i

ContentsRegional Rural Banks of India and Its Performance - An Empirical Study 1

R. Suresh

"Atithi Kab Aaoge..Atithi Devo Bhava" Developing Tourism as a Foremost tool toSpearhead The Economy of India 11

Alka K DhanaiVipul Jain

Benefiting the Small Business Firms by Making Use of Economic and Sustainable 22

IT Techniques in their SystemPraveen TripathiPradeep SemwalVinay Rana

Factors Affecting Consumer Preferences for Private and National Brands in Men's Apparel 28Arif HasanFayaz Ahmad Nika

The Impact of Students Diversity on Group Work In Dehradun Universities : An Empirical Study 37

Meenakshi Sharma

A Study on Agriculture Credit through Formal Sector in Uttarakhand 46Ramanpreet Kaur Nayyar

Relevance of Training and Development Evaluation Program for Organizations 55Ravindra SharmaRitesh Upadhyay

Capital Structure of Select Indian Pharmaceutical Companies: Its Determinants 62Jitender Kumar

Problems in Marketing of Grapes in Theni District 68V. Alagu PandianNirupamaManish Kumar Mishra

Role of Public Banks in the Inclined Growth 75Preeti R. BhandariSuchita Gera

Activity Based Costing in Public Sector Organization 80Sanjay Sharma Shruti Aggarwal

Knowledge Management : A Need 87

Sonali Raghuvanshi

Entrepreneurship Amongst The Youth of Uttarakhand 93V M TripathiAmbica Prakash

International Bilateral Trade Relations with Saudi Arabia and its Impact on Indian Economy 98Rishabh Dev

R. Suresh*

ABSTRACTThe Regional Rural Banks are formed to serve the needy rural poor for the agricultural and allied activity capital requirements. It is well known that the lenders are the sufferers from non-recovery of loans lent to willful defaulters and cheaters. The banking system is the heart of any Countries' economy, striving to achieve growth and that remain a permanent and dominating factor in the global competitive business environment. The major part of the Indian banking sector, the commercial and scheduled nationalized and private banks and Cooperative Banks play a vital role. But this two tier mechanism faced problems to satisfy the capital needs to the rural mass. To improve the rural credit mechanism and the inadequate situation led the Government of India to form a committee to find feasible solution to enable easy rural credit satisfying mechanism through Regional Rural Banks. In particular, the regional rural bank of India mainly focuses on supply of credit to the rural people. This paper attempts to study that the Performance of Regional Rural Banks of India that satisfies the rural people for their agriculture and agro-based business financial needs and in turn they earn profit for their activities through their banking activity.

REGIONAL RURAL BANKS OF INDIA AND ITS PERFORMANCE - AN EMPIRICAL STUDY

Vedaang, 6 (1) : 1-10, 2015

* Head, Department of Commerce, Madurai Kamaraj University College, Aundipatti, E-mail. jeyasuresh_suresh@yahoo.co.in

Introduction

The villages are the backbone of any country. As far as India is concerned, it is populated highly with rural mass that undertakes the agriculture and its allied activities at larger level. The income from these activities occupies more in the Gross Domestic Product of India. Since India is an agrarian country that badly needs capital for agriculture activity. These requirements are satisfied to the needy poor through banks of India. The lending process in general to needy poor people is executed through banks like commercial banks, co-operative banks and Regional Rural Banks.

It is well known that the banking system is the heart of any Countries' economy, striving to achieve growth and that remain a permanent and dominating factor in the global competitive business environment. The major part of the Indian banking sector, the commercial and scheduled nationalized and private banks play a vital role. They are having a favourable growth, asset quality and profitability. The Reserve

Bank of India and the Government of India is continuously taking efforts and measures with notable changes in policies, procedures and regulations to strengthen the banking sector. It was felt that the flow of money through commercial banks to the rural mass are not sufficient and not up to the mark for the development of rural economy, because they are commercial in nature. To improve the rural credit mechanism cooperative banking sector were also introduced earlier and that was also not in a position to satisfy the rural needs in terms of money. This inadequate situation led the Government of India to form a committee to find feasible solution to enable easy rural credit satisfying mechanism. The committee that headed by Shri. M. Narshimam in the year 1975 came out with its recommendation to form Regional Rural Banks. In particular, the regional rural bank of India mainly focuses on supply of credit to the rural people. This paper attempts to study that the Regional Rural Banks of India satisfies the rural people for their agriculture and agro-based business financial

ISSN 09757961

R. Suresh*

ABSTRACTThe Regional Rural Banks are formed to serve the needy rural poor for the agricultural and allied activity capital requirements. It is well known that the lenders are the sufferers from non-recovery of loans lent to willful defaulters and cheaters. The banking system is the heart of any Countries' economy, striving to achieve growth and that remain a permanent and dominating factor in the global competitive business environment. The major part of the Indian banking sector, the commercial and scheduled nationalized and private banks and Cooperative Banks play a vital role. But this two tier mechanism faced problems to satisfy the capital needs to the rural mass. To improve the rural credit mechanism and the inadequate situation led the Government of India to form a committee to find feasible solution to enable easy rural credit satisfying mechanism through Regional Rural Banks. In particular, the regional rural bank of India mainly focuses on supply of credit to the rural people. This paper attempts to study that the Performance of Regional Rural Banks of India that satisfies the rural people for their agriculture and agro-based business financial needs and in turn they earn profit for their activities through their banking activity.

REGIONAL RURAL BANKS OF INDIA AND ITS PERFORMANCE - AN EMPIRICAL STUDY

Vedaang, 6 (1) : 1-10, 2015

* Head, Department of Commerce, Madurai Kamaraj University College, Aundipatti, E-mail. jeyasuresh_suresh@yahoo.co.in

Introduction

The villages are the backbone of any country. As far as India is concerned, it is populated highly with rural mass that undertakes the agriculture and its allied activities at larger level. The income from these activities occupies more in the Gross Domestic Product of India. Since India is an agrarian country that badly needs capital for agriculture activity. These requirements are satisfied to the needy poor through banks of India. The lending process in general to needy poor people is executed through banks like commercial banks, co-operative banks and Regional Rural Banks.

It is well known that the banking system is the heart of any Countries' economy, striving to achieve growth and that remain a permanent and dominating factor in the global competitive business environment. The major part of the Indian banking sector, the commercial and scheduled nationalized and private banks play a vital role. They are having a favourable growth, asset quality and profitability. The Reserve

Bank of India and the Government of India is continuously taking efforts and measures with notable changes in policies, procedures and regulations to strengthen the banking sector. It was felt that the flow of money through commercial banks to the rural mass are not sufficient and not up to the mark for the development of rural economy, because they are commercial in nature. To improve the rural credit mechanism cooperative banking sector were also introduced earlier and that was also not in a position to satisfy the rural needs in terms of money. This inadequate situation led the Government of India to form a committee to find feasible solution to enable easy rural credit satisfying mechanism. The committee that headed by Shri. M. Narshimam in the year 1975 came out with its recommendation to form Regional Rural Banks. In particular, the regional rural bank of India mainly focuses on supply of credit to the rural people. This paper attempts to study that the Regional Rural Banks of India satisfies the rural people for their agriculture and agro-based business financial

ISSN 09757961

needs and in turn they earn profit for their activities through their banking activity.

Statement of the problem

The most critical problems faced by Regional Rural Banks of India are their economical non-viability and shortage in mobilization of funds and low interest revenue. It is well known that there are lesser possibilities to the Regional Rural Banks to earn greater profit like commercial banks, because its operations are mainly focused on rural areas. Even though the Regional Rural Banks face the stiff competitions from the side of commercial banks, most of them are doing well. No study has been undertaken in this angle to analyze the activities of Regional Rural Banks from either side and hence the researcher is indented to study whether the Regional Rural Banks performances do satisfy themselves with greater revenue and in turn it lends to the needy poor in time and satisfies them.

Review of literature

The studies that have been undertaken to analyze the Regional Rural Banks are very few. The literature on Regional Rural Banks cited in the present study were obtained from the committee reports formed by government of India, reports of the Reserve Bank of India and National Bank for Agriculture and Rural Development and the reports of the researchers.

The Kelkar Committee (1986) made comprehensive recommendations covering both the organizational and operational aspects. Some of them were incorporated to Regional Rural Bank Act, 1975 such as, Enhancement of authorized capital of Regional Rural Banks from Rs. 1 crore to Rs. 5 crores and paid up capital from Rs.25 Laksh to Rs. 1 crore, appointment of Chairman of Regional Rural Banks by the concerned sponsor bank in consultation with NABARD, Providing assistance to Regional Rural Banks by sponsor banks to train RRB staff and giving financial assistance to Regional Rural Banks in their first five year of their existence and provision to the merge and amalgamate Regional Rural Banks to protect from loss.

NABARD (1986) published in its study A study on viability of Regional Rural Banks that the viability of Regional Rural Banks was essentially depend upon the fund management strategy, margin between resources mobility and their deployment and the control exercised on current and future costs with advance. The proportion of the establishment costs to total cost and expansion of branches were critical factors, which affected their viability. The main suggestion was for the improvement of the infrastructure facilities and opening of branches by such area where Regional Rural Banks were already in function.

Narashimam Committee suggested in the year 1991 that the Regional Rural Banks should be permitted to engage in all types of banking business and should not be forced to restrict their operations to targeted groups. This recommendation became a turning point in the functioning of the Regional Rural Banks, which uplifted their position. Simultaneously, prudential norms were introduced to maintain the standard of Regional Rural Banks equivalent to international standard. Due to these recommendations-amalgamation/mergers, of Regional Rural Banks in India were made. In addition to that the Government of India and the Reserve Bank of India jointly worked to bring up the status of the Regional Rural Banks to international standard and to adopt the prudential norms in the year 1994, as prescribed to all the scheduled commercial banks in the year 1992.

Bhandari Committee (1994), recommended comprehensive restructuring of Regional Rural Banks and greater devolution of decision-making power to the board of Regional Rural Banks in the matter of business development and human resource matters.

Basu committee (1996) mooted the idea of liquidation or revamping of Regional Rural Banks.

Thingalaya Committee (1997) gave another similar suggestion that very weak Regional Rural Banks should be viewed separately and the possibility of their liquidation may be recognized. They might be merged with neighboring Regional Rural Banks.

Vyas Committee-I, the expert committee on rural credit, gave its opinion that the sponsor bank should ensure necessary autonomy to their Regional Rural Banks in their credit and other portfolio management systems.

Shri. Narasimham (1998) in his Committee Report state that NPAs constitute a real economic loss to the nation in that they reflect the application of scarce capital and credit fund to unproductive uses. The money locked up in NPA is not available for productive areas and to extent that the bank seeks to make provisions for NPAs or to write them off. It is a charge on their profits. NPAs in short, are not just a problem for the bank; they are bad for the economy. It also recommended that change in sponsor banks may in some cases help in improving the pe r fo rmance name ly improve the competitiveness, work culture, management and efficiency of the concerned Regional Rural Banks. In addition to that, in order to impart viability to the operations of Regional Rural Banks.

Chalapathy Rao Committee (2003) recommended that the entire system of Regional Rural Banks may be consolidated while retaining the advantages of these institutions. The sponsoring banks may include other financial institutions for the support.

Purwar Committee (2004) laid basement for the better performance of Regional Rural Banks in the year 2004. It recommended the amalgamation of Regional Rural Banks by way of vertical and horizontal merges.

Sardesai Committee (2005) gave its recommendation that to improve the operational viability of Regional Rural Banks and take advantage of the economies of scale, the route of amalgamation/mergers of Regional Rural Banks may be considered taking onto account the views of various stakeholders.

The highlights of the empirical studies of various authors are;

V. K. Ramachandran and Madura Swaminathan (2001) revealed that, Rural Banking Policy in India discussed various issues in rural financing. They observed that every borrower is

screened by the lender for their creditworthiness and lender shave a sharp-eyed assessment of the borrower's income and wage-earning capacity when they lend money. As a consequence, there has been a proliferation of different types of loans with respect to the terms and conditions attached to each loan.

Sanjay Sinha et al (2003) expressed that, Profitability is very strongly correlated with proactive and well-judged management, and is not only two of the five Regional Rural Banks surveyed that these qualities were observed. Programmes of capacity building and motivation among mangers are likely to generate high returns

Dilip Khankhoje and Milind Sathye (2008) in their article recommend that the existing policy of bringing down non-performing assets as well as curtailing the establishment expenditure through voluntary retirement scheme for bank staff and rationalization of rural branches are steps in the right direction that could help these banks improve efficiency further over a period of time.

Dr. Ch. Rajaram, and Dr. K. Rajendar (2008) in their article said that Quality of loan asset is the most important factor for the basic viability of the banking system. Lower level of non-performing assets helps the banks in consolidating their position and give credence to efficiency of the management. On the contrary, higher non-performing asset levels make their balance sheets weak and less competent.

Suresh. R, (2010), Regional Rural Banks of India perform well only they get more capital injection by the Government of India so as to reach the capital level on par with the commercial banks for their business activity to lend needy poor persons involved in agriculture and allied activities.

Objectives of the study

The following are the objectives of the study

1. To trace the origin and growth of Regional Rural Banks of India

2. To study the physical performance of the Regional Rural Banks of India

2 [Vol VI, No. 1Vedaang 2015] 3Regional Rural Banks of India and its Performance - An Empirical Study

needs and in turn they earn profit for their activities through their banking activity.

Statement of the problem

The most critical problems faced by Regional Rural Banks of India are their economical non-viability and shortage in mobilization of funds and low interest revenue. It is well known that there are lesser possibilities to the Regional Rural Banks to earn greater profit like commercial banks, because its operations are mainly focused on rural areas. Even though the Regional Rural Banks face the stiff competitions from the side of commercial banks, most of them are doing well. No study has been undertaken in this angle to analyze the activities of Regional Rural Banks from either side and hence the researcher is indented to study whether the Regional Rural Banks performances do satisfy themselves with greater revenue and in turn it lends to the needy poor in time and satisfies them.

Review of literature

The studies that have been undertaken to analyze the Regional Rural Banks are very few. The literature on Regional Rural Banks cited in the present study were obtained from the committee reports formed by government of India, reports of the Reserve Bank of India and National Bank for Agriculture and Rural Development and the reports of the researchers.

The Kelkar Committee (1986) made comprehensive recommendations covering both the organizational and operational aspects. Some of them were incorporated to Regional Rural Bank Act, 1975 such as, Enhancement of authorized capital of Regional Rural Banks from Rs. 1 crore to Rs. 5 crores and paid up capital from Rs.25 Laksh to Rs. 1 crore, appointment of Chairman of Regional Rural Banks by the concerned sponsor bank in consultation with NABARD, Providing assistance to Regional Rural Banks by sponsor banks to train RRB staff and giving financial assistance to Regional Rural Banks in their first five year of their existence and provision to the merge and amalgamate Regional Rural Banks to protect from loss.

NABARD (1986) published in its study A study on viability of Regional Rural Banks that the viability of Regional Rural Banks was essentially depend upon the fund management strategy, margin between resources mobility and their deployment and the control exercised on current and future costs with advance. The proportion of the establishment costs to total cost and expansion of branches were critical factors, which affected their viability. The main suggestion was for the improvement of the infrastructure facilities and opening of branches by such area where Regional Rural Banks were already in function.

Narashimam Committee suggested in the year 1991 that the Regional Rural Banks should be permitted to engage in all types of banking business and should not be forced to restrict their operations to targeted groups. This recommendation became a turning point in the functioning of the Regional Rural Banks, which uplifted their position. Simultaneously, prudential norms were introduced to maintain the standard of Regional Rural Banks equivalent to international standard. Due to these recommendations-amalgamation/mergers, of Regional Rural Banks in India were made. In addition to that the Government of India and the Reserve Bank of India jointly worked to bring up the status of the Regional Rural Banks to international standard and to adopt the prudential norms in the year 1994, as prescribed to all the scheduled commercial banks in the year 1992.

Bhandari Committee (1994), recommended comprehensive restructuring of Regional Rural Banks and greater devolution of decision-making power to the board of Regional Rural Banks in the matter of business development and human resource matters.

Basu committee (1996) mooted the idea of liquidation or revamping of Regional Rural Banks.

Thingalaya Committee (1997) gave another similar suggestion that very weak Regional Rural Banks should be viewed separately and the possibility of their liquidation may be recognized. They might be merged with neighboring Regional Rural Banks.

Vyas Committee-I, the expert committee on rural credit, gave its opinion that the sponsor bank should ensure necessary autonomy to their Regional Rural Banks in their credit and other portfolio management systems.

Shri. Narasimham (1998) in his Committee Report state that NPAs constitute a real economic loss to the nation in that they reflect the application of scarce capital and credit fund to unproductive uses. The money locked up in NPA is not available for productive areas and to extent that the bank seeks to make provisions for NPAs or to write them off. It is a charge on their profits. NPAs in short, are not just a problem for the bank; they are bad for the economy. It also recommended that change in sponsor banks may in some cases help in improving the pe r fo rmance name ly improve the competitiveness, work culture, management and efficiency of the concerned Regional Rural Banks. In addition to that, in order to impart viability to the operations of Regional Rural Banks.

Chalapathy Rao Committee (2003) recommended that the entire system of Regional Rural Banks may be consolidated while retaining the advantages of these institutions. The sponsoring banks may include other financial institutions for the support.

Purwar Committee (2004) laid basement for the better performance of Regional Rural Banks in the year 2004. It recommended the amalgamation of Regional Rural Banks by way of vertical and horizontal merges.

Sardesai Committee (2005) gave its recommendation that to improve the operational viability of Regional Rural Banks and take advantage of the economies of scale, the route of amalgamation/mergers of Regional Rural Banks may be considered taking onto account the views of various stakeholders.

The highlights of the empirical studies of various authors are;

V. K. Ramachandran and Madura Swaminathan (2001) revealed that, Rural Banking Policy in India discussed various issues in rural financing. They observed that every borrower is

screened by the lender for their creditworthiness and lender shave a sharp-eyed assessment of the borrower's income and wage-earning capacity when they lend money. As a consequence, there has been a proliferation of different types of loans with respect to the terms and conditions attached to each loan.

Sanjay Sinha et al (2003) expressed that, Profitability is very strongly correlated with proactive and well-judged management, and is not only two of the five Regional Rural Banks surveyed that these qualities were observed. Programmes of capacity building and motivation among mangers are likely to generate high returns

Dilip Khankhoje and Milind Sathye (2008) in their article recommend that the existing policy of bringing down non-performing assets as well as curtailing the establishment expenditure through voluntary retirement scheme for bank staff and rationalization of rural branches are steps in the right direction that could help these banks improve efficiency further over a period of time.

Dr. Ch. Rajaram, and Dr. K. Rajendar (2008) in their article said that Quality of loan asset is the most important factor for the basic viability of the banking system. Lower level of non-performing assets helps the banks in consolidating their position and give credence to efficiency of the management. On the contrary, higher non-performing asset levels make their balance sheets weak and less competent.

Suresh. R, (2010), Regional Rural Banks of India perform well only they get more capital injection by the Government of India so as to reach the capital level on par with the commercial banks for their business activity to lend needy poor persons involved in agriculture and allied activities.

Objectives of the study

The following are the objectives of the study

1. To trace the origin and growth of Regional Rural Banks of India

2. To study the physical performance of the Regional Rural Banks of India

2 [Vol VI, No. 1Vedaang 2015] 3Regional Rural Banks of India and its Performance - An Empirical Study

exhibits the details from 2001-2002 to 2012-2013 in terms of numbers of Regional Rural Banks and its branches with districts coverage and the staff employed during these periods.

The above Table 1 reveals that there is a negative growth in no. of Regional Rural Banks due to amalgamation. It also reveals a merge growth in no. of districts covered, branches and staff employed that shows a light on the face of Regional Rural Banks that they have not grown in a satisfactory level which may be due to decision of Government of India to cut down the expenditure that may increase the level of profit. However the C.V. highlights a lesser variation in the no. of district coverage, no. of branches and no. of staff employed.

Null hypotheses are framed from the above physical analysis as given below;

1. There is no significant difference between the no. of Regional Rural Banks and its branches in the development of Regional Rural Banks of India.

2. There is no significant difference between the no. of districts covered and no. of employees in the development of Regional Rural Banks of India.

A paired t-test was performed to test the hypothesis 1 & 2 was considered to test the third hypothesis. The results are exhibited in Table 2, 3.

Table 2 reveals that the calculated t-value is less than the t-critical value and hence it is concluded that the framed null hypothesis-1 is accepted that there is no significant difference at 5% level of confidence between the no. of Regional Rural Banks and its branches in the development of Regional Rural Banks of India. It is also identified that there is a negative correlation among these variable.

3. To study the business performance of the Regional Rural Banks of India

4. To offer suggestions for further development of Regional Rural Banks of India.

Methodology and data collection

This paper attempts to study and analyze the banking business performance and productivity of the Regional Rural Banks in terms of branch-wise, district-wise, staff-wise and state-wise as overall. The required details for the analysis are from 2001 to 2013 and the data for the mentioned years were used based on the requirement of details by dividing it into pre-amalgamation period up to 2005-2006 and post-amalgamation period after 2005-2006. The data collected from the reports of Reserve Bank of India and NABARD from its website. The collected secondary data were involved in various statistical analyses like average, standard deviation, coefficient of variance compounded growth rate and correlation. The hypotheses framed were tested with the parametric tests like t-test, f-test, ANOVA (Single factor).

Regional Rural Banks of India- An overview

The multi-agency approach to rural credit was meant to sub-serve the needs of the input-intensive agricultural strategy (Green Revolution), which had initially focused on betting the strong. The Regional Rural Bank Act, 1976, succinctly summed up the overall vision to sub-serve both the developmental and the redistributive objectives.

The Regional Rural Banks popularly known as the small man's banks have taken deep roots and have become an inseparable part of the rural economy. It plays a vital and essential role in the rural institutional financing for agricultural credit in terms of geographical coverage, with a friendly approach and contributes more to the development of rural economy. There were only six Regional Rural Banks with 17 branches covering 12 districts to begin with. It was noticed in the year 1985 that there were 188 Regional Rural Banks with12,606 branches. There were 196 Regional Rural Banks with 14,390 branches covering 511 districts across the country during 1999. Due to the initialization of

the process of amalgamation of Regional Rural Banks to safeguard them from losses the Government of India with effect from September 2000 in terms of Section 23A of The Regional Rural Bank Act, 1976, the number of Regional Rural Banks declined to 90 operating in 26 States across 594 districts with a network of 14,761 branches as on March 31, 2008. With further amalgamation, excluding the formation of a regional rural bank in the Union Territory of Puducherry, the total number of Regional Rural Banks declined to 86 as on March 2009 with a branch network up to 15,181. During 2010, 2011 and 2012 it came down to 82 banks with 15480, 16001 and 16909 branches covering 618, 620 and 638 districts respectively. Later in 2013 the banks suddenly came down to 64 having 17856 branches in 635 districts with a share capital of Rs.19700 lakhs, share capital deposit of Rs.597684.49 lakhs. During 2014, the population of Regional Rural Banks is 56 having a branch network of 19082 with no change in the share capital of the previous year status. As per the report of the NABARD, the provisional financial results of RRBs for the year 2013-14, indicates that all 57 RRBs have earned profits aggregating Rs. 2,833 crore as compared to 63 out of 64 RRBs earning aggregate profit of Rs. 2,275 crore in 2012-13.

Banking activity analysis

As the first step, the physical analysis is made by considering the number of branches and district coverage that include the state-wise distribution of Regional Rural Banks. In India, till inception of Regional Rural Banks the commercial and cooperative banks rendered financing services to the rural mass. After 1975, the Regional Rural Banks gained an adequate and tremendous growth in terms of number of branches in the district of India. In this case, the Regional Rural Banks faced crises in terms of sources of finance and they met with huge level losses. This situation led the government of India for amalgamating the Regional Rural Banks those were loss making. This structural consolidation process was undertaken during the year 2005-2006.Due to this process the no. of Regional Rural Banks went down from 196 to 133, 94, 90, 86 and finally to 64. The following table-1

4 [Vol VI, No. 1Vedaang 2015] 5Regional Rural Banks of India and its Performance - An Empirical Study

exhibits the details from 2001-2002 to 2012-2013 in terms of numbers of Regional Rural Banks and its branches with districts coverage and the staff employed during these periods.

The above Table 1 reveals that there is a negative growth in no. of Regional Rural Banks due to amalgamation. It also reveals a merge growth in no. of districts covered, branches and staff employed that shows a light on the face of Regional Rural Banks that they have not grown in a satisfactory level which may be due to decision of Government of India to cut down the expenditure that may increase the level of profit. However the C.V. highlights a lesser variation in the no. of district coverage, no. of branches and no. of staff employed.

Null hypotheses are framed from the above physical analysis as given below;

1. There is no significant difference between the no. of Regional Rural Banks and its branches in the development of Regional Rural Banks of India.

2. There is no significant difference between the no. of districts covered and no. of employees in the development of Regional Rural Banks of India.

A paired t-test was performed to test the hypothesis 1 & 2 was considered to test the third hypothesis. The results are exhibited in Table 2, 3.

Table 2 reveals that the calculated t-value is less than the t-critical value and hence it is concluded that the framed null hypothesis-1 is accepted that there is no significant difference at 5% level of confidence between the no. of Regional Rural Banks and its branches in the development of Regional Rural Banks of India. It is also identified that there is a negative correlation among these variable.

3. To study the business performance of the Regional Rural Banks of India

4. To offer suggestions for further development of Regional Rural Banks of India.

Methodology and data collection

This paper attempts to study and analyze the banking business performance and productivity of the Regional Rural Banks in terms of branch-wise, district-wise, staff-wise and state-wise as overall. The required details for the analysis are from 2001 to 2013 and the data for the mentioned years were used based on the requirement of details by dividing it into pre-amalgamation period up to 2005-2006 and post-amalgamation period after 2005-2006. The data collected from the reports of Reserve Bank of India and NABARD from its website. The collected secondary data were involved in various statistical analyses like average, standard deviation, coefficient of variance compounded growth rate and correlation. The hypotheses framed were tested with the parametric tests like t-test, f-test, ANOVA (Single factor).

Regional Rural Banks of India- An overview

The multi-agency approach to rural credit was meant to sub-serve the needs of the input-intensive agricultural strategy (Green Revolution), which had initially focused on betting the strong. The Regional Rural Bank Act, 1976, succinctly summed up the overall vision to sub-serve both the developmental and the redistributive objectives.

The Regional Rural Banks popularly known as the small man's banks have taken deep roots and have become an inseparable part of the rural economy. It plays a vital and essential role in the rural institutional financing for agricultural credit in terms of geographical coverage, with a friendly approach and contributes more to the development of rural economy. There were only six Regional Rural Banks with 17 branches covering 12 districts to begin with. It was noticed in the year 1985 that there were 188 Regional Rural Banks with12,606 branches. There were 196 Regional Rural Banks with 14,390 branches covering 511 districts across the country during 1999. Due to the initialization of

the process of amalgamation of Regional Rural Banks to safeguard them from losses the Government of India with effect from September 2000 in terms of Section 23A of The Regional Rural Bank Act, 1976, the number of Regional Rural Banks declined to 90 operating in 26 States across 594 districts with a network of 14,761 branches as on March 31, 2008. With further amalgamation, excluding the formation of a regional rural bank in the Union Territory of Puducherry, the total number of Regional Rural Banks declined to 86 as on March 2009 with a branch network up to 15,181. During 2010, 2011 and 2012 it came down to 82 banks with 15480, 16001 and 16909 branches covering 618, 620 and 638 districts respectively. Later in 2013 the banks suddenly came down to 64 having 17856 branches in 635 districts with a share capital of Rs.19700 lakhs, share capital deposit of Rs.597684.49 lakhs. During 2014, the population of Regional Rural Banks is 56 having a branch network of 19082 with no change in the share capital of the previous year status. As per the report of the NABARD, the provisional financial results of RRBs for the year 2013-14, indicates that all 57 RRBs have earned profits aggregating Rs. 2,833 crore as compared to 63 out of 64 RRBs earning aggregate profit of Rs. 2,275 crore in 2012-13.

Banking activity analysis

As the first step, the physical analysis is made by considering the number of branches and district coverage that include the state-wise distribution of Regional Rural Banks. In India, till inception of Regional Rural Banks the commercial and cooperative banks rendered financing services to the rural mass. After 1975, the Regional Rural Banks gained an adequate and tremendous growth in terms of number of branches in the district of India. In this case, the Regional Rural Banks faced crises in terms of sources of finance and they met with huge level losses. This situation led the government of India for amalgamating the Regional Rural Banks those were loss making. This structural consolidation process was undertaken during the year 2005-2006.Due to this process the no. of Regional Rural Banks went down from 196 to 133, 94, 90, 86 and finally to 64. The following table-1

4 [Vol VI, No. 1Vedaang 2015] 5Regional Rural Banks of India and its Performance - An Empirical Study

Table-3 reveals that the calculated t-value is less than the t-critical value 2.20 and hence it is concluded that the framed null hypothesis-2 is accepted that there is no significant difference at 5% level of confidence between the no. of districts covered and no. of staff employed in the development of Regional Rural Banks of India. It is also clear from the above that there is a moderate positive correlation among the above two variable.

The second step of analysis goes to the business analysis. The funds sources of Regional Rural Banks are owned funds that include share capital, share capital deposits and reserves and surpluses and the borrowed funds, deposits

collected from the public for which the banks have to pay interest for these two items. These three items are put into the analysis to study the performance of the banks. The application of funds includes advances lent to the customers, and investments made by the bankers with the commercial banks and with the Reserve Bank of India for which it receives income by way of interest. Special focus on Advances have been made by considering the gross loans outstanding of the banks for making analysis even though the sources will not be used only for lending purpose. The following Table 4 shows the sources of the Regional Rural Banks for the periods taken for the analysis. Table 7 exhibits the application of funds of the Regional Rural Banks.

Table 4 displays that the there is a steady growth in the ways of creating sources by the banks for their business activities. The coefficient of variation exceeds 50% in all cases due to reasons of mobilization of sources at larger level when compared to the previous every time. Considering the sources of the Regional Rural Banks, a hypothesis is framed as there is no significant difference between the owned, borrowed sources and deposits in the lending process of the Regional Rural Banks that supports for the higher performance of the banking activity and the same is tested with the statistical tool ANOVA one way classification Table 5. The correlation among these three variables was also computed.

The following Table 7 exhibits the application of funds of the Regional Rural Banks for the periods taken for the analysis.

It is evident from coefficient of variation that advances and investment varies more due to faster application of funds for interest resources. The compounded growth rate also shows a satisfactory position, but in case of advances outstanding the banker should take precautionary steps to protect

Thus the calculated F-value is greater than the f-critical value, the formed null hypothesis is rejected and concluded that there is a significant difference the owned, borrowed sources and deposits in the lending process of the Regional Rural Banks that supports for the higher performance of the banking activity. This may due

to high level of participation of deposits in the sources of funds and highlights that the major role is played by the deposits collected from the public in lending activity. In addition to that these three variables are also involved in testing the relationship through correction. Table 6 shows the relationship and shows that these are having a high degree of positive correlation.

6 [Vol VI, No. 1Vedaang 2015] 7Regional Rural Banks of India and its Performance - An Empirical Study

Table-3 reveals that the calculated t-value is less than the t-critical value 2.20 and hence it is concluded that the framed null hypothesis-2 is accepted that there is no significant difference at 5% level of confidence between the no. of districts covered and no. of staff employed in the development of Regional Rural Banks of India. It is also clear from the above that there is a moderate positive correlation among the above two variable.

The second step of analysis goes to the business analysis. The funds sources of Regional Rural Banks are owned funds that include share capital, share capital deposits and reserves and surpluses and the borrowed funds, deposits

collected from the public for which the banks have to pay interest for these two items. These three items are put into the analysis to study the performance of the banks. The application of funds includes advances lent to the customers, and investments made by the bankers with the commercial banks and with the Reserve Bank of India for which it receives income by way of interest. Special focus on Advances have been made by considering the gross loans outstanding of the banks for making analysis even though the sources will not be used only for lending purpose. The following Table 4 shows the sources of the Regional Rural Banks for the periods taken for the analysis. Table 7 exhibits the application of funds of the Regional Rural Banks.

Table 4 displays that the there is a steady growth in the ways of creating sources by the banks for their business activities. The coefficient of variation exceeds 50% in all cases due to reasons of mobilization of sources at larger level when compared to the previous every time. Considering the sources of the Regional Rural Banks, a hypothesis is framed as there is no significant difference between the owned, borrowed sources and deposits in the lending process of the Regional Rural Banks that supports for the higher performance of the banking activity and the same is tested with the statistical tool ANOVA one way classification Table 5. The correlation among these three variables was also computed.

The following Table 7 exhibits the application of funds of the Regional Rural Banks for the periods taken for the analysis.

It is evident from coefficient of variation that advances and investment varies more due to faster application of funds for interest resources. The compounded growth rate also shows a satisfactory position, but in case of advances outstanding the banker should take precautionary steps to protect

Thus the calculated F-value is greater than the f-critical value, the formed null hypothesis is rejected and concluded that there is a significant difference the owned, borrowed sources and deposits in the lending process of the Regional Rural Banks that supports for the higher performance of the banking activity. This may due

to high level of participation of deposits in the sources of funds and highlights that the major role is played by the deposits collected from the public in lending activity. In addition to that these three variables are also involved in testing the relationship through correction. Table 6 shows the relationship and shows that these are having a high degree of positive correlation.

6 [Vol VI, No. 1Vedaang 2015] 7Regional Rural Banks of India and its Performance - An Empirical Study

the banks from non-performing assets. A null hypothesis is framed that there is no significant difference in performance between advances and investments and the same is tested with F-test. The results were exhibited in Table 8.

Table 9 reveals that the CD Ratio is showing a steady growth from 41.83% to 66.13%. It shows a positive performance of utilization of funds from the source deposits and both of them are having high degree of positive correlation.

It is also essential to consider the comparison of total sources and total utilization of funds by the banks to identify the effective banking activity. Table 10 shows the effective utilization of sources.

The utilization of sources during the entire study period is more than 90%, except the year 2010-2011. It is evident that the banks have performed well in their banking activity. A null hypothesis is framed that there is no significant difference in performance between total sources and utilization which was tested by F-test. The results have been shown in Table 11.

Since the calculated F-value is less than the F-criterion value 2.69 at 5% level of significance. Hence the formed null hypothesis is accepted and concluded that there is no significant difference in performance between advances and investments. It shows the application ways are almost equal. This is proved through correlation analysis that these two variables have a high degree of positive correlation.

The Regional Rural Banks were formed to develop the rural economy by providing credit and other facilities for the purpose of the development of the agricultural activities of the targeted poor people. The credit deposit ratio of the bank indicates the creation of credit out of the deposits mobilized by the banks that are indicated in Table 9.

The calculated F-value 1.28 is less than the F-criterion value 2.69 at 5% level of significance. Hence the formed null hypothesis is accepted and concluded that there is no significant difference in performance between total sources and utilization. It shows the utilization is almost equal to sources. This is proved through correlation analysis that these two variables have a high degree of positive correlation.

Concluding remarks

The role played by the banking system of India after independence has brought in decisive changes in the monetary system of the country. The performance of the Regional Rural Banks in India since 1975 is good, even though the Regional Rural Banks faced so many numbers of crises and competition with other banks. The negative results shown in the above study does not mean that the banks did not perform well, but due to the measures as downsizing the banks taken by the Government of India to protect the Regional Rural Banks from its doldrums. It is clear that the Regional Rural Banks are competing with other banks with its limited

resources and restrictions. The plan of making the Regional Rural Banks as like as Commercial Banks of India without diluting its aim should be mead at the earliest by the Government of India for its further development by increasing its capital base and introducing new deposit mobilization methods and lending methods with sizable increase in the interest rate, that may be lower of the commercial banks. It is necessary to take steps by the Government of India by insisting all the Government departments and other corporate sectors should compulsorily have transactions that are basic to them with the Regional Rural Banks instead of having with private banks for the promotional activity. Further it is found that the state of Nagaland is totally neglected in opening the Regional Rural Banks. Initiative measures should be taken to give total coverage in districts located in India by forming Regional Rural Banks. The private sector banks should to be insisted for opening of Regional Rural Banks on par with nationalized banks. Even though the core banking solution of all banks including Regional Rural Banks is in practice usage of Automatic Teller Machine, Cash Deposit Machine for accepting deposits and repayment of loans should be enabled. Neglecting of any rural area should be avoided. When these measures are taken, it is sure that the banking system in India will come up and it is possible to bring the banking activities to international standard.

References

Nirmala Prasad,K. and Chandra Doss, Banking and Financial System, Himalaya Publishing House, Mumbai, 1999.

Parameswaran, R. and Natarajan, S, Indian Banking, Sulthan Chand and Sons, New Delhi, 2002.

Subha Rao, P., Principles and Practice of Bank Management, Himalaya Publishing House, Mumbai, 1988.

Bhavani Prasad, Veena. D., Non-performing assets Reduction Strategies for Commercial Banks in India, International Journal of Management & Business Studies, Vol.1, Issue.3, Sept.-2011, pp.47-53

Jayanth R. Varma, Indian Financial Sector Reforms: A Corporate Perspective, Journal of the Indian Institute of Management, Ahamedabad, January-March 1998, 23(1), p.27-38 Copyright: Vikalpa- http://www.iimahd.ernet.in/ vikalpa.

2015] 9Regional Rural Banks of India and its Performance - An Empirical Study8 [Vol VI, No. 1Vedaang

the banks from non-performing assets. A null hypothesis is framed that there is no significant difference in performance between advances and investments and the same is tested with F-test. The results were exhibited in Table 8.

Table 9 reveals that the CD Ratio is showing a steady growth from 41.83% to 66.13%. It shows a positive performance of utilization of funds from the source deposits and both of them are having high degree of positive correlation.

It is also essential to consider the comparison of total sources and total utilization of funds by the banks to identify the effective banking activity. Table 10 shows the effective utilization of sources.

The utilization of sources during the entire study period is more than 90%, except the year 2010-2011. It is evident that the banks have performed well in their banking activity. A null hypothesis is framed that there is no significant difference in performance between total sources and utilization which was tested by F-test. The results have been shown in Table 11.

Since the calculated F-value is less than the F-criterion value 2.69 at 5% level of significance. Hence the formed null hypothesis is accepted and concluded that there is no significant difference in performance between advances and investments. It shows the application ways are almost equal. This is proved through correlation analysis that these two variables have a high degree of positive correlation.

The Regional Rural Banks were formed to develop the rural economy by providing credit and other facilities for the purpose of the development of the agricultural activities of the targeted poor people. The credit deposit ratio of the bank indicates the creation of credit out of the deposits mobilized by the banks that are indicated in Table 9.

The calculated F-value 1.28 is less than the F-criterion value 2.69 at 5% level of significance. Hence the formed null hypothesis is accepted and concluded that there is no significant difference in performance between total sources and utilization. It shows the utilization is almost equal to sources. This is proved through correlation analysis that these two variables have a high degree of positive correlation.

Concluding remarks

The role played by the banking system of India after independence has brought in decisive changes in the monetary system of the country. The performance of the Regional Rural Banks in India since 1975 is good, even though the Regional Rural Banks faced so many numbers of crises and competition with other banks. The negative results shown in the above study does not mean that the banks did not perform well, but due to the measures as downsizing the banks taken by the Government of India to protect the Regional Rural Banks from its doldrums. It is clear that the Regional Rural Banks are competing with other banks with its limited

resources and restrictions. The plan of making the Regional Rural Banks as like as Commercial Banks of India without diluting its aim should be mead at the earliest by the Government of India for its further development by increasing its capital base and introducing new deposit mobilization methods and lending methods with sizable increase in the interest rate, that may be lower of the commercial banks. It is necessary to take steps by the Government of India by insisting all the Government departments and other corporate sectors should compulsorily have transactions that are basic to them with the Regional Rural Banks instead of having with private banks for the promotional activity. Further it is found that the state of Nagaland is totally neglected in opening the Regional Rural Banks. Initiative measures should be taken to give total coverage in districts located in India by forming Regional Rural Banks. The private sector banks should to be insisted for opening of Regional Rural Banks on par with nationalized banks. Even though the core banking solution of all banks including Regional Rural Banks is in practice usage of Automatic Teller Machine, Cash Deposit Machine for accepting deposits and repayment of loans should be enabled. Neglecting of any rural area should be avoided. When these measures are taken, it is sure that the banking system in India will come up and it is possible to bring the banking activities to international standard.

References

Nirmala Prasad,K. and Chandra Doss, Banking and Financial System, Himalaya Publishing House, Mumbai, 1999.

Parameswaran, R. and Natarajan, S, Indian Banking, Sulthan Chand and Sons, New Delhi, 2002.

Subha Rao, P., Principles and Practice of Bank Management, Himalaya Publishing House, Mumbai, 1988.

Bhavani Prasad, Veena. D., Non-performing assets Reduction Strategies for Commercial Banks in India, International Journal of Management & Business Studies, Vol.1, Issue.3, Sept.-2011, pp.47-53

Jayanth R. Varma, Indian Financial Sector Reforms: A Corporate Perspective, Journal of the Indian Institute of Management, Ahamedabad, January-March 1998, 23(1), p.27-38 Copyright: Vikalpa- http://www.iimahd.ernet.in/ vikalpa.

2015] 9Regional Rural Banks of India and its Performance - An Empirical Study8 [Vol VI, No. 1Vedaang

INTRODUCTION

Tourism in the form of 'travel' has been an inherent nomadic besetting in man ever since the very emergence of humanity. However, having had its genesis in primitive nomadism, tourism in the form of travel grew strength by strength through the ages along with the progressing civilization to now ultimately transform it into 'a revolutionary social movement' which has virtually become a way of life to the modern societies in particular (Ramola 2008). The genesis of modern day tourism can be attributed to the instinct of curiosity which the humanity first confronted on becoming a bit more thoughtful than the other wild denizens. Gradually, the purposes of 'travelling' steadily diversified as the man became 'grazier' and 'settler'. 'Barter', the earliest form of trade and businesses created stronger propensity to the process of relatively frequent and farther movements.

Invention of 'wheel' was perhaps the first landmark in the travel history that paved way for smoother, faster and farther movements. However, , earlier to 'technological revolution, on account of 'antiquated means of transport', 'lack of way side facilities', 'safety and security' and, non-availability of 'discretionary money and time', 'travel' largely remained the privilege of elite and well to do class of society who could afford to buy the conveniences

(Kandari 1984). Still there was a 'class' who would brave the way-side constraints and risks to satisfy their urge to explore the unknown, to whom the credit goes for creating a strong zeal in the society to 'know the unknown'.

Incidentally, the spark for travel which received a strong momentum during the 'Greek' and 'Roman' empires comprehensively vanished during the 'dark age', only to receive a fresh lease of life during the Middle Ages when a new class of traveler emerged, i.e., 'adventures and explorers'. Strongly motivated by 'curiosity' and 'quest for knowledge', these inquisitive bravadoes, despite their limited means, used to set-out on long and arduous voyages, bravely facing the en-route risks and discomforts. Their accounts on 'different land and people' induced a strong urge in the society to travel to 'alien lands and cultures' or to 'explore bounties of nature'. Thus, daring spirits like Marco polo, Columbus and Benjamin of Tudela, Vasco-De-Gama, Jewish Scholar, Iban-Batutah, Francisco Friar added new dimensions to travel in terms of 'activity', 'concept' and 'philosophy' (Kandari 1984). In the context of Europe, the Era of Renaissance and Grand Tours, alongside development of spas and subsequently the popularity of beaches and health resorts etc gave considerable momentum to travel and tourism. Simultaneously, with the advent of

Jayanthi Lal Jain and M. Swaminathan Deregulation of interest rates on deposits and its impact, The Journal of Indian Institute of Bankers Dec 1998, pp 5-12.

K. Rajender Dr. & S. Suresh, Management of Non-performing assets in Indian Banking A Case Study of State Bank of Hyderabad The Management Accountant, Sept. 2007, Vol.42, No.9 P. 740 -749.

Rajaram, Dr. Ch. & Dr. K. Rajendar, article Management of Non-performing assets in Indian Scheduled Commercial Banks, The Management Accountant, Aug 2008, Vol.43, No8 P. 107.

Samjay Sinha, Tanmay Chetan, Orlanda Ruthren and Nilotpal Pathak working paper The outreach / viability conundrum :Can India's Regional Rural Banks Really Serve Low-Income Clients?, Overseas Development Institute, 111 Westminister Bridge Road, London, UK, Oct 2003

Suresh, R. Dr., Regional Rural Banks and Prudential Norms- an Overview in The Management Accountant, an official organ (Journal) of ICWAI, June 2010, Vol.45, No.6, page number 484-491 & 500.

Suresh, R. Dr., Deposit, Lending and Recovery Performance

of Pandyan Grama Bank: An Analysis in Indian Journal of Finance, New Delhi, a monthly refereed journal, January 2012 edition, Vol. 6, No.1.

Suresh, R. Dr., Management of Non-Performing Assets in Regional Rural Banks- A case study of Pandyan Grama Bank, Virudhunagar, Tamilnadu in the Indian Journal of Finance, New Delhi, October 2010 edition, Vol.4, No.10, page numbers 37-47.

Vasan Anand Kumar, Performance of Regional Rural Banks Kurukshatra, Vol. XXXVI, No.8, May 1988, pp 19-20

Handbook for Directors of Regional Rural Banks, Reserve Bank of India, College of Agricultural Banking, Pune.

Ananthan, B.R Regional Development Banks A Performance Evaluation of Karnataka SFC, Unpublished Ph.D Thesis, 1981

Suresh. R, Application of Prudential norms and its impact on Pandyan Grama Bank, Virudhunagar, unpublished Ph.d., thesis, 2010

Shri. M.Narashimam Working Group Recommendations (1975)

Annual Reports of Reserve Bank of India & NABARD-2013

10 [Vol VI, No. 1Vedaang

"ATITHI KAB AAOGE..ATITHI DEVO BHAVADEVELOPING TOURISM AS A FOREMOST TOOL TO

SPEARHEAD THE ECONOMY OF INDIA

ABSTRACTOne of the oldest civilization of the world, one of the greatest nation of the world, one of the greatest democracy and obviously no need to speak about the population. This great nation INDIA has everything. We have every possible resource but the one that we are blessed with is 'MOTHER NATURE'. A nation that has mountains and oceans, deserts and monuments, heritage sites and culture- All ingredients of a pure recipe that makes up for a great tourism nation. Tourism will not only build 'BRAND INDIA' but it will create enormous employment opportunity for the youth of India.

Vedaang, 6 (1) : 11-21, 2015 ISSN 09757961

Alka Dhanai*, Vipul Jain**

* Associate Professor, Dept. of Management, Shri Guru Ram Rai Institute of Technology & Science, Dehradun

**Associate Professor, Dept. of Management, Shri Guru Ram Rai Institute of Technology & Science, Dehradun

INTRODUCTION

Tourism in the form of 'travel' has been an inherent nomadic besetting in man ever since the very emergence of humanity. However, having had its genesis in primitive nomadism, tourism in the form of travel grew strength by strength through the ages along with the progressing civilization to now ultimately transform it into 'a revolutionary social movement' which has virtually become a way of life to the modern societies in particular (Ramola 2008). The genesis of modern day tourism can be attributed to the instinct of curiosity which the humanity first confronted on becoming a bit more thoughtful than the other wild denizens. Gradually, the purposes of 'travelling' steadily diversified as the man became 'grazier' and 'settler'. 'Barter', the earliest form of trade and businesses created stronger propensity to the process of relatively frequent and farther movements.

Invention of 'wheel' was perhaps the first landmark in the travel history that paved way for smoother, faster and farther movements. However, , earlier to 'technological revolution, on account of 'antiquated means of transport', 'lack of way side facilities', 'safety and security' and, non-availability of 'discretionary money and time', 'travel' largely remained the privilege of elite and well to do class of society who could afford to buy the conveniences

(Kandari 1984). Still there was a 'class' who would brave the way-side constraints and risks to satisfy their urge to explore the unknown, to whom the credit goes for creating a strong zeal in the society to 'know the unknown'.

Incidentally, the spark for travel which received a strong momentum during the 'Greek' and 'Roman' empires comprehensively vanished during the 'dark age', only to receive a fresh lease of life during the Middle Ages when a new class of traveler emerged, i.e., 'adventures and explorers'. Strongly motivated by 'curiosity' and 'quest for knowledge', these inquisitive bravadoes, despite their limited means, used to set-out on long and arduous voyages, bravely facing the en-route risks and discomforts. Their accounts on 'different land and people' induced a strong urge in the society to travel to 'alien lands and cultures' or to 'explore bounties of nature'. Thus, daring spirits like Marco polo, Columbus and Benjamin of Tudela, Vasco-De-Gama, Jewish Scholar, Iban-Batutah, Francisco Friar added new dimensions to travel in terms of 'activity', 'concept' and 'philosophy' (Kandari 1984). In the context of Europe, the Era of Renaissance and Grand Tours, alongside development of spas and subsequently the popularity of beaches and health resorts etc gave considerable momentum to travel and tourism. Simultaneously, with the advent of

Jayanthi Lal Jain and M. Swaminathan Deregulation of interest rates on deposits and its impact, The Journal of Indian Institute of Bankers Dec 1998, pp 5-12.

K. Rajender Dr. & S. Suresh, Management of Non-performing assets in Indian Banking A Case Study of State Bank of Hyderabad The Management Accountant, Sept. 2007, Vol.42, No.9 P. 740 -749.

Rajaram, Dr. Ch. & Dr. K. Rajendar, article Management of Non-performing assets in Indian Scheduled Commercial Banks, The Management Accountant, Aug 2008, Vol.43, No8 P. 107.

Samjay Sinha, Tanmay Chetan, Orlanda Ruthren and Nilotpal Pathak working paper The outreach / viability conundrum :Can India's Regional Rural Banks Really Serve Low-Income Clients?, Overseas Development Institute, 111 Westminister Bridge Road, London, UK, Oct 2003

Suresh, R. Dr., Regional Rural Banks and Prudential Norms- an Overview in The Management Accountant, an official organ (Journal) of ICWAI, June 2010, Vol.45, No.6, page number 484-491 & 500.

Suresh, R. Dr., Deposit, Lending and Recovery Performance

of Pandyan Grama Bank: An Analysis in Indian Journal of Finance, New Delhi, a monthly refereed journal, January 2012 edition, Vol. 6, No.1.

Suresh, R. Dr., Management of Non-Performing Assets in Regional Rural Banks- A case study of Pandyan Grama Bank, Virudhunagar, Tamilnadu in the Indian Journal of Finance, New Delhi, October 2010 edition, Vol.4, No.10, page numbers 37-47.

Vasan Anand Kumar, Performance of Regional Rural Banks Kurukshatra, Vol. XXXVI, No.8, May 1988, pp 19-20

Handbook for Directors of Regional Rural Banks, Reserve Bank of India, College of Agricultural Banking, Pune.

Ananthan, B.R Regional Development Banks A Performance Evaluation of Karnataka SFC, Unpublished Ph.D Thesis, 1981

Suresh. R, Application of Prudential norms and its impact on Pandyan Grama Bank, Virudhunagar, unpublished Ph.d., thesis, 2010

Shri. M.Narashimam Working Group Recommendations (1975)

Annual Reports of Reserve Bank of India & NABARD-2013

10 [Vol VI, No. 1Vedaang

"ATITHI KAB AAOGE..ATITHI DEVO BHAVADEVELOPING TOURISM AS A FOREMOST TOOL TO

SPEARHEAD THE ECONOMY OF INDIA

ABSTRACTOne of the oldest civilization of the world, one of the greatest nation of the world, one of the greatest democracy and obviously no need to speak about the population. This great nation INDIA has everything. We have every possible resource but the one that we are blessed with is 'MOTHER NATURE'. A nation that has mountains and oceans, deserts and monuments, heritage sites and culture- All ingredients of a pure recipe that makes up for a great tourism nation. Tourism will not only build 'BRAND INDIA' but it will create enormous employment opportunity for the youth of India.

Vedaang, 6 (1) : 11-21, 2015 ISSN 09757961

Alka Dhanai*, Vipul Jain**

* Associate Professor, Dept. of Management, Shri Guru Ram Rai Institute of Technology & Science, Dehradun

**Associate Professor, Dept. of Management, Shri Guru Ram Rai Institute of Technology & Science, Dehradun

12 [Vol VI, No. 1Vedaang 2015] 13Atithi Kab Aaoge..Atithi Devo Bhava Developing Tourism as a foremost tool.....

industrialization, there was gradually increase in leisure and disposable income which gave further impetus to the travel - propensity' but only to be dispirited by the two successive World Wars when the movement of people remained largely confined to the displacement of armies (Ramola 2008).

With the end of World War II, there was a sudden out-burst to set-out on travel to release stresses and strains of war-time. Thanks to the technological advancements (especially in the field of aviation and communication system) occurred during the long war years to win-over an edge on the opponents that it came as an obvious convenience for travel hunting society. This is why that tourism not only got effectively institutionalized but started growing at an unprecedented rate immediately after World War II. As the ever improving technology, particularly provided more and more discretionary time and income to the people coupled with effective access to information and means of communication, the stage was all set to an unprecedented travel boom. The ill effect of industrialization, automation and urbanization too have its contribution to this effect in terms of creating strong desire to at least temporarily escape physical and psychological problems of noise, pollution, overcrowding, routine, monotony and boredom etc. In fact, the interplay of technological advancement and industrialization has made travel and tourism both a 'convenience', and 'compulsion' to the modern society (Kandari, 1984). To quote Wahab (1971), 'the inhabitants of large urban and industrial cities are most eager escapers from their environment on weekends and annual holidays'.

Observation of (Singh, 1975) 'modern tourism is a direct product of economic and social progress promoted by technological and scientific advances, higher real income, longer leisure time, demographic expansion and increasingly cheaper and varied tourist-plant facilities that provide the essential conditions for the growth of tourism', further support this view.

As of now, more and more people have a natural access to faster, cheaper and safer means of transport and an equally effective communication system. Time-distance gap in real terms has

considerably narrowed down thereby transforming the world into a close neighborhood. "The spread of education has created cultural awareness and has stimulated desire to travel" (Hellen 1966). Development of newer attractions and destinations, improvement in tourist plant facilities and services, availability of competitive tourist supplies both in terms of quality and price and, effective marketing strategies being adopted by tourism developers and private sector enterprises are further tempting more and more globe trotters to set out on recreational, pleasure and adventure trips; to explore nature and culture; to experience extremes of 'activity' or 'in-activity'; to simply go for change, or, to satisfy spiritual and religious urge; to relish holidaying or just go for change, etc (Ramola 2008)

Realizing the multifaceted socio-economic, cultural and environmental advantages of tourism, now virtually every region and country of the world is engaged in applying 'tourism friendly policies and, evolving competitive tourism products to lure more and more tourists. As a result, the people have wider options to select destinations and touristic pursuits according to their interest, aptitude, spending capacity and availability of leisure. Consequently, more and more potential tourists are turning to effective ones thereby leading to ever faster growth in tourism. This phenomenal change in tourism has been experienced worldwide. Presently, tourism has been declared as an industry and its socio-economic and environmental impacts are being visualized clearly. The greatest and the most significant development in modern tourism is the demand for outdoor in mass recreation.

Some of the Key Advantages of Promoting tourism are :

It is most effective and efficient means of earning foreign exchange, and thus vitally contributes in improving balance of payment situation of the countries. Since, in tourism, market comes to the product thus even a tea seller or porter becomes able to directly or indirectly earn foreign exchange for the country.

I t c rea tes t remendous employment

opportunities, not only for professionals, but semi-skilled and unskilled workforce as well. The employment multiplier of tourism is one of the highest. It has been generally observed that each job created in its direct sector leads to creation of 1.5 jobs indirectly.

The money spent by foreign tourists at the destination not only leads to net addition to the economy but also acts like 'injection of external purchasing power in to host economy.

Tourism overlay way for development/ modernization of infrastructure from which the resident population is directly benefitted

Host governments directly and indirectly earns revenue through various taxes i.e., License fee, entry fee, income /sales /service/excise etc taxes.

Tourism contributes in conservation of monuments and historical site alongside revival and rediscover of cultural traditions.

It helps in improving the living standard and health and hygiene conditions of the destination societies apart from infusing sense of belongingness towards their social, natural and cultural heritage.

The best part of responsible tourism is that it offers opportunities for cross - societal interaction thereby creating social, cultural and environmental awareness, especially in the destination populace ultimately enabling it to understand the holistic perspective of life.

It helps is conservation of nature and eco-systems by playing a vital role in terms of reliving the excessive pressure on them by providing alternate/additional means of livelihood. Apart from this, nature, wildlife and eco tourism etc directly contribute in protection, preservation and conservation of natural manifestation through its economic, ethical and psychological impacts.

United Nations in its session on Travel and Tourism in the year 1963 has appreciated and acknowledged the role and contribution of tourism in developing communal harmony and

societal understanding that ultimately is too vital in the context of world peace.

In view of the above, tourism can play as 'an agent to holistic development'.

Interestingly, the employment opportunities created in tourism sector are open to trained professionals, as also to semi-skilled and unskilled workforce as well. Not only this, the income and employment multiplier of tourism are considerably higher as compared to any other industry or trade. Because of the eminent role that tourism plays in modernization of infrastructure, improvement in l i v i n g s t a n d a r d , a c t i v a t i o n o f l a t e n t entrepreneurship, enhancement in social awareness, inculcating positive attitude towards life, catalytically energizing the economy, developing social understanding and communal harmony, helping in protection, preservation and conservation of natural and cultural heritage areas, and above all, narrowing down the regional imbalances, it is rightly credited to be an agent to holistic development, especially in the context of developing economies. Moreover, on account of the automatic market differentiation, it is the only sector that provides effective opportunity to the poorer economies to compete with even the most affluent ones. Now aware of the multi- prong advantages of tourism, virtually every region and nation is taking it as one of the priority areas in its scheme of central planning.

However, it is undoubtedly established now that tourism is a strong economic force, especially for up-coming economies on more than many counts, i.e., (i) it can be promoted anywhere and everywhere, even in the areas where no alternate economic activity is distantly possible, viz., snow clad peaks, black mountains, deserts, beaches, deep seas and even where there is virtually nothing, i.e., outer space, (ii) Every country/destination, irrespective of being affluent or poorer has inherent monopoly over its product and thus tourism provides a level platform for competition, (iii) by and large the basic tourist product, natural or manmade, is inherently available and is non-consumptive and non-renewable which can be offered to market at different prices depending on

12 [Vol VI, No. 1Vedaang 2015] 13Atithi Kab Aaoge..Atithi Devo Bhava Developing Tourism as a foremost tool.....

industrialization, there was gradually increase in leisure and disposable income which gave further impetus to the travel - propensity' but only to be dispirited by the two successive World Wars when the movement of people remained largely confined to the displacement of armies (Ramola 2008).

With the end of World War II, there was a sudden out-burst to set-out on travel to release stresses and strains of war-time. Thanks to the technological advancements (especially in the field of aviation and communication system) occurred during the long war years to win-over an edge on the opponents that it came as an obvious convenience for travel hunting society. This is why that tourism not only got effectively institutionalized but started growing at an unprecedented rate immediately after World War II. As the ever improving technology, particularly provided more and more discretionary time and income to the people coupled with effective access to information and means of communication, the stage was all set to an unprecedented travel boom. The ill effect of industrialization, automation and urbanization too have its contribution to this effect in terms of creating strong desire to at least temporarily escape physical and psychological problems of noise, pollution, overcrowding, routine, monotony and boredom etc. In fact, the interplay of technological advancement and industrialization has made travel and tourism both a 'convenience', and 'compulsion' to the modern society (Kandari, 1984). To quote Wahab (1971), 'the inhabitants of large urban and industrial cities are most eager escapers from their environment on weekends and annual holidays'.

Observation of (Singh, 1975) 'modern tourism is a direct product of economic and social progress promoted by technological and scientific advances, higher real income, longer leisure time, demographic expansion and increasingly cheaper and varied tourist-plant facilities that provide the essential conditions for the growth of tourism', further support this view.

As of now, more and more people have a natural access to faster, cheaper and safer means of transport and an equally effective communication system. Time-distance gap in real terms has

considerably narrowed down thereby transforming the world into a close neighborhood. "The spread of education has created cultural awareness and has stimulated desire to travel" (Hellen 1966). Development of newer attractions and destinations, improvement in tourist plant facilities and services, availability of competitive tourist supplies both in terms of quality and price and, effective marketing strategies being adopted by tourism developers and private sector enterprises are further tempting more and more globe trotters to set out on recreational, pleasure and adventure trips; to explore nature and culture; to experience extremes of 'activity' or 'in-activity'; to simply go for change, or, to satisfy spiritual and religious urge; to relish holidaying or just go for change, etc (Ramola 2008)

Realizing the multifaceted socio-economic, cultural and environmental advantages of tourism, now virtually every region and country of the world is engaged in applying 'tourism friendly policies and, evolving competitive tourism products to lure more and more tourists. As a result, the people have wider options to select destinations and touristic pursuits according to their interest, aptitude, spending capacity and availability of leisure. Consequently, more and more potential tourists are turning to effective ones thereby leading to ever faster growth in tourism. This phenomenal change in tourism has been experienced worldwide. Presently, tourism has been declared as an industry and its socio-economic and environmental impacts are being visualized clearly. The greatest and the most significant development in modern tourism is the demand for outdoor in mass recreation.

Some of the Key Advantages of Promoting tourism are :

It is most effective and efficient means of earning foreign exchange, and thus vitally contributes in improving balance of payment situation of the countries. Since, in tourism, market comes to the product thus even a tea seller or porter becomes able to directly or indirectly earn foreign exchange for the country.

I t c rea tes t remendous employment

opportunities, not only for professionals, but semi-skilled and unskilled workforce as well. The employment multiplier of tourism is one of the highest. It has been generally observed that each job created in its direct sector leads to creation of 1.5 jobs indirectly.

The money spent by foreign tourists at the destination not only leads to net addition to the economy but also acts like 'injection of external purchasing power in to host economy.

Tourism overlay way for development/ modernization of infrastructure from which the resident population is directly benefitted

Host governments directly and indirectly earns revenue through various taxes i.e., License fee, entry fee, income /sales /service/excise etc taxes.

Tourism contributes in conservation of monuments and historical site alongside revival and rediscover of cultural traditions.

It helps in improving the living standard and health and hygiene conditions of the destination societies apart from infusing sense of belongingness towards their social, natural and cultural heritage.

The best part of responsible tourism is that it offers opportunities for cross - societal interaction thereby creating social, cultural and environmental awareness, especially in the destination populace ultimately enabling it to understand the holistic perspective of life.

It helps is conservation of nature and eco-systems by playing a vital role in terms of reliving the excessive pressure on them by providing alternate/additional means of livelihood. Apart from this, nature, wildlife and eco tourism etc directly contribute in protection, preservation and conservation of natural manifestation through its economic, ethical and psychological impacts.

United Nations in its session on Travel and Tourism in the year 1963 has appreciated and acknowledged the role and contribution of tourism in developing communal harmony and

societal understanding that ultimately is too vital in the context of world peace.

In view of the above, tourism can play as 'an agent to holistic development'.

Interestingly, the employment opportunities created in tourism sector are open to trained professionals, as also to semi-skilled and unskilled workforce as well. Not only this, the income and employment multiplier of tourism are considerably higher as compared to any other industry or trade. Because of the eminent role that tourism plays in modernization of infrastructure, improvement in l i v i n g s t a n d a r d , a c t i v a t i o n o f l a t e n t entrepreneurship, enhancement in social awareness, inculcating positive attitude towards life, catalytically energizing the economy, developing social understanding and communal harmony, helping in protection, preservation and conservation of natural and cultural heritage areas, and above all, narrowing down the regional imbalances, it is rightly credited to be an agent to holistic development, especially in the context of developing economies. Moreover, on account of the automatic market differentiation, it is the only sector that provides effective opportunity to the poorer economies to compete with even the most affluent ones. Now aware of the multi- prong advantages of tourism, virtually every region and nation is taking it as one of the priority areas in its scheme of central planning.

However, it is undoubtedly established now that tourism is a strong economic force, especially for up-coming economies on more than many counts, i.e., (i) it can be promoted anywhere and everywhere, even in the areas where no alternate economic activity is distantly possible, viz., snow clad peaks, black mountains, deserts, beaches, deep seas and even where there is virtually nothing, i.e., outer space, (ii) Every country/destination, irrespective of being affluent or poorer has inherent monopoly over its product and thus tourism provides a level platform for competition, (iii) by and large the basic tourist product, natural or manmade, is inherently available and is non-consumptive and non-renewable which can be offered to market at different prices depending on

grow by 2.2% in 2014 to 103,069,000 (3.4% of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes the activities of the restaurant and leisure industries directly supported by tourists. By 2024, Travel & Tourism will account for 126,257,000 jobs directly, an increase of 2.0% pa over the next ten years. (WTTC Travel & Tourism Economic Impact 2014) .

The available data for first six month of the year 2013 illustrate quite encouraging trends. During this period, International tourist arrivals have already recorded an increase of 5% as compared to the same period of 2012. In net terms, so far there has been an increase of 25 million arrivals as compared to the preceding year. This growth has been above the projections made at the beginning of the year (+ 3% to +4%); also exceeding the trend of the UNWTO. This reflected a robust tourism sector despite ongoing economic challenges in some parts of the world.

In terms of International tourism receipts; it increased to US$1.07 trillion (837 billion) in 2012, corresponding to an increase in real terms of 4.0% from 2011. The World Tourism Organization reports the following countries as the top ten tourism earners for the year 2012 (Table 1.2).

USA continues to be top tourism earners for many decades, now, though France, Italy and Spain attract more arrivals as compared to the former. Even if the receipts of Macau are added to that of China, the figure comes far ahead to the European countries. The performance of China, in particular has been astonishing over last three decades. It opened its doors for tourism only in the year 1978, and now already stands among top tourism destinations of the world, both in terms of arrivals and receipts.

The fact that international tourist traffic and receipts patterns are now increasing above expectations confirms that travelling is now part of consumer patterns for an increasing number of people in both emerging and advanced economies. This underlines the need to rightly place tourism as one of the key pillars of socio economic development being a leading contributor to economic growth, exports and jobs.

Future Perspective

Prognosis reveal that International Tourist Traffic may keep on increasing at the rate of 4.5 to 5.5% per annum, which means that the number of tourist arrivals may touch about 1.5 billion mark by the year 2020 (Figure 1.1) which means it is likely to double by the year 2025. Thus, the world is heading towards a big tourism boom.

the spending capacity of the buyer, (iv) cost of tourism development especially that of the adventure, rural, eco, spiritual, health, wildlife and the like form of tourism is rather minimal, (v) it is the most effective way of earning foreign exchange, apart from being the most efficient employer, (vi) income from tourism denotes net addition to the economy and that its economic multiplier is one of the highest, (vii) judiciously planed tourism helps to the cause of conservation of natural, cultural, social and economic environments; (viii) responsible tourism may decisively contribute in socio-cultural prosperity apart from revival and rejuvenation of lost traditions/heritage; (ix) role of positive tourism in creating political social harmony/understanding is par excellence; and, (x) to the developing economies in particular, tourism can play the role of an agent to holistic development ( Ramola 2008).

Talking in economic terms tourism accounts for more than 12 % of the world trade and over 30% of the total international trade in services besides acting as the single largest item of export for many countries. Putting together the international tourism receipts including those generated by international fare, tourism surpasses all other international trade categories. The WTO forecasts on employment indicates that approximately 25 crore people shall find direct employment in tourism industry by the turn of 2020. (Source: WTTC Report 2005).

Growth in International Tourism

Available statistics emphatically prove that tourism is the fastest growing industry of the world. The growth pace has been virtually unprecedented, particularly after World War II. This is aptly evident from the fact the number of international tourists increased from a mere 14.4million in the year 1948 to over 1000 million and tourism receipts from 2.1 billion US $ to well over a trillion, now. Three decades spanning 1960 to 1990, especially witnessed highest average annual growth rate of about 7.5 % in the tourist traffic. All through these years, the declining trend has only been recorded in the 1982 which was on account of the soaring inflation caused due to overwhelming increase in the price of petroleum products. However, the

trends recovered immediately in the very next year. There-after, a sharp decline in tourist traffic (about 9 million) was seen after the un-famous 9/11 incident, and again in 2009, but in the span of year the traffic trends were back on the track. Tourism is generally considered to be an extremely sensitive industry which may be affected by adverse social, political, economic and environmental conditions in the market regions, at destinations and even in-between (en-route), but the trends, so far, also indicate that this smokeless industry has the inherent capacity to promptly recover as well.

14 [Vol VI, No. 1Vedaang 2015] 15Atithi Kab Aaoge..Atithi Devo Bhava Devel