Whether Govt. Policies relating to market at the current situation (Recession & Election 2009) in India affects the unorganized retail segment (business and investment in share-market point of view)?
The pre-thoughts and actual results
A study in Asansol (West Bengal)


Robin K. Agarwal
Lecturer (Finance)
Asansol Engineering College

Key Words: Election 2009, Unorganized Retail Market, Global Recession, Investment


The following study has done in two parts. In the first part it is tried to find the pre-assumptions and actual believes of the people about election, Govt measures and its impact, while in the second part an actual result of election and pre-assumptions of the people is described.

'Election is the word that has significant impact in any democratic nation. From minor to major, more or less everyone looks attach with the issue. The issue spread over all the nationals either any source of information is there or not. Effect of viral marketing is the best seen in the companioning of election. In Indian constitution there are two houses in the parliament, Lok Sabha and Rajya Sabha. For each of the house there are elections (Union Election for the Lok Sabha, State Election for the Rajya Sabha) in India in each of five years of interval. Union Elections, 2009 are on the way and working related with it seems to start from personnel's ends.

In democracy everyone has its own words. In the Elections in India, the mega political festival, a representative party is elected to control the different matters of the 'Mini Globe'.

Business Class is broadly segmented in India into different categories. Depending upon the consumer perception from top to bottom there is a huge demarcation in these categories. Retail segment is one of the important classes of business. In India retail sector is broadly constituted from the two segments- Organized and Unorganized Retail Sector. From the sources it is estimated that the organized segment is growing rapidly in comparison of the Unorganized or traditional segment (10% growths for Unorganized while 45% growth for organized sector is estimated for 2010-11).

Intention of reaching beyond the boundaries and the interaction between the controlled and uncontrolled methodologies resulted an all time supreme recession throughout the World. Appearance with more strength in this turmoil is a big challenge. Key remedies for the disturb environment extract somewhere from the authority and regulatory bodies which lastly adjust according to 'the Controller'.

Activities are of much kind but in all activity there may be a one common thing, 'Objective'. Providing a fresh air for the breadth of the business class by the authority, is a widely accepted tool over the globe, to achieve many political objectives. To fund the 'Vote Bank', one of the key objective of any political issue, can be easily done with the help of the policies which is favorable for the growth of the economy. In the current situation Govt. is making some sense and non-sense activity for the market. Effect of these policies can be seen in the entire nation and especially if we talk about the business house, and on that specifically the retail segment which again divided into two parts where unorganized part is dominating vigorously, the impact is some how unique.

"To every action there is an equal and opposite reaction", the law is valid in case of all the living and non-living entities of the environment, but reaction is perceptional if it is close to human beings. For the several activities of Government about the market under current situation of India, it is important to know whether the activities are for the vote bank or the right actions as according to the situation; whether the people of India is considering all the matter as a Govt. traditional vote generating strategies or something else' is there any effect of the measures taken by the Govt. at Unorganized retail segment?     

Problem to be examined

A step for the market that has been taken by the Govt. of India is considered the Election issue or the necessary phenomena as according to the global slump?

Need for the study

Global business is facing the biggest ever recession in the market. Authorities of several economies are coming up with the measures for the market either in the form of liquidity exposure or softening the authority charges. India, a developing country is not untouched with this situation. The authority and regulatory body of India is recognized at the Global level for its good economic strategies (Especially for the Banking System). On the other hand there is an election (central) in India. The conclusion of the election will result with a 'Would be authority' of the 'mini globe'. There is a significant effects of election of an economy can be seen on the every-side of the economy. The election time has the equal importance for the investment point of view especially the investment in the share market.

Views of the organized sectors and the business entities under the specific authorities are comparably easy to obtain. From the sources it is estimated that around 92% of the retail segment of India is unorganized. Due to ample of constraints, opinions of the unorganized retail sector about the said issues, is somewhat typical to estimate. To know the thought of the very small level business person the research is a favorable tool. With the help of the research the expression of 'the segment' about the Govt. actions on the current market position is tried to be recorded to identify the level of satisfaction of the 'customer attached business entity' of India.

Why Unorganized Retail Segment?

India is a very large market. Covering up even a small fragment of any industry in India, can be a good source of revenue for any company across the globe. Consumers are more or less heavily associated with the retail entity. For getting a good relation with the customers and consumers the companies are coming up with their retail outlets which is a part of an organized retail segment. In India, traditional or unorganized retail segment is still dominating heavily over the organized sector. Number of peoples associated with the unorganized segment is very high. About 92% employment of India is at Unorganized sector, on which a good percentage in the unorganized retail sector. From the sources it is estimated that the unorganized segment contributes about 40% of the GDP of the nation. The policies of authorities and regulatory bodies, puts a maximum impact on this segment. Organized segment is growing with more paces rather than the unorganized segment in India, due to many of reasons in which business and strategy awareness, quality of service, customer relation, and infrastructure are more important. Besides this on the investment point of view the majority of the individual retail investor belongs to the class of unorganized sector. It is also important to know the reaction of the share market under this influencing season since the effect on the sensex (index of thirty top share of India listed in BSE) leads to the cash flows from investor to market or vice-versa. Opinions of the self employed one under unorganized retail segment, about the current govt. market measure policies, is considered for the study to make an overview of the overall thinking about the current trends in the market. The study is also helpful to feel the gap between the opinions of individual segment to the overall segment of market about the Govt. market measures at the time of recession and election. Besides it a revision of the practical thinking of the unorganized segment in this period can be done.

Why share market

In the stock exchange only the organized companies are listed. Investors invest their money there in the market and experience positive and negative results. If the investor is segmented into different classes then there must be a finding that a very bulky number of investors are from the unorganized retail segment. It is possible that the investment of these segment in the stock market is basically depends upon the perception and suggestion rather than a fundamental and technical analysis. Now with election the share market also moves in a dramatic manner due to several positive and negative sentiments exist in the market. Under these circumstance it is also a matter to search that what should be the important features of investment at the time of election for the investors like unorganized retail sector.

Review of Literature

Study on the political competition demonstrates how incumbent politicians might manipulate economic policies to persuade voters before an election, and thereby generate political budget cycles (Nordhuas, 1975; Lindbeck, 1976; Chaudhri & Dasgupta, 2005). With the specific reference to India Karnik,1990; Khemani, 2004 has done the similar kind of study.

In a regional study on India by Chaudhuri & Dasgupta (2005) finds that there is an increase in current expenditure and decline in development spending during the election years.

In another study by Schuknecht (1999) finds for developing countries, that govt. resort to expansionary fiscal policies to improve their chances of re-election.

Govt. often fails to keep the commitment which he made to the people during the previous elections that they would continue with the economic globalization policies until it yields benefits to the socity in the long run (Slantchev, 2005).

It is seen that sometimes in case of India, due to various political compulsions like coalition & regional politics, the govt. are forced to sacrifice the reform process. The best example could be halt of privatization process in India by UPA govt. in 2002 due to pressures from its allies.

Research objective

* To study the views of the unorganized retail segment about the current Govt. actions.
* To know the impact of the Govt. measures on the unorganized retail segment.
* To predict the low level business person perception about the authority (central).


* Govt. measures and its biasness towards election are justified.
* There is no significant impact of the Govt. Policies on the low level business house.
* Govt. measures and election results are insignificant

Data Collection

Primary Data is collected by a survey method through a structured questionnaire (Appendix). Retail shops like grocery, stationary, fast food corners were considered for the study.

The Secondary Data has been collected through internet, journals, and news dailies.

Research Methodology

The study involved a field survey conducted across different shops in the town Asansol of West Bengal. The respondents were approached at their shops on the working hours. It was felt that a psycho test of the businessman had been their on the field regarding the said issues.

100 shops were approached for the study. The questionnaires (appendix) were filled with an interviewic mode from each of the shopkeepers.

The sampling technique selected is the convenience sampling.


Pie Chart showing the opinion of the people

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Source: E-mail January 11, 2011


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