Effect of Socio-Economic Variables on Level of Investment of Salaried Class Employees Working in Private Sector at Jhansi District

I. INTRODUCTION

Every country needs money for the development of its economy. Especially, developing countries like India need funds for the economic development of the country. But for the proper management of funds circular flow of money is very important. Therefore, the three most important variables for the growth of the economy are Income, Savings and Investment. Income is the earnings which are received by an individual or business for services rendered by them. Savings is the part of income which has been foregone to fulfill some motive. (Kotlikoff, 2008) said that ―Savings is the decision to defer consumption and to store this deferred consumption in some form of asset.‖ Investment is that part of savings which is sacrificed in present in order to earn return in future. Therefore, investment is the most important variable for the growth of the country. All the three variables are interlinked with each other. Without income there will be no savings, without saving no investment and without investment no income (fig 1)

But, for making investment savings play a vital role. Savings depend upon the willingness and capacity

are of no use without investment. Investment means employment of funds in productive areas in order to generate income in the future. The main objective of investment is to make future provisions and generate additional earnings. But, there are several socio-economic factors such as age, gender, marital status, nature of family, income etc. which affect the level of investment of investors and it is necessary find out the factors affecting the level of investment.

1. To study socio – economic characteristics of Private Sector Employees. 2. To know the effect of demographic variables such as age, gender, marital status and income on level of investment.

The study is based on empirical information gathered from the employees working in different organizations of private sector in Jhansi district. In order to accomplish the objectives of the present study, the study uses primary data. The data has been collected through a well structured questionnaire prepared for the purpose of survey after a detailed study of the past researches. However, secondary data has also been collected from various journals, periodicals, research papers, newspapers, books and websites etc. for the purpose of collecting data for theoretical framework and literature review. • Sample Size: 250 employees working in different organizations of private sector in Jhansi are taken randomly for the purpose of the study • Selection of Sample: A total of 5 organizations from private sector were selected for the purpose of data collection. The organizations selected for the purpose of the study are banking, insurance, education, medical and communication as this study is confined to Jhansi district only. 50 employees from each organization have been considered for the purpose of the study. • Data Analysis and Interpretation: The data was coded and analysed by using SPSS 20 and Ms Excel. In order to analyze the collected data, Simple percentages,

IV. REVIEW OF LITERATURE

(Sood & Kaur, 2015) aimed to study the saving and investment pattern of salaried class people of Chandigarh. It was found from the study that there is a significant relatioonship between age, income and sector wise employment and annual savings and the most preferred investment avenues were found to be LIC and bank deposits. (Srividhya & Visalakshi, 2013) studied the saving and investment pattern of college teachers of from Puducherry. It was analysed from the study that the teachers prefer to invest in bank deposits and prefer to save money to meet future uncertainties. (Bhavsar N., 2013) aimed to study the saving and investment pattern of school teachers of Ahmednagar and found out that the basic purpose of saving is to meet the future needs. Majority of them are risk averse in nature therefore they prefer to pool their savings as bank deposits an main purpose for investment is child education, marriage and future security. (Amraveni & Archana, 2017) studied the investment behaviour of investors in Wranglar city towards various investment avenues. The study aimed to find out the preference of investment alternatives and factors which influence the choice of an investment avenue. It was found that there is a significant relationship between annual savings and demographic variables such as age, income, sector wise employment and education of investors by using chi-square test. The investors of Wrangler city prefer to invest in insurance policies and pension schemes (Bhardwaj, Sharma, & Sharma, 2013) aimed to study the income, saving and investment pattern of employees of Bahra University, Solan and found out that the consumption expenditure of employees is high and their desire to save is low. The level of awareness of employees regarding investment alternatives is high but they are not willing to invest the savings as they feel insecure.

The socio- economic variables such as gender, age, marital status, employment sector, income etc. have been assessed as these are the variables which affect the level of investment of investors. They are assessed in the table below:

Source: Primary data collected by the Researcher

As analysed from Table 1 above it has been found that 55% of the belong to the age group of 25-35 years and 24% of them are in the age group of 35-45 years. It is evident from the above table that majority of investors are young and middle aged. 78% of them are males and 22% are females. Which shows that majority of investors are males. 64% employees are married, 35% of them are unmarried and only 0.4% are divorcee and widow. 20% each of the total sample size belong to Banking, Insurance, Education, Medical and communication sector. 56% employees are living in nuclear family and 35% are living in joint family. 46% of the employees have 4-6 members in the family and 43% have 2-4 income earners in the family. There are 2-4 income earners in the family of 74% employees and 24% have only one income earner in the family. The monthly income of 24% employees is between 50000-75000 and Above 75000.

VI. OBJECTIVES OF INVESTMENT

Friedman Rank Analysis has been used to assess the objectives of investment of private sector employees. The test works on the principle of ranking the data of each group. Lowest mean score= Rank 1, Next highest mean score = 2 and so on. The above table shows that majority of employees invest to make provisions for the future (2.82) followed by maintaining standard of living in future (4.26). The third important objective of investment for private sector employees is acquiring of assets (4.46) followed by to arrange for future inflation (5.00). The sixth objective of investment is for recreational purpose like holidays, tours, trips etc. (5.97). The seventh, eighth, ninth and last objective for investment is safety of money, good rate of return, tax savings and stability of returns. It has been analyzed that the main objective of investment for private sector employees is to make provisions for future.

To assess the Level of Investment of private sector employees cross-tabulation has been used between all the socio-economic variables and level of investment.

The above table reveals that 51.4% employees below 35-45 years, 42.3% 25-35 years, 25% employees within the age group of 45-55 years and

As depicted by the above table 39.0% male employees invest high level of savings while, 49.1% females employees invest a high level of savings.

The above table reveals that 27.6% employees from private sector who are single, 47.8% employees who are married, 100% employees who are divorcee and 100% employees who are widow invest high level of savings.

The above table reveals that in case of private sector employees 0% employees who are 10th pass, 30% employees who are 12th pass, 30.2% employees who are graduates, 41.6% employees who are post graduates and 49.4% employees who are professionals invest a high proportion of savings. Thus, it has been analysed that employees possessing a professional degree make highest level of investment as compared to employees who are post graduates, graduates, intermediate and high school.

The above table reveals that in case of private sector employees 80% employees from Banking sector, 58% employees from Insurance sector,56% employees from Education sector, 4% employees from Medical and 8% employees from Communication sector invest a high proportion of their savings. Thus, it has been found that employees working in banking organizations invest a high proportion of their savings.

As depicted by the above table in case of private sector 34.0% employees living in joint family and 50.5% living in nuclear family invest a high level of savings.

As denoted in case of private sector employees 55.8% employees having family monthly income between above Rs. 75,000, 31.8% employees having family monthly income between Rs. 50,000 to Rs. 75,000, 37.5% employees having family monthly income between Rs. 25,000 to Rs. 50,000 and 26.7% employees having family monthly income less than Rs. 25,000 invest a high level of savings.

To find out the association between socio-economic variables and Level of Investment Chi-Square test of statistics has been used. It is a non- parametric test applied to test the goodness of it fit. It is used to find out the association between dependent and independent variables through a specific framed hypothesis. The results of the test are analyzed in the following table.

IX. CONCLUSION

Keeping in view the above findings, followings suggestions are recommended: • It has been found that mostly employees within the age group of 25-35 years invest from private sector invest a higher proportion of their salary. Thus, policy makers should target employees from higher age group and make them aware of benefits of investment. • As most of the employees are post graduates or holding professional degree, therefore, knowledge of investment avenues can be provided by including it in the curriculum at graduation and post-graduation level. • It has been observed that different employment sectors have different level of knowledge in which employees working in banking and insurance sector were found to have highest level of investment. While,

awareness programmes for employees working in medical sector and all the other sectors where level of financial literacy is low. • The basic purpose of investment is found to be future provision. Hence, it is suggested that employees should pool their savings in a diversified way in order to generate good return which will automatically create future provisions.

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Ph.D. Research Scholar (Management), Department of Banking Economics and Finance, Bundelkhand University, Jhansi, Uttar Pradesh gazalaahmad@ymail.com