Monday, August 30, 2010

Steps in Research Process

Research in common parlance refers to a search for knowledge.  It aims at discovering the truth.  Research is undertaken to discover answers to questions by applying scientific method.  Research must be based on some problems or on some facts.  Inquisitiveness and dissatisfaction are the two main building rocks of any research.  In a progressive science the generalized answers may not hold good beyond a certain time period, with the passage of time the facts may change and the problem itself may undergo change and so also the concept.  Therefore, a constant search is become essential to know the exact truths.  That constant search or research process consists of a series of closely related activities or steps.  Such activities overlap continuously rather than following a strictly prescribed sequence.
However, the following steps are involved in research:
1.Formulating the Research Problem:  In a research process the first and foremost steps happens to be that of selecting and properly defining the problem.  A research problem in general refers to some difficulty with a researcher experiences in the context of either a theoretical or practical situation and wants to obtain a solution for the same.
While selecting a research problem, at first the researcher selects a discipline and from that a particular subject is chosen.  From this a broad area of that particular subject, and then he selects a few topics for problems.  At the final stage he selects a single topic after considering several factors.
Following points may be observed by the researcher in selecting a problem:
Over done subject should not be chosen.
Too narrow or too vague problem should be avoided.
The subject selected for research should be familiar and feasible.
The solvability of the problem should be considered.
The importance of the subject, qualification and training of the researcher, ability of the researcher and availability of data should also be considered.
The time available with the researcher and the availability of money with him etc. should also be considered.
The topic may also be based on the special interest and convenience of researcher.
2.Review of Literature:  Once the problem is formulated a brief summary of it should be written down.  It is compulsory for a research worker writing a thesis fir PhD degree to write a synopsis of the topic to submit it to the necessary committee for obtaining approval.  At this juncture the researcher should undertake extensive literature survey connected with the problem.  This is essential to know whether the problem has already been investigated before, if so how and what extent etc.  For this purpose the abstracting and indexing journals, published and unpublished bibliographies, academic journals, government reports, books etc. must be tapped depending upon the nature of the problem.
3.Fixing the Objectives:  After making the extensive literature review, the researcher fixes the objectives of his study with the help of literature review, discussion with experts etc.
4.Development of Working Hypothesis:  Working hypothesis is a tentative assumption made in order to draw out and tests its logical or empirical consequences.  They affect the manner in which tests must be conducted in the analysis of data and indirectly the quality of data which is required for analysis.  The role of hypothesis is to guide the researcher by delimiting the area of research and keep him on the right track.
5.Preparing the Research Design:  Research Design is the conceptual framework structure within which the research is conducted.  It constitutes the blue print for collection, measurement and analysis of data.  In other words it is a plan of the proposed work.  There are several designs mainly coming under experimental and non-experimental designs.
6.Determining Sample Design:  For conducting research the researcher needs adequate and accurate data.  In order to obtain these data a researcher conducts investigation into a given population.  Population means aggregate of all elements possessing all the characteristics which the researcher wants to study.  In other words the entire group from which a sample is chosen is known as 'Population'.  A complete enumeration of all the items in the population is known as 'Census Inquiry'.  This type of equity involves great deal of time, money and energy.  Besides these census inquiry is not possible in practice under many circumstances.
Selecting a few items from the universe or population is called a 'Sample'.  The researcher must decide the way of selecting a sample, popularly known as 'Sample Design'.  In other words, the sample design is a definite plan determined before any data are actually collected for obtaining a sample from a given population.  Samples can be either Probability Samples or Non – Probability Samples.
7.Collecting the data or Collection of data:  There are several ways for collecting the appropriate data which differ considerably in context of money, costs, time and other resources at the disposal of the researcher.
Primary data can be collected wither through experiment or through survey.  If the researcher conducts an experiment, he observes some quantitative measurement of the data with the help of which he examines the truth contained in his hypothesis.  But in the case of survey the data can be collected by several ways such as observation, personal interviews, telephone interviews, mailing of questionnaires, schedules etc.
8.Analysis of Data:  After the data have been collected, the researcher turns to the task of analyzing them.  The analysis of data requires a large number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, editing, tabulation and then drawing statistical inferences.  Thus the researcher should classify the raw data into some purposeful and usable categories through coding, editing and tabulation, then analyses this with the help of some statistical measurements.
9.Hypothesis Testing:  After analyzing the data the researcher is in a position to test the hypothesis if any, he had formulated earlier.  For testing the hypothesis various statistical tests such as T-Test, F-Test, Chi-Square Test etc. are applied.  Hypothesis testing will result either in accepting or in rejecting the hypothesis.  If the researcher had no hypothesis to start with, generalizations established on the basis of the data collected and analyzed.
10.Generalization and Interpretation:  If the hypothesis is tested and upheld several times, it may be possible for the researcher to arrive at generalization, ie., to build up a theory.  As a matter of facts the real value of research lies in its ability to arrive at certain generalization. If the researcher had no hypothesis to start with, he might seek to explain his findings on the basis of some theory.  It is known as 'Interpretation'.  The process of interpretation may quite often trigger of new questions which in turn may lead to further research.
11.Preparation of Report:  Finally the researcher has to prepare the report of what has been done by him with utmost care.

Thursday, August 19, 2010

Research – An introductory approach : What is Research ? Characteristics of research : Classification of social research - motivating factors of social research - importance of social research and limitations of social research.

Introduction
        One of the basic desires of man is to know of things around him. Basically man is developing certain inquiry is his mind and wants to get reply for it. He is asking so many questions such as why, how, when etc. of all things. Moreover in the modern complex world man is faced with many problems. He wants to find immediate solution to these problems. His desire to find the solution to the problems is mainly due to his urge to do something better or more efficiently. Problem solving is a technical process which not only require ingenuity but also a fund of accumulated knowledge and wisdom. This accumulation of knowledge is very essential to solve a problem.  According to Charls Pierce the American philosopher there are four ways of gaining knowledge.
1.Method of Tenacity : We hold something true because we believe it to be so for a very long time.   Old people's tales fall under this category.
2.Method of Authority : Some persons holding position like teachers and religious leaders make statements and which are accepted by us.
3.Method of Intuition : Certain information found reasonable are accepted by us. Men easily guess that women are soft spoken.
4.Method of Science : Under this method ideas are accepted only after they have been vigorously tested.
    Scientific Method is defined by Rummel as the systematic and refined use of specialized tools and procedures to obtain a more adequate solution to a problem that would be possible by less discriminatory means. This scientific method of studying a problem is termed as Research. The word meaning of research is to search back.
    Research is considered to be the more formal, systematic and intensive process of carrying on the scientific method of analysis. Intensive study, deep analysis and reflective thinking are the basic ingredients of research. Application of scientific tools and accepted steps and procedures are essential for an ideal research.
Social Research
    Social Research studies men and his institutions in an empirical way. The relevance of social research is far greater in developing countries like India which are confronted with complex socio-economic problems like poverty, unemployment, illiteracy and the like.
Importance of Social Research
1.Social Research provides the basic data for social planning.
2.Research has a greater role in providing solution to immediate problems faced by the community.
3.It promotes social interest and better understanding in the society.
4.It enables the researcher to have an intimate knowledge of the society and such a knowledge guides social growth on  proper lines.
Definition of Social Research
    According to P.V Young social Research may be defined as a scientific undertaking which, by means of logical and systematized techniques seeks to  :-
1.Discover new facts or verify and test old facts.
2.Analyze the sequences, inter relationships and causal explanations which were derived within an appropriate theoretical frame of reference, and
3.develop new scientific tools, concepts and theories which would facilitate reliable and valid study of human behavior.
    Social Research is a systematic method of exploring, analyzing and conceptualizing social life in order to extent, correct or verify knowledge, whether that knowledge aid in the construction of a theory or in the practice of an art.
Characteristics of Research
1.Research is a systematic and accurate investigation : There is no place for approximations and ambiguities in research.
2.Research is directed towards the solution of a problem : It may attempt to answer a question or to determine the relation between two or more variables.
3.Research emphasizes the development of generalizations, principles or theories that will be helpful in predicting future occurrences.
4.Research is based upon observable experience or empirical evidence.
5.Research demands accurate observations and descriptions.
6.Research involves gathering of both primary and secondary data for a new purpose.
7.Research is characterized by patient and unhurried activity.
8.Research requires expertise. The researcher should know what is already known about the problem and how others investigated it.
9.Research should be carefully recorded and reported.
10.Research sometimes require courage.
Objectives of Research
1.Identify the problem to be solved.
2.Describe an institution or a group or a phenomenon.
3.Explain the relationship between variables ie, causal explanation.
4.Discover information that never be discussed in the ordinary course of life.
5.Discover new information and modify the existing information.
Motivations in doing Research
    The possible motives for doing research may be either one or more of the following :
1.Desire to get a higher degree with its consequential benefits.
2.Desire to face the challenge in solving unsolved problems.
3.Desire to get intellectual joy of doing some creative work.
4.Desire to be of services to the society.
5.Desire to get respectability.
Types of Research
    Social Research has been classified several ways depending on the purpose for which it is undertaken, the extent to which it satisfies the scientific procedure or the methods of data collection or the control factor involved etc. There is no hard and fast rule in the classification. The classification is done more for the sake of promoting better understanding or for the sake of convenience.
    On the basis of purpose for which it is conducted, research is mainly classified into four such as Pure Research, Applied Research, Action Research and Evaluation Research.
    1. Pure Research
    Pure Research or Fundamental (basic) Research is the research that is undertaken for widening the horizon of knowledge, that is just for the purpose of acquiring new knowledge. It is conceived as a search for broad principles without any immediate utilitarian objective. Its essential element is building theories and principles by broad generalization. It is time consuming and involves much costs. A researcher may have to devote his entire life time, out of scientific curiosity, unmindful of immediate rewards.
    Eg: Scientific inventions such as steam engine, electricity etc.
    2. Applied Research
    Applied Research is need based and aims at solving immediate problems or here the researcher is making use of existing knowledge to solve a problem. It is completed in a short span of time and is empirical and  men-centered. Its major purpose is to improve the system or practice and the theoretical development is of minor importance.
3. Evaluation Research
    This type of research is primarily directed to evaluate the performance of the developmental projects and other economical programmes that have already been implemented. The objective being to realistically assess the impact of any such programme. This is of three types such as Concurrent evaluation, Phasic evaluation and Terminal Evaluation.
a. Concurrent Evaluation :
     It is a continuing process of an inspection of the project that has been launched ie. The evaluation goes on side by side with the implementation of the project. It evaluates the performance and gives direction and control as and when possible.
b. Phasic Evaluation
    Phasic or Periodic Evaluation takes place at different phases or stages of performance of the project. It enables us to evaluate the performance of the completed phase and make adjustments in the subsequent phases after keeping in view the failures and success of the previous phase.
c.Terminal Evaluation :
    It is the evaluation of the project after it is being completed. The main objective is to provide necessary feed back ie. an overall assessment is made to see how the best a project has served the objective for which it was launched.
4. Action Research
The process by which the practitioners attempt to study their problems scientifically in order to guide, correct and evaluate their decisions and actions in called Action Research. In this case the person who faces the problem tries to find out its solution. There is a thin line of difference between applied research and action research, sometimes it may consider one and the same.
            On the basis of data collected method research is classified into historical, case study, survey and experimental research.
1.Historical  Research or Method:
                In this method the research is conducted on the basis of historical data. Historical Research is essential for both basic and applied research in business. Explanations  for the present are derived from historical inquiries. Historical Research is concerned with digging up facts. The main sources of historical data are books, documents, newspapers, magazines, diaries, auto-biographies, personal  letters, personal agreements, historical paintings etc. The steps involved in this method are selection of the problem, formulation of hypothesis, preparation for collection of data, organization of data, evaluation of data, interpretation and writing the report.
2.Case Study Method
        The case study research has been one of the important methods of social research. It is a deep and intensive study of a particular social unit confined to a very small number of cases. It also seeks to determine social process, it reveals the complexity of factors, and indicate their sequences and inter relationships.  Social unit may be a person, a family, an institution,  a cultural group or even an entire community. It uses of both primary and secondary sources of data. Steps involved in case study are selection of cases, identification of situations, gathering and recording of data, interpretation and reporting of data.
3.Survey Method :
        This includes the systematic gathering of data from population by applying personal contact, interviews or other techniques. It is a process by which quantitative facts about a social phenomena are collected to contribute to the solution of immediate problems. Survey technique is used only when the desired information cannot be gathered more easily and less expensively from other sources.
4.Experimental Method :
    This approach to research is based on scientific methods in so far as causal relation are studied under controlled conditions. The main aim of this is to identify the variables and the relationship with each other. The variables under this kind of study are termed as independent variable and dependent variable.
Independent Variable and Dependent Variable :
    The variable that the researcher wish to explain is the dependent variable. The variable which is expected to explain the changes in the dependent variable is referred to as independent variable. The independent variable is also called  Predictor variable, it is the explanatory variable considered to be the presumed cause of change in the value of dependent variable. The dependent variable is the expected outcome of independent variable.
    There may be some other kinds of researches such as exploratory research, descriptive research, diagnostic research etc.
Exploratory Research :
        When the purpose of research is to gain  familiarly with the problem or to achieve  new insights into it, in order to formulate a more precise problem the exploratory studies are generally made.
        There are 3 approaches to the exploratory study such as :-
1.Survey of literature or literature reviews.
2.Discussion with experts.
3.Case-study or examination of existing records.
    Descriptive Research :  It is concerned with describing the characteristics of phenomenon and find out the relationship between variables. Descriptive study may employ any or all the methods of data collection such as interviews, questionnaires, observations etc.
    Diagnostic Research : It is concerned with finding the real cause of a problem and what can be done to overcome this problem.
Limitations of Social Research :
    Social Research deals with social phenomena which is different from physical phenomena. Man has complete control over physical phenomena because it can be put to laboratory test under guided conditions. Because of this fundamental difference there are several difficulties or limitations to social research.
1.Complexity of Social Data: Researches in social sciences are based on human behavior and the behavior of human beings, is influenced by so many factors such as physical, social, psychological, geographical, biological and sociocultural. Because of these factors an observer is generally confused.
2.Problems in interpreting relationship between cause and effect :  In case of a social phenomena cause and effect are inter dependent and one stimulates the other. It is very difficult to establish cause-effect relationship in social sciences.
3.Problems of Concepts : Different concepts are used in social research and the same concept may be defined differently in different researches.
4.Dynamic nature of social phenomena :  Human society is constantly changing and improving itself by past knowledge. Thus not only the deductions based on past studies, but even the techniques used in past may prove useless for the present and future studies.
5.Problem of maintaining objectivity : The problem of impartiality is in part a problem of objectivity. Any personal bias vitiates the universality criterion of a scientific preposition. To be objective in the conduct of an inquiry one shouldn't let one's belief be influenced by his personal motives, customs and social situations of which he himself is a part.
6.Unpredictability : Predictability is one of the most important characteristics of science. But it is not so in the case of social sciences because of complexity of social data as well as due to the fact that social behavior is sufficiently irregular and unpredictable.
7.Difficulty in the verification of inferences : Verification of the research results obtained is possible in the case of physical sciences but in social sciences it is much more difficult. The events in social sciences are non-repetitive and the social scientists are ill equipped with their tools to verify prediction.
8.Difficulty in the use of experimental method : In the case of social sciences it is not possible to put human beings to laboratory tests. Here the research has to wait for the circumstances to occur in the natural course. They cannot be created artificially.
9.Problem of interdisciplinary approach : Social research in any field are inter related, therefore we cannot draw water tight compartments for each sector of social sciences.  The main problem in interdisciplinary research is that every branches of knowledge has its own line of approach and a methodology suited for the purpose. When they are tried to  be fitted in a single frame, distortions are  bound to take place.
10. Less Finance : Inadequate financing is one of the major problem faced by the social research in modern world.

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Monday, August 9, 2010

Census and Sample Investigation - Sample - Sample Design - Sampling Process - Advantages and Limitations of Sampling.

Census and Sample Investigation
All items in any field of inquiry constitute a universe or population.  A complete enumeration of all items in the population is known as ‘Census Inquiry’.  It can be presumed that in such an inquiry, when all the items are covered, no element of chance is left and highest accuracy is obtained.  But in practice this may not be true even the slightest element of bias in such an inquiry will get larger and larger as the number of observations increase.
Census type of inquiry involves a great deal of time, money and energy.  When field of inquiry is large this method becomes difficult to adopt because of the resources involved.  Moreover, this method is practically beyond the reach of ordinary researchers.  Further it is not possible to examine every item in the population sometimes and it is not possible to obtain sufficiently accurate results by studying only a part of total population.  When the field of studies or the universe is a small one, it is no use in resorting to a sample survey.  When the field studies are undertaken in practical life, considerations of time and cost almost invariably lead to a selection of respondents ie., a selection of only a few items.
Meaning of Sample:   A sample is a smaller representation of a large unit or value.  In other words a sample is that part of the universe or population which we select for the purpose of investigation.  In the ordinary course we make judgment and take decisions on the basis of samples. For example:
When we go to a shop, we examine a handful of rice to find the quality of rice in the whole bag.
A doctor examines only a few drops of blood to draw conclusions about the blood constitution of the body.
Similarly when field studies are undertaken in practical life, considerations of time and costs almost invariably lead to a selection of respondents ie., a selection of only a few items from the population.  The respondents selected should be a representative of the total population as possible in order to produce a miniature cross section.  The selected respondents constitute what is technically called a sample and the selection process is called ‘Sampling Technique”.  The survey so conducted is called as ‘Sample Survey’.
Sample Design:  A sample design is a definite plan for obtaining a sample from a given population.  It refers to the technique or procedure that enables the researcher for selecting an item for the sample.  Researcher must prepare a sample design for the study ie., he must plan how a sample should be selected and of what size such a sample would be.  Sample design is determined before data collection.


Steps in Sampling or Sampling Process:  Sampling process in research has the following steps:
1.Define the population and determine the sampling unit:  The population is the aggregate of all the elements to be studied.  When the number of unit belonging to a particular universe is certain, it is called ‘Finite Universe’- example: Number of workers in a factory, area of a town etc.  When the number of unit cannot be ascertained, it is called as ‘Infinite Universe’.  Example: number of stars in the sky, listeners of a specific radio program etc.
A properly defined population must be defined in terms of Elements, Sampling units, Extend and Time.  Suppose the research is conducted on the problem of Indian Cotton Textile Export, the element should be different types of cotton and cotton textile products, sampling unit would be the firm’s exporting these, extend is India and the time may specified by 2009 or so on.  The sampling unit should be definite, clear and unambiguous.  It may be a geographical one (example- State, District, Village etc.), a social unit (example- a family, school etc.), or it may be an individual.
2.Identify the Sample frame or Source list:  It is a list which contains the names of the unit of the population or universe.  In the above example the sampling frame would be the lists of the firms that are members of the Council for cotton textile export.  If the source list is not available, the researcher has to prepare such a list, which is comprehensive, correct, reliable, appropriate and representative of the population.
3.Determine the Sample Size:  It refers to the number of items to be selected from the universe to constitute a sample.  The size of the sample shall be optimum while fulfill the requirements of efficiency, representativeness, reliability and flexibility.  The size of the sample depends upon a number of factors like:
a)Homogeneity and heterogeneity of the universe:  If the items in the universe are homogeneous, a small sample is required and vice-versa.
b)Number of classes:  If many classes or groups are to be framed, then a large sample is required so that every class must be of proper size for statistical analysis.
c)Law of statistical regularity:  The law indicates that for obtaining accurate results the sample shall be randomly selected and must represent the whole universe.
d)Other considerations:  Other factors like type of sampling, size of questionnaire, standard of accuracy, availability of finance, training of investigators and time at the disposal of the researcher etc., shall also be considered.
4.Sampling Procedure: Finally the researcher must decide the type of sample he will use ie, he must decide about the techniques to be used in selecting the items for the sample.  There are several sample designs out of which the researcher must choose the best one fit for his study.
Characteristics of a good sample
A good sample must be representative of the universe.  It should contain majority of the characteristics of the universe, if not all.  In other words, a good sample should posses all the basic characteristics of the universe.
Another requirement pf a good sample is that it is free from bias.  Bias may c reap in the selection of the sample for reasons like convenience, substitution, mistake in the adoption of sampling method and failure to cover the whole of the chosen sample.
The third essential of a good sample is its adequacy.  Adequacy in the sense that the sampling size must be adequate to yield reasonable conclusions regarding the population from the sample drawn.
The sample must enable the measures of sampling error in fact the representativeness of the sample and the validity of conclusions depend to a large extent on these errors even if a proper selection is employed, a sample may not be exactly representative of the population owing to sampling errors.  As such the researcher must be in a position to estimate the influences of these errors and declare to the readers the percentage of accuracy of his survey results.
Finally, the results of a good sample should be applicable to all items of the universe with a reasonable level of confidence.  Unless the sample has this characteristic there is no use in conducting a research study.
Advantages of sampling:  The sampling technique is used in survey method of data collection.  The following are the advantages of sampling techniques:
1.When the size of population or universe is very large, sampling technique is best suited for the collection of data as it economizes money, time and effort.
2.When the lesser percentage of accuracy is sufficient in any study, the sampling technique is much suitable for the  collection of data or information through the sample survey.  A higher percentage of accuracy can be ensured only through census survey.
3.The sampling technique enables the investigator to collect the required information from relatively a large size of population or the availability of data is unlimited in character.
4.There are certain types of study where census method cannot be adopted at all.  For instance, in a study relating to the availability of mineral resources in the country sampling method is used to make an attempt to evaluate its availability below the earth in the country.
5.When the items of universe or population is more homogeneous in nature, sampling technique is more feasible and useful.
6.Sometimes the sampling units are get exploited while making the study.  In such situations census study is not possible and thereby sampling study is advantageous.  For instance, a study conducted for measuring the life period of electric bulbs produced by an organization.
Limitations of Sampling:
1.The conclusions or generalizations derived from a sample survey are always less accurate and liable for more errors compared to the conclusions arrived through census method.
2.When the various units of the survey population are not alike and liable to change frequently, the sampling technique will be very difficult.  The conclusions derived from one set of units are not comparable with another set of units which are frequently liable to change in their nature.
3.If due care is not taken in conducting a sample survey, the conclusions will be much misleading and erroring in nature.
4.The adoption of sampling techniques can be successful only if due care is taken to select the sample by competent persons in the field.
5.When the population is heterogeneous and the time available are very short, it is not possible to make a selection of a best sample.  Moreover, if we need 100% accuracy, the sampling techniques cannot be used.

Thursday, August 5, 2010

Sub Prime Mortgage Crisis (SPMC) in US: An Overview - Crisis in India

The Crisis in India:

After a long spell of growth, the Indian economy is experiencing a downturn. Industrial growth is faltering. The FEX reserves are depleting, the rupee is depreciating and the sensex is shuttling near 10000 marks. The Indian economy, in line with global scenario, commenced groping in the dark.

The immediate effect of the US crisis has been heavy outflow of FIIs from the equity market.  Faced with the need to retrench assets to cover the losses in their home countries and seeking havens of safety in a highly volatile environment, FIIs have been major sellers in Indian Markets.  A pull out of the FIIs has triggered collapse in Indian Stock Market.  The sensex have fallen from its closing peak of 20873 on Jan, 2008 to around 9500 by the beginning of November 2008.  Driven the stock indices down, the exit of FIIs has led to a sharp depreciation of the rupees.  Going by RBI reference rate, between January 2008 and November 2008, the rupee depreciated by almost 25% with respect to a weak currency like dollar (from Rs.39.20 to Rs.50.20). The depreciation occurred despite having frequent sale of dollars by the RBI.

The second route through the global financial crisis had affected India is through the exposure of Indian Banks situated abroad or banks operating in India to the impaired assets resulting from the sub prime crisis.  Unfortunately, there are no clear estimates of the extent of that exposure, giving room for rumour in determining market trends.  ICICI Bank was one of the major victims of run on the bank for quite a short period due to rumours that sub prime exposures had badly damaged its Balance Sheet even though RBI claimed that the exposure of Indian Banks to assets impaired by the financial crisis is quite small.

The RBI had estimated that as a result of exposure to Collaterised Debt Obligations (CDO) and Credit Default Swap (CDS), the market losses of Indian Banks at the end of July 2008 was around USD 450 mio including USD 90 mio to Public Sector Banks and USD 360 mio to Private Sector Banks.  Though it is a serious concern, RBI opined that even if they are to be provided for, these Banks are well capitalized and can handle the situation.  The fears are compounded by the minority in metros and major cities dealing with foreign banks and whose global exposures to toxic assets are substantial.  What is disgusting to the investor and depositors are the limited Information available on the risks to which they are exposed.

The fourth indirect fall out of the global crisis and its ripples in India is the losses sustained by NBFCs/Mutual Funds as a result of their exposure to domestic stock market and currency market.  The losses would be larger than expected and is resulted in  RBI’ s decision to direct Banks to extend loans to MFs against CDs or buy back of their own CDs before maturity- under Liquidity Adjustment Facility (LAF).  These losses are bound to render some institution fragile, with implications that will become evident only in the ensuing months,

In the uncertain environment, Banks/FIs are more concerned about their own Balance Sheet and have been cutting back on credit especially the huge volume of housing, automobile and retail loans provided to individuals. The reluctances of lenders to increase their exposures in the market in which they are already overexposed and the fears of increasing payment obligations in an uncertain economic environment are bound to curtail debt financed consumption and infrastructure investments.  It is known that credit financed housing investments and credit financed consumption have been important drivers of growth in recent years and underpin the 9% growth trajectory that India have been experiencing.

Finally, the global recession generated by the financial crisis in the developed economies would adversely affect India’s exports especially exports of IT and ITES. More than 60% of IT/ITES are directed to the US international Banks/FIs.  The nationalization of many of these Banks/FIs would increase the pressure to cut outsourcing to keep jobs in the developed countries.  The reported reduction of capacity utilization, labour retrenchment, contraction of salary structure etc. by major industrial houses engaged in automobiles, textiles, iron and steel, cement, aviation etc. have created much hue and cry among the public. Pursuant to the slowing of growth outside the financial sector would have implications for merchandise and service exports.  The net result would be a smaller export stimulus and widening trade deficit.
    RBI Measures:
In the developed economies like US and European countries, the Balance Sheet of many Banks/FIs was rotten due to credit defaults and many financial institutions became bankrupt.  Even though, the Banks/FIs in India are not that much affected, the withdrawal of FIIs from our stock market generated a threat of instability in our economy.  In such a circumstance, the stabilization measures of RBI‘s have aided to avert liquidity squeeze substantially.  The major steps initiated by RBI are   as follows:


a.
Cash Reserve Ratio (CRR)
August 30, 2008
9%


October 11, 2008
7.50% (Reduced by 150 bps)


October 15, 2008
6.50% (Reduced by 100 bps)


November 1, 2008
5.50% (Reduced by 100 bps)
b.
Repo Rate
July 30, 2008
9%


October 20, 2008
8% (Reduced by 100 bps)


November 1, 2008
7.50% (Reduced by 50 bps)
c.
Statutory Liquidity Ratio (SLR)
November 1, 2005
24% (Reduced by 100 bps)
d.
Introduction of dual repo on September 15, 2008 to increase liquidity
e.
Provision of liquidity support of Rs.60,000 crores to MFs and NBFC ‘ s through commercial banks
f.
Special Refinance facility to Commercial Banks.
g.
Dollar support to Indian Banks with foreign branches

The RBI reiterates that it is confident of managing the situation and minimizing the adverse impact of global crisis to Indian economy.  Pursuant to better economic recovery, P. Chidambaram, our Finance Minister, optimistically pointed out
“there is a storm blowing across the world. India will be affected to some extent, although indirectly, but Indian Business and industry have placed India in a situation where we can weather the storm.”

    Conclusion:    
If we look at the economic scenario prevailing in and around the country, the postulates of globalisation and the aftermath of global villages concept have became more significant. The positive correlated change in national economy in line with global happenings/events is quite visible and challenging.   The FIIs/ FDIs have more voice and role in FEX growth. The ups and downs of indices at NASDAQ / NIKKE/ London Stock Exchange will get mechanically reflected in Chinese /Indian Stock Exchanges within seconds.  The situation demands improvement in investor confidence. To achieve this objective, the Global economy needs more funds to improve liquidity and wants proper and pragmatic economic restructuring.  Our Government is also not in the backstage.  Frequent reduction of CRR and repo rates, accompanied by slashing of SLR are clear indication of measures puts forth by RBI to keep up the pace of economic growth and to retain the investor confidence, both domestic and international. The strategies for restructuring, through quite time consuming, demands integration of diverse segments of economy, including financial, manufacturing and service segments, under close supervision and regulation. The repeated measures enforced by RBI coupled with rapport from GOI will definitely rejuvenate Indian economic scenario at the optimal level.

Sub Prime Mortgage Crisis (SPMC) in US: An Overview:

The heat of economic melt down is spreading slowly across the world for the first time since the Great Depression of 1930s.  The fall of some of the giant global Banks/FIs of US/European/Asian countries including Lehman Brothers, Merrill Lynch, Bear Sterns, AIG (US), Dexia (Belgium), Origami Bank, Sumo Bank, Bonsai Bank (Japan) etc. unearth the gravity of the situation.  Filing for bankruptcy by Banks/FIs across the US / European countries have become quite common and placed the investor confidence at high alert. Even we noticed with surprise the insolvency of Republic of Iceland a consequence of the adverse economic situation. Ben Bernanke, the Head of Federal Reserve, US has admitted the economic slow down in US and expressed that it would take another two three years to set right the economy and make the situation under control. The reported reduction of capacity utilisation, contraction of labour strength, down ward revision of salary structure etc. by major industrial houses engaged in automobiles, textiles, iron and steel, cement, aviation etc. have created much hue and cry among the public.

Indian economy is also not free from this global phenomenon. Though initially the Government of India have vehemently claimed proper insulation of our economy against any global crisis, of late Mr. Man Mohan Singh, our PM has acknowledged that India is also under the clutches of global melt down.  The hectic withdrawal by FIIs has resulted in unparallel crash in sensex, heavy depreciation in rupee value against dollar and significant reduction in FEX reserves. To overcome the situation, RBI has opted for various quantitative measures to infuse liquidity in the financial system.  In his strategic meeting with leading industrialists of the country, Mr. Singh sought for their assistance to keep away from employee reduction, contraction of productivity and labour retrenchment. Under such a circumstance, it is quite significant to evaluate the scenario behind the global economic crisis and its aftermath.

I.    The US Collapse and its Intensity:

The topography of the Wall Street Banks (WSB) changed radically since September 2008.   Bear Sterns, founded in 1923, collapsed and was hastily acquired by J.P. Morgan (JPM).  The ailing Bank Washington Mutual was also bought into the fold of JPM. Lehman Brothers, founded in 1850, declared bankruptcy, and was taken over by Barclays Bank.  Merrill Lynch, founded in 1914, folded alongside Lehman Brothers, to be picked up by Bank of America. A few days later, American International Group (AIG), founded in 1919, the world’s largest insurance company, went down the slope towards bankruptcy, but was fortunately saved at the eleventh hour by an emergency infusion of $ 85 billion by the US Government. A few weeks later, the Federal Reserve provided an additional loan of almost $ 38 billion to strengthen the ailing insurance giant. The Government sponsored mortgage agencies Fannie Mae and Freddie Mac, created in 1968 and 1970 respectively, retreated from their autonomy in to the embrace of Government.  In the mid October 2008, Wells Fargo Bank absorbed Wachovia Bank, founded in 1879.  JPM, founded in 1879, and Goldman Sachs, founded in 1869, went from being Investment Banks to become Bank Holding Companies. This turbulence has caused a downward slide and slope for major stock markets across the world and the credit market commenced to seize up. The pulse of electricity now began to make inroads into the confidence of those who hire and fire, who make and break. Things are so bad that General Motors released a statement that “Bankruptcy is not an option” for the Company.  The Labour Department, US announced that the country lost 1.59 lacs jobs in September, up from 0.73 lacs jobs lost in August 2008.  The Wall Street Journal released its survey of 52 economists who pointed out that things can only go negative. The shifts in US from ardent laizzez faire postulates to nationalization concepts are quite a paradox.

II.    SPMC – An Overview:

From late 2002 to mid 2005, the US Federal Reserve funds rate stood at levels that implied that when adjusted for inflation, the real interest rate was negative. Easy access to credit at low interest rates triggered a housing boom, which in turn triggered inflation in housing prices and encouraged more housing investments.  From the FY 2001 to FY 2007, the real estate value of households and the corporate sector is estimated to have increased by $ 14.5 trillion.
  
The SPMC is an ongoing economic problem in US and became more visible during 2007. The situation is characterized by contracted liquidity in the credit market and banking system. Sub prime lending is the practice of extending mortgage loans to borrowers with poor credit history. Higher rate of interest is charged to mitigate the risk factors, viz. poor income level, low credit score, unstable employment status etc. Sensing the opportunity coupled with encouraging interest rate environment, the Banks/FIs expanded the borrower base by inducting sub prime ones or borrowers with low credit ratings and high probability of default, viz. the No Income, No Jobs and Assets (NINJAs).   Mortgage borrowers attracted these clients by relaxing income criteria and offered sweeteners like lower interest rate for initial period with reset options. The share of such sub-prime loans in all mortgages rose sharply, from 5% in 2001 to more than 20% by 2007.  Borrowers chose to use this “opportunity” because they were not properly informed about their commitments. Also, they were over confident about their ability to meet the repayment obligations.

On the supply side, the complex nature of finance centered on the “Originate and Sell” model.  The Banks/FIs discounted the risk because they expected to cash in on large profits even while transferring the risk associated with the investments. The mortgage brokers sought out willing borrowers for a fee, turning to sub prime markets in search of volumes. The Mortgage lenders and Banks financed these mortgages because they wanted to buy the interest and amortization flows associated with such lending. Also, they wanted to sell these instruments too less regulated intermediaries such as the Wall Streets Banks.  The Banks, who bought these mortgages, opted to expand their business by bundling assets and sold to institutions, investors, hedge funds and portfolio managers. To suit different tastes for risks, they bundled them into tranches with varying probability of default and differential risk weightage/protection against losses.

The associated risk was rated by approved independent agencies which, not knowing the details of the specific borrowers to whom the original credit was sanctioned, use statistical models to determine which kind of tranche could be rated as being of high, medium or low risk.  Once certified, these tranches could be absorbed by Banks, Mutual Funds, pension funds and insurance companies, which could create portfolios involving varying degrees of risk and different streams of future cash flows linked to the original mortgage.  Whenever necessary, these institutions could insure against default by turning to the insurance companies and entering into arrangements such as CDSs.  Even Government Sponsored Enterprises such as Freddie Mac and Fannie Mae, which were not expected to be involved in or exposed to the sub prime market, had to cave in because they feared they were losing business to new rivals who were tiring to cash in on the boom and poaching on the business of these specialists. Because of this complex chain, institutions at every level assumed that they were not carrying any risk or they were properly insured against.

The problems began with defaults on sub prime loans.  In some cases, default occurred before interest rates were reset to higher levels and in others, after the resetting of rates. As the proportion of default grew, the structure gives in and all assets turned illiquid.  Rising foreclosures pushed down housing prices as more properties were up for sale. On the other hand, the losses suffered by financial institutions were freezing up credit, resulting in a fall on housing demand. As the housing prices collapsed, the housing equity held by many depreciated and they found themselves paying back loan that were much larger that the value of the assets. Default and foreclosures seemed a better option than remaining trapped in this losing deal.

Since mark to market accounting required taking account of prevailing market prices, many financial firms had to write down the values of the assets they had and take the losses into their balance sheets. But since the market value was unknown, many firms took much smaller write down than warranted.  But they could not hold out forever. The extend of the problem was partly revealed when leading Wall Street Bank like Bear Sterns declared that investments in two funds it created linked to Mortgaged Backed Securities (MBS) were worthless.  This signaled that many financial institutions were near insolvency.  Infact, given the financial integration within and across countries, almost all financial firms in the US and abroad were severely affected. Fear forced firms from lending to each other, affecting their ability to continue with their business to meet short-term cash needs.  Insolvency began threatening the best and largest firms.  The independent Wall Street investment banks, Bear Sterns, Lehman Brother etc, shut shop or merged into bigger banks or converted themselves into bank holding companies that were subject to stricter regulations. This was seemed as the end of an era in which these independent investment banks epitomized the innovation that financial liberalization had unleashed.

 III.    SPMC- A Search for Causes:

    The Securities and Exchange Commission has conceded that self-regulation of Investment Banks contributed to the crisis. The first thing occurred with the withdrawal of the Glass Steagall Act (GSA), which was passed after the Great Depression in 1930s. The GSA separated the investment activities and commercial banking activities. The Act was repealed in 1999 with the Gramm Leach Bliley Act (GLBA) with liberalization in investment and commercial banking activities. Economist Robert Kuttner has criticized that the repeal of GSA has possibly contributed to the sub prime crisis. Coupled with this, the Community Reinvestment Act (CRA) has encouraged lending to untrustworthy/non creditworthy consumers. It has been stated that the amendments to CRA in the mid 1990s, raised the amount of home loans to otherwise unqualified low income borrowers and allowed for the securitisation of CRA regulated loans containing sub prime mortgages. The US Department of Housing and Urban Development’s mortgage policies fuelled the trend towards issuing risky loans.

    Before 1970s, the US financial sector was highly regulated and stable in which Banks were dominated, deposit rates were controlled and small and medium deposits were guaranteed. The Bank profits were determined by the difference between deposit and lending rates, and banks were restrained from straying into areas such as securities trading and insurance. Infact, this was the concept of “the lend and hold model”. The Banks extended their activity beyond conventional commercial banking into merchant banking and insurance through a holding company and transform themselves in to universal banking with multiple services. Within banking, there was a gradual shift in focus from generating net interest margins to earning fees and commissions for various financial services. The “Lend and Hold” model gives way to “Originate and Sell” model.   While banks did provide credit and create assets that promised a stream income in the future, they did not hold those assets any more.  Rather they structured them into pools, “securitised” those pools and sold them for a fee to institutional investors and portfolio managers.  Those who bought the risk looked into the returns they would earn in the long term.  That Banks were no longer museums, but parking lots that served as temporary holding spaces to bundle up assets and sell them to investors looking for long term instruments.  Many of these structure products were complex derivatives and it was difficult to assess the risks associated with them.  The role of assessing risk was given to private rating agencies, which failed to estimate the risk associated.

    Also, the financial liberalization increased the number of layers in financial system, with varying degrees of regulations across each layers. In areas where regulations were quite light like investment banks, hedge funds and private equity firms, the FIs could borrow huge amounts against smaller own capital and issued leveraged investments to create complex products that were often traded over the counter rather than through exchanges.

    Finally, while the many layers of the financial structure were seen as independent and were differentially regulated depending on how and from whom they obtained their capital (such as small depositors, pension funds or high net worth individuals). They were in the final analysis integrated in ways that were not always transparent.  Banks that sold credit assets to investment banks, and claimed to have transferred the risk, lent to or invested in these investment banks to earn higher returns from their less regulated activities.

Components of Research Design

Components of a research design
Any investigator before getting on to the job of planning a research design for a proposed study should be clear about what to observe, whom to observe, how to observe, why to observe, how to record the observations, how to analyze, what inferences can be drawn etc.  After making sufficient understanding regarding these, the researcher can resort to the job of planning a research design.  The research design contains title of investigation, objectives, review of literature, the hypothesis, different variables to be studied, sampling plan, data collection, analysis of data, interpretation, verification, conclusions, summary and suggestions, bibliography etc.

1.Title of the Problem:  One should take more care not only in selecting the problem but also in its caption, as it reflect the nature of the study.  It is said that the title should be as brief and precise as possible.  In case of a research study the title itself indicates the nature and extend of the study.
2.Nature of the study:  It is also required to decide the nature of the study, ie., whether he is interested in descriptive or exploratory study or a statistical study.  This determines the techniques to be used in the study.
3.Objectives of the study:  Every study should state the objectives or purposes for which study is undertaken.  These objectives may be stated either in the form of questions or in the form of statements.  Objectives of the study are to be set to make the researcher on the right track. Depending on the nature of the study, objectives may also vary.
4.Scope of the study:  In order to make the study meaningful it is always better to define and delimit the scope of the study.  The scope of the study should be delimited with reference to geographical area to be covered, reference period, type of institutions or respondents to be studied, the issues to be covered etc.  This is to make the study manageable in terms of researcher's aim, interest and competence and the available techniques, time, finance and facilities. For eg:  A student carrying out his research on working of public sector undertakings has to define what he means by working and what are the issues he is interested in studying.  In general working may be profitability, financing, marketing or a combination of all these.  Then he has to define public sector ie., whether it include Departmentally run undertakings, Public corporations or Companies.
5.Survey of Literature:  Survey of existing Literature in the field of study is another important step in the formulation of research design.  Any research study should invariably be preceded by survey of literature for the purpose of getting an insight in to the works already conducted.

6.Conceptualization of Terms used:  Every researcher is required to make his mind clear by defining the meanings attached or wanted to attach to different terms used in the study.  This is become essential because terms and concepts in any discipline carry with them different meanings.
7.Formulation of hypothesis:  Hypothesis is considered as a principle instrument in research.  It can be said as a starting point for research.  Hypothesis is defined as a tentative generalization, the validity of which remains to be tested.  Hypothesis is considered necessary for any study to be conducted on scientific lines
8.Selection of sample:  In social science research, it may not be possible for an investigator to study the entire situation  or population due to several reasons.  Therefore, the investigator may be forced to select a sample out of the population.
9.Data Collection:  This is one of the important step in the whole research design.  The research scholar has to decide about the nature of the data and the sources from which he has to collect the same.  There are basically 2 sources of data, primary and secondary.  Depending upon the nature of the study, the investigator would be required to use the primary and secondary sources.  Whatever be the source, collection of adequate and pertinent data is highly essential.
10.Data Analysis:  The data collected from various sources must be properly processed and analyzed.  Different techniques may have to be adopted to process the data.  After processing the data has to be analyzed to bring out necessary information.  Analysis of data has an important role in the research design.  Quality of the study, its utility or how meaningful conclusions are arrived are depend not on how much data are collected but how the data are analyzed.
11.Report Writing:  A research study finally ends with the writing of a report which is a tool for communicating the various aspects of the study.  Writing of an effective report depends on the skill of the investigator.

Types of Trade Agreements -

Global Free Trade as dreamt by WTO is not possible in all its respects.  Homogeneity and harmony of interest are the preconditions for the success of a free trade agreement.  Heterogeneity and conflicting interest between various nations constraints the global free trade.  Their arise different types of trade agreements on the basis of the degree of regional integration brought about by them:
1. Preferential Trade Agreements (PTAs):  Regional agreement in which members of PTA impose a preferential tariff or lower customs duty on the products originating from member countries.
2. Free Trade Agreements (FTAs): FTA is a special case of PTA where all tariff and non-tariff barriers are abolished and free access is allowed to the products of member countries.  Their a free trade area is evolved, which is a designated group of countries that have agreed to eliminate tariffs, Quotas and preferences on most goods and services between them.
3. Customs Unions (CUs): A Customs Union moves beyond a free trade area by establishing a common external tariff on all trade between, members and non-members.  There exists a common external trade policy. 
4. Common Markets (CMs): A Common Market deepens a customs union by providing free flow of factors of production such as labour and capital inaddition to the flow of outputs.
5. Economic Unions (EUs): In an Economic and Monetary Union, members share a common currency and macro-economic policies.
Out of these the most rampantly seen economic integration type is Free Trade Area or Regional Trade Blocks.  This is because of the homogeneity characters and geographical proximity with in an area.  In a world where global free trade is difficult to achieve the trade liberalization was enabled through RTBs to a great extend.  The approach of RTBs are somewhat regional when compared to the global or multilateral approach of WTO.  Advocates of regionalization argue that countries with homogenioes interests are more likely to liberalize trade dramatically than the large heterogeneous group of countries involved in WTO.  Moreover Article XXIV of the GATT Agreement recognizes RTB's as half way step towards free trade.  India is already involved in a number of FTA's like:-
South Asia Free Trade Area (SAFTA) by all the member states of South Asian Association for Regional Co-operation (SAARC), India- Sri Lanka Free Trade Agreement, Agreement on India- Bhutan Trade And Commerce, Trade Agreement between India and Bangladesh, Trade Agreement between India and Maldives, India - Nepal treaty of trade, India - Afganisthan Preferential Trade Agreement etc.
ASEAN is one such Free Trade Area integrating 10 small countries sharing a common culture, ethnicity, similar economic conditions, geographical proximity etc.  It is an FTA with small member countries or Under Developed Countries, Which turns to be a successful RTB or FTA.  Even though certain political reasons which paved the way of integration of these 10 counties, now it turned to be an economy zone.  As part of its look east policy mentioned in the previous post, India cannot be able to stay back from this agreement.  So India is there and the agreement became reality.  Now let us think about alternatives or remedies to overcome the ill effects which may arise as the outcome of the agreement.  There is no doubt that it will have far reaching impact on Kerala's economy and agricultural sector.

Tuesday, August 3, 2010

Free Trade the Dream of WTO

The global business environment is very significantly influenced by the WTO principles and agreements.  The GATT, which is the predecessor of WTO, was born in 1948 as a result of the international desire to liberalize the trade.  The Bretton Woods Conference (1944) recommended the establishment of IMF, World Bank and also that of an International Trade Organization (ITO).  IMF and World Bank were established in 1946, but the ITO charter was never ratified.  Instead, GATT had been drawn up only as an interim agreement to fill the gap until the ITO charter ratification, for guiding the international trading system in 1948.  Later on the GATT was transformed into WTO with effect from January, 1995.  The objective of World Trade Organization is to establish a multi-lateral trading system as against the uni-lateral trading system of United States.  Before 1995 the US, through its dominating laws like Super 301 rule, puts trade barriers based on their political interests.  But after 1995, WTO tries to achieve free trade among all the world countries independent of the level of development and region to which they belong.  Even today certain dominating forces and factors undermines the real interest or dream put forth by WTO.
Functions of WTO:
WTO is a member driven organization which aimed at:
* Administering and implementing the multilateral and pluri-lateral trade agreements.
* Acting as a forum for multi lateral trade negotiations.
* Seeking to resolve trade disputes.
* Overseeing national trade disputes, and
* Co-operating with other international institutions involved in global economic policy making. 

Free Trade ------ ?

Free trade is a type of trade policy that allows traders to act and transact without interference from government.  Most of the State conduct trade policies that are to a lesser or greater degree protectionist.  Each country developed a trade policy which protects the interests of local producers and traders through restricting competition from other countries with the help of quotas and tariffs.  One ubiquitous protectionist policy employed by States comes in the form agricultural subsidies whereby countries attempt to protect their agricultural industries from outside competition by creating artificial low prices for their agricultural goods.  But according to free trade policy, prices are a reflection of true supply and demand, and are sole determinant of resource allocation.  So a free trade agreement prevents all government interventions like subsidies, taxes and tariffs, non-tariff barriers such as regulatory legislation and quotas.
Features of Free Trade:  Free trade implies certain features like:
* Trade of goods without taxes including tariffs or other trade barriers like quotas or subsidies.
* Trade in services without taxes or other trade barriers.
* The absence of 'Trade Distorting' policies such as taxes, subsidies, regulations etc., that give some firms, households, or factors of production an added advantage over others.
* Free access to markets.
* Free access to market information.
* Inability of firms to distort markets through government imposed monopoly or oligopoly power.
* The free movement of labour between and within countries.
* The free movement of capital between and within countries.

ASEAN - Understanding it as a free trade agreement

Kerala State is known for its lush expanses of cardamom, pepper, tea and rubber that grow on its misty hills, and the beautiful catches of fish on a coastline punctuated by lagoons and backwater.  But a cloud hovens over this picture of plenty - a free trade deal with the Association of South East Asian Nations (ASEAN).  The State which has been blessed with natural resources is now filled with agitations against the Indo-ASEAN free trade agreement. The academic community in the State is debating on the pros and cons of the agreement.  The organizations favouring the UPA 2 is trying to project the merits of the agreement, but the ruling party of the State organizing mass public agitations which include the human chain formed by them.  In the midst of all these an effort is made here just to understand ASEAN as a free trade agreement.  This will enable the student community to understand the agreement clearly and to encourage them to enquire into it further:
ASEAN Agreement:  The ASEAN agreement which paved the way for present discussion and agitations is a free trade agreement signed by Anand Sharma, the Commerce Minister of India on August 13, 2009 at Bangok with the Association of South East Asian Nations.  The agreement already became operative from January, 2010.  ASEAN is the abbreviation of Association of South East Asian Nations which comprises ten Nations, ie., Brunei Darussalam, Combodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.  India is a dialogue partner at ASEAN, which already has FTAs with three other dialogue partners China, Japan and South Korea.
India's engagement with ASEAN started with its "Look East Policy" in the year 1991.  India became a Sectional Dialogue Partner of ASEAN in 1992 and Full Dialogue Partner in 1996.  Followed by discussions with India and ASEAN Economic Minister leads to the establishment of ASEAN - India Economic Linkages Task Force, which was asked to prepare the draft framework agreement.  Subsequently, at the first ASEAN - India summit held on 5th November 2002 in Phnom Penh, Cambodia, the erstwhile Prime Minister of India made the following major announcements:-
1.  India will extend special and differential trade treatment to ASEAN Countries, based on their levels of development to improve their market access to India.
2.  FTA within 10 years time frame.
A framework agreement on Comprehensive Economic Co-operation between the ASEAN and India was signed by the Prime Minister of India and the Heads of Nation/Governments of ASEAN members during the second ASEAN-India summit on 8th October 2003 in Bali, Indonesia.  Followed by this, the ASEAN- India Trade Negotiations Committee was constituted and several meetings have been held.  They undertook several rounds of negotiations for a Comprehensive Economic Co-operation Agreement which includes a Free Trade Area in Goods, Services and Investments.  Now the negotiations in Trade in goods turned to be working agreement and the negotiations in Trade in Services and Investments were already started.
Till now we are going through the development of Indo- ASEAN free trade agreement.  For enabling a clear understanding on the agreement, a clear cut idea regarding free trade agreement is a must.  That we will see in the followed by posts.................................

Monday, August 2, 2010

Characteristics of Research Design

Generally a good research design minimizes bias and maximizes the reliability of the data collected and analyzed.  The design which gives the smallest experimental error is reported to be the best design in scientific investigation.  Similarly, a design which yields maximum information and provides a opportunity for considering different aspects of a problem is considered to be the most appropriate efficient design .  Thus the question of a good design is related to the purpose or objective of the research problem and also with the nature of the problem to be studied.  A good research design should satisfy the following four conditions namely objectivity, reliability, validity and generalization of the findings.
1. Objectivity:  It refers to the findings related to the method of data collection and scoring of the responses.  The research design should permit the measuring instrument which are fairly objective in which every observer or judge scoring the performance must precisely give the same report.  In other words, the objectivity of the procedure may be judged by the degree of agreement between the final scores assigned to different individuals by more than one independent observer.  This ensures the objectivity of the collected data which shall be capable of analysis and drawing generalizations.
2. Reliability:  Reliability refers to consistency through out a series of measurements.  For eg: if a respondent gives out a response to a particular item, he is expected to give the same response to that item even if he is asked repeatedly.  If he is changing his response to the same item, the consistency will be lost.  So the researcher should frame the items in a questionnaire in such a way that it provides consistency or reliability.
3. Validity: Any measuring device or instrument is said to be valid when it measures what it is expected to measure.  For eg: an intelligence test concucted for measuring the I.Q should measure only the intelligence and nothing else, and the questionnaire shall be framed accordingly.
4. Generalizability:  It means how best the data collected from the samples can be utilized for drawing certain generalisations applicable to a large group from which sample is drawn.  Thus a research design helps an investigator to generalize his findings provided he has taken due care in defining the population, selecting the sample, deriving appropriate statistical analysis etc.  while preparing the research design.  Thus a good research design is one which is methodologically prepared and should ensure that:
a) The measuring instrument can yield objective, reliable and valid data.
b) The population is clearly defined.
c) Most appropriate techniques of sample selection is used to form an appropriate sample.
d) Appropriate statical analysis has been carried out, and
e) The findings of the study is capable of generalisations.