International Journal for Neo Classical Research and Development

Transcription

IJNCRDM, Volume 1, Number 1 January-March 2015
International Journal
for
Neo Classical Research and Development in
Management
Volume 1
Number 1
January-March 2015
www.mcmrtm.com
Articles
Number
Page
A comparative study in volatility between spot and
NIFTY using GARCH (1,1) Model
Anita Nandi Barman
5
Indian Corporate Leadership & Sustainability
Arnab Bashkar
17
Tagor’s Expression of Literature: An Understanding into
Women emancipation and relevance to management
Paramita Biswas
23
Performance of Regional Rural Banks in the State of Odisha
Sulgna Das
29
Empirical Study to test whether weak form hypothesis still holds
Good in the Indian Market
Abhijit Dutta
Padmabati Gahan
37
1
Editor
Dr. Abhijit Dutta
Editorial Board
1. Prof. Dr. Naveen Das
Director, NSHM Business School Kokata
Former Director of ISB Hyderabd
2. Prof. Dr. G. Ratnaja
Professor Marketing, IBS, Hyderabad
3. Prof. Dr. Aloke Sen
Former Director, School of Management, BESU
Former Director, Heritage Business School,
Kolkata
4. Prof. Dr. Niloy Sarker
Head, Depertment of Health and Hospital
Management
NSHM, Knowledge Campus, Durgapur
5. Prof. Dr. Padamabati Gahan
Former Head of Department
Department of Business Administration
Sambalpur Univeristy
Ms Sulagana Das
Research Associate
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2
About the Journal
International Journal Neo Classical Research and Development in Management (IJNCRDM) is a double
refereed journal which is published on bi- monthly basis and will try to propagate research in all the field
of management like Financial Management, Marketing Management, Information Technology
Management, Humana Resources Management, Communication Management and applied and policy
research in economics used for management of enterprises.
It covers in its scope theoretical research, applied research, extensive literature survey of literature in
any field which has been described earlier. The journal will focus itself on methodological rigor and will
ensure that the articles published are of highest standard in its area.
Process of Submission:
The Journal can be submitted online through the portal or through the email given below in the
prescribed format. On submission the author(s) will receive an acknowledgement of receipt of the
article by the journal in the email of the communicating author.
The article will then be put though double blind review and will informed to the author. On receiving the
intimation, the author has to submit Rs. 3,000 (Rupees Three thousand) either through the payment
gateway in the web page of the journal or send a demand draft in the name of the editor, IJDMR,
Payable at Bhubaneswar. The author should send the declaration for transferring the right of the copy
right of the article to the journal.
Instruction for authors.
1. The article should be written in MS Word using Arial Font have 11 pt font size with one and a half line
spacing.
2. All the major sections such a Introduction, Literature survey, Analysis, Interpretation and Conclusion should
be consecutively numbered as 1.1, 1.2 and the like.
3. All the tables and figures should be consecutively numbered, carrying a title and in necessary cases have the
source of the table or figure acknowledged under the table or the figure.
4. All tables and figures should be integrated in the article.
5. Authors should avoid using footnotes as far as possible.
6. The title page with 500 worlds Abstract with key words should be given in a separate page from the main
text of the article. The same page should carry the name of the author(s) along with their affiliation and email
address.
7. The main article should carry the title of the article and should not carry page numbers.
8. The article should follow APA style of reference
3
.
Editorial
The first issue of the International Journal for neo classical research and
development in Management has seen the light of the day. The Team which
helped in nurturing and fostering the growth of the journal has been the
backbone for this event.
The current issue deals in letter and spirit of the journal various classical and new
areas of management research. The issues that have been identified are stock
market related, performance of regional rural banks, corporate leadership and a
very special view on Rabindranath Tagore and Women emancipation and effect in
management.
The papers are diverse and interesting as it deals with a wild range of views and
helps in increasing the horizon of understanding the dimensions of research that
is being held in India. From the next issue we would like to include a diary of
recent times and its effect on the contemporary issues in Management.
I wish the readers, a very happy New Year 2015 and happy reading of the first
issue of the Journal.
4
Comparative study in Volatility between Spot and of NIFTY using GARCH (1, 1)
Model
Prof. Anita Nandi Barman
Abstract
With the implementation of liberalization, privatization and globalization in the Indian economy
and also with the introduction of derivative instrument in the Indian Stock Exchange has
resulted in huge trading in Indian stock market. This paper measures and compares volatility in
stock market through use of certain descriptive statistical measures first and then through
measures of conditional variance modeled in different ARCH family of frameworks for NIFTY
index of 8 Global 500 rank holding companies of India as per 2013 data. Analysis of stock
market for the evaluation of risk has received lot of attention both from policy makers and
researchers. The quality of risk measures very largely depends on how well the econometric
model captures the behavior of underlying asset. We employed GARCH i.e., General
Autoregressive Conditional Heteroskedastic (GARCH), models to study the behavior of volatility.
Our study shows that GARCH (1, 1) model fairly explains volatility clustering and its high
persistence among the selected companies.
Key Words: Stock Price, Volatility, Heteroscedasticity, GARCH Model
1. Introduction
The Indian capital market especially the stock market has undergone several structural changes
over the last 2 decades. The advent of new financial instruments such as Index futures, stock
options, and stock futures started in a phased manner from mid 2000. These changes
apparently changed the rule of trading and movement in the prices of the stock markets.
Theoretical disagreements about coherence in future trading volume and spot trading volume
has offset been a matter of consistent argument between practitioners and the theoreticians.
Apparently the magnitude of fluctuation in the returns of an asset is directly proportional to the
volume of trade and inversely proportional amongst the underlying and derived instrument.
Anderson et al 2004 concluded this sampling interday return with sufficient frequency.
Assistant Professor. NSHM
anita.nandi@nshm.com
College
of
Management
and
Technology,
Durgapur,
5
It must be noted here that the significance of movement of the assets price is called its
volatility. The prediction of volatility in financial market has been rekindled by Bollerslev et al
1994, when they established that financial assets returns volatility are highly predictable.
Observably, they realized volatility i.e. measured by simply summing interday squared returns
can be treated as “observed volatility”. This has profound implication to financial researchers as
it provides better measurement of total risk and can lead to better price prediction of various
traded assets.
Popular models of volatility clustering where developed by Engle 1982 and Bollerslev
1986. The autoregressive conditional heteroscedastic (ARCH) models was developed by Engle
1982 and generalized ARCH(GARCH) models was developed by Bollerslev 1986 and has been
extensively used in capturing volatility clustering in financial time series through the last 2
decades.
The advantage of GARCH model is that it can replicate the fat tails observed in many
high frequency financial assets return series, where large changes occur more often than a
normal distribution could imply.
This paper is directed at studying the volatility clustering in Spot and Index of Nifty (S& P
CNX Nifty) In order to understand the pattern of clustering in spot market as against the
clustering in index. Several studies earlier try to observe and compose the volatility clustering
between derivatives prices and the NIFTY. Foremost amongst them are Karmakar (2005) used
GARCH (1, 1) model to understand volatility and predictability of NIFTY individual stocks. Rohit
Krishnan (2010) observing the large and small error clustering in a GARCH (1, 1) model using
restricted stock prices and Index during study period, Dutta (2013) used five minute interval tick
prices to compare the volatility clustering in very small period by using asymmetric GARCH and
compared the threshold values of GARCH (p, q) and GARCH (1, 1), TGARCH and EGARCH
respectively to understand the steadiness of their models in prediction of volatility cluster.
Thenmozhi (2002) had examined the impact of nifty futures on the volatility of underlying NIFTY
spot index. Gupta (2003) had tried to examine the impact of index futures on the underlying
cash market volatility in India and ten compared the futures market volatility with that of spot
market. Kumar and Mukhopadhya (2003) have tried to investigate the presence along with the
extent of impact of index futures introduction on the volatility structure of the underlying NSE
Nifty index.
Patra and Mohaptra (2013) studied the compared the volatility between spot and futures
market using NSE data base and concluded that the returns in the futures market exhibit lesser
volatility than returns in underlying spot market considering GARCH class models which process
volatility.
2. Data and Methodology
6
High frequency data are direct information from the market and are a recent entrant to the
world of statistics.
High-frequency data have now become a popular experimental bench for analyzing financial
markets (Dacorogna et al., 2001). It cannot be denied that very high frequency data have
microstructure effect (e.g., how the data are transmitted and recorded in the data base). In
order to avoid serious microstructure biases and at the same time reduce the measurement
error due to data generation at low frequency; we have used data at regularly spaced fiveminute intervals (Andersen et al., 2001). The present study uses 8 Global Rank Holding
Companies as per 2013 data, listed on NSE over a period of August 2008 to February 2014 days.
The closing prices of the day for the companies have become the pointer for study in this paper.
The daily return has been calculated using this pointer. The daily closing index of the S&P CNN
Nifty has been taken to calculate the return on the index for the same period of time. A large
part of the data has been used to model volatility by using the GARCH (1, 1) specification. The
data consist of 1401600 data points.
2.1 Volatility forecasting
The volatility forecasting represent the accuracy with which one can predict the movement of
the stock price/index changes with degree of certainty. For this we go through the following
process:
Let,
r , i  1,..., mt
denote log of price relatives at an intra-day time-point i on day t, where mt is the number of
return observations obtained by using prices m times per day. Then daily return on day t is
calculated as
rt  i 11 rti
m
Following Andersen et al,
(2001), we define the daily realized volatility ( tV 2 ) as the sum of squares of returns collected at
5-minute intervals:
mt
Vt   rti2
2
i 1
Let  t2 denote volatility forecast. One can assess the accuracy of the daily volatility
forecasts under a model by considering the simple linear regressions (Andersen et al., 2005) of
y t on  t2 :
yt  a  b t2   t
7
Where yt  Vt 2 or rt 2 and then computing the coefficient of determination R 2 . The model with
the highest R 2 value may be treated as the best model for predicting y t . On the other hand, if

the R 2 Value turns out to be generally higher for one choice of y t , then that choice Vt 2 or rt 2 ,

may be considered to be a better measure of observed volatility.
3. Objective of the Study:
i.
ii.
iii.
iv.
To analyze the presence of GARCH (1, 1) in the return series
To evaluate the data whether they are normally distributed or not.
To examine the presence of autocorrelation in the return series.
To comment on the serial correlation of the return series.
4. Methodology:
4.1 Volatility Models
Random walk: The random walk model is the simplest of the models considered and it is given
2
2
by  r   t 1   t , where  t is a white noise series.
Historical Average: The historical average model (Yu, 2002) is given by:
1
t 1 2
 r2 
t

t  1 i 1
GARCH: The volatility model for the rr or at is said to follow a GARCH (m, s) model (Bollerslev,
1986, Bollerslev et al., 1994) if;
at   t  t ,  t2   0  i 1 i t2 t   j 1  j  t2 j ,
m
s
(5)
Where  0  0,  j  0,  j  0,

max( m. s )
i i
( i   t )  1, with  i  0 for i  m and B j  0 for j  s,
And  t  is a sequence of random variables with mean 0 and variance 1, which is often
assumed to have a standard normal or standardized student-t distribution.
An exogenous explanatory variable X k may be included in the GARCH model. For example, the
GARCH (1,1) model can be augmented as
at   t  t ,  t2  a0  a1at21  1 t21  1 X kt
(6)
GARCH (1, 1) process  t2  a0  a1at21  1 t21 is done as follows. For this model the meanreverting form is given by
(at2   2 )  (a1  1 )(at21   2 )  ut  1ut 1.
8
Where  2  a0 /(1  1  1 ) the unconditional long-run is level of volatility and ut  (at2   t2 ) is
the volatility shock.
5. Results and discussions
5.1 SPOT Market Volatility test
The spot market shows that the AIC and SIC criterion are sufficiently low indicating that there is
a good case of the fit for the GARCH (1, 1) model. Since the DW value is less than zero, there is
autocorrelation in the series. The residual graph indicate that there is a GARCH path where we
see upto about 500 days there is high volatility which has gone into a low volatility period after
500 days. The Histograms show a low kurtosis indicating that data are log normal and shows
two distinct period of flow of volatility.
Table 1.1 GARCH (1, 1) for the Spot market
Dependent Variable: PT
Method: ML – ARCH
Date: 06/02/14 Time: 15:26
Sample: 1 800
Included observations: 800
Convergence achieved after 100 iterations
C
Coefficient Std. Error
z-Statistic
Prob.
334.9536
63.32246
0.0000
7.612157
1.892386
-27.45658
0.0000
0.0584
0.0000
5.289649
Variance Equation
C
ARCH(1)
GARCH(1)
7263.162
1.493027
-0.900798
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
-0.374115
-0.379293
125.8989
12617023
-4682.890
954.1529
0.788965
0.032808
Mean dependent var
S.D. dependent var
Akaike info criterion
Schwarz criterion
Durbin-Watson stat
269.4260
107.1997
1.71722
1.74065
0.005057
Date: 06/02/14 Time: 15:37
The data has a skewness coefficient of zero and kurtosis coefficient of 1.44, hence the null
hypothesis that the errors are normally distributed is rejected and works in favour of the data.
9
We observe that the GARCH (1, 1) series in negatively correlated. Since the p<5%, the null
hypothesis is accepted and there is no serial correlation in the series.
Fig 1.1 Histogram of the Spot Market
120
Series: Residuals
Sample 1 800
Observations 800
100
Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis
80
60
40
20
Jarque-Bera
Probability
-3.40E-12
56.63899
213.3740
-161.9460
107.1997
-0.122709
1.434890
83.65998
0.000000
0
-160 -120 -80 -40
0
40
80 120 160 200
Fig 1.2 Residual graph for the spot market
500
400
300
200
200
100
100
0
-100
-200
-300
100
200
300
Residual
400
500
Actual
600
700
800
Fitted
The NIFTY Volatility test: The volatility clustering for the NIFTY during the period is almost with
a low SIC and AIC criterion. The DW value is less than zero indicates that there is positive
10
autocorrelation in the data. The low kurtosis being low the data is not necessarily normally
distributed. The residual graphs indicate a high volatility period upto 200 hundred days
followed by a consistent period of low volatility.
Table 1.2 GARCH (1, 1) for NIFTY
Method: ML – ARCH
Date: 06/05/14 Time: 11:26
Sample(adjusted): 2 800
Included observations: 799 after adjusting endpoints
Convergence not achieved after 100 iterations
C
Coefficient Std. Error
z-Statistic
Prob.
5634.991
346.7241
0.0000
6.040271
3.280585
-13.88175
0.0000
0.0010
0.0000
16.25209
Variance Equation
C
ARCH(1)
GARCH(1)
128855.6
1.073639
-0.774049
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
-0.001769
-0.005549
470.7768
1.76E+08
-5844.233
21332.76
0.327271
0.055760
Mean dependent var
S.D. dependent var
Akaike info criterion
Schwarz criterion
Durbin-Watson stat
5615.256
469.4759
1.63888
1.66233
0.016232
The J B statistics is low indicating that the errors are not normally distributed and hence there is
chance occurrence of the fit which could have been fat tailed. We observe that GARCH (1, 1)
model is negatively related with a fit due to low AIC and SIC criterion.
Fig. 1.3 Histogram of NIFTY
11
100
Series: Residuals
Sample 2 800
Observations 799
80
Mean
Median
Maximum
Minimum
Std. Dev.
Skewness
Kurtosis
60
40
2.13E-10
12.49418
1225.544
-1071.056
469.4759
0.154020
2.559495
20
Jarque-Bera
Probability
9.619077
0.008152
0
-800
-400
0
400
800
1200
Fig. 1.4 Residual graph of NIFTY
7000
6500
6000
5500
1500
5000
1000
4500
500
0
-500
-1000
-1500
100
200
300
Residual
400
500
Actual
600
700
800
Fitted
We therefore conclude the following from the above two time series which can be written
compared as follows.
12
Table 1.3 Comparative analysis of volatility clustering of the SPOT and NIFTY during the
period under study.
Spot
Sl. Criterion
No
.
1
Is there a
presence of
GARCH (1,1)
2.
3.
NIFTY
Effect
Sl. Criterion
Interpretati
No
on
.
Yes, low SIC There is 1. Is there a
and
AIC high
presence of
indicative
volatility
GARCH (1,1)
followed
by a low
volatility
after 500
days
Are the data Yes data is
normally
normally
distributed
distributed
as indicated
by
JB
statistics
Is
there Yes as the
autocorrelati DW is less
on in the than zero.
series?
The error 2.
is
not
normally
distribute
d
The error 3.
co vary
with the
series
data
giving a
good
predictio
n about
the link
of
the
error to
the data
Interpretati
on
Effect
Yes, low AIC There is
and
SIC presence
indicative
of high
volatility
till
200
days
followed
by
a
period of
low
volatility
Are the data Yes the data The error
normally
is normally is
distributed
distributed
Not
normally
distribute
d
Is
there Yes as the The error
autocorrelati DW is less co vary
on in the than zero.
with the
series?
series
data
giving a
good
predictio
n
About
the link
of
the
error to
13
series
4.
Is there serial Q statistics
correlation?
is low
P>5%
Hence the
H0
is
accepted
There is 4.
no serial
correlatio
n
meaning
adjacent
error
terms are
related
and does
not spill
to
the
next
period
the data
series
Is there serial Q statistics There is
correlation?
is low
no serial
P>5%
correlatio
Hence the n
H0
is meaning
accepted
adjacent
error
terms are
related
and does
not spill
to
the
next
period
6. CONCLUSION:
There has been an effort made in the paper to map volatility in stock market by comparing the
volatility of the spot and the NIFTY in the same period. The paper uses eight distinct companies
during the study period and uses GARCH (1, 1) model to understand the clustering patterns.
The results shows that there are distinct ARCH and GARCH patterns in the series and the
periods are almost similar. The prolonged high volatility period is followed by a long low
volatility period. There series are normally distributed and there is autocorrelation in the series.
The absence of the serial correlation indicates that the adjacent error terms are related and
does not spill into the next period. It is interesting to conclude that the volatility pattern of the
spot and index are similar, showing the maturity of the Indian stock market.
REFERENCES
1. Alexander M. Mood, Franklin A. Graybill, Duane C. Boes, Introduction to the Theory of
Statistics, 3rd Edition, Tata McGraw-Hill.
2. Andersen. T.G et al (2001), The Distribution of exchange rate volatility, Working Paper series
99-08, Financial Institutions Centre, The Wharton School, University of Pennsylvania.
14
3. Bollerslev T, Chou R.Y, Kroner K.F (1992) “ARCH modeling in finance: a selective review of the
theory and empirical evidence” Journal of econometrics, 52, 5 – p. 59.
4. Bollerslev T, Engle, R.F. and Nelson. D.B. (1994, “ARCH Models” in R. F. Engle & D.Mc Faddeln
(eds) Handbook of E Econometrics, Vol – IV, Amsterdam, Nork – Holland.
5. Bollerslev. T (1986)” Generalized Autoregressive Conditional Heteroskedastasticity, Journal of
Econometrics 13, pp. 307 – 327.
6. Brooks C and Persand G (2003), Volatitlity Forecasting for Risk Management, Journal of
Forecasting, 22, pp. 1-22
7. Dacorgna. M, Fulrio Corsi et al (2001), Constant High precision, volatility from high frequency
Data, EFMA, Lugano Meeting, FCO Working Paper No. 2000-09-05.
8. Diebold .F.X (1989) “Forecast Combination and Encompassing: Reconciling Two divergent
Literature “International Journal of Forecasting, 589 – 592.
9. Dutta. A (2010), “A Study of the NSE’s Volatility for Very Small Period using
GARCH Models” September, Vol 6, pp. 39-51
Asymmetric
10. Eagle R.F and Brown S.J (1986) “Model selection for forecasting” applied mathematics and
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variance of UK inflation”, Econometric, 50, pp. 987 – 1008.
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Value and the Volatility of the Nominal Excess Return on Stocks”, Journal of Finance , 48, 17, pp.
79 – 1801.
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Vol 30, No3, July- September, pp. 21-37.
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Singapore Management University Working Paper Series, pp. 1-44
15
15.Nelson D.B (1991) “conditional heteroskdesticity in asset returns: A new approach”,
Econometrica 59, pp. 347 – 370.
16.Pagan. A. R and Schwert . G. W (1990). Alternative Models for Conditional Stock Volatility,
Working Paper no. 2955, National Bureau of Economic Research, 1050 Massachusetts Avenue,
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and future markets” Vilakshan, XIMB Journal, Vol.10, No.1, March, pp. 115-134
16
Indian Corporate Leadership & Sustainability
Arnab Bhashkar
Abstract
In this era of rapidly changing economy, globalization and increased competition, the
organizations in India are getting lesser time to think strategically and productively and this
multifaceted environment with fast-pace brings forth the utility of new leadership qualities and
styles with which a leader can envisage the future with clear vision and set goals accordingly
towards which he/she redirects his/her organizations with the help of motivated followers
without whom a leader cannot be successful in spite of having all necessary qualities.
Leadership can be defined as the ability to influence a group towards the achievement of goals
or to get the work done from followers without force. To do this successfully, the leader should
know him/ her properly and be sure that the vision he/she has is well communicated to the
followers. Leadership also demands of building trust among colleagues and trust to leader and
taking effective action to realize this leadership potential. Proper aid and support to each other
can ensure the achievement of goal and thus in turn, determines the success of a leader.
Traversing from the past to present, leadership styles in Indian corporate has been evolved with
the change of economic environment and culture which are intertwined. This paper aims to
explore specific sustainable leadership qualities and styles which a leader should acquire in this
changing environment to steer an organization towards the growth rapidly by motivating and
satisfying employees.
Keywords- Human Resource Management, Leadership, Corporate leadership, Leadership
qualities, Styles, Psychological contracts, Labour relations, Sustainable, India
Research Scholar (Dept. of Humanities and Social Science), Techno University, Kolkata,
arnab.bhaskar@gmail.com
17
1. INTRODUCTION
From mythology to real life, the omnipresence of leaders and their leadership qualities and
styles are becoming the subject of interest of modern aspiring youths who love to take the onus
to build and shape the future of their working organizations. The relationship between
Leadership and Human Resource Management lies in roles and duties assigned to the
respective employees and the roles assigned to employee determines the behaviour of that
employee and here psychological contracts plays a crucial role in leading the followers and this
in turn, determines the labour relations which influence in maintaining harmony and growth of
an organization.
As per the organization culture and environment, leadership styles are changed accordingly.
India, the second largest democratic country and greater degree of diversity, needs a leader
who can cope up with different cultures and environments of different provinces.
Ab initio, it has been seen that little children fond of hearing the story of mythology or real life
where leaders always cast a spell upon their tender minds becoming the centre of attraction of
the story. Leaders should have the quality to motivate followers till the goals are achieved or
even standing at the verge of fiasco. A leader should be aware of all his/her followers’ abilities,
limitations, and intentions so that it would be easier for a leader to guide them. As human
resource management, apart from other activities, deals with the development of employees,
so leaders can act as catalysts to enhance the ability of employees not only in their assigned
jobs but by motivating them and giving moral encouragement. Most of the followers want
their leaders should be trustworthy and openly so that they can go forward for the common
goal believing that they are guided properly with the hands of dignified individuals. So
motivation, trustworthiness, awareness, inspiration and dignified individuality are some traits
of leaders which human resource management demands to maximize employee performance
to meet employers’ strategic objectives.
The concept of corporate leadership is not very age old. Although the term “leadership” is
historical associated with eminent leaders worldwide. As change is the only constant, so with
the time the world has came across changes and seems to be smaller in terms of
communication, cost of communication and mode of transportation and technological
advancement made all these things possible and triggers globalization. Amidst of 19 th century,
the contemporary process of globalization occurred with the increase of capital and labour
mobility across the boundaries coupled with decreased transportation cost. At this, the
competition among corporate houses started increasing and the year 2000 onwards, due to
18
trade liberalization, these competitions have been triggered worldwide. Due to increased
competition, the survival of the corporate became tougher and to cope up with this increased
competition, corporate houses felt the need of a person who can set goals by envisaging the
future and motivating the employees or followers to achieve that goal maintaining healthy
relationship among them.
1.1 . PSYCHOLOGICAL CONTRACTS AND CORPORATE LEADERSHIP
At the time of joining employees have to be abiding by rules, regulations and job
responsibilities assigned to them by their working organizations. But an informal and invisible
obligation is made coupled with mutual beliefs and perceptions between employer and
employee. After joining in the organization there arises a relationship which builds expectations
to each other i.e. employer and employee. A legal contract never determines how employers or
managers or supervisors will behave with their employees or followers. But it has to be assured
that there would not arise any false or vague expectations to each other or otherwise on behalf
of employees, trade unions generally have to interfere into the tussle between them by the
process of collective bargaining and thus a collective agreement is reached. If all the contracts,
either visible or invisible, are approved by both the parties then it will be easier for a leader to
motivate employees or followers as there will exist a harmonious relationship among the
employees. If employees are not happy with the management of their working organization
then a tussle will arise among them or among the line and staffs. Then it will be difficult for a
leader to guide and motivate them towards the goal which has to be achieved for the sake of
their organization and this thing instigates the needs of labour relations which is very crucial for
an organization to grow and sustain.
1.2. LABOUR RELATIONS AND CORPORATE LEADERSHIP
An interaction between the management and the employees or workers is the key to drive an
organization or to make an organization alive. The management of an organization should look
after employee benefits in any manner and the management expect the same from its
employees. There should be a win-win situation for both the parties for organizational
effectiveness and to maintain this situation, labour unions play a vital role. Feelings of labour
union and management towards each other determines the behavior of labour union and
management. So a leader has to cope up with this attitudinal and behavioural aspects so that
he or she can communicate and motivate accordingly. If there would arise any unholy alliance
between employees and employers and create grievance to the employees then a true leader,
having an aura and veneration, would handle the situation by reducing their grievances and
inspire them to give full dedication towards the job and satisfy them by arising a sense of
fulfillment.
19
2. INDIA AND LEADERSHIP STYLES
Post-liberalization period (since 1991) made a history for Indian economy. Experiencing the
combination of protectionist, import-substitution and Fabian social democratic-inspired policies
which governed sometimes even after the British occupation; India took the breath of
economic liberalization that has redirected the country towards the market-based economy.
India had established itself as one of the world’s fastest growing economies.
In 1991, under the Prime Ministership of P.V.Narasimha Rao, the then Finance Minister Dr.
Manmohan Singh adopted liberal and free-market principles and liberalized its economy to
international trade. India then started to take part in worldwide movement with capital, goods
and services and thus India experienced the concept of globalization regarding which Roland
Robertson, a famous sociologist and theorist of globalization, stated in his book Globalization:
Social Theory and Global Culture (1992) that globalization is “the compression of the world and
the intensification of the consciousness of the world as a whole”. Barriers to international trade
have been lowered through the General Agreement on Tariffs and Trade (GATT). So, at the age
of globalization, Indian corporate highly feels the need leaders who can guide the organization
towards a positive growth in spite of facing huge competition and ample number of obstacles.
India is a country of great cultural diversity and multi-religion. The labours, workers or
employees of different provinces may have different attitudes, belief systems, behaviours and
physical ability towards jobs. A leader should understand all these things. A leader should know
the ability of employees, their motives, areas which they lag, way to motivate them, way of
effective communication so that he or she can guide and encourage them accordingly towards
a predetermined goal keeping mental positivism in each of them at every time and should be
assured that for every quantum of time employees are charged, either physically or mentally,
and full of enthusiasm. A leader in India should take no autocratic or coercive approach to lead
his or her team because not every member of a team are equal in all aspects. If leader takes
coercive approach then it may affects negatively because quality of work will fall as employees
or workers do not like to work under force or threat. People of different provinces have
different psychological patterns and varied level of stamina. So to lead these kinds of people a
leader should be liberal by his thoughts of leading and should not strict to a particular
leadership style or approach.
3. LITERATURE REVIEW
Ample number of studies carried out by various researchers previously all over the world has
been gone through as literature review in the area of leadership roles and styles in Human
Resource Management.
20
Communication: According to Leigh and Maynard (1994), the importance of communication
and wrote that hallucination that settle safe and sound inside our head is worthless. If we
actually concern about our idea we will crave to allocate it with others. Nearly all successful
managers are good communicators and leaders are even better at it. We must refine our
communication skills if we want to lead successfully. Sage (2006), Dran (2004), Akerson and
MAI (2003), Kohles (2000), West-Burnham (1997), Bennis, Parikh & Lessem (1994), have
worked upon the communication as Leadership Role and stated it as great skill.
Influence: some scholars think that Influence and supremacy are inextricably linked and
influence is the most important concepts in all of leadership. Power is defined as the capacity to
cause change. Influence is the degree of actual change in a target person's attitude, values and
ethics and this are researched out by the scholars like Clark (1999), Hemlin (2006), McDonald,
Michael, Gooding and Cart. (2005), Letendre, Henry and ToIan (2003), Galo. (2001), Musella and
Leithwood,(1988),
Confidence: Confidence is an essential part for a leader. Jong Ruyter (2006), Kwok et. al. (2000),
Bolger, Pulford and Colman (2000), Lambrecht et. al. (1997), Sadler (1970) and investigated on
confidence and verify it as leadership role.
Strategy: As per Cornelius et. al. (2002), leader must take on certain "roles" to be truly effective.
A strategic leadership style can solve issues of long-term importance, including common
policies, common direction, and organizational development or enhancement different plans. A
good strategic leader can handle easily all issues that will improve the day-to-day running of the
business.
Priorities: A leader should be able to prioritize the activities and similar was carried out by
Fisher (2004), Gibson, Martin and Singer (2004), Gibson, Martin and Singer, 2004), James
(2003), Holmes (2002), Yamuna Ako (2002), and Webster (1997).
4. CONCLUSION
It is concluded that the leadership is associated with some vital aspects of Human Resource
Management, either directly or indirectly and it is evidenced that in most of the organization,
irrespective of the industry, leaders are following coercive approach to lead the followers or
employees and the employees don’t like this as they are not comfortable to work under force
and threat of various forms. Every person has dignity and hardly have they wanted to lose it for
anything. If this coercion goes on, the output of any organization will be badly affected.
21
5. RECOMMENDATION FOR SUSTAINABLE LEADERSHIP STYLE
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
Leaders should be flexible by their thought.
Leaders should have risk taking ability.
A true leader should make himself as an example towards his or her followers.
A leader should be visionary and have the quality of farsightedness.
A leader should have veneration which help him or her to be respectful to each of the
followers.
A good leader should transit from the stage of “Me” to “We”.
A leader should communicate effectively in all direction i.e. 360 degree and in same
manner.
A leader should be a catalyst energizing his or her followers into action.
A leader should have the mentality of achieving his or her purpose irrespective of
means.
A leader should be self confident and has belief to himself or herself.
Leaders should be stick on a goal or persuasive.
Leaders should remember that a good leader can gain from limited resources whereas a
so called leader can lose in spite of having vast resources.
A good leader should have clear direction and effective control over employees.
A leader should be a friend without being involved in friendship.
REFERENCES
1. Ali, Akbar (2009), “The Role of Leadership in Human Resource Management a Comparative
Study of Specific Public and Private Sectors in Pakistan”, Journal of Management and Social
Sciences, Vol. 5, No. 2, Fall, pp. 180-194
2. Singh, Sanjay Kumar (2010), “Benchmarking leadership styles for organizational learning
in Indian context”, Benchmarking: An International Journal, Vol. 17 No. 1, pp. 95-114.
3. Pal, Saibal K., Kpur, Vijay (2011), “Exploring Unique Corporate Leadership Styles in India”,
Opinion, Volume 1, No. 1, December, p. 6
22
Tagore’s Expression of Literature: An Understanding into women emancipation and
relevance to management.
Paramita Biswas
Abstract
Rabindranath Tagore during his life time created a space for himself in literature, culture and other
walks of like. He elicited enough encouragement for women and induced in the practice a semblance
of management skill for them, by putting them in key areas of managing his university Viswa Bharati.
In this paper, Tagore has explored in literature and life to understand his stand how he could manage
to do so in a time frame when conservatism was the call of the day.
Key Words:
Rabindranath Tagore, Women emancipation, management relevance.
1.. Introduction
Post 1913, when the first Nobel prize was awarded to Rabindranath Tagore for his lyrical poetry
in Bengali “Gitanjali” and for the first time in Asia, it attacted without any qualm the largest
attention which was to continue for a while then. This prompted Tagore to pick up issues which
required social attention as he was heard and looked after as an ideal both in Bengal and India
alike. One the many issues that he addressed during his life time, women emancipation and
managing the issues relating to it were one of the major and foremost ideas. Tagor, in his
capacity as a poet, philosopher and teacher took upon himself the herculean task of creating a
culture which was women centric and which empowered women to a greater extent. His,
enablement of women at Viswa Bharati was a case in point. He purported women characters in
his literature in a way which not only did give a space for this characters but also provide for a
enough space for debating the role of women, the extent of emancipation and the time frame
in which they have been frozen.
Tagore (1915) in Strisiksa while talking about “The Education of Woman” vouched the opinion
that, “Whatever is worth knowing is “Knowledge”. It should be known equally by men and
women, not for the sake of practical utility, but for the sake of knowing". Later in the article, he
dwelt on this point with clarity. He observed that "Knowledge has two departments: one, pure
knowledge; the other, utilitarian knowledge. In the field of pure knowledge, there is no
distinction between men and women; distinction exists in the sphere of practical utility; women
should acquire pure knowledge for becoming a mature human being, and utilitarian knowledge
for becoming true women"
Assitant Professor, NCMT,NSHM, Durgapur, paromita.biswas@nshm.com
23
Tagore showed extraordinary support for the emancipation of women and their role in
formation of society. His school which was established in Santinikentan and a central theme os
development of women and involving them in day to day management of the institution.
Majumdar (1976) in her writing and reminiscence of the her stay in Santiniketan clearly
observes that she and other women teachers were encouraged to carry out important decision
taking at the school and Tagore would stand by them, even though they were not in the
requirement of the establishment, which Tagore would modify with the spirit of the decision
intact later.
It has been observed that the letters of Tagore from Europe, which are completed shows how
he drew the differences between European and Indian women. He wrote “they are not
confined to the inner chambers of the house. They meet friends. They listen and voice their
opinions if there is a discussion among their relations on an elevated subject. They can grasp
how intelligent people view a thing from many different angles and many different points of
view. So if a topic comes up they don't ask childish questions, nor do they stare in
bewilderment. They can hold relaxed conversation with their friends, they are not grim or
engulfed in shame at gatherings, they don't get improperly close with their acquaintances, nor
are they unsociably distant. They are cheerful and content in society.” ('Letters from an
Expatriate in Europe). Tagore was highly influenced by the liberated condition of European
women and the education of women in England and entire continent.
Tagore(1891), in his Europe Jatrir diary, observes that that women should no longer be
imprisoned in the four domestic walls but rather should stand erect and upright for which
proper education is required for women also.
Tagore not only believed but also practiced women emancipation and education in his life and
writings. Throughout his life, Tagore in his writings, always raised voiced against the existing
social evils which he believed to be the greatest obstacles in the way of women emancipation
and education.
2. Emancipated Women of Tagore’s Household
Tagore’s family right from his grandfather Dwarikanath Tagore was liberal and worked towards
the emancipation of women. Drawing a counter narrative to the then conservative society,
24
female education was given priority from the time of Dwarkanath Tagore. His elder sister
Rasibilasi could read Hari Kusum Stabha. Dwarkanath’s wife Digambari Devi showed the
courage to cross the threshold of Andar Mahal by attending parties conducted by her husband
in the garden house at Belgachia. Tagore’s wife Mrinalini Devi went to Loreto School to improve
her English and Kadambari Devi wife of Rabindranath Tagore’s older brother Jyotirindranath
was the first women in the clan to ride a horse in the “maidan” defying the then conservative
Bengali society. The progressive Jnanadanandini wife of Satyandranath Tagore showed courage
and dare to go to England in the 19th century. She was the one who went to Bombay with her
husband and left the ancestral house and move to a separate residence with her husband, son
and daughter giving birth to the concept of nuclear family. Chitra Deb (1978), in her book
‘Thakur Bariir Andermahal’ meaning the inside story of Tegorian Famaily, says that ‘the modern
way of draping the sari with the 'pallu' (end of the drape) thrown around the left shoulder in
neat pleats was the result of Jnanadanandini's efforts’. Jnanadanandini’s daughter Indira Devi
was the first women graduate of Tagore household.
It is obvious that the tremendous cultural richness and progressive cross cultural mentality had
been absorbed by Rabindranath, growing within, thus forcing him to go beyond the existing
tradition and social condition prevailed in the colonial Bengal. Growing in a family where female
education was given priority; provide him with the insight that education is necessity for inner
development as well as for the development of the social environment.
3. Women in In Fiction and writings of Tagore
Giving equal place to women in his Viswasbharati, Rabindranath proved to be a true advocator
of Women emancipation as dreamt by Raja Ram Mohan Roy and Ishwar Chandra Vidya Sagar.
Being the champion of women emancipation he purposefully makes women the protagonists of
his novels. In question of women emancipation and education he was always with the
enlighteners. The analysis of the stories, written specifically in the 20th century, confirms that
as far as the question of women in the society is concerned Tagore was never influenced by the
patriarchal views.
In one of his short story Khata ( Copy or Exercise Book),as the name itself is symbol of
education, Tagore focuses on three major issues in the society – child marriage, women
education and age difference in marriage. In this story he portrayed age old tradition of our
society. Child marriage and women education were two most important issues of 19 th century
and naturally he was also influenced and wrote several stories like Khata.
As the advancement of women education begins one can notice that the age of marriage of the
girls and education qualifications increased with the passage of time in Tagore’s story.
25
Education had also given women protagonist the courage, become much stronger to question
the established norms of the society. The heroines of the Tagore’s novel which were written in
the 1st part of 20th century had their education at home. For example Tagore’s first novel
Chokher Bali’s heroine Binodini did not have any formal education but her father appointed a
European Governess for his daughter up gradation and grooming. Similarly Suchorita and Lolita
of Gora did not have any college education. But Tagore made Suchorita the representative of
modern age women who refuse to sit idly at home but to serve the country and the people.
Suchorita was the precursor who shows that women too can have political awareness and
interest. She surpasses other heroines of Tagore in her keen perception, critical judgment, and
liberal outlook. It was Suchorita who made Gora realized that women too have a role in the
upliftment of the country. The other character of the novel Gora was Lolita who rebels against
all sorts of tyranny and oppression of the society. She was the harbinger of women’s liberation
and feminist movement in the 20th century. Bimala, heroine of Ghare Baire (The Home and the
World) did not have any formal education but her husband also tried to educate her. Labanya,
heroine of Sesher Kabita (Farewell My Friend) written in 1928 was a post graduate and Ela of
Char Adhay (Four Chapters) written in 1934 was research scholar.
“Rabindranath Tagore’s THE WIFE’S LETTER (Streer Patra) is a powerful feminist writing. This
text tried to give a picture of Rabindranath’s perspective of Feminism. The story is a
revolutionary one because at a time when the author penned this story, it was impossible to
imagine in Indian society that a women was leaving her husband’s home denouncing her
marital existence in search of her own identity.
4. Tagore and his women emancipation and Managerial implications in the society
From facts to fiction, from life to literature, Tagore throughout his life tried to fight against the
ruthless rituals and meaningless dogma in the society. To deviate from the prevailing customs
reflected in his text and also in his own life was really path – breaking. As a true follower of
Ishwar Chandra Vidya Sagar, Tagore took the initiative to get married his son Rathindranath
with Pratima Devi who was a widow. The intellectual, multicultural Tagore’s house hold helped
Tagore to evolve as a passionate seeker of freedom, a cosmopolitan man as expressed in his
own songs .
With this vocal cultivation for the place of women in the society, it has thus become a matter of
great debate whether or not, Tagore became the first stepping stone of the creating the batch
of women who could take their own decision, walk shoulder to shoulder with her men and
share the burden of the family like that of the men in the family. A walk in the “Santinikatan”
26
would show even in letter and spirit, how his believe in creating a fearless society for women
existed. It is imperative to note that, several women were given official charges during his life
time in Viswa Bharati.
The ability of women, as depicted in the discussion, shows that Tagore was conscious of the
fact that ignoring women would be impossible in the work place as well as in the domestic
realm.
5. Conclusion
Tagore in his entire life followed his own conscience, campaigning against the existing social
evils to rouse social awareness through his writings. He wanted a world where there are no
boundaries of religion, caste, and narrow gender politics. Breaking the traditional normative
system and questioning the social rituals of Bengal was undoubtedly path breaking. His work
and life followed many such instances. It is important to note that Tagore was amongst few at
time who would induce women into the mainstream work of the school and university he
established and latter even inducted them to several managerial positions within the
organization. This showed his ability to create a position for the modern women in the society
and make use of the managerial ability.
Reference
1. Deb C (1976), Thakur Barier Andar Mahal”, Ananda, p. 126
2. Majumdar. L (1976), “ Rabindranath O Santiniketan”, Desh, pp. 23-32
3. Tagore, Rabindranath (1915), Streesiksha Sabuj Patra, Bhadra –
4. Biswas Paramita, & Banerjee, Dr. Joydeep( 2014), Feminism
Ashwin (BY),
and Rabindranath – A Brief
Discussion Through The Wife’s Letter, The English Research Express , International
of
Journal
English Language and Literature: pp. 61-69.
27
5. Radice William.(1991) “Selected Short Stories, Rabindranath Tagore, Trans, India , Penguin
Books , 1991.Print
6. . Tagore R (1921), Letters from Europe, Omnibus of Tagore, Viswa Bharati.
28
Performance of Regional Rural Banks in the State of Odisha
Sulagna Das
Abstract:
The present paper studied the microfinance status of the Regional Rural Banks of Eastern India
which included the states of Odisha for three years. The study was based on secondary data,
from NABARD site. The four sections of the study include total savings of SHGs, total loan
disbursed, outstanding loan and non-performing assets.
Key Words: Microfinance, outstanding loan, non-performing assets
1. Introduction:
Microfinance is the newest silver bullet for poverty alleviation. Wealthy philanthropists like
financier George Soros assured millions of dollars in the microcredit movement, banks and MFIs
came forward to make the movement successful by lending microfinance funds to the poor.
Nobel Laureate Muhammad Yunus, declared microcredit as an important instrument to fight
against poverty and United Nations designated 2005 as the International Year of Microcredit.
Microcredit has attracted billions of dollars, the “Grameen” banks alone disbursed a huge
amount in microloans over the past years, as per the Microcredit Summit Campaign Report
2006, there were 1000 MFIs, and 300 commercial banks in India, that lent an amount of $1.3
billion to 17.5 million people.(Karnani, 2007)
Microfinance is the way of providing small loans to the poor families, who lack access to the
traditional financial institutions and help them in growing their small business.(Microfinance /
Self Help Groups –SHG, n.d.)The need for creating a legal institution that would provide
microfinance has been of great importance. The fervour suggests that microfinance should help
the poor and achieve the target of poverty eradication, through evaluation. (Satish, 2005)
Poverty is multi-dimensional and microfinance played a significant role in providing access to
the financial services, and fighting against the impacts of poverty.
Phd research scholar, KIIT University, Bhubaneswar, Odisha
29
Self Help Groups in India represents a distinctive approach towards financial intermediation
that combines access to the low-cost financial services along with the development of women
SHG members, through self-management process. SHGs has been given the power to address
social issues like abuse of women, dowry system, and schools for children.(Self Help Groups in
India A study of the lights and shades, 2006)
Self Help Groupis a registered or unregistered small group of 15 to 20 micro entrepreneurs,
who have homogeneous background and aspecific purpose where the group members come
together to save small amount regularly to meet up their emergency needs and contribute
towards a common fund on mutual help basis as the tools of empowerment and social
involvement.(Microfinance and self-help groups, n.d.)For facilitating quick and smooth banking
service to the poor, National Bank for Agriculture and Rural Development has launched a pilot
project, in the year 1991-92, which provided microcredit by linking Self-Help Groups with
banks. (Microfinance and self-help groups, n.d.)
2. Review of Literature:
In their recent study (Lohana, S.R., Musale, R. S., 2011) discussed about the role of SHGS in
micro finance sector, analyzed the status of the Micro finance in India with special reference to
SHGs, of different states of India, and forecasted the opportunities available to the SHGS for
boosting up the microfinance sector for a period of 2003 to 2005 (Nasir, S., 2013)tried to
analyze the prevailing condition of the Microfinance in India, from its beginning till now. The
main aim was to discover the gap in functioning of the MFIs and provide practical solution to
overcome issues and render financial services by using cost effective techniques.(Vij, D., 2013)
attempted to find out the measures for transferring the Self Help Groups into strategic business
enterprises, and promote income, and quality of living. (Singh, N.T., 2009)focused on of all the
aspects of micro finance in India, especially the institutions that faced the challenges and were
involved in promotion, and modes of delivery and rapid developments. (Porkodi, S., Aravazhi,
D., 2013) examined the role of micro finance in financial inclusion and the empowerment of
people of India(Das, D.K., Boruah, D., 2013)studied the role of Micro-Finance and Self-HelpGroups for the socio-economic development of the poor people in Assam(Behera, A.R., 2010)
focused on the SHGs of Odisha that affected the poverty by different approaches and
programmes (Ratan, A.L., Chakraborty, S., Chitnis, P.V., Toyama, K., Ooi, K.S., Phiong, M.,
Koenig, M., 2012) studied about the efficiency and quality gains of the financial record
management application built on a low-cost digital slate prototype. (Nair, A., 2005) used a case
study approach, to explore the merits and demerits of federating, and suggested some
solutions to the problems (Pokhriyal, A.K., Ghildiyal, V., 2011)analyzed the development of
microfinance, in terms of contribution, achievements and disappointments of SHG-bank linkage
program(Lahkar, R., Pingali, V., Sadhu, S., 2012) analyzed the hypothesis of the presence of
30
growing number of MFIs to over-borrowing, with a primary dataset that was generated through
surveys conducted in eight districts of Andhra Pradesh (Mishra, S., Mall, M., Mishra, P.K.,
2013)focused on the development of the Microfinance in India as a powerful instrument for
poverty alleviation. (Sriram, M.S., 2010)studied about the standardized model of lending in
commercial microfinance (Shil, P., Deb Nath, B., 2013 )studied about the role of Rural Credit
Cooperative and SHG Model, in lending credit, and problems faced by them. (Roy, A., 2013)
dealt with the microfinance programme in North-East India, the volume of savings, loan
disbursement and loans outstanding. (Das, L., 2012)found an urgent need for improved
governance to manage microfinance effectively for future growth (Roy, A., 2011) studied
progress of microfinance in the North Eastern Region in terms of savings mobilization, loans
disbursed, loans outstanding and non-performing assets. (Ghosh, M., 2012) analyzed the
progress of SHG-Bank linkage programme regionally and nationally(Mahanta, P., Panda, G.,
Sreekumar, 2012)discussed three distinct aspects of microfinance, the growth of microfinance,
the role played by NABARD in growth of SHGs and Grameen Bank, and the role government
plays for protecting the micro-borrowers. (Kamath, R., Srinivasan, R., 2009)built a microfinance
sector model and explained the reasons behind small loan sizes of high qualityfor multiple
borrowings.(Devaraja T.S., 2011)discussed the factors associated with the development of
microfinance based on a Win-Win scheme for both MFIs and their clients (Kusugal, P.S., 2014)
studied Microfinance as a powerful instrument for poverty alleviation in the new economy
(Singh, S., 2011)attempted to study the challenges faced by the micro finance sector in Bihar.
(Das, P.K., 2014)discussed about the conceptual framework,development process, and services
rendered bythe SHG linked microfinance programme and challenges faced by the Indian
microfinance (Pramanik, B.K., Halder, M., 2013) with the help of consolidated data the paper
analyzed the various trends and progress of the microfinance sector for the SHG–Bank Linkage
model and MFI–Bank Linkage model.
3. Objectives: To make a comparative study of the Regional Rural Banks of Odisha on the basis
of the number of Self-Help Groups, Savings Amount of the SHGs, Total Loan Disbursed by SHGs,
Outstanding Loan and NPA of the SHGs, for SHG Scheme, SHG under SGSY scheme, and WSHG
scheme. Lastly, make an attempt to analyze and interpret the reasons for the differences.
4. Research Design:
A percentage is calculated, considering 2009-2010 as the base year for all the factors. The
formula can be stated as: Current Year/Base Year * 100.
31
5. Research Methodology:
In the present study, the Regional Rural Banks of the eastern region has been taken into
account. The study was purely based on the secondary data, ‘The status of Microfinance in
India’ a report, published by NABARD. The study was performed on, Baitarani Gramya Bank,
Kalinga Gramya Bank, Neelachal Gramya Bank, Rushikulya Gramya Bank, Utkal Gramya Bank
were the five banks under Odisha, which have been studied from 2009-10 and 2011-12, and
Odisha Gramya Bank, and Utkal Gramya Bank in 2012-13, Odisha Gramya Bank was the new
name given to the merger of Baitarani Gramya Bank, KalingaGramya Bank, Neelachal Gramya
Bank, and Utkal GB was the new name for the merger version of Utkal Gramya Bank and
Rushikula Gramya Bank.
The analysis was done on the basis of comparison, with 2009-2010 as the base year, an effort
has been made to analyze the percentage changes in the other years, a rank has been given to
the states accordingly, on the basis of the four factors, Progress under Microfinance – Savings
of SHGs with Regional Rural Banks, Bank loans disbursed by Regional Rural Banks to SHGs, Bank
Loans outstanding against SHGs, and NPAs against Bank loans to SHGs.
6. Performance of RRBs of Odisha:
National Bank for Agriculture and Rural Development (NABARD) has been extending credit
supply to Odisha State Government by way of refinance through the banks and Odisha State
Financial Corporation, for developing social and economic infrastructure of Odisha, from the
Rural Infrastructure Development Fund (RIDF). (Role of Institutional Credit, 2013)Though Orissa
started late in the SHG movement, substantial progress has been noticed over the years in SHGBank linkage. According to a report in 2004, Orissa stood first in performance criteria for the
Eastern Region, in linking the SHGs and credit linkage, which exceeded the milestone of rupees
one lakh mark by 2004, November. (Empowered Woman a Vision Document for micro-Finance
in Orissa, 2009)
Like the other two states, the microfinance status of Odisha has been studied for the three
years 2010-11, 2011-12, and 2012-13, in comparison to 2009-10, for the three schemes,
normal, SGSY and WSHG. It was observed that in the year 2010-11 both the number of SHG and
total savings had an increasing curve, the first was increased by 107.7% and second one
increased by 104.7% for the normal scheme, 116.6% and 114.35% for SGSY scheme and 106.1%
and 110.1% for the WSHG scheme. In 2011-12 it was 122.36% and 94.93% respectively for
normal scheme, 74.75% and 96.51% for the SGSY scheme, and 99.26% and 82.99% for the
WSHG scheme and lastly in the year 2012-13 the percentages were 131 and 102.77, for the
32
normal scheme, 5.8% and 227.8% for the SGSY scheme and 134.99% and 108.19% for the
WSHG scheme. (Table 3)
The number of SHGs and total loan disbursed had an uneven curve, sometimes it was observed
to have raised a small extent, sometimes it fell below the minimum level. In 2010-11, for the
normal scheme it was 100.9% and 112.5% respectively, 155.9% and 141.7% for the SGSY
scheme, and 99.4% and 106.1% for the WSHG scheme. In 2011-12 it was noticed that all the
values had a diminishing curve, it was only 64.7% and 94.3% for normal scheme, 52.9% and
67.1% for the SGSY scheme and finally 56.8% and 72.4% for the WSHG scheme, in comparison
to the base year. (Table 4) But it was found that the percentages for the outstanding loan had
an increasing trend, in comparison to 2009-10. The percentage of SHGs and outstanding loan
was 113.1% and 125.1% for normal scheme, 119.3% and 114.7% for SGSY scheme, 120.6% and
198.2% respectively for WSHG scheme in the first year, i.e. 2010-11. In 2011-12 the
percentages were 102.9 and 111 for normal scheme, 72 and 101 for SGSY scheme, and 81.9 and
143.9 for WSHG scheme. In 2012-13 it was 88.4 and 161 for normal scheme, 269.5 and 145.7
for SGSY scheme, and finally 97.7 and 248.1 for the WSHG scheme. (Table 5)It was found that
the NPA also increased accordingly for the following years. It was 200.8% for normal scheme
and 189.7% for SGSY scheme in the year 2010-11, 102% for normal scheme and 15.7% for SGSY
scheme, NPA for the SGSY scheme reduced significantly as noticed. In 2012-13 the NPA
percentage was found maximum to be 495.8 for the normal scheme and 383.1 for the SGSY
scheme over 2009-10. (Table 6)
The functions carried by the MFIs and banks in Odisha were in a budding stage, and had lots of
opportunities for expansion. The rise in this situation was due to the lack of experience and
assessment mechanism in wholesale funding among bankers.SBI tried to appraise and approve
bulk lending of 75 lakhs to “Swayamshree Micro- Credit Services” and has agreed to support
Biswa and Gram Utthan.(Empowered Woman a Vision Document for micro-Finance in Orissa,
2009)
7. Conclusion:
After analyzing the microfinance status of the four states in Odishal, by the merged regional
rural banks, it was found that there has been an urgent need for the increase in microfinance
and microcredit in the rural and interior areas, where people need to start their own livelihood
by doing something on their own and save for their future contingencies. The SHGs as found
tried their best to improve their services in the last three years, but it is further expected, and in
the near future we would like to see every family having their quality of life.
33
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28. Mahanta, P., Panda, G., Sreekumar (2012) Status of Microfinance In India - A Review.
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Of
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Credit
(2013)
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Bengal. Annual Report of AMFI-WB – 2012 – 2013 (2013) Retrieved from
http://www.amfi-wb.org/pdf2/402731003_04_25_2014.pdf
36
Empirical study to test whether Weak form Hypothesis still holds good in the Indian Stock
Market.
Dr. Abhijit Dutta*
Dr. Padmabati Gahan**
Abstract
The study test the weak form hypothesis of EMH for the Indian Stock Market by using daily data for
Bombay Stock Exchange SENSEX for the period March 31 1998 to 1st April 2013. The paper indicate that
Indian Stock Market indicates efficiency as random test and unit root test are similar and accept random
walk for the market. The result of Auto correlation and Ljung Box test reject the hypothesis of random
walk. As the variance ratio test is more effective tool than the other tests performed in the study, we go
by the result of variance ratio test. The volatility persistence is due to the asymmetry in the available
public information other than historic prices of stock indices and private information which is generally
withheld by selected groups such as mutual funds, management, financiers and stock exchange officials.
Key words: Efficient Market Hypothesis, Random Walk Hypothesis, ADF test and LB test
1.1 Introduction
The capital market is based on information flows. How the market reacts is largely depended on the
degree to which the participants of the market can use the information available to them. The markets
are said to be efficient. This otherwise mean that the stock prices reflect and used the available
information quickly. The more reactive the stock price is to the available information the more is the
efficiency of the market.
Fama (1970) noted that efficient markets is the market where there are large numbers of national profit
maximizers’ actively competing with each other trying to predict the future market and where the
current information is almost freely and equally available to all participants. Efficiency is almost freely
and equally available to all participants. Efficiency of the market depends on the extent of absorption of
information, the time taken for absorption and type of information absorbed.
* Porfessor, MIMTS, Bhubaneswa, Odishar
** Professor Sambalpur Univeristy, Sambalpur, Odisha
37
The ability of the market to absorb information is of different degree. Fama(1970) classified efficiency in
three groups as below:
1. 1 Weak Form
This form asserts that he past prices are already absorbed by the market and any attempt to predict
prices on the basis of historical information is totally futile as future changes are independent of past
price changes. Hence, the market efficiency and the predictability of price change in stock market are
inversely related.
1.2. Semi Strong Form
The semi strong form of Efficient market Hypothesis (EMH) postulates that market absorbs quickly and
efficiently all the publicly available information as well as information regarding historical process. As
prices adjust to information quickly superior profits cannot be earned on a consistent basis.
1.3. Strong form
According to strong form EMH, prices of securities fully reflect all available information both public and
private. If this form is true, prices reflects than information to the selected groups like mutual funds,
management financiers and stock exchange officials. Thus, according to this form no information that is
available be it public or insiders can be used consistently to earn superior returns. In practice this
extreme form of market efficiency hypotheses is very unlikely to hold since there are positively trading
and information costs.
2. Review of Literature
Ample numbers of researches have been done on efficient market hypothesis. Pioneering works of Fama
(1965) developed this theory. Later Fama (1970), introduced the concept of three form of EMHs. The
first order auto correlations were positive for 23 of the 30 companies and they were significant for 11 of
the 30 companies.
Cooper (1982) analyzed the world stock market s by taking 36 countries. The study observes that the
markets in USA and UK as efficient based on random walk hypothesis. Sharma and Kennedy (1977) used
run test and spectral analysis and concluded that all these markets analysis were strong form of EMH
for BSE, NYSE and LSE and conformed that all these markets were efficient using random walk
hypothesis.
Barua (1981) and Gupta (1985) found that the Indian market were weak form efficient. Later Bhaumik
(1977) annual prices closely represent a random variable. Ramasastri (1999) tested Indian Stock Markets
for random walk using Dickey –fuller unit root test and study supports the null hypotheses that stock
prices are random walk.
38
Mitra (2000 a, b )developed a neural network model and disapproved the random walk hypothesis for
BSE Index. Chaudhuri and Yangru (2003) investigated whether stock prices indices of seventeen
emerging markets can be characterized as random walk (through unit root) or mean reversion process
implementing a test that can account for structural breaks in the underlying series and is more powerful
than standard tests.
Dutta (2010) tested for volatility using asymmetric GARCH and concluded that the volatility in Indian
market is spurious and does not support the random walk.
Several other studies over the period including Ahmad et al (2007), Worthington and Higgs (2003)
suggested that Asian markets show weak form hypothesis using the unit root process.
The literature shows mixed results about the efficiency of the Indian and other stock exchanges. Since
SEBI has made rigorous arrangement to reform the Indian Capital market in order to increase the
market efficiency. However the papers do not try to relate reform to the stock market efficiency in
Indian Context. This paper tries to understand and test the random walk hypothesis for the Indian stock
market using SENSEX series for long period of March 31 1998 to 1st April 2013 during which different
phases of stock market reform happened as noted in the table 1.1 below.
Table 1.1 Reforms of the Indian stock market
Year
1992
1995
1996
Reform
SEBI Created to regulate Indian Capital Market; NSE set up in Mumbai
Bombay Online Trading Introduced
The Depositaries Act enacted for dematerialized trading, SEBI reconstituted governing
boards of stock exchanges; capital adequacy norms introduced; screen based trading
extended to all the exchanges for expanded trading.
2000
Derivative trading introduced
2002
Compulsory rolling settlement for all kinds of scrips introduced ; Compulsory trading of
shares of all companies listed in stock exchanges in DEMAT..
2003
Settlement Guarantee to reduce counter party risk
2004
Rationalization of Margin trading system
Source: Various sources and SEBI website.
4. Methodology
In the present study several econometric models were used to check the random walk hypothesis for
the Indian stock market with reference to BSE.
4.1 Unit root test
A data set is said to be stationary if its mean and variance are constant over time and the value of
covariance between two time periods depends only on the distance or lag between the two periods and
on the actual time at which the covariance is computed. The correlation between a series and its lagged
39
values are assumed to depend only on the length of the lag and not when the series started. A series
observing these properties is called a stationery time series. It is also referred to as a series that is
integrated of order zero or as I(o). The unit root test checks whether a series is stationery or not.
Stationery condition has been tested using Augmented Dickey-Fuller (ADF). For this the following types
of ADF regression has been applied.
n
∆Yt = α1 Yt-1 + Σ βm ∆Yt-m + μt
…….. equation 1.
m=1
n
∆Yt = αo + α1 Yt-1 + Σ βm ∆Yt-m + μt
…….. equation 2.
m=1
Where μt is white noise. The additional lagged terms have been included to ensure that the errors are
uncorrelated. The following hypotheses have been tested by applying unit root test as given below.
Ho = Yt is not I (0) and Ho = Yt is I (0)
This means that Yt is not integrated of order zero in null hypothesis and Yt is integrated of order zero in
alternate hypothesis.
If the calculated value of ADF statistics are higher than their critical values from fullers table, then the
series are non stationery or not integrated of order zero and vice versa.
4.2 Auto correlation function (ACF)
The auto correlation function is another alternative for testing random walk hypotheses for stock index
series. It was defined by Barlett (1946) as:
^
^
Ρk = Yk / Yo ................................................................... equation 3.
^
^
Where Yk is the covariance at lag k and Yo
is variance at lag k which are expressed as follows.
40
^
Y k = Σ ( Yt - Y ) ( Yt+k - Y)/n …………………………….. equation 4
^
Yo = Σ ( Yo - Y )2 /n …………………………………………….. equation 5
Thus ρ can be finally rewritten as follows;
n-k
Σt=1 ( Yt - Y ) ( Yt+k - Y)
ρ = ----------------------------n
Σ ( Yo - Y )2
t=1
If the prices changes of the stocks are random then, ρk for the first differences of stock index series will
be zero for all time lags. Standard error of ρk’ *SE (ρ ) + can be estimated as below:
SE = 1/ Ѵn
Here, SE standard error and n stands for number of observations.
The hypothesis of the autocorrelation test is;
Ho = Auto correlation coefficient are equal to zero
Hα = Auto correlation coefficient are not equal to zero
Ljung and Box test is applicable to test the joint hypotheses that all ρk autocorrelation coefficient are
simultaneously equal to zero.
5. Analysis of the results
5.1 Unit root test.
Unit root test is conducted for the period March 31 1998 to 1st April 2013. Since the basic assumption of
the random walk hypothesis is that if stock index (here SENSEX) series follow random walk then these
series will be non stationery at levels and their first difference will be random variable. Therefore for
the study, the period has been broken into three period of 31st March 1998 to 1st April 2002 (hence
forth called as period 1), 2nd April 2002 to 1st of April 2008 (henceforth called as period 2) and 2nd of
April 2009 to 31st March 2013 (henceforth called as period 3). There after ADF has been taken into
41
consideration for these periods as well as for the entire period. Table 1.1 shows the result of the ADF
tests.
Table 1.1 Augmented Dickey-Fuller Unit Root Test
Series or periods
SENSEX (period 1)
st
SENSEX (1 difference of
SENSEX series at period 1)
SENSEX (period 2)
st
SENSEX (1 difference of
SENSEX series at period 2)
SENSEX (period 3)
st
SNSEX (1 difference of
SENSEX at level 3)
SENSEX (overall period)
st
SENS (1 difference for
the overall period)
ADF Test Statistics
- 1.46
-13.66
At 5% confidence level
-1.68
-1.68
P-value
0.13
0.00
-2.05
-23.42
-1.86
-1.86
0.16
0.00
-2.88
-28.75
-1.86
-1.86
0.00
0.00
-2. 21
-1.86
0.00
-45.66
-1.86
0.00
The above table shows that for all the three periods separately and the overall period the series of
SENSEX is non-stationery but stationery when the first difference of theses series are been considered. It
can be thus concluded on the basis of the unit root test, that SENSEX follow a random walk hypothesis
and Indian stock markets are efficient.
5.2 Autocorrelation and Ljung-Box Test
The autocorrelation coefficients for the first order differences are presented in the table 1.2 below.
Table 1.2 Autocorrelation coefficients statistics of first difference of the SENSEX series.
Lag
1
2
3
4
5
6
7
8
9
10
Auto Correlation
1st period
0.11*
-0.06
-0.11*
-0.09
0.02
0.02*
-0.11*
0.03
0.04
-0.06*
Auto correlation
2nd period
0.01
-0.04
-0.10*
-0.08
0.03*
0.01
-0.10*
0.02
0.04*
-0.04
Auto correlation
3rd period
0.02*
0.06
-0.12
0.08*
0.02
0.03
-0.10
0.02*
0.22
0.12
Auto Correlation
entire period
0.09*
-0.06
-0.10*
0.11
0.02
0.02*
-0.12*
0.06
0.05*
-0.06*
42
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
-0.01
0.11
-0.04*
-0.13
-0.06*
-0.06
0.04
0.02
0.03*
0.05
0.06
0.07*
0.01
0.02*
0.03
-0.01
0.11
0.13
-0.12
-0.14
-0.14
-0.16
-0.17
-0.12
0.01
0.07
0.05
-0.01*
0.01
-0.06
-0.12*
-0.07
-0.09*
0.03
0.01
0.01*
0.05
0.05*
0.06
0.06
0.02*
0.03
0.01
0.10*
0.11
-0.11*
-0.12
-0.12
-0.15*
-0.11
-0.01*
0.01
0.07*
0.04
-0.11*
0.11
-0.06*
-0.12*
-0.06*
-0.06
0.04*
0.01
0.02
0.03*
0.02*
0.07
0.01
0.02*
0.01
0.02
0.03
0.13*
0.01
-0.11*
-0.11*
-0.12
-0.13
-0.11
0.02*
0.07
0.06*
-0.11*
0.11
-0.04*
-0.11
-0.11*
-0.12
0.11
0.12*
0.13*
0.07*
0.09
0.08*
0.02
0.03*
0.03
-0.01
0.11*
0.13
-0.12
-0.12
-0.14
-0.13
-0.12
-0.12
0.02*
0.07
0.04
*Significance +- 1.96 SE
The autocorrelation coefficient for the first difference of the stock return is depicted in the table
above. The autocorrelation coefficients for a lag up to 37 periods are reported here for all the
three periods and the overall period. The results shows that autocorrelation coefficients are
significant for the 1st period at lags 1, 3 ,6 ,7 ,10, 13, 15 ,19, 22 and 24. Similarly for the 2 nd
period the autocorrelations are significant for the lags 3, 5, 7, 9, 11, 14,16, 19, 21, 24, 27, 29, 32,
34, 36. For the 3rd period the autocorrelations are significant at the lags 1, 3, 8, 11, 12, 14, 15, 17,
20, 21, 24, 25, 28, 30, 31, 35 and 37 and for the overall period at 1, 4, 8, 11, 13, 14, 15, 17,
20,21,24,28, 30, 31, 35 and 37. The null hypothesis that p=0 is not rejected. Hence, the
autocorrelation test indicates that the Indian stock market remained inefficient during all the
period despite several steps taken to increase its efficiency.
43
Table 1. 3 Ljung-Box Q statistics of first difference of the SENSEX series
st
nd
rd
Lag
1 period
2 period
3 period
37
145.14*
60.63*
98.67*
Significant at 1% level of significance
Overall period
110.98*
The table above which shows the Ljung-Box statistics for the joint significance of the
autocorrelations at a selected lag of 37. L-J statistics is found to be significant at 1% level for all
the three levels as well at the overall level. The L-B statistics thus rejects the random walk
hypothesis.
Hence both autocorrelation coefficients and L-B statistics rejects the random walk hypotheses.
6. Conclusion
This study is directed at studying the efficiency of the market by using a period of fifteen years
data from the Bombay Stock Exchange and try to understand whether the EMH in its weak
form hold good for the market or not. For the study Unit root test and autocorrelation were
used along with L-B statistics. The unit root test confirms the random walk where as the other
two methods reject it. Since the variance ratio test is more powerful than the usual Dickey
Fuller test we can safely conclude that random walk does not hold good for the Indian Market
at this period of time. The results are consistent for all the three split periods. This means that
future stock prices cannot be predicted on the basis of the historical prices. We further observe
that volatility continues even after measures to reform the market in all the three period for
which we carried out the unit root test. The reasons may be many and cannot be sharply focus.
But one can guess that integration of the market to the global market especially to that of
Europe and America could make the volatility contagious. During this [periods there were large
number of FII activities which could have increased the informational asymmetry in the
market. It is imperative that policy makers make necessary steps to increase the information
sharing in the market and free float of equity in the market. This will enable a better control on
volatility and help in improving the market efficiency in India.
44
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45
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46
Published by:
Dr. Abhijit Dutta
For Neo Classical Management and Research Team
510 A, Subhadra, Sikar Chandi Chakka, Bhubaneswar 751024
47

International Journal for Neo Classical Research and Development

Transcription

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