Rural Households Behaviour in Investment

PROJECT REPORT 2020-2021
“A STUDY ON SAVINGS AND INVESTMENT OF RURAL

HOUSEHOLD WITH SPECIAL REFERENCE TO
CHULLIMADA, KANJIKODE”
PROJECT REPORT
Submitted to Calicut University in partial fulfilment of the requirements for the

Award of the Degree of
B.COM (COMPUTER APPLICATION)

Submitted by
SREEJITH.S
(Reg. No: VVASBCM111)
Under the guidance of
Mrs JYOTHI.M.V
Assistant Professor Department of Commerce & Management
VV COLLEGE OF SCIENCE AND TECHNOLOGY
CHULLIMADA PALAKKAD
(Affiliated to Calicut University)
(2020-2021)


CHULLIMADA, PALAKKAD
(Affiliated to Calicut University)
CERTIFICATE
This is to certify that the project report entitled “A STUDY ON SAVINGS AND
INVESTMENTS OF RURAL HOUSEHOLD WITH SPECIAL REFERENCE
TO CHULLIMADA KANJIKODE” submitted to Calicut university in partial
fulfilment of the requirement for the award of Degree of B.COM (COMPUTER
APPLICATION) is a bonafied record of the work done by SREEJITH.S
(VVASBCM111) during the period of his study 2020-2021 in PG Department of
Commerce & Management, VV COLLEGE OF SCIENCE AND
TECHNOLOGY,CHULLIMADA, KANJIKODE,PALAKKAD.
Date :
Signature of the Guide :
Signature of the HOD :
Signature of the Principal :
Signature of the External :

DECLARATION
I SREEJITH.S hereby declare that the project report entitled “A STUDY ON
SAVINGS AND INVESTMENT OF RURAL HOUSEHOLDS WITH
SPECIAL REFERENCE TO CHULLIMADA KANJIKODE” is a bonafied
work done by me and is submitted to Calicut university in the partial fulfilment of
requirements for the award of the B.COM (COMPUTER APPLICATION)
academic year 2020-2021 under the supervision and guidance of Mrs
JYOTHI.M.V, Assistant professor in commerce, VV College of Science and
Technology Chullimada, Kanjikode, Palakkad.
I also declare that this project report has not been submitted previously, full or
partial for the award of any degree, title or recognition.
DATE:
PLACE:
SREEJITH.S
(Reg. No: VVASBCM111)

ACKNOWLEDGEMENT
I whole heartedly express my deep sense of gratitude to my respected guide Mrs

JYOTHI.M.V , Assistant professor in PG department of commerce and
management , VV College of Science and Technology Palakkad, Kanjikode, for
her thought providing guidance and supervision.
I am highly obliged to professor Dr. V K SUDHAKARAN, Head of the

Department of commerce VV College of Science and Technology, Palakkad who
encouraged me throughout my project work. I express my sincere gratitude to all
other teachers of Commerce Department.
With profound gratitude I place my sincere thanks to Professor Dr. V K

SUDHAKARAN, principal of VV College of Science and Technology for giving
this opportunity to undergo this project.
I would like to thank my family and friends who have contributed for the
successful completion of this project.
Above all I thank the almighty for giving me grace throughout my work
SREEJITH.S

LIST OF TABLES
TABLE NO PARTICULARS PAGE NO.

4.1 Table showing Gender of respondents
4.2 Table showing Marital status of the respondent
4.3 Table showing Size of family of the respondents
4.4 Table showing Educational qualification of the
respondents
4.5 Table showing Annual income of the respondents
4.6 Table showing Annual saving of the respondents
4.7 Table showing Motivating factor of the
respondents
4.8 Table showing The percentage of factor considered
for increase in the size of saving
4.9 Table showing Medium of investment preferred by
the respondents
4.10 Table showing Time horizon of investment
4.11 Table showing Source of advice for investment
4.12 Table showing Source of information
4.13 Table showing Time taken for changing investment
4.14 Table showing Special provision need to boost up
investment
4.15 Table showing Type of investment
4.16 Table showing Percentage of income investing
4.17 Table showing Fixed investment
4.18 Table showing Sufficiency of existing investment
4.19 Table showing Monitoring investment
4.20 Table showing Investment in share market
4.21 Table showing Satisfaction level with present
investment and saving scheme

LIST OF CHART
CHART NO PARTICULARS PAGE NO.
4.1 Chart showing Gender of respondents
4.2 Chart showing Marital status of the respondent
4.3 Chart showing Size of family of the respondents
4.4 Chart showing Educational qualification of the
respondents
4.5 Chart showing Annual income of the respondents
4.6 Chart showing Annual saving of the respondents
4.7 Chart showing Motivating factor of the
respondents
4.8 Chart showing The percentage of factor considered
for increase in the size of saving
4.9 Chart showing Medium of investment preferred by
the respondents
4.10 Chart showing Time horizon of investment
4.11 Chart showing Source of advice for investment
4.12 Chart showing Source of information
4.13 Chart showing Time taken for changing
investment
4.14 Chart showing Special provision need to boost up
investment
4.15 Chart showing Type of investment
4.16 Chart showing Percentage of income investing
4.17 Chart showing Fixed investment
4.18 Chart showing Sufficiency of existing investment
4.19 Chart showing Monitoring investment

4.20 Chart showing Investment in share market
4.21 Chart showing Satisfaction level with present
investment and saving scheme

CONTENTS
CHAPTER TITLE PAGE NO.

1 INTRODUCTION
2 REVIEW OF LITERATURE
3 THEORETICAL
FRAMEWORK
4 DATA ANALYSIS AND

INTERPRETATION
5 FINDINGS, SUGGESTIONS
AND CONCLUSION
BIBLIOGRAPHY
APPENDIX

CHAPTER 1
INTRODUCTION OF THE STUDY

INTRODUCTION OF THE STUDY
1.1 INTRODUCTION
Saving is an important macroeconomic variable to be studied under the purview of

the economic area on n individual as well as household basis. In a country like
India, the income standard is almost uncertain and leads to more consumption
rather than saving which has been a central problem. If the saving is low, then the
investment will also be low leading to low capital formation. The present study
analyses the determinants and patterns of savings behaviour in rural households.
India is a developing country where, there has been a consistent increase in the
national saving rate after the independence period, though with considerable
fluctuations from year to year. In international stand point of view, India has a had
a high saving rate as compared to other developing countries, except those in East
Asia. To study on rural saving, the compositions of savings, the methods of
measuring savings, and the pattern of saving.
The present study tries to analyse the determinants and pattern of saving behaviour
on rural households. Saving is an important variable for every country to be studied
for the economic growth and development of under the purview of the economic
area on an individual as well as household basis.
According to classical economists like Adam Smith ,Dvid Ricardo and J.J.MILL,
"saving is an important determinant of economic growth”. Saving components can
be based on an individual or on household basis which proves to be the well being.
As for an individual saving becomes the cushion for the future's intercourse of the
unforeseen and upcoming as well as the uncertain circumstances of life. Saving is
the part of the income earned by the individuals. For the higher economic growth of
the country, marginal propensity to save should be higher but it helps to the
multiplier process. The determinants and pattern of saving differ from rural to
urban region. In rural areas, the marginal propensity to consume is more than the
marginal propensity to save which seems to be vice-versa in urban areas where the
marginal propensity to save is more than that of the marginal propensity consume

According to Rao(1980)saving constitutes the basis of capital formation constitutes

a major determinants of economic growth. In the developed countries, the income
is generated at a higher rate which encourages people to have more savings which
opines to more investments leading to more capital formation. But in a country like
India, the income standard is almost uncertain and leads to more consumption
rather than saving.
The present study focuses to examine the main determinants of the saving pattern
in rural population especially in the context of aggregate saving behaviour. India is
fast losing its status as a country of big savers. According to RBI Annual Report
(2011), “The persistence of inflation at the high average rate of about nine percent
during 2011-12 further atrophied to save off the downward pressure on their real
consumption or lifestyle”. The changing pattern of India household savings is the
result of a number of factors. The household savings in India has experienced a
variety of changes over the past one or two decades as due to the changes in
lifestyles and consumption models in a developing country like India. India
economy has noticed a lot of rises and falls in the household savings rate. This
might have resulted due to the variable composition of savings over the passage of
time.
1.2 STATEMENT OF THE PROBLEM

Saving is a very important component which is responsible for combating or
meeting any emergency accrued by the individuals or the households or any
corporate agencies. Saving is more of meant for meeting contingencies but
sometimes it also acts as a form of investment. But sometimes people are not
inclined towards saving and the vert delicate reason is lack of awareness. The
present study can be relevant one to know the reason of dissaving and if saving
occurs then what are the determinants which are responsible for saving.

1.3 OBJECTIVES OF THE STUDY

The present study examines the determinants and patterns of saving behaviour in
rural households. The objectives are:
1. To analyse savings and investments habits among rural households.
2. To analyse attitude towards savings and investments.
3. To understand choice and saving preference of rural people.
4. To study and identify factors which influence the saving behaviour among rural
people.
1.4 SCOPE OF THE STUDY

The future welfare of the society mainly depends upon the saving pattern of the
families. For various purposes they are making some savings from their monthly
income. In different opportunities they are investing their excess income for future
benefit.
This study covers the saving and investment habits among

rural households in Chullimada, kanjikode.
1.5 RESEARCH METHODOLOGY

Research Methodology is the term that basically means the science of how research
is done scientifically. It is a way to systematically and logically solve problem,
helps us to understand the process not just product of research and analysis method
in addition to the information obtained by them.
1.5.1 RESEARCH DEIGN

It is a systematic study in which the researcher uses descriptive research to
formulate the objective for the study.
1.5.2 SOURCE OF DATA

Primary data
Primary data is collected through questionnaire method and interview method.

Secondary data
Secondary data is collected from the books, journals, other published and
unpublished reports and websites.
1.5.3 SAMPLING DESIGN

A sampling design is a definite plan for obtaining a sample from given population.
It refers to the technique or the procedure of the researcher would adopt in selecting
items for the sample. The study mainly based on convenience sampling method.
1.5.4 SAMPLE SIZE

The sample were selected from 50 respondents from Chullimada
1.5.5 AREA OF THE STUDY

The study was conducted in the area of Chullimada.
1.5.6 TOOLS FOR ANALYSIS

Tools used for the analysis of the study is Simple percentage analysis, Bar diagram,
Pie chart.
1.5.7 PERIOD OF STUDY

The period of study was 21 days

1.6 LIMITATIONS
• This study confines within the limited period.
• The study covers only the rural households.
• The personal bias of the respondent may influence the study.
• Due to the lack of the availability of the head of the family as many of
them are mostly out for work, the data received from the family members are
inadequate.

CHAPTER 2
REVIEW OF LITERATURE

REVIEW OF LITERATURE
In this chapter, the concepts relevant to the present study are compiled and
presented in a logical order. To support and enrich the theoretical orientation of the
present study, an attempt was made to review similar and relevant past studies and
literature available in books, scholarly journals, magazines, newspapers and other
resources.
A Study on The Indian Household Investors Survey Mathivanan.R. and

Mohanaranjani (2013) 44 research paper aimed to analyze the gap between
financial literacy and saving/investment behaviour among the working women.
The findings of the study shows that women have expressed high degree of
awareness i. e, financial literacy towards traditional saving/investment avenues, but
they have actively have shifted their saving/investment avenues from traditional
bank saving avenues to modern technically risky capital market operations.
SaritaBahl (2012) study aims to study the investment behaviour among the
working women in Punjab. The study show that how much women are aware about
the investment benefits and whether they invest their money or not, and if invested,
how much money is invested by them. She made efforts to determine the level of
agreement of working women of Punjab on various aspects of investment planning.
(2005) conducted by the Society for Capital Markets Research &Development,
Delhi emphasizes the fact that investment preferences among household investors
have important socioeconomic applications. Such preferences influence the
direction in which, and the channels through which, household financial savings
would flow. A developing economy, like India, and needs a flowing amount of
household savings to flow to corporate enterprises. Such flow can grow on a
sustained basis if, and only if, there is an effective system to ensure that the
enterprises receiving the flow are sound and will make proper use of the money
provided.
Al-Tamimi (2006) investigated a study on most and least influencing

factors on the United Arab Emirates investors behaviour, by surveying 343
individual investor. The most influencing investment factors identified by the
authors were: corporate earnings get rich quickly, stock marketability, past

performance and the creation of organized financial markets. In addition two

factors had unexpectedly the least influence, namely religious reasons and family
member's opinions. However, the author did not consider the relationship between
financial literacy and investment decision, which will be dealt in the current study.
Shri. T.S.Vijayan (2006) in his address at (ORCD) Conference co-hosted by

pension Fund Regulatory and Development Authority has commented that financial
education can help individuals to take control of their financial situation, and
improved spending habits, increased savings, investments for future requirements,
children's higher education, wise use of credit facilities, can all contribute towards
growth and stability of the economy. He also said that as the currently available
financial instruments are becoming more and or complex and the investors has to
choose a plethora of instruments to invest his hard earned money. There should be
cross-industry co-ordination and nexus between different industry bodies and
regulators to promote a study on the awareness of financial instruments in India.
Das.V.S (2007) states in his report that financial education or financial

literacy has assumed greater importance in the recent years, as financial markets
have become increasingly complex and there is also an information asymmetry
leading to making informed choices more and more difficult for the common
person. Financial education can broadly be defined as providing the familiar with
and understanding of financial market products, especially, rewards and risks, in
order make informed choices. Viewed from this standpoint, financial education
primarily relates to personal financial education to enable individuals to take
effective actions to improve overall wellbeing and avoid distress in matters that are
financial. The report also states that the absence of proper financial counselling,
coupled with inadequate financial literacy levels has often resulted in pushing the
consumers towards costlier options and eventual debt traps. Thus, there is a need
for financial counselling in all the areas.
Horioka and Wan (2007) in their research work had established the fact that
china's household saving rate has been high and rising and that the main
determinants of variations overtime and over space are the lagged saving rate, the
income growth rate, the real interest rate and the inflation rate. However they found
that the variables relating to the age structure of the population usually do not have
a significant impact on the household saving rate. These results they claimed

provide mixed support for the life cycle hypothesis as well as the permanent
income hypothesis, and that they (the results) are consistent with the existence of
inertia or persistence, and imply that china's household saving rate will remain high
for some time to come. Regarding the issue of whether rural households can save or
not, two conflicting views have been aired: the traditional or old view and the new
view. The traditional view purports the idea that rural households cannot save
because they are too poor and therefore rural savings mobilization efforts are
deemed futile and worthless.
Maditinos et al. (2007) examined the techniques and methods used by six
different groups of Greek investors: official members of Athens Stock Exchange,
Mutual fund management companies, portfolio investment companies, listed
companies, brokers and individual investors. The results revealed that on average
the participants ranked their instinct / experience as the most important factor that
influences their investment behaviour in the stock market. Naga Sridhar, G.(2007)
commented in his study that despite their expanding reach, banks still need to tap a
larger share of household savings in India and compete with lucrative investment
options such as real estate in the process. According to the study, household
savings, as a share of Gross National Savings in India, are the highest in the world
at 69 percent as against 55 and 44 percent in France and China, respectively. And
the banks have a reason to be concerned as only 47 percent of these savings are
accessed by the financial service sector. The lion's share of investment is being
made in the booming real estate sector and also in gold jewellery, says the study.
The reason for banks inability to attract domestic savings should be located in the
high geographical fragmentation of banking operations with limited presence in
rural areas.
Verma (2007) considered savings, investments and economic growth for India
using annual time series data for the period 1950-51 to 2003-04. The study finds
that savings unambiguously determines investments in both the short run and long
run. And, no evidence has been found to support the "commonly accepted in all the
areas. An empirical study conducted by Abdus Salam and UmmaKusum, (2008)
on savings behaviour in India, revealed that household sector savings provided to
bulk of national saving. The study reported that the share of total household savings
has gone up from 75.9 percent 1980-81 more than 86 percent in 2007-08.

Krishnamoorthy.C. (2008) in his study has analysed the profile and awareness
of salaried class investors and their attitude and satisfaction towards investment. It
has been concluded that all salaried people were aware of bank deposits, PF,
scheme, insurance schemes, post office savings schemes, gold and however only
few were aware of UTI.
Ang (2009) examined the dynamic relationship between the domestic savings and
investment rates in India over the period 1950-2005 by controlling the level of
financial liberalization. The results indicate that greater financial liberalization
enables more domestic resources to be channel to investment activities.
RaghavanGuruswami (2010) says that financial literacy has become an increasingly

important requirement for functioning in matured economies. Trends in work
patterns, demography and service delivery suggest that it will become even more
important in the years ahead. Improvements in financial literacy can not only
support social inclusion but also enhances the contribution to the economy as a
whole. Financial illiteracy leads to financial exclusion, financial exploitation and
financial discrimination. Socially under privileged, poor, disabled, women a group,
uneducated, ethnic minorities unemployed, children as well as old people form the
nucleus of financially excluded population in any country. Therefore to ensure
against financial exclusion, there is an urgent need to promote and enhance
financial literacy.
Sethupathi.M. (2011) empirical research work analyzed the financial services

awareness and investment pattern of the rural masses in Coimbatore district of
Tamil Nadu. The sample population knowledge on the modern and market
sophisticated investment avenues is very much limited. The author has also
specified that the rural households in the study area primary give importance to
The safely of the principal money they invest before selecting savings/investment
avenue. The study reveals mixed investor's perceptions towards feasibility of
financial services offered by various agencies in rural areas and it has been
concluded that minimum deposit facilities or no-frill account is a more popular
mode of financial inclusion among the rural masses of Tamil Nadu in general and
in particular to the study region Coimbatore District as per the opinion.

CHAPTER 3
THEORETICAL FRAMEWORK

THEORETICAL FRAMEWORK
Saving decisions are at the heart of both, short and long- run macroeconomic
analysis (as well as much of microeconomics). In the short run, spending dynamics
are of central importance for business cycle analysis and the management of
monetary policy. And in the long run, aggregate saving determines the size of the
aggregate capital stock, with consequence for wages, interest rates, and the
standard of living. Aggregate savings for an economy is a predominant component.
The problem of savings behaviour can be taken up both at the micro and macro
level. The following two of the approaches are now well established by the
Relative Income Hypothesis by Duesenberry, (1949), the Permanent Income
Hypothesis by Friedman (1957) and the Life Cycle Hypothesis by Ando and
Modigliani (1963).
3.1 TYPES OF SAVINGS

The types of saving are mainly based on the income available to the household,
firm and corporate bodies. The saving type can be classified in the basis of the
sectors accounting for the saving distribution. It can be broadly classified under
three headings namely,
(a) Household sector saving
(b) Private sector saving
(c) Public sector saving
The categories of savings are discussed below:
HOUSEHOLD SECTOR SAVING
The savings done or accrued by the individual members in a household consists of

household sector saving. The household saving contribute to a larger share in the
Indian economy which comprises of the individual saving behaviour at a larger
scale including the financial as well as financial assets. The
Individual at the household level make a share to the national income computation
of a country.

PRIVATE CORPORATE SECTOR SAVING
The savings made in the private owned corporations are called as the private sector
corporations. The private corporate sector comprises of:
1. Non-government non-financial companies
2. Commercial banks and insurance companies working in private sector
3. Co-operative banks, credit societies and non credit societies
4. Non- banking financial companies in the private sector.
PUBLIC SECTOR SAVING
The public sector's savings are constituted into government savings, and savings
generated by the public sector undertakings in the form of internal resources. One
process of estimating public sector saving is to scrutinize the relationship between
public savings and the consolidated returns shortage of government which is an
alternative measure of government savings.
3.2 NATURE OF SAVING

Savings can be known as the cash or physical products set aside for future use.
People in rural and other low-income communities can save when they are guided
and encouraged by the Government and financial institutions. The people in rural
region, savings are made through traditional credit rotation groups, or purchase od
domestic animals (goat, pigs, chickens, or cows). Gradually, the traditional way of
saving in rural region has been abolished; the people shifted their saving pattern to
save in form of physical assets, like gold, land and durable goods and financial
assets like shares, stocks, and bonds.
The Micro Finance Institutions (MFIs) and micro-enterprises are playing a

major role in recent years in rural region by encouraging the people to save more.
MFIs need to inject capital or funds which may be the owner's of money or loan.
When a loan is used, it is someone else who has done the saving. Micro enterprises,
like other businesses, convert savings (of the owners and the others) into
investment, in the creation of wealth. Variations in the

saving pattern is mostly found in different societies as there exists, a difference in

environmental, social, economic and cultural contexts. Human wants gets
transformed as the society grows and in turn cause substantial changes in the
outlook of the people towards saving. In low-income communities the ability to
save is low and often is in cash or kind. Saving in cash is cheap and convenient.
Variations in saving is visible in different communities as there exists difference in
income levels, consumption pattern, awareness of the saving benefits, family size,
investment opportunities, etc. Human attitude towards saving has been changed
through decades as in the remarkable growth in the society.
3.3 DETERMINANTS OF SAVING RATE

The rural household's decision to consume present or in the future is influenced by
the current or permanent income. The significance of 'incentives' as a determinant
of savings is that although there has been a long footing fright about the effects of
the level of per family income upon proportion of income that is saved, there has
been no comparable concern about the effect of variation in the relative prices of
new income streams upon savings and investment.
3.4 REAL PER CAPITA INCOME

The real per capita income of the individuals proves to be a foremost determinant
of saving rate. When the income of an individual increases the consumption pattern
improves which in the sense some part is left out which goes to saving as to secure
one's unforeseen future. As rightly pointed out by the neoclassical growth model
(Solow, 1956) that higher savings rate will lead to higher steady situation levels of
income ( or output) per capita, while the endogenous growth theory models imply
that higher savings rates would lead to higher levels of growth of income per
capita. Thus in common, both the variables should be well thought-out. The real (in
stable domestic prices) Gross Domestic Product (GDP) per capita is used as an
estimation of real income This two indicators rightly give an outlay to the saving
pattern.

3.5 DEMOGRAPHIC FEATURES

The saving can be most often determined by the demographic features like sex
ratio, the age distribution, and the rate of dependent population. Saving highly
determined by whether the female's contribution towards saving is or the male is
contributing to its highest level and again if the problem age distribution in the
family contributing to the saving is optimum the saving rate is determined in a
different perspective.
Aggregate savings is exaggerated by the age distribution o population if the carve

up of dependent population is high than the in earning groups, the savings ratio will
be low. According to the life – cycle hypothesis a larger working population next of
kin to the older population contributes to raise the savings rate. In an instance if the
income ea population is comparably high to that of the dependent population the
saving rate will experience a hike which is in some way will lead to in propagation
in a long term basis.
3.6 SHARE OF AGRICULTURE TO GDP

India is an agriculture dominant country where most of the people are eng in
agriculture activity in which the concentration of the rural population is As because
of some way or the other the production level decides the fate individual farmers
which sometimes experiences a high production level have more income and will
automatically encourage the people to save and if the production is less than the
income will have a fall resulting in a fall in the saving rate. The rural or agricultural
sector of the economy display different savings behaviour than the urban/industrial
sector, especially in the case of developing countries, with large agricultural
sectors. The agricultural sector could have a different savings rate due to a lower
access to the banking system and because of lower and unbalanced incomes in the
agricultural and sometimes due to lack of access to other financial institutions
nearby determines the saving rate. Proper awareness and education is needed to b
proper understanding of the saving rate of a country with a remarkable share the
GDP.

3.7 REAL INTEREST RATES

Every banking institution including other financial institutions people to save with
an expectation of giving a considerable amount interest on the saving amount. This
rate of interest determines the saving the individuals on a view to encourage people
towards saving. When interest high people are more interested to save rather than
invest and rate of interest is less people are less inclined towards saving rather are
likely to invest more in an expectation of getting more rate of ret is a negative and
an inverse relationship between savings and rate Critically, an increase in interest
rates will have an indefinite effect because of a positive substitution effect towards
future consumption negative income effect due to increased real proceeds in saved
wealth
3.8 SOCIAL BARRIERS

The society we live in is full of constraints likely due to variations distinctions in
the age, sex, culture, tradition, social taboos, and n which by playing an important
role determines the saving behaviour region, state or country. Income plays a major
role in identifying distinctions among different groups but income cannot always
remove all the barriers for availing the opportunities because of the variations off
context of culture, gender, class etc. People belonging to diverse eth can have a
refutation to the equal admittance to education, employment other basic services
by the social and financial institutions as v investment opportunities available.
3.9 STRUCTURE OF SAVINGS IN INDIA

In India domestic savings originate from three principal sectors namely
i. household sector
ii. Privet corporate sector and
iii. Public sector
The household sector comprises of individual, non- corporate business and private
collectives like temples, educational institutions and charitable foundations.
The saving can be held in the form of increases in

a) Liquid assets like currency bank deposits and gold
b) Financial assets like shares, securities and insurance policies and physical
assets.
The corporate sector includes joint stock companies in the private business sector,
industrial credit and investment, corporation etc. and cooperative institutions.
Saving of the corporate sector is represented by the retained earnings of this sector.
Government sector consists of the central and state government, the local
authorities and various government and department undertakings; hence the saving
of this sector relates to the budgetary surplus on current account of the central
government, state government, local authorities, the current surplus of various
government departments and retained projects of government undertakings.
3.10 CONCEPTUAL FRAMEWORK

• Household: A social unit living together where all the individuals share a
common kitchen.
• Savings: The share of disposable income not spent on consumption of consumer

goods but accumulated or invested straight in capital equipment or in paying off a
home mortgage, or not directly through out purchase of securities.
• Financial Institution: Private (shareholder- owned) or public (government owned)

organizations that, generally speaking, act as a waterway between savers and
borrowers of funds (suppliers and consumers of capital).
• Consumer spending pattern: Good and services bought by households in the

fulfilment of their needs and wants. It includes non- durables such as food, semi-
durables such as clothing, and durables such as refrigerators etc.
• Average propensity to save: Fraction or percentage of disposable (after tax)

personal income not spends for consumer goods. It in general varies with the
intensity of income.
• Net worth: It is defined as the total market value of all assets, such as home
equity, stocks and bonds, and savings accounts, minus all de such as mortgages,
school loans and automobile loans.

CHAPTER 4
DATA ANALYS IS AND INTERPRETATION

TABLE 4.1
TABLE SHOWING GENDER OF RESPONDENTS
Sl. No Gender No. of Percentage

households
1 Male 27 54
2 Female 23 46
3 Transgender 0 0
Total 50 100
CHART 4.1
CHART SHOWING GENDER OF RESPOND
MALE FEMALE
0%
46%
54%
Source: Primary Data
Interpretation
Out of the sample households taken for the study, 54% are male and 46% are
female. The sex of the head of the household emphasizes the impact of saving as it
is shown that the male population are more and suppose to involve themselves in
different occupational status are inclined to save more.

TABLE 4.2
TABLE SHOWING MARITAL STATUS OF THE RESPONDENTS
SL. NO Marital Status No .of households Percentage

1 Unmarried 6 12
2 Married 40 80
3 Widowed 3 6
4 Divorced 1 2
Total 50 100
CHART 4.2
CHART SHOWING MARITAL STATUS OF THE RESPONDENTS
90
80
80
70
60
50
40
30
20
12
10 6
2
0
unmarried married widowed divorced
Source: primary data
Interpretation
As per the study 80 % of the respondents are married and 12 %, 6% and 2% are
unmarried, widow and divorced respectively.

TABLE 4.3
TABLE SHOWING SIZE OF THE FAMILY OF THE RESPONDENTS
SL. no Size of the No. of Percentage

family households
1 Only 2 members 10 20
2 2 – 5 members 28 56
3 5 – 10 members 7 14
4 More than 10 5 10
Total 50 100
CHART 4.3
CHART SHOWING SIZE OF FAMILY OF THE RESPONDENTS
60 56
50
40
30
20
20
14
10
10
0
only 2 members 2-5 members 5-10 member more than 10
Interpretation
The size of the family is also determinants of the saving behaviour of the rural
households. majority 56 % of households consist of a family size of 2-5
members and lowest that is 2 members constitute 20 % of the population . 5- 10
members constitute 14% and more than constitute 10%.

TABLE 4.4
TABLE SHOWING EDUCATIONAL QUALIFICATIONS OF

RESPONDENTS
Sl. No Educational No. of Percentage

qualification households
1 Below SSLC 22 44
2 SSLC 19 38
3 Graduate 3 6
4 Post graduate 5 10
5 Professionals 1 2
Total 50 100
CHART 4.4
CHART SHOWING EDUCATIONAL QUALIFICATIONS OF THE

RESPONDENTS
below sslc sslc graduate post graduate professional
10% 2%
6%
44%
38%
Interpretation
Almost 44% of the household are below SSLC , 38 per cent are achieved
SSLC 6%, 10% and 2 % are achieved graduate , post graduate and
professionals respectively

TABLE 4.5
TABLE SHOWING ANNUAL INCOMES OF THE RESPONDENTS
Sl. No Annual income No of households Percentage
1 Less than 1 lakh 30 60

2 1 – 2 lakh 14 28
3 2 – 3 lakh 6 12
4 More than 3 lakh 0 0
Total 50 100
CHART 4.5
CHART SHOWING ANNUAL INCOMES OF THE RESPONDENTS
70
60
60
50
40
30 28
20
12
10
0
0
less than 1 lakh 1 - 2 lakh 2-3 lakh more than 3 lakh
Interpretation
Around 60 % of households accrued annual income is less than 1 lakh , 28%

accrued annual income between 1 – 2 lakh and 12% accrued 2-3 lakh.

TABLE 4.6
TABLE SHOWING ANNUAL SAVING OF THE RESPONDENTS
SL.NO Annual saving No. of households Percentage

1 Less than 25000 28 56
2 25000-50000 15 30
3 50000-75000 6 12
4 75000- 1 lakh 1 2
Total 50 100
CHART 4.6
CHART SHOWING ANNUAL SAVING OF THE RESPONDENTS
60 56
50
40
30
30
20
12
10
2
0
Less than 25000 25000-50000 50000-75000 75000-1 lakh
Interpretation
Almost 56% of the households saving is less than 25000. Around 30% of the
household saving is between 25000-50000 12%, 2 % are 50000-75000 and 75000-
100000 respectively.

TABLE 4.7
TABLE SHOWING MOTIVATING FACTOR OF SAVING OF THE

RESPONDENTS
Sl. No Motivator of saving No. of Percentage

households
1 To Meet specific purpose 6 12
2 To Get tax benefits 5 10
3 To Earn income 23 46
4 To Meet contingent expenses 6 12
5 To be secured at old age 10 20
Total 50 100
CHART4.7
CHART SHOWING MOTIVATING FACTOR OF SAVING OF THE

RESPONDENTS
50 46
40
30
20
20
12 10 12
10
0
To meet specific To get tax benefits To earn income To meet contingent To be secured at
purpose expense old age
Interpretation
Around 46 % of the households save on the objective to earn income. 20% on the
objective to be secured at old age. 12 % has both on to meet specific purpose and
to meet contingent expense. 10% on the objective to get tax benefits.

TABLE 4.8
TABLE SHOWING THE PERCENTAGE OF FACTORS CONSIDERD FOR

INCREASE IN THE SIZE OF THE SAVING
SL. No Factors No. of households Percentage

1 Increase in salary 35 70
2 Additional statutory 5 10
requirement
3 Future needs 5 10
4 Tax benefit 5 10
Total 50 100
CHART 4.8
CHART SHOWING THE PERCENTAGE OF FACTORS CONSIDERED

FO INCREASE IN THE SAVING
80
70
70
60
50
40
30
20
10 10 10
10
0
increase in saraly Additional statutory future needs tax benefits
requirment
Interpretation
Around70 % of the household considers increase in salary as a factor considers for

increase the size of saving. Both other have 10 % equally on additional statutory
requirements, future needs, tax benefits are the others categories.

TABLE4.9
TABLE SHOWING MEDIUM INVESTMENT PREFERED BY THE

RESPONDENTS
SL. No Medium prefer to invest No. Of Percentage

households
1 Bank deposits 15 30
2 Insurance 10 20
3 Post office 10 20
4 RD,NSC 2 4
5 Government security 8 16
6 RPF 2 4
7 Others 3 6
Total 50 100
CHART4.9
CHART SHOWING MEDIUM INVESTMENT PREFERED BY THE

RESPONDENTS
40
30
30
20 20
20 16
10 4 4 6
0
Bank Insurance Post office RD,NSC Government RPF Others
deposits security
Interpretation
Almost 30 % of the household prefer bank deposits for investment both insurance
and post office consist of 20%. 16 %prefer government securities. RD, NSC has
and RPF also has 4%. the other section has 6%.

TABLE 4.10
TABLE SHOWING THE TIME HORIZON OF INVESTMENT
Sl. No Time horizon No. of households Percentage

1 Long term 10 20
2 Medium term 15 30
3 Short term 5 10
4 Very short term 5 10
5 As per 15 30
convenience
Total 50 100
CHART 4.10
CHART SHOWING THE TIME HORIZON OF INVESTMENT

35
30 30
30
25
20
20
15
10 10
10
0
Long term Medium term Short term Very short term As per
convenience
Interpretation
Around 30 % of the household consist at both medium term and as per convenience
section. And other 20 % consist of long term. Short term and very short term come
under 10%.

TABLE 4.11
TABLE SHOWING SOURCE OF ADVICE FOR INVESTMENT
Sl. No Categories No. of household Percentage

1 Family members 15 30
2 Company agents 10 20
3 Friends and 5 10
colleagues
4 Financial advisors 15 30
5 Self decision 5 10
Total 50 100
CHART 4.11
CHART SHOWING SOURCE OF ADVICE FOR INVESTMENT
35
30 30
30
25
20
20
15
10 10
10
5
0
Family members Company agents Friends and Financial Self decision
colleagues advisors
Interpretation
In this, analyses that both family members and financial advisors has 30%. 20
%covered by the company agents. Friends and colleagues and self decision has
10%.

TABLE4.12
TABLE SHOWING SOURCES OF INFORMATION
Sl. No Source of No. of households Percentage

information
1 TV and Radio 20 40
2 Journal and Magazine 10 20
3 Organizational reports 10 20
4 Others 10 20
Total 50 100
CHART4.12
CHART SHOWING SOURCES OF INFORMATION
45
40
40
35
30
25
20 20 20
20
15
10
0
TV and Radio Journal and Magazine Organizational Others
reports
Interpretation
40 % prefer TV and radio as their source of information of investment. Journal and

magazines, organizational reports and others 20%.

TABLE 4.13
TABLE SHOWING TIME TAKEN FOR CHANGING INVESTMENT
Sl. No Time horizon No. of households Percentage

1 1 month 15 30
2 1-6 month 20 40
3 1 year 10 20
4 Above 1 year 5 10
Total 50 100
CHART4.13
CHART SHOWING TIME TAKEN FOR CHANGING INVESTMENT
45
40
40
35
30
30
25
20
20
15
10
10
0
1 month 1-6 month 1 year Above 1 year
Interpretation
Almost 40% of the household prefer 1-6 month duration for changing investment.
30% constitute 1 month duration. 20 %10 %constitute 1 year and above 1 year
respectively.

TABLE 4.14
TABLE SHOWING SPECIAL PROVISIONS NEED TO BOOST UP

INVESTMENT
Sl. No Special provisions No. of households Percentage

1 Extra incentives 15 30
2 Additional bonus 20 40
3 Tax concession 10 20
4 High retirement 5 10
Total 50 100
CHART4.14
CHART SHOWING SPECIAL PROVISIONS NEED TO BOOST UP

INVESTMENT
45
40
40
35
30
30
25
20
20
15
10
10
5
0
Extra incentives Additional bonus Tax concession High retirement
Interpretation
Around 40 % of the household has prefer additional bonus for boosting up their
investment. Extra incentives has 30%. Tax concession has 20 % and high
retirement benefits has 10%.

TABLE 4.15
TABLE SHOWING TYPE OF INVESTMENT
Sl. No Types of No. of households Percentage

investment
1 Regular return plan 15 30
2 Medical plan 5 10
3 Pension 10 20
4 Specific purpose 15 30
plan
5 Multiple purpose 5 10
plan
Total 50 100
CHART4.15
CHART SHOWING TYPE OF INVESTMENT
35
30 30
30
25
20
20
15
10 10
10
5
0
Regular return Medical plan Pension Specific purpose Multiple purpose
plan plan plan
Interpretation
In this, both regular return plan and specific purpose plan has 30%. Pension plan
also has 20%. Both medical plan and multiple purpose plan has 10%.

TABLE 4.16
TABLE SHOWING PERCENTAGE OF INCOME INVESTING
Sl. No Percentage of No. of households Percentage

income
1 0-15% 20 40
2 15%-30% 15 30
3 30%-50% 15 30
Total 50 100
CHART 4.16
CHART SHOWING PERCENTAGE OF INCOME INVESTING
35
30 30
30
25
20
15
10
4.3
5
0
0-15% 15%-30% 30%-50%
Interpretation
Around 40% of the household invest 0-15% of their income for saving. 15-30%
and 30-50 % both has 30 % income investing.

TABLE 4.17
TABLE SHOWING FIXED INVESTMENT
Sl. No Fixed investment No. of households Percentage

1 Yes 20 40
2 No 30 60
Total 50 100
CHART4.17
CHART SHOWING FIXED INVESTMENT
40%
Yes
No
60%
Interpretation
60 % of the respondents do not have fixed investment. 40 % have fixed investment.

TABLE 4.18
TABLE SHOWING SUFFICIENCY OF EXISTING INVESTMENT

SCHEME
Sl. No Level No. of households Percentage

1 More adequate 10 20
2 Sufficient 30 60
3 Not sufficient 10 20
Total 50 100
CHART 4.18
CHART SHOWING SUFFICIENCY OF EXISTING INVESTMENT

SCHEME
70
60
60
50
40
30
20 20
20
10
0
More adequate Sufficient Not sufficient
Interpretation
In this study 60 % of the respondents are sufficient with the existing investment
scheme. 20 % are more adequate and also 20 % are not sufficient.

TABLE 4.19
TABLE SHOWING MONITORING OF INVESTMENT
Sl. No Time No. of households Percentage

1 Daily 10 20
2 Monthly 30 60
3 Occasionally 10 20
Total 50 100
CHART 4.19
CHART SHOWING MONITORING OF INVESTMENT

70
60
60
50
40
30
20 20
20
10
0
Daily Monthly Occasionally
Interpretation
Almost 60% of the household monitor their investment monthly. Both daily and
occasionally has 20%.

TABLE4.20
TABLE SHOWING INVESTMENTS IN SHARE MARKET
Sl. No Invest in share No. of households Percentage

market
1 Yes 10 20
2 No 40 80
Total 50 100
CHART 4.20
CHART SHOWING INVESTMENTS IN SHARE MARKET
20%
Yes
No
80%
Interpretation
In this analyses that both family members and financial advisors has 30%.20%
covered by the company agents. 10% covered both friends and colleagues and self
decision.

TABLE 4.21
TABLE SHOWING STAISFACTION LEVEL WITH PRESENT

INVESTMENT AND SAVINGS SCHEME
Sl. No Satisfaction level No. of households Percentage

1 Highly satisfied 5 10
2 Satisfied 20 40
3 Neutral 10 20
4 Dissatisfied 10 20
5 Highly dissatisfied 5 10
Total 50 100
CHART4.21
CHART SHOWING STAISFACTION LEVEL WITH PRESENT

INVESTMENT AND SAVINGS SCHEME
45 40
40
35
30
25 20 20
20
15 10 10
10
5
0
Highly satisfied Satisfied Neutral Dissatisfied Highly
dissatisfied
Source; primary data
Interpretation
Most 40% of the household are satisfied with present saving and investment
scheme. Both neutral and dissatisfied has 20%. And 10% covers by both highly
satisfied and highly dissatisfied.

CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS, SUGESTIONS AND CONCLUSIONS
5.1 FINDINGS
Following findings of simple percentage analysis conducted on the data collected
with the respect of the study.
1. Most of the respondents are male.
2. Most of the respondents are married (54%).
3. Majority of the respondent's family consist of 2-5 members.
4. Most of the respondents are below SSLC.
5. In this study most of the respondents accrue the annual income is less than 1
lakh.
6. Most of the respondents annual saving is less than 25000.
7. Most of the respondent's motivator of saving is to earn income.
8. In this study, most of the respondents consider increase in salary for increase the
size of saving (70%).
9. In this study, most of the household prefer bank deposits for investment (30%).
10. Most of the respondents prefer medium term and as per convenience as the
time horizon of their investment.
11. In the study, most of the respondents consider the advice of family members
and financial advisor's for investment.
12. Most of the respondents prefer TV and radio as their source of information of
their investment.
13. Most of the respondents prefer 1-6 month duration for changing investment.
14. In this study, most of the respondents are consider additional bonus for
boosting up their investment (40%).

15. Most of the respondents prefer regular return and specific purpose plan for
future.
16. In this study, majority of the household invest 0-15% income for saving.
17. Most of the respondents do not have fixed investment.
18. Most of the respondents are sufficient with the existing investment schemes.
19. Most of respondents monitor their investment monthly.
20. Majority of the respondents do not invest in market (80%)
21. In this study most of the respondents are satisfied with the present investment
and savings scheme

5.2 SUGGESTIONS
1. There is a need for conducting awareness classes on share market importance in
the recent era.
2. Unnecessary expenditure can be avoided for increase the size of saving rural
people.
3. Banks should provide facilities regarding investments that will help rural
investors.
4. Additional schemes such as children's marriage scheme, education schemes

should provide by the government that will help the rural people
5. There must be a proper channel of agents who can advise or council these
people regarding saving.
6. A rigorous health check up should be provided which can raise their free health
standards and reduce medical expenses.

5.3 CONCLUSION
This is a preliminary study of the saving pattern of the rural households. TH is a
need of further research to identify the government policies, prices of commodities
(durable and non durable goods) especially where there unequal distribution of
income and a problem related to allocating of resources. There should be proper
policies of the banks and other financial institutions in the rural areas. The price
effect and the income effect policy should be introduced for the changes in the
saving pattern in these areas. Interest rate policies of the financial institutions
should be made more polis for the proper and effective implementation of the
programmes and policies the government making the rural people more inclined
towards saving. The main constraints of rural families inability to save are
inadequacy of income sickness, fear of safety of their income. Other constraints
identified included family and societal demands, misuse of money as a result of
lack of budget, other problems inherent in the activities of financial intermediaries
such remoteness of banks, high banking charges, and delays and congestion at
banks. Frequency with which the rural household saved was diverse and is affected
mainly by the amount of money that the family saved.

BIBLIOGRAPHY

BIBLIOGRAPHY
BOOKS
1. Agrawal Pradeep, Sahoo Pravakar and Dash Ranjan (2008) “savings behaviour
in South Asia”, Working Paper Series No. E/289/2008.
2. Multisite North Central Research Project 1013. (2007), “survey instrument: the
Economic and Psychological Determinants of Household Saving Behaviour”.
WEBSITES
 WWW.MANAGEJOURNAL.COM
 WWW.WIKIPEDIA.ORG
 WWW.ALLSUBJECTJOURNAL.COM
 WWW.IJIM.IN

APPENDIX

QUESTIONAIRE
“A STUDY ON SAVINGS AND INVESTMENT OF RURAL HOUSEHOLDS
WITH SPECIAL REFERENCE TO CHULLIMADA KANJIKODE”
Dear Respondent,
As part of my BCOM (CA) Degree course I required to do a

project work. It be pleased if you could spare a few minutes for filing up these
questionnaire.
PERSONAL DETAILS
Name :
Age :
1. Sex : Male Female Transgender
2. Material Status
Unmarried Married Widowed Divorced
3. Size of the family
Only 2 members 2-5 members 5-10 members More than 10
4. Educational qualification
Below SSLC SSLC Graduate Post graduate Professionals
OTHER DETAILS:
5. Annual Income?
 less than 1 lakh

 1-2 lakh
 2-3 lakh
 more than 3 lakh

6. What is your Annual Saving?
 Less than 25000

 25000-50000
 50000-75000
 75000-100000
7. What is your motivation for savings?
 To Meet specific purpose

 To Get tax benefits
 To Earn income
 To Meet contingent expense
 To be secured at old age
8. Which factor do you consider for increase the size of saving?
 Increase in salary
 additional statutory requirements
 future needs
 tax benefits
9. In which of these do you prefer to invest?
 Bank deposits
 insurance
 post office
 RD,NSC
 govt. securities
 RPF
 other

10. What is the time horizon of your investment?
 Long term
 medium term
 Short term
 very short term
 as per convenience
11. Whose advice do you consider while investing?
 Family members
 company agents
 friends& colleagues
 financial advisors
 self decision
12. What are the sources of information for your investment?
 TV & radio
 journal & magazines
 organization reports
 others0-1000
13. How frequently you change your investment?
 1 month
 1-6 month
 1 year
 above 1 year
14. Which of these special provision do you need to boost up investments ?
 Extra incentives
 additional bonus
 tax concession
 high retirement benefits

15. Which type of investment do you prefer for future?
 Regular return plan

 Medical plan
 pension plan
 specific plan
 multiple purpose plan
16. What percentage of income do you invest?
 0-5 %
 15-30 %
 30-50%
17. Do you have any fixed investment?
 Yes
 No

18. Do you feel the existing investment schemes are adequate?
 More adequate
 sufficient
 not sufficient
19. How often do you monitor your investment?
 Daily
 monthly
 occasionally
20. Do you invest money in share market?
 Yes
 No

21. Are you satisfied with the present savings and investment schemes?
 Highly satisfied
 Satisfied
 neutral
 dissatisfied
 highly dissatisfied

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PROJECT REPORT 2020-2021

“A STUDY ON SAVINGS AND INVESTMENT OF RURAL

Submitted to Calicut University in partial fulfilment of the requirements for the

B.COM (COMPUTER APPLICATION)

(Reg. No: VVASBCM111)

Under the guidance of

VV COLLEGE OF SCIENCE AND TECHNOLOGY

(Affiliated to Calicut University)

VV COLLEGE OF SCIENCE AND TECHNOLOGY

VV COLLEGE OF SCIENCE AND TECHNOLOGY

(Affiliated to Calicut University)

Signature of the Guide :

Signature of the HOD :

Signature of the Principal :

Signature of the External :

VV COLLEGE OF SCIENCE AND TECHNOLOGY

(Reg. No: VVASBCM111)

VV COLLEGE OF SCIENCE AND TECHNOLOGY

I whole heartedly express my deep sense of gratitude to my respected guide Mrs

I am highly obliged to professor Dr. V K SUDHAKARAN, Head of the

With profound gratitude I place my sincere thanks to Professor Dr. V K

VV COLLEGE OF SCIENCE AND TECHNOLOGY

TABLE NO PARTICULARS PAGE NO.

VV COLLEGE OF SCIENCE AND TECHNOLOGY

4.19 Chart showing Monitoring investment

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CHAPTER TITLE PAGE NO.

4 DATA ANALYSIS AND

VV COLLEGE OF SCIENCE AND TECHNOLOGY

INTRODUCTION OF THE STUDY

VV COLLEGE OF SCIENCE AND TECHNOLOGY

INTRODUCTION OF THE STUDY

Saving is an important macroeconomic variable to be studied under the purview of

VV COLLEGE OF SCIENCE AND TECHNOLOGY

According to Rao(1980)saving constitutes the basis of capital formation constitutes

1.2 STATEMENT OF THE PROBLEM

VV COLLEGE OF SCIENCE AND TECHNOLOGY

1.3 OBJECTIVES OF THE STUDY

1. To analyse savings and investments habits among rural households.

2. To analyse attitude towards savings and investments.

3. To understand choice and saving preference of rural people.

1.4 SCOPE OF THE STUDY

This study covers the saving and investment habits among

1.5 RESEARCH METHODOLOGY

1.5.1 RESEARCH DEIGN

1.5.2 SOURCE OF DATA

Primary data is collected through questionnaire method and interview method.

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1.5.3 SAMPLING DESIGN

1.5.4 SAMPLE SIZE

1.5.5 AREA OF THE STUDY

1.5.6 TOOLS FOR ANALYSIS

1.5.7 PERIOD OF STUDY

VV COLLEGE OF SCIENCE AND TECHNOLOGY

• This study confines within the limited period.

• The study covers only the rural households.

• The personal bias of the respondent may influence the study.

VV COLLEGE OF SCIENCE AND TECHNOLOGY

VV COLLEGE OF SCIENCE AND TECHNOLOGY