MACRO BUSINESS EMVIRONMENT

ASSIGNMENT
ON
IMPACT OF DEMONETIZATION AND GST ON
TRAVEL’S BUSINESS
SUBMITTED
TO
Prof KRA. BALAJI
MBA - BMSCE

SUBMITTED
BY
GEETHU S KUMAR – 1BM16MBA17
GURURAJ GIRENNAVAR - 1BM16MBA18
HARSHA TB - 1BM16MBA20
JYOTHIPRAKASH KG - 1BM16MBA22
KM MOHAMMED ANSAF - 1BM16MBA23

MBA – BMSCE (2016-18)

 TABLE OF CONTENTS

SL. NO CONTENTS PG.

NO
1 BACKGROUND 3
2 OBJECTIVES OF THE STUDY 4
3 RESEARCH METHEDOLOGY 5
4 ANALYSIS OF THE DATA 6

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BACKGROUND
Demonetization: Demonetization is the act of stripping a currency unit of its status as legal
tender. It occurs whenever there is a change of national currency: The current form or forms of
money is pulled from circulation and retired, often to be replaced with new notes or coins.

The first currency ban:

In 1946, the currency notes of Rs 1,000 and Rs 10,000 were removed from circulation. The
ban really did not have much impact, as the currency of such higher denomination was not
accessible to the common people. However, both the notes were reintroduced in 1954 with an
additional introduction of Rs 5,000 currency.

Rs 500 and Rs 1000 notes were introduce in 1934 and after four years in 1938, Rs 10,000 notes
were introduce.

The second currency ban:

That came in 1978; the then Prime Minister of India Morarji Desai announced the currency ban
taking Rs 1000, Rs 5000 and Rs 10,000 out of circulation. The sole aim of the ban was to curb
black money generation in the country.

As a move towards solving the problem of black money, on November 8, 2016 the PM of India,
announced the 3rd demonetisation in the media where in the old currency of Rs 500 and Rs
1000 was scrapped and the new Rs 500 and Rs 2000 notes were introduced.

Goods and Service Tax: Goods and Services Tax (GST) is an indirect tax which was
introduced in India on 1 July 2017 and was applicable throughout India which replaced
multiple cascading taxes levied by the central and state governments. It was introduced as The
Constitution (One Hundred and First Amendment) Act 2017, following the passage of
Constitution 122nd Amendment Act Bill. The GST is governed by a GST Council and its
Chairman is the Finance Minister of India.

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Travel Business A travel agency is a private retailer or public service that provides travel
and tourism related services to the public on behalf of suppliers such as activities, airlines, car
rentals, cruise lines, hotels, railways, travel insurance, and package tours. In addition to
dealing with ordinary tourists most travel agencies have a separate department devoted to
making travel arrangements for business travellers and some travel agencies specialize in
commercial and business travel only.

Ministry of tourism defines a “A Travel Agent / Agency (TA) is the one who makes
arrangements of tickets for travel by air, rail, ship, passport, visa, etc. It may also arrange
accommodation, tours, entertainment and other tourism related services”.

A Travel Agent is one who makes arrangements of tickets for travel by air, rail, ship, passport,
visa, etc. It may also arrange accommodation, tours, entertainment and other tourism related
services. Travel Agency is a part of the Sector “Tourism and Hospitality” whose affairs are
controlled by the ministry of tourism.

India ranked 3rd among 184 countries in terms of travel and tourism’s total contribution to GDP
in 2016. In India, the sector’s direct contribution to GDP is expected to grow by 7.9 per cent
per annum during 2016–26. Travel and tourism’s contribution to capital investment is projected
to grow 6.3 per cent per annum during 2016–26, higher than the global average of 4.5 per cent.

OBJECTIVES OF THE STUDY

1. To find out impact of demonetization & GST on travel business.

2. To know the customer and travel business owner’s perception towards demonetisation &
GST.

3. To know the status of current mode of transaction in business Operations.

4. To know the problems faced by business associates at the time of demonetisation & GST
Regime.

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 RESEARCH METHODOLOGY
SCOPE: -
The study is used to analyse the impact of GST and Demonetisation on travel business. This
study involves considering the population of people involved in travel business. Scope of this
study is restricted to 25 respondents. The type of sampling technique used for this study is non-
probability sampling method because in non-probability sampling the samples are gathered in
a process that does not give all the individuals in the population equal chance of being selected.
Non- probability sampling does not involve random selection, rather it relies on subjective
judgement of researcher.

DATA COLLECTION: -

Data is collected, from a small population- those who are involved in the travel business. Data
collection instrument used in this case is questionnaire. Through questionnaire tool, we collect
data from those that are involved in the travel business, pertaining to how the economic reforms
like GST and Demonetisation affect their business. Type of data collected is primary data.
Primary data is information that we collect specifically for the purpose of such survey. An
advantage of primary data is that it is specifically tailored to our research needs. The source of
primary data is the population sample from which we collect the data. The first step in the
process is determining the target population.

DATA ANALYSIS: -

After obtaining data, from the target sample population, through questionnaires (in the form of
Google forms), the data is analysed. Data analysis and interpretation through graphs is done
through Microsoft Excel. Data analysis and interpretation through graphs is done separately
for each variable in the questionnaire.

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Gender

➢ Male-54.2%
➢ Female-37.5%
➢ Others-8.3%
Age

➢ 18-35 age group 64.5%

➢ 36-70 age group 36.5%

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1.Since how long are you in travel business.

➢ There are about 58.3% of people running travel business from 1-

3 Years.
➢ There are about 20.8% of people running travel business from 4-
10 years.
➢ There are about 16.4% of people running travel business from
more than 20 years.
➢ Rest is the people running travel business from 11-20 years.
2.Are you aware of recent central government economic reforms?

➢ 95.8% of the travel business people are aware of recent central

government economic reforms.
➢ 4.2% of the travel business people are not aware of recent
central government economic reforms.
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3.If, yes which of the following reforms are u aware?

➢ 95.7% of the people are aware of both Demonetization and

GST.
➢ 4.3% of the are aware of only Demonetization.

4.How did it effect on our daily business activity?

➢ Positive effect is more compared to negative effect which

comprises of 50%.
➢ Negative effect is about 20.8%.

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5.If negatively affected, for what extent in terms of profit margin?

➢ 41.7% of the negative effect on 6-10% of profit margin.

➢ 33.3% of the negative effect on1-5% of profit margin.
➢ 16.7% of the negative effect on 11-20% of profit margin.
➢ 8.3% of the negative effect on above 20% of profit margin.
➢ 6. If Positively affected, for what extent in terms of profit
margin?

➢ 35.7% of the positive effect on 11-20% of profit margin.

➢ 35.7% of the positive effect on 6-10% of profit margin.
➢ 14.3% of the positive effect on 1-5% of profit margin.
➢ 14.3% of the positive effect on above 20% of profit margin.

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7.Did you experience any slowdown in the business booking and
business operations due to reforms?

➢ 60.9% of the travel business people haven’t faced slowdown in

operations of the business.
➢ 39.1 of the travel business people have faced slowdown in
operations of the business.

8.If yes, how many days you experienced the slowdown in your
business activity?

➢ 1 week of the slowdown of business activity comprises of

11.1%
➢ 2 weeks of the slowdown of business activity comprises of
44.4%
➢ 1 month of the slowdown of business activity comprises of
22.2%
➢ More than 1 month of slowdown of business activity comprises
of 22.2%

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9.Which mode of payment are you preferring for daily bus
booking now a day?

➢ Both cash and digital mode of payment preferred is 54.2%

➢ Digital mode of payment preferred is29.2%
➢ Cash mode of payment preferred is 16.7%
10. Are you happy with the current changes in your business
operation in mode of payment due to GST and Demonetization?

➢ 70.8% of the people are happy with the changes in their business
operations in mode of payment due to GST and Demonetization.
➢ 29.2% of the people are not happy with the changes in their
business operations in mode of payment due to GST and
Demonetization.

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11.Are you happy with the current GST rate slab for your
business operation?

➢ 54.2% of the people are happy with the current GST slab rates.
➢ 45.8% of the people are not happy with the current GST slab
rates.
12.Do you feel that the customers are happy with the present
changes with the business operation in mode of payment due to
GST and Demonetization?

➢ 62.5% of the customers are happy with the present changes with the
business operation in mode of payment due to GST and
Demonetization.
➢ 37.5% of the customers are happy with the present changes with the
business operation in mode of payment due to GST and
Demonetization
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13.How do you rate GST and Demonetization reform?

➢ 50% of them have rated average to GST and demonetization

reform.
➢ 37.5% of them have rated good to GST and Demonetization
reform.
➢ 8.3% of them have rated bad to GST and Demonetization
reform.

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