Shah, Deepak (2007): Dwindling Viability of PACS during Period of Institutional Reforms: An Evidence from Maharashtra.
Download (87kB) | Preview
The present investigation was conducted in Kolhapur district of Maharashtra. The study showed a reduction in the operational efficiency of the selected PACS during the post-economic reform period as against the pre-economic reform period. The operational efficiency was measured in respect of various liquidity ratio, profitability ratios and financial leverage ratios. Not only the selected societies showed a decline in their current ratio, rate of return on assets, return on owner’s equity and marginal efficiency of capital (MEC) but also higher dependency on lender’s capital for their finances. This dependency was seen to be higher in the case of ‘A’ graded society. Nonetheless, ‘A’ graded society showed an improvement in its permanent capital during the latter period as against the former period. On the other hand, permanent capital position of ‘B’ graded society had declined during the latter period. Further, in the case of ‘A’ graded society there was not much improvement in the net worth, and in fact the share of net worth in its total liability had declined in the post-economic reform period. The declining share of net worth had caused an increase in debt-asset ratio of this society during the latter period as against the former period. In fact, among various ratios, the most important ratio estimated in this study was the return on owner’s equity. The estimated return on owner’s equity of the selected societies were seen to fall sharply during the post-economic reform period. Since the return on owner’s equity is a function of as to how efficiently a firm manages its assets, the net profit margin on sales and the degree of financial leverage, a reduction in return on equity of the selected societies could, therefore, be considered as a sign of reduction in the efficiency of the societies in managing their assets and liabilities, and also income and expenditure pattern during the latter period as against the former period.
|Item Type:||MPRA Paper|
|Institution:||Gokhale Institute of Politics and Economics|
|Original Title:||Dwindling Viability of PACS during Period of Institutional Reforms: An Evidence from Maharashtra|
|Keywords:||Institutional Reforms Viability of PACS|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes|
|Depositing User:||Deepak Shah|
|Date Deposited:||08. Jul 2007|
|Last Modified:||22. Feb 2015 17:16|
Ambastha, C.K. (1984), ‘Factors Underlying Growing Overdues’, The Tamil Nadu Journal of Cooperation, October, pp. 153-162.
Clemens, J.H. and L.S. Dyer (1977), ‘Balance Sheets and the Lending Banker’, Europa Publications Limited, London, U.K.
Gadgil, M.V. (1994), ‘ Formal Agricultural Credit System in India : Shape of Things to Come’, Indian Journal of Agricultural Economics, Vol. 49, No. 3, July-Sept., pp. 476-490. Nimmi, K.G. (1986), ‘An Analysis of the Extent of Diversification of Lending and Viability of PACS’, B.Sc.(C&B) Dissertation, Kerala Agricultural University, Kerala. Sasi, P.B.(1987), ‘Performance Evaluation of Pananchery SCB’, B.Sc. (C & B) Dissertation, Kerala Agricultural University, Kerala. Shah, U.M. (1988), ‘Organisation and Functioning of PACS’, Tamil Nadu Journal of Cooperatives, December, pp. 366-373. Shah, Tushaar (1995), ‘Making Farmers’ Co-operatives Work’ , Sage Publications, New Delhi, pp. 54. Shah, Deepak (2001), ‘How far Credit Cooperatives are Viable in the New Economic Environment: An Evidence from Maharashtra’, Prajnan, Vol. 30, No. 2, pp. 149-174. Subrahmanyam, B (1999), ‘Cooperative Credit Structure: A Perspective for 2000 A.D.’, in ‘Positioning Cooperatives in 21st Century’, Proceedings of the National Symposium, K. Elumalai and K. Chellappan (eds.), Vaikunth Mehta National Institute of Cooperative Management, Pune, pp. 89-101.
Viscione, Jerry A. (1977), ‘Financial Analysis: Principles and Procedures’, Houghton Mifflin Company, Boston, U.S.A.