Weathering Climate Change & Financial Markets

This article explores some of the impacts of climate change on the global financial system. The systemic risk arising from climate change may permanently change our existing idea of financial market risk. Sustainable development is the key to a sustainable life and a sustainable financial system. 

Yearly change in earth's surface temperature from 1961 to 2022 (in Celsius)
Source: IMF climate change dataset (209 countries, 12958 data points)

Introduction:

Climate change has emerged as one of the most pressing challenges of the 21st century, with far-reaching consequences across various sectors of the global economy. Beyond its environmental and social implications, climate change also poses significant risks to financial markets worldwide. From increased volatility in commodity prices to the potential for widespread asset devaluation, the financial sector increasingly recognizes the need to factor climate-related risks into investment decisions.

Escalating Costs and Physical Harm:

Climate change directly raises costs linked to severe weather incidents, causing billions in damages annually and disrupting global supply chains. Insurance companies are particularly vulnerable to increased claims and payouts from climate-related disasters.

Regulatory Pressures and Policy Changes:

Governments worldwide are enacting stricter regulations to mitigate climate change, affecting businesses in carbon-intensive sectors. Companies not adapting to these regulations face fines, litigation, and reputational harm, impacting their financial performance and market standing.

Transition Risks and Stranded Assets:

The shift towards a low-carbon economy risks rendering certain assets and industries obsolete or financially unviable, termed "stranding" of assets. Fossil fuel-related assets face devaluation as the world moves towards renewable energy sources, prompting institutional investors to divest from such assets.

Market Volatility and Investor Confidence:

Climate change introduces uncertainty into financial markets, affecting investor sentiment and asset prices. Factors like extreme weather events and regulatory changes create volatility in commodity markets, prompting investors to assess climate-related risks in their decision-making.

Opportunities in Climate-Resilient Investments:

Amid climate challenges, opportunities arise in sustainable and climate-resilient sectors such as renewable energy and clean technology. Companies with strong environmental, social, and governance (ESG) performance attract investors seeking sustainability in their portfolios.

Conclusion:

Climate change reshapes the global economy, posing challenges and opportunities for financial markets. Collaboration among investors, businesses, and policymakers is crucial in integrating climate risks and opportunities into investment strategies and regulatory frameworks. Embracing sustainability and investing in climate-resilient industries can navigate the challenges of climate change toward a more sustainable global economy.

R code for figure: Packages used- plotly, htmlwidgets

p <- plot_geo(data, locations=~CODE) %>%

add_trace(
z = ~temp, 
color = ~temp, 
colors = 'Reds',
text = ~Year, 
locations = ~CODE, 
frame = ~Year, # Animation frames
type = "scattergeo", 
mode = "markers" 
)

BY

Palak, M.A. Economics (2022-2024), School of Behavioural and Social Science (SBSS), Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad, Haryana. palakguglani10@gmail.com

Cloud Computing and Cloud Accounting: A Closer View Towards Better Future

Cloud-based accounting works by utilizing secure electronic programming to assist with smoothing out business processes. With cloud-based programming, an organization doesn't need to set up individual work areas with programming since everybody in the organization can get to the cloud on their own gadgets. This makes such applications cost-effective and highly used accounting tools. This paper outlines the benefits and popularity of Tally as an effective accounting tool.

State-wise Tally-Search-interest on Google from 2004 to Present
Source: Google Trends
This can be used as the proxy for the Tally learner/users across different states. Gujarat, Tamil Nadu, Maharashtra, Karnataka, and Chatiishgarh have higher Tally search interest between 2004 and 2024.

Cloud Computing

Cloud computing is the on-demand availability of computer frame resources, data volume, and recording capacity, without direct management by the user. Distributed computing has a rich history that goes back to the 1960s, with the underlying ideas of time-sharing becoming promoted through remote work passage (RJE). The "server farm" model, where clients submitted positions to administrators to run on centralized computers, was dominatingly utilized during this period. Distributed computing depends on the sharing of assets to accomplish cognizance and regularly involves a pay-more-only-as-costs-arise model, which can help in reducing capital costs yet may likewise prompt unforeseen working costs for clients.

Objectives 

To investigate whether the company “Cyborg Net Solutions” is performing better in terms of sales and renewals of tally ERP year-wise. And to find out which software is best and what are their benefits.

Methodology 

I have collected primary data for Cyborg Net Solutions in Faridabad Haryana for the past 9 years which is engaged in Tally services and tally subscription renewal. This will show the growth of the company and its potential to grow in the market.

About the Tally ERP 9 

Tally is an ERP bookkeeping programming bundle utilized for recording the everyday business information of an organization. The most recent variant of tally is tally ERP 9.

The following are some important features of Tally.

a. Tally ERP 9 is called multi-lingual Tally programming. Records can be kept up within one language and reports can be seen in another language.

b. One can keep up with accounts of up to 99,999 organizations.

c. Utilizing finance highlight, one can computerize representative records.

d. Tally has the component of synchronization, the exchanges kept up within different areas of workplaces can be consequently refreshed.

e. Create merged budget reports according to the prerequisites of the organization.

Alternative Applications

BUSY: Busy is a coordinate billing and accounting software for micro, small, and medium ventures. It is easy-to-use, capable, and versatile as per your commerce needs. Active Program is additionally accessible on Desktop, Cloud, and other apps. Cloud accounting software offers different points of interest and drawbacks, depending on the particular needs and settings of the client.

MARG: MARG Accounting Software is designed to streamline accounting processes for businesses of various sizes, particularly in India. It offers features such as inventory management, financial reporting, GST compliance, invoicing, and payroll management.

ZOHO: Zoho Book provides a range of features for managing finances, including invoicing, expense tracking, bank reconciliation, financial reporting, and inventory management. It is accessible via web browsers and mobile apps, offering users the flexibility to manage their finances from anywhere with an internet connection.

Despite increased competition, Tally remains a highly trusted and used accounting application across India.

The following Table shows the advantages and disadvantages of various accounting applications:

Features	Tally	Marg	Busy	Zoho books
Deployment	Offline	Offline	Offline	Online
Suitable for sectors	Trader, trader	Trader and service provider	Trader service provides and manufacture	Trader and service provider
AcTallying concepts	Indian	Indian	Indian	USA
Pricing	21000+	8900+	7200	2950/YEAR
Multi-users	Separate version 65000+	Available	Separate version 37000+	Available
Data backup	Manual	Manual	Manual	Available
Inventory management	Available	Available	Available	Available
No. of partner companies	6000000+	1000000	600000+	1489

The trend of sales and renewal of Tally 

Primary data on the sales and renewal of existing subscriptions of Tally has been collected from "Cyborg Net Solutions", Faridabad. It is an IT solution and service provider company. Data from 2015-16 to 2023-24 is presented in the following data and graph.

YEAR	SALE OF TALLY ERP 9	TSS( renew)
2015-16	2700000	3250000
2016-17	3240000	3900000
2017-18	12960000	15600000
2018-19	3706000	3519000
2019-20	4360000	4140000
2020-21	4160000	5300000
2021-22	4,320000	5676000
2022-23	5100000	6300000
2023-24(upto 31 January2024)	54000000

Data Source: Primary data from Cyborg Net Solutions  by the Author
"tss" represents subscription renewal
"sales of Tally" represents new sales

Data for 2015 to 2017 is before GST and data from  2017 to 2023 is after GST.  we can see from the graph that the highest sale was in 2017-18 because of the introduction of GST on 1st July 2017. There is a complication in invoice billing and companies switched over to software billing that’s why there is a rise in sales of tally.  In 2018-19 people didn’t buy Tally ERP because they already bought it and the sales were almost stable and there was no need in the market and there was a stagnant growth in sales of tally and tally renewal subscriptions. In 2019-20 there was a slight growth in the business trend. In 2020-2021 there was an increase in tally subscription renewal. The sales in 2020-21 and 2021-22 were maintained due to covid 19.  The growth was stagnant at that time. Although there was stagnant growth Tally renewal subscriptions were increasing significantly. In 2022-23 also the sales of tally increased but Tally renewal subscriptions significantly as is evident from the graph. In 2023-24 E-invoicing was made compulsory for sales above five crores so there is significant growth in this financial year. The growing need for digital financial accounting and changing legal framework are helping cloud accounting and cloud computing boom in India.

R code for graph: Packages used- rayshader, ggplot2 and diva-gis(for map data)

p13 <- ggplot(full_df)

p13 <- p13 + geom_sf(aes(col=Tally_search))

p13<- p13 + geom_point(aes(x=lon,y=lat,col=Tally_search_interest))

p13 <- p13 + geom_sf_text(aes(label = NAME_1), size = 1, color = 'black')

p13 <- p13 + scale_fill_viridis_d()

par(mfrow = c(1, 2))

plot_gg(p13, width = 5.5, raytrace = TRUE, preview = TRUE)

plot_gg(p13, width = 5.5 ,multicore = TRUE, windowsize = c(1200, 1000), 

        zoom = 1.3, phi = 3, theta = 3, sunangle = 225, soliddepth = 0)

By 

Divneet Kaur Ahuja, M.A Economics (2022-2024), School of Behavioural and Social Science (SBSS), Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad, Haryana. divneetahuja01@gmail.com

Empowering the Future: A Comprehensive Guide to Gujarat's Leading Solar Panel Manufacturers

 Solar energy plays an important role in the path to a sustainable future. India may be one of the last countries to join the solar energy race, but it is catching up with other developed nations very quickly. The state of Gujarat is one of the leading stakeholders behind India’s success. This article highlights the contribution of this West Indian state in empowering the future. 

Solar Energy Race
Data source: https://ourworldindata.org
Original Source:  Energy Institute - Statistical Review of World Energy (2023); International Renewable Energy
Agency (2023) 

Gujarat is a western Indian state that has become a major player in the solar energy industry. Gujarat is home to top solar panel manufacturers who have a significant influence on the direction of clean energy because of the state's abundance of sunshine and dedication to sustainable practices.

Given the urgency of addressing climate change and reducing reliance on conventional fossil fuels, there has been a sharp increase in demand for solar power globally in recent years. Gujarat has emerged as a center for solar energy initiatives thanks to its progressive policies and welcoming investment climate. As a thorough guide, this article highlights the state's leading producers of solar panels.

·         [Manufacturer A] is one of the prominent figures in the solar industry in Gujarat. Well-known for its state-of-the-art technology and dedication to excellence, they have established themselves as leaders in the sector. Their cutting-edge production facilities use innovation to create high-efficiency solar panels that make a substantial contribution to the region's renewable energy targets.

·         [Manufacturer B] is another important factor in Gujarat's solar success. They have adopted cutting-edge manufacturing techniques with an emphasis on sustainability to produce environmentally friendly solar panels. Their commitment to environmental responsibility fits in perfectly with Gujarat's plan for a more environmentally friendly future.

·         [Manufacturer C] a business that continuously pushes the limits of solar technology, would be incomplete when discussing Gujarat's solar trek. Being a reputable name in the solar industry, their research and development efforts have produced breakthroughs in durability and efficiency.

The development of Gujarat's solar manufacturing industry has been further accelerated by government initiatives and policies. Companies have been encouraged to invest in solar infrastructure by incentives, subsidies, and a supportive regulatory framework, which has created a market that is both inventive and competitive.

Unlocking Solar Benefits in Gujarat: Approximate Figures at a Glance

Here's a simple breakdown to show you potential savings from solar panels in Gujarat. The table below gives approximate annual savings for different solar panel system sizes: 1kW, 2kW, 3kW, 4kW, and 5kW. Remember, these values are just estimates and may change based on where you live, how much energy you use, and the efficiency of the solar panels.

Solar panel system size (kW)	Annual Savings (INR)
1kW	9000-12000
2kW	18000-24000
3kW	27000-36000
4kW	36000-48000
5kW	45000-60000

Source: Secondary data from various sources

These figures are approximations and may change depending on solar panel quality, installation expenses, nearby electricity rates, and available incentives.

conclusion

This article emphasizes how important the solar panel manufacturers in Gujarat are for creating a sustainable and environmentally friendly future. It suggests that Gujarat serves as a great example of how taking early action and having leaders with big ideas can lead to a cleaner and brighter tomorrow, especially considering the global challenges posed by climate change.

R code and packages used for the plot: ggplot2, gganimate, gifski, countrycode                          

plot<-ggplot(data, aes(x=Solar.generation , y= Solar.energy.capacity, size=Solar.generation, color = Continent, frame = Year , group = Code)) +

geom_point() +

 scale_x_log10() +

labs(title = "Year: {frame_time}", x = "Solar generation - TWh", y = "Solar energy capacity - GW") +

  theme_minimal() +

  geom_text(aes(label =Entity ), hjust = 2, vjust = 0.5, size = 10, check_overlap = TRUE) +

  transition_time(Year) +

  ease_aes('linear')

animate(plot, nframes = 100, end_pause = 20, width = 800, height = 600, renderer = gifski_renderer())                                                             

By

Gautam Sharma, M.A Economics (2022-2024), School of Behavioural and Social Science (SBSS), Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad, Haryana. gauttisharma@gmail.com

Privatization of Public Enterprises & its Implications on Economic Policy and Development

 Since 1951, Central Public Sector Undertakings (CPSUs) have played an important part in India's economic growth and development. Over the years investment in CPSUs has increased tremendously*. They impose a financial strain on GDP while suffering losses. The 1991 industrial strategy signaled a turn toward disinvestment, resulting in more privatization. The COVID-19 crisis sparked a focus on privatization for economic recovery. However, there are fears that excessive privatization may lead to market monopolization.

Introduction:

Government agencies in India combat corruption and the expansion of the private sector shows that privatization could help to minimize it. Private firms vigorously battle corruption, which promotes GDP growth. However, privatization has both benefits and drawbacks. Transparency, fair asset appraisal, and effective regulatory frameworks are critical to success.

The financial and Economic impacts of privatization:

Privatization increases efficiency, innovation, and cost savings, all of which contribute to macroeconomic capitalization. It reduces corruption, improves service, and encourages public participation. However, concerns about local monopolies, capital outflows, and rising inequality continue.

Global privatization revenues (1988-2016), in billions of US dollars

Privatization has varying effects on budgets, with some countries saving proceeds rather than spending them immediately. Long-term favorable effects on revenue and deficits have been documented in several circumstances. Data show that growth and employment are beneficial, particularly in competitive industries. Privatization is associated with economic growth, although fears about employment losses remain. The following figure demonstrates the pre and post-privatization performances of five companies.

Pre and Post-performance of different companies
Data Source: Economic Survey, 2019-2020, chapter-9
echap09_vol1.pdf (indiabudget.gov.in)

World Bank and IMF Involvement:

Privatization activities are led by the World Bank, with the IMF emphasizing procedural and objective conditions. Procedures with major fiscal and macroeconomic implications receive special attention.

Alternative meanings of privatization:

Privatization refers to the transfer of assets from public to private hands, which can include deregulation, franchising, outsourcing, or the sale of state-owned enterprises to private investors.

Conclusion:

Privatization, while pursued for certain reasons, may have unforeseen consequences. Success in reducing corruption and serving the public requires careful implementation, taking into account both good and negative consequences. When managed properly, increased market competition and efficiency have the potential to be beneficial.

# R code for plot and library used: rgl, plot3D, plot3Drgl magick

plot3d(Net_Worth,Net_Profit,Gross_Revenue,col=cols,type = "s",size=5,)

legend3d("right", legend = paste( c(Name[1:5])), pch = 16, col = data$col[1:5], cex=2, inset=c(0.02))

text3d(Net_Worth,Net_Profit,Gross_Revenue,data$type, add = TRUE, colkey = FALSE, cex = 2,col=9, size=1)

play3d(spin3d(axis = c(0, 0, 1), rpm = 4), duration = 100)

BY

Riya Arora, M.A. Economics (2022-24), School of Behavioural and Social Science (SBSS), Manav Rachna International Institute of Research and Studies (MRIIRS), Faridabad, Haryana. riya2001arora@gmail.com

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