), more in wood burned
for energy (4.0 compared with 3.7 Pg), and much less in emissions (1.7 compared with 3.2
Pg) for the same time period.

Our cumulative amount in products and landfills in 1990, 2.7 Pg, is relatively small but
significant compared with an estimated 13.8 Pg in trees and 24.7 Pg in soils, forest floor, and
understory in the United States in 1987 (1). We project accumulation in products and landfills
to increase to 5.3 Pg by 2040.

Total carbon accumulation for just the projection period 1990 to 2040 is 9.0 Pg for this study
(which includes net imports) and 8.3 Pg for Heath et al. (7). We estimate for 2040 that 38
percent will have accumulated in products and landfills compared with 27 percent for Heath
et al. (7). We estimate 55 percent will have been burned for energy and 9 percent will have
been emitted, compared with 35 and 38 percent, respectively, for Heath et al. (7). Our higher
accumulation in products and landfills is due primarily to assumed slower decay of wood and

86
paper in landfills. Our higher wood burned for energy is due to counting of black liquor
burning for energy and increased burning of CH4 for energy.

Conclusion

Our projections indicate we have accumulated 2.7 Pg of carbon in the pool of wood and
paper products in use and in landfills and dumps in the United States between 1910 and 1990.
This is substantial compared with the 1990 pool of carbon in forest trees (13.8 Pg) and in
forest soil (24.7 Pg).

In 1990, we were adding to the wood and paper product pools at the rate of 59 Tg per year.
This rate is projected to increase to 74 Tg per year by 2040 (Tables 6 and 7). If we add
sequestration in forest trees and soils, the rate of additions to U.S. stocks is 333 Tg/yr in 1990
and 235 Tg/year by 2040. The annual net drain from the atmosphere to the United States is
slightly less than the accumulation in stocks due to net imports supplementing U.S. stocks.
Net drain measured in carbon terms is 331 Tg for 1990 and is projected to decline to 233 Tg
by 2040.

Net drain measured in CO2 equivalent effect on the atmospheric is 331 Tg for 1990 and is
projected to decline to 222 Tg by 2040. The total drain from the atmosphere to the United
States in 1990 was 24 percent of the 1990 U.S. carbon emissions level of 1,367 Tg. It is
possible to increase the additions to the products and forest pools (or net drain from the
atmosphere). Following arc some ways sequestration could be increased if the projected total
tonnage of trees harvested remains the same; these key changes could increase net additions
to the products pool: 1) shifting product mix to a greater proportion of lignin-containing solid
wood, paper, and paperboard products, which decay less in landfills; 2) increasing product
recycling; 3) increasing product use-life; and 4) increasing landfill CH4 burning in place of
fossil fuels.

If the tonnage of wood harvested is increased, sequestration increase would be determined by

several factors beyond those considered in this analysis: 1) how much CIC in the forest would
increase in the future as a result of increased harvest today; 2) how much manufacturing
emissions would change due to substitution of wood and paper products for non-wood
products; and 3) how much emissions may decrease from forest fires due to reduction in fuels
available for fires. These are key questions for further study.

87
 Project 1:

12 MW Bundled Wind Power Project in Tenkasi, Tamilnadu (0796)

Exhibit XXXI: Financial analysis without CDM revenue (Rs. in Lacs)

2003 2004 2005 2006 2007 2008

1 Total revenue 927 927 927 927 927 927
(without CDM)
2 Less:Operational Cost
-- Operation and 71 76.1 81.6 87.4 93.7
Maintenance Cost
--Insurance 18.3 18.3 18.3 18.3 18.3 18.3
Total Expenses 18.3 89.3 94.4 99.9 105.3 112
3 PBIDT (1-2) 909 838 833 827 821 815
4 Depreciation 244 244 244 244 244 244
5 Interest 244 244 195 147 98 49
6 PBT [3-(4+5)] 420 349 393 436 479 522
7 Tax 33 27 31 34 38 41
8 PAT(6-7) 387 322 362 402 442 481
9 Add Depreciation 244 244 244 244 244 244
10 Net Cash Accruals 631 566 606 646 686 725

11 Less: Use of funds (Cash Outflow)

Capital Expenditure(Debt- 1921 + Equity- 2961 = 4882)
Repayment of term 592 592 592 592 592
loan
Total Cash Outflow: 592 592 592 592 592

12 Surplus/Deficit (10-11)631 (26) 14 54 94 133

Source: Financial statement of the project

Exhibit II: Highlights of Selected projects

# Project Type of Capacity Cost of Costof IRR (w/o IRR with
No. project (MW) project (Rs. capital CDM CDM
In lacs) revenue) Revenue

1 796 Wind power 12 4881 10.91% 9.49% 12.18%

2 2770 Wind power 1.5 974 11.85% 8.35% 12.75%

3 3642 Wind power 67.5 11208 11.38% 10.41% 13.21%

4 3700 Wind power 13.75 7860 11.82% 9.34% 12.43%

5 3710 Wind power 6 3720 11.38% 10.36% 13.89%

Source: https://cdm.unfccc.int/index.html

88
 Exhibit XXXI: Financial analysis without CDM revenue (Rs. in Lacs) ..Continue

2009 2010 2011 2012 2013 2014

1 Total revenue (without 927 927 927 927 927 927
CDM)
Less:Operational Cost
-- Operation and 100.5 107.7 115.4 123.7 132.6 142.1
Maintenance Cost
--Insurance 18.3 18.3 18.3 18.3 18.3 18.3
Total Expenses 112 118.7 126 133.7 142 150.9
3 PBIDT (1-2) 808 801 793 785 776 766
4 Depreciation 244 244 244 244 244 244
5 Interest
6 PBT [3-(4+5)] 564 557 549 541 532 522
7 Tax 44 44 43 42 42 41
8 PAT(6-7) 520 513 506 498 490 481
9 Add Depreciation 244 244 244 244 244 244
10 Net Cash Accruals (Cash 764 757 750 742 734 725
Inflow)(8+9)
Less: Use of funds (Cash Outflow)
Capital Expenditure(Debt- 1921 + Equity- 2961 = 4882)
Repayment of term loan

TotalCash Outflow:
12 Surplus/Deficit (10-11) 764 757 750 742 734 725

IRR Without CDM revenue 9.49%

Source: Financial statement of the project

2003 2004 2005 2006 2007 2008

1 Total revenue (without 927 927 927 927 927 927
CDM in lacs)
CDM Revenue 158 158 158 158 158 158
Total revenue (with 1085 1085 1085 1085 1085 1085

2 Less:Operational Cost
-- Operation and 71 76 82 87 94
Maintenance Cost
--Insurance 18 18 18 18 18 18
Total Expenses 18 89 94 100 106 112
3 PBIDT (1-2) 1066 995 990 985 979 973
4 Depreciation 244 244 244 244 244 244
5 Interest 244 244 195 147 98 49
6 PBT [3-(4+5)] 578 507 551 594 637 680
7 Tax 45 40 43 47 50 53
8 PAT(6-7) 533 467 508 548 587 626
9 Add Depreciation 244 244 244 244 244 244
10 Net Cash Accruals 777 711 752 792 831 871
(Cash Inflow)(8+9)
11 Less: Use of funds (Cash Outflow)
Capital Expenditure (Debt- 1921 + Equity- 2961 = 4882)
Repayment of term loan 592 592 592 592 592
Total Cash Outflow: 592 592 592 592 592
12 Surplus/Deficit (10-11) 777 119 160 200 239 278

89 Source: Financial statement of the project

Exhibit XXXII: Financial analysis with CDM revenue (Rs. in Lacs)…. Continue
2009 2010 2011 2012 2013 2014
1 Total revenue (without 927 927 927 927 927 927
CDM in lacs)
CDM Revenue 158 158 158 158 158 158
Total revenue (with 1085 1085 1085 1085 1085 1085

2 Less:Operational Cost
-- Operation and 100 108 115 124 133 142
Maintenance Cost
--Insurance 18 18 18 18 18 18
Total Expenses 119 126 134 142 151 160
3 PBIDT (1-2) 966 959 951 943 776 766
4 Depreciation 244 244 244 244 244 244
5 Interest
6 PBT [3-(4+5)] 722 715 707 699 532 522
7 Tax 57 56 55 55 42 41
8 PAT(6-7) 665 659 652 644 490 481
9 Add Depreciation 244 244 244 244 244 244
10 Net Cash Accruals 909 903 896 888 734 725
(Cash Inflow)(8+9)
11 Less: Use of funds (Cash Outflow)
Capital Expenditure (Debt- 1921 + Equity- 2961 = 4882)
Repayment of term loan
TotalCash Outflow:
12 Surplus/Deficit (10-11) 909 903 896 888 734 725
IRR With CDM 12.18%
revenue

Source: Financial statement of the project

Without considering the CDM revenues for the above project the IRR works out to 9.49%
and with CDM revenues, it works out to 12.18%. The cost of capital for the given capital
structure is 10.91% and hence the project is viable only after considering CDM revenues.

90
References

1. Leach, G. and Gowen, M. 1987. Household Energy Handbook. World Bank

Technical Pap. 67, World Bank, Washington, D.C.

2. Levine, J. S., 1996. Biomass Burning and Global Change. MIT Press, Cambridge,
MA. pp. 902 +28.

3. McDonald, R.C.; Isbell, R.F.; Speight, J.G.; Walker, J. and Hopkins, M.S. 1990.
Australian Soil and Land Survey Handbook – Field Handbook, 2nd ed. Inkata Press,
Melbourne. 198 pp.

4. Negi, J.D.S. 1984. Biological productivity and cycling of nutrients in managed and
man made ecosystem. Ph.D. thesis, Garhwal University, Garhwal.

5. Rai, S. N. 1981. Productivity of tropical rain forests of Karnatka. PhD. thesis,

University of Bombay. Bombay.

6. Ravindranath, N.H.; Rajiv Kumar Chaturvedi and Murthy, I.K. 2008. Forest
conservation, afforestation and reforestation in India: Implications for forest carbon
stocks. Current Science: 216 95 (2): 216-222.

7. Saxena, A.; Jha, M.N. and Rawat, J.K. 2003. Forests as Carbon Sink-The Indian
Scenario. Indian Forester 129(7):807-814.

8. Sharma, S.; Bhattacharya, S. and Garg, A. 2006. Greenhouse gas emissions from
India: a perspective. Current Science 90(3): 326–333.

9. Shukla, P.R. 2006. India‟s GHG emission scenarios: Aligning development and
stabilization paths. Current Science, 90 (3): 384-395.

91
 THE BANKING OPPORTUNITY IN MICRO
AND SMALL ENTERPRISE SECTOR 11
Shyam Ji Mehrotra
12
Rashmi Chaudhary
13
Hemendra Gupta
Abstract
Micro and Small Enterprise (MSE) is referred to as an engine of growth in emerging markets.
They play a major role in creating jobs and generating income in the economy. Despite
various initiatives taken by GOI for growth of the sector, YOY growth of MSE credit has
been faltering over the years and has touched below 10% as on March 31, 2016. This paper
attempts to understand the current opportunities for banks in MSE financing, identify issues
and challenges that need to be addressed for creating an enabling environment and finally
draw strategy to help the banks to create an eco-system friendly to MSE. Through this study
we have identified that risk averse attitude of bank employees, high percentage of NPA in
MSE sector and information asymmetry of MSE borrowers are major constraints in MSE
financing. Sensitizing, Skill Building and Empowering Employees, Enforcement of
Bankruptcy code, Easing CGTMSE (Credit Guarantee Fund Trust for Micro and Small
Enterprises) scheme and Replacing MSE loan products with Flexible User Friendly Products
are key recommendations of the study.
Keywords: MSE Financing, Make in India, Small Finance Banks, P2P Funding, Information
Asymmetry, Mudra Yojana, CGTMSE
Introduction
MSE as an engine of economic growth
MSE have been playing a critical role in developed and developing economies. They have
been identified to possess the unique strength of innovation and have served as incubators of
new technologies and practices. In Indian context, MSEs have demonstrated remarkable
resilience to sustain an annual growth rate of 10% to 18% from 2009 to 2016 (Chart 1) and
have made substantive contribution in manufactured output and exports, generation of
employment, industrial development across rural regions, use of traditional and inherited
skills, mobilization of local resources with low capital requirements. About 95% are tiny
units with low capital and poor managerial skills. They have been found vulnerable to
competition emerging due to opening up of economy and de-reservation of the sector by the
government.

11 Associate Professor, Jaipuria Institute of Management.

Email-shyamji.mehrotra@jaipuria.ac.in
12 Assistant Professor, Jaipuria Institute of Management.
Email-rashmi.chaudhary@jaipuria.ac.in
13 Assistant Professor, Jaipuria Institute of Management.
Email-hemendra.gupta@jaipuria.ac.in

92
 14
CHART I

Make in India is an innovative multi-pronged campaign launched by the GOI to reenergize

the manufacturing sector. Introduced at the time when industrial growth is subdued, it
envisions raising the contribution of the sector to 25% of the GDP by 2022 and in the process
15
aims to create 100 million new jobs . Manufacturing sector is estimated to grow 9.5 per cent
in 2015-16 against 5.5 per cent in 2014-15 and contributes about 17 per cent of GDP and
employs 12 per cent of workforce. It is estimated that 10-12 million youth will enter
workforce each year in next two decades and each percentage point increase in
16
manufacturing could create as many as 20-30 million additional job. Make in India engages
several key drivers to push the manufacturing sectors such as Ease of doing business, Start up
India and Stand up India, Smart City, Digital India, Clean energy, Skill development mission
along-with several initiatives by Ministry of Micro, Small and Medium Enterprise opening up
exciting growth prospects for MSE sector. In these circumstances MSE can play a major role
in the India‟s growth story and can assist in national agenda of financial inclusion.
MSE financing and role of Banks
Banks are the foundation of financial system in all emerging economies and India is the
same. The banks in India have been quite effectively performing the vital function of
financial intermediation. MSE financing in India has largely been domain of public sector
banks. As per RBI data (Chart II), YOY growth of MSE credit has been faltering over the
years and have touched below 10% as on March 31, 2016.
Banking reforms and policy changes taking place in India during the last one decade are
gradually changing banking landscape in general and MSE credit in particular. With
17
emergence of Small finance banks , Trade Receivable discounting systems and new
technology start up, P2P lending, Cloud funding etc., alternate delivery channels are
gradually occupying space in MSE financing.

14MMSME Annual Report 2015-16- Annual growth rate on preceding years

15 th
Economic Times Article Dated 16 February,2016- Why Make in India may be the answer
to India's unemployment puzzle
16
Economic Times Article Dated 29th April, 2016- A Robust platform for Indian
Manufacturers.
17
RBI granted approval to ten entities to set up Small Finance banks in September 2015
93
 18
CHART II

% YOY Growth of Non Food Credit and Micro

& Small Enterprises
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

Percentage YOY Growth Non Food Credit

Percentage YOY Growth Micro & Small Enterprises

Extent of financial inclusion in MSE

Despite all the positive developments happening in the MSE sector and RBI mandate to
include MSE financing under priority sector obligation of 40% of adjusted net bank credit for
scheduled commercial banks, there is still a huge gap estimated to be around USD 126
19 th
billion . The working group of the Private sector Investment for the 12 Five year plan
(2012-2017) has estimated credit gap in the range of 65 to 43% over 2010-11 to 2016 -17 as a
percent of the total demand as under:-

Only 5.18% of the units (both registered & unregistered) avail of finance through institutional
20
sources which indicate the extent of financial exclusion in the sector is very high . The most
critical problem faced by the MSE sector is access to adequate and timely credit at a

18
RBI data on YOY credit and MSE growth
19
YES BANK SME Newsletter 2013
20
Fourth Census of MSME Sector September 2009

94
reasonable cost. The recommendation by the Report of Prime Minister task force on MSME
January 2010 laid emphasis on the adherence of the stipulated targets by the commercial
banks for the micro enterprise (viz. 20% year on year growth for micro and small enterprise
lending). There is growing realization that if the country has to move to a higher growth
21
trajectory, then MSE sector would need to play a central role.

Review of Literature

There has been considerable research on importance of credit growth for development of
economy. Das and Khasnobis (2007) advocated existence of long term co-integrating
relationship of financial development with the allocation of credit to various purposes. Singh
Charan, Pemmaraju, Das (2016) have also identified that causal relationship exists between
credit and GDP in Indian Market. It is thus important that there have to be credit growth for
sustaining GDP growth in the economy.
As per RBI data bank credit growth has fallen to multi-decade low of 5.1% as on December
2016. This is primarily due to fall in credit demand in Industry. MSE credit growth has also
fallen down below 10% during the same period. This has forced the government and banks to
look into various challenges and hurdles in growth of credit in general and MSE in particular.
There are studies that identify reasons for failure in MSE financing and also for growing
delinquencies.
Gamage Pandula (2015) , College of Business, Victoria University, Melbourne, Australia in
study of Sri Lanka observed that this risk comes from different angles including single person
risk, uncertainty surrounding MSE business, risk of default, insufficient assets, lack of
collateral, weak management and high failure rate.
Balogun and Alimi (1988) in their study in Lagos State of Nigeria noted that having high rate
of interest, lack of supervision and undue intervention of government in various government
sponsored scheme were identified as major factors for loan default. Similarly Alex Addae –
Korankye (2014) in their study of microfinance institution in Ghana found that major cause
of loan default were having high rate of interest, appraisal not properly done and clients are
not selected properly. It also recommended that MFI credit policies to be reviewed
periodically.
Berger and De Young(1995) surveyed different Indian banks and concluded that major cause
of default was deficiency in project analysis , inadequate collateral and unrealistic terms and
conditions for repaying and also at time natural calamities.
There has been another side of the story which is reluctance of the bankers to lend to
this sector and they are also in dilemma of choosing reputation or earning as observed by
Rajan (1994) that banks tend to be overaggressive in lending in the boon period of economy
however they tend to slow on recovery. Similar views were also observed by Chavan and
Gambacorta (2016) who also concluded that banks are over aggressive when economy is in
upswing and are extremely cautious at time of slowdown. They also observed that banks
which are well capitalized tend to take less credit risk. This conservatism is also catapulted
by new norms of Basel III which banks have to comply and thus banks are going slow in
lending as they will be required to mop additional capital for these risk weighted assets.
Ghosh (2015) found that generally small and medium enterprises have multiple bank
accounts and which increases their bargaining power of low interest rate with banks and this
mainly with private banks and thus banks tend to overlook proper appraisal system
21 St
RBI Speeches –Inaugural address delivered by Shri S.S Mundra, Deputy Governor, RBI at the 1
th
Banking Research Conference at Hyderabad on 29 January 2016.
95
 Another reason identified was the valuation of collateral by bankers which is linked
with the economic cycle (Moore and Kiyotaki Moore, 1997; Shin and Adrian a, 2010;
Jimenez Saurina and Jimenez, 2006; and Borio et al., 2001). It was observed that there banks
expand their credit limit as the economy picks up and the valuation of collaterals rises which
in downturn of economy turns out to be bane as the loan books look overstretched.
Government in recent years have provided lot of stimulus for MSE financing through many
of its flagship schemes like Make in India , Skill India, Startup India Standup India, Digital
India & Smart City and Mudra Yojna. These measures are expected to generate huge credit
demand in the next five to ten years and therefore there is a need to study whether Banks are
ready to meet this future credit demand of MSE.
To a larger agenda of addressing the financial inclusion and to meet the unmet credit
demand of MSE, the Reserve Bank has permitted establishment of small finance banks. Non–
Banking finance Companies & Micro Finance Companies are already occupying space of
MSE funding and gradually expanding. P2P (Peer to Peer) lending, Crowd funding and
Working Capital funding by E-Commerce companies are other emerging sources. In this
background it is pertinent to examine if the banks consider these delivery channels as a threat
to take over MSE financing and bank may lose an important lending segment.
In the recent years growing NPA has been a major cause of concern for banks. MSE
sector as on March 2015 constitute 45% of non-performing loans and high NPA is considered
22
as prominent reason for poor credit flow to MSE‟s. As stressed assets mounts and bank
increasing face questions about lending, credit challenges for the MSE are likely to accelerate
further. Government in recent years have taken step streamlining recovery through enactment
of Bankruptcy code and have also extended coverage of CGTMSE scheme. However the
sustainability of these measures and its impact in extending more credit to MSE sector need
to be investigated.
Objectives of this study

With this background, this papers attempts to

1. To identify credit potential of MSE Vis- a- vis banks readiness to meet credit
needs,
2. To identify major constraints of banks in MSE financing,
3. To identify factors contributing to high delinquency of MSE loans and
4. To spell out policy measures that Reserve Bank, Government of India and Banks
should take to improve flow of credit to MSE‟s

Research Design & Methodology

The present study is descriptive in nature and aims to identify issues faced by the banks in
MSE financing. The primary data has been collected through survey method using structured
questionnaire. The respondents includes 120 bankers across the country handling the credit
portfolio as Branch Manager, Manager Credit, Specialist Officer & Officer in various banks.
The questionnaire was self-developed after an extensive review of literature and discussion
with the senior bankers. The variables in the questionnaire are measured using non-
comparative five point Likert-scale. (1-Strongly Agree, 2-Agree, 3-Neutral, 4-Disagree and
5- Strongly Disagree). The data was analyzed using MS-Excel.

22‘Bank have been told to finance without worry, but they are not forthcoming because they
fear NPAs.‟ (Shri Kalraj Mishra Minister MMSE BS April 27, 2016).
96
Data Finding & Analysis

Objective 1-To identify credit potential of MSE Vis- a-vis banks readiness to meet credit
needs

97
 Whether following initiative of the Government is likely to generate huge credit demand in
MSE sector for next 5-10 years?
Strongly Strongly Composite
Agree Agree Neutral Disagree Disagree Score
Make in India 41.67% 46.67% 9.17% 2.50% 0.00% 207
Skill India (Pradhan
Mantri Kaushal Vikas 24.17% 50.00% 21.67% 4.17% 0.00% 247
Yojana)
Start Up India Stand Up
30.83% 50.00% 16.67% 2.50% 0.00% 229
India
Smart City 30.00% 46.67% 16.67% 6.67% 0.00% 240
Digital India 35.00% 40.00% 19.17% 5.83% 0.00% 235
Incentives and support
28.33% 50.83% 17.50% 3.33% 0.00% 235
by MMSE ministry

Do you feel that commercial banks face challenge with other credit delivery channels in
meeting unmet credit demand of MSE sector?

Strongly Strongly Composite

Agree Neutral Disagree
Agree Disagree Score
Non-banking Finance
12.50% 56.67% 15.00% 14.17% 1.67% 283
companies
Micro-finance
10.00% 54.17% 18.33% 14.17% 3.33% 296
companies
Small finance banks 9.17% 44.17% 30.00% 14.17% 2.50% 308
Emerging alternate
systems like P2P
lending, crowd funding,
9.17% 45.83% 29.17% 14.17% 1.67% 304
working capital funding
by e-Commerce
companies.
Informal system 5.00% 48.33% 27.50% 17.50% 1.67% 315

Banks view the Make in India initiative as a significant opportunity to create credit demand
in MSE sector in next 5 to 10 years. Other significant key drivers to push credit in MSE
Sector are Start-Up India Stand-Up India, Digital India & Incentives and support by MSME
ministry. As per our survey, all these four initiatives are likely to play a major role in MSE
growth story in the near future. This is with consonance with the Government of India
Agenda of financial Inclusion in which MSE financing can play a major role.

98
As regards banks readiness to meet credit demand of MSE, the respondents agreed that the
commercial banks faced challenge from the Non-Banking Finance Companies & Micro-
Finance Companies. However, they did not perceive the threat from Small Finance Banks as
they are not yet established and from emerging systems like P2P funding & Crowd funding
because of its incipient nature.
Objective 2-To identify major constraints of banks in MSE financial.

According to you why banks are not able to make aggressive MSE financing the way they
make retail loans?
Strongly Strongly Composite
Agree Neutral Disagree
Agree Disagree Score
Information asymmetry
10.83% 66.67% 13.33% 9.17% 0.00% 265
of MSE borrowers
Banks inability to carry
13.33% 43.33% 15.00% 22.50% 5.83% 317
due diligence
Risk averse attitude of
29.17% 52.50% 9.17% 8.33% 0.83% 239
bank employees
High percentage of NPA
27.50% 48.33% 15.00% 7.50% 1.67% 249
in MSE sector
Difficulty in compliance
to bank‟s lending
15.00% 50.83% 15.00% 18.33% 0.83% 287
policies and RBI
guidelines

99
 How can bank make their employee ready to improve flow of MSE credit?
Strongly Strongly Composite
Agree Neutral Disagree
Agree Disagree Score
Sensitizing work-force
of risk of losing
significant MSE business 31.67% 56.67% 10.83% 0.83% 0.00% 217
Recruitment of
Specialized officer to
handle MSE Department
29.17% 49.17% 14.17% 6.67% 0.83% 241
Skill development of
Officers handling MSE
credit
50.83% 46.67% 1.67% 0.83% 0.00% 183
Performance linked
incentive
Removing fear of staff 30.00% 44.17% 19.17% 5.83% 0.83% 244
accountability for failure
of commercial decisions
38.33% 55.83% 5.00% 0.00% 0.83% 203
Adequate manning of
MSE branches/portfolio
29.17% 60.83% 9.17% 0.00% 0.83% 219
If a MSE borrower is unable to comply any of the following requirement whether he/she
will be considered for granting loan by your bank?
Yes No May be
KYC Requirement 23.33% 76.67% 0.00%
MSE registration 26.67% 45.00% 28.33%
Income tax returns of firm as well as partners/ proprietors/
directors 34.17% 42.50% 23.33%
Asset & liability statement of promoters and guarantors 31.67% 55.00% 13.33%
Evidence of payment of statutory dues like income tax, VAT,
Excise etc. 32.50% 48.33% 19.17%
Audited financial statements of firms 31.67% 37.50% 30.83%
Legal documents for place of business like rent agreement or
lease deeds, permission to set up unit in non-commercial
property 32.50% 53.33% 14.17%
Power connection/sanction of power load 31.67% 47.50% 20.83%

100
 Banks extend financial assistance under Pradhan Mantri MUDRA Yojana (PMMY) to
Micro & Small Enterprises segment. The scheme aims at “reaching the unbanked
segments” provides loans in three categories ranging from Rs. 50,000 to Rs.10 lakh Mudra
bank act as a refinancing agency to banks for lending to micro & small businesses. Express
your agreement/disagreement with the problems faced in the execution of the scheme?
Strongly Strongly Composite
Agree Neutral Disagree
Agree Disagree Score
Unscrupulous and non-
serious people trying to
take benefit of liberal
financing 52.50% 40.00% 5.83% 1.67% 0.00% 188
Willful defaulters
44.17% 35.83% 13.33% 6.67% 0.00% 219
High chances of
misutilization and
diversion of funds 48.33% 39.17% 8.33% 2.50% 1.67% 204

101
It is evident that banks are unable to tap credit potential of MSE financing and there are
23
complains at various forum about lack of financing to MSE by banks . With this background an
attempt was made to find out the reasons why banks are not able to make aggressive MSE
lending the way they make retail loans. Based on our literature survey & formal discussion with
the senior bankers we identified that five major constraints of Banks in MSE financing are
Information Asymmetry of MSE borrowers, Banks inability to carry due diligence, Risk averse
attitude of bank employees, High percentage of NPA in MSE sector and difficulty in compliance
to bank‟s lending policies and RBI guidelines. We attempted to validate these constraints through
our survey. Based on the response it is observed that the Risk averse attitude of bank employees
is the top most constraint in aggressive MSE financing followed by High percentage of NPA in
MSE sector & Information Asymmetry of MSE borrowers. Further skill development, removing
fear of staff accountability and sensitizing work-force have been found to be three meaningful
ways to improve flow of MSE Credit. For Information asymmetry we attempted to look into the
major compliance areas where bank found it difficult to grant loan and major area of constraints
have been identified as difficulty in KYC compliance , Asset & liability statement of promoters
and guarantors & legal documents for place of business like rent agreement or lease deeds,
permission to set up unit in non-commercial property. We also attempted to know problem faced
by banks in executing the Mudra Yojana and found that major stumbling block in the successful
implementation of the scheme is the fear that unscrupulous and non-serious people may take
benefit of liberal financing followed by chances of misutilization and diversion of funds.

23
RBI Speeches –Inaugural address delivered by Shri S.S Mundra, Deputy Governor, RBI at
St th
the 1 Banking Research Conference at Hyderabad on 29 January 2016.
102
Objective 3- To identify factors contributing to high delinquency of MSE loans
Table-III

Could you please mention the factors contributing to high delinquency of MSE loans?

Strongly Strongly Composite

Agree Neutral Disagree
Agree Disagree Score
Providing of timely and
25.00% 44.17% 18.33% 10.83% 1.67% 264
adequate credit by banks.
Poor monitoring of
customers transactions by 21.67% 60.83% 13.33% 4.17% 0.00% 240
banks.
Poor cash flow
management by 29.17% 59.17% 11.67% 0.00% 0.00% 219
borrowers.
Diversion of funds by
38.33% 51.67% 7.50% 2.50% 0.00% 209
borrowers.
Willful default by
37.50% 50.83% 8.33% 2.50% 0.83% 214
borrowers
Unscrupulous and non-
serious people trying to
35.00% 54.17% 10.00% 0.83% 0.00% 212
take benefit of liberal
MSE financing

103
 Rank the measures to control loan default of MSE‟s

Toa To a To To
Not at Composite
large moderate some little
all Score
extent extent extent extent
Proper monitoring & control
65.00% 28.33% 6.67% 0.00% 0.00% 170
of loan
Dedicated staff to spot signs
of MSE default and engage
48.33% 39.17% 11.67% 0.00% 0.83% 199
with MSE to minimize losses
or rehabilitation of sick units
Proper Advisory services to
39.17% 47.50% 13.33% 0.00% 0.00% 209
MSE
Bankruptcy code for faster
36.67% 44.17% 16.67% 1.67% 0.83% 223
recovery
Frequent loan waivers by
government is vitiating 50.83% 30.00% 10.83% 5.83% 2.50% 215
repayment culture

Do you agree that the following are the reasons of CGTMSE coverage not providing
enough comfort to banks?

Strongly Strongly Composite

Agree Agree Neutral Disagree Disagree Score
18 month cooling 255
21.67% 55.00% 13.33% 9.17% 0.83%
period
Too many claim 250
25.83% 50.00% 15.00% 8.33% 0.83%
formalities
CGTMSE can reject
claims if good number
of account of a branch 28.33% 50.83% 13.33% 6.67% 0.83% 241
in particular sector
goes bad
Bank branches are not
fully conversant of the 23.33% 48.33% 12.50% 14.17% 1.67% 267
scheme

High percentage of NPA in MSE is one of the prime reason that constraint banks in liberal
MSE financing. We attempted to identify factors that contribute delinquency, measures
needed to control defaults and extent of comfort from CGTMSE scheme. Diversion of funds
by borrowers followed by unscrupulous and non-serious people trying to take benefit of
liberal MSE financing, willful default by borrowers and poor cash flow management by
borrowers have been found as the key contributing factors of high delinquency of MSE

104
loans. To control loan defaults the respondents ranked proper monitoring and control as a
very effective measure. Respondents also very strongly opined that frequent loan waivers are
vitiating repayment culture and therefore government must not do this frequently. We further
look into the extent of comfort felt by banks in MSE financing for loans covered by
CGTMSE scheme and found that provision of rejection of claim by the corporation if too
many accounts of a branch in particular sector goes bad is the prime reason of discomfort for
bankers followed by too many claim formalities.

105
Objective 4: To spell out policy measures that bank should take to improve flow of credit to
MSE‟s

Can the following policy measures accelerate the flow of credit to MSE?

Strongly Strongly Composite

Agree Agree Neutral Disagree Disagree Score
Research MSE need 233
19.17% 67.50% 13.33% 0.00% 0.00%
and preferences
Developing MSE 226
22.50% 66.67% 10.83% 0.00% 0.00%
specific products
Liberalizing credit
approval process and 235
29.17% 51.67% 13.33% 5.83% 0.00%
reducing paper
formalities
Opening of MSE 240
25.00% 54.17% 16.67% 4.17% 0.00%
finance branches
Faster legal decision
to ensure speedy 45.83% 47.50% 4.17% 2.50% 0.00% 196
recovery
Reducing capital
requirement for MSE 17.50% 50.83% 17.50% 14.17% 0.00% 274
loans

Lastly we attempted to address the policy issues that can speed-up loan sanctioning
process & empower employees to take lending decisions. The respondents felt that fastening
of legal decision process for speedy recovery, developing MSE specific products and easing
the provisions of CGTMSE will go a long way in improving the flow of credit to MSE sector.
Recommendation and Way Forward
Our study observed that banking of Micro and Small Enterprises can be potentially rewarding
for banks but banks seem not ready as they do not perceive the threat from the small finance
banks & the emerging systems like P2PFunding & crowd funding. We found that three very
important factors that constrain flow of credit to MSE are (1) risk averse attitude of bank
employees (2) high percentage of NPA in MSE Sector and (3) Information asymmetry of
MSE borrowers. These three issues needs to be addressed by regulator, banks and
government through proactive policy initiatives.
Risk averseness is first and foremost thing to address as due to fear of NPA and consequential
accountability of employees is blocking the decision making process. Massive retirements in
public sector banks in the past five-seven years have created a huge talent crisis particularly at
middle management level and are having far reaching implications in credit decision making
process. Survey highlights that skill development as one of the important measure to overcome
this constraints. RBI initiative of National Mission for Capacity Building of Bankers for MSME
Financing (NAMCABS) seems very relevant and timely and need to be

106
made more effective and vibrant. Banks are also required to revamp and reorient their
internal training system so as to have renewed focus on attitude and skill building of their
employees on MSE financing. Sensitizing employees of losing significant business
opportunity is also one of the important finding of the survey and the same need to be
percolated through top down approach.
High Non performing asset in MSE Sector is a stumbling block in expansion of MSE Credit.
Fact is NPA is impacting the credit making process and therefore bankers need to be
24
empowered. This empowerment of the bankers will come through strengthening of the
legal system in which willful defaulters have no place and unscrupulous borrowers trying to
take undue advantage of the scheme have to be strictly dealt with through civil & criminal
process. Good news is that bankruptcy code is finally through from parliament and hopefully
legal procedure will be put to place shortly. Vitiation of recovery climate through frequent
loan waiver is another grey area on which government and regulator has to give serious
thought and take corrective action. Easing CGTMSE scheme and making it banker friendly
fits in larger agenda of government of ease of doing business and will create the comfort of
banks in giving collateral free loans to MSE borrowers.
Information asymmetry of MSE borrowers is third major challenge for banks. Asymmetric
information means that one party has access to relevant information while the other lacks.
Applying the theory of asymmetric information in MSE financing provide basis to adverse
selection of borrowers. Adverse selection of the borrower may happen when information
relating to credit history of borrower, project risk and assets and liabilities of borrowers and
or guarantors are known more by borrowers than by banks. This asymmetric information
aggravates the financing difficulty for MSEs. Because of this lack of institutional knowledge
and the difficulty of obtaining reliable information on MSEs, banks need to initiate policy
measures to be creative in (a) understanding the MSE sector to targets customers which they
perceive less risky say rural artisans, craftsmen and women entrepreneurs who are well
established and enjoy readymade markets for their products (b) develop MSE specific
products suitable to target customers (c) acquire customers from specific segments and (d)
take risk mitigating measures such as monitoring and control of loans, dedicated staff for
financing the clusters of borrowers and giving advisory services to MSE clients for product
development, market development etc. In same context, we recommend policy initiatives by
the RBI by replacing end use centric and procedure oriented MSE loan products with flexible
user friendly no question asked loan products for MSEs coupled with mandated minimum
paper documentation instead of one size fit all approach to speed up the loan disbursal
process. This will be a larger agenda for regulator and is a part of government imitative of
ease of doing business.
Scope of Future Study
This paper attempted to identify challenges in MSE Financing faced by the banks and
suggested measures for creating an enabling environment. We found that the skill
development of the bank employees is a major gray area and we feel that training need of the
bank employees have to be analyzed in much deeper details so that further strategies of skill
development can be made. On demand side study on MSE will also highlight their problems
and further provide future course of action.

24
SBI Chairperson- Smt. Arundhati Bhattacharya
107
References

1. Adrian, T. and H. S. Shin (2010), “The Changing Nature of Financial Intermediation

and the Financial Crisis of 2007-09”, Staff Report No. 439, March.
2. Alex Addae-Korankye (2014), “Causes and Control of Loan Default/Delinquency in
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 GUIDELINES FOR CONTRIBUTORS

Research papers, case studies, book reviews etc. are invited for inclusion in Journal of
Applied Management-Jidnyasa, Symbiosis Institute of Management Studies, Pune. SIMS
is a constituent of Symbiosis International University.

Copyright

Articles submitted to the journal should be original contributions and should not be under
consideration for any other publication at the same time. Authors submitting articles for
publication warrant that the work is not an infringement of any existing copyright and
will indemnify the publisher against any breach of such warranty. For ease of
dissemination and to ensure proper use, papers and contributions become the legal
copyright of the publisher unless otherwise agreed. Submissions should be sent in Word
Format to jidnyasa@sims.edu

Editorial objectives

To provide those involved in research and practice in management with ideas, news,
research findings, case examples and discussion on management and related fields.

Editorial scope

The journal draws on insights and contributions worldwide. High quality submissions are
sought from academics, researchers and practitioners from around the world. Generally,
contributions should cover the theoretical development and the practical application in
the field of management and related disciplines. Contributions should emphasize any
practical implications of the research or findings as well as future research implications
(including lessons from unsuccessful initiatives). Case study articles should normally
specify:
 Background and content
 Objectives, i.e. what we were trying to do
 The salient events
  The results and how they are obtained
 The implications for others involved in management

The Reviewing Process

Each paper is reviewed by the Editor and if it is judged suitable for this publication it is
then sent to two referees for double blind peer review. Based on their recommendations
the Editor then decides whether the paper should be accepted as is, revised (minor or
major revision) or rejected. Following major revisions papers are returned to the original
reviewers for their decision.
Manuscript requirements

An electronic copy of the paper should be submitted in double-line spacing with wide
margins to jidnyasa@sims.edu. All authors should be shown and author‟s details must be
on a separate page and the author should not be identified anywhere in the article.

As a guide, articles should be between 2500 and 5000 words in length. A title of not more
than eight words should be provided. A brief autobiographical note should be supplied
including full name, affiliation, e-mail address and full contact details. Authors must
supply a structured abstract set out under 4-6 sub-headings:

Purpose: Methodology/Approach; Findings; Research limitations/implications (if

applicable); Practical implications (if applicable); and, the Originality/value of paper.
Maximum length is 250 words. In addition provide up to six keywords which encapsulate
the principal topics of the paper.

Where there is a methodology, it should be clearly described under a separate heading.

Headings must be short, clearly defined and not numbered. Notes or Endnotes should be
used only if absolutely necessary and must be identified in the text by consecutive
numbers, enclosed in square brackets and listed at the end of the article.

Figures, charts and diagrams should be kept at a minimum. They must be numbered
consecutively using Arabic numerals with a brief title and labeled axes. In the text, the
position of the figure should be shown by typing on a separate line the words “take in
Figure 2”. Good quality originals must be provided.

Tables should be kept to a minimum. They must be numbered consecutively with Roman
numerals and a brief title. In the text, the position of the table should be shown by typing
on a separate line the words “take in Table IV”.

Photos and Illustrations must be supplied as good quality black and white original half
tones with captions. This position should be shown in the text by typing on a separate line
the words “take in Plate 2”.

References to other publications should be complete and in Harvard style. They should
contain full bibliographical details and journal titles should not be abbreviated. For
multiple citations in the same year use a, b, c immediately following the year of
publication. References should be shown within the text by giving the author‟s last name
followed by a comma and year of publication all in round brackets, e.g. (Miller, 1994). At
the end of the article should be a reference list in alphabetical order as follows:

(a) for books

Surname, initials and year of publication, title, publisher, place of publication, e.g.
Casson, M. (1979), Alternatives to the Multinational Enterprise, Macmillan,
London.
(b) for chapter in edited book
Surname, initials and year, “title”, editor‟s surname, initials, title, publisher, place,
pages, e.g. Bessley, M. & Wilson, P. (1984), “Public Policy and small firms in
Britain”, in Levicki, C.(Ed.), Small Business Theory and Policy, Croom Helm,
London, pp. 111-26. Please note that the chapter title must be underlined.

(c) for articles

Surname, initials, year “title”, journal, volume, number, pages, e.g. Fox, S.
(1994) “Empowerment as a catalyst for change: an example from the food
industry”, Supply Chain Management, Vol l2, No3, pp 29-33. If there is more
than one author list surnames followed by initials. All authors should be shown.

(d) Electronic sources should include the URL of the electronic site at which they
may be found, as follows:

Neuman, B.C. (1995), “Security, payment, and privacy for network commerce”,
IEEE Journal on Selected Areas in Communications, Vol. 13, No.8, October, pp.
1523-31. Available on http://www.research.att.com/jsac/

Final submission of the article

Once accepted for publication, the final version of the manuscript must be e-mailed to
jidnyasa@sims.edu the final revised paper will be considered to be the definitive
version of the article. The author must ensure that it is complete, grammatically
correct and without spelling or typographical errors.
 JIDNYASA –Empowering through research

“JIDNYASA”, a Sanskrit word for “Undying Thirst for Knowledge”

which resonates with the core ideology of this institute, that is, its con-stant
search for innovation and sharing it for mutual growth.

This journal comes as a rich source of information in the wake of the

constantly changing business environment. It acts as a reservoir of
knowledge gathered from various academicians from all over the coun-try,
the students and representatives from the industry to indicate the know-how
of the corporate world. The dynamic business scenario requires us to have
clarity of vision, which can only be achieved through enriching our
perceptions. JIDNYASA can help us achieve that.

The main motive of this journal is to inculcate a culture of disciplined and

focused research among the student managers and academicians. It also
gives a suitable platform to the industry practitioners to carry out research
and share their view points and experiences on the growing business
scenario.

We strive to lead by innovation

Ms. Preeti Kamboj

Dr. Brig Rajiv Divekar (Director)
Ms. Nivedita Shetty
Dr. Jaya Chitranshi (Editor) (Executive Team)
Symbiosis Institute of Management Studies (SIMS), Pune, India established in the year 1993, is UGC approved
and ISO certified (ISO 9001:2015). SIMS is a constituent of the prestigious Symbiosis Internation-al (Deemed
University). SIU has been accredited with a CGPA of 3.58 by National Assessment and Accredi-tation Council
(NAAC) on a four point scale at A Grade. SIU has been ranked amongst the Top 100 universi-ties in India and Top
250 universities in Asia by QS World University ranking agencies in 2017. SIMS has been declared as the 25th Best
B School in India by the Economic Times in 2017. aThe Week magazine has ranked SIMS as 18th Top B-school and
12th Non-government B-school in West Zone in 2017. SIMS has been ranked 3rd in the Top B-Schools by Sector
[MBA (Executive)] in the country by CSR-GHRDC B-Schools Survey 2017.
SIMS is an accredited Centre for Corporate Governance of National Foundation for Corporate Governance
(NFCG) for conducting research projects and seminars for SMEs in and around Pune. SIMS is a programme
implementing agency of Department of Science and Technology (DST) for Entrepreneurship Education.
SIMS is the only successful example of a public-private partnership existing in higher education between
Symbiosis International (Deemed University) and the Ministry of Defence.
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