Kausik Lahiri Telemedicine

Globsyn Management Journal (GMJ)
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Published by Globsyn Business School
Globsyn Management Journal
Volume VII, Issue 1 & 2

January - December 2013
Globsyn Business School, Kolkata

Table of Contents
Vol VII, Issue 1 & 2, January - December 2013
Patron’s Desk ........................................................................................................................................ i
Editorial ................................................................................................................................................. ii
Research Articles
 Telemedicine, e-Health and Health related IT enabled Services: the Indian Situation
Kausik Lahiri ..................................................................................................................1
 Merger and Acquisition — A Myth? (From an Indian Acquirer’s Perspective)

Ms. Sutapa Chatterjee & Dr. Sharmistha Banerjee ..........................................................17
 Demographic Variables and ATM Services: An Empirical Survey

Dr. Sunita Bishnoi ........................................................................................................34
Perspectives
 Transition of Indian Society: Post-Liberalization Era

Prakash Bhattacharya ....................................................................................................54
 Perceived fairness of employees in Performance Appraisal System: with reference

to Indian Public and Private Sector Banks
Dr. Deepali Bhatnagar ..................................................................................................67
 Awareness in Consumer about Consumer Protection Act. & Consumer Right in India
Dr. Neetu Sharma .........................................................................................................82
Case Study
 An Assessment of Delhi Tourism Sector: A Socio-Economic Developmental Perspective

Sazzad Parwez ..............................................................................................................94
Teaching Note ..............................................................................................................106

Patron’s Desk
It has been our endeavour to build a Business School based on Technology, Innovation and
Research. It is here where the role of GMJ is important. We would like this Journal to represent
management educators and innovators to share their research in this Journal. Let this become a
true choice for all management students, researchers and educators.
My best wishes to the entire team.
Bikram Dasgupta
Founder & Executive Chairman
GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 i

Editorial
Knowledge economy is the driving factor in today's India. Hence, quality higher
education plays a pivotal role in shaping the future generation. Higher education
should be structured to fulfil the aspirations of knowledge seekers as also paving
ways of knowledge application. Thus competent resources are required to drive this
cognition and build an edifice of knowledge. Management education in its own
way has to bridge the gap of mainstream education and the industry needs.
We take immense pleasure in presenting the seventh volume of Globsyn
Management Journal, popularly known as GMJ amongst its readers, wherein
we critically review and select articles which are relevant in contemporary
times. This volume of GMJ has research articles on telemedicine, mergers and
acquisition and results from an empirical survey on ATM services. GMJ also
presents to its readers, authors' perspectives on the transition of the Indian
society in the post-liberalisation era, fairness in performance appraisal process
and consumer awareness about Consumer Protection Act and Rights. The Case
Study has a very contemporary and relevant topic focused on the tourism
sector, its socio-economic developmental perspective. Thus the write-ups are
convergent to engage and enlighten the readers to expand their horizon of
thoughts and application.
The entire editorial team of GMJ thank you for your whole-hearted support and
co-operation in facilitating the Journal to move towards the heights of success.
Ipsita C. Patranabis
Associate Editor
GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 ii

Research Articles
Research Articles
Telemedicine, e-Health and Health related IT enabled
Services: the Indian Situation
Kausik Lahiri
Associate Professor of Economics
Surendranath College, University of Calcutta
Abstract
Globalization has resulted in free flow of goods and JEL Classifications: I110, O33
services and transfer of technology across borders.
I. Introduction and Motivation of the Study
With technology advancement and IT revolution in
this new regime the healthcare sector has undergone a The recent years has seen the movement of the
radical change. IT based healthcare services and world economy towards a globally integrated one
related IT services arising out of healthcare delivery with market signals being allowed to play strategic
system has reached new heights. With high technology roles in promoting allocative efficiency. To ensure
oriented satellite services provided by ISRO and greater efficiency through freer movement of
medical expertise supplied mostly by the newly economic resources across borders regulatory role
emerged super-specialty hospitals, telemedicine of supra national institutions like WTO is believed
services are not only getting exported abroad but to be very crucial. With elimination of
reaching remote corners of the country as well through discriminatory barriers that affect both services and
public-private-partnerships. These are paving the path service providers and also addressing a host of non
for sophisticated ambulatory services, new generation trade measures like protection of health,
diagnostics and pathological services and remote environment, public order, issues related to
robotic surgeries making India a healthcare hub of competition and consumer protection etc.
South Asian region. The estimated net benefit from the Advancement in information and communications
spread of telemedicine in India may exceed 1.5 per cent technologies has ignited the expansion of trade in
of her GDP. This technological breakthrough has its services. Technological progress has reduced the
presence in back-office management of healthcare cost, increased the speed, improved the quality, and
related services like (a) medical billing coding etc., (b) expanded the range of available services that can
claims processing and (c) clinical trials and contract now be traded abroad. Consequently, the canvas of
manufacturing. Sources of vulnerabilities arise for the trade in services has now expanded to encompass
sector with more market orientation and weak more professions and industries as well as new
regulatory framework. Gradual conversion of a merit geographical locations, made possible through
good into a market good calls for greater regulatory business process outsourcing (BPO) and off-shoring
vigilance. practices.
Key words: Healthcare Markets, Telemedicine, The healthcare sector is one such area which has
Information Communication Technology been significantly influenced by globalization
1I gratefully acknowledge the insightful comments from anonymous referees of the journal and meticulous guidance of Prof. Sarmila
Banerjee of the University of Calcutta.
GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  1

Kausik Lahiri
despite its merit good and not-for-profit nature. divided into two categories: First is IT aided
The recent trends show decline in public sector services in healthcare or the healthcare services
expenditures and the rise in private sector those are enabled and facilitated by IT. Examples
participation in health care in many developing are telemedicine, tele-radiology or tele-
countries, liberalization of related sectors such as diagnostics (broadly categorized as telemedicine
insurance and telecommunications and hereafter). Second are the IT based services that
technological advances enabling the cross-border are indirectly connected with healthcare activities
movement of many health services. Moreover, such as Medical Transcription, Medical Coding,
reducing tariffs leading to lower prices for related Medical Billing and Electronic Medical Record
products like medical equipments etc. encourage (EMR). This paper intends to explore the nature
technology transfer and changing international of ICT services in healthcare (section II), spread
rules concerning patent protection (TRIPS) and prospect of telemedicine in India (section III),
affecting access to essential medicines have the presence of healthcare related BPO services in
potential to bring in major institutional change in India (section IV), scope of public-private
the national health system. partnerships inproviding these services (section
In present day technology is the backbone for V) and finally, section VI will conclude the paper
healthcare services to diagnose, prevent and treat by indicating the challenges faced by the
diseases (WHO 2004). Revolutionary access to regulators in clicking balance between efficiency
information and communication technology and equity objectives in this sector.
(ICT) based services in the sector has enhanced II. ICT services in healthcare
the support services by improving patient-
healthcare provider interaction, rapid With trade liberalization under WTO, India is
dissemination of information etc. and of course now in a position to reap advantage of
improved access to healthcare through Information and Communication Technology
telemedicine (Aron, 2009), mobile health services (ICT), which includes use of computer hardware,
through satellite connectivity via nodal super software, storage, internet, telephone, modem,
specialty hospitals and sophisticated ambulatory satellite links etc. During the post liberalization
services, and so on. However, at its core, period ICT industry grew tremendously and
healthcare policymaking involves complex trade- India is now a powerhouse of IT-ITES-BPO
offs between promoting equitable and affordable services. Collaboration between public sector,
access to a basic set of health services, creating private sector and NGOs in addressing the
incentives for efficiencies in the healthcare system supply deficiencies of public infrastructure as
and managing constraints in government well as financing of healthcare services by
budgets. International trade in health services utilizing the opportunities offered by IT and ITES
influences all these trade-offs. It presents may result in newer solutions of healthcare
opportunities for cost savings and access to better provisioning with improved efficiency.
quality care, but it also raises challenges in In this context, we would like to mention that
promoting equitable and affordable access. three out of eight (goals 4, 5, and 6) of Millennium
IT based services in healthcare can be broadly Development Goals2 are directly related to
2 The Millennium Development Goals (MDGs): (1) Eradication of poverty and hunger, (2) Improving education, (3) Empowerment and education
for women, (4) Reduction of child mortality, (5) Improving maternal health, (6) Combating HIV, AIDS, malaria and other diseases,
(7) Improving water and sanitation systems and (8) Improving international partnerships (among other things to improve access to
affordable, essential drugs on a sustainable basis.
Page  2 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

Telemedicine, e-Health and Health related IT enabled Services: the Indian Situation
healthcare services. Literature reveals that the (approximately 30% of population),

scope of ICT to meet the healthcare related MDGs infrastructural deficiencies in terms of number of
are immense. Bringing unattainable market beds and number of health professionals, urban
within the reach of the deserving population, ICT centric care services along with the fact that the
can provide more efficient methods by improving deserving population residing mostly in the
delivery of healthcare services and management remote rural areas outside the scope of modern
efficiency as well as easy dissemination and healthcare system, ICT based healthcare services
transfer of knowledge (World Bank 2003). have immense potential to change the health
According to Suggs (2006), the use of IT has situation of India, if implemented properly.
grown in the fields of health communication, E-healthcare in India in terms of telemedicine, tele-
patient and provider education, health radiology, medical transcription, hospital
promotion, transfer of knowledge and delivery of management systems etc. has been triggered off.
healthcare. The beneficiary set of ICT based The private corporate hospitals, and to some extent
healthcare has the potential to include patients, their public counterparts are now in a position to
providers, both rural and urban population and reap the advantage of sophisticated tele-
thus correct some inherent biases. communication technology through advanced
IT and ITES can affect health sector in three hardware, software and satellite services. Software
different ways: firstly, improve delivery of products for the business available in India are
healthcare through better outreach and access, mainly the internationally proven ones alongside
better and faster diagnosis with telemedicine and the locally developed products. Both IT aided
tele-radiological support, disease surveillance, healthcare services and IT services based on
decision support system with better access and healthcare have reached new heights in India.
retrieval of bio-medical literature and Changes, both in the composition of demand for
advancements; secondly, improve functioning of healthcare and the supply of quality care services
the healthcare system through improved logistics with enhanced global connectivity through fantastic
for healthcare with advanced billing and ordering growth of the ICT and expansion of trade in services
systems and better management And finally, are noted in the changing pattern of forward and
improve communication about health with better backward linkages in input-output structure of the
information flows among patient and provider, macro economy (Lahiri, Banerjee 2013). Increase in
better opportunities for patient information, the extent as well as intensity of use of tele-
interactive communication and health research communications, electronic and electrical
(Chetley et al 2007). Also if utilized properly, it machineries have been observed in the Indian
would generate certain desired outcomes such as medical and hospital sector. Technical progress of
better treatment decisions, better quality and the sector has also been observed by Dholakia et al
safer care, better information and knowledge (2009), Kadekodi, Kulkarni (2006). With faster
about health and healthcare, better response from communication facilities and quick adaption of
governments on health needs, better policy technology oriented medical services, India has now
decisions on basis of national and local become a popular destination of cross border trade
information systems (Dzenowagis 2005), and so (mode 1 under GATS) of medical process
on. outsourcing services. In fact, India is leading
With growing population and expanding middle exporter of medical transcription, tele-pathology
class, enhanced coverage of health insurance

Kausik Lahiri
and tele-diagnostic services (Smith et al 2009). the time and space constraints faced by any closed
The ‗Indian model‘3 of tele-radiology and tele- economy. Since India is located in a different time
medicine services has gained popularity over zone from most of the OECD countries, hence
‗Nighthawk model‘4 (Mclean 2006). This aspect of through tele-connectivity a 24X7 emergency service
trade in mode 1 services in healthcare is mostly can be ensured at a much cheaper rate for the entire
exploited by the private sector organizations. globe. The benefits of telemedicine incude cost
savings at client‘s (patient‘s) end in terms of travel
Though IT based services have acclaimed India a
time and expenses as well as lost work hours. A
leading position in the international healthcare
study by Oklahoma State University reveals that
market, India is yet to exploit its potential to the
telemedicine helps cost savings from US$ 2,000
fullest extent to serve the domestic market
(approx) to US$ 150,000 (approx) by saving in travel
satisfactorily. The next section will deal with the
time and expenses and by outsourcing specialty
expansion and prospect of IT aided healthcare in
India and the consequent spread of telemedicine. services through telemedicine (Whitacre et al, 2009).
Cost saving, especially for the customer is expected
III. Telemedicine in India to be highly beneficial and encouraging as apart
In case of telemedicine integration of global from geographical reasons the main barrier of
economy has played a catalytic role in removing access
Figure 1 : Telemedicine setup in India

3 Under the ‘Indian Model’, companies based in India provide tele-radiology and telemedicine services to the US healthcare institutions with US
certified professionals, mainly during the night hours (third shift: 23.00 – 7.00 hrs) at US at a much lower cost than Nighthawk services.
4Under the ‘Nighthawk’ model, US healthcare institutions deploy healthcare professionals in countries like Spain or Australia providing
‘night time’ services at US hospitals using ‘sun shift’ for the professionals.

to healthcare is financial. With declining tele-health services related to diagnostics (tele-

government share in final consumption for radiology), medical opinions and consultations
healthcare expenditure and continuous escalation (telemedicine), laboratory testing, surveillance,
of costs, reduced cost with access to telemedicine transmission and processing of specialized data,
would definitely promote the equity aspect. records etc. (medical transcription, medical
Moreover, deficiency in healthcare infrastructure coding, medical billing and like). India is a leader
and human resources can also be minimized with in exporting medical transcription, tele-pathology
expansion of telemedicine projects, which will and tele-diagnostic services (Smith et.al, 2009).
eventually help in correcting heavy urban bias. Applying IT for use of healthcare resources
Figure 1 presents a description of telemedicine enables direct health related services that refers to
contact between the two parties that encompasses
setup.
diagnostic and testing facilities, advisory, health
With the revolution in IT and faster transportation information, health data mining etc. (figure 2). IT
and adaptation with the technology orientated related services arising from healthcare refer to
modern healthcare service provisions, India is now the back-end services which includes services like
an attractive destination for care services through medical transcription, medical coding and billing,
medical process outsourcing and medical tourism. health system MIS (Management Information
Cross border trade in health services include Systems), back-office services etc. (figure 3).
electronic health services transactions or
Exchange of Health Services
Country A Country B
Figure 2 : Trade in Direct Health related Services
Exchange of Health Services
Country A Country B Back-end

setup
Figure 3 : Trade in Services Arising from Healthcare

A number of telemedicine projects in operation Ramachandra Medical College and Research
are currently involving healthcare institutions like Institute, Amrita Institute of Medical Science
Apollo Group of Hospitals (APOLLO), Asia Heart (AIMS), Fortis Hospital, Narayan Hrudayalaya,
Foundation (AHF), Online Telemedicine Research Escorts Heart Institute and Research Centre, Sri
Institute (OTRI), Sanjay Gandhi Post Graduate Gangaram Hospital, Sankar Nethralaya, Aravind
Institute of Medical Science (SGPGIMS), All India Eye Hospital, Meenakshi Eye Mission, Seth Sukhlal
Institute of Medical Sciences (AIIMS), Post Karnani Memorial Hospital (SSKM) and many
Graduate Institute of Medical Education and more. Figure 4 describes the telemedicine network
Research (PGIMER), Tata Memorial Hospital, Sri across the country.

Kausik Lahiri
Figure 4 : Telemedicine network across India

Source: Compiled from SGPGI, (www.sgpgi-telemedicine.org) and ISRO (www.isro.org)
Modernization of tele-communication and India‘s Global presence and international recognition of

indigenous satellite research programs by Indian India in telemedicine is reflected through the Pan-
Space Research Organization (ISRO) are now at African e-network project. The project of 5429
such a stage from where the benefits of usage can million links Indian establishments with 53
be reaped by the social sectors like health. African countries through satellite and fibre optic
Telemedicine started in India with Apollo connections, to provide tele-education and tele-
Hospital‘s Aragonda Project (Andhra Pradesh). medicine. Five Universities and Twelve super
Recent years have observed the spread of specialty Hospitals from both private and public
telemedicine in India utilizing the ISRO network. sector are engaged in providing tele-medicine
It covers 382 hospitals across the country with and tele-medical education services in the Pan
306 Rural / District hospitals / health centres and African e-Network Project. The SAARC
16 mobile telemedicine units connected to 60 telemedicine network includes India, Bhutan,
super specialty hospitals (www.isro.org). More Nepal, Afghanistan, Maldives, Sri Lanka,
than 300,000 cases have been dealt with through Bangladesh & Pakistan. The project is funded by
telemedicine services in India (Bhaskaranarayana the Ministry of External Affairs, Govt. of India
et al 2009). Though there is some spread of involving the super specialty Hospitals of India
healthcare out-reach through telemedicine like SGPGIMS, Lucknow and PGIMER,
services, considering 23000 primary health Chandigarh. Both the projects are implemented
centres (PHCs) and 3000 community health by the Ministry of External Affairs, Govt. of India
centres (CHCs) there are miles to go before it can through Telecommunications Consultants India
make any meaningful contribution. Box 1 shows Ltd. (TCIL). Apart from the government initiated
some of the telemedicine projects in India and the projects, the Indian private healthcare institutions
partners involved. are also now engaged in expanding their

telemedicine network across border. Apollo hospitals, Narayana Hrudayalaya and Sankar Nethralaya
are offering telemedicine services to other countries. Apollo has built up network of telemedicine and
tele-radiology services with Bangladesh, Sri Lanka, Nepal, Bhutan, Burma and Kazakhstan. The other
hospitals engaged in the Pan-African e-network project are also diversifying in other countries In
search of newer destinations.
Box-1 Telemedicines initiatives / projects in India
Major telemedicine projects:

• Telemedicine module for Tropical Medicine in West Bengal - Webel (Kolkata), IIT, Kharagpur
and School of Tropical Medicine, Kolkata
• Telemedicine and Telehealth Education facilities in Kerala –3 specialty hospitals with 4
District/ Rural Hospitals
• Telemedicine network (CME programme) for Naga Hospital Kohima with Apollo Hospital,
Delhi
• Onconet Network - Kerala and Tamilnadu States
• State wide Telemedicine network based on terrestrial communication in the state of Himachal
Pradesh, Tamilnadu, Punjab
• Telemedicine network for Tripura –2 referral hospitals with 4 nodes
• Networking of District Hospitals of Mizoram & Sikkim with Apollo Hospital, Delhi
• Setup Community Information Centers in 30 blocks of the North Eastern states and Sikkim in
collaboration with National Informatics Center using NICNET
Major Hospitals / Institutes:

• Telemedicine at SGPGIMS, Lucknow, Tele-health care & Distant Education in Medicine,
National & International collaboration in policy initiatives, technical knowledge exchange &
HRD
• All India Institute of Medical Sciences, New Delhi, J & K network, Haryana ( Rohtak Medical
College, Ballabhgarh Community Centre), SCB Medical College Cuttack, Guwahati, SRMC,
Chennai, AIMS, Kochi
• Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, Mata
Kaushalya Hospital at Patiala, Sub-divisional Government Hospitals at Dasuya and Ajnala in
Hoshiarpur and Amritsar in Punjab state
• Amrita Institute of Medical Sciences, Kochi, 36 Telemedicine Centers all over India Emergency
Medical Center at Pampa
• Fortis Hospitals, HIS & PACS, 13 nodes
• Apollo Telemedicine Network Foundation, Telemedicine consultancy and software providers,
Active participants in the Standardization and ITIH activity, Installed a number of peripheral
telemedicine nodes through franchise under Apollo Health Street Company

Kausik Lahiri
Other initiatives:
• Telecardiology – Asia Heart Foundation, Escort Heart Institute, Narayana Hrudayalaya,
Bangalore
• Telemedicine for Cancer Care - Regional Cancer Centre, Thiruvananthapuram; Tata Memorial
Hospital, Mumbai; SGPGIMS Radiotherapy Network, Lucknow
• Mobile Units (Tele-ophthalmology & mammography) - Shankara Nethralaya, Aravind Eyecare
Hospital, Sir Ganga Ram Hospital
• National e-Governance Action Plan (NeGP), (DIT Initiative) - Vaccination Schedule, Maternity
Care, Family Planning, Medicines , Ambulance Services and Transportation, Hospital /
Primary Health Centers information, Blood Bank, Life Saving Drugs, Doctor‘s Database,
Appointment with Doctors, E-Diagnostics, Materials Management System (Medicines)
Source: SGPGI, (www.sgpgi-telemedicine.org)
Benefit Cost estimation of the spread of service but for a number of others there will be
Telemedicine Services in India incentive to disclose their otherwise suppressed
demand for treatment. The out-of-pocket
Benefit: The spread of telemedicine service will
expenditure incurred by a typical rural household
enhance the access of health service even to the
remotely located people without taking up any on travel, food and other services related to
treatment but not strictly related to the illness
outward travel from their locality and lower the
episode came out to be Rs.650.00 at 2004 which
cost of access in terms of saved travel cost as well
after suitable price adjustment turns equivalent to
as time cost. Since the service is mostly meant for
Rs. 920.00 per capita. It is interesting to note that
the rural population an assessment of
the amount charged by Apollo Hospital, the first
approximate per capita benefit may be obtained
private telemedicine consultant charges 900
by using information culled out from the NSSO
60th round survey database on the ‗Morbidity (Solberg 2008) per consultation. In fact, for public
hospitals and health centers this service can be
and Health Care‘ (schedule 25.0). It is observed
availed free of cost.
from the unit level data that nearly 10 per cent of
rural population is reporting morbidity out of Cost: The cost of telemedicine service has two
which nearly 15 per cent are not seeking any important components: (i) cost of network
medical help mostly due to (i) absence of facility connectivity and (ii) cost of installing computer set-
within reach, (ii) long waiting time, (iii) lack of up in the receiving stations. The number of
fund to finance healthcare related services and receiving stations is 23,000 Primary Health Centers
(iv) not considering the ailment serious enough to (PHC), 3,000 Taluk (Sub-divisional) Hospitals and
be reported. It is observed in another study by 650 district Hospitals. According to the estimate of
Chatterjee (1990) that the perceived need for the Department of health, Government of India, the
health care is a combined effect of actual need, cost of creation of necessary infrastructure at each
availability, ability and affordability. So, it is station is expected to be equal to Rs.0.5 million at
expected that if option of telemedicine can be 2005-6 prices (Bagchi 2006), which after suitable
explored properly then it will bring not only this price adjustment equals Rs.17 billion. This
left out 15 per cent within the ambience of care investment is expected to depreciate over a period

of 5 years after which replacement would be of very high tele-consultation fees (NR 3100). Dr.
required. So, the annualized value (At) with an Devi Shetty, renowned Indian Surgeon found
interest rate of 15% would come up to Rs.3.9 while introducing a telemedicine project in
 5
t
1    1
Karnataka in association with ISRO that the main
barrier of access to healthcare is finance. This
billion where At      x17
t  0  1  0 .15  
finding led to the formation of the successful
 
Yeshasvini Farmers Cooperative Healthcare
The annual cost of accessing the service of Health Scheme, a unique community based health
SAT, a dedicate part of ISRO satellite for insurance (CBHI) programme in collaboration
telemedicine related networking comes out to be with the Government of Karnataka. The Karuna
approximately equal to Rs.1.1 billion (Bagchi op Trust, Karnataka also works on the same lines
cit) (in fact, the range suggested is Rs.0.762 – 1.27 with CBHI thus providing the necessary support
billion). When added together the total cost turns to overcome the financial barrier to healthcare
out to be Rs.5 billion. Even if a 10 per cent and telemedicine. Healthcare financing remaining
operation and maintenance cost is added the total the main issue for access to healthcare, with
annual cost will not exceed Rs.5.5 billion. This is greater outreach of telemedicine, favourable
expected to provide service to 0.802 billion rural health financing schemes like CBHI may improve
people with a per capita cost of Rs.7 the access.
(approximately).
IV. Healthcare related IT services in India
Assessment: The net benefit per episode would
Increasing availability of indigenously built
be Rs. (920.00 – 7.00) = Rs.913.00. As the outreach
software had helped to improve the scope of IT
will expand the average cost per episode would
aided healthcare in India. The expertise in
go down and not only the reporting of morbidity
software services is not limited to the IT aided
but treatment completion rate will also go up.
healthcare services alone. Variety of solutions
According to NSS data the reported morbidity in
such as telemedicine systems, Picture Archival
rural India is only 10 per cent. After spread of
Communication system, Hospital Management
telemedicine service if it increases to 20 per cent,
System etc. provided by these companies help the
the net benefit generated would be of the order of
IT based healthcare to drive up efficiency of
Rs.732 billion, which is nearly 1.5 per cent of
delivery and infrastructure, managing uneven
Gross Domestic Product.
patient flows, cost of management through better
processing of Business Intelligence. Moreover,
Caution: Though it is believed that telemedicine cloud based services offer virtual server
benefits include savings in cost, yet, to the poor, infrastructure drives which subsequently reduces
deserving population of India, these charges are the cost related to energy and space and helping
high enough to create entry barriers. As found by infrastructure optimization. IT giants like Dell,
Piya (2010), withdrawal of telemedicine services HCL Infosystems are providing IT based
by Apollo from OMHRC (Nepal) is due to solutions for the healthcare industry. Dell
financial matters related to payment issues. It is provides cloud based solutions for all eight
believed that Apollo was unhappy with the centres of Max Healthcare in India converting the
income from OMHRC. It might be that Apollo IT infrastructure into a private MPLS (Multi-
was not achieving the same level of profit from Protocol Label Switching ); cloud run remotely
telemedicine that it could get otherwise in spite

Kausik Lahiri
from Dell services Data Centre, Noida. On the by the respective insurance company. Insurance
other hand, HCL, Infosystems offer cloud claims processing involves (i) Re-pricing, which is
solution to Fortis group of hospitals. Based upon adjustment of claims after accommodating special
this system with unique patient identification concessions after bargaining between the
number, Fortis is able to transfer patient data insurance company and the service provider, (ii)
across all centres and the need to carry Adjudication, applies to co-insurance,
documents from one centre to other becomes deductibles, limits, and provider reimbursement
redundant. Cloud also enables Fortis to offer schedules to determine actual claim payments,
telemedicine at remote locations. It is very (iii) Enrollment services to determine an
difficult to separate IT aided healthcare services individual's eligibility and insurance plans and
from IT services arising from healthcare. End to then recording necessary modifications,
end solution nature of the system integrates it terminations, (iv) Utilization review done by a
together. Piramal e-Swasthya, a project to team of medical professionals to pre-certify and
improve access to health in rural areas uses such monitor an insured patient's course of treatment.
model systems to develop doctor less villages
with tele-clinic facility using e-diagnosis systemMedical billing, coding and claims processing has
and optimizing resources. gained momentum in India (Table 1).
The healthcare BPO market can be divided into Outsourcing of these activities to contractors
three main segments: (a) The Provider market involves transactions cost efficiency and is very
involving medical billing coding etc., (b) the popular. The global healthcare BPO market is
Payer segment involving claims processing and growing at a compound annual growth rate of
(c) the Pharmaceutical segment involving 21.4% (www.marketresearch.com). Growth of IT
clinical trials and contract manufacturing. related services in healthcare has shown
Medical Coding is a process that assigns proper commendable progress. With employment in IT
diagnostic and treatment codes to the identified related health services rising from 30,551 in 2000
medical procedures. It involves generation of to 2,42,500 in 2005 (Smith et.al), revenue earned
texts or images which are transmitted over the from such services rose from US$264 million to
internet to locations where the information is $4072 million (table 1) during the period, i.e.,
coded with appropriate coding systems. Medical more than 15 times. Indian healthcare institutions
Billing involves creation of charge entries with are increasingly getting involved in IT services
the help of patient treatment information onto arising from healthcare with their international
standardized forms according to coding systems. counterparts. For instance, apart from the
These are then verified and re-priced after telemedicine network, The Apollo group of
adjusting special concessions (if any) previously hospitals also have partnerships with Health
negotiated between the insurance company and Services America and Medstaff International,
the service provider. These entries are the basis USA for medical coding and billing,
for reimbursement documentation of medical records,
5Computing Cloud - is a colloquial expression used to describe a variety of different computing concepts that involve a large number of
computers that are connected through a real-time communication network (typically the Internet) (Wikipedia).
6Multi-Protocol Label Switching (MPLS) is a mechanism in high-performance telecommunications networks that directs data from one
network node to the next based on short path labels rather than long network addresses, avoiding complex lookups in a routing table
(Wikipedia).

insurance claims processing etc. (Smith, et al, op.cit). India has gained an international market as a
premier provider of mode 1 services in healthcare with its infrastructure and trained skill base.
Table 1: Revenue Earning by India in IT related services in healthcare
Revenue (US $, millions)

Service Segments
2000 2005 (increased by)
Customer interaction Centres 60 2250 (37.50)
Medical Transcription 30 800 (26.67)
Financial and accounting services 50 375 (7.50)
Medical Billing and collection 3 75 (25.00)
Insurance Claims processing 13 30 (2.51)
Pre press and digital pre media 45 200 (4.45)
Geographical Information Systems -- 50 (new)
Distance Learning 60 150 (2.50)
HR services -- 115 (new)
Litigation support services 3 27 (9.00)
Total 264 4072 (15.42)
Source: ESC: Electronics & Computer Software Exports Promotion Council
In the Pharmaceutical segment, (i) Clinical trials pharmaceutical companies have chosen India as a
include testing the drugs and formulations on destination of off-shoring and outsourcing
patients across locations and demographics. different activities like drug discovery including
Contract research organizations collect data on clinical trials (Table 2). India‘s edge comes from
the trial drug on the samples and are transmitted IT enabled Research & Development services in
digitally to the main centres, (ii) Contract areas of clinical data management, bio statistics
Research are research activities that cross and medical writing. While the pharmaceutical
geographical boundaries to locations where industry comes as an allied manufacturing sector
quality data access with faster computation and to the health services, several activities of it,
analysis are possible with the help of qualified especially activities related to R&D comes under
personnel. Many pharmaceutical companies are services, and if traded, comes under the purview
now conducting clinical trials as well as contract of GATS. A very complex combination of off-
research in India. shoring and outsourcing activities within the
pharmaceutical sector extends beyond
With the revolution in IT and adaptation with the manufacturing services. With largest number of
technology orientated modern healthcare service US FDA approved firms outside USA, India
provisions, India is now an attractive destination attracts a huge volume of outsourced and off-
for medical process outsourcing. It is worth shored drug manufacturing business too.
mentioning in this context that big

Kausik Lahiri
Table2: Off-shoring and Outsourcing activities of foreign firms in India (2010)
Company Drug Discovery Drug Development Drug Manufacturing

Off-shoring Outsourcing Off-shoring Outsourcing Off-shoring Outsourcing
Pfizer -------------- √ √ -------------- √ √
Abbott -------------- -------------- ----------- -------------- √ √
Novartis -------------- -------------- √ -------------- ------------ √
Sanofi-Aventis -------------- -------------- ----------- √ √ √
Roche -------------- -------------- ----------- √ ------------ --------------
BMS -------------- -------------- ----------- √ ------------ --------------
Eli Lilly √ √ ----------- √ ------------ --------------
GSK -------------- -------------- √ √ √ √
Astra -Zeneka -------------- -------------- ----------- -------------- √ √
Merck -------------- √ ----------- -------------- √ √
Novo Nordisk -------------- √ ----------- -------------- √ √
J&J -------------- √ ----------- -------------- ------------ --------------
Amgen -------------- √ ----------- -------------- ------------ --------------
Source: OPPI, Ernst & Young (2011): India Emerging: Pharma‘s evolving Business models.
V. ICT based healthcare and Private-Public-

Partnership in India
To achieve the Millennium Development Goals, forms for improved transportation and
especially those related to healthcare, a ambulatory services, blood bank facilities,
comprehensive approach is required cutting contracting clinical and non clinical processes as
across different areas involving private, well as awareness programmes on health and
government and non-government organizations hygiene has gained momentum. Global
working together (World Bank 2003 op cit). The endorsement of international organizations like
World Bank (2001) and the National Commission WHO, World Bank, United Nations etc. has
on Macroeconomics in Health (2003, 2005) influenced national and local level health policy
advocated inclusion of the private sector in planning and implementation, strengthening free
achieving health related goals and making both market with matching reduction in the role of the
public and private sectors more accountable. The government (Baru, Nundy 2008). Government of
Tenth Five-Year Plan (2002-2007) also stressed the India realizes the need for mobilizing resources
need for private sector participation in the for healthcare to improve delivery mechanisms
delivery of healthcare services. This period has and partnerships could help to minimize the
witnessed increased involvement of private and problem of poor health services delivery. Many
voluntary organizations as well as self help international funding agencies like World Bank,
groups to improve access to healthcare. Public- UNDI, UNICEF, Melinda and Bill Gates
Private-Partnerships (PPPs) collaborations in Foundation, Clinton Foundation, Carter
various Foundation, international

NGOs and Church based organizations promoted related projects contribute to the complicated
collaborations in healthcare. Examples of some institutional frame. Examples are Apollo
major global partnerships are Global Alliance for Telemedicine Enterprises sponsored by the
Vaccines and Immunisation (GAVI), Global Government of India, ISRO, GE and Wipro;
Alliance for Tuberculosis Drug Development, Telemedicine services by Asia Heart Foundation,
Global Polio Eradication, Programmes on HIV / sponsored by Government of India and ISRO;
AIDs. These global partnerships promoted Online Telemedicine Research Institute (OTRI),
programs helped build up national / local level sponsored by Government of India, ISRO and
partnerships. industry, AIMS telemedicine network, Disaster
With advent of technological progress and management and Proactive care in Tele-Health
telemedicine in particular, these partnerships are Network, Amrita Institute of Medical Sciences
required to be developed at a larger scale. (AIMS), Kerala and Karnataka Integrated
Yeshasvini Trust, Karuna Trust (Karnataka) are Telemedicine and Tele-health project along with
good examples of such partnerships in Narayana Hrudaalaya. Other examples are
healthcare. Many of such telemedicine and collaborations of ISRO with state governments of
healthcare initiatives involve non-government West Bengal, Rajasthan, Chhattisgarh, Punjab,
organizations apart from the private for profit Tripura, Himachal Pradesh, Tamil Nadu and
and public sector institutions. RTBP project Tamil Kerala involving various premier hospitals of the
Nadu; Sustainable Tele-Health Network for country / states.
preventive and curative interventions, Uttar
Pradesh; Remote Continued Medical Education However, expansion of private and voluntary
(CME) network, Lucknow; etc. are a few networks for healthcare provisioning based on
examples. More importantly, under National ICT dependent care in India with improved
Rural Health Mission (NRHM) the National access for the deserving population is rested on
Rural Telemedicine Network (NRTM) has been better financial management. Gradual entry of
established in collaboration with ISRO, DIT (GoI), private facilities would lead to price escalation
State Governments and various super specialty that would impede the poorer section of the
hospitals, both public and private. The NGOs are society to enter the market; due to low ability to
also involved in the NRHM to reach the pay their access would be denied. More sources
deserving mass of the country realizing the of vulnerability arise due to lack of regulatory
infrastructural constraints. arrangement and vigilance on technology
Importantly, the very nature of growth and arriving in this sector. Weak regulatory
expansion of ICT based healthcare services in environment in the health sector in India (Lahiri
India are rooted in PPP initiatives. Enabled by 2013) involving various departments and
dedicated satellite services of ISRO to reach ministries of the government coupled with the
corners of the country, initiatives and arrival of IT oriented new technology is bound to
involvement of various ministries like Ministry of under serve these challenges. In absence of any
Communications and Information Technology, legal provision ensuring investigations into lack
Ministry of Health and Family Welfare, Ministry of infrastructure of the Central Drug Standards
of External Affairs along with the public as well Control Organization (CDSCO) and more
as private sector enterprises of healthcare and IT importantly, information asymmetry between
sector in various health

Kausik Lahiri
the provider (agent) and the patient / customer to the original access and outreach problem under
(principal), there are fears of increased unethical constraints of healthcare financing and huge out
and unnecessary practices related to excess of pocket expenditures in the absence of universal
provision of healthcare services to the affording health insurance coverage. Moreover,
affluent class. Over prescription of drugs, independent partnership initiatives might result
unnecessary recommendations of investigations in regulatory issues for the sector. Various highly
and prolongation of treatment arises from the technical dimensions are involved in such
information asymmetry that prevails in such a collaborations and it needs to be regulated under
sector under market conditions like India. With a uniform framework built up by the regulatory
the tendency of telemedicine to delegate various body involving stakeholders from all relevant
medical works to non-medical personnel (David spheres. We conclude following Krishna (2008)
2005), one cannot rule out the possibility of that telemedicine should not be thought to be the
creation of a new generation of quacks arising answer to all healthcare problems; rather, it
from such remote services. should be viewed as a tool to complement the
VI. Conclusion healthcare facilities which can be very helpful to
address a wide range of problems.
Technology revolution in India during the post
liberalization phase with opening up of the
services sector under GATS has resulted in a sea References
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Research Articles
Merger and Acquisition — A Myth?
(From an Indian Acquirer’s Perspective)
Ms. Sutapa Chatterjee
Ph. D Scholar, University of Calcutta
&
Dr. Sharmistha Banerjee
Associate Professor, Department of Business Management,
University of Calcutta
Abstract
Global investment in mergers and acquisitions Schijven, 2008). Paralleling this practical
has reached unprecedented levels in recent years. importance, in both monetary and strategic terms,
But according to KPMG study (1999), ‗83% of all acquisition activity has increasingly become a
mergers and acquisitions failed to produce any focus of study in several academic fields.
benefit for the shareholders and over half actually Although this interest has generated considerable
destroyed value‘. With this backdrop we tried to acquisition-related knowledge, the range of
explore performance levels of cross border and findings from these diverse areas lacks theoretical
domestic merger and acquisition (M&A) from an integration, which constrains scholars‘ abilities to
Indian Acquirer‘s perspective. The focus of our synthesize notable contributions from each
study is to explore the change in performance discipline. For instance, initial research,
levels of the companies in the post M&A period concentrated mostly in the literature on finance,
in comparison to the pre M&A phase in the short paved the way for scholarly work in the
run. For studying the performance of the acquisition literature.
sampled firms we choose some HR and Finance Despite the fact that a large proportion of
related parameters as an indicator of short term worldwide merger activity involves firms from
performance i.e. 2-3 years immediately after different countries, the voluminous literature on
M&A has taken place. In this paper we also made mergers has focused primarily on domestic deals.
a comparative study of companies that have Much of the earlier work on cross-border mergers
undergone intra-India M&A and India-overseas focuses on synergies, marketing ability, or
M&A on the basis of these parameters to arrive at technological advantages to explain why a
inferences which may have meaningful indicators foreign firm would value domestic assets more
for corporate policy in case of future M&A. highly than would a domestic firm (Graham and
Key words: M&A, Short Term, HCROI, RPP, Krugman, 1995). Other factors proposed to
ROA, EPS include trade tariff-jumping (Neary, 2007), tax
incentives (Scholes and Wolfson, 1988) (Swenson,
1. Introduction 1994) (Desai, Foley and Hines, 2001), and
Global investment in M&A has reached macroeconomic conditions. Empirical work
unprecedented levels in recent years (Barkema & focuses on explaining the general pattern that FDI

Ms. Sutapa Chatterjee & Dr. Sharmistha Banerjee
flows from developed to less developed countries "swallows" the business of the target and the
(e.g. Cushman (1987) and Swenson (1994)). buyer's stock continues to be traded. A merger
However, none of these studies provide a trend happens when two companies, often having the
or theoretical justification for a relation between same size, agree to continue their operations as a
overseas vis-a-vis domestic M&A. single new company rather than remain
In the period, since 2000 most of the South East separately owned and operated. Whether a
Asian countries stepped in the M&A vehicle, purchase is considered a merger or an acquisition
embracing the world markets and opened their mostly depends on whether the purchase is
borders for foreign direct investment. Western friendly or hostile and how it is announced.
countries, in turn, face opportunities to expand to Sometimes differentiating between merger and
new markets that offer high growth perspectives, acquisition can be difficult and confusing because
it depends on the contract terms between the
especially in the last few years when the global
acquirer and the target and their behavior after
financial crisis and the credit crunch, globally
restrained the investment opportunities. announcement of the deal. Therefore, more often
the literature identifies mergers and acquisitions
However, though the sheer numbers of such
as one concept and uses them together and even
acquisitions are huge but there is a huge debate
on the success rate of such M&A. Selden and interchangeably. Henceforth we will be using the
Colvin, (2003) stated that 70-80% of acquisitions word merger and acquisition (M&A) to mean
fail, meaning that they create no wealth for the anyone or both.
share owners of the acquiring company. In this paper a detail survey of the available
literature on M&As and its impact on the different
For these reasons we were motivated to explore
aspects of corporate entities has been carried out.
performance levels of cross-border mergers or
Further, research studies specific to India and their
acquisitions in the period from 2002 to 2008 and
limitations and research dimensions for the present
or vis-a-vis domestic M&A from an Indian
study has been analysed. Evaluating the
acquirer‘s perspective. We choose this period as it
performance of corporations involved in M&As has
encloses a phase of economic transformation,
been the subject of a great deal of research. Khemani
which is undoubtedly still in process. In this
(1990) states that there are multiple reasons,
paper we have concentrated on 20 mergers and
motives, economic forces and institutional factors
acquisitions deals which are intra India and
that can be taken together or in isolation, which
India-overseas. The focus of our study is the
influence corporate decisions to engage in M&As.
change in performance levels of the companies, if
While Baker et. al. (2012) remarked that the target
any, in the post merger phase as compared to the
companies‘ recent peak prices or judgmental
pre merger ones.
anchors affects several aspects of mergers &
2. Survey of Literature acquisitions including offer prices, deal success,
The terms ‗merger‘ and ‗acquisition‘ are often market reaction and merger waves. Smit and Ward
used as synonyms, but they have slightly (2007) found that shareholders of acquiring
different meanings (De Pamphilis, 2008). When a companies do not earn statistically significant
company takes over another company and clearly positive or negative abnormal returns around the
establishes itself as the new owner, the purchase announcement date. In this context Franks and
process is called an acquisition. From a legal Harris (1989) indicated that generally the
viewpoint, the target ceases to exist, the buyer shareholders of the target firms benefitted

whereas those of the bidder firms lose after the K. Ramakrishnan (2010) also researched on the
merger and acquisition deal was struck. effects of announcements of mergers on
However, it was difficult to pinpoint the main shareholder wealth in the India context. The
deciding factor of mergers & acquisitions. research concluded that the acquired firms‘
In fact it was difficult to measure the isolated shareholders enjoyed significant wealth gains
impact of mergers & acquisitions as well. Research whereas the acquiring firm‘s shareholders did not
resembling the above mentioned studies was also experience the same.
conducted but mainly from the financial aspect. However, researchers in this millennium recognized
Selcuk and Yilmaz (2011) investigated the impact of that there is a strong direct correlation between
merger & acquisition deals on the performance of human resource involvement and success in
acquirer Turkish companies between 2003 and 2007. mergers and acquisitions. It is said that the ‗HR can
Analysis of both stock market and accounting data make or break the mergers and acquisitions‘ by
weakly supported the hypothesis that acquirer Schraeder and Self (2003). Schmidt (2003) has
companies were negatively affected by mergers & identified 5 major roadblocks to merger and
acquisitions activities. Ahmad et. al. (2012) acquisition (M& A) success, three of which are
investigated the impact of capital structure on firm human resource (HR) issues. Becker and Gerhart
performance by analyzing the relationship between (1996) examined the influence of a firm‘s HRM
operating performance of 58 Malaysian firms, system on its financial performance. It has invoked
measured by return on asset (ROA) and return on the researchers to come up with different findings
equity (ROE) with short-term debt and total debt that help to establish the interrelationship between
for the period 2005 to 2010. The study found that HRM and finance. This millennium started with the
only short-term debt and total debt had significant study by Hitt et. al. (2000) examined the direct and
relationship with ROA. Tuch and O‘Sullivan (2007) moderating effects of human capital on professional
considered the impact of acquisitions on firm service firm performance. The results showed that
performance. It was observed that in the short run, the leveraging of human capital had a positive effect
acquisitions had an insignificant impact on on performance. Viljoen, (2012) examined audited
shareholder wealth whereas overwhelmingly financial data of companies listed in Johannesburg
negative returns were noticed in the long run Stock Exchange (JSE) to study the nature of central
performance. It also found that acquirers with tendency and dispersion of their HCROI. Wright et.
superior pre-bid performance tend to experience al. (2003) research revealed that both organizational
significant underperformance in the post-bid commitment and HR practices were significantly
period. related to operational measures of performance,
Research studies were also conducted in India but operating expenses and pre-tax profits. Siegel et. al.
mainly from the financial aspect. The work of Rao & (2005) analyzed the differential effects on
Rao (1987) was one of the earlier attempts to productivity and human capital for different types
analyse mergers in India. Kumar and of ownership changes in mergers and acquisitions.
Panneerselvam (2009) presented a comparative For full and unrelated acquisitions, the results
study of the effect of mergers acquisitions on the suggested that ownership change resulted in
wealth of shareholders of acquirer and target firms increase in relative productivity. In the empirical
during the period 1998-2006. The results indicated analysis of Swedish manufacturing firm it was
that mergers and acquisitions had a positive effect found that mergers and
on net present value for bidding and target firms.

acquisitions enhanced plant productivity, 3. Objective of the Study

although they also resulted in the downsizing of This paper aims to study the performance of the
businesses. sampled firms by examining some of their human
Recent research work has laid great emphasis on resource (HR) and finance related parameters as
human capital. Shook and Roth (2011) found that an indicator of short term performance i.e. 2-3
HR practitioners were not involved in planning years immediately after the M&A has taken place.
decisions related to downsizings, mergers, and/ The selected parameters are:
or acquisition. So they suggested that these
practitioners need to play a more active role • HCROI (Human Capital Return on
during the planning stages to ensure that training Investment) which is measured by:
and development supports the financial goals of {Revenue - (Operating expenses-
these change events. Kesti M. (2011) proposed Compensation)}/Compensation
that in recent times human capital has emerged
• RPP (Revenue per Person Rupee,) with the
as a dominant force in organizations and there is
help of:
irrefutable evidence that the efficacy of this
human capital is of importance when studying Total Revenue/Total People costs
the economic performance of an enterprise. It has • ROA (Return on Assets), following
an important role in changing or eroding the conventional method:
enterprise value. It has been established that
PAT (Profit after Tax)/Total Assets
there is a strong direct correlation between
human resource involvement and success in • EPS (Earnings per share), as accepted in
mergers and acquisitions. Rizvi (2011) found a literature to be:
positive association between human capital (PAT-Preference Dividend)/Number of
indicators and organizational performances Shares.
through quantitative and qualitative study of
We have chosen HCROI and RPP ratios to access
firms. Doseck (2012) discussed the aspects of
employee related performance of the companies
organizational culture, human capital
and ROA and EPS ratios to access the finance
management and change management and
related performance. However we must submit
identified best practices and challenges of HRM
that we have looked at the business performance
professionals during the integration phase of
from investors, shareholders and employees point
mergers and acquisitions. HCROI looks at the
of view but not taken any indicators from the
ROI in terms of pro?t for monies spent on
customer‘s side in the present study.
employee pay and bene?ts (Jac Fitz-enz, 2012).
4. Hypothesis
With this backdrop we try to comprehend
whether the M&A have led to improvement or We propose to find out whether there is any
deterioration in performance of the M&A entity significant improvements/decline in the
in the post merger and acquisition period. We above mentioned ratios in the post M&A
also attempt to study the magnitude of change period, for which the following hypothesis
for intra- India and India-Overseas cases in the have been framed:
sampled firms with parameters capturing both I) H01 = There is no significant change in
financial and HR perspectives. HCROI in the pre and post merger period.

HA1= There is significant change in HCROI namely HCROI, RPP, ROA and EPS for all the
in the pre and post merger period. companies for all the six years in the pre and post
II) H02 = There is no significant change in RPP M&A period. A descriptive analysis was initially
in the pre and post merger period. attempted which was supplemented by statistical
analysis, the details of which are given below.
HA2= There is significant change in RPP in
the pre and post merger period. A descriptive analysis of the HR related ratios
was attempted from the HCROI and RPP tables
III) H03 = There is no significant change in
(Table II and III respectively). From Table II, we
ROA in the pre and post merger period. see an apparent downward trend in HCROI ratio
HA3= There is significant change in ROA in in 80% of the companies whereas only 20% of the
the pre and post merger period. companies which have shown an increase in the
IV) H04 = There is no significant change in EPS HCROI ratios in the post M&A period. The
in the pre and post merger period. downward trends may be attributed to huge
operating expenses (Jet Airways, ONGC, Sterlite
HA4= There is significant change in EPS in or Tata Steel) and Cultural issues (Suzlon,
the pre and post merger period. ONGC). However, there are only four companies
Further we attempt to make a comparative which have shown an upward trend in HCROI in
study on these parameters, of companies the post M&A period namely, DRL-Betapharma,
that have undergone intra India M&A and VIP-Aristocrat Industry, Graphite India-Carbon
India-overseas M&A. Investment & Kingfisher-Deccan Aviation. From
5. Methodology & Data Set Table III it is seen that 55% 0f the companies have
experienced a decreasing trend in the RPP Ratio
The research work has been empirical in nature while 45% of the companies have shown an
and stratified sampling technique has been used. upward trend. This may be attributed to takeover
Secondary data has been used from Prowess and of loss making plants and loan payments in the
Annual Reports of 20 companies (list of Post Merger period. We know from literature
companies in Table I) during the five year period survey that M&A does not take place only with
from 2002-03 to 2007-08 and considered F0 as the one objective of increasing revenue in the short
year of M&A. The study covered the three term, but for various other reasons. We may
preceding years of M&A (considered as F-3, F-2, categorize the observations as follows:
F-1) and three years succeeding the same
(considered as F1, F2, F3). The financial and We may observe that there are two M&As namely
human resource (HR) related parameters for the Dr. Reddy‘s Labs-Betapharma and Graphite India
years F-3, F-2, F-1 and F1, F2, F3 have been Ltd-Carbon Investment where both HCROI and
analysed. The data of the acquirer company has RPP ratios are showing an upward trend and the
been taken for analysis in the premerger period, business performance as a whole has also shown
as the study wanted to focus on Indian Acquirer‘s an upward trend in the short run. So a closer
perspective from the Intra India and Overseas scrutiny of these four companies was attempted.
India M&A. The data for the M&A entity was The combination of Dr Reddy‘s and Betapharma
considered for the post M&A period. enabled, the M&A entity to continue to expand its
growth trajectory and at the same time provide a
6. Analysis
strong foundation to leverage Dr Reddy's global
At the onset we calculated all the four ratios product development and

marketing infrastructure to build a significant In companies where HCROI decreased but RPP has
generics business in Europe (Business Line Feb, increased, which we find that in companies like
2006). This may have led to better financial and Hindalco- Novelis M&A the objective of increasing
HR ratios and the business as a whole also revenue was fulfilled. But, Hindalco had never
improved in the short run. From Table II & III it before gone for cross border acquisitions so they
is also apparent that Graphite India -Carbon were yet to learn to integrate (HBR. May, 2009). So
Investment, has shown upward trend in HCROI RPP has increased but HCROI has not increased
and RPP ratio post M&A. This may be explained which has yielded satisfactory business results.
from the rationale behind the merger. According Therefore we may apparently say that forward
to company officials, the merged entity mobilised looking trend is slightly positive.
resources at competitive costs and capitalized on In companies where HCROI and RPP ratios both
opportunities in the post M&A (Economic Times, have shown a downward trend, we find that
Nov, 2001). Graphite India has reported all round
there are cultural issues, like in Suzlon-Imperial
substantial growth in the period immediately
Energy M&A entity. In the integration period, as
post M&A. So it appears that upward trends in
they had to integrate 14,000 employees across 5
HCROI and RPP ratios has shown good overall
continents as has been recorded in their annual
business prospect. This is already hinted in
report. It may be important to mention that
literature by Bontis and Fitzenz (2002), where he
Suzlon business as a whole went for a dip. Thus
established the relationship between human
we may apparently infer that downward trends
capital management and economic and business
in the HR related ratios immediately post M&A
outcomes.
may be caused by cultural diversity which has
There are some M&A like VIP Industry Ltd- not been effectively addressed.
Aristrocat and Kingfisher-Deccan Aviation which
From a study of the highest and lowest HR
have shown upward trend in HCROI but have
related ratios we find that, the highest, in fact
shown an apparent downward trend in RPP in
extremely high HCROI (54.01695) and RPP
the post M&A period as compared to pre M&A
(457.0508) has been recorded in the pre M&A
scenario. Detailed scrutiny of the facts reveals
period by Eastern Silk Industries. As we can see
that acquisition of Deccan Aviation by Kingfisher
from the annual report of Eastern Silk Industries,
Aviation Company in the year 2007 reported a
total employee cost is extremely low as compared
rise in HCROI in the post M&A period. Probably
to the rest of the companies which are included in
this can be explained by the facts that, the
this study. They did not make huge investments
company took several measures to increase the
in the Pre or Post M&A period so compared to
revenue. The company annual reports shows that
big manufacturing giants like Tata Steel-Chorus
the company went for an equity infusion of
or Sterlite-Asarco industries. This may be one of
around Rs 20 billion through strategic and
the reasons why Eastern Silk industry HR ratios
financial investors and monetized aircraft order
are unusually high (an outlier) in pre M&A
book over the time and noded for 7 new global
period . We may conclude that for this study
routes. All this attributed to marginal overall
Eastern Silk-Stella Silk Industries M&A entity has
business growth in the immediate and long run.
behaved like an outlier.
So we may infer from these two ratios that there
is marginal positive trends in overall business Sterlite Industries-Asarco has reported a minimum
prospect. HCROI (-0.1268) in the 2nd year, 2008 post M&A.

From the Annual report data we see that the 6.2 Financial Ratios
revenue has increased by 71% from pre to post
A descriptive analysis of the ROA ratios (Table
M&A but the operating expense has increased IV) clearly points out that 85% of the companies
more than the revenue and the employee cost has under study has experienced a decrease in ROA
risen by 67% in the post M&A period. This ratios over the seven years span from Pre to Post
explains why HCROI has decreased and is at a M&A. Similarly analysis of EPS ratios (Table V)
minimal level as compared to other samples in depicts that 80% of the companies have shown a
the study. downward trend.
In the following section of the paper statistical Again only 15% of the samples viz, DRL-
analysis was carried out using SPSS software. Betapharma, VIP Industry-Aristocrat Luggage
Using our sample where n=20, M&A cases, and and Graphite India-Carbon Investment M&A
applying paired T test, we arrive at the following entity has shown a rising trend in ROA and EPS
results. ratios as in HR Related ratios mainly because of
6.1 HR related ratios increase in PAT. This may be exemplified by DRL
PRE POST
Mean ± Std. Mean ± Std.
P VALUE SIGNIFICANCE
Deviation Deviation
HCROI 6.04 ± 5.05 4.42 ± 2.94 0.009 Significant
RPP 37.94 ± 42.05 35.93 ± 41.97 0.502 Not Significant
Here we test the hypothesis that the mean HCROI is experience, in 2005-06, immediately after the
same in the pre and post M&A: We have applied acquisition of Betapharma, when PAT rose from
paired T test to get the 2-tailed P value as 211 to 1629 in million rupees as in Annual report
0.009<0.05. Hence, we reject the null hypothesis to 2006 and ROA and EPS apparently increased. In
claim that there is a significant change in the mean the remaining 80% of the companies all ROA and
HCROI level in the two periods. Also since the EPS ratios are apparently showing a downward
mean HCROI post M&A is lower than the mean pre trend from pre to post M&A period probably
M&A level we can conclude that there is a decline
because of takeover of sick units or loans. This is
very apparent from the Tata Steel and chorus
in the HCROI level in the post M&A period and the
merger when, the debt-laden metals company,
decline is statistically significant.
tried to raise about 250 million Singapore dollars
Here we test the hypothesis that the mean RPP is in its first foreign currency bond issue to repay
same in the pre and post M&A: We have applied some of its foreign loans ( ET April, 2013).
paired T test to get the 2-tailed P value as The highest ROA and EPS have been recorded by
0. 502>0.05. Hence, we cannot reject the null Indian Oil in the pre M&A period (namely ROA
hypothesis to claim that there is a no significant is 1.1294 and EPS is 418.766). But in the post M&A
change in the mean RPP level in the two periods. period, it is also estimated that IOC needs to
Since the RPP post M&A is lower than pre M&A avoid immediate losses of almost Rs 1,000 crore.
level we can conclude that there is a decline in the (Business Line Feb,2006) . Thanks to these losses
RPP level in the post M&A period. But the ROA and EPS have gone for an apparent
decline is not statistically significant. downward swing.

In case of Kingfisher pre & post M&A figure has the mean EPS pre M&A level we can conclude
shown minimum and negative ROA (-0.5039) & that there is a decline in the EPS level in the post
EPS (-111.6367) is showing negative figures also. M&A period, which is also statistically significant
Vijay Mallya-led Deccan Aviation, raised around and reconfirms the findings in the earlier
Rs 1,000 crore as debt from financial institutions paragraphs.
with adverse stock market conditions which In fact it is apparently clear that acquisitions by
delayed the airline's plans to raise Rs 1,600 crore DRL, Graphite India and VIP have consistently
in the form of equity (ET News, April 23, 2008). shown an upward trend in all the four ratios
This may be one of the reasons why ROA and considered in our study. This is also
EPS are showing negative figures. reemphasized from the companies‘ trends in
This analysis has been hereafter supplemented by business results. So we may say that these
Statistical analysis using SPSS software to companies have experienced significant business
examine whether the downward trends observed growth in the short run immediately after M&A.
from descriptive analysis were statistically Further we attempt to make a comparative study
significant. Using our Sample where n=20, M&A on these parameters, of companies that have
cases, and applying paired T test, we arrive at the undergone intra India M&A and India-overseas
following results. M&A. Ironically we also observe that only one
6.3 Overall change in Finance related ratios company i.e. Dr.Reddy‘s Laboratories-
PRE POST
Financial Mean ± Std. Mean ± Std.
Ratios Deviation Deviation
ROA 0.12 ± 0.16 0.04 ± 0.11 0.005 Significant
EPS 36.95 ± 46.1 16.59 ± 28.33 0.022 Significant
Here we test the hypothesis that the mean ROA is Betapharma in the India overseas M&A is
same in the pre and post M&A: We have applied consistently showing an upward trend in all the
paired T test to get the 2-tailed P value as four indicators of business in the short run post
0.005<0.05. Hence, we reject the null hypothesis to
M&A. The rest of the M&A entities in the India
claim that there is significant change in the mean
overseas samples are all showing a downward
ROA level in the two periods. Also since the ROA trend. This may be accounted for by the same
post M&A is lower than pre M&A ROA level. So we explanation as stated in the descriptive analysis
can conclude that there is a significant decline in the
earlier in this section. However in the intra India
ROA level in the post M&A period. This is also M&A samples we find from the descriptive
explained in the descriptive analysis. analysis that only VIP Industry-Aristocrat
Here we test the hypothesis that the mean EPS is luggage M&A and Graphite India-Carbon
same in the pre and post M&A: We have applied Investment M&A entity is showing positive trend
paired T test to get the 2-tailed P value as in all the four ratios and the overall business has
0. 022<0.05.Hence we cannot reject the null apparently improved as well, whereas the rest of
hypothesis to claim that there is a significant the companies are showing a downward change.
change in the mean EPS level in the two periods. This may be rationalized by the cultural diversity,
Also since the mean EPS post M&A is lower than or VRS issues or take over of debt laden plants as

explained in the descriptive analysis. However, to On the other hand, ROA level is showing
check whether these changes were statistically declining trend in the Post M&A period in both
significant, we applied the paired T test to get the Intra India and Inter India case but the decline in
2-tailed p value of the 10 Indian companies which the India- overseas case is statistically significant,
had undergone M&A with overseas companies whereas in case of intra India the decline is not
(India-Overseas) and the 10 Indian companies statistically significant.
which had undergone M&A with Indian EPS level is also apparently declining in the post
companies (India-India) separately, we got the M&A period in both intra India and inter-India
following results. case but the decline in the overseas case is
statistically significant, whereas in case of India
INDIA-OVERSEAS: the decline is not statistically significant.
PRE POST
Deviation Deviation
HCROI 6.46 ± 3.31 4.92 ± 2.46 0.012 Significant
ROA 0.16 ± 0.06 0.07 ± 0.05 0.004 Significant
EPS 39.53 ± 19.36 22.34 ± 15.6 0.01 Significant
INDIA-INDIA:
PRE POST
Deviation Deviation P VALUE SIGNIFICANCE
HCROI 5.63 ± 6.53 3.91 ± 3.42 0.132 Not Significant
ROA 0.09 ± 0.21 0.02 ± 0.14 0.15 Not Significant
EPS 34.37 ± 64 10.85 ± 37.12 0.171 Not Significant
Comparing the set of data obtained for India- 7. Conclusion

Overseas and India-India we find that, the This paper studied four parameters which can
HCROI level is showing an apparent declining throw light on the performance of the selected
trend both in the India-Overseas case as well as in companies in the pre and post M&A phases,
the domestic (India-India) M&A sampled cases. spanning for a period of six years i.e., three years
But the 2-tailed test indicates that the overseas prior to the M&A and three years‘ post M&A,
decline is statistically significant as well. following available literature that suggests these
Apparently, mean RPP level is increasing in the parameters are good indicators of performance in
India-Overseas case and in case of India-India it the short run. In case of all the 20 companies out
is declining. But the paired 2-tailed test indicates of two HR parameters chosen, HCROI divulged a
that the change in RPP level from pre M&A to significant and declining change in the post M&A
post M&A for both the data set is statistically not period, whereas no significant change was
significant. observed in the other factor which was RPP.

The two aspects chosen for computing the 8. Way forward

financial performance i.e. ROA and EPS showed
Future studies may consider including the
significant change and both cases it was
customer related parameters to arrive at a more
declining. Since three out of the four parameters
comprehensive finding. The work may also be
have shown significant and declining change, it
further extended to study possible relations
may be concluded that the overall performance of
between all the business parameters and long run
the twenty sampled firms showed significant
business performance.
declining change in performance due to M&A.
CHANGE SIGNIFICANCE
PERIOD OVERALL OVERSEAS_ INDIA INDIA _INDIA
HCROI_pre-HCROI_post Significant decline Significant decline Not Significant
RPP_pre- RPP_post Not Significant Not Significant Not Significant
ROA_pre-ROA_post Significant decline Significant decline Not Significant
EPS_pre- EPS_post Significant decline Significant decline Not Significant
It is also seen that the India-Overseas M&A also References

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 www.drreddys.com/investors/annual-reports.html
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Table I: List of M&A Samples

Acquirer Targe Target
SL. Acquirer Company t Company Merger Date
Countr countr
No. y y
1. India Tata Steel UK Corus Group 30_Jan_07
Canad
2. India Hindalco a Novelis 11_Feb_07
3. India Dr.Reddy‘s Lab Germany Betapharm 15_Feb_06
4. India HPCL Kenya Kenya Petroleum Refinery Ltd 21_Sep_05
5. India Ranbaxy Labs Romania Terapia SA 30_Mar_06
6. India Tata motors UK Jaguar Land Rover 8_Mar_08
Canad
7. India VSNL a Teleglobe 13_Feb_06
8. India ONGC UK Imperial Energy 1_Jan_09
9. India Suzlon Energy Belgium Hansen Group 17_Mar_06
10. India Sterlite Industries Mexico Asarco 1_Mar_08
11. India VIP Industry limited India Aristocrat Luggage Ltd. 28_Mar_08
12. India Graphite India Ltd India Carbon Investment Ltd. 23_May_02
13. India Indian Oil India IBP Co. Ltd. 2_May_05
14. India Kingfisher Airline India Deccan Aviation 1_Jun_07
15. India Jet Airways India Air Sahara 2_Apr_07
16. India JK Industries India Vikrant Tyres 8_Oct_02
17. India JSW Steel India Southern Iron & Steel Co. 10_Mar_08
18. India MIRC electronics India OnidaSavak Ltd 5_Apr_05
19. India TVS motor India Lakshmi Auto 8_Oct_03
20. India Eastern Silk Industries Ltd India Sstella Silk Ltd 31_Mar_07
Page 30
Table II: HCROI % Change
HCR HCROI-
Merger Co. HCROI-3 OI-2 1 HCROI_pre HCROI1 HCROI2 HCROI3 HCROI_post
Tata Steel-Corus Group 3.478316 5.7 5.23 4.79 5.65 4.54 4.33 4.74
Hindalco -Novelis 4.705725 4.98 5.02 4.94 5.09 4.09 3.29 4.05
Dr. Reddy's Labs-Betapharm 4.405026 2.97 1.24 2.68 5.88 2.58 2.77 3.52
HPCL-Kenya Petroleum Refinery
12.92353 15.31 10.39 12.68 13.22 6.75 8.64 9.26
Ltd.
s
M
.
Ranbaxy Labs-Terapia SA 5.050324 3.2 2.05 3.33 3.34 0.06 2.51 1.86
a
p
a
t
u
S
Tata Motors-Jaguar Land Rover 3.248716 3.51 2.7 3.12 2.13 3.28 1.84 2.38
VSNL-Teleglobe 9.164328 4.99 5.48 6.63 4.06 2.9 2.36 3.02
ONGC-Imperial Energy 9.884437 8.12 6.07 7.60 7.69 7.3 6.37 7.08
e
e
j
r
e
t
t
a
h
C
&
Suzlon Energy-Hansen Group 6.135261 7.92 12.11 9.94 11.04 11.81 3.17 7.80
Sterlite Industries-Asarco 3.623928 10.42 11.77 8.91 12.63 -0.13 3.78 5.50
VIP Industry limited -Aristocrat
armistha.D
BanerjeeSh
2,&1 SSUEIVII, OL V
Luggage Ltd 1.775081 2.03 1.73 1.83 1.67 2.41 1.85 1.98
GMJ,
r
Graphite India ltd-Carbon
Investment Ltd 3.781782 3.67 2.2 2.75 3.91 3 2.48 3.09
Indian Oil -IBP Co Ltd 5.308139 7.28 4.16 5.49 5.25 4.24 3.68 4.19
Kingfisher Airline-Deccan Avition 1.984887 0.3 -0.06 0.22 0.33 1.46 2.39 1.32
Jet Airways-Air Sahara 4.899744 3.52 2.11 3.09 1.43 2.72 2.87 2.31
JK Industries -Vikrant Tyres 3.122731 2.95 2.26 2.64 2.42 1.59 1.35 1.77
J
AR Y
AN U
JSW Steel-Southern Iron & Steel Co 13.23103 17.44 12.21 14.03 12.52 8.28 9.53 9.81
MIRC Electronics-Onida Savak Ltd 2.75505 3.15 1.92 2.59 1.93 1.46 2.3 1.90
TVS Motor-Lakshmi Auto 2.514627 2.98 3.09 2.88 2.49 1.93 2.03 2.13
-D
Eastern Silk Industries Ltd-Sstella

3E
ER
MB
CE
1
0
2
Silk Ltd 54.01695 17.25 19.13 20.75 17.61 8.86 7.14 10.62
GMJ, V
Table III: RPP % Change

Merger Co. RPP-3 RPP-2 RPP-1 RPP_pre RPP1 RPP2 RPP3 RPP_post
O
L
IVII,
E
U
S
S
1
HPCL-Kenya Petroleum
99.11 100.88 91.39 96.65 132.87 129.2 115.9 124.65
& 2, J ANUA
Refinery Ltd.
Ranbaxy Labs-Terapia SA 15.26 11.55 12.13 12.80 11.33 7.69 7.19 8.36
RY
an(From Perspective)Acquirer’sIndian
VSNL-Teleglobe 31.32 24.39 24.14 26.77 17.46 14.29 11.72 14.17
Merger
- D
ECEM
BER
Suzlon Energy-Hansen Group 31.54 45.58 54.95 48.41 49.06 50.61 37.24 44.31
Sterlite Industries-Asarco 90.1 161.48 205.81 157.33 140.57 169.7 173.85 161.49
201
3
Myth?A—Acquisitionand
VIP Industry limited -Aristocrat
9.63 10.24 10.21 10.05 8.96 10.05 10.25 9.80
Luggage Ltd
Graphite India ltd-Carbon
13.84 13.85 9.79 11.26 12.33 11.7 12.25 12.10
Investment Ltd
Indian Oil -IBP Co Ltd 64.29 76.04 76.11 72.13 83.69 85.45 54 69.03
Kingfisher Airline-Deccan
9.62 7.88 7.27 7.66 6.38 7.35 9.16 7.55
Avition
Jet Airways-Air Sahara 11.58 10.03 7.52 9.08 8.2 8.51 9.52 8.74
JSW Steel-Southern Iron & Steel
47.96 48.98 41.58 45.24 49.75 43.22 52.05 48.38
Co
MIRC Electronics-Onida Savak
21.08 22.28 24.16 22.54 21.81 23.16 21.3 22.08
Ltd
Eastern Silk Industries Ltd-
457.05 94.36 97.48 121.28 79.7 75.41 66.39 73.26
Sstella Silk Ltd
Pa
ge
31
Page 32
Table IV: ROA % Change
Merger Co. ROA-3 ROA-2 ROA-1 ROA_pre ROA1 ROA2 ROA3 ROA_post
M
s
HPCL-Kenya Petroleum Refinery Ltd. 0.16 0.17 0.11 0.15 0.07 0.04 0.02 0.04
.
Tata Motor s-Jagua r Land Rover 0.17 0.17 0.16 0.17 0.04 0.07 0.03 0.04
Ranbaxy Labs-Terapia SA 0.32 0.19 0.06 0.18 0.1 -0.14 0.08 0.01
a
p
a
t
u
S
VSNL-Teleglobe 0.13 0.07 0.13 0.11 0.07 0.04 0.06 0.06
e
e
j
r
e
t
t
a
h
C
&
Suzlon Energy-Hansen Group 0.11 0.23 0.29 0.24 0.22 0.13 -0.03 0.06
VIP Industry limited -Aristocrat Luggage
0.05 0.06 0.06 0.06 0.03 0.19 0.2 0.14
2,&1SSUEIVII,O
Ltd
Sharmist
Banerjee
LVGMJ,
ha.Dr
Graphite India ltd-Carbon Investment

0.09 0.05 0.06 0.07 0.09 0.07 0.06 0.07
Ltd
Kingfisher Airline-Deccan Avition -0.06 -0.5 -0.32 -0.34 -0.45 -0.41 -0.25 -0.37
Jet Airways-Air Sahara 0.08 0.06 0 0.04 -0.02 -0.06 0 -0.02
J
ANUA
RY
- D 2013ECEMBER
Eastern Silk Industries Ltd-Sstella Silk Ltd 0.08 0.07 0.11 0.09 0.04 0.04 0.01 0.03
OLVGMJ,
Table V: EPS % Change

IVII,
Merger Co. EPS-3 EPS-2 EPS-1 EPS_pre EPS1 EPS2 EPS3 EPS_post
SSUE 1 2,&
Hindalco -Novelis 90.71 143.29 14.28 28.44 23.31 13.09 10 14.46
J
Ranba xy L abs-Terap ia SA 42.83 284.29 6.01 26.83 16.56 -24.85 13.61 1.19
HPCL-Kenya Petroleum Refinery Ltd. 45.31 56.11 37.64 46.35 46.3 33.44 16.94 32.23
Y
R
A
U
N
A
an(From Perspective)Acquirer’sIndian
Merger
- D
VSNL-Teleglobe 27.37 13.25 26.54 22.39 16.44 10.68 18.1 15.08
R
E
B
M
E
C
E
2013
Suzlon Energy-Hansen Group 17.47 56.41 40.71 39.56 36.66 8.46 -3.13 5.65
Myth?A—Acquisitionand
VIP Industry limited - Aristocrat Luggage
4.7 5.73 5.63 5.40 3.29 17.71 21.94 14.31
Ltd
Graphite India ltd-Carbon Investment
13.71 8.39 26.49 16.19 17.42 16.34 21.43 18.39
Ltd
Kingfisher Airline-Deccan Avition -111.64 -34.69 -30.97 -33.04 -60.5 -61.95 -20.64 -41.60
Jet Airways-Air Sahara 45.4 52.36 3.24 33.67 -46.6 -54.17 1.12 -33.21
Eastern Silk Industries Ltd-Sstella Silk
21.14 33.53 27.88 27.60 11.41 2.42 0.71 2.46
Ltd
Page 33
Research Articles
Demographic Variables and ATM Services:
An Empirical Survey
Dr. Sunita Bishnoi

Associate Professor
DAV Institute of Management, Faridabad, Delhi NCR
Abstract
Technology has played a vital role in the evolution single strongest factor that provides a bank with a
of Indian banking sector through speed, accuracy, competitive edge over others. The banking has
efficiency, promptness and reduction in cost. undergone a major change due to the adoption of
Banking services are now tilting to ―Anywhere Any E-banking. One of the latest channels of
time banking‖ aspect. The objective of the proposed distribution to be used in the financial services
paper is to determine the perception in ATM organizations is electronic banking; this method
service. The impact of demographic variables is was established in the mid-1990s in some
highlighted in the paper. To achieve the objective of countries, thereafter speedily covers all over the
the study primary data is collected through a world (Allen et al, 2001). E-banking can offer
structured questionnaire from public, private and speedier, quicker and self dependable services to
foreign banks customers using ATM services of the customers for which they may be fairly
their respective bank. In total 220 respondents were satisfied than that of manual system of banking.
studied. Collected data is analyzed with the help of E-banking system not only generates latest viable
various statistical techniques such as frequency return, it also offers its better dealings with
distribution, mean, S.D. and other suitable tools. To customers (Jannatul Mawa Nupur, 2010).
test the hypotheses t test, Z test and ANOVA is E-Banking provides various e- channels for using
used. The study is helpful to plug out weak areas, banking services like ATMs, credit cards, debit
which need improvement with special reference to cards, internet banking, mobile banking, electronic
ATM services provided by various banks. The fund transfer (EFT), electronic clearing system etc.
study provides meaningful direction to bank However as per the Indian e banking scenario ATM
managers and decision maker to improve their is the most acknowledged than any other e-
service quality for higher customer satisfaction. channels. The Indian ATM industry has seen
Sample size may not be a true representative of the explosive growth in recent times. (Kumbhar). Banks
population since it is limited to Delhi only. have been positioning ATMs to increase their reach.
While ATMs facilitate a variety of banking
Key Words: Indian Banking, Customer transactions for customers, their main utility has
Satisfaction, ATM services, Regression analysis been for cash withdrawal and balance enquiry. Now
and primary data. we can deposit cash in ATMs up to certain cash
limit. While the ATM is a great service for
1. Introduction
customers, for the banks it means immense savings
The banking sector has become completely on the cost of operations. While a typical cash
dependent on technology as the service/product transaction carried out in a bank‘s branch premise
delivery channel. Technology is identified as the would cost Rs 40 that in an ATM will

Dr. Sunita Bishnoi
only cost Rs18 translating into a cost saving of Rs economic and effective while mobile banking
22 per transaction (Singh, and Komal, 2009). does not hold a strong position in public. The
2. Review of Literature study also suggested some strategies to improve
ATMs and m-banking services. Kaul (2007) in his
A number of studies specially related to ATM article explained the importance and benefits of
services are reviewed in this section ATM, the players in the Indian market and
Sundaram and J. Premalatha (2012) studied the presented various information concerning the
overall satisfaction level of the customers of the growth of ATM.
various banks in Vellore district, and they Al-Hawari et al. (2006) compiled a list of five
concluded that customers felt that bankers must major items about ATM service quality that
improve the safety, provide accurate, timely include convenient and secured locations,
information and make easy for customers while functions of ATM, adequate number of machines
using the ATM services in order to retain the and user-friendliness of the systems and
customers. They concluded that the majority of procedures. Mcandrew (2003) talked about the
the customers are highly satisfied in using the various utilities of ATMs, which has given
ATM services of their banks. Singh and Saxena worldwide popularity. The utilities include
(2011) conducted a study on Customer withdrawal of cash as per convenience of the
Satisfaction regarding the use of ATMs and customers than during the banking hours at
revealed that the ICICI Bank being the largest branches. Besides providing off time and off
private sector bank must make its customers shore services, there is reduction of cost of
satisfied to sustain in this world of competition. servicing. Shastri (2001) analyzed the effect and
They considered that the management of ICICI challenges of new technology on banks. He found
Bank should seriously consider the that technology has brought a sea change in the
recommendations made by their customers functioning of banks and use of ATMs has
regarding ATMs and take all necessary steps to increased with the passage of time. Davies et al.,
follow the same. Khan (2010 concluded that the (1996) examined the factors that influence
key dimensions of automated banking service customers‘ satisfaction on ATM services includes
quality include reliability, ease of use, privacy, costs involved, and the efficient functioning of
convenience and responsiveness. He concludes ATM. He found that ATM service is the
that ATM facility resulted in speed of important service for customers‘ satisfaction.
transactions and saved time for customers.
3. Methodology of the Present Study
Singh and Komal (2009) conducted a
Looking at the changing environment, awareness,
comparative study among banks and concluded
technological up gradation and innovation in
that the satisfaction level of the customer was
banking sector, there is a need to study the
highest in SBI Bank followed by ICICI Bank and
behavior of customers towards their perception
HDFC Bank. Kamala (2008) has made a detailed
and satisfaction level. The present paper is a step
survey regarding the customer satisfaction
in this direction. This paper has tried to study the
towards ATM services in Tirunelveli city of
variation of views between banks customers and
Taminadu. She observed that the respondents
various demographic factors.
were conscious about more innovative techniques
in ATM services. Uppal R.K. (2008) concluded  Population and Sample: the population
that among all e-channels, ATM is the most defined for this research paper was limited

Demographic Variables and ATM Services: An Empirical Survey
to the ATM users of various banks operated Hypothesis (Null Hypotheses)

in Delhi, Gurgaon and Faridabad. In this
That there is no difference in the perception of
study random sampling technique has been
respondents across various demographic
used and in total 220 respondents were
variables regarding
studied to find out the objectives of the
study during June to August 2012.  Various types of transactions,

 Database and procedure of analysis:   Reasons to use ATM services,
primary data collection method was used  and problems in ATM services‖
for the purpose of the study. A structured 
4. Results and Discussions
questionnaire was used to collect primary
data for the study. The respondents were 4.1 Gender-wise Perception regarding ATM
asked to indicate their perception regarding Services
various aspects of the ATM services, Consumer may have different perception
problems while using ATM and various regarding the various ATM/Debit cards
transactions through ATM on a five point transaction services, various reason for use of
Likert scale. ATM and problems while using ATM/debit

 Statistical tools and techniques: the cards. To find out whether there is any significant
collected data further have been analyzed difference between the mean scores of customer
by using descriptive statistics such as mean perceptions belonging to gender, t-test has been
scores and standard deviation. To find out applied. Table 1 depicts mean, t-test and
the variation of opinion among various significance level of various dimensions of ATM
categories t test and F test have been cards according to gender group. As observed
applied. These statistical techniques are run from the table, the calculated t value except the
through SPSS version 13 for windows. dimensions ‗refill mobile prepaid cards‘ all
3.1 Objectives of the Study remaining dimensions of ATM services is too less
to be significant. The t test values of various
 The aim of the paper is to provide a dimensions regarding ATM services show that
groundwork investigation of the various there is no significant difference between mean
transactions, reasons and problems in ATM scores of the respondents across the gender. Thus,
services, and in the gender group of respondents almost have

 To analyze the relationship between equal agreement of found regarding each of the
demographic variables and ATM services dimension of ATM services provided by banks
provided by various banks. operated in Delhi and NCR.

Dr. Sunita Bishnoi
Table 1: Gender-wise Perception regarding ATM Services
Sr. Various ATM services Male Female t- values (Sig.)

No. Mean S.D Mean S.D
Transaction of ATM
1 Withdrawal of cash 2.023 1.135 2.169 1.090 -.951 (.343)
2 Pay your utility bills 2.984 1.287 2.674 1.241 .787 (.075)
3 Transfer fund between your own 2.992 1.222 2.719 1.225 1.620 (.107)
account
4 Refill your mobile prepaid cards 3.364 1.293 2.944 1.368 2.281* (.024)
5 Stock market/mutual funds 3.674 1.251 3.427 1.356 1.376 (.173)
transactions
6 Donation/charity 3.659 1.241 3.742 1.192 -.495 (.621)
7 Shopping at merchant establishment 3.008 1.395 2.933 1.204 .424 (.672)
8 Fuelling up your vehicle 2.705 1.354 2.708 1.263 -0.14 (.989)
Reasons for Use of ATM cards and services
9 It is a free service from bank 1.682 0.696 2.045 1.054 -2.846** (.005)
10 I am frequently required to travel 1.977 0.824 2.258 0.924 - 2.31*(.022)
11 It does not require to carry cash 1.651 0.845 1.899 0.867 2.096* (.037)
12 Any time withdrawal 1.868 0.896 1.775 0.808 .798 (.426)
13 No queuing 1.953 0.837 1.978 0.797 -.214 (.830)
14 Reduce risk of cash loss 1.783 0.910 2.000 0.929 -1.710 (.089)
15 Provide mini statements 1.938 0.817 1.978 0.965 -.316 (.752)
16 Safe transaction 2.008 0.786 1.854 0.936 1.272 (.205)
17 Easy to use 1.814 0.758 1.854 0.847 -.357 (.721)
18 Connectivity to other banks ATMS 2.039 0.905 2.079 0.907 -.319 (.750)
Problems while using ATM cards
19 Cards gets blocked 4.194 0.830 3.966 0.971 1.803 (.073)
20 Machine out of cash 3.465 1.076 3.483 1.298 .108 (.914)
21 No printing of statement 3.736 1.079 3.775 1.232 -.241 (.810)
22 Machine out of order 3.674 0.911 3.640 1.151 .233 (.816)
23 Wrong amount in the slip 4.295 0.955 4.022 1.177 1.808 (.072)
24 Poor visibility of statement slip 3.884 0.973 4.022 0.965 -1.04 (.300)
25 Balance reduce without cash receipts 3.992 1.064 4.112 0.982 -.858 (.392)
26 Difficulty in retrieve cards 4.085 0.866 4.258 0.747 -1.575 (.117)
In the second part of the table the difference of and ‗It does not require to carry cash‘ are differ at
opinion regarding various reasons for use of ATM 5 percent level of significance as gender group is
services have been presented. Regarding the issue concerned. Hence it can be concluded that male
‗It is a free service from bank‘ is significantly and female respondents have difference of
associated at 1 percent level of significance as opinion regarding these dimensions. Remaining
reflected by its t value (-2.846) and its significance other dimensions related to reasons for use of
level. On the other hand the perception regarding ATM services has no difference of perception and
the dimensions ‗I am frequently required to travel‘ consequently null hypothesis have accepted.

As reflected in third part of the table, calculated t responses among the respondents who have
values for each of the dimensions related to education up to graduation and those who are post
problems while using ATM services is too less to be graduates. Hence the null hypothesis is rejected.
significant. Thus the gender groups almost have The issue ‗donation/Charity‘ have found significant
equal level of conformity regarding the mentioned at 5 percent level among the two groups of
dimensions related to problems of ATM services. respondents based on educational level. The non-
significant t values on eight dimension of ATM
4.2 Education-wise Perception regarding ATM
services brings us to the conclusion that the
Services
respondents having education up to graduation and
A glance of the education wise summary of means post graduation do not differ in their opinions
bring forth that ―pay your utility bills‖, ―shopping regarding the dimensions withdrawal of cash, fund
and fueling up vehicles‖ are the aspects with transfer, refill mobile cards and stock market/
significant t-value at 0.01 level indicating assorted mutual fund transactions.
Table 2: Education-wise Perception regarding ATM Services
Graduate Post graduate

Sr. No. Various ATM services t- values(Sig.)
Mean S.D Mean S.D
Various Transactions through ATM
1 Withdrawal of cash 2.759 0.898 2.971 1.244 1.504 (.221)
2 Pay your utility bills 2.293 1.417 1.843 1.132 -3.024** (.003)
3 Transfer fund between your own account 2.99 1.223 2.784 1.229 1.528 (.218)
4 Refill your mobile prepaid cards 3.284 1.33 3.112 1.343 .900 (.344)
5 Stock market/mutual funds transactions 3.755 1.323 3.414 1.258 3.800 (.053)
6 Donation/charity 3.882 1.229 3.526 1.19 4.722 * (.031)
7 Shopping at merchant establishment 3.343 1.361 2.655 1.195 15.799** (.000)
8 Fuelling up your vehicle 3.078 1.377 2.379 1.17 16.433** (.000)
Reasons for use of ATM cards and services
9 It is a free service from bank 1.578 0.776 2.052 0.903 16.991** (.000)
10 I am frequently required to travel 2.049 0.801 2.129 0.937 .456 (.500)
11 It does not require to carry cash 1.716 0.905 1.784 0.822 .346 (.557)
12 Any time withdrawal 1.676 0.846 1.966 0.854 6.27* (.013)
13 No queuing 1.784 0.816 2.121 0.793 9.504 (.002)**
14 Reduce risk of cash loss 1.804 0.912 1.931 0.93 1.032 (.311)
15 Provide mini statements 1.775 0.819 2.112 0.902 8.279** (.004)
16 Safe transaction 1.843 0.865 2.034 0.833 2.763 (.098)
17 Easy to use 1.696 0.755 1.948 0.811 5.595* (.019)
18 Connectivity to other banks ATMs 1.853 0.894 2.233 0.878 9.97** (.002)

Dr. Sunita Bishnoi
Graduate Post graduate

Sr. No. Various ATM services t- values(Sig.)
Mean S.D Mean S.D
19 Cards gets blocked 4.088 0.924 4.112 0.872 .038 (.845)
20 Machine out of cash 3.676 1.045 3.293 1.244 5.975* (0.15)
21 No printing of statement 3.873 1.166 3.647 1.113 2.140 (.145)
22 Machine out of order 3.775 0.974 3.56 1.041 2.440 (.120)
23 Wrong amount in the slip 4.324 0.987 4.06 1.106 3.399 (.067)
24 Poor visibility of statement slip 3.961 1.033 3.922 0.915 .085 (.772)
25 Balance reduce without cash receipts 4.137 1.005 3.957 1.05 1.666 (.198)
26 Difficulty in retrieve cards 4.255 0.864 4.069 0.777 2.799 (.096)
The second part of the table is related to various 4. 3 Sector-wise Perception regarding ATM
reasons for the use of ATM services and Services
educational level of the respondents. The 9th,
A comparison of public and private sector
13th, 15th and 18th dimensions are significantly
customers along with the dimensions of ATM
associated with educational level at 1 percent and
services is presented in table 3. Though t values
12th and 17th dimensions are significantly
associated at 5 percent level of significance. As and their significance level is too less to be
reflected in third part of the table, calculated t significant regarding all the dimensions included
values for each of the dimensions excepted in various ATM services, reasons to use ATM
‗machine out of cash‘ related to problems while cards services and problems while using ATM.
using ATM services is too less to be significant. Hence it is worthy to mention here that the
Thus the education group almost has equal level respondents of public and private sector banks
of conformity regarding the mentioned have similar perception regarding the various
dimensions in the third part of the table. dimensions listed in Table 3.
Table 3: Sector-wise Perception regarding ATM Services
Public Sector Private Sector

Sr. No. Various ATM services Bank Banks t- values (Sig.)
Mean S.D Mean S.D
Various Transaction through ATM
1 Withdrawal of cash 2.176 1.112 2 1.124 1.161 (.247)
2 Pay your utility bills 2.922 1.208 2.809 1.337 .653 (.514)
3 Transfer fund between your own account 2.873 1.248 2.896 1.217 -.138 (.891)
4 Refill your mobile prepaid cards 3.059 1.273 3.33 1.375 -1.511 (.132)
5 Stock market/mutual funds transactions 3.52 1.333 3.635 1.266 -.650 (.516)
6 Donation/charity 3.775 1.266 3.635 1.172 .840 (.402)
7 Shopping at merchant establishment 3.039 1.349 2.939 1.286 .557 (.578)
8 Fuelling up your vehicle 2.794 1.33 2.635 1.307 .888 (.376)

Private Sector
Public Sector Bank
Sr. No. Various ATM services Banks t- values (Sig.)
Mean S.D Mean S.D
9 It is a free service from bank 1.882 0.978 1.783 0.781 .823 (.411)
10 I am frequently required to travel 2.147 0.959 2.043 0.799 .858 (.392)
11 It does not require to carry cash 1.657 0.884 1.826 0.830 -1.448 (.149)
12 Any time withdrawal 1.745 0.852 1.896 0.862 -1.29 (.198)
13 No queuing 1.922 0.767 2.000 0.869 -.707 (.481)
14 Reduce risk of cash loss 1.843 0.962 1.896 0.892 -.415 (.678)
15 Provide mini statements 1.922 0.792 1.991 0.950 -.589 (.556)
16 Safe transaction 1.863 0.901 2.017 0.805 -1.326 (.186)
17 Easy to use 1.863 0.718 1.800 0.860 .585 (.559)
18 Connectivity to other banks ATMS 1.980 0.944 2.122 0.870 -1.142 (.255)
Problems while using ATM Cards
19 Cards gets blocked 4.137 0.845 4.0700 0.943 .558 (.578)
20 Machine out of cash 3.549 1.114 3.400 1.220 . 941 (.348)
21 No printing of statement 3.902 1.048 3.635 1.202 1.749 (.082)
22 Machine out of order 3.745 0.941 3.583 1.076 1.187 (.237)
23 Wrong amount in the slip 4.147 1.129 4.217 0.998 -.483 (.629)
24 Poor visibility of statement slip 3.882 1.008 3.991 0.941 -.820 (.413)
25 Balance reduce without cash receipts 4.118 1.018 3.974 1.047 1.025 (.307)
26 Difficulty in retrieve cards 4.167 0.913 4.148 0.740 .166 (.869)
4.4 Occupation-wise Perception regarding ATM

Services
It is comprehensible from the table 4 that the establishment‘ are significant at 5 percent level of
dimensions namely ‗Withdrawal of cash‘, significance. Hence, here the null hypothesis
‗Transfer fund between your own account‘, ‗Stock
stand rejected and alternate hypothesis accepted
market/mutual funds transactions‘ and
stating that respondent‘s occupation does invite
‗Donation/charity‘ has significant association
with occupational category at 1 percent level of significant differences of respondents opinion in
significance, where as the dimensions ‗Refill your the context of various ATM services related
mobile prepaid cards‘ and ‗Shopping at merchant dimensions.

Table: 4 Occupation-wise Perception regarding ATM Services
GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013
Level of Awareness and Business Public sector Private sector Professional Student
Sr. No Knowledge Mean S.D Mean S.D Mean S.D Mean S.D Mean S.D F values
1 Withdrawal of cash 1.948 0.867 1.838 1.093 1.951 1.048 2.657 1.305 3.143 1.574 5.027** (.001)
2 Pay your utility bills 2.690 1.158 2.595 1.518 3.062 1.187 2.829 1.224 3.429 1.813 1.535 (.193)
3 Transfer fund between your 2.724 1.281 2.270 1.217 3.123 1.133 3.114 1.078 3.429 1.512 4.218** (.003)
own account
Refill your mobile prepaid
4 3.259 1.446 2.622 1.299 3.222 1.173 3.400 1.355 4.286 1.496 3.241* (.013)
cards
5 Stock market/mutual funds 3.586 1.325 2.919 1.299 3.642 1.248 3.943 1.110 4.286 1.496 3.839** (.005)
r . ta
D ni
transactions
6 Donation/charity 3.655 1.193 3.135 1.549 3.765 1.076 4.029 0.923 4.429 1.512 3.475 **(.009)
u
S
Shopping at merchant
7 2.966 1.108 2.622 1.516 2.951 1.264 3.171 1.424 4.286 1.254 2.678 *(.033)
establishment
i
o
n
h
s
i
B
8 Fuelling up your vehicle 2.534 1.287 2.514 1.193 2.728 1.215 2.886 1.510 4.000 1.732 2.367 (.054)
Page  41
Page  42
9 1.845 0.951 2.216 1.109 1.716 0.637 1.657 0.725 1.857 1.464
Level of Awareness Business Public sector Private sector Professional Student
Sr. No
and Knowledge Mean S.D Mean S.D Mean S.D Mean S.D Mean S.D F values
c
i
h
p
a
r
g
o
m
e
D
It is a free service from 2.555*
bank (.040)
I am frequently
10 2.000 0.879 2.243 1.164 2.062 0.659 2.143 0.944 2.143 1.069 .492 (.742)
required to travel
s
e
l
b
a
i
r
a
V
It does not require to 1.535
11 1.776 0.839 1.514 0.731 1.815 0.896 1.714 0.825 2.286 1.254
carry cash (.193)
12 Any time withdrawal 1.741 0.870 1.919 1.010 1.840 0.798 1.886 0.796 1.714 1.113 .319 (.865)
d
n
a
13 No queuing 2.034 0.816 1.838 0.958 1.914 0.809 2.000 0.642 2.429 0.976 .982 (.418)
OLVGMJ
M
T
A
,
Reduce risk of cash 1.386

14 1.897 1.003 1.865 0.855 1.877 0.927 1.686 0.676 2.571 1.397
loss (.240)
:
s
e
c
i
v
r
e
S
Provide mini
VII,
15 2.017 1.1.00 1.811 0.569 1.963 0.872 1.914 0.658 2.286 1.254 .586 (.673)
statements
1.216
I
E
U
S
S
1
&
,
2
J
Y
R
A
U
N
A
16 Safe transaction 1.862 0.963 1.730 0.693 2.037 0.798 2.057 0.906 2.143 0.900
(.305)
n
A
17 Easy to use 1.845 0.894 1.811 0.701 1.852 0.808 1.743 0.657 2.000 1.000 .208 (.934)
l
a
c
i
r
i
p
m
E
y
e
v
r
u
S
Connectivity to other
18 2.190 0.926 1.919 0.954 2.037 0.828 2.086 0.951 1.714 1.113 .795 (.530)
banks ATMS
2013ECEMBERD-
Dr. Sunita Bishnoi
The second part of the Table 4 is related to

1.069 .395 (.812)
1.604 .348 (.845)
various reasons to buy ATM cards and it is clear
1551. 8503. **
F values
from the table that the issue ‗it is a free service
433*2.
1.512 (.408)
6041. (.294)
1341. (.144)
6761. (.178)
1131. (.049)
7301.
5881.
1.002
1.243
from bank‘ is significantly differs at 5 percent
level of significance. Remaining all other issues
have reflected no association with occupational
categories as t values are less to be significant.
Mean S.D
2863.
Hence it can be concluded that there is no

4.143
3.286
3.571
4294.
8573.
2864.
0004.
Student
difference of perception among various

occupational categories. Similarly in the third part
9540.
0.833
1.262
1.330
2721.
9380.
8430.
6320.
of the table the dimension i.e. ‗difficulty in
retrieve cards‘ has significant association with
Private sector Professional
Mean S.D
occupational categories at 1 percent level of

8293.
4.200
3.371
3.629
9713.
0574.
3714.
2004. significance and ‗balance reduce without cash

receipts‘ at 5 percent level of significance. All
9610.
other dimensions are not associated with

0621.
9070.
9870.
0.915
1.083
1.012
7340.
occupational categories as their t values are too

Mean S.D
using ATM
less to be significant.
4.5 Income-wise Perception regarding ATM
3.568
4.012
3.568
3.889
1854.
0494.
1114.
2474.
Services
‗Income classification‘ is a significant variable
1.216
Public sector
4.189 0.938
3.351 1.086
1.146
0261.
9560.
2031.
1511.
affecting the purchase of ATM services and

Mean S.D
Problems
various problems in use of ATM services. The

3.514
while
results of comparison of means across four

3.486
9463.
5953.
6763.
7033.
groups of respondents having annual household

income up to 3 lakhs, 3-6 lakhs, 6- 10 lakhs and
0.881
above 10 lakhs are depicted in table 5. Apart from

0.872
1.246
1.142
8810.
9630.
0161.
6540.
Mean S.D
‗Pay your utility bills‘, ‗Transfer fund between

Business
your own account‘, ‗Stock market/mutual funds

3.828
4.103
3.500
3.828
4314.
9483.
9483.
3104.
transactions‘ and ‗Donations/ Charity‘ all other

dimensions of ATM services display wide
variation among the four income groups of
Machine out of order
Difficult in retrieveycards
Wrong amount in the
without cash receipts

Level of Awareness
Machine out of cash
respondents. The mean comparison points out

and Knowledge
Cards gets blocked
that ‗Withdrawal of cash‘, ‗Refill your mobile

Poor visibility of
Balance reduce
No printing of
statement slip
prepaid cards‘, ‗Shopping at merchant

establishment‘ and ‗fueling up vehicle‘ have
statement
emerged as highly weighted dimension among all

slip
the groups. The hypothesis is thus rejected and

alternative hypothesis accepted.
Sr. No
22
19
20
21
23
24
25
26

Table 5: Income-wise Perception regarding ATM Services
Page  44
Level of Awareness and Less than three Three to six lac Six to ten lac Ten lac and above
Sr. No.
Knowledge Mean S.D Mean S.D Mean S.D Mean S.D F values
1 Withdrawal of cash 1.941 0.960 2.188 1.029 1.765 1.124 3.286 1.490 8.147**(.000)
2 Pay your utility bills 3.074 1.342 2.788 1.156 2.549 1.346 3.357 1.151 2.498 (.061)
c
i
h
p
a
r
g
o
m
e
D
Transfer fund between your
3 2.882 1.310 3.024 1.046 2.588 1.299 3.071 1.492 1.471 (.223)
own account
4 3.147 1.341 3.024 1.144 3.294 1.487 4.071 1.592 2.653* (.050)
cards
ria
ble
Va
s
Stock market/mutual funds
5 3.618 1.361 3.506 1.231 3.451 1.331 4.214 1.188 1.401 (.244)
transactions
6 Donation/charity 3.691 1.319 3.718 1.076 3.706 1.331 3.5 1.225 .129 (.943)
d
n
a
7 establishment 3.368 1.280 2.659 1.323 2.922 1.309 3.214 1.051 3.982** (.009)
M
A
T
GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013
8 Fuelling up your vehicle 3.088 1.346 2.471 1.191 2.569 1.269 2.786 1.718 3.115* (.027)
:
s
e
c
i
v
r
e
S
n
A
l
a
c
i
r
i
p
m
E
y
e
v
r
u
S
IVII,OLVGMJ,
Level of Awareness and Less than three Three to six lac Six to ten lac Ten lac and
Sr. No.
E
U
S
S
Knowledge Mean S.D Mean S.D Mean S.D Mean S.D F values
1 & J2,

It is a free service
9 1.691 0.868 1.812 0.748 2.000 1.039 2.000 0.961 1.404 (.243)
ANUA
from bank
RY
10 I am frequently 1.971 0.732 2.082 0.694 2.216 1.101 2.286 1.437 1.008 (.390)
- D
required to travel
ECEMBE
It does not require

11 1.765 0.932 1.835 0.843 1.588 0.804 1.786 0.802 .892 (.446)
D
r
R
.
to carry cash
201
Any time
12 1.824 0.929 1.835 0.871 1.725 0.666 2.214 1.051 1.187 (.316)
3
it
n
a
u
S
withdrawal
Reduce risk of cash
13 No queuing 2.000 0.93 2.024 0.74 1.784 0.673 2.071 1.141 1.092 (.353)
i
o
n
h
s
i
B
14 1.897 0.995 1.753 0.83 1.882 0.816 2.429 1.284 2.230 (.086)
loss
Provide mini
15 1.868 0.913 1.953 0.770 1.98 0.969 2.286 0.994 .898 (.443)
statements
16 Safe transaction 1.985 0.954 2.012 0.809 1.706 0.672 2.214 1.051 2.062 (.106)
17 Easy to use 1.897 0.900 1.965 0.731 1.588 0.669 1.571 0.852 3.140*(026)
Connectivity to
18 2.088 1.033 1.965 0.778 2.078 0.913 2.357 0.929 .844 (.471)
other banks ATMS
Page 45
The second part of the table is reflecting the

association between different income groups and
1. (.202)554
4. (.008)049**
3281. (.266)
5. (.001)812**
2. (.050)652*
1. (.287)266
3022. (.078)
9261. (.126)
various reasons to purchase ATM cards. Out of
F values
the total listed ten dimensions only one

dimension i.e. Easy to use is associated with
various groups of income as reflected by the t
value and its significance. Remaining all other
dimensions are perceived in similar way by all
S.D
4.429 0.852
2144. 8020.
3.429 1.158
Ten lac and
4.286 0.726
2.857 1.231
3.000 1.569
3.571 1.284
1434. 8640.
the income groups, as their t values are not
significant. Hence the null hypothesis is accepted
Mean
here and concluded that there is no difference of

opinion regarding the various dimensions related
to reasons for purchase of ATM cards.
ten lac
0.737
8480.
The last part of table reflects that there is a
0.973
0.992
1.041
7640.
0171.
0.627
S.D
significant association between income groups

and various problems faced by respondents while
4.235
9613.
Less than three lac Three to six lac Six to
Problem while using ATM cards
3.667
4.353
3.235
3.392
3.765
3.745
using ATM cards such as, ‗Machine out of cash‘

S.D Mea
‗No printing of statement‘ and ‗cards gets

blocked‘ at 1 percent and 5 percent level of
significance respectively. Remaining dimensions
1.272
7640.
1.018
0.897
1.323
1.114
0.980
1.045
related to problems while using ATM cards are

not associated with income groups, hence it bring
Mean
4.000
1884.
to a close that there is similar opinion of

3.553
4.071
3.447
3.859
3.941
4.165
respondents regarding the dimensions.

4. 6 Age-wise Perception regarding ATM
0.984
8700.
1.047
1.002
0.981
1.028
9960.
0331.
Services
S.D
The age wise comparison shows that the

respondents in the age group of 18-30 years, and
4.324
2504.
Mean
3.838
3.912
3.809
4.044
4.147
4.088
31-45 years as well as those above 45 years do not

differ in their responses significantly on various
Wrong amount in the slip
dimensions related to the services of ATMs and

Balance reduce withoutcashreceipts
No printing of statement
Sr. Level of Awareness and
hence the null hypothesis is accepted as t values

Difficulty in retrieve
Machine out of order
are very less to be significant. A glance at the

Machine out of cash
Cards gets blocked
table 6 part two points out that the fact that the
Poor visibility of
respondents between the age group of 18-30, 31-

statementslip
No. Knowledge
45 years and those above 45 years are differs in

their responses on the aspects that ‗they need not
cards
to carry cash‘ at 5 percent level of significance.

23
26
22
19
20
21
24
25

Dr. Sunita Bishnoi
Table 6: Age-wise Perception regarding ATM Service
Level of Awareness and 18-30 31-45 45-60

S.No. F-values
Knowledge Mean S.D Mean S.D Mean S.D
1 Withdrawal of cash 1.875 0.882 2.258 1.276 2.135 1.134 2.754 (.066)
2 Pay your utility bills 2.807 1.329 2.989 1.315 2.649 1.006 1.064 (.347)
Transfer fund between your
3 3.057 1.263 2.839 1.209 2.568 1.144 2.188 (.115)
own account
4 3.239 1.322 3.323 1.304 2.757 1.402 2.491 (.085)
cards
Stock market/mutual funds
5 3.614 1.36 3.602 1.244 3.405 1.301 .373 (.689)
transactions
6 Donation/charity 3.773 1.22 3.688 1.179 3.514 1.325 .588 (.556)
7 3.034 1.254 3.065 1.358 2.622 1.341 1.643 (.196)
establishment
8 Fuelling up your vehicle 2.693 1.244 2.839 1.385 2.405 1.279 1.451 (.237)
9 It is a free service from bank 1.727 0.784 1.882 0.819 1.946 1.177 1.091 (.338)
I am frequently required to
10 2.045 0.772 2.086 0.816 2.216 1.205 .497 (.609)
travel
11 It does not require to carry cash 1.83 0.861 1.828 0.928 1.378 0.545 4.338* (.014)
12 Any time withdrawal 1.818 0.81 1.892 0.938 1.703 0.777 .656 (.520)
13 No queuing 2.068 0.814 1.914 0.928 1.838 0.442 1.327 (.267)
14 Reduce risk of cash loss 1.977 0.922 1.817 0.82 1.757 1.14 1.027 (.360)
15 Provide mini statements 2.023 1.028 1.839 0.811 2.081 0.595 1.463 (.234)
16 Safe transaction 1.955 0.815 1.882 0.858 2.081 0.924 .733 (.482)
17 Easy to use 1.875 0.92 1.763 0.772 1.892 0.458 .579 (.562)
Connectivity to other banks
18 2.08 0.937 2.043 0.884 2.027 0.897 058 (.944)
ATMS

Level of Awareness and 18-30 31-45 45-60

S.No. F-values
Knowledge Mean S.D Mean S.D Mea S.D
Problems while using ATM Cards
19 Cards gets blocked 3.977 0.909 4.129 0.887 4.324 0.852 2.059 (.130)
20 Machine out of cash 3.705 1.116 3.398 1.235 3.108 1.022 3.820* (.023)
21 No printing of statement 4.068 1.026 3.548 1.273 3.514 0.87 5.922** (.003)
22 Machine out of order 3.807 0.981 3.527 1.079 3.649 0.889 1.740 (.178)
23 Wrong amount in the slip 4.386 0.903 4.108 1.068 3.892 1.286 3.366* (.037)
24 Poor visibility of statement 4.057 1.010 4.022 0.955 3.459 0.767 5.746** .004)
slip
Balance reduce without
25 4.125 0.945 4.022 1.011 3.892 1.265 .694 (.501)
cash receipts
26 Difficulty in retrieve cards 4.261 0.795 4.237 0.758 3.703 0.909 7.179** .001)
The respondents of various age groups perceive 4.7 Area of residence- wise Perception regarding
differently at 5 percent level of significance as the ATM Services
problems such as machine out of cash, wrong The significant F- values along all dimensions of
amount in the slip are concerned, where as no ATM services points out variation in responses of
printing of statement, poor visibility of statement the customers residing in different locations of
slip and difficulty in retrieve cards differ Faridabad, Delhi, Gurgaon and Noida. The
significantly at 1 percent level of significance. dimensions ‗Pay your utility bills‘ and ‗Fuelling
up your vehicle‘ has significant difference among
the residence of Faridabad, Gurgaon and Delhi at
5 percent level of significance.
Table 7: Area of residence- wise Perception regarding ATM Services
Level of Awareness and Faridabad Delhi Gurgaon

Sr. No
Knowledge Mean S.D Mean S.D Mean S.D F values
1 Withdrawal of cash 2.097 1.003 2.024 1.123 2.141 1.211 .219 (.804)
2 Pay your utility bills 2.903 1.468 3.094 1.211 2.535 1.106 3.874 *(.022)
3 Transfer fund between your 2.758 1.327 3.106 1.134 2.718 1.221 2.392 (.094)
own account
4 3.145 1.412 3.235 1.182 3.183 1.457 .083 (.920)
cards
5 Stock market/mutual funds 3.435 1.350 3.553 1.258 3.718 1.300 .802 (.450)
transactions
6 Donation/charity 3.548 1.399 3.800 1.100 3.690 1.190 .762 (.468)
7 3.065 1.413 3.094 1.221 2.761 1.336 1.436 (.240)
establishment
8 Fuelling up your vehicle 2.903 1.399 2.824 1.217 2.394 1.315 3.089* (.048)

Dr. Sunita Bishnoi
Sr. Level of Awareness and Faridabad Delhi Gurgaon

No Knowledge Mean S.D Mean S.D Mean S.D F values
9 It is a free service from bank 1.952 0.965 1.847 0.681 1.704 0.991 1.348 (.262)
I am frequently required to 3.157*

10 1.935 0.765 2.035 0.698 2.296 1.101
travel (.045)
It does not require to carry 4.413*
11 1.871 0.877 1.871 0.897 1.507 0.754
cash (.013)
12 Any time withdrawal 1.903 0.953 1.882 0.837 1.704 0.800 1.141 (.321)
13 No queuing 2.048 0.931 1.953 0.83 1.901 0.700 .541 (.583)
14 Reduce risk of cash loss 1.968 0.905 1.929 0.884 1.718 0.974 1.493 (.227)
15 Provide mini statements 1.903 0.844 1.988 0.852 1.958 0.948 .167 (.846)
16 Safe transaction 1.968 0.886 2.047 0.8 1.803 0.872 1.632 (.198)
17 Easy to use 1.871 0.859 1.847 0.794 1.775 0.741 .273 (.761)
Connectivity to other banks
18 1.968 0.958 2.094 0.868 2.085 0.906 .404 (.668)
ATMS
19 Cards gets blocked 4.145 0.921 4.059 0.822 4.113 0.964 .175 (.840)
4.112*
20 Machine out of cash 3.726 1.162 3.541 1.108 3.169 1.195
(.018)
21 No printing of statement 3.984 1.138 3.788 1.124 3.507 1.132 3.015* (.050)
22 Machine out of order 3.774 1.062 3.612 0.965 3.62 1.033 .544 (.581)
23 Wrong amount in the slip 4.419 0.879 4.094 1.042 4.085 1.192 2.180 (.116)
Poor visibility of statement

24 4.048 1.047 4.059 0.93 3.704 0.916 3.184 * (.043)
slip
Balance reduce without cash
25 4.032 1.055 4.082 1.003 4.000 1.056 .126 (.882)
receipts
26 Difficulty in retrieve cards 4.145 0.989 4.247 0.770 4.056 0.715 1.049 (.352)
The part second of the table reflecting significant out of cash‘ ‗No printing of statement‘ and ‗poor
difference of opinion among respondents belongs to visibility of statement slip‘ at 5 percent level.
different area of residence regarding ‗I am Remaining all other dimensions are similarly
frequently required to travel‘, ‗it does not required perceived by the respondents hence it can be
to carry cash‘ at 5 percent level of significance. The concluded that in three dimensions area of
part three of the table is reflecting significant residence has significant impact on various
difference of opinion among respondents belongs to problems faced by respondents regarding ATM
different area of residence regarding ‗Machine services.

4.8 Association with the Bank and Perception of Apart from ―shopping at merchant establishment‖
Respondents and ―transfer fund between your own account‖ all
the other dimensions of ATM services display wide
‗Association with bank‘ is a significant variable
variation among the four different groups of
affecting the purchase of ATM services and
respondents at 1 percent and 5 percent level of
various problems in use of ATM services. The significance. The mean comparison points out that
results of comparison of means across four ‗Withdrawal of cash‘, ‗Refill your mobile prepaid
groups of respondents having association with cards‘, ‗Shopping at merchant establishment‘ and
the bank are less than one year, one to three year, ‗fueling up vehicle‘ have emerged non-significant
three to five year and five year and above dimension among all the groups, as F values are too
depicted in Table 8. less to be significant.
Table 8: Association with Bank and Perception of Respondents
Less than one One to three Three to Five years

Sr. No. Level of Awareness year year five year and Above F values
and Knowledge Mean S.D Mean S.D Mean S.D Mean S.D
1.443
1 Withdrawal of cash 2.375 1.408 1.837 0.965 2.020 1.086 2.200 1.164
(.231)
1.975
2 Pay your utility bills 2.500 1.414 3.224 1.462 2.843 1.332 2.727 1.124
(.119)
Transfer fund
3.595*
3 between your own 2.750 1.753 3.204 1.207 3.137 1.167 2.627 1.180
(.014)
account
Refill your mobile 2.190
4 2.875 1.642 3.612 1.272 3.118 1.291 3.064 1.343
prepaid cards (.090)
Stock
1.305
5 market/mutual 2.875 1.642 3.796 1.354 3.569 1.285 3.527 1.247
(.274)
funds transactions
2.323
6 Donation/charity 4.000 1.414 4.020 1.145 3.725 1.218 3.509 1.217
(.086)
Shopping at
4.409**
7 merchant 3.125 1.458 3.531 1.309 2.647 1.180 2.873 1.314
(.005)
establishment
Fuelling up your
8 2.625 1.302 2.959 1.485 2.569 1.082 2.664 1.336 .837 (.475)
vehicle

Dr. Sunita Bishnoi
Level of
Sr. Awareness and Less than one One to three Three to five year Five years and F values
No. Knowledge year year Above
Mean S.D Mean S.D Mean S.D Mean S.D

It is a free service from
9 1.500 0.535 1.673 0.826 1.980 0.860 1.855 0.917 1.437 (.237)
bank
I am frequently
10 2.000 0.535 2.082 0.838 2.020 0.707 2.136 0.981 1.240 (.869)
required to travel
It does not require to
11 2.125 1.246 1.837 0.943 1.941 0.881 1.600 0.757 2.687* (.047)
carry cash
12 Any time withdrawal 1.500 0.535 1.735 0.861 2.078 0.891 1.782 0.850 2.158 (.094)
13 No queuing 2.000 1.069 1.857 0.791 2.196 0.939 1.900 0.741 1.893 (.132)
14 Reduce risk of cash loss 1.875 0.991 1.714 0.866 2.039 0.894 1.864 0.953 1.041 (.375)
15 Provide mini statements 2.125 1.126 1.694 0.769 2.216 1.137 1.936 0.733 3.146* (.026)
16 Safe transaction 2.000 0.756 1.653 0.723 2.137 0.917 1.982 0.857 2.943* (.034)
17 Easy to use 1.750 0.707 1.633 0.755 2.059 0.925 1.818 0.732 2.509 (.060)
Connectivity to other
18 1.625 0.744 1.98 0.968 2.078 0.821 2.109 0.922 .858 (.464)
banks ATMS
19 Cards gets blocked 3.875 0.835 4.122 0.904 3.863 0.895 4.218 0.882 2.042 (.109)
20 Machine out of cash 4.000 0.926 3.612 1.187 3.294 1.238 3.455 1.138 1.185 (.316)
No printing of
21 4.375 0.518 3.816 1.149 3.745 1.214 3.682 1.133 .986 (.400)
statement
22 Machine out of order 3.875 1.246 3.98 0.829 3.216 1.101 3.709 0.971 5.408** (.001)
Wrong amount in the

23 3.875 1.246 4.531 0.793 4.137 1.020 4.073 1.139 2.471 (.063)
slip
Poor visibility of
24 4.125 0.991 4.082 0.975 3.941 0.947 3.864 0.981 .669 (.572)
statement slip
Balance reduce without
25 4.25 0.463 4.163 0.85 3.980 1.029 4.000 1.133 .453 (.716)
cash receipts
Difficulty in retrieve
26 4.500 0.535 4.224 0.771 4.196 0.825 4.082 0.858 .918 (.433)
cards

The second part of the table is reflecting the • Further the study pull out that occupation
association of customers association with bank has a strong bearing on various banking
and various reasons to purchase ATM cards. Out transaction. Where as regarding reasons to
of the total listed ten dimensions three dimension buy ATM cards only one dimension namely
i.e. it does not required to carry cash, provide ‗it is a free service from bank‘ is associated
mini statement, and safe transaction is significant with occupational category.
at 5 percent level of significant. Remaining all • The various income groups have significant
other dimensions are perceived in similar way by association with ‗withdrawal of cash‘, ‗refill
all the association groups, as their t values are not mobile cards‘, ‗shopping and fueling up
significant. vehicle‘ as various transaction are
The last part of table reflects that there is a concerned. Further income group differs
significant association between association with regarding the reason that ‗ATM card is easy
bank and various problems faced by respondents to use‘. The perception of various income
while using ATM cards out of the total listed groups differ significantly in case of that
eight dimensions only one dimension i.e. ‗sometimes cards get blocked‘, ‗machine out
‗machines out of order‘ is significantly associated of cash‘ and ‗no printing of statement‘.
with various group of association at 1 percent
• Regarding various banking transactions
level of significance. Remaining all other
there is no association among various age
dimensions related to the problems while using
groups of respondents. Regarding banking
ATM cards are not significant as their f values are
queries the different age group has
too less to be significant, hence it bring to a close
significant association with the dimension ‗it
that there is similar opinion of respondents
does not require to carry cash‘. The different
regarding the dimensions.
age group has difference of perception
5. Major findings of the study regarding ‗machine out of cash‘, ‗no printing
• The study found a significant relation between of statement‘ ‗wrong amount in the slip‘,
gender and some dimensions related to ATM ‗poor visibility of statement slip‘ and
services such as ‗refill mobile prepaid cards‘, ‗difficulty in retrieve cards‘.
‗free services from bank‘, ‗require travel and • The dimensions ‗pay your utility bills‘ and
need not to carry cash‘. ‗fueling up your vehicle‘ has significant
• Education level of the respondents has high association with area of residence.
degree association with some dimensions of Regarding the various reasons for use of
ATM transaction services namely ‗pay your ATM services various areas of residence has
utility bills‘, ‗donations/charity‘, ‗shopping significant bearing on the issues that ‗I
and ‗fueling up vehicles‘. On the other hand frequently require to travel‘, and ‗not
association between education level and require to carry cash‘.
banking inquires related to ATM services as • The mean comparison points out that
‗free service from bank side‘, ‗any time ‗Withdrawal of cash‘, ‗Refill your mobile
withdrawal‘, ‗provide mini statements‘, prepaid cards‘, ‗Shopping at merchant
‗easy to use‘, ‗machine out of cash‘ and establishment‘ and ‗fueling up vehicle‘ have
‗connectivity to other banks‘ ATM‘ were emerged as highly weighted dimension
also found significant. among all the groups based on association
• One interesting finding from the paper is with the bank. The dimension ‗Easy to use‘
that the perceptions of respondents of public is associated with various groups.
sector and private sector banks do not differ • Further the study reflects that there is a
significantly. significant relation between association with

Dr. Sunita Bishnoi
the bank and various problems faced by • Allen, F., McAndrews, J., Strahan, P. (2001). E-
respondents covered under study. While Finance: An Introduction. Working Paper No. 01-
using ATM cards the problem ‗Machine out 36, Financial Institutions Center, Wharton
of order‘ has significant difference of University, Philadelphia, PA, (accessed on 7
opinion. Remaining dimensions related to October 2013).
problems while using ATM cards are not • Davies, F., Moutinho, L., and Curry, B. (1996).
associated with groups of the respondents, ATM users‘ Attitudes: A Neural Network
hence it bring to a close that there is similar Analysis. Marketing Intelligence and Planning,
opinion of respondents regarding the Vol. 14, No.2, pp.26–32.
problems while using ATM cards.
• Singh Pahwa and Saxena (2011). Analytical Study
6. Implications of the study
of Customer Satisfaction at ICICI Bank with
The present research paper analyses various Special Reference to ATMs. IPEDR, Vol. 12,
important issues related to ATM services. The (2011) IACSIT Press, Singapore
paper concludes that most of respondents are
• Sundaram and Premalatha (2012). Analysis of
using ATM only for cash withdrawal and for
Customer Satisfaction with reference to ATM
online shopping. Stock transactions and
Services in Vellore District, Tamil Nadu. IJEMR
donations/charity are the least used services of
– February 2012, Vol. 2, No. 2 - Online - ISSN
ATM by respondents. So the bank managers and
other responsible authorities should effort to 2249 – 2585 - Print - ISSN 2249 - 8672
improve the various services as various inquiries • Jannatul Mawa Nupur (2010). E-Banking and
and transactions used by the customers. In the Customers‘ Satisfaction in Bangladesh: An
study a sufficient stressed have been given to Analysis. International Review of Business
various problems faced by the respondents while Research Papers Vol. 6, No. 4. pp. 145 – 156.
using ATM services, so the study is useful for the • Khan (2010). An Empirical Study of Automated
public and private sector banks to confiscate all Teller Machine Service Quality and Customer
the problems and provide insight to satisfy the Satisfaction in Pakistani Banks. European Journal
customers in a healthier tactic.
of Social Sciences Vol. 13, No. 3, pp 333-344.
7. Future Research Directions
• McAndrews, J. J. (2003). Automated Teller
The present study is limited to Delhi, Gurgaon and Machine Network Pricing – A Review of the
Faridabad and only confined to public and private Literature. available at: http://
sector banks. The future research can be border in www.rnejournal.com/articles/
areas and can add the foreign sector because these
• Shastri R. V. (2001). Technology for Banks in India
banks are providing better technological facilities to
– Challenges. IBA Bulletin, Vol. XXIII, No. 3
their customers. The research can add a good
literature in terms of comparison among various
(March), pp 23-45.
types of banks and bank specific studies. • Singh and Komal (2009). Impact of ATM on
Customer Satisfaction: A Comparative Study of
References SBI, ICICI and HDFC Bank. Business Intelligence
• Al-Hawari, M., and Ward, T. (2006). The Effects of Journal, Vol. 2 No. 2.
Automated Service Quality on Australian Banks‘ • Uppal R.K. (2008). Customer Perception of E-
Service Performance and the Mediating Role of Banking Services of Indian Banks: Some Survey
Customer Satisfaction. Marketing Intelligence and Evidence. The ICFAI Journal of Bank Management,
Planning, Vol.24, No.2, pp.127-147. Vol. VII, No. 1 Feb. 2008 PP. 63-78.

Perspectives
Perspectives
Transition of Indian Society: Post-Liberalization Era
Prakash Bhattacharya
Research Scholar
Department of Humanities
National Institute of Technology, Durgapur
Abstract
Man is a social animal. Since the inception of the Introduction
human civilization, the society has been
Since the beginning of the civilization, the human
providing the necessary social and financial
being structured their own society in the form of
support during various phases of our life. Social
family. It provides the necessary level of social
life is highly influenced by the economic activities
and financial support at different stages of life.
performed by the people in the society. Indian
Availability of fertile land, supply of adequate
economy has been developed as an agrarian
water as well as the knowledge and skill of the
economy. It helps the Indian societies to form the
people for the agriculture and allied activities
joint-family system where all the brothers of a
helped the Indian economy to commence its
family use to stay together to pursue the common
progress as an agrarian one. Such economic
economic objectives of the family. Such system
environment led to the formation of joint family
has provided an excellent hedge against the risks
system in India where all the members of a family
of premature death and excessive longevity of
use to stay together in order to pursue the
any member as the burden of the same were
common economic objective of the family. This
shared by the other family members. However, as
fact reduced mobility of the people to negligibly
the economy grew, the industrial progress
small level, except for the reasons of trade and
gradually replaces the agricultural activities. As a
commerce. A society with joint family system
result, in search for better earnings, many started
uses to provide suitable umbrella against the risks
migrating to urban areas to get better
of premature death and excessive longevity as the
assignments leaving their caste based familial
burden of the same is distributed among the
professions. On the other side, with decreasing
several members of the family. On the other side,
birth rate and increasing rate of literacy, many
it has also formulated the norms about the nature
women are entering into the workforce. All these
of intergenerational relationships in a family and
developments have made the positions of the
the role of every member of the family. As a
elderly persons in the society as marginalized
result, the elderly people are highly respected in
one. This paper proposes to study the transition
the society and use to play the most important
of Indian society due to several developments in
role in relation to decision making as regard to
the Indian economy and corresponding changes
the household matters whereas the younger
in the position of the older persons in the society.
people use to ensure their well being1.
Key Words: Urbanization, joint family system,

But with the passage of time, the older people are as the potential entrepreneurs in the modern sector2.
gradually marginalized one. This paper proposes The relationship among output, consumption,
to study the changes in the Indian society due to savings and government action was considered
various reasons and its impact towards the seriously from the point of the growth of output,
changing perception of the people towards the not from the point of view of the growth of output,
elderly persons. The second part of this paper not the growth of consumption. The growth of
will focus on the process of the incremental output depends on the level of economic activities,
urbanization in India and its impact on the degree of knowledge and the amount of capital that
society in relation to the changes in the structure is directly related to the availability of natural
of the family. The third part of the paper will resources as well as the human behavior. Therefore,
elaborate on social impact of the process of it may be considered that the growth is critically
globalization of the Indian economy that leads to dependent on working with higher productivity,
exponentially rising demand for the specialized application of better knowledge and judicious
professionals from different functional areas. The investment of capital by duly exploiting the
fourth section will highlight about the increasing opportunities related to trade and commerce3. Based
participation of the women in the job market and on the differences in growth prospects, he has
the consequent changes in their role in the focused on the reallocation of labor force from the
society. The fifth section will focus on the changes traditional sector to modern sector as a matter of
on the position of the elderly persons in the utmost important. The traditional sector was
society owing to the above reasons. The sixth assumed to have the capacity to supply infinite
section will assess the impact on the insurance number of laborers to the modern sector as the
sector with the transition in the Indian society. elasticity of supply was considered to be infinitely
Finally, in the seventh section, conclusion will be high as against any minor change in the wage
made about the relative changes in the position of difference. Lewis believed that this kind of
the elderly people in the society and its expected reallocation would continue till the attainment of
impact in the economy. the turning point i.e. when the labor reallocation
Incremental Urbanization and its Social Impact will exceed the population growth and the entire
economy becomes fully commercialized. However,
The noted economist Arthur Lewis has provided
the modern sector is not capable of absorbing the
―an appropriate framework for studying economic
entire volume of mobilized labor. The degree of
development‖ in his Theory of Economic Growth3.
absorption critically depends on the supply of
There he has depicted the existence of two sectors in
capital i.e. the volume of savings and investment
the economy. The first one is agriculture or
channelized to the modern sector that in turn would
traditional sector that is dominant, non-capitalist
lead to the generation of employment in the modern
but subsistence in nature to the people. The second
sector vis-à-vis catalyzing the process of
one is relatively smaller non-agricultural
urbanization in the economy2.
commercial sector or modern sector but potentially
dynamic and expanding with time. The traditional
sector is governed by the two groups – landlords The degree of urbanization indicates the level of
and workers where wages are set through the transformation from traditional rural economy to
process of bargaining. He has noted the landlords modern industrial one. It is a continuous and long
as the savers in the traditional sector while the term process that studies the progressive
people from the same group are acting concentration of population in the urban areas.

The process of urbanization takes place in three country. Hence, long-term GDP growth needs the
different stages. The initial stage is represented better qualities for the city attributes like, safety,
by the traditional rural societies primarily pollution and congestion through better urban
dependent on agriculture with dispersed pattern economic management. Many countries reached
of settlements. In the intermediate stage, the about 50 percent urbanization before getting the
process of restructuring of the economy and status of middle income group whereas the high
investment in the social infrastructure is income countries achieved about 70 – 80 percent
accelerated in the form of better transportation, urbanization. The pace of urbanization is directly
communication, healthcare facilities, etc. These related to industrial growth and so economic
factors lead to have more comfortable civic life development of the country as observed in the
while the degree of dependence on agriculture developed countries. For India, this process
gradually declines. At the final stage, the degree resembles with the most of the characteristics
of urbanization reaches 70 percent or more and features of the urbanization process with the
the growth rate of urban population becomes developing countries. The urbanization process in
same as that of the total population7. India might have started during the pre-
In the Indian context, the process of urbanization independence period but the pace of the same has
has evolved not only with higher degree of been accelerated during the post-independence
concentration of people in large cities and era. The availability of better economic
agglomerates but also with wider variations in opportunities and infrastructural supports are the
the pattern of urbanization in various states and main reasons that attract the rural people in the
cities4. Gill and Kharas have observed that there urban areas. Therefore, the process of
is high degree of positive correlation between the urbanization is of utmost important in order to
index of city liveability and per capita GDP of the place the economy in higher growth trajectory.
Table 1: Urbanization in India
Year 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011
Urban Population (in 25.9 28.1 33.5 44.2 62.4 78.9 109.1 159.5 217.6 284.5 377
million)
Percent Urban 10.3 11.2 12 13.9 17.3 18 19.9 23.3 25.7 27.8 31.2
Decadal Growth 41.4 26.4 38.2 46.1 36.4 31.2 32.5
Rate of Urbanization 2.54 0.4 1.06 1.72 1.02 0.82
Number of Towns 1825 1949 2072 2250 2343 2363 2590 3378 3768 5161 7935
(Source: Registrar General of India)
The above table represents that the size of urban has gone up from 1825 to 7935 respectively during
India grew from 25.9 million in 1911 to 377 million the above period. The above figures reflect an
in 2011, where the percent urbanization has been increasing trend of urbanization and hence India
increased from 10.3 percent to 31.2 percent of the may be considered as at the acceleration stage in
total population during the above period. While the relation to the process of urbanization7. During the
number of towns and urban agglomeration last century, significantly large number of

towns has come up while the city limits are many researchers have found that the process of
reasonably extended to accommodate large urbanization in India is mainly due to ―Rural Push‖
number of rural migrants. owing to large scale poverty rather than ―Urban
Pull‖ backed with higher degree of industrial
There are broadly three reasons contributing to
growth. Such poverty bound migration has led to
the process of incremental level of urbanization.
very poor quality urbanization in India that is
These are natural growth of urban population,
associated with misery, unemployment and rapid
increasing order of net rural-urban migration and
growth of slum dwellers those lead to degraded
the reclassification of the urban areas with the
quality of urban life. Moreover, due to the co-
extension of the municipal boundaries8. All these
existence of rural poverty and urban misery, the
components of urban growth are described in the
urban life cannot be considered to be ‗dynamic‘ one
following table:
that in turn leads to the formation of the larger size
Table 2: Components of Urban Growth of informal sector in Indian economy8.
Therefore, the urbanization process in India is
Percent Share 71 – 81 81 – 91 91 - 01 2001 - 11
experiencing two major challenges. The first one
Natural Increase 41.7 59.9 59 44
Net Migration + 39.4 22.6 21 24 is to achieve high growth of productivity
Extension of activities with economies of scale and better
Municipal degree of agglomeration. While the second one is
Boundaries to the management of the side effects of
Reclassification of 18.8 17.4 20 32 urbanization vis-à-vis economic progress leading
Area
to city-congestion, regional inequality and rapidly
(Source: Registrar General of India) rising real estate prices4. Technical Group on
The above table indicates that during 1971 – 81, Population Projections, appointed by the
about 41.7 percent of urban growth was natural, Planning Commission of India, has estimated that
39.4 percent was due to net migration and the the size of the urban population as percentage of
extension of municipal boundaries whereas the total population will increase up to 32.0 percent
reclassification of areas led to 18.8 percent urban by 2011 and 33.7 percent (425 million) by the year
growth. While for the next decade, the above 2016 and 41 percent (550 million) by the year
reasons contributed by the extent of 60 percent, 20215. Despite various development programs
22. 6 percent and 17.4 percent urban growth undertaken by the government like, Integrated
respectively. However, the result from 2011 census Rural Development Program (IRDP), Training of
revealed that due to better degree of birth control, Rural Youth for Self Employment (TRYSEM),
natural increase in urban growth has come down Prime Minister‘s Rojgar Yojana (PMRY), National
from 59 percent in the decade of 1991 -01 to 44 Rural Employment Guarantee Scheme under
percent in 2001 – 11 while marginal increase in rural NREGA, etc. the size of rural-urban migration is
migration has been observed. While major growth showing an increasing trend over the decades.
of urbanization in India was due to reclassification The above mentioned rural to urban migrants are
of urban towns and expansion of the urban mostly the younger persons. As the rural
agglomerates. Hence, from the above figures, it may population is growing, the size of the arable land
be concluded that population explosion led to in India is also gradually decreasing to meet the
higher growth of urbanization than due to other incremental demand for housing, leading to
causes of growth. However, increasing order of disguised unemployment. The

main objective of migration is to search for more traditional norms and respect to the elderly
earning opportunities and thereby leading to a persons as well as the authority vested with them.
better standard of living. In many instances, only Consequently, the older persons are gradually
one or few members of a family is/are migrating to marginalized owing to the defiance and decline in
the urban areas. All the members of a family cannot respect to them. As a result of that, the level of
continue to stay at the same place in urban areas family care likely to be offered to them is
due to higher cost of living as well as the non- concerned to decline with the growth and
availability of suitable accommodation. It is development of Indian economy11.
ultimately leading to the disintegration of joint
Presently, everybody wants to have a rewarding
family system. In many cases, it may be observed
career to have a better lifestyle, leaving the earlier
that these people are leaving their old parents in
caste based familial professions. It may be
their respective native places, mostly in the rural
evidenced from the rapid growth of the
areas due to the various reasons1. Therefore, the
professionals in the Indian job market e.g. the
degree of protection as was obtained from the joint
number of Cost and Works Accountants
family system has been declining gradually as the
increased from 2,272 in 1970 to 23,061 in 2004 and
system is gradually eroding. Therefore, in one hand
55,000 in 2011 (ICWAI), the number of Chartered
the growth of the industrialization in India
Accountants increased from 11,227 in 1971 to
gradually catalyzes the process of urbanization but
96,392 in 2001 to 11,41,516 in 2007 (ICAI), the
on the other hand, the older people are depriving of
number of doctors (Allopathy) has gone up from
invaluable family support system as enjoyed since
61,800 in 1951 to 592, 215 in 2002 and 668,131 in
ancient times3. So, the policy makers should re-look
2006 (MCI) etc. According to the Ministry of
the present systems – formal and informal – of
Human Resource Development, as on March
caring the older persons to meet the forthcoming
2005, there were about 16000 colleges and 343
challenges of the ―Age Quake‖10.
institutes of higher education with 9.3 million
Social Impact of Globalization students producing 441,000 technical graduates,
The process of globalization has been commenced 2.3 million graduates and 300,000 post graduates
from the 1980s with increasing degree of integration in every year. English is the most widely spoken
in relation to economic activities across the world, foreign languages in India that is having the
especially in the developed countries. Decreasing highest degree of proficiency among the educated
transportation costs and revolutionary development persons. Hence, the knowledge workers in India
in Information and Communication Technologies are playing a dominant role through the BPO and
are the main factors that led the globalization KPO businesses across the world11. They are
process. As a result, the concept of cross border making significant contribution in national
trade, capital flows, technology transfer, etc. have income in terms of international trade and hence
been increased significantly9. The process of became the most significant growth catalyst for
economic liberalization has been started in India in the Indian economy. All these are due to
1991 and it led to the emergence of capitalism, favorable demographic profile and the presence
division of labor and availability of lucrative of a large number of well trained English
opportunities. So, the market relationships are speaking persons in India11. The revenue from the
emphasized with greater importance than an BPO sector grew to US$88.1 billion (6.4 percent of
emotional one1. Growth of individual importance GDP) in FY2011by generating direct and indirect
has led to the erosion of employment to the extent of 10.8 million and the

same is expected to reach US$130 billion (7 percent Anglo-Saxon system that advocates passing the
of GDP) by the FY2015 providing an employment obligation of caring the old parents to the younger
opportunities for 14.3 million directly and children as it may destroy the family bond of love
indirectly. With the development of more than 3000 and affection, thereby leading to high level of social
Software Technology Parks of India (STPI), the IT- crisis. The pragmatic change in the life philosophy
BPO sector is no longer limited to the big cities of renouncing mode to acquisition mode during the
rather these are extended in the small towns. Hence, old age is a sheer mismatch as per Indian ethos.
the image of India has been changed drastically Hence, we should not imitate the concepts of
from bureaucratic country to an economy of tech- ―Proton Family‖ (Single Parent) or ―Mason Family‖
savvy innovative entrepreneurs offering (No Parent) system in the western societies that are
internationally acclaimed technology solutions and similar to the emergence of the concept of Nuclear
business services12. Corresponding to the increasing Family system. Rather the social thinkers and
demand of skilled man-power, the country is also government should further strengthen the family
producing incremental number of engineers and community bonds through several festivals in
associated with this sector as follows: order to protect and
Table 3: Employment Opportunities in IT Software and Services
2004 2005 2006 2007 2008

No. of Engineering 316,000 365,000 441,000 501,000 536,000
Graduates
Degree (Four Years) 139,000 170,000 222,000 270,000 290,000
Diploma and MCAs 177,000 195,000 219,000 231,000 246,000
(Three Years)
No. of IT 179,000 201,000 246,000 280,000 303,000
Engineering IT 84,000 102,000 133,000 162,000 180,000
Graduates (Degree)
Engineering IT 95,000 99,000 113,000 118,000 123,000
Graduates (Diploma)
* IT Professionals include Computer Science, Electronic and Telecom Professionals
(Source: NASSCOM)
Consequently, the mobility of the people has encourage social capital for the caring of the
increased manifold to meet the requirements of elderly persons in the Indian society10.
the augmenting areas of production and services
Changing Role of the Women
sectors. Therefore, the traditional joint family
system is getting fragmented resulting in the Since ancient days, motherhood is considered to
formation of the nuclear families1. However, the be the supreme role of the Indian women that is
family bond, extended family relationships and religiously performed and socially celebrated by
community connections are still stronger in the offering highest degree of respect to mother and
Indian society as compared to the western one. mother land. So, the women use to play the most
Therefore, we should not move to rule based crucial role as traditional caregivers, especially to

the children and aged persons in the family1. But their family incomes but also to use their mental
with globalization, the intra-household abilities in constructive and creative manners.
responsibilities for males and females have been
The following table shows the participation of
changed. The women are undertaking the
women in the organized sectors in India:
responsibilities for the survival and financially
well-being of the entire family while the men are The above table shows that the total employment
no longer the sole provider of financial supports opportunities in the organized sector have been
for the family14. With the reduction of the number fluctuating from 27.96 million in 2000 to 26.44
of children, parents are taking extra care for the million in 2004 and thereafter gradually increased
higher education of the girl child. Consequently, to 29.00 million in 2011. Contrary to that trend,
being influenced by western thoughts and the number of female employees has registered a
knowledge, Indian women are also engaged consistently rising trend from 4.92 million in 2000
themselves in the feminism and started to 5.95 million in 2011. The similar type of data
movement for liberalization and against gender may be obtained for the unorganized sector in
discrimination13. Increasing social awareness, India. As more and more women are joining the
higher level of education and continuous work force of the country, it is concerned to affect
economic progress are removing gender bias in their care-giving roles significantly due to the
the society with the expectation for improved increasing opportunity cost of their time. In the
Table 4: Incremental Women Employees in the Organized Sector
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011
Total Employment 27 26.44 26.46 26.99 27.28 27.55 28.17 28.71 29
Male Employees 22.03 21.51 21.44 21.87 21.96 22.04 22.59 22.85 23.05
Female Employees 4.97 4.93 5.02 5.12 5.31 5.51 5.58 5.86 5.95
Female Employees 18.4 18.6 19 19 19.5 20 19.81 20.41 20.52
(Note: For the first three rows, the figures are in million while the last row represents the
percentage of female employees in the organized sector)
Source: Economic Survey of India various issues; Ministry of Finance, Government of India.
status of the women. As a result, the role of the Indian societies, neither the formal home care
Indian women has been redefined with the facilities at very large scale exist nor can the
changes in their traditional attitudes in the working women avoid their moral responsibilities
society. The Indian women have proved their ensuring reasonable care for the elder members of
professional skills in almost every areas like, the family. Hence, higher level of physical pain and
science, technology, sports, law makers, law mental strain for the Indian women cannot be rule
protectors, medical, journalism, etc. where men out in future days. But the old people deserve
had the strongest presence earlier. The women adequate care and emotional support during the last
are considered to be an important resource and part of their life. Those expectations can only be met
strength to the economy14. Thus, increasing with reasonable cost to the individuals as well as to
number of women are joining the workforce not the society. So, it should be considered as a tougher
only to utilize their knowledge and to enhance challenge to the society

to develop viable solution for the forthcoming support to the older persons17. The government may
problem that should be sustainable in the long be complacent about the continuity of joint family
term. system and traditional values in order to provide
the social security system. But as the system is
In consequent to the above developments, the
gradually waning, the alternatives should be
older people are experiencing drastic changes in
considered1. The size of the old age persons
the physical and socio-economic environments.
increased from 19.6 million in 1951 to 76.6 million in
Their positions are gradually marginalized in
2001. As per the projection of the United Nations,
smaller families, especially in the decision
these figures will increase to 112 million in 2015 to
making process, though their opinions were
316 million in 205018. Due to the trend of population
seriously followed earlier. So, the so-called family
ageing, the older people in India are facing a
institution that use to look after the elderly
number of problems and constrained to adjust with
persons, widows, sick and orphans has brought a
the same. These problems include the absence of
new challenge to the society as a whole1.
social and income security, loss of social role and
Increasing number of older persons and the
recognition for their activities as well as the lack of
transition in the social environment may
opportunities for the creative works. These
probably increase the proportion of the destitute
problems vary depending on age, socio-economic
among the aged persons15. These factors are also
status, health condition, living status, etc.16 In
leading to the need to construct large number of
Census 2001; it has been observed that 40.3 percent
old age homes in India so as to enable the older
of the older persons are still participating in labor
people to enjoy the concluding part of their lives
force, mostly in the rural areas. Out of the entire
in a friendly environment. The impact of the
elderly population, 60.2 percent of elderly men and
above factors may be observed in the living
20.9 percent of aged women are working. However,
arrangements of the elderly Indians as shown by
the degree of participation varies among major
the National Family Health Survey 1 and
states as has been observed to be the highest in
National Family Health Survey 2, as given in the
Nagaland and the least in Goa due to the type of job
Appendix 1 conducted by the International
available. Many older persons in the developing
Institute of Population Studies, Mumbai, as an
countries are forced to work to earn their livelihood
assignment under the Ministry of Health and
due to the non-availability of any regular income to
Family Welfare, Government of India, during the
them19. As per NSSO 1998, about 50 percent of the
years 1992–93 and 1998–991.
elderly are dependent on others totally while about
Social Life of the Older Persons in India 20 percent are partially dependent. As per NFHS II
Since the ancient era, the traditional norms and (1998 - 99), about 86.7 percent are living with their
values in the Indian society have provided special families where the living arrangement, economic
provisions to show respect and to take care of the security and physical well-being are largely
older persons in the society. However, these are contingent on the family income16.
changing due to various reasons16. Consequently,
the elder persons are increasingly perceived as the The problems of an ageing is not limited to an
burden to the society as they are inactive individual but to the entire society as experienced
economically. Fast changes in the family system and by the developed and developing nations. The
reducing number of children are considered to be aged persons are considered to have better skill,
the constraints for the availability of kin knowledge, wisdom and experience than the

younger ones. All these qualities may be exploited these people. It may be done through incremental
in order to produce more with better quality at consciousness about the ageing process and also
cheaper price. However, few consider that the aged by arranging the adequate volume of social
persons are problematic to the society as they security measures. In addition to these, one may
experience diminishing power, prestige and redefine the roles and responsibilities of the aged
privileges with the advancement of ages in the persons by replacing the existing ones in order to
society due to the loss of memory power and improve the degree of life satisfaction. In this
physical strength. Consequently, the older persons regard, one may also define and delineates new
are perceived to be weak, indolent and calm in environment where they will be freely allowed to
nature as against the perception of smart, dynamic set their own goals and objectives to be active in
and courageous nature of the younger people. So, their lives.
the older persons should be gradually disengaged
Impact on the Insurance Sector
from their duties by restricting their scope of
employment and commitments in relation to the Due to higher rate of literacy and better spread of
important tasks of the society. The modern societies higher education among the masses, the degree of
have comparatively less use for older people in the awareness regarding the need for the insurance
pre-industrial and industrial societies. Hence, there coverage and requirement of old age income
is a necessity not only for the creation of separate security is gradually increasing. Understanding
identity for the aged persons but also to offer the the requirements of higher degree of insurance
relevant degree of privileges in socio-economic, penetration among the common people in India,
political and psychological aspects to Government of India constituted the Malhotra
Table 5: Insurance Penetration and Density in India
Year Life Insurance Non-Life Insurance Insurance Industry

Density Penetration Density Penetration Density Penetration
2001 9.12 2.15 2.4 0.56 11.5 2.71
2002 11.7 2.59 3 0.67 14.7 3.26
2003 12.9 2.26 3.5 0.62 16.4 2.88
2004 15.7 2.53 4 0.64 19.7 3.17
2005 18.3 2.53 4.4 0.61 22.7 3.14
2006 33.2 4.1 5.2 0.6 38.4 4.8
2007 40.4 4 6.2 0.6 46.6 4.7
2008 41.2 4 6.2 0.6 47.4 4.6
2009 47.7 4.6 6.7 0.6 54.3 5.2
2010 55.7 4.4 8.7 0.71 64.4 5.1
2011 49 3.4 10 0.7 59 4.1
Explanations:
* Insurance density is measured as ratio of premium (in US Dollar) to total population.
* Insurance penetration is measured as ratio of premium (in US Dollars) to GDP (in US Dollars).
* The data of Insurance penetration is available with rounding off to one digit after decimal from
2006. (Source: IRDA Annual Report 2010-11)

Committee in the year 1994 to suggest about the from Rs.109.99 billion and Rs.198.89 billion as on
changes in the policy framework required in March 2006 to Rs.358.74 billion and Rs.467.81 billion
order to open the Indian Insurance Industry to as on March 2011 respectively. In the same trend,
the domestic and multinational companies. group single premium and group non-single
Consequently, following the passage of the IRDA premiums have gone up from Rs.44.06 billion and
Bill in December 1999, many players started Rs.6.04 billion to Rs.263.57 billion and Rs.168.14
entering in this field to grab a certain share of the billion respectively during the same time period.
growing markets and hence to earn better Consequently, the number of policy issued against
profitability. In the year 2012, IRDA has individual single premium and individual non-
registered about 24 life insurance companies, 27 single premium has also gone up from 26.97 lakh
non-life insurance companies and one Re- and 327.44 lakh as on March 2006 to 55.94 lakh and
insurance company. Entry of many insurance 425.27 lakh respectively. While in case of group
companies in the Indian market has led to insurance coverage, the number of lives covered has
incremental insurance penetration and increasing gone up from 123.29 lakh and 28.52 lakh lives as on
insurance density in the Indian economy. March 2006 to 281.17 lakh and
552. 09 lakh as on March 2011 against the
As per the observations from the above table, the
insurance density has gone up from 11.5 in 2001 to
collections of group single premium and group
59.0 in 2011 – more than five folds increase in a span
non-single premium respectively20. All the figures
of one decade. During the above period, the level of
are showing the incremental awareness of the
insurance penetration has gone up from 2.71 to 4.10.
people in relation to the requirement of insurance
These figures indicate the incremental spread of
coverage. As the joint family system is gradually
insurance coverage among the people. This is diminishing from the system, the availability of
attributable to the relentless efforts of the marketing
traditional support system is also eroding
personnel of all the insurance companies as well as
correspondingly. With the entry of more number
the competitive environment emerged following the
of women in the workforce, due to the reduced
passage of the IRDA Bill 1999. number of children in the family and with rising
According to IRDA, for the life insurance, per capita income, people are enjoying higher
individual single premium and non-single consumption power which helps to have better
premium collections have increased gradually affordability in relation to life insurance coverage.
Table 6: Growth of the Insurance Sector in India (Annual Premium Underwritten)
Nature of Premium 11-Mar 10-Mar 9-Mar 8-Mar 7-Mar 6-Mar

Individual Single 358.74 296.78 247.34 287.71 235.46 109.99
Premium
Individual Non-Single 467.81 520.56 446.88 497.82 379.23 198.89
Premium
Group Single Premium 263.57 214.89 137.39 118.72 124.22 44.06
Group Non-Single 168.14 60.68 39.47 25.64 15.16 6.04
Premium
(Figures are in terms of Rs. billion)

Table 7: Growth of the Insurance Sector in India (Number of Policies/Schemes)

Individual Single Premium 55.94 67.49 59.5 84.41 67.17 26.97
Individual Non-Single 425.27 464.47 449.48 424.08 394.11 327.44
Premium
Group Non-Single Premium 0.1 0.04 0.03 0.02 0.02 0.03
(Figures are in terms of lakh)
Table 8: Growth of the Insurance Sector in India (Group Insurance Coverage)

Group Non-Single Premium 552.09 379.91 194.12 62.97 47.37 28.52
(Figures are the number of lives in terms of lakh)
Conclusion
In the above discussions, we have observed about elderly use to stay in the pilgrimage centers
the social transition of India due to incremental during their last few years. Considering their well
urbanization owing to increasing migration of the being, rich people as well as the rulers of ancient
rural people in order to earn better livelihood. In India used to spend significant amount of their
one hand people are leaving their caste based earnings10. In one hand, the government should
familial professions while on the other hand also offer some economic benefits to the younger
everybody is looking for a lucrative career for sons and daughters for assuming the
their working life. These factors lead to the responsibilities of taking care of their old parents.
breakage of the joint family system that in turn However, in many cases such an opportunity
dissolving the traditional support system for the may not be available due to the decreasing
elderly persons. Presently, increasing number of number of kids, many of whom may not be living
educated women is joining the workforce not with the parents due to some obligations or with
only to earn more but also to have a challenging the couples without any kid. In these cases,
career to achieve self esteem. As a result of that, institutional support in the form of old age homes
the care giving role of the women is being under the supervision of the Ministry of Health
seriously affected as they are supposed to and Family Welfare will be of great help for the
compromise judiciously to manage the stress older persons. As it will help them to socialize
associated at the place of work and at the home. themselves with the people of similar age and
Hence, India should consider some alternative same types of social strata while they will be
arrangement for arranging the long-term care for cared by the professional care providers. This will
the growing number of old age population. We definitely bring happiness and mental satisfaction
may think for some institutional system as has to these people at the concluding stage of their
been observed in the earlier days where the lives.

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Appendix 1
Living Arrangement for the Aged Indians
Observations in NFHS 1 (1992–93) Observations in NFHS 2 (1998–99)

Characteristics Alone Two members 2 or more Others Alone Two members 2 or more Others
HH generation HH generation
(both aged) (both aged)
Male:
Age:
60–64 1.09 5.19 90.6 3.16 1.6 7 88.4 3.2
65–69 1.3 6.22 88.6 3.87 1.4 9.8 85.4 3.3
70–74 1.87 7.55 85.7 4.88 1.8 10.6 84.2 3.4
75–79 1.79 7.9 85.6 4.74 2.3 11.6 83 3.1
80 + 2.14 6.58 88.1 3.19 1.6 7.2 87.3 3.8
Residence:
Rural 1.42 6.37 88.4 3.8 1.6 9 86.1 3.3
Urban 1.5 6.09 88.6 3.8 1.8 8.3 80.6 3.2
Literacy:
Illiterate 1.64 6.46 90.6 3.61 1.5 9.4 85.5 3.4
Literate 1.23 6.11 86.3 4.05 1.8 8.3 86.8 3.1
Total 1.44 6.31 88.4 3.8 1.6 8.9 86.2 3.3
Female:
Age
60–64 2.41 4.07 90.3 3.19 3.9 6.7 86 3.5
65–69 3.03 4.99 88.3 3.72 4.2 6.7 85 4.1
70–74 4.47 3.43 88.8 3.31 5.4 3.7 86.8 4.1
75–79 3.16 3.39 90.7 2.79 5.1 3.1 89.1 2.8
80+ 3.55 0.74 93 2.69 4.2 1.4 91.7 2.7
Residence:
Rural 2.76 3.06 91.4 2.78 4.6 5.7 86.1 3.6
Urban 2.59 2.91 91.2 3.26 3.5 4.5 88.5 3.5
Literacy:
Illiterate 4.64 5.12 85.7 4.55 4.7 5.3 86.6 3.4
Literate 2.04 2.37 92.1 3.5 2.7 5.1 78.8 4
Total 3.43 3.82 89.1 3.67 4.4 5.4 86.7 3.6

Perspectives
Perceived fairness of employees in Performance Appraisal
System: with reference to Indian Public and Private Sector
Banks
Dr. Deepali Bhatnagar

Amity Business School
Amity University, Rajasthan
Abstract
Performance appraisal (PA) is an important human theory of organizational justice; Greenberg‘s taxonomy
resource tool which provides information to many of four-factor model of organizational justice was taken
critical human resource decisions such as training and as a theoretical framework. Better understanding of the
development needs, compensation and benefits, layoffs, perceptions of the fairness based on the concepts of
staffing, pay raises etc. Though Performance appraisal systemic, configural, informational, and interpersonal
system was devised to facilitate the better functioning justice of performance appraisal and related employee
of the organization but at the same time it has been reactions to such systems should provide decision
generating dissatisfaction among employees and is makers with more specific information needed to
often viewed as unfair and ineffective. Widespread improve the effectiveness of the system in achieving
frustration and dissatisfaction with performance organizational goals
appraisal has challenged researchers and practitioners Keywords: perception of fairness; performance
in both the private and public sectors to evaluate the
appraisal; public and private sector bank
effectiveness of performance appraisal systems.
Evaluation of the success of a performance appraisal 1. The Changing Landscape of Indian Banking
system is recommended as part of the system Indian banking has entered the new era of
implementation and management process. However, technology-enabled and customer-centric banking.
comprehensive research of the evaluation of It is bracing itself to catch up with the global trends
performance appraisal system in a field setting is in banking – in the matter of up-gradation of service
scarce. quality standards, provision of multiple delivery
Though few studies which have been conducted, points channels, newer innovations in products and
out employee perception of fairness of performance services and provision of financial services beyond
appraisal, as a significant factor in employee the traditional boundaries of banking. Whilst
pursuing these endeavors, Indian banking continues
acceptance and satisfaction of performance appraisal.
to readjust itself to the demands and compulsions of
Thus it becomes important to study the perception of
evolving global prudential standards. In this
the employees about the fairness of the performance
journey, the banking sector is supported by a robust
appraisal practices in their organization. This study
supervisory system.
seeks to understand how perceived fairness in the
performance appraisal process affects employees‘ While reforms in the matter of financials,
satisfaction. The perception of fairness on performance technology, supervisory system, etc, have been
appraisal was discussed and analyzed in the light of pursued with vigor in the last couple of years and

Perceived fairness of employees in Performance Appraisal System: with reference to Indian Public
and Private Sector Banks
have taken deep roots, reforms in the area of HR as compared to incumbents (McKinsey &
have been lagging behind. In the past few years, Company 2007).
Indian banking has witnessed radical Besides the competitive, strategic and
transformation in the way it operates. This is only technological differences that exist in public and
the beginning of the journey. For successfully private sector banks, differences have been
operating in the new banking order, they need to observed with respect to performance appraisal
build new capabilities. For pursuing frontline practice. New private banks are introducing
excellence, they need to redefine and readjust the newer approaches to regulate and measure their
roles and responsibilities of the frontline employees‘ performance. Appraisal mechanisms
organization and the staff. Retraining and re- like, 360-degree feedback and balanced score card
skilling of employees in tune with the new (BSC) are being used in new private sector banks,
requirements would also have to be afforded whereas most of the public sector banks are still
prime place in the organizations‘ agenda. adhering to the traditional and highly
In tune with the paradigm shift in Indian banking, confidential way of doing appraisals (Juneja,
the HR function in the banks has to extricate itself Shankar and Bhattacharya 2007). Apart from that,
from the mode in which it found itself over the last performance appraisals are not linked with pay
four to five decades. As the market has changed, the and promotion decisions in public sector banks
customer too has changed, customer expectations and thus are not perceived as motivating by
have taken new forms, and people policies also employees. It has been regarded as one of the
have to change, as it is the people who will be the processes generating maximum dissatisfaction
key differentiators in the new era. Together with among employees (Rao 2004). A kind of general
financial capital and technology capital, human apathy has been observed among employees and
capital contributes to the capabilities of the banking employers toward performance appraisal and the
organizations. need to conduct employees‘ perception studies
has been felt.
Moreover with the arrival of new private and
foreign banks the force of competition have Furthermore, there is a dearth of studies which
intensified on the Public sector banks, it has given relate performance appraisal with issues of
them a cause to be more competitive, effective fairness in the Indian context (Agrawal and
and innovative in their approach. There exists a Gupta 2007). Therefore, the main objective of the
vast literature that distinguishes the working of study was to study the differences between public
public sector banks from private sector ones. One and private sector banks with respect to
such report by McKinsey & Company (2007), in perception of fairness of the performance
their study, highlighted the clear divide between appraisal system and employees‘ satisfaction with
the performance of attackers (new private and performance appraisals.
foreign banks) and incumbents (public sector and 2. Theoretical Perspectives
old private sector banks). It indicates that in
2.1 Satisfaction from Appraisal System
between 2000 and 2007, attackers have increased
assets from 12 to 26%, profits from 21 to 32%, and Employee satisfaction towards performance
market capitalization from 37 to 49%. Apart from appraisal has been the most frequently measured
this, the study posits that attackers also excel in (Keeping and Levy, 2000) and it has been primarily
corporate leadership, marketing and sales, conceptualized in three ways: (a) satisfaction with
distribution efficiency, IT, credit policy, and skills the performance appraisal interview, (b)

satisfaction with the appraisal system, and (c) appraisals, one could reasonably expect that
satisfaction with performance ratings. Keeping organizations would devote considerable
and Levy (2000) argued that it is necessary to resources to the appraisal process.
address employees‘ reactions toward their
Correspondingly, it may be anticipated that
performance appraisal for many reasons,
managers try to make certain that the dimensions
including (a) the notion that reactions represent a
of the appraisal process are known, understood,
criterion of great interest to practitioners and
and supported by the participants. Contrary to
(b) the fact that reactions have been theoretically
expectations, research has indicated that
linked to determinants of appraisal acceptance
performance appraisals are often conducted on
and success but have been relatively ignored in
only annual and perhaps perfunctory basis.
research.
(Morris et al., 1991) contend that most managers
Pettijohn, Pettijohn and Taylor, (2000) indicate that fail to use the evaluation process to its fullest
appraisals can have a positive impact on job potential in motivating employees.
satisfaction when employees believe that they are
In one study, Jawahar (2006) reported that
being evaluated by the ―proper‖ criteria. This
satisfaction with appraisal feedback was
finding makes a strong case for the implementation
positively related to job satisfaction and
of either salesperson participation in the
organizational commitment and negatively
development of the evaluation criteria used or for
related to turnover intentions. Blau (1999) also
managers to communicate the ―logic‖ underlying
reported that employees‘ satisfaction with
their use of specific criteria in the evaluation
performance appraisal system significantly
process. Boswell and Boudreau, (2000) investigate
affected overall job satisfaction. In his study, Blau
how perception of performance appraisal use
(1999) measured general satisfaction with
relates to employee satisfaction with both appraisal
appraisal and not satisfaction with appraisal
and appraiser. They bring renewed support for the
feedback. Ratees who are satisfied with the
importance of individual development in the
appraisal process, especially with appraisal
performance appraisal process and focused on
feedback, should have higher levels of
employee perceptions of performance use, thus the
commitment. In summary, theoretical arguments
result support the importance of employees
and empirical evidence suggests satisfaction to be
perceiving developments as part of the performance
among the most important of reactions to the
appraisal process.
appraisal process.
Organizations should perhaps make the
2.2 Fairness in Performance Appraisal
developmental aspect of the performance
appraisal process clear so employees understand Understanding fairness or organizational justice
and believe that a primary purpose of their in performance appraisal process and practices is
performance appraisal is for job and career extremely important for organizations because of
development. its relationship with employees‘ job satisfaction
Jaworski and Kohli (1991) identify other benefits and organizational commitment and,
that can he obtained from performance appraisals.
subsequently, their propensity to search for
Among these benefits are increases in role clarity,
another job.
performance, and job satisfaction. Given the Employee perceptions of fairness of performance
positive returns obtained from performance appraisal have been shown to be linked to

satisfaction with the system. Fairness of satisfaction from performance appraisal system is
performance appraisal has been studied by a dependent of the amount of fairness they
number of researchers over time. In their review of perceive in it.
performance appraisal research Bretz, Mikovich 2.3 Organizational Justice Theory
and Read (1992) indicated that the most important
performance appraisal issue faced by organizations Organizational justice may be defined as the
is the perceived fairness of the performance review study of fairness at work (Byrne and
and the performance appraisal system. Their Cropanzano, 2001). Organizational justice
findings suggested that most employees perceive researchers generally agree that fairness can be
their performance appraisal system as neither divided into two primary types with a third, less
accurate nor fair. Skarlicki and Folger (1997) suggest clearly defined type often proposed. The first
that the appraisal process can become a source of commonly accepted type of justice is referred to as
extreme dissatisfaction when employees believe the distributive justice. Distributive justice considers the
system is biased, political or irrelevant. A major fairness of the outcomes of a particular decision.
problem for organizational leaders is that the Procedural justice, the second type, is generally
performance appraisal process and the performance defined as the fairness of the process that leads to
evaluation system are often perceived as both the outcome. These two areas form the backdrop of
inaccurate and unfair (Latham & Wexley, 1981). majority of research conducted in the field in the
last twenty years (Byrne & Cropanzano, 2001). A
third type of justice is often referred to as
Ahmed (1999) investigated the measure of
interactional justice. Beyond distributive and
effectiveness that a state agency uses to assess its procedural justice, the third form of justice proposes
performance appraisal function. Some of the that the quality of interpersonal treatment received
criteria for assessment as suggested by the during the enactment of organizational processes
respondents included impact on employee and distribution of organizational outcomes is an
motivation, employee satisfaction with the important contributor to fairness perceptions. These
system, employee‘s perception regarding fairness researchers contend that interactional justice can be
and objectivity, and the degree to which it understood as separate from procedural justice on
provides adequate and valuable feedback. the grounds that it represents the enactment of
Gabris and Ihrke (2000) reported that leadership procedures rather than the development of the
credibility of immediate supervisors is procedures themselves.
significantly associated with whether employees
perceive performance appraisal systems as The study of interactional justice focuses on how
procedurally fair and instrumentally just and formal agents of the organization treat those who
appropriate. Boswell & Boudreau, (2000) found a are subject to their authority, decisions, and
significant positive relation between employee actions (Cobb, Wooten & Folger, 1995). Early
attitudes and procedurally just performance studies of interactional justice focused on the
appraisals and underscored the importance social accounts or explanations that agents (most
employees place on fairness. often leaders) gave for their decisions and actions
The literature as well as the direction of recent (Bies, 1987).
research indicates that employee reactions The concepts of procedural and distributive
towards performance appraisal variables or the justice are relatively well accepted in the study of

organizational justice. The third component of of justice focus on the treatment of individuals
justice, the interpersonal, social or interactional and help ensure fairness by focusing on the
factor, is acknowledged, but is not integrated interpersonal treatment one receives. Greenberg‘s
consistently in the formulation of justice models. four proposed classes of justice include: systemic
Researchers have proposed a variety of models (structural-procedural); configural (structural-
ranging from the two-factor distributive and distributive); informational (social-procedural);
procedural factor model excluding interactional and, interpersonal (social-distributive).
type justice to two and three factor models
The concepts of procedural and distributive
incorporating interactional justice as part of
justice are relatively well accepted in the study of
procedural justice or as a standalone component.
organizational justice. The third component of
Greenberg‘s four-factor model is an additional
justice, the interpersonal, social or interactional
proposition that may help researchers and
factor, is acknowledged, but is not integrated
practitioners in sorting through the complex
consistently in the formulation of justice models.
issues of performance appraisal.
Researchers have proposed a variety of models
Greenberg (1993) emphasized the need to consider ranging from the two-factor distributive and
more fully the social determinants of fairness that procedural factor model excluding interactional
were not recognized by the prevailing emphasis on
type justice to two and three factor models
the structural aspects of outcome of distributions
incorporating interactional justice as part of
and procedures. He proposed taxonomy of justice
procedural justice or as a standalone component.
classes formed by cross cutting the two commonly
Greenberg‘s four-factor model is an additional
accepted categories of justice, procedural and
proposition that may help researchers and
distributive, with two focal determinants, social and
practitioners in sorting through the complex
structural. The distinction between social and
issues of performance appraisal.
structural determinants is based on the immediate
focus of the just action (Greenberg, 1993). Structural Description of the perceptions of fairness
determinants reflect the situation whereby justice is allocated across the four categories may provide
sought by focusing on the environmental context in practitioners with valuable information to better
which the interaction occurs. Structural manage the complex system of performance
determinants ensure fairness by structuring a appraisal. Figure 1, shows Greenberg‘s four-factor
decision-making context. The social determinants taxonomy of justice as applied to performance
appraisal.
Procedural Justice Distributive Justice

Structurally Systemic Configural
Determined Concerns about procedures to Concerns about the norms
assign raters, set criteria, gather that lead to ratings and the
information and seek appeals
Socially Informational Interpersonal
Determined Concerns about the way Concerns about the
raters communicate with their treatment that ratees receive
ratees. from their raters.
Figure 1: Greenberg's (1993) Taxonomy of Justice Perceptions Applied

to Performance Appraisal (Thurston, 2001)

Thurston (2001) developed ten scales to reflect bank employees. Employees were personally
Greenberg‘s (1993) four-factor taxonomy of approached and given the questionnaire. In many
justice. These scales were allocated to each factor cases, respondents were called in the conference
according to Thurston‘s (2001) interpretation of room and briefed about the study and were
Greenberg‘s theory. The study included requested to fill the questionnaire and
measurement of employee perceptions of the confidentiality was assured. The questionnaires
fairness of performance appraisal based on a were personally distributed to and collected from
hypothesized four-factor model of organizational the managers from different branches of the
justice (Greenberg, 1993) as operationalized by respective banks.
Thurston (2001). The relationships of these
3.4 Measurement of variables
perceptions to employee reactions indicating
satisfaction with key components of performance 3. 4.1 Satisfaction from the Performance
appraisal were investigated. appraisal system
Based on the above stated literature, the study Employee satisfaction with the Performance
draws the following hypothesis: Appraisal system was measured with four items
H1: The perceived fairness in the system positively adapted from Greller (1978) . These items include:
impacts the Satisfaction of employees from ―I am satisfied with the evaluation,‖ ―I am
Performance Appraisal. satisfied with the feedback I received from my
supervisor,‖ ―The overall process is capable
3. Methodology
enough to measure all the efforts that I put in my
3.1 Sample organizations job‖. Respondents rate this parameter using a five
The data were collected from two banks belonging point Likert type scale, anchored 1 (strongly
to public sector and a private sector. Purposive disagree) and 5 (strongly agree). The content
sampling method was used to select different banks validity of the scales for use in this study was
with different performance appraisal practices. further established through use of an expert panel
Other public and private sector banks were also consisting of human resources department staff,
approached for the purpose of data collection; representatives of other departments familiar
however, final selection of the banks was made on with the performance appraisal system.
the basis of the permission granted by the banks to 3.4.2 Perceived Fairness in system
collect information and data.
The items and scales utilized in this study to
3.2 Participants measure perceptions of performance appraisal
The total sample of 300 managerial and executive fairness are based on Greenberg‘s (1993) four-factor
staff members was taken, 150 questionnaires model of organizational justice. The four factors
were circulated among the public sector relevant include systemic, configural, informational and
bank employees and 150 questionnaires were interpersonal aspects of justice. Systemic (structural-
circulated among the private sector relevant bank procedural) and configural (structural-distributive)
employees. Out of them the response figure was justice perceptions include structural dimensions of
123 public sector bank employees and 97 private performance appraisal practices.
sector bank employees. The total number of
Informational and interpersonal include the social
respondents compounded to 220. The response
rate was 73.33%. aspects of performance appraisal. Perceptions of
fairness were measured on a five point scale with
3.3 Procedure 1 = strongly agree; 2 = agree; 3
Information on performance appraisal practice was = neither agree nor disagree; 4 = disagree; and,
collected by distributing questionnaires to the 5 = strongly disagree.

4. Findings group of 26-40 years. 30.9% of the people taken as

4.1 Demographic Profile of the respondents of sample were in the age group of 41-50 years. Only
17.2 % of the sample size falls in the age group of
the study
51-60 years.
In all 300 questionnaires were administered from
which 259 were filled and returned. Out of those
Table.3 Number of years of association with the
259 questionnaires only 220 were utilized for present bank
interpreting the results of the study because rests of
Number of Years Number of Percentage
them were not completely filled. The Demographic
of Association Employees
characteristics were summarized using frequencies
and percentages for all variables including: type of Less than one year 2 0.009
Bank to which the respondent belongs, age, number
of years with the bank, number of years in the 1-3 years 40 18.1
current job and educational level, familiarity with 4-6 years 70 31.8
the existing performance appraisal system. Tables 7- 9 years 64 29.09
below contain the details of demographic ≤10 years 44 20
characteristics of respondents.
Table1: Bank wise composition of respondents Table 3 depicts the Number of years of association
of employees with the present bank. Out of the total
Type of Bank Number of Percentage sample size 31.8% of the people had 4-6 years of
Employees experience with the present bank in which they
Public Sector 124 56.3 were working and 29.09% of the sample had 7-9
Private Sector 96 43.63 years of experience. 20% people had more than 10
years of association with present bank .only
Table 1 depicts the composition of respondents .009% of the people had less than one year of
based on their association with the type of bank
experience.
(public sector bank/ private sector bank)
according to this table 124 respondents from the Table 4 Number of years on the current
entire sample were associated with various designation
public sector banks and 96 were from private
Number of Years on Number of Percentage
sector bank.
current designation Employees
Table 2 Age Group of respondents
Less than one year 16 7.2
Age Group Number of Percentage 1-3 years 152 69
Employees 4-5 years 52 23.63
18 - 26 years 41 18.6 6-10 years 0 0
26 - 40 years 73 33.1 More than 10 years 0 0
41 - 50 years 68 30.9
Table 4 depicts that 69% of the sample size was
51 - 60 years 38 17.2
on the same designation from past 1-3 years and
According to Table 2, out of the total sample size 23.63% were on same position from past 4-5 years
considered for study, 18.6% people falls in the while only 7.2 % of the sample was on the same
age group of 18-25 years, 33.1% belong to the age position for past one year.

Table 5: Familiarity with Appraisal System Table 6 portrays that out of the total sample size
61.3% of the population was Post Graduate 16.8
Response Number of Percentage % were graduate and 21.8 % people were
Employees professionally qualified.
Yes 183 83.1 4.2 Scale Reliability Analysis of Variables
No 37 16.8
The reliability of composite variables is presented
Table 5 reflects that out of the total sample size in Table 2. Hair et al. (2009) suggested that usual
83.1% of the population was familiar with the lower limit for Cronbach alpha is .70. Table 7
performance appraisal system in their respective below depicts, all the variables were having
organizations and 16.8 % people were unaware of Cronbach alpha of more than .70 So all the
it. variables listed below are significantly reliable
Table 6: Education level of Respondents
Education Number of Percentage

Level Employees
High School 0 0
Graduate 37 16.8
Post Graduate 135 61.3
Professionally
48 21.8
Qualified
Table 7: Cronbach's Alpha, Mean, and Standard Deviation of all variable
Items Cronbach's Alpha Mean Std. Deviation

Systemic (F1) 0.914 2.8 1.23
Configural (F2) 0.854 3 1.21
Informational (F3) 0.766 2.5 0.94
Interpersonal (F4) 0.854 2.5 0.95
Satisfaction with the
0.768 2.9 1.22
evaluation of PA (S1)
Satisfaction with quality of
feedback that PA System 0.914 2.9 1.26
provides. (S2)
Satisfaction with overall
0.854 2.9 1.26
process of evaluation (S3)
Total Satisfaction (S4) 0.923 3 1.2

Table 8: Correlations of all variables
1 2 3 4 5 6 7
Systemic (F1) 1
Configural (F2) .651* 1
Informational (F3) .493* .518* 1
Interpersonal (F4) .547* .498* .428* 1
Satisfaction with the
.437* .491* .421* .630* 1
evaluation of PA (S1)
Satisfaction with quality of
feedback that PA System .471* .501* .502* .640* .655* 1
provides. (S2)
Satisfaction with overall
.453* .534* .391* .517* .454* .471* 1
process of evaluation (S3)
Total Satisfaction .540* .608* .532* .728* .896* .874* .733*
*Correlation is significant at the 0.01 level (2-tailed).
Correlations analysis was conducted to test The purpose of stepwise regression is to select a
relationship between performance appraisal small subset of variables that account for most of
fairness factors with satisfaction factors. Table 8 the variation in the dependent or criterion
shows these relationships. It was found that variable.
systemic, configural, informational and
Table 9 shows the regression analysis result
interpersonal aspects of justice were significantly
between fairness variables and satisfaction with
related with satisfaction factors ratings. It was
the evaluation process of performance
also found that overall satisfaction is significantly
appraisal. It was found that configural justice
correlated to all justice variables (systemic,
and interpersonal justice were significantly
configural, informational and interpersonal).
related with satisfaction with the evaluation
Their correlation coefficient (r) values are 0.540, process of performance appraisal. Adjusted R2,
0.608, 0.532, and 0.728 respectively, and they the strength of association or the explanatory
were significant at p = 0.01 level. power of the model in Model 1 is 0.424 and
To further test hypotheses in this study, a 0.462 in Model 2. The models are significant at
stepwise regression analysis was conducted. 0.01 levels.
Table 9: Regression Analysis between performance fairness
Variables and Satisfaction with the evaluation process
9a - Model Summary
Model R R Square Adjusted R Std. Error F Sig.

Square of the Estimate
1 0.652 0.425 0.425 0.68426 279.683 0
2 0.682 0.465 0.462 0.66104 163.854 0

9b - Coefficients
Unstandardized Standardized Collinearity
Model Coefficients Coefficients t Sig. Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 1.457 0.201 0.652 7.238 0
Interpersonal 0.699 0.042 16.724 0 1 1
2 (Constant) 0.702 0.241 2.909 0.004
Interpersonal 0.572 0.047 0.534 12.185 0 0.74 1.352
Configural
0.281 0.053 0.232 5.294 0 0.74 1.352
Dependent Variable: Satisfaction with the Evaluation process in PA
Table 9 shows the stepwise regression analysis were significantly related with satisfaction with
result between performance fairness variables quality of feedback. Adjusted R2 for Model 1,
with satisfaction with quality of feedback Model 2 and Model 3 are 0.413, 0.464 and 0.476
provided. The result shows that informational respectively. The models are significant at 0.01
justice, interpersonal justice and configural justice levels.
Table 10: Regression Analysis of Fairness Variables with Satisfaction with quality of feedback
10a - Model Summary

Model R R Adjusted Std. Error F Sig.
Square R Square Of the
Estimate
1 0.644 0.414 0.413 0.69974 267.446 .000a
2 0.683 0.467 0.464 0.66851 165.082 .000b
3 0.693 0.48 0.476 0.66126 115.58 .000c
10 b - Coefficients
1 (Constant) 1.57 . 206 7.624 0
Interpersonal 0.699 0.043 0.644 16.354 0 1 1
2 (Constant) 0.764 . 237 3.223 0.001 1.22
Interpersonal 0.582 0.045 0.536 12.905 0 0.819 1.22
Informational 0.283 0.046 0.253 6.095 0 0.819
3 (Constant) 0.449 0.256 1.754 0.08
Interpersonal 0.526 0.048 0.484 10.89 0 0.7 1.429
Informational 0.23 0.049 0.206 4.682 0 0.717 1.395
Configural 0.173 0.057 0.141 3.05 0.002 0.647 1.546
Dependent Variable: Satisfaction with the quality of feedback from PA

Table 11 shows the stepwise regression analysis with satisfaction with process of performance
result between farness variables and satisfaction evaluation. The strength of the relationship
with process of performance evaluation. The (Adjusted R2) for Model 1 and Model 2 are 0.310
result shows that configural factor and and 0.390 respectively. The models are significant
interpersonal justice were significantly related at 0.01 levels.
Table 11: Regression Analysis fairness Variables with Satisfaction with the process of Performance
Evaluation
11a - Model Summary
R Adjusted R Std. Error

Model R F Sig.
Square Square of the Estimate
1 0.558 0.312 0.31 0.57066 170.862 0
2 0.627 0.394 0.39 0.5364 122.036 0
11b - Coefficients

1 (Constant) 2.12 0.193 11.011 0
Configural
0.516 0.039 0.558 13.071 0 1 1
2 (Constant) 1.59 0.196 8.12 0
Configural 0.359 0.043 0.389 8.326 0 0.74 1.352
Interpersonal 0.271 0.038 0.332 7.12 0 0.74 1.352
Table 12 shows the stepwise regression analysis with the overall satisfaction. Adjusted R2 for
result between fairness variables with overall Model 1, Model 2 and Model 3 are 0.544, 0.621
satisfaction. The result shows that interpersonal and 0.636 respectively. The models are significant
justice, configural justice and interpersonal at 0.01 levels.
informational justice were significantly related
Table 12: Regression Analysis fairness Variables with the Overall Satisfaction
12a - Model Summary
Std. Error
Adjusted R
Model R R Square Of the F Sig.
Square
Estimate
1 0.738 0.545 0.544 0.46956 452.265 .000a
2 0.789 0.623 0.621 0.42826 310.456 .000b
3 0.799 0.639 0.636 0.4195 221.325 .000c

12b - Coefficients

1 (Constant) 1.861 0.138 13.47 0
Interpersonal 0.61 0.029 0.738 21.267 0 1 1
2 (Constant) 1.048 . 156 6.708 0
Interpersonal 0.473 0.03 0.573 15.569 0 0.74 1.352
Configural 0.303 0.034 0.324 8.787 0 0.74 1.352
3 (Constant) 0.825 0.162 5.075 0
Interpersonal 0.444 0.031 0.538 14.498 0 0.699 1.43
Configural 0.25 0.036 0.267 6.927 0 0.646 1.547
Informational 0.128 0.031 0.151 4.107 0 0.715 1.399
As shown in Table 9b, 10b, 11b and 12b, the 5. Implications

tolerance value for all variables are above 0.5 as The main objective of this study is to explore the
well as VIF values are all quite close to 1.0, thus relationship between fairness of performance
the result from this study denotes low collinearity appraisal system and employee satisfaction toward
between the independent variables. Tolerance is a the system. Literature on employees‘ perception on
measure of collinearity between two independent the fairness in performance appraisals predicted
variables or multicollinearity among three or that fairness is significantly and positively related to
more independent variables (Hair et al., 2009). It satisfaction to performance appraisal. This study
is the proportion of variance in one independent found that specific fairness components proposed
variable that is not explained by the remaining by Greenberg (i.e. Configural, interpersonal and
independent variables. Multicollinearity is a data informational justice) are significantly and
problem that can adversely impact regression positively related to specific component of
interpretation by limiting the size of the R- employee satisfaction while systemic justice was not
squared and confounding the contribution of found to be related to any of satisfaction variables.
independent variables (Hair et al., 2010). For this Systemic justice failed to show any relationship with
reason, two measures, tolerance and VIF, are satisfaction variables. One explanation for this
used to assess the degree of collinearity among phenomenon is that procedural justice or perception
independent variables. Each independent of fairness of the procedures or the means of
variable will have a tolerance measure and each appraising employee‘s performance is perceived
of measure should be close to 1 (Hair et al., 2009). less important by the respondents as compared to
A tolerance of less than .5 or large VIF values (a other justice components. Since performance
usual threshold is 10.0, which corresponds to a appraisal system is part and parcel of their routine
tolerance of 0.1) indicate a high degree of human resource practices; it was perceived as the
collinearity or multicollinearity problem (Hair et system must
al., 2009).

have been complying with all procedural system and process. Literature in performance
standards. Further research is needed to examine appraisal fairness postulates this relationship but
this problem. little empirical evidence has been provided to
This study found that configural justice is prove this relationship. This study found that
significantly and positively related to satisfaction informational justice or explanation of why
with the evaluation of appraisal as well as procedures were used in a certain way or
satisfaction with the quality of feedback. This is outcomes were distributes in a certain fashion is
congruent with the previous studies which found significantly and positively related to employee
that perception of fairness of allocation of satisfaction with the performance ratings,
resources or rewards or outcomes that are satisfaction with the supervisor and satisfaction
distributed to employees (Milkovich and with the performance appraisal system.
Newman, 2005) may lead to emotional feelings 6. Conclusion
and emotional behaviours (Greenberg, 1987). This study explores the relationship between
Configural justice or perception of fairness of perception of fairness of performance appraisal
distribution of outcomes affects employee system under the purview of organizational
satisfaction with the performance appraisal
justice theory and how this perception of fairness
ratings and satisfaction with the supervisor who
affects employee satisfaction. Overall, this study
facilitate the appraisal process.
found that fairness of performance appraisal does
Informational justice was found to be affect employee‘s satisfaction.
significantly and positively related to employee Cardy and Dobbins (1994) suggest that
satisfaction with quality of feedback. This finding
dissatisfaction feelings of unfairness in the
shed some light to our understanding of
performance appraisal process and perceived
relationship between interactional justice, which
inequality in evaluation may doom any
consists of interpersonal justice, and
performance appraisal system to failure. Murphy
informational justice, and employee satisfaction.
and Cleveland (1995) also contend that reaction
Literature does recognize the important of this criteria are almost always relevant and
relationship but empirical evidence has yet to unfavorable reactions may result in the failure of
surface to test this relationship. Informational the most carefully constructed performance
justice or treatment of employee with politeness, appraisal system. The important of employee
dignity and respect during performance appraisal reactions toward performance appraisal system
process do affect employee satisfaction with the may play an increasingly important role in the
quality of feedback. performance appraisal practices because the
Finally, this study found that interpersonal justice is continuous development and improvement of the
significantly and positively related to employee system (Hedge and Borman, 1995). Findings from
satisfaction with the evaluation of performance, this study could possible contribute to our
satisfaction with the quality of feedback and understanding of relationship between
satisfaction with the process of performance organizational justice in performance appraisal
evaluation. This finding again provides some system and employee reactions emotionally and
evidence to the importance of interpersonal justice behaviorally. For human resource practitioners,
in performance appraisal process which may affect these findings could be used as guidelines in the
the satisfaction of employee towards the process of development, institution and

implementation of performance appraisal system.  Boswell W.R and Boudreau J.W. (2000),
They must recognize that organizational justice Employee satisfaction with performance
affects employee reaction toward performance appraisals and appraisers: The role of perceived
appraisal system implemented by the appraisal use. Human Resource Development
organization and, in turn, this will affect the Quarterly, Vol.11, No. 3, pg. 283.

effectiveness and efficiency of the system.  Boswell, W. R. and Boudreau, J. W. (2000).
In conclusion, this study has explored the Employee Satisfaction with Performance
literature detailing the relationship between Appraisal and Appraisers: The Role of Perceived
perceptions of fairness of performance appraisal Appraisal Use. Human Resource Development
system and how it affects employee reaction Quarterly, 11, 3, 283-299.

toward the system. A review of theoretical and  Bretz, R.D., Milkovich, G. T., and Read, W.
empirical research appears to indicate that (1992). The Current State of Performance
employee perceptions of fairness and their Appraisal Research and Practice: Concerns,
reactions would normally have chain effect, Directions, and Implications. Journal of
which most likely to affect the benefits of the Management, 18, 2, 321-352.
system. Hence, an in depth understanding in the 
 Byrne, Z.S. And Cropanzano, R. The History Of
dynamic relationship of organizational justice in
Organizational Justice: The Founders Speak. in
performance appraisal is vital in facilitating and
Cropanzano (Ed.) Justice In The Workplace:
enabling performance appraisal to be a
From Theory To Practice, 3-26, Mahwah, NJ,
productive means for both organization and
Lawrence Erlbaum Associates, Inc.
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Towards Best Global Practices – Insights from

Perspectives
Awareness in Consumer about Consumer Protection Act. &
Consumer Right in India
Dr. Neetu Sharma

Assistant Professor
Department of Commerce
Career College, Barkatullah University Bhopal (M.P.)
Abstract
To satisfy various wants people purchase goods Key words: Consumer awareness, Consumer
and services by paying price. But what to do if Protection act., Data Collection , Consumer
the goods and services bought are found out to Exploitation
be bad in quality or unreasonably priced or
Introduction
measured less in quantity etc. In such situations
the consumers, instead of getting satisfaction, feel In the current financial age, when generally
cheated by the sellers who have sold the goods business transactions are directed online or by
and services. The Paper has been written to study means of electronic means, consumers must be
the general awareness among consumer for particularly industrious about drilling consumer
consumer protection and specially awareness of awareness —ensuring their characters and their
provisions of Consumer Protection Act. It assets against lawbreakers who might misuse them.
specifically studies the level of awareness with Consumers ought to be vigilant and aware of
regard to procedural formalities to be completed potential issues so they don‘t get ripped off by
while filing a complaint in consumer forum. It extortionists. Consumers can study how to secure
also explains the important theoretical points their security, analyze advertisements, distinguish
related to protection of consumer‘s interest. For tricks and turn into a keen auto purchaser and home
this purpose a sample of 50 respondents has been purchaser using online and disconnected from the
taken. Data has been collected through well net assets. Consumer Awareness anyone who
structured questionnaire. Analysis and consumes goods is a consumer. Consumer
interpretation of data have shown very awareness is the practice where consumers are
interesting, alarming and informative results and aware of what they are buying. This relates to price,
findings. At the end some recommendations have benefits of products, potential scams, and other
been given for strengthening the present setup alternatives to name brand products. Consumers
more effective. They also feel that they should be should research items thoroughly before purchasing
properly compensated for the loss. So there them in order to know exactly what they are buying
should be a system to redress such issues. On the and what to expect. Consumers get exploited in the
other hand consumers should also realize that market. They respond to advertisements and buy
they do have responsibilities not just rights. goods.

Dr. Neetu Sharma
Generally advertisements do not give all the (2) Consumer of Services:- Consumer of Services
information that a consumer needs know or wants means a person who hires or avails of any
to know about a product. Consumer awareness is services for a consideration which has been paid
the understanding and knowledge that a buyer or promised or partly paid and partly promised
should have of his rights as a customer. The or under any system of deferred payment and
awareness is very important for the buyer since it includes any beneficiary of such services. But it
permits him to get the most from what he buys. does not include a person who avails of such
Some of the common methods of exploitation are services for any commercial purposes. For the
Under weight and under measurements -not purpose of this clause ‗commercial purpose‘ does
measured or weighed correctly Substandard not includes use by a person of goods bought and
Quality -defective home appliances and medicines used by him exclusively for the purpose of
beyond expiry date High prices-charging above the earning his livelihood by means of self –
retail price Duplicate Articles-selling fake items in employment. For example, if a person earns by
the name of the original Adulteration and Impurity- purchasing computer, taxi, Photostat machines
is done to get higher profits Lack of safety Devices- etc. that will be called consumer of goods. Here it
absence of inbuilt safe guards in appliances Artifical is also important to mention that service has been
Articles-selling fake items in the name of the clearly defined in the Act. It includes the services
original Adulteration and Impurity-is done to get like banking, financing, insurance, transportation,
higher profits Lack of safety Devices-absence of processing, supply of electrical and other energy,
inbuilt safe guards in appliances Artifical cars boarding and lodging or both, housing
require constant and regular service. Rough construction, entertainment, amusement or the
behaviour and Undue conditions-harassment in purveying of news or other information,
getting LPG connection or a telephone educational institutions etc., but does not includes
connection..Factors causing exploitation of the rendering of any service free of charge or
Consumers. The history of the customer in the sense under a contract of personal service.
of one, who consumes anything, may be said to be
have started with the history of mankind. The legal, Objective
technical or perfect definitions of the consumer The main objectives of this study are -
have been given in the consumer protection Act.
 Understand the need for consumer
1986. Under this Act, the term „consumer has been
awareness;
defined into two categories: 
 Explain the consumer awareness about the
consumer protection act in India.
(1) Consumer of goods:- Consumer of goods
means a person who buys any goods for a Goods are those products which are manufactured
consideration and includes the user of goods. or produced and sold to consumers through
Under this Act a consumer is one who has paid wholesalers and retailers. Service means service of
or promised to pay the consideration or partly any description which is made available to the
paid and partly promised to pay or under any potential user with respect to the provision of
deferred payment system such as hire purchase facilities in connection with banking, finance,
system or installment system. But it does not insurance, transport, supply of electrical or other
include a person who buys the goods for resale energy, housing, construction, water supply, health,
and for any commercial purpose. entertainment, amusement etc. It does not

Awareness in Consumer about Consumer Protection Act. & Consumer Right in India
include any service rendered free of charge or possible for consumers to personally come in
under a contract of personal service. contact with a producer or seller. Moreover in the
Consumer Awareness age of advanced information technology the
physical distance between consumer and
Consumer awareness refers to the combination of producer/seller has also increased, since
the following: consumers can get their commodities at door step
 The knowledge of the product purchased by booking orders over telephone or through
by the consumers in terms of its quality. For internet etc. Similarly from among large varieties
example the consumer should know of commodities, it has become very difficult to
whether the product is good for health or know as to which one is genuine? People think
not, whether the product is free of creating that a product which has appeared in some
any environmental hazard or not etc. advertisement must be good or the producer
 whose name is known through advertisement
 The education about the various types of
must be selling the right product.
hazards and problems associated with
marketing of a product - For example, one But this may not be true always. Much information
way of marketing a product is is deliberately hidden in certain advertisements to
advertisement through news papers, mislead the consumers. In case of packed food
television etc. Consumers should have products and medicines, there is an expiry date
proper education about the bad effects of which implies that the particular product must be
advertisement. They must also verify the consumed before that date and not at all after that
contents of the advertisement. date. This information is very important because it
 involves the health of the consumer. Sometimes it so
 The knowledge about ‗Consumer Rights‘ - happens that either such information is not
This means that, first, the consumer must provided or the seller deliberately did not give the
know that he/she has the right to get the information since the consumer did not ask for it or
right kind of product. Secondly, if the notice the inscription written on the product. It also
product is found out to be faulty in some happens many times that a consumer buys goods
manner, the consumer should have and services without taking the bill or the seller
knowledge of claiming compensation as per does not provide the bill. This is done to avoid
the law of the land. paying tax on the product to the government. Such

 The knowledge about consumer‘s own a tax is value added tax (VAT) i.e. a type of tax that
responsibilities- This implies that is place on a product whenever value is added at a
consumers should not indulge in wasteful stage of production and at final sale. If this tax is
and unnecessary consumption. included then price of the product will be higher
because of the tax and accordingly it will be
Need for Consumer Awareness
acknowledged by providing the bill. But in order to
The market today is flooded with very large attract the consumer by selling the product at a
number as well as varieties of goods and services. lower price, the seller deducts the tax and so does
The number of producers and final sellers of the not provide the bill. Just because the price is less the
commodities have also increased many folds. So consumer also does not bother to ask for the bill.
it has become very difficult to know as to who is Such practice creates two serious problems.
a genuine producer or seller? It is practically not

Dr. Neetu Sharma
Another major issue is that the consumers are not products and services. Most of these advertisements
united. Producers have become stronger and contain exaggerated and un-provable claims.
organized because there are Producers‘ and Commonly seen advertisements of tooth-pastes,
Traders‘ Associations to protect their interest. But cosmetics, tonics, body-building, figure improving
the buyers are still weak and unorganized. As a and height increasing instruments makes claims in
result the buyers are duped and deceived quite very attracted way and catchy way. Through these
often. Because of the above arguments it is very advertisements do not explain how the claimed
important for consumers to protect themselves qualities of the products produce the benefits; the
from the unfair trade practices of the traders and consumer believes them because of the appealing
service providers. They need to be aware of their way of presentation, ultimately the consumer feel
rights as consumers and use them promptly. It cheated at last. Although the above points clearly
should be noted that consumer awareness is not states the problems exploitation of consumer, but
just only about consumers‘ rights. It is a well some other points can also be mentioned in support
known fact that many consumers around the of these. This exploitation are in the forms of:
world have been indulging in mindless and
wasteful consumption because of their money
(1) Unfair trade practices.
power. This has divided the society into rich
consumers and the poor. Hence there is also need (2) Spiraling prices.
for consumer awareness to educate the (3) Adulteration.
consumers about their responsibilities.
(4) Poor quality products.
Consumers also need to act more responsibly and
join hands with the government. (5) Deceptive packing.
Consumer Exploitation (6) Deficiency in goods and services
Mostly Indian consumer is poor, illiterate, ignorant, (7) Monopolistic etc. employment.
passive, unaware, and helpless. Due to illiteracy, Consumer Redressal System in India
unawareness, traditional or passive outlook
consumer is being exploited in different ways. The There is legal and administrative machinery
manifestation of consumer neglect are evident in working in the field of consumer education in our
the adulterated food we eat, the spurious, unsafe country. It is important for you to understand it.
and substandard product we buy, the repeated Consumer redressal system is a system under
shortage of essential commodities accompanied by which the consumers can file a complaint in a
black marketing and profiteering, the hazardous consumer court and demand justice when they
drugs banned in some of the countries that are are cheated by the sellers or manufacturers of the
pushed through the counter, the glossy, unethical commodity or service they buy. It comprises of
and manipulative advertisements with which we the Laws to protect the interest of the consumers
are bombarded, the humiliation, indignity and and the Institutions to enforce the laws to uphold
harassment that we are subjected to by public sector consumers‘ rights. Thanks to the government, we
undertakings such as railways, transport have consumer laws made through legislations in
corporations, nationalized banks insurance our country with a special focus on consumer
companies, etc. and the polluted water we drink education. The purpose is to help the people
and air we breathe. Business firms spend huge understand their rights and responsibilities as
amount of money on advertising their consumers and to redress their grievance. There

is also existence of Institutions in the form of  Real estate developers are classified as
government departments and consumer courts to traders and liable to be tried in a consumer
deal with the grievances of the affected court.

consumers. Let us discuss them below.  Oversees agencies operating through e-
Government Legislations commerce sites on the internet or
telemarketing are not allowed to sell their
We have had several government legislations in
products unless they maintain an office in
our country even before independence to protect
India. They have to organize the inspection
the rights of the consumers. But Consumer
of goods prior to purchase, or refund goods
Protection Act 1986(CPA) is the most important
within 30days.
one and gives you as a consumer all the support 
and guidance against violation of your rights.  Officials and stakeholders like state
CPA is specifically designed to protect consumer government departments of post and
interest. There are a couple of other legislations telecom, passport offices, municipal
aimed at providing consumer protection, enacted services, Central Government Health
after independence, like Prevention of food Scheme (CGHS) and railways are
adulteration Act(PFA)1954, the Essential demanding exemption from the Act fearing,
Commodities Act ,1955 (ECA) and the Standard they will have to face a barrage of litigation.
of Weights and Measures Act(SWMA) of 1976. Institutions to Deal with Consumers’
The CPA was enacted with the objective of Grievances
providing ‗cheap‘, ‗simple‘ and ‗quick‘ justice to The citizens of India have Institutional
the millions of consumers in the country. It machinery, to deal with consumers‘ grievances,
ensures justice which is less formal, involves less working at all levels: national, state and district.
paperwork, cut delays and is less expensive. CPA There are two types of institutions-
applies to all goods and services, unless
(i) Government Councils and
specifically exempted. It covers the private,
public and cooperative sectors. It also empowers (ii) Consumer Courts.
a consumer to haul up municipal authorities in Besides this there are also several Non-
consumer courts if they fail to provide all the Governmental Organizations (NGOs) registered
services ranging from street lighting and drinking under the government law which provides
water to drainage and health. Among other various kinds of support to the aggrieved
measures included in CPA some recent ones are: consumers.
 Consumers are allowed to decide where (i) Government Councils
they want to seek redressal. Read the following flow chart to know the

 A company cannot insist on being liable to government councils working at national and
be tried only in a court of its choice. State levels.

 Consumers are allowed to sue service As shown in the chart (Figute 1), there is a Central
providers of a company for passing on their Consumer Protection Council (CCPC) at the
personal information to salespersons e.g. National Level which is headed by a Central
banks, insurance company etc. Minister in-charge of the Consumer Affairs in the

Dr. Neetu Sharma
Consumer Protection Machinery at the governments level
Central Consumer Stete Consumer

Protection Council Protection Council
Figure 1: Consumer Protection Machinery
Consumer Courts in India
National Consumer Stare Consumer District Consumer

Disputes Redressal Disputes Redressal Forum
Commission Commission (DCF)
(NCDRC) (SCDRC)
Figure 2 : Consumer Courts in India
Central Government at New Delhi. At the State accountable to the people. The central and the state
Level there is a State Consumer Protection governments are responsible for making policies
Council (SCPC) in each state of India which is with respect to the working of these courts.
headed by a State Ministerin- charge of the Consumer Awareness in Rural India
Consumer Affairs in the State Government.
On account of the globalization and liberalization,
(ii) Consumer Courts increase in middle income and high income
Read the following flow chart (figure 2) to know population in the villages our rural markets are
the types of Consumer Courts working at also expanding. So companies are reaching with
national and state and district levels. their products to our rural markets as well. But
the rural consumers in India are generally
As given in the chart, there are three layers of
ignorant and illiterate. So they are exploited by
Consumer Courts in India. At the bottom is the
the manufacturers, traders and service providers.
District Consumer Forum (DCF) at the district
Rural consumers face problems like fake brands,
level in the state. There are 604 District Forums in
spurious products, lack warranties and
the country now. At the mid level there is State
guarantees, imitation, unreasonable pricing, lack
Consumer Disputes Redressal Commission
of varieties and so on. There is a need for
(SCDRC). There are 35 State Commissions in the
spreading consumer awareness in the rural areas
country. Finally at the top there is an apex body
more seriously.
known as National Consumer Disputes Redressal
Commission (NCDRC) working hand-in-hand to Timely Delivery of Justice
provide cheap, speedy and simple redressal to You know that justice delayed is justice denied.
consumer disputes in the country. A Consumer Unlike the civil courts, the consumer courts are
Court is quasi-judicial in nature and is directly quasi-judicial bodies that need to follow a simple,

summary procedure for quick disposal of set up to come together to provide collective
complaints. However repeated adjournments, resistance against all kinds of associations. The
delays on the part of the state government to fill main function of consumer associations are: (1)
up the posts of judges and unnecessary To educate consumers. (2) To protect the
technicalities slow down the process of justice for consumers. Many consumer associations are
the consumers. Delays often take away the playing an important role in the direction of
essence of the law. Read the following case that consumer protection.
illustrates these points. The Government
2 Business Associations: Another part of self-
amended CPA in 2003 to eliminate such delays.
regulation is Business associations. Self
Consumer Protection regulations by business community through fair-
Consumer Awareness in India is growing. The deal to reseller and consumers does wonders. It
growing feeling among them that they are can create healthy atmosphere in the society
ruthlessly exploited and taken for a ride which especially in relation to consumer protection
has organized the consumer movement. Many (B) Government Interventions or legislative
sellers even do not response to the genuine measure: As we all know that consumers constitutes
grievance of consumers and many products fails the largest unorganized public body in the country
to satisfy the requisite quality and safety and protection of their interests and rights is of vital
standards. Due to all these consumer have been importance in a well regulated and independent
more critical/aware of the policies and practices mechanism to provide quality goods, services and
of business houses in the recent years than ever utilities to the satisfaction of consumer. The
before. Consumers are organizing themselves for government has enacted more than 50 Acts/ laws
the protection of their interests. Such a move to which can be interpreted in favour of consumers.
better the protection offered to the consumer is These enactments have empowered the government
called „consumerism , which in other word is to control production, supply, price, distribution
also called consumers protection awareness. In and quality of a large no. of goods and services.
this context it is necessary that the various groups
Most of these types of power or practices are
of society such as Government, Judiciary, and
mentioned in a number of business laws aimed at
Voluntary Associations of consumers play their
regulating trade and providing justice to consumers
role to protect and promote the consumer-
and protecting their rights and interests. Some of
interests – economic, social, and environmental.
them are being mentioned here : The Indian Penal
Consumer Protection Methods Code 1860, Indian contract Act 1872, Sale of Goods
Consumer protection measures/methods can be Act 1930, Agricultural produce grading and
understood by dividing them into two categories: marking act 1937, Drugs and Cosmetics Act 1940,
Drugs and Remedies (objectionable
(A) Self-Regulation:- In this part, two types of
Advertisements) Act, 1954, Essential Commodities
association come to the rescue of customers and
Act 1955, Trade and Merchandise Act 1958,
business community namely consumer-
Standards and Weights and Measures Act 1976,
associations and business associations.
Supplies of Essential Commodities Act 1980, The
1 Consumer Associations:- It is a fact that every one Bureau of Indian Standard Act 1986, The
of us is a consumer and it is therefore important Environment (protection) Act-1986, Banking
that we should unite together to protect our Regulation Act 1949, Railways Act 1989, etc... These
interests. The consumer associations are ideal are just some names, the list

Dr. Neetu Sharma
is so long to be mentioned and described here. All bought by him suffer from one or more defects.
these Acts/laws show that government has a well (3) The services hired or availed of or agreed to be
- established system or a approach for the hired or availed of by him suffer from deficiency
protection of consumer‘s interests and for creating in any respect.
an healthy business environment. But at the end,
Where to File a Complaint A written complaint
still it can be said that the interests of the consumer
as amended by consumer Amendment Act, 2002
were not being safeguarded due to many reasons. A
can be filed:
number of objectives of the above pieces of
legislations overlap. The multiplicity of laws for (A) If the cost of the goods or services and
trade regulations and consumer protection has been compensation asked for is upto Rs. 20 lakh, then
characterized by weak implementation as a result of the complaint can be filed in District Forum
which unfair and exploitative practices abound in which has been notified by the state
the Indian markets. Most of the legislations are The Consumer Protection Act 1986, (herein after to
punitive in nature and none of them is be referred to as ‗Act‘) is one of benevolent social
compensatory in nature. In spite of all these there legislation intended to protect the large body of
was no separate mechanism for the redressal of consumer from exploitation. The Act has come as a
consumer grievances and it were covered under panacea for consumers all over the country and has
civil courts, which are known for expensive, time - assumed the shape of Government for the district
consuming, complex and inordinate delays. All where the cause of action has arisen or where the
these points show that there was a strong need in opposite party resides. A complaint can also be filed
the economy, to set-up a Independent Act for the at a place where the branch office of the opposite
settlement of consumer grievances. So in order to party is located.
overcome these limitations in different legislations (B) If the cost of goods or services and
and implementing machinery and keeping in view compensation asked for is more than Rs. 20 lakh,
the UN guidelines, Consumer Protection Act 1986, but less than Rs. 1 crore, then the complaint can
came into existence, which proved to be the be filed before the state commission notified by
milestone in the sovereignty of the customers. the state commission or UT concerned.
(C) If the cost of goods or service and
Some Important Provisions of the Act Who Can compensation asked for exceed Rs. 1 crore then
File Complaint The followings can file a the complaint can be filed before the National
complaint under the Act: (1) A consumer. (2) Any Commission at New Delhi.
consumer organization (3) The central How to File a Complaint Procedure for filing
Government. (4) The state Government. (5) One complaints and seeking redressal are simple.
or more consumers on behalf of numerous There is no prescribed Performa for the
consumers who are having the same interests. submission of complaint. However it must be
What Constitute a Complaint Under the Act written. It may be submitted directly or by post.
‗Complaint‘ means any allegation in writing A nominal amount of fees is also required to be
made by complainant in regard to one or more of deposited for making complaints before District
the following: (1) any unfair trade practice or a Forum. A complaint should contain the following
restrictive trade practices adopted by any trader. information:
(2) The goods bought by him or agreed to be (1) Name and address of the complainant.

(2) Name and address of the opposite party or against the order of the National commission can
parties. be filed before the Supreme Court within a period
(3) Description of the fact of the complaint. (4) of 30 days. At this stage the appellant is required
Documentary evidence collaborating the to deposit in the prescribed manner 50% of that
complaint. (5) Relief expected as redressal amount or Rs. 50000 whichever is less.
of complaint. The complaint can be filed Findings
within two years from the date on which Results show that consumer awareness and skills
cause of action has arisen. Complainant can are worryingly low. However, there is a
plead his case/complaint on his own; this considerable potential to empower consumers
means that he is not under compulsion to and thereby to improve consumer welfare and
hire the services of lawyer. reduce consumer detriment. The internet and the
Relief Available to the Consumer If after the media have a key role to play in consumer
proceedings conducted under section 13, the empowerment with more than 38% of consumers
District Forum is satisfied that the goods using the internet to compare products and given
complained against suffer from any of the defect the media‘s capacity to reach citizens directly.
specified in the complaint or that any of the Consumers’ detriment and redress
allegation contained about the services are
More than one in five Indian interviewed had
proved, it may give orders for one or more of the
encountered a problem for which they had cause
following reliefs: (1) Removal of defects from the
for complaint. Consumer detriment is estimated
goods. (2) Replacement of the goods. (3) Refund
at 0.4% of EU GDP. The less educated and elderly
of price to the complainant. (4) Award
are more reluctant to seek redress, although they
appropriate compensation for the loss or injury
are no less likely to have problems. The survey
suffered. (5) Removal of deficiencies from service. confirms the importance of access to good
Procedure for Filing Appeal redress. Many of these problems could be solved
if we had more alternative dispute resolution
Any person aggrieved, by an order made by
(ADR) mechanisms.
District Forum may prefer an appeal against such
order to the state commission within a period of Consumers’ skills
30 days from the date of order, in such form and In terms of numerical skills, consumers struggle
manner as man be prescribed. No appeal shall be with simple calculations: only 45% could answer
entertained by the state commission unless the three consumer related questions correctly. In
appellant has deposited in the prescribed manner terms of financial skills, two out of ten people
50% of that amount in terms of an order of the interviewed were not able to choose the cheapest
District Forum or Rs. 25000, whichever is less. option when buying a flat screen TV. Only 58%
Further any person aggrieved, by the order made could correctly read an ingredients label and 18%
by the state commission, may prefer an appeal, could not identify the best-before date. Only 2%
against such order to the national commission of consumers recognized five common public
within a period of 30 days from the date of the information logos. 33% of consumers thought that
order in such form and manner as may be the CE mark meant ―made in India‖, and only
prescribed. In this situation appellant has to 25% correctly knew it meant that the product
deposit in the prescribed manner 50% of the ‗complies with India legislation‘. Many could not
amount or Rs. 35000 whichever is less. Appeal name a consumer organization in their country.

Dr. Neetu Sharma
Consumers’ knowledge of their rights should also come forward to should work more and
A majority of consumers were not aware of their more to aware the consumers to raise voice against
fundamental rights such as the right to have a exploitation. Last but not the least; the consumers
faulty product repaired, replaced or reimbursed must educate himself/herself about his rights and
24 months after purchase, the right to cancel an availability of redressal mechanisms.
online financial services contract within 14 days if References
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Case Study
Case Study
An Assessment of Delhi Tourism Sector: A Socio-Economic
Developmental Perspective
Sazzad Parwez
Research Scholar
Centre for Studies in Economics and Planning
School of Social Sciences
Central University of Gujarat
Gandhinagar, Gujarat
Abstract
Tourism is one of the most important sectors in the governments, private bodies and voluntary
Delhi economy. Delhi has become a major player in organisations should become the active partners
the international tourism market since the country in the endeavour to attain sustainable growth in
opened its doors to the outside world in the last few tourism and overall economy as well.
decades. Tourism is a diversified and decentralized
Keywords: Delhi, Tourism, Tourism Industry,
industry. The commercial imperatives drive
Socio-Economic Growth, Sustainable Growth
tourism change according to the location, as do the
environmental, social and cultural impacts of 1.0 Delhi Tourism
tourism on particular communities. Tourism is now Tourism is one of the important sectors in the
considered as an efficient tool for promoting social and economic development of any region
economic growth of the host country. Tourism and it true in the case of Delhi. It is significant
industry in India and especially Delhi being the
issue to consider whether the development
capital has been growing at a rapid pace generating
through Tourism is sustainable or not. Though
of foreign exchange besides giving a fillip to the
the concept of sustainability of tourism is not an
country‘s overall economic and socio-cultural
easily measurable, the occurrence of any negative
development. It is thus imperative to examine the
impacts on the society and ecology is often taken
dynamics of the relationship between tourism
to indicate lack of sustainability. In fact, the heart
sector expansion and economic growth in Delhi.
of any development process is proper planning
This paper is an attempt in this direction. The
and management based on assessment of all the
methodology of the present study relied on the
factors directly or indirectly involved and
secondary data and information, review of print
interacting with the existing environment and
literature and visit to the selected sites to witness
extraneous monitoring of the planning strategies
food security status in India. To broaden our
and objectives.
research, one conducted the literature review based
on two approaches: thematic approach and A main barrier to planning and local
coverage approach. Paper suggest that as a part of management, both right now and in decades
the policy implications it is necessary that all wings ahead, is to increasingly external forces on local
of the central and state development so that development achieves the

An Assessment of Delhi Tourism Sector: A Socio-Economic Developmental Perspective
shared with the local population. In a metro city Discussion must take place in an open and
like Delhi, the primary responsibility for this rests transparent way. If interaction among parties is to
with the local government and its different have impact on social and economic
agencies. development, it must have accountability among
As stakeholders of services, builders of economic the parties with regard to investments, practices
infrastructure, regulators of Individuals and and policies.
institutions and managers of natural Tourism has become the biggest socio economic
environment, local authorities in Delhi have activity in the world over the time, and for a
many direct instruments to influence overall country like ours with abundant tourism resources
development. Yet in addition to stakeholder‘s it is a matter of far more significance. Consciously or
roles in the development process, perhaps the otherwise, any talk of tourism today implies
most important role that local agencies can play is attracting the travellers from abroad and his needs
that of facilitator for the diverse interests seeking and comforts seem to be the concern of those
to influence development. Only with such a connected with the tourist industry. While we
facilitator can a community of different interests should continue to assist development of tourism
define a shared vision and act consistent with this for its benefits, we cannot neglect the many millions
objective. The true proof of tourism is the of domestic tourists who travel long distances every
development of the local community. Tourism is year to visit various tourist and pilgrim centres. It
a recognised as global industry, like any other needs to recognise that international tourist facilities
industry, tourism business can enforce in the country cannot have the good foundation
considerable impact on local environment which unless a more effort is made to stimulate domestic
are often diverse and unique for the economy. tourism.
This structural diversity produces unique social 2.0 Socio-Economic Profile of Delhi
changes upon the local community, including
This chapter gives the present socio- economic
changes in local demographics, and changes in
profile and parameters of Delhi. The data is
local labour markets.
important as it is an indicator of economic growth
The commercial activity of tourism industry is to of Delhi. In 1991 the population of Delhi was
promote the ―saleable‖ and appealing aspects of 9420644 which was increase by 1.38 % over to 1.67
the community, transport non-residents into the crore as per census of 2011. As per estimates
society, and to manage the hospitality for and released by Registrar General of India the present
guide the activities of these visitors, and provide population of Delhi is more the two crore. The sex
them with all the goods and services to purchase ratio is 866 female per 1000 males. The Density of
during their stay in the place. If these commercial population in urban areas of National Capital
activities degrade the community‘s heritage and Territory of Delhi is 11297 per sq. km.
wealth, then the community suffers more directly
The National Capital Territory (NCT) is rich and
than the consumer
ancient cultural heritage and living traditions.
Management of adverse tourism impacts are to Delhi is a metro city of monuments of colour and
be found in the shared interest of stakeholders contrasts. In this great city the medieval and the
such as local communities, tourism businesses, modern, the hoary past and the youthful present,
and tourism consumers in maintaining the the old and the new have blended into one to
natural wealth and social heritage of this region. unfold the past grandeur and the present

Sazzad Parwez
excitement. Connectivity plays a crucial role for 2.1.2 Profile of Domestic Tourists
Delhi to be a global destination. Delhi is well Although the importance and significance of
connected to the rest of the world and the all domestic tourism was recognise by the Indian
corners of the country by road, rail and air. In planners as early as during the mid-1950s, the
2011, Delhi ranks 2nd among states in India with domestic tourism sector by and large remained
respect of FTA arrivals which constitute good neglected and was accorded a very low priority in
numbers in terms of pan India tourism. the successive Five Year Plans of most state
2.1 Profile of Tourists governments. Resources constraint with other
2.1.1 Profile of International Tourists Visiting more urgent development tasks led many a state
government to give less priority to the domestic
Delhi
tourism.
Tourism is important to the economic and social
Several Indian states have recently been showing
life of developing countries and the increasing
keen interest in s planning for the development of
numbers of developing countries is recognised all
domestic tourism. The fact that domestic tourism
over the world. The evolution of international
generates more employment (especially for
travel started in 1987 and gathered strength in the
unskilled labour) than foreign tourism, and also
few decade. All regions of the world shared in
this rising tide of trend. In developing countries confers a varied range of benefits (facilitating the
such as India, tourism industry represented development of backward areas, promoting
almost one third of the trade in services. cultural and social diffusion, etc.)
International tourist arrivals in India increased Major barrier shortcoming that has repeatedly
from 1958272 in 2009 to 1893850 in the year 2010 affected negatively domestic tourism planners is the
with a decline of 3.14% over the previous year. lack of a comprehensive and uniform statistical
An international tourist arrival in winter months base. Not only are domestic tourist statistics not
is highest. Out of the total international tourists compiled by many Indian states, but even where
arrivals to India, about 61 % visit Delhi. such data are gathered, these are not far from
Table 2.1: Domestic and foreign tourist visits during 2001-2010 for Delhi
Year Domestic % of growth in domestic Foreign tourist % of growth in foreign
tourist visit tourist visit visit tourist visits
2001 1324636 NA 830092 NA
2002 1228059 -7.8642 543036 -52.86
2003 1430546 14.15 693827 21.733
2004 1866552 23.35 839574 17.35
2005 2061782 9.46 1511893 44.46
2006 2237130 7.83 1974836 23.44
2007 2388330 6.33 2018848 2.18
2008 2132970 -11.92 2339287 13.69
2009 8834037 75.85 1958272 -19.45
2010 13558353 34.84 1893650 -3.41
Source: A. Majumder, Department of Tourism and Private Tourism Operators in Delhi, 2012

complete and differ widely in both from and sector was previously restricted to operate. Huge
content from State to State, for want of a growth in the industrial and service sector was
definition of ‗domestic tourist‘ and methodology witnessed after the reforms have been introduced.
for collection of statistics. Slowly, the growth of private tourist operators
The domestic tourism to Delhi has been rising at was observed all over the country.
a fast pace since independence. Increase of Tourism agencies who provide only the
domestic tourist visits is shown by rapid rise of transportation services for local sightseeing or who
unapproved hotels and inns apart from increase operate small sightseeing packages in and around a
in approved hotels in one and two star categories. few tourist destination. Besides, there are many
As country tourists visiting Delhi do not indicate giant players in the tourism industry who provide a
a marked seasonal pattern of preference, it is the wide range of services. They have huge chain of
most sustaining factor for tourist facilities of all luxury hotels, restaurants, A/C and non-A/C buses,
types in Delhi. private vehicles, expensive and luxurious tour
packages, provision of booking railway and air
The diversity in domestic and international
tickets (both domestic and international). Most of
tourist visits over the last year has undergone
private players generally operate through offices
considerable variations over the time 2001-2010.
which they have all over country. But now their
In 2002, a negative change has been observed for
mode of operation has become much more
both domestic and foreign tourist visits mainly
advanced having a greater network all over the
because of the attack on the World Trade Centre country. It was only in the beginning of the 21st
in 2001. Again, in 2008-09 a downward change century that India witnessed the power and range of
has been observed because of the economic crisis. internet or web. Slowly this virtual system has
From last many years, Department of Tourism had engulfed the whole country.
been the only organization promoting tourism in There are a huge number of private tourism
India on behalf of the Government of India. Rather operators that are operational in the tourism
it can be said that it had a monopoly status in the industry and they are multiplying in number day
tourism industry in India in the initial period. As by day. The character of all these private tourism
time passed by, public became aware of the operators which operate through websites is
potential of the tourism industry to act as an engine similar.
of growth for India. Introduction of the industrial
2.1.3 Domestic Tourist Projections
reforms of 1991 was a noteworthy phenomenon for
India. The industrial reform opened up the entry Delhi has witnessed 1496882 domestic tourist
gate for the private participants into those areas visits in 1998 which increased to 1571726 in 1999
where the private and 1728899 in the year 2000.
Table 2.2: Foreign Tourist and Domestic Tourists Visiting Delhi
Year Foreign tourist visit to Delhi Domestic tourist visit to Delhi
2005 1518309 2208184
2010 1807614 2667236
2015 2096919 3126289
2020 2386224 3585341
Source: Ministry of Tourism, GOI, 2012

Sazzad Parwez
In the year 2001 there was a marked decline in table gives us a view of the popularity in either
the tourist visits. The normal forecast of domestic the Domestic or International tourists of the
tourist visits over the next 20 years from 2003 to tourist sites like Purana Qila, Jantar Mantar,
2022. The year 2005 will observe an estimated Safdarjung tomb, Bahai temple, Raj Ghat, Lodhi
2.20 million domestic tourists visits in Delhi. It Garden etc. support infrastructure at these sites.
will rise to 2.66 million in 2010 and 3.58 million in 3.0 Tourists and Most visited Destinations in
2020. There will almost be 3.76 million domestic
Delhi
tourist visits in the year 2022.
As per the rankings of WTO and that maintained
Table 3.2 indicates the results of a sample survey
by the Ministry of Tourism, GoI, it is observed
of the most visited Tourist sites in Delhi. Some of
that India with 5.8 million FTA ranks 40 th
the key inferences drawn are as follows: (0.78%) in the world and 15th (2.4%) in Asia.
Qutub Minar is the most visited monument by the
With 1.89 mn Delhi commands 32.95% of India‘s
Visitors staying overnight in Delhi- Domestic and
FTA which is a considerable count. As per
International. Red Fort is comparatively less visited
statistics, there has been a dip in Delhi`s count,
than Qutub Minar by the Foreign Visitors.
though globally the FTA has been increased.
Humayun‘s tomb is less popular with the domestic
visitors in comparison to the foreign visitors. The
Table 3.1: Most visited Tourist Destinations in Delhi (2009-10)
Most visited tourist Percentage count

destination of Delhi Domestic Domestic day Foreign overnight
overnight visitors visitors visitors
Qutub Minar 51.9 13.9 61.4
Red Fort 45.1 21.8 32
Delhi Zoo 25.1 17 3.6
Pragati Maidan 21 14.7 15.4
Delhi Haat-INA 18.4 11.3 15.8
Jama Masjid 15.2 9 28.6
Akshardham 12.9 4.1 18.6
Bahai Temple (Lotus Temple) 12.4 4.9 20.4
Hazarat Nizamuddin Shrine 11.2 4.7 32.1
National Science Centre 9.3 8.4 4.2
Purana Quila 9.3 6.7 1.8
National Rail Museam 9 4.5 8.5
Gurudwara Bangle Sahib 8.6 5.5 6.9
Gurudwara Sisganj 8.5 6.2 6.6
Raj-Ghat 7.4 4.2 17.3
Source: Tourism Survey in the State of Delhi -Annual Final Report (Ministry of Tourism, Department of Tourism,
Government of India)-2009-10

3.1 Most Visited Monuments of India Million) and Qutub Minar, Delhi (2.15 Million). In
respect of foreign tourist visits Taj Mahal, Agra
A survey conducted by the Government of India
in 2009-10, provides an overview of facts and (0.49 Million) was the most visited monument in
2009 followed by Agra Fort, Agra (0.31 Million)
statistics in Delhi. The table 3.2 provides the
highlights of the survey, based on which visitor and Qutub Minar, Delhi (0.22 Million),
management facilities can be analysed and Humayun‘s tomb, Delhi (1.8 million).
envisaged.
Table 3.2: Most Visited Monuments of India
10 most popular centrally protected ticketed 10 most popular centrally protected ticketed
monuments for domestic visitors in 2010 monuments for foreign visitors in 2010
Name of
Rank Domestic visitors Rank Name of monuments Foreign visitors
monuments
1 Taj Mahal, Agra 2585560 1 Taj Mahal, Agra 491554
2 Qutub Minar, Delhi 2498907 2 Agra Fort, Agra 314116
3 Red Fort, Delhi 2262810 3 Qutub Minar, Delhi 21623
4 Sun Temple, Konark 1738696 4 HumayunTomb, Delhi 183042
Charminar,
5 1509556 5 Fatehpur Sikari, Agra 210450
Hydrabad
6 Agra Fort, Agra 1417641 6 Keshva temple 181078
Golconda Fort,
7 1373170 7 Red Fort, Delhi 142029
Hyderabad
Ellora caves, Mattencherry palace
8 1187432 8 128753
Aurangabad museum, Kochi
Bibi-kamaqbara, Western group of
9 1100088 9 90721
Aurangabad monuments
Groupof monuments,
10 Gol-gumbaj, Bijapur 1011341 10 69758
Mamallapuram
Source: Tourism Survey in the State of Delhi -Annual Final Report, 2009-10, Ministry of Tourism, GoI
Delhi has rich cultural and historical heritage and 4.0 Accommodation for Tourists
the city possess three world heritage Monuments
4.1 Supply Demand Gap
listed by United Nations Educational, Scientific
and Cultural Organization (UNESCO). Of all the There has been about 1161 accommodation visits
monuments in India, Taj Mahal (2.58 Million) was with than 20600 rooms comprising of 5- star
the most visited monument in 2009 for domestic hotels, 4 -star hotels, 3 -star hotels, 2- star hotels,
tourist visits followed by Red Fort, Delhi (2.37 1- star hotels and other type of accommodation

Sazzad Parwez
in Delhi. Out of these about 70 units consists of star a committee of experts. There have been
category accommodation with 9184 rooms. Other considerable complaints both by foreign and
accommodation consists of unapproved hotels, domestic tourists being cheated by touts and
lodges, inns, youth hostels tourist camps, private unscrupulous people. Local authorities have to
rented or the paying guest, etc. In the year 2000, understand the importance and psychology of
there were 1274177 international tourist visits and tourists. Delhi police needs to introduce ―tourist
about 1728899 domestic tourist visits to Delhi. police‖ at all tourist centres and every police
Indicates the forecasted visits of foreign and station has a separate number for tourist‘s
domestic tourists to Delhi during 2003-2022 AD. complaints.
4.2 The Demand Supply Gap 5.0 Perspective for Future needs: Travel Demand
All the data and numbers presents the demand by 2022
supply gap or shortage/excess of rooms in star Current situation and trends scenario says that
category accommodation in Delhi during the 2022 appears to be quite alarming. The various
period 2003-2022 AD. It may be seen that against indicators for assessment of travel demand are
the existing 9184 rooms in 2003 in star category shown as under:
accommodation in Delhi. In the year 2005 the A tourism destination is composed of a series of
shortage will increase to 1018 rooms. The accommodation and attraction (along with weather)
shortage is likely to grow to 2988 in 2010 and which draw predictable volumes of visitor‘s traffic.
6926 in the year 2020. At the end of 2022 AD the Payrolls and revenues which comprise tourism
shortage of rooms in star category hotels in Delhi success, it is essential to provide certain necessities
is likely to be 7714 rooms. The shortage of rooms of functional subsistence. The following action plans
will require accommodation of various categories are suggested for Delhi for Tourism Infrastructure
in the approved sector. The required additional Development in phases from 2002 to 2022. Details of
rooms will involve construction of hotels, all of phased implementation program are given in the
which cannot be accommodated in the N.C.T. subsequent chapter. The supply-demand gap shows
DDA which is preparing the master plan 2002- that there is a shortage of hotels of approved
2020 has to earmark land for hotels in various categories. The twenty years period has been
zones not only in N.C.T. but also in D.M.A. and divided in five year phases. The number of hotels
N.C.R. taking into account the progress of other required over the period is shown vide: Possibly
infrastructure facilities over the period 2002-2022. one of the classic errors or shortcomings in tourism
The spread of hotels in outlying areas of N.C.T. development programs lies in insufficient planning
and D.M.A will ease the burden on existing civic or provision for infrastructure facilities. Somehow,
amenities in N.C.T for a change and also bring the costs of public works programs always seem to
about regional spread of accommodation facilities
exceed initial estimates. Failure to look in to could
which will be in balance with the carrying
costs and other implications can leave an area
capacity of the infrastructure facilities planned
without sufficient capacity to support both tourists
and thought out.
and its own citizens. In the worst case, tourism
In the short term facilities provided by attractions and accommodations can stand unused
unapproved hotels can be improved to some or underutilised if the area does not provide the
extent. The criteria for improvement of necessary support services. Inspite of
unapproved hotels can be tackled by constituting
this rich and diverse cultural heritage, Delhi is standard to locate accommodation facilities and
used by a large number of domestic and foreign some attractions in the vicinity of most gateway
tourists only a gateway for traveling to Jaipur, airports and that needs to be changed.
Agra and other cities of tourist interest. Though, People go on vacation to enjoy themselves and
Delhi has the highest number of tourist arrivals, it
they don‘t have fun while they are sitting on
is only used as an entry point to the country. The airplanes – on trains or buses. So, the idea is to
following action plans are suggested for Delhi for bring tourists to the activities which attract them
Tourism Infrastructure Development in phases as quickly and directly as possible. To illustrate it
from 2002 to 2022. Details of phased most of travellers do not enjoy completing a flight
implementation program are given in the of several hours only to find themselves faced
subsequent chapter. with a bus or train ride several more hours to
The supply-demand gap shows that there is a reach their ultimate destination. So, it is
huge shortage of hotels of approved categories. important to think of all the traveling a tourist
The twenty years period has been divided in five will do as part of a single experience. Travel
year phases. The number of hotels required over within an area is an extension of the trip from
home and the return trip home is an extension of
the period is shown vide table below. During the
the travel within the destination area.
first phase no luxury hotel of 5- star category is
required in National Capital Territory. During 6.0 Carrying Capacity Analysis
the subsequent phases the demand for 2- star and Tourism carrying capacity (TCC) is defined as
above categories increases assuming that civic ‗the maximum number of people that may visit the
infrastructure in outlying areas of Delhi meets or tourist destination without causing destruction of the
exceeds the projected demand. In the final phase physical, economic and socio cultural environment and
(2018-2022) five luxury hotels are expected to an unacceptable decrease in the quality of visitors‘
come up more so in the Delhi metropolitan area. satisfaction.‘ (Alvin Chandy, 2009).
Table 5.1: Number of hotels required
Hotel categories 2003-07 2007-12 2012-2018 2017-2022 Total

1-star 22 23 20 25 90
2-star 13 14 20 26 73
3-star 7 8 12 16 43
4-star 3 2 5 4 14
5-star/5star deluxe - 1 2 5 8
Source: Working Paper, Centre for Civil Society, 2012
MRTS and outer expressways planned would Assessment of TCC is based on three most
have been implemented and this spread of hotels important indicators: Physical-Ecological, Socio-
will have more forward and backward linkages Demographic and Political- Economic. Physical
with support industries in the surrounding States and Ecological Indicators are based on fixed
of Delhi. Fact that Delhi does not have an Airport components (ecological capacity, assimilative
Hotel. Given tourist distaste for ground travel capacity) and flexible factors (infrastructure
immediately after long flight, it has become systems like water supply, electricity,
Sazzad Parwez
transportation, etc). Socio-demographic Indicators infrastructure at tourist destinations/circuits in a

refer to social and demographic issues and sustainable manner. Hence, for the purposes of
importance to local communities, as they relate to this report the primary focus would be on the
the presence and growth of tourism. Some of Physical and Ecological Indicators. It is expected
these can be expressed in quantitative terms but that development in physical infrastructure at
most require suitable socio- psychological destinations/circuits would translate into
research work. Political-economic Indicators refer to improvements in the socio-demographic and
the impacts of tourism on local economic political-economic conditions of these regions.
structures, activities, etc. including competition to According to the figures shown in Table 6.2, the
other sectors. territory of Delhi shows the available capacity
The purpose of the interventions intended by the both in present as well as till 2020. It is possibly
due to expanding city limits of the Delhi-NCR.
Ministry of Tourism, Government of India is to
improve the quality and quantity of tourism
Table 6.1: Evaluation Criterion for Physical and Ecological Indicators
Physical-ecological indicators Evaluations criterion

Biodiversity Threatened species, protected areas as a % of territory and type of
ecosystem
Air quality Population exposure to air pollution- SOX and NOX emission
intensities
Noise pollution Sensitivity to noise pollution. Allowable decibels limit if specified.
Availability of power Hours of regular power supply from all energy sources
Water Intensity of use of water resources. Drinking water availability
@135 lpcd
Waste management Generation of waste, moment of hazardous waste, availability of
waste management system.
Cultural and heritage Listed buildings and scheduled ancient monuments at risk.
No. of community heritage groups active.
Cultural traditions and communities which are at risk of getting
extinct.
Tourist infrastructure Availability of tourist infrastructure such as on site
accommodation, wayside amenities, signage, restaurants, public
conveniences, petrol pumps etc.
Land infrastructure Area of land available for tourism development.

Quality of transport Inter and intra city transport connectivity in tourist town.
infrastructure Availability of last mile connectivity.
Source: White V., M. G. (2006). Indicators of Sustainability and Sustainable Tourism: Some Example Sets. Aberdeen:
The Macaulay Institute.
Table 6.2: Town wise Carrying Capacity Analysis of Delhi
Town/city Destinations Existing Carrying Available Existing Carrying Available

load capacity capacity load capacity capacity
Delhi All tourist 2010 2020
destinations in 20661973 37816500 17154527 32088304 32626000 537696
Source: Annual Report, Ministry of Tourism, Govt. of India, 2011
Table 6.3 shows the destination-wise carrying dwelling time of the visitors so that its capacity
capacity of Delhi priority circuit. It can be could be increased. Table 6.3 shows all the
observed that among the various key diverse tourist attraction of Delhi and there
destinations, Dargah of Hazrat Nizamuddin carrying capacity. It also suggests that as a
shows the negative carrying capacity and projected carrying capacity of tourist destination,
remaining destinations still have scope for future how much Delhi can take as a tourist destination
primarily due to management aspects. and how to go about it mainly in context of policy
Since Dargah Hazrat Nizamuddin is a religious formulation and implementation for developing
centre, it would be suggested to restrict the Delhi as tourist hub and realise its potential.
Table 6.3: Destination-wise Carrying Capacity of Delhi Priority Circuit
Tourist Existing Carrying Available Estimated Carrying Suggested Enhanced

Place capacity capacity capacity
destination load 2010 capacity Daily 2010 load 2020 daily 2020 measures daily 2020
Delhi Qutub Minar 11843 19500 7657 37277 861 - 861
Delhi Red Fort 14215 455500 16118 44744 7961 - 7961
Delhi Jama Masjid 5545 2250 4955 17455 1772 - 1772
Delhi Purana Quila 3239 27000 18361 10194 16503 - 16503
Humayun
Delhi Tomb & 2941 32000 29059 9258 27371 - 27371
Isakhan Tomb
Delhi India Gate 4121 42000 48379 12921 46015 - 46015
Garden of five
Delhi senses 2480 11000 19520 7806 18097 - 18097
Safdargunj
Delhi Tomb 328 9750 25672 1032 25484 - 25484
Kotla Feroz
Delhi Khan 277 12375 24473 872 24314 - 24314
Delhi Tughlakabad 128 16000 21206 402 21132 - 21132
Restricting
Dargah the dwell
Delhi Hazarat 7000 1012.5 -925 22034 -4942 time to 45 323
Nizamuddin mins crowd
mgmt.
Source: Annual report, Ministry of Tourism, Govt. of India, 2011
Sazzad Parwez
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on Tourism in India – Challenges Ahead, IIMK 
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 Swain & Mishra 2012 ―tourism principle and Travel and Tourism Climbing to New Heights – The
practices‖ Oxford University Press, first edition
 2006 Travel and Tourism Economic Research‖. 
 The Travel & Tourism Competitiveness Report 
 http://articles.timesofindia.indiatimes.com/2012-
(2007) World Economic Forum Geneva,
07-10/india/32617722_1_foreign-tourist-arrivals-
Switzerland Furthering the Process of Economic
foreign-exchange-earnings-ftas
Development 
  http://en.wikipedia.org/wiki/Tourism_in_India
 Thessaloniki (2009) , ‗Global SWOT Analysis‘ A 
report produced for TOUREG Project, Greece and  http://www.incredibleindia.org/index.php/media-
the Technical University of Crete, Greece section/press-releases/1574-foreign-tourist-

 Tourism analysis: an interdisciplinary journal. arrivals-and-foreign-exchange-earnings-in-april-
Vol. 11 No. 2 2012-08-may-2012
 
 Tourism management: research - policies -  http://www.incredibleindia.org/index.php/trade-
practice. (2006), No. 6 nav/latest-news/1531-foreign-tourist-arrivals-
 and-foreign-exchange-earnings-in-february-2012-
 Uemura C. (2005). ―Determinants of
07-march-2012
competitiveness in the tourism industry‖. JECR 
Researcher Report no. 51  http://www.jagranjosh.com/current-
 affairs/foreign-tourist-arrivals-in-india-registered-
 Vijayanand, S. ‗Socio-Economic Impacts in
21-percent-growth-in-july-2012-1344432216-1
Pilgrimage Tourism‘, School of Management,
Pondicherry university.
Case Study
Teaching Note
Case Overview
Tourism is one of the most important sectors in the tourist destination attraction in quantitative
the Delhi economy. Delhi has become a major term and an analytical index to study the carrying
player in the international tourism market since capacity of tourist destination to develop the
the country opened its doors to the outside world future policy and framework for Delhi tourism.
in the last few decades. Tourism is a diversified
Case Analysis
and decentralized industry. The commercial
imperatives drive tourism change according to As this paper mainly talks about tourism in Delhi,
the location, as do the environmental, social and its economic aspects and developmental aspects
cultural impacts of tourism on particular with analysis of secondary data and information.
communities. Tourism is now considered as an The main goal of this study is to investigate the
efficient tool for promoting economic growth of effect of tourism on the economic growth and
the host country. Tourism industry in India and development of Delhi. The results show that the
especially Delhi being the capital has been spending of international and domestic tourists
growing at a rapid pace generating of foreign positively impacts the economic growth of Delhi.
exchange besides giving a fillip to the country‘s We have found that there is increase in the spending
overall economic and socio-cultural of international and domestic tourists and
development. It is thus imperative to examine the expenditure of government leads to increase in the
dynamics of the relationship between tourism
GDP per capita income. According to the
sector expansion and economic growth in Delhi.
government agencies Delhi offer a considerable
This paper is an attempt in this direction.
potential, not only for heritage tourism, but also for
The methodology of the present study relied on the environmental and ecotourism, cultural tourism,
the secondary data and information, review of pilgrims tourism, and discovery tourism. This
print literature and visit to the selected sites to potential, however, is still yet to be fully harnessed.
witness tourism sector status in India. To broaden In addition, the results show that the conventional
our research, one conducted the literature review sources of growth such as investment in physical
based on two approaches: thematic approach and and human capital and the ability of households to
coverage approach. Paper suggest that as a part
have the wherewithal of spending on health,
of the policy implications it is necessary that all
housing, nutrition, and other household items can
wings of the central and state governments,
enhance their productivity and spur their economic
private bodies and voluntary organisations
growth. A policy implication which may be drawn
should become the active partners in the
from this study is that Delhi can improve their
endeavour to attain sustainable growth in
economic growth performance, not only by
tourism and overall economy as well.
investing on the traditional sources of growth such
Teaching Objectives as investment in physical and human capital and
The main objective of this case study is mainly to trade in tourism sector, but also by strategically
understand how tourism sector has an impact on harnessing the contribution the tourism industry
socio economic status of Delhi. To study the and improving their governance performance. The
pattern and trend of both domestic and foreign major limitation of study has been it is completely
tourist visit to capital city, same time to observe based on analysis of
Teaching Note
secondary data and information which are also 2. 1 Profile of Tourists

available in limited scale and acute data source. 2. 1.1 Profile of International Tourists
Assigned Case Questions Visiting Delhi
 How tourism sector has an impact on socio 2. 1.2 Profile of Domestic Tourists
economic status of Delhi? 2. 1.3 Domestic Tourist Projections

 What has been the pattern and trend of both 3. 0 Tourists and Most visited Destinations in
domestic and foreign tourist visit to Delhi? Delhi

 What has been the Demand supply gap of 3. 1 Most Visited Monuments of India
Delhi as a tourist destination?
 4.0 Accommodation for Tourists
 What will be the carrying capacity of tourist
4. 1 Supply Demand Gap
destination to Delhi?
4. 2 The Demand -Supply Gap
Teaching Plan
5. 0 Perspective for Future needs: Travel
The teaching plan is an outline on how to allocate
Demand by 2022
time within class. For most business school
courses, this is 75-80 minutes. Typical 6. 0 Carrying Capacity Analysis
components of a teaching plan are the following: 7. 0 Conclusion and Road Ahead
 Class introduction: Tourism is one of the  Wrap-up points
important sectors in the social and economic 
The main goal of this study is to explore the
development of any region and it true in the
effect of tourism through international and
case of Delhi. It is significant issue to consider
domestic tourists on the economic growth
whether the development through Tourism is
and development of Delhi. We have found
sustainable or not. Though the concept of
that there is increase in the spending of
sustainability of tourism is not an easily
international and domestic tourists and
measurable, the occurrence of any negative
expenditure of government leads to increase
impacts on the society and ecology is often
in the GDP per capita income. According to
taken to indicate lack of sustainability. In fact,
the government agencies Delhi offer a
the heart of any development process is considerable potential, not only for heritage
proper planning and management based on tourism, but also for the environmental and
assessment of all the factors directly or ecotourism, cultural tourism, pilgrims
indirectly involved and interacting with the tourism, and discovery tourism. This
existing environment and extraneous potential, however, is still yet to be
monitoring of the planning strategies and captured. In addition, the results show that
objectives. the conventional sources of growth such as

 Major topics: a listing of topics, each topic investment in physical and human capital
area and identification of items that is and the ability of households to have the
important to get on the board wherewithal of spending on health,
housing, nutrition, and other household
1. 0 Delhi Tourism items can enhance their productivity and
2. 0 Socio-Economic Profile of Delhi spur their economic growth.
INTRODUCTION
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For Books:
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Globsyn Management Journal (GMJ)

Chief Academic Advisor Associate Editor

Journal Advisory Board Editorial Team

Prof. R. C. Bhattacharya Dr. Prithviraj S. Banerjee

Dr. Tridib Mazumdar Dr. S. Sahney - IIT Kharagpur

Cover Design and Layout:

Copyright © Globsyn Business School 2013-2014

Volume VII, Issue 1 & 2

Globsyn Business School, Kolkata

Patron’s Desk ........................................................................................................................................ i

 Merger and Acquisition — A Myth? (From an Indian Acquirer’s Perspective)

 Demographic Variables and ATM Services: An Empirical Survey

 Transition of Indian Society: Post-Liberalization Era

 Perceived fairness of employees in Performance Appraisal System: with reference

 An Assessment of Delhi Tourism Sector: A Socio-Economic Developmental Perspective

Teaching Note ..............................................................................................................106

My best wishes to the entire team.

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 i

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 ii

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  1

Page  2 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

healthcare services. Literature reveals that the (approximately 30% of population),

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  3

Figure 1 : Telemedicine setup in India

Page  4 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

to healthcare is financial. With declining tele-health services related to diagnostics (tele-

Exchange of Health Services

Figure 2 : Trade in Direct Health related Services

Exchange of Health Services

Country A Country B Back-end

Figure 3 : Trade in Services Arising from Healthcare

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  5

Figure 4 : Telemedicine network across India

Modernization of tele-communication and India‘s Global presence and international recognition of

Page  6 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

Box-1 Telemedicines initiatives / projects in India

Major telemedicine projects:

Major Hospitals / Institutes:

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  7

Source: SGPGI, (www.sgpgi-telemedicine.org)

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GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  9

Page  10 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

Table 1: Revenue Earning by India in IT related services in healthcare

Revenue (US $, millions)

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  11

Table2: Off-shoring and Outsourcing activities of foreign firms in India (2010)

Company Drug Discovery Drug Development Drug Manufacturing

V. ICT based healthcare and Private-Public-

Page  12 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013

GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  13

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GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  15

2577/thesis.pdf?sequence=2 accessed on available at http://pods.dasnr.okstate.edu/

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GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  17

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GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013 Page  19

acquisitions enhanced plant productivity, 3. Objective of the Study

Page  20 GMJ, VOL VII, ISSUE 1 & 2, JANUARY - DECEMBER 2013