Past Issue : Volume-12 (2020-2021)


Forecasting Fund Flows in Indian Equity Mutual Funds Market using Time Series Analysis: An Empirical Investigation

Mutual Funds are the second most preferred financial investment option in India amongst households, corporate and private investors alike. Managed funds bring with them the expertise of fund managers along with the benefits of diversification and lower costs. The sensitivity of fund flows defines the ability of the fund manager in offering expected future returns. Mutual fund flows exhibit time series characteristics, it being financial data collected at regular intervals over a time period. This paper studies the dynamics of mutual fund flows by utilising time series regression modelling. Monthly fund flows data for a sample of 142 equity open-ended growth orientation across major marketcap categories– Large Cap, Large and Mid Cap, Multi Cap, Mid Cap, and Small Cap have been analysed using ARIMA Modelling in the R software package. Appropriate lag length and the presence of a unit root have been investigated with the help of established techniques coupled with suitable checks of robustness. Model of best fit has been used to forecast monthly fund flows for a lag length of 60. Our study leads us to two major outcomes. One, unlike many developed and emerging markets, fund flows in the chosen sample do not confirm to positive feedback trading hypothesis. This lends credible support to the absence of irrational exuberance in mutual fund investments. Second, equity-based funds in Large Cap, Large and Mid Cap, and Multi Cap category exhibit strong trend component while funds in Mid Cap and Small Cap category have a strong random component. Beginner investors can take advantage of alpha offered by fund managers possessing effective market -timing skills, an indicator of trend-investing strategy. Funds belonging to these categories are also lesser prone to market volatility in comparison to Mid Cap and Small Cap funds, being more suitable for experienced investors.
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Priya Malhotra and Pankaj Sinha

Monetary Policy Transmission in Financial Markets: The Case of India

The paper looks into the monetary policy transmission across different segments of the financial market in India from May 2011 to March 2018. It studies the effect of two instruments of monetary policy i.e., policy rate and a composite index (score) comprising of quantity instruments and policy rates on the money market, government securities market, foreign exchange market and the stock market using VAR analysis. The results show that monetary transmission is fairly quick in the money market and other interest rates of short maturity compared to interest rates of longer maturities. The impact on exchange rate is an appreciation for the policy rate but a depreciation followed by an appreciation for the composite index. Lastly the effect of policy rate and composite index on the sensex is negative.
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Suvojit Lahiri Chakravarty

Higher Education Institutions and Digital Practices in the Context of COVID-19

Before the Novel Coronavirus outbreak (COVID-19), an open distance learning system was prevalent in India. Only a few institutions delivered education through digital or hybrid modes. However, with the onset of COVID-19, the digital mode of education has gained popularity, and its prevalence is now commonplace. There is no easy substitute for the digital mode of education and its adoption involves multilevel changes. This paper examines adoption of the digital mode of imparting education by Higher Education Institutions (HEI) in India. Web interviews were undertaken with principal stakeholders hailing from diverse sets of India’s higher education institutions with the aim to understand in-depth, digital practices during COVID-19. Qualitative tools were used to analyse the data. The institutions found to be using heterogeneous ways to disseminate learning. While some of them practice a basic form of digitalisation, some had developed their own best practices. As a behavioural pattern, the development and prevalence of the digital mode may continue even post COVID-19. However, education through digital mode will persist to be plagued with challenges like digital divide.
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Jai Mohan Pandit and Bino Paul

Financial Literacy Levels amongst Salaried Women: Do they have a Bearing on their Financial Behaviour?

The introduction of a wide array of financial instruments, alongside increased complexity has rendered it crucial for financially vulnerable groups like women to understand the real premises on which they are centered as opposed to being simply aware of them. The study using statistical tools including Descriptives, ANOVA, Chi-Square, Factor analysis conducted during October 2020 - January 2021 assessed financial literacy levels among salaried women in Ludhiana City and its effect on financial behaviour, found the average financial literacy score to be 68%, being higher than OECD financial literacy survey score of 60.48%. Additionally, financial literacy had significant effect on respondents’ subsequent financial behaviour.
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Ravneet Kaur and Rajiv Kumar Maheshwary

Financing Education under Samagra Shiksha Abhiyan: An Initial Analysis in Selected States of India

Funding policies in the education sector have undergone significant change over the years in India. In recent years, one such big change is the integration of three major flagship programmes for education, namely: Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA) & Teacher Education (TE) under one umbrella scheme known as Samagra Shiksha Abhiyan (SMSA). As financial year 2018-19 is the initial year for implementation of the scheme, hence, this paper explores the planning and budgeting aspects of the Samagra Shiksha Abhiyan in selected states of India. The study has been carried out for the eight states, viz., Andhra Pradesh, Bihar, West Bengal, Uttarakhand, Uttar Pradesh, Himachal Pradesh, and Delhi, for the period of 2018-19 to 2019-20. The paper studies the financing of education under SMSA. The paper also analyses the distribution of support from the union government under the scheme. Drawing on the lessons from such analysis, the historical background and past experiences of implementation of previous education schemes, viz., Sarva Shiksha Abhiyan, Rashtriya Madhyamik Shiksha Abhiyan, and Teacher Education, the paper examines the design and ground level challenges of the Samagra Shiksha Abhiyan in selected states of India.
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Pallavi Khanna

Recent Update Accounting Standards in India

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Gurminder Kaur Arora