CURRENT PERSPECTIVES IN FINANCE

CURRENT PERSPECTIVES IN FIANCE-Edited by Dr.Indrani Saha,Dr.Kajal Gandhi and Dr.Ram Prahlad Choudhury,Rohini Nandan,19/2,Radhanath Mallick Lane,Kolkata-700012,pp  vi+352,HB,Rs 450/-,2016)

The book titled as “ CURRENT PERSPECTIVES IN FINANCE” was released on 18^th April,2016 in Shri Shikshayatan  College,Kolkata.It contains 28 articles which were presented in the seminar on 11^th September,2015 organised by  the above college.This book is edited by Dr.Indrani Saha (Shri Shikshayatan  College),Dr.Kajal Gandhi(Shri Shikshayatan  College) and Dr.Ram Prahlad Chowdhury(Calcutta University).

In the article , “Issues of finance ,entrepreneurship and growth with reference to Indian Financial System”,  Dr.P.K.Haldar (Tripura University) initiated to focus Indian financial system and its process of reforms which were also emphasized by the new Government under the programme of Start up India,Stand up India,Make in India,Digital India and so on.Make in India is consistent with financial sector reform in this context of globalization and institutional reforms.It requires good management of risk at home and foreign markets through financial integration.New Government introduced Companies Act 2013 to encourage hi-tech business,entrepreneurial venture and start ups in pursuit to create new business assets where SEBI also made reform in listing norms for start up companies,entrepreneurships to accelerate economic growth. 

In the article, “ Is there any relation between gold price and inflation in India?”,Dr.Debesh Bhowmik(International Institute for Development Studies,Kolkata) endeavours to relate gold price with inflation in India during 1960-2014 using cointegration and VAR model. The paper showed that the gold price is cointegrated with the percentage change in consumer price index and whole sale price index in the order  of (1,1) which is tested by Johansen Cointegration  Methodology. Trace statistic and Max-Eigen Statistic are found significant having three cointegrating equations. Granger causality test assured that there is two-way causality between CPI and WPI and gold price and CPI but there is one way causality between gold price and WPI respectively.VAR model becomes unstable because impulse response functions diverge from zero,and some of AR polynomial roots  lie outside unit root circle .All variables are related with previous period.Residuals are normally distributed as shown by Doornik-Hansen test.VEC model suggests that the error correction terms are adjusting speedily which are  significant yet VEC model is unstable since impulse response functions diverge from zero although roots lie inside the unit circle .Doornik-Hansen VEC Residual Normality test assures that residuals are multivariate normal.Although , gold price is significantly positively related with whole sale price index  only but the relation between CPI and gold price is direct and insignificant.

Dr Avijit Sinha and Debabrata Jana (Vidyasagar University) in their article “A study into the competition trend among the private commercial banks in India” studied the nature of competition among private banks with structural and non structural measure where they used concentration ratios like CR3,CR5 and Herfindahl-Hirsman index, h statistic using Panzar and Rosse model where labour,capital and loanable fund were taken for reaction on profitability.For H statistic the test of white heteroskedasticity and Ramsey RESET were done and did not find any heteroskedasticity and model inadequacy problems.A few selected banks dominate the major share in the market as reported by concentration ratio.The non structural measure also shows the presence of monopolistic competition in the private sector banks.

Snehamay Bhattacharjya (Calcutta University) and Sutapa Banerjee(Sri Shikshayatan College) in their paper “Dividend policy-An Unsolved puzzle” identified all possible determinants of dividend policy.It considered dividend policies like liquidity,profitability,liverages,size,risk,investor base,growth opportunities,signaling,insider ownership and dividend history.Liquidity and profitability bears mostly a positive relation with dividend policy,whereas,size,risk,and growth opportunities mostly bear a negative relationship with dividend policy.A few studies have shown concentration in the nature of the relationship between a few determinants and dividend policy for which further studies are required.  

In the article “Money market volatility in India-An empirical analysis”,Madan Mohan Jana and Nilanjana Biswas(Sushil Kar College) analysed the interdependence between the stock market and money market and investigated the movement pattern of money market instruments yield rate and NSE nifty index in India and examined how the money market instruments impulses upon NSE nifty index in India.

Krishna Dayal Pandey and Dr.Tarak Nath Sahu(Vidyasagar University) in their paper titled “Does capital structure affect firm performance and value-A study on BSE listed manufacturing firms” found a negative effect of capital structure measured by debt equity ratio on firm performance and value introducing return on assets and return on capital employed to represent performance and also introduced Tobin’s Q as a measure of value.They suggested that capital structure should be highly considered as one of the sensitive decision areas and the magnitude of leverage should be maintain at a possibly minimum level.

Samyabrata Das and Atanu Ghosh (New Alipur College) in their article “ Are Pharma funds good bets?:A study in the Indian context” studied three pharma funds,namely,Reliance Farma Funds,SBI Farma fund and UTI pharma and health care fund based on secondary data using parameters to measure risk,return, aggressiveness of funds and extent of diversification.The paper concludes that the funds are heavily titled towards equity,exposure to a single stock is more than 12%,SBI pharma fund has performed better than the benchmark index on most occasion ,SBI pharma fund has remained the most aggressive fund during all the periods and the funds are adequately diversified within the sectors.Only experienced investors having high risk tolerance and familiarity with the nifty-gritty of the concerned sector of the economy can take a limited exposure to such funds in order to add a little bit of aggression to their portfolio.

Prof.Snehamay Bhattacherjya(Calcutta University) and Ujjayani Saha Gupta(Shri Shikshayatan College) in the article titled “ A study on corporate social responsibility in Indian cement industry:A case study on select few major cement companies in India”,showed CSR activities of ACC cement,ULTRATECH cement and AMBHUJA cement during 2010-2015 where they are committing to its stakeholders to conduct  business in an economically,socially and environmentally sustainable manner that transparent and ethical.In all companies the CSR impact is strongest with welfare programme.The CSR spending of each of the companies are nearly 2% of the 3 years average net profit after tax as mentioned in the new Companies Act 2013 except for Ambuja which has contributed to nearly 3% of their average net profit after tax.The CSR activities are done in areas where the companies benefits to a lager extent especially in health and family welfare program,community infrastructure development project,contribution in religious and social program,promotion of cultural heritage,national resource management,women empowerment program,educational program,community welfare activities and agricultural development.

Dr.Kajal Gandhi (Shri Shikshayatan College) in his “Impact of economic urbanization on Indian stock market development-A review of literature” said that the long practiced state dominated economic development model has lost much of its edge  and focus has been shifted sharply towards more market determined strategy of development.After  the economic liberalization process started in 1990s  Indian stock market  has produced an average   nominal return of about 17% annually in terms of capital appreciation and now Indian capital market is 4^th largest in Asia and 10^th largest in the world in terms of market capitalization.

 In the article, “Evaluating the effectiveness of NREGA programme on rural people :An empirical study on panitor grampanchayet of Basirhat,North 24 Parganas,WestBengal”,Dipayan Singha (Sri Chaintanya Mahavidyalaya) and Dr.Amit Majumder(Bijoy Krishna Girls’ College) found that NREGA is satisfactory in Basirhat during the study period of 2012-13-2013-14 although they found decline in unemployment,decline in flood affected areas,increase in ground water level,increase in financial activity of rural households,increase in vegetation covered areas and incrase in financial activities of women.

Akraprava Chakraborty(Umesh Chandra College) in his article “The effects of interest rate changes by Researve Bank of India though their monetary policies” attempted to find out the effects of changing interest rate on banks and other financial and industrial sectors,traders and consumers and even he showed the reaction of commercial banks and capital markets.He tries to synchronise it with monetary policy and fiscal policy of the country.

Asim Kumar Roy (Dr.Kanailal Bhattacharjya College) and Dr.Samarpita Seth(New Alipore College) in their article , “ A comparative study of UTI mastershare funds and UTI equity funds” ,showed that during 2008-2015,the funds have generated satisfactory risk adjusted return,both the funds are defensive in nature,managers of both funds are successful in reducing unsystematic risk,fund managers of both the funds are successful in selecting quality stocks,both the funds exhibit very good performance so far as SIP return is concerned.

The study of Arup Kumar Sarkar  and Tarak Nath Sahu (Vidyasagar University) in “Individual investor behavior in stock market in India” revealed that people  of ages between 28 years to 37 years invest in stock market in India whose income is above 100000/ to achieve long run profit.There is heuristics,prospects and market bias on the Indian individual’s investor’s behavior in stock market in India where herding dimension is not strong.The age of individual investor has an effect on individual investor behavior including marital status.Occupation ,experience and income also matter.There is relation between risk attitude and individual investor behavior.Future research may cover relation of demographic factors and risk attitude and also consider institutional investors.    

Soheli Ghose (St.Xavier’s College)in the article “ strategies that help poverty reduction through inclusive growth” highlighted some strategies of inclusive growth like expenditure on health and education,improved infrastructure and improved employment and growth in agriculture might be beneficial to reduce in poverty ratio in India.

Souvik Mukherjee(Jadavpur University) and Tanusree Das(Shri Shikshayatan College) in their paper on “ The financial and economic crisis in Greece-A strategic analysis” concluded that there is inverted U kind of relation between levels of public debt and growth rate of GDP of Greece during 2009-2015.The levels of public debt,the rate of unemployment and the current account deficit are inversely affecting the growth rate of GDP which is a matter of serious concern.

Sreemoyee Guha Roy(St.Xavier’s College) in the paper “Inclusion through micro insurance: A case study of Malda District,West Bengal” evaluated the performance of microinsurance product in the rural Malda and found high vulnerability .

Dr.Kushal De (Dhruba Chand Halder College) in his paper “A review of the financial crisis of 2008 and its impact on India” attempted to review the global financial crisis and its impact on Indian economy based on secondary sources of information.He showed impacts on industry,trade,exchange rate,employment, poverty and cited examples of monetary and fiscal policy of government and RBI although high impact was not felt in manufacturing,services,transport,hotels etc.

In the “Income tax Act ,1961 and the problem of black money in real estate transactions”,Dr.Ram Prahlad Choudhury (University of Calcutta) and Dr.Surjya Narayan Ray(Dinhata College) analysed the Finance Act 2013 including sections 50C,43CA,56(2) and 194 1A in prevention of black money.They proposed to amend more on those acts  to resolve the ambiguities,confusions and controversies relating to implementation.

In “Impact of E-Banking on traditional services”,Asit Kumar Shit (Charu Chandra College) concluded that E-Banking is a borderless entity permitting anytime ,anywhere and anyhow banking which facilitates us  with all the functions and many advantages as compared to traditional banking services.It showed that opportunity cost of lost of banks customers will reduce to use of E-Banking and also indicate non-existing of enough knowledge and trust have led to decrease in using E-Banking  in the world  and education can increase using of E-Banking service among the banks were taken customers in the world.

Fatema Mandlaywala(Shri Shikshayatan College) and Pingla Roy Chowdhury(Shri Shikshayatan College) tried to assess the level of financial literacy among individuals in Kolkata in their paper “Financial literacy:Relevance in modern day investment -Kolkata based case study” and concluded that 39.5% individuals irrespective of gender are financially literate,male literacy is higher by 13%,age group of 40 are more financially literate as compared to 30s or 50s and above.A high percentage of people  rely on investing their savings in banks as fixed deposits to avoid any risk.

Parna Banerjee(Scottish Church College) in the paper “Effectiveness of investors’ awareness programmes among potential investors-A case study”,concludes that prices of almost all sample gold ETFs and CNX Nifty do not reflect the change in the market index Nifty except that of Kotak Gold.On the other hand,from the regression analysis where 11 sample as independent variables with CNX Nifty as the dependent  and GOLDSHARE,HDFCMFGETF,IGOLD,KOTAKGOLD are good predictors of market  return.

Sourav Dutta Mustafi(Maharani Kasheswari College) and Sudipta Ghosh (Maharani Kashaswari College) in their article “ Progress and prospect of SHG (self help groups) in light of  microfinance:A regionwise analysis in Indian context” found that although SHG movement has been empowered in recent years but region wise disparity should taken into account in order to make SHG more fruitful,so that  the benefits of SHG can be reached to the farther corner of India.

Pranjal Kumar Chakraborty(Scottish Church College) in his paper “Ethical issues in informal microfinance institutions-A study of Murshidabad District,West Bengal” explained that the expansion of commercialized MFIs in Murshidabad gradually created a stiff competition among the MFIs,thus some of the MFIs shifted from social objectives to complete profit maximization likewise a conventional private money lenders.Local informal MFIs ,Mahajans believe that both of the social and financial objectives cannot attained at the same time,but only through paradigm shift towards profitability and sustainability practices .On the contrary microfinance is effective and flexible strategies in fighting global poverty.

Sebanti Show and Nancy Jaiswal (Shri Shikshayatan College) in their paper on “Mutual Funds:As a resource mobiliser in Indian Economy” analysed the relationship between AUM mobilized by mutual fund companies and GDP growth rate of India.To find out correlation coefficient Kendall’s tau b and Spearman’s rho  correlation was applied during 1999-2000-2013-14.Kendall’s tau b correlation coefficient was found 0.886 which is significant at 1% confidence level and rho was found as 0.971 which indicates that the relation between GDP growth rate and AUM  mobilized by mutual fund companies have a strong positive relation.

Sunita Ghatak (T.H.K Jain College) in the paper “The new era of merger regime in the light of companies Act2013---without juridical prudence—A welcome move” showed true facts of rationality of restructuring concentrating  on the key issues and commercial implications of the regulatory norms of mergers and acquisitions as per the new act.The 2013 Act envisages a paradigm shift in the process of compromise/arrangements.It envisages that all the powers and functions of the company law board,company court,BIFR under Sick Industrial Companies Act will henceforth be exercised by the NCLT.Establishment of a single forum which is dedicated to corporate matters is a welcome move and removes the problem of multiple regulators.

Debayan Sengupta (Shyama Prasad College) in the article on “Conceptual study on financial implications of stress” investigated on the nature and extent of stress  among individuals in different organizations highlighting the causes of stress,the financial implications of stress and the need to identify the stress and tackle  them accordingly.He suggests that organization should identify the different work  environment contributors such that a healthy work culture can be developed within and its employees can feel more comfortable with their job responsibility.The eeficiency and productivity would improve substantially and the organization will reach to its goal smoothly.

Suvarun Goswami (Rishi Bankim Chandra College) in his article on “Corporate social responsibility in eastern coal fields limited:A study” analysed the conceptual perspectives of CSR of a lot of confusions exist as to the real meaning and essence of the term along with a thorough literature review.His findings on ECL showed that 249 workers,36 trade unions,23 management personnel gave positive views on CSR,improving standard of living of workers and their activities are adequate and even benefitted by the neighbours.He suggested PPP model in CSR who must follow voluntary guidelines of 2009 G.O.I.,,submit audit and report,permits NGOs,and concerned ministry should emphasis on poverty alleviation,gender equality,promote education and health,ensure environment sustainability and social welfare.  

***********

Is There any Relation between Gold Price and Inflation in India?

Dr.Debesh Bhowmik (Ex.Principal,and Associated with International Institute for Development Studies,Kolkata)

Key words-Gold price, Inflation,Cointegration,VAR,VECM

JEL-C32,E41,E44

ABSTRACT

This paper endeavours to relate gold price with inflation in India during 1960-2014 using cointegration and VAR model. The paper showed that the gold price is cointegrated with the percentage change in consumer price index and whole sale price index in the order  of (1,1) which is tested by Johansen Cointegration  Methodology. Trace statistic and Max-Eigen Statistic are found significant having three cointegrating equations. Granger causality test assured that there is two-way causality between CPI and WPI and gold price and CPI but there is one way causality between gold price and WPI respectively.VAR model becomes unstable because impulse response functions diverge from zero,and some of AR polynomial roots  lie outside unit root circle .All variables are related with previous period.Residuals are normally distributed as shown by Dooknik-Hansen test.VEC model suggests that the error correction terms are adjusting speedily which are  significant yet VEC model is unstable since impulse response functions diverge from zero although roots lie inside the unit circle .Doornik-Hansen VEC Residual Normality test assures that residuals are multivariate normal.Although , gold price is significantly positively related with whole sale price index  only but the relation between CPI and gold price is direct and insignificant.

I.Introduction

We are mostly aware of the fact that the Indian inflation rate depends on money supply, interest rate, oil prices, asset prices, growth rate, exchange rate, and so on but whether gold prices have any influences on CPI or on WPI is a matter of wide research and studies which are not fully done. Yet a few studies in India endeavour to analyse the said relation. Even, how much gold return hedges against inflation needs to be researched in India. Since the gold dollar convertibility collapsed and the International Monetary System is now a non-system, then how much gold price influence in the international payment mechanism is a subject of analysis via exchange rate mechanism which is either in fixed or in float.

Therefore, I have studied that gold price in India is an influential factor to change inflation rate whether it is measured by percentage change in consumer price index or by whole sale price index. This study covers the period from 1960 to 2014.

II.Earlier Studies

Soni and Parashar(2015) analyze the casual relationship between Gold demand and Inflation using  the monthly data from 2002 to 2012 .The results of Augmented Dickey- Fuller test conclude that the series are stationary and integrated of order one. There is a positive correlation between stock returns and gold price from 2002 to 2007 but due to economic crisis in USA in 2008 and 2011 this correlation seems to be fading and it was establish by using correlation and Johansen's co-integration test that there is no relation between gold prices and stock returns i.e. Sensex return in the long run period. The results of Granger causality test reveals that returns of Sensex index does not lead to increase in gold price and rise in gold price does not lead to increase in Sensex. Overall, we can conclude that gold is a significant predictor of inflation for many developed inflation-targeting countries. Worthington, Pahlavani (2006), explore the short-run as well as long-run relationships between the gold price and the general price level to investigate the hedge inflation effectiveness of gold.  The idea that gold as an inflation hedge is not new, which is virtually found with related papers like “gold is an asset of “safe havens” against the debasement of paper money” , “gold is leading indicators of inflation” or “gold is an inflation hedge” and so on. Mahdavi, Zhou (1997) test the performance of gold and commodity prices as leading indicators of inflation with cointegration and vector error-correction model (VECM) over 1958-1994. Their findings show that the stability of the gold price signalling inflation may vary depending on the time span being examined. Ranson, Wainright (2005) conclude that the price of gold is the superior predictor of the next year inflation. Capie et al. (2005) apply Exponential generalized autoregressive conditional heteroskedasticity (EGARCH) technique to investigate the exchange rate hedge of gold price by using weekly data over the period 1971- 2004. They find that the gold returns can be a hedge against U.S. dollar depreciation and that there is a negative relationship between gold price and sterling-dollar and yen-dollar exchange rates but the strength of this relationship varies over time.  Laurent (1994), Harmston (1998), Ghosh et al. (2004) who study the relationship between the gold price and wholesale price find that gold acts effectively as a long-run inflation hedge in U.S., Britain, France, Germany, and Japan. Using monthly gold price data. Wang and Nguyen(2013) investigates the rigidity of gold price adjustment and the inflation-hedging ability of gold in U.S. and Japan applying the linear and non-linear cointegration test and the nonlinear threshold regression model. Based on thirty-six years of gold price and Consumer Price Index (CPI) data, it is found in the short run that gold return is unable to hedge against inflation in both countries when gold price adjustment is in the low-momentum regime. During high-momentum regime, the gold return is unable to fully hedge against inflation in Japan because of the rigid adjustment between gold price and CPI; however, the gold return fully hedges against inflation in U.S. where the gold price adjustment is not rigid. These findings also explain why gold in U.S. effectively hedges against inflation and gold in Japan just partially hedges against inflation in the long-run. Levin and Wright (2006) examine the factors that contribute to the fluctuation of gold price with cointegration and VECM techniques over 1976- 2005. Their findings are triple. First, there is a long-run relationship between the price of gold and U.S. price level. Second, there is a positive relationship between changes in the gold price and changes in U.S. inflation, U.S. inflation volatility, and credit risk, while there is a negative relationship between gold price movements and changes in the trade weighted U.S. dollar exchange rate and the gold lease rate. Third, in the major gold consuming countries such as Turkey, India, Indonesia, Saudi Arabia, and China gold acts effectively as a long-term hedge against inflation.  The findings of prior studies that prove the effective inflation hedge of gold are almost consistent. Ghosh et al. (2004) investigate the contradiction between short-run and long-run movements in the gold price and find that the gold price rises over time at the general rate of inflation and hence is an effective hedge against inflation under a set of conditions during 1976-1999. Using data for 14 countries over the 1994 to 2005 period, Tkacz(2007) assess the leading indicator properties of gold at horizons ranging from 6 to 24 months. He finds that gold contains significant information for future inflation for several countries, especially for those that have adopted formal inflation targets. This finding may arise from the manner in which inflation expectations are formed in these countries, which may result in more rapidly mean-reverting inflation rates. Compared to other inflation indicators for Canada, gold remains statistically significant when combined with variables such as the output gap or the growth rate of a broad monetary aggregate. Zafar and Javid(2015) analysed the nature of the relationship of expected and actual inflation with gold return and its cost of carrying i.e. the interest rate. By employing an autoregressive moving average (ARMA) with generalised autoregressive conditional heteroscedasticity (GARCH) models, the time varying relationship between the variables is studied. The data sample used in the study ranges from January, 2001 to December, 2013. The results support gold as an effective hedge against inflation in Pakistan; since, the returns on gold investment exceeds its cost of carrying with the view of changing expected inflation. Another important implication of the study is that gold can also perform a considerable role with the prospect of Islamic financing because it is proven to be more advantageous as compared to its alternative interest bearing investments. Kumar and Malik(2015) examined that the inflation rate and gold prices are positively correlated with each other. When there is increasing trend of inflation in the economy the gold prices increase too. This satisfies the gold is inflation hedge in times of high inflation trend taking period of six years and six months commencing from April 2009 to December 2014 . Gold prices and repo rates are negatively correlated. It can be explained as the repo rate increases the gold prices decreases. Because increase in repo rate reduces the flow of money in the economy and purchasing power of individuals decreases. Using data for four major economies, namely the USA, the UK, the Euro Area, and Japan, Beckmann and Crudaj (2012) allow for nonlinearity and discriminate between long-run and time-varying short-run dynamics. Thus, they conduct a Markov-switching vector error correction model (MS-VECM) approach for a sample period ranging from January 1970 to December 2011. They found threefold: First, gold is partially able to hedge future inflation in the long-run and this ability is stronger for the USA and the UK compared to Japan and the Euro Area. In addition, the adjustment of the general price level is characterized by regime-dependence, implying that the usefulness of gold as an inflation hedge for investors crucially depends on the time horizon. Finally, one regime approximately accounts for times of turbulences while the other roughly corresponds to ’normal times’.

Worthington and Pahlavani(2006)studied that the inflation hedging quality of gold depends on the presence of a stable long-term relationship between the price of gold and the rate of inflation. Because of significant structural changes in both the gold market and consumer prices, this analysis uses the Zivot and Andrews (1992) test procedure to endogenously determine the most significant structural breaks impacting upon this relationship. The results suggest the most significant structural breaks in both markets correspond to the gold market moving to purely open market operations and the acceleration of inflation in the 1970s. A modified cointegration method incorporating these breaks indicates that a strong cointegrating relationship exists between gold and inflation suggesting that gold is a useful inflation hedge in the post-war and post1970s period.  Narayan, Narayan, & Zheng (2008) concluded that the investors can use the gold market as a hedge against the coming inflation and oil markets could be used to predict the prices of the gold market. Büyüksalvarcı (2010) confirms the findings by showing the effects of 7 economic variables (Gold prices, Oil prices, Interest rate, CPI, foreign exchange rate, Money supply and Industrial production index) on the Turkish stock exchange. In his study he also mentioned that gold is now an alternative tool of investment for Turkish investors. The increase in the prices of gold attract the investors, the investors tends to invest in gold rather than in stocks, which cause the stock prices fall. Therefore the relationship between gold prices and stock returns are negative, increase in one cause decrease in other and vice versa. Adibe and Fei(2009) consider safe haven, inflation hedge, and dollar destruction hypotheses. The safe haven hypothesis claims that gold returns will increase as fear increases. They use three alternative measures of fear: volatility in the S&P 500 Index, the consumer expectation in Michigan Survey of Consumers and Moody’s Baa and Aaa bond premium. Gold returns do not have significant correlation with any of these measures. Related to safe haven hypothesis is the idea of gold being a negative-beta asset. They tested this hypothesis with S&P 500 returns, U.S. Industrial Production and Kilian’s Dry Cargo Index and rejected it in favor of the zero-beta asset alternative. The inflation hedge hypothesis postulates the negative correlation between expected inflation and the return of gold. They find a very significant relationship between the price movement of gold, real interest rates and the exchange rate, suggesting a close relationship between gold and the value of U.S. dollar. The multiple linear regressions verify these findings. The decomposition of gold price under a semi-structural VAR model shows that aggregate demand shocks, monetary demand shocks, and precautionary demand shocks have only a modest influence on the price of gold. The unspecified structural shock underlying exchange rates is the driving force of the gold price. The central message of the paper is that gold’s relationships with fear and inflation are not what most people believe. We should not regard gold as a mysterious asset that is immune to fluctuations and behaves uniquely on the market. Rather, we should regard it as another currency, whose value is a reflection of the value of the U.S. dollar and U.S. monetary policy.

III.Methodology and Data

To find out the relation between gold price and inflation rate ,we used Johansen (1988) model for cointegration and Johansen (1991,1996) model for VAR Analysis. We have done Granger Causality test by using Granger Model(1969).Hansen-Doornik( 1994 ) model is used for Normality test. Data have been collected from the International Financial Statistics of IMF ,World Bank, Reserve Bank of India, and inflationindia.com for the year from 1960 to 2014.

IV.Econometric models

One percent increase in gold price per year leads to 0.1398% increase in inflation rate( measured by change of CPI) per year in India during 1960-2014 which is insignificant .The double log regression model is given below.In Fig-1,the estimated trend line is shown by green line.

Log(x₁)=0.6871+0.139821log(y)

               (0.886)   (1.366)

R²=0.034  ,F=1.867  ,DW=1.896, where x1= percentage change of CPI, y=gold price (Rupees thousand per 10 grams)

….. V.Some Policy Recommendations

If a nation fixes the target rate of inflation then gold price has its impact too and gold market is considered  as a hedge against the inflation expectation. Gold price has positive relation with inflation and inflation expectation. Therefore, Gold indexed WPI related bond sale in times of high inflation is effective OMO along with other monetary policy which is also useful when inflation expectation is very high. Gold convertible bonds is another effective tool in curbing gold price induced inflation.The control of gold price hike to the Government is the primary tool when ceremonial demand is too high. Gold flows should be more protective formulating good articles subject to FEMA.

VI.Conclusion

This paper concludes that percentage change in CPI (inflation rate) and WPI are cointegrated with gold price in the order of (1,1) and Granger Causality test(1969) confirmed that CPI and WPI has bi-directional causality,gold price and CPI has also bi-directional causality but gold price and WPI has uni-directional causality .VAR model states that percentage change in CPI,WPI and gold price are related with their previous period and gold price is also related with previous period’s WPI significantly.VAR model is unstable having diverging impulse response functions including autocorrelation but all roots lie inside the unit circle with residuals are multivariate normal.The VEC model showed the significant speedy error correction process although the VEC model is unstable. The estimated VECM states that the first difference gold price is significantly related with the change of Inflation rate (CPI) and the change of WPI of the previous periods and even related with the change of gold price of the previous period significantly.All roots lie inside the unit circle and having autocorrelation problems but residuals are multivariate normal and diverging impulse response functions. Double log regression showed gold price is significantly positively related with WPI and insignificantly related with percentage change in CPI which is negatively related insignificantly in multiple double log regression analysis during 1960-2014 in India.

---see book page 22-39

AN INTRODUCTORY ANALYSIS ON UNPAID WORK OF WOMEN

AN INTRODUCTORY ANALYSIS ON UNPAID WORK OF WOMEN

Article published in the HUMAN RIGHTS INTERNATIONAL JOURNAL ---VOL-4,ISSUE-1, 2016,  115-121

AN INTRODUCTORY ANALYSIS ON UNPAID WORK

Dr.Debesh Bhowmik(Retired Principal)

Key Words.Unpaid work, care work,

JEL-E01,E24,J22,

What is unpaid work

Unpaid work includes all non-remunerated work activities and it is safe to say that it lacks social recognition.According to the United Nations System of National Accounts of 1993,some unpaid work activities are deemed “Economic Work” and other unpaid work activities are classified  as “Non-Economic”.Economic work can be stated as,[i] production of fixed assets for household use,such as building a house,[ii] subsistence production work,such as crop production,annual husbandry,forestry,and fishery for own use,[iii] collection of raw materials for income generating activities like crafts and other manufacturing and [iv] activities such as unpaid family work for crop production that reaches the market , as well as animal grazing ,agro processing for sale.The Non-Economic work is defined as ,[i] household maintenance[ii]cleaning[iii] washing [iii] cooking [iv]shopping [v] providing care for infants and children [vi] care for permanently ill or temporarily sick and [vii] all volunteer works for community services.

In Marxian economies, unpaid work, especially women’s housework, is levelled as ‘reproduction’. Neo-classical economics looks at unpaid work essentially as a form of consumption-but still treated as a form of leisure (in case of married women).Economists interested in unpaid work have mostly concentrated on microanalysis of household work. At the macro level, ‘an iceberg view of the economy’ prevails: what is visible is actually only a very small part of what goes on in economy.

The burden of unpaid work and paid work respectively are distributed unequally between men and women. As a result men receive the lion’s share of income and recognition for their economic contribution-while most of women’s work remains unpaid, unrecognised and undervalued. The unequal distribution of unpaid work between women and men is substantially linked to the sex-segregated labour market and the prevailing sex discrimination and domination of men’s values in society at large.(Swiebel,1999).

Measurement of unpaid work.

The value of the unpaid labour can be calculated as ,[i] Output method, [ii] Input method.

Output method tries to measure the results of unpaid production by assigning a price to the quantities of goods and services produced. This method involves the measurement of output by observation of prices and requires data on the quantities of services produced.

Input method is divided into , [a] The opportunity cost method,[b] The market replacement cost method.

Input or Indirect method involve valuing output in terms of cost of inputs and require information about the time spent on household work. The input approaches value household production as the sum of all of its inputs which include labor inputs(time use) and the use of physical capital (the land, dwellings and equipment owned by households).However,the time use survey only provide information on time use and so on, in practice, the valuation method do not take account of value of physical capital used by households in non market production.

The opportunity cost method searches what is the cost of the cost paid work opportunities unavailable to the unwaged worker became of her responsibilities plus the cost of her unwaged work.Or in other words, each hour devoted to domestic activities could have been sold in the labour market in stead.On the other hand, the replacement cost method finds out what would it cost to pay a third person or a replacement to do the work being completed by the unwaged workers. It means that household save money by performing family care work themselves instead of buying similar services on the market or hiring someone to provide them for household. The opportunity cost method has two wings,[i] Specialist approach,[ii] Generalist approach .

Each approach has certain limitations, ie the replacement cost typically assigned to women’s work reflect current market value ,not real value, and so, are quite low. These calculations are a beginning step to understanding the economic value of women’s work with much more work to be done.

The Time use data is used for measurement of valuation of work to estimate the work performed by women also where data have been collected from household survey on a national scale. The total value of unpaid family care work at national level depends on ,[i] the amount of time that each person devotes to this activity,[ii] the number of people who perform it and [iii] the value attributed to each unit of time of this work.

The difficulties of measuring and valuing unpaid work are most widely cited. Conceptually, at least, the battle against the invisibility of women’s work seem largely to have been won .Women’s domestic work is still uncounted.

Presently, Canada is using Nova Scotia GPI (Genuine Progress Index) to measure unpaid work which has 20 components of indices. But GPI is not intended to replace the GDP rather GPI in effect adopts a qualitatively different approach. The GPI assesses the economic value of social and environmental assets by imputing market value to the services provided by the stock of human , social and environmental  capital .But this imputation of market values is not an end in itself. It is a temporary measure, necessary only as long as financial structures such as prices , taxes and monetary incentives continue to provide the primary ones for the actual behaviour of businesses, consumers and governments.

GPI can provide a useful tool for communication between the market and nonmarket sectors. It can provide a means to move beyond monetary assessments towards a more inclusive and integrated policy and planning framework.GPI itself should give way to multi dimensional policy analysis across a number of data bases.

Some empirical findings

Human Development Report-1995 asserted that if these unpaid activities were treated as market transaction at the prevailing wages, they would yield huge monetary valuation-a staggering $ 16 trillion or about 70% more than the officially estimated $23 trillion of global output. Of these $16 trillion,$ 11 trillion is the non-monetised, invisible contribution of women. Its study pointed out that a sample of 31 countries study indicated not only that men (53% in developing countries and 51% in industrial countries) but also that of women’s total work time – both in developing and in industrial countries, roughly two third is spent in unpaid work and one third in paid work. For men in industrial countries these shares are reversed .Men in developing countries spend even less of their total work time in unpaid work roughly one fourth. Women continue to do more than half of the unpaid household in most industrialised countries and between two and four times more unpaid childcare than men. Between 1980-2000,across the developed world women doubled their share of paid work with respect to men ,going from 22 to 44 percent of total paid work. However, the share of women’s time in unpaid labour hardly changed during the time period. It is estimated that if women’s unpaid work were assigned a monetary value it would constitute between 10% and 39% of GDP. Other studies show that reducing the household time burdens on women could increase agricultural labour productivity by as much as 44% in some countries.

The total yearly value of unpaid family care work equals to 8.29 and 67.06 billion Euros which corresponds to 4.3% and 4.5% of GDP in Poland and Italy respectively. In Poland 9.5% of the estimated total value of care may be attributed to child care, whereas in Italy it is 72%. The value of child care is mostly the results of women’s activity, with 5.42 over 7.92 and 35.3 over 52.2 billion Euros in Poland and Italy respectively. According to market replacement cost, the total yearly value of unpaid family care work equals 6.79 and 61.77 billion Euros which corresponds to 3.7% and 4.1% of GDP in Poland and Italy respectively. The total yearly value of unpaid family care work estimated with the specialist market replacement cost equals 8.53 and 75.08 billion Euros, which corresponds to 4.5% and 5% of GDP in Poland and Italy respectively. On the other hand, according to the social cost of unpaid family care work, the value of child care in Poland ranges from a minimum of 3.5% of GDP to a maximum of 4.2% of GDP. The value of child care in Italy ranges from a maximum of 3.2% of GDP to a maximum of 3.8% of GDP. The value of adult care is lower in Poland than in Italy. In Poland, the loss in value of childcare amounts to 0.6% of GDP ( a loss of 17%), whereas in Italy the loss amounts to 0.3% ( a loss of 9%). (Framcacilla, Giannelli, Grotkososka and Socha,2011)

In Spain, the Bank of Spain studied that the majority of women (99.15%) undertaken some household activity versus only 77.63% of the men. The women spend almost 3 times more time in household works than the men, spending 214.95 minutes per day versus only 111.72 minutes per day for men. Women contributing to more than 50% of the household income engage in more than 50% of household production. The share of total house work time for a women is 76% when she earns than that of her husband,71% when she earns the same , and 68% when she earns more. Women devoted less time to household activities as their relative income increases: 229 minutes when they earn less, 204 when they earn the same  and 189 when they earn more. However, the men’s household work time increases from 82 to 92 minutes as women’s  earnings increases, but decreases again to 87 minutes when women’s earnings increase beyond men’s. On average , women spend around 128 minutes and 143 minutes on household and childcare, whereas men devote 72-82 minutes per day to these activities. Women spend 365 minutes per day with children under 10, whereas men spend , on average,252 minutes per day. Higher income households might be able to outsource more, and thus reduce a wife’s house work burden. Higher the spouces education level, the lower a wife’s share of total housework. The outsourcing of household maintainance service has appositive and statistically significant increasing wife’s share of housework by 8.7%.A husband devotes 28.5 more minutes per day to routine childcare if his wife earns the same amount he does, in relation to husband who earns more than their wives but this positive effect only exists up to the point where a wife earns the same amount as her husband and remains constant beyond that. The U shaped relationship between housework and childcare and relative earnings is also robust to a continuous rather than discrete alternative definition to also robust to a continuous  rather than discrete alternative definition of relative earnings. (Sevilla-Sanz,Nadal, and Fernandez,2010)

 In Canada, the study examines the profile and time spent on paid and unpaid work for young adults from 3 generations-late baby boomers (born from 1957-1966) when they were age 20-29 in 1986, GenerationX (1969-1978) which was in that age group in 1998 and Generation Y(1981-1990) which reached within 2010.It was found that young adults from generation Y were more likely to be single(67%) ,living at home (51%) and going to school(19%) compared with their counterpart in the two previous generations. Time spent on employment and housework was also most alike for young men and women of generation Y. At ages 20-29,late baby boom men did ,on average , 1.4 hours more paid work per day than women. In generation Y, this difference narrowed to 1.1 hours. When late baby boomers women were age 20-29, they did 1.2 hours more housework per day than men. By the time generation Y was the same age ,the difference had narrowed to 0.4hours.Average daily, time spent on paid work and housework by men and women in young dual-earner couples in more alike for those without children and particularly so for generation Y. (Katherine,2011)

--------------------SEE JOURNAL 

SEMINAR ON REDEFINING BUSINESS VISION :ISSUES AND CHALLENGES

St.Xavier’s College,Kolkata organized a UGC sponsored National Seminar on “Redefining Business Vision:Issues and Challenges” on 19March,2016 in collaboration with University of Calcutta and ICSSR.Fr.Dr.J.Felix Raj,S.J.,Principal of St.Xavier’s College inaugurated the seminar by lighting lamp and by welcoming address.The theme address was given by Prof.Swagata Sen-Pro-Vice Chancellor of Calcutta University.The theme of the Plenary session was “Strategies for Redefining Corporate vision-Issues and Challenges” where Prof.Kanika Chatterjee of Calcutta University addressed about Towards a Social License vision of global legitimacy.Mr.Chandra Shekhar Ghosh of Bandhan Bank said on how Bandhan Bank becomes a big giant of private bank in India where strategy and vision were the two pyramids.Prof.Sankarshan Basu  of IIM,Bangalore,threw light on Reinsurance.In the Pannel Discussion under the theme “Reshaping strategies for sustainable business vision” ,Prof.Banikanta Mishra of Xavier University,Bhubaneshwar,said about Corporate Social Responsibility,Prof.Peeyush Mehta of IIM,Kolkata,said on the sustainable business vision and its consequences,Prof.Pranabesh Roy,Xavier School of Management ,Jamsedpur addressed on Human Resource Management where how many years can be considered as sustainable business is to be judged was the central point of lecture.

There were 7 technical sessions on finance,accounting,marketing,and human resources comprising 51 papers.

I have presented a paper on “Financial crises and nexus between growth and foreign direct investment”.

The abstract of my paper is given below.

 Financial Crises and Nexus between Economic growth and Foreign Direct Investment

Dr.Debesh Bhowmik

 (Retired Principal and Associated with International Institute for Development Studies, Kolkata)

Email-debeshbhowmik@rediffmail.com

ABSTRACT

The objective of this paper is to study the relation between FDI and growth with multiple factors. Secondly, it exclusively explained the nature of FDI in the financial crises when growth declined. Ragimana(2012),Adelake(2014),Tintin(2012),Stehrer and Woerz(2009),Li and Liu(2005), Dinda(2009),Nair(2010) and many other studies have been incorporated to relate growth and FDI with other variables  for several countries including India. Data have been collected from the World Bank, Reserve Bank of India, UNCTAD for the year from 1990 to 2013.For co-integration and VAR analysis the models of Engle and Granger(1987) , Johansen (1991,1996) and Johansen and Juselius (1990) methodologies were used. Hansen and Doornik(1994) model was done to test of normality for residuals.

Taking GDP growth rate, degree of opennesss, total external debt, interest rate and exchange rate as the important determinants of FDI in India during 1990-2013, the paper verified that the Engle-Granger methodology showed that there is co-integrating relationship where degree of openness and interest rate are significant where as Johansen test proved that there are 5 cointegrating vectors  in the level series, 5 cointegrating vectors in the first difference series respectively. The VECM is verified and it was found that there are serial correlation and ARCH error with non-normal distribution where all roots lie inside the unit root circle including 5 unit roots but impulse response functions do not approach to zero and error correction terms and residual systems are explosive.

The paper also concludes that FDI does not cause Granger financial crises but financial crises do cause Granger FDI. In every financial crisis since 1890,FDI changes downward but in Euro crises and US subprime crises, FDI did not decline in most of the East Asian countries. The declining growth rate and flows of FDI in all financial crises were the general phenomenon. Also in India, financial crises had negative impact on FDI and growth.

The limitation is that there are  many determinants of FDI in the economy as suggested by existing literature available on this issue, namely,(i) Market Size(ii) Portfolio Diversification(iii) Resource Location(iv) Differential Rate of Return(v) Foreign Exchange Reserves(vi) Internationalization (vii) Openness(viii) Government Regulations(ix) Political Stability(x) Tax Policies(xi) Inflation (xii) Industrial Organization(xiii) The Level of External Indebtedness(xiv) Foreign Exchange Rate (xv) technology ,(xvi) human capital respectively. The choice variables depend on the needs of the economy.

More analysis can be done in the cases where FDI decline in every financial crisis regionally or sub-regionally. Even, why China and other East Asia did not react negatively too much in recent crises is to be an added future studies. Even, the relation among currency crisis, banking crisis and debt crisis with growth can be explained in a more detail manner in future studies in specific country.

Key words- Foreign Direct Investment, economic growth, financial crises, cointegration, VAR

JEL-C23,C33, F21,F01,O55

WHO ARE THINKING FOR THE UPLIFTMENT OF DALITS?

Article-Who are thinking for the upliftment of Dalits?

by

Dr.Debesh Bhowmik

EDU WORLD ,VOLUME-IV,NO-1,JANUARY-DECEMBER2015

APH PUBLISHING HOUSE,NEWDELHI

Who are thinking for the upliftment of Dalits ?

Dr.Debesh Bhowmik (Retired Principal, debeshbhowmik@rediffmail.com)

Abstract

This paper discussed about the economic status of dalit focusing their deprivation ,social exclusion and discrimination. To what extent they are protected by Indian constitutions have been classified through various acts. What did the India’s Five Year Plans formulate programme for dalit has been explained in details with much criticisms. Some recommendations from the national and international institutions have been given to justify the assessments of the dalit’s developmental programmes.  

Key words- Social status of dalit, opportunity in constitution, dalits in the plans, recommendations.

JEL-D63,J15,I30

I.Introduction

Dalit is a designation for a group of people traditionally regarded as untouchable. Dalits are a mixed population, consisting of numerous social groups from all over India; they speak a variety of languages and practice a multitude of religions. The word Dalit—literally translating to “oppressed” or “broken”—is generally used to refer to people who were once known as “untouchables”, those belonging to castes outside the four‐fold Hindu Varna system. According to the Hindu caste hierarchy, there are four castes namely the Brahmins (priestly caste), the Kshatriya (warriors), the Vaishyas (traders) and the Shudras (menial task workers). Below this four-tier caste ladder there is another rung of peoples, who are called the untouchables (Panchamas). Among the untouchables, the status of women is further eroded and closely linked to the concept of purity. This is what the rigid, fundamentalist Hindu promotes through continuation of caste system, imposing the Brahminical values to maintain the caste system. Discrimination against Dalits has metamorphosed over time from overt, open and accepted norm to subtle, invisible, hidden and ‘unaccepted’ behaviour. Through history, the practice has been to assume that Dalits are the serving class and therefore what they need at best is the skill to be able to serve the rest.

Origins of Untouchability and the Dalits Untouchability were initially introduced for the purpose of segregating what Indian society perceived as two individual races. Vedic literature classified India into the Aryan race and the Anaryas or Dasyus race. The segregation of the two was based upon specific phenotypic differences such as skin pigmentation, the shape of the lips, and the nasal bone. As time passed,skin pigmentation became the most distinctive racial dividing line and continues to remain so today.

Of the two races, the Aryan populations are light-skinned and traditionally formed the

first three varnas of the caste system. These three original levels represented class and social

distinctions within the Aryan race. For example, the highest members of society were part of the

Brahman caste, the next highest were part of the Kshatriya caste, and so on. It is suggested that

around 2,000 B.C., partial Aryan descendants, known as the Sudras, were also allowed entrée to

the caste system in an extremely restricted sense. They were made the fourth and last caste of the

Aryan community (Dahiwale, 2002). In this manner the caste system was first formed.

In opposition to the Aryan population, those labeled as Anarya and Dasyus were dark-skinned

and traditionally functioned as a slave class. Because of their low status in the Indian

social structure, this group of people was shifted and isolated away from the Aryan houses and

living areas. As a result they were separated physically and socially from caste members. They

were given the names of Antya, Antyaja and Antyavasin, which mean untouchable, isolated, and

non-caste. This was the initiation of untouchability in India (Rao, 2001).

In an effort to preserve caste structure, the ancient Code of Manu (Manusmruti) details thousands of rules describing acceptable social intercourse among different castes. The Code of Manu is an ethical code maintained by classical Hinduism. It teaches that the caste system is divinely ordained and the only means of transcending the caste system is through repeated incarnations (Massey, 1994). The laws include descriptions of what items can or cannot be accepted by a person from a particular caste, what one can and cannot eat, with whom one can or cannot eat, and, perhaps most importantly, who one can and cannot touch. Untouchables were so called because the mere sight of their shadows was thought to be polluting.

 Dalit women are also coerced to be victimised in the patriarchy. Dalit women are bearing the burden of double day caste and sexual division of labour. Dalit women are demeaned and degraded and their body is a free terrain of colonization by men from other community. Dalit women are a deprived section and at the lowest level of economic and educational structures. They are poor, illiterate, sexually harassed, faces state, caste violence and exploited. Doubly, triply or multiply discriminated, Dalit women face a lot of struggles in daily bases otherwise just being overwhelmed with those surges of discrimination up to them. Without being struggling, Dalit women would be just left in despair.Dalit women are thrice discriminated, treated as untouchables and as outcastes, due to their caste, face gender discrimination being women and finally economic impoverishment due to unequal wage disparity, with low or underpaid labour. Within the dalit community, Dalit women face more burdens due to caste and gender discrimination. Dalit women are subjected to systematic oppression and structural violence both from the general community and from within their own community and their families. They would be influenced, pressurized, blocked, intimidated, stigmatized and revictimised. If they still take up the struggle for justice, it would really be a difficult path that they have to travel.

II. Social  And Economic Status Of Dalit

According to census 2011, Dalits make up24.4%of the total Indian population, but their access &control over resources of the country is marginal—less than 5%. Close to half of the Dalit population lives under the Poverty Line, and even more (62%) are illiterate. The Dalit population is broadly distributed across Indian states and districts. In 2011, the state of Punjab had the highest proportion of its population as Dalit, at about 31.9 percent, and the state of Mizoram had the lowest at nearly zero. The government of India recognises and protects them as Scheduled Castes(SC) and Scheduled Tribes(ST). The term Dalit has been interchangeably used with term Scheduled Castes, and Scheduled Tribes.They belong to various religion.22% SC and 9% ST are Hindu .90% SC and 7.40% ST belong to Buddhism and 9% SC and 33% ST are Christrian,31% SC and 0.9%ST are Sikhs,16% ST belong to Zaroa and 2.6% ST are Jains respectively. 

 Among the Dalits, most of those engaged in agricultural work are landless or nearly landless agricultural labourers. The average household income for Dalits was of Rs. 17,465 in 1998, just 68% of the national average. Less than 10% of Dalit households can afford safe drinking water, electricity and toilets, which is indicative of their deplorable social condition. About 65 % and 56 % of ST and SC women respectively suffered from anaemia compared to 47.6 % of non‐SC/ST women . About 90 % of women working in unorganized sector are mainly from lower castes . In 1991, about 71 % of Dalit women workers in rural area were agricultural labourers. Only 19 % of them owned land .

According to the Ministry of Labour, 85% of the Dalit women have the most formidable occupations and work as agricultural laborers, scavengers, sweepers, and disposers of human waste. In 2001, about 57 % of SC and 37 % of ST women respectively were agricultural wage labour in rural areas, as compared with 29 % for non‐SC/STs. In urban areas, 16 % SC and 14 % ST women were daily wage labourers as compared with only 6 % from non‐SC/STs. Only 21 % of SC women were cultivators compared with 51 % for STs and 45 % for non‐ SC/STs. SC/ST women also faced differential treatment in wage‐earning, particularly in urban areas. In 2000, SC and ST women casual labourers received daily wages of Rs 37 and Rs 34 respectively, compared with Rs. 56 for non‐SC/ST women; the national average was Rs 42.

In rural areas, 37.8% of government run schools make Dalit children sit separately from other children .In 27.6% of rural villages, Dalits are prevented from entering police stations. In 33% of rural villages, public health workers refuse to enter Dalit homes.48.4% of Dalit villages are denied access to water sources .In 70% of rural villages, Dalit and non-Dalit people cannot eat together.

III.Dalit And Indian Constitution

The provision and safeguards for Backward Classes and especially for SCs and STs have been incorporated in the Constitution of India. The safeguards are in the field of social, economic, political, educational, cultural and services under the State for the people belonging to these communities for their development.  The safeguards provided to Scheduled Castes are grouped in the following broad heads:

[i]Social Safeguards

[ii]Economic Safeguards

[iii]Educational & Cultural Safeguards

[iv]Political Safeguards

[v]Service Safeguards

Social Safeguards

 Article 17, 23, 24 and 25 (2)(b) of the Constitution enjoins the State to provide social safeguards to Scheduled Castes. Article 17 relates to abolition of untouchability being practiced in society.

 Article 23 prohibits traffic in human beings and ‘beggar’ and or other similar forms of forced labour and provides that any contravention of this provision shall be an offence punishable in accordance with law. Althogh there is no specific mentions about SCs in this Article but majority of the bonded labour belong to SC community. Article 24 provides that no child below the age of 14 years shall be employed to work in any factory or mine or engaged in any hazardous employment. Even in this Article, there is no special mention about the SCs but substantial portion of child labour engaged in hazardous employment belong to SC community. Article 25 (2) (b) provides that Hindu religious institutions of a public character shall be opened to all classes and sections of Hindus. The term Hindu includes persons professing Sikh, Jain and Buddhist religion.

Economic Safeguards

 Articles 23, 24 and 46 form the economic safeguards for the Scheduled Castes and Scheduled Tribes. Article 46 states that, “The State shall promote with special care the educational and economic interests of the weaker sections of the people, and in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.”

Educational and Cultural Safeguards

 Article 15 (4) empowers the State to make special provisions for the advancement of any socially and educationally backward classes of citizens and for SCs. This provision has enabled the State to reserve seats for SCs in educational institutions in general and professional courses etc.

Political Safeguards

 Reservation of seats for Scheduled Castes and Scheduled Tribes in the local bodies of the State/Union Territories, Legislative Assemblies of the State and in Parliament are provided in the Constitution of India as follows: the Article 243 D- Reservation of Seats, Article 243 T- Reservation of Seats:- Article 330- Reservation of Seats for Scheduled Castes and Scheduled Tribes in House of the People, Article 332- Reservation of Seats for Scheduled Castes and Scheduled Tribes in the Legislative Assemblies of the State, Article 334- Reservation of Seats and Special Representation to Cease after 60 Years, etc are to be mentioned.

Service Safeguards

 Service safeguards are contained in Articles 16(4), 16 (4A), and 335. In the year 2001, the Parliament through Constitution (Eighty-fifth Amendment) Act, 2001 amended the provisions contained in Article 16 (4A). In Article 16 (4A) for the words: “in matters of promotion to any class” the words “in matters of promotion, with consequential seniority, to any class” has been substituted. The effect of this amendment is that the SCs/STs promoted earlier than their counter-part in general category by virtue of reservation policy shall be senior to general category in the promoted scale/post.

Important Legislations

 In addition some of the legislations of specific as well as general nature have greater relevance to Dalit communities.(a) The Untouchability Offences Act, later reformulated as the Protection of Civil Rights Act (1955) and rules 1977,(b) The Scheduled Caste/Scheduled Tribe (Prevention of Atrocities) Act 1989 and rules1995,(c) Bonded Labour (system) Abolition Act, 1976

d) Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act, 1993

e) Devadasi system Abolition Act in the states of Andhra Pradesh, Maharashtra and Karnataka.

f) Child Labour (Prohibition and Regulation) Act, 1986,(g) Minimum Wages Act, 1948, (h) Equal Remuneration Act, 1976 and ( i) Land Reforms Act in different states.

Moreover,there is a provision to set up Special Courts for trying cases registered on the grounds of untouchability and atrocities under inflicted on Dalits and Adivasis under the SC and ST (Prevention of Atrocities) Act, 1989.

But these are not enough to protect them for their living in society.The international institutions thus raised some inefficiencies about Indian Constitutions for safeguarding SC and ST.The following are the objections.

[a] On 2/1/07, European Union passed a resolution that found India's enforcement of laws to protect Dalits "grossly inadequate. Also found that "atrocities, untouchability, illiteracy and inequality of opportunity, continue to blight the lives of India's Dalits." The resolution called on the Indian government to end caste-based discrimination.

[b] On 2/13/07, Hidden Apartheid Caste Discrimination Against India's Untouchables-113 page joint report was published Human Rights Watch and The Center for Human Rights and Global Justice at New York University School of Law. Report found that India systematically failed to uphold its international legal obligations to ensure the fundamental human rights of Dalits, despite laws and policies against caste discrimination.

[c] On 3/9/07, United Nations Committee on Elimination of Racial Discrimination (CERD) found that "de facto segregation of Dalits persists" and highlighted systematic abuse against Dalits including torture and extrajudicial killings, an "alarming" extent of sexual violence against Dalit women and caste discrimination in post-tsunami relief.

[d] On 7/24/07, US House of Representatives passed a concurrent resolution condemning the caste system and untouchability in India.

[e] The greatest deficiency of the Protection of Civil Rights Act was the fact that abuses against Dalits were not limited to name-calling or denial of entry into public spaces: violence was a defining characteristic of the abuse. Thirty-four years after the introduction of the PCR Act, the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, was enacted to bring these other forms of abuse to an end. “In the Atrocities Act_ the complainant is given more weight... There are also stringent provisions against the police for negligence.”

[f] Although Article 17 of the Indian Constitution banned untouchability in 1950, Dalits still suffer widespread discrimination and mistreatment, particularly in villages and rural communities. Local law enforcement personnel often refuse to document, investigate, and respond adequately to Dalit complaints. Upper caste members often threaten and assault Dalits who dare protest against the atrocities The 1989 Act also requires states to set up Special Courts to adjudicate Scheduled Caste offenses. In addition, the Act provides punishment for public servants who fail to enforce the protections set forth in the Act. The Scheduled Caste and Scheduled Tribes (Prevention of Atrocities) Rules of 1995 further delineate procedures for state governments to take toward investigation, prosecution, and punishment pursuant to the 1989 Act.

[g] While Indian domestic law is designed to protect Dalits, the fact that Dalits often do not benefit from these laws demonstrates India’s failures under CERD.Compliance is monitored by the Committee on the Elimination of Racial Discrimination (CERD Committee), which reviews periodic reports written by States Parties, conducts hearings, and issues comments on inter-state and individual complaints.

*****SEE MORE IN THE JOURNAL

INTERNATIONAL SEMINAR ON DYNAMIC EVOLUTION OF MANAGEMENT PARADIGM

INTERNATIONAL SEMINAR ON “DYNAMIC EVOLUTION OF MANAGEMENT PARADIGM”

(Organised by Department of Business Administration of Vidyasagar University)

------------------ Debesh Bhowmik

 

 

During 26-27 February,2016,Department of Business Administration,Vidyasagar University, WestBengal organized 2-days UGC sponsored International Seminar on “Dynamic Evolution of Management Paradigm”.It was inaugurated by honourable vice chancellor Prof.Ranjan Chakraborty lighting the lamp with many of the other dignitaries.In his inaugural speech ,he told about the need of management helps and he is a believer of nature and environment .He mentioned about GHG, climate change,correlation between humans and nature.How global warming damage the nature,he showed briefly where he noted two books,”Expansion of Sahara” and “Encroachment of Sahara” which were helped Tagore to write the poem of Africa.Rabindranath Tagore is also an ecologist who emphasized BRISHKHOROPAN, and he was an environmentalist. Prof.Chakraborty is not in favour of the concept sustainable development and green development because it is an infinite and endless process.In Plenary Session on 26^th February,Prof.Bhabotosh Benerjee,a guest faculty of IIM,Calcutta addressed on important management theories,viz,Michael Porter’s value chain approach, Robin Cooper’s confrontation strategy etc with detailed analytical views. In the Plenary session,Prof.Lokaranjan Guha ,from University of Queensland, in his guest lecture,said on the theme of the seminar and focus on local possibilities for the development of Midnapore of marketing facilities of various agro-product from which the MBA scholars can make project how to secure dynamism in the marketing process in this area.He emphasized on modern IT,ecommerce,supply chain management,green growth,renewable energy,and upgradation of management education.

On the Strategic Marketing Session,Dr.Debmalya Dutta ,Prof.of Burdwan University,MBA gave key note address and more than 13 paper presenters from different universities and colleges have presented their valuable papers on service marketing,consumer preference,digital marketing,supply chain management,medical tourism,attitudinal gap,tea bush health analysis, and management,organic food,competitive marketing strategy,on line marketing,fast food,consumer band perception etc.

In the Accounting,Finance,Banking and Economics session,Prof.P.K.Hota of Utkal University gave key note address on Indian Banking Performance and also mentioned on Make in India programme.More than 10 important papers on RRB,micro finance,FDI,Accounting cycle,financial inclusion,risk management,higher education were presented.

In the Plenary session on 27^th February,2016, Prof Dhananjoy Kumar of Islamic University, Kustia, Bangladesh, gave key note address on Evolution of Human Resource Management, especially on Bangladesh economy. He mentioned about the scope of its development showing HDI of Bangladesh and confessed that his country follows India,USA,Japan etc.The Chairman of this Session Prof.Debobrata Mitra of North Bengal University told about Indian capital market and its recent development in a brief.In the technical session-3,there are many important papers on Intellectual capital,NGO,Employee empowerment,R and D in Phermaceutical industry,Institutional ownership,green farm practices,crisis management,industrial relation,stress,white color crime etc.

In session-4,key note paper was delivered by Prof. P.Bezborah of Dibrugarh University,Assam.on Leadership-The key to Human Productivity where he gave importance on leadership which influence on human development,growth,productivity,managerial skill,organizational process,as well as employee and ownership relationship.The chairperson ,Prof.Bidhu Bhusan Misra-Prof of Utkal University addressed on the role of public sector banks.In the session,there are many academic papers on globalization on business,women’s sexual harassment,corporate social responsibility,corporate governance,primary agriculture society,make in India,stock market of India,quality control management,FDI, and Chinese Yuan enters into SDR basket,.

I had a paper in the technical session-4 entitled,”Chinese Yuan enters into the basket of special drawing rights” which was awarded as the best paper in this session.

CHINESE YUAN ENTERS INTO THE BASKET OF SPECIAL DRAWING RIGHTS

Dr.Debesh Bhowmik (Retired Principal and Associated with International Institute for Development Studies, Kolkata)

Keywords-Special Drawing Rights, Alternative weight of Yuan, Yuan /US$ exchange rate, ARIMA(1,1,1),AR(3),GARCH(1,1)

JEL-F31,F33,F55,F58,P34,

 

The paper analyses the approval of IMF for Yuan as one of the currency in the basket of SDR which will effect from 1-10-2016 showing the weight of Yuan as 10.92% as against 41.7% for US$, 30.9% for Euro , 8.3% for Yen and 8.1% for Pound Sterling respectively. An alternative weight for the SDR basket is proposed. 

The paper explained that the decision of IMF will boost internationalization of Yuan,will speed up the transition from managed float to freely floating exchange rate mechanism including reform of financial sector and capital account convertibility as well as bust in the equity and share markets. It might increase Chinese global export share and expect further depreciation of Yuan subject to increase in interest rate in Federal Reserve Bank.

The paper verified that Chinese gross and global shares of export and import are positively associated with gross SDR and global share of SDR during 1980-2013 which were observed by double log regression model but these variables were not cointegrated which are calculated by Johansen Cointegration Test. ARIMA(1,1,1) model is tested to show the stationarity of Yuan US$ monthly nominal exchange rate during 2010M1-2016M1. AR(3) process is applied to verify the volatility, stability and stationarity. Even GARCH(1,1) model including conditional variance were used to show high volatility during the specified period.

The paper emphasized that in the long run, China will lead the Asian and world capital market as well as Asian and global trade and finance as were observed in ancient past during 1300-1700.By 2030,Chinese global GDP share is projected as 33.4% as against 33.1% of USA. It is hoped that Chinese new status in the IMF might bring back as a catalyst to stabilize international monetary system with the emergence of SDR as a world reserve currency and as an unit of account for international payments mechanism if most of the countries peg their currencies with SDR which can converge international price level and increase global trade so that shortage of international liquidity might disappear and reestablishment of a new Bretton Woods III might evolve.

My paper is awarded as the best paper in the Technical Session -4 (Photo -Prof.S.Bag, Prof.P. Bezborah, Dr.Bhowmik and Prof.D.Biswas).