Returns on Shareholders Equity of Select Industries in Liberal Economic Scenario:Empirical Evidence From India

Abstract

In the name of liberalization, various reform measures were introduced to make the Indian industries efficient and to achieve growth and development in the economy. The present paper is an attempt to empirically examine the profit rate in terms of returns on shareholders equity of select industries during the period 2004-05 to 2012- 13. The findings of the study indicate that returns on shareholders equity in majority of the selected industries did not rise over the time period. The industry as a whole has recorded an average profit rate of 24% during the entire study period. On the average, auto&ancillary industry has posted highest profit rate (103%), while chemical and paper industry have posted lowest profit rate (5%) during the whole study period. The sub-period analysis shows that economic recession has negative impact on the generation of profit.The study concludes that liberalization measures should be further strengthened in order to achieve better efficiency, productivity, and profitability for the selected industries in particular and other industries in general.