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SHAKTIGAUN-Rural Self Employment

SHAKTIGAUN-Rural Self Employment

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Published by api-3730856
An interesting project for providing self-employment to people in rural areas and reduce poverty
An interesting project for providing self-employment to people in rural areas and reduce poverty

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Published by: api-3730856 on Oct 18, 2008
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PROJECT SHAKTI GAON (A Gate-Way to Self Employment

CONCEPTUAL BACKGROUND : In an attempt to reduce rural poverty through self employment, Swarna Jayanti Gram Swarozgar Yojana (SGSY), a group based scheme, has the greatest advantage of pooling resources from individual members thereby strengthening the collective enterprises with need based linkages. The enterprises those are taken up by the SHGs are either resource based (e.g. Agri/MFP etc.) or skill based (e.g. handloom, handicrafts etc.) But besides these there are quite a large number of vibrant SHGs (about 30% to 40%) having neither of the above two but they need to be strengthened. There are few success models emerged in the mean time. One of them is the Project Shakti Gaon Corporation Ltd. – A corporate initiative with Indian Oil

Initially the project has been started in Ganjam District as an enterprising district. The Dealership of the gas has been offered to District Supply & Marketing Society (DSMS), the district unit of ORMAS. Selected SHGs are taken as Extension Counters in the block level. These SHGs were covered under SGSY and linked to banks and B’MASSs for credit facility.

THE PROJECT PROPOSAL Fixed Capital Requirement 1. 2. Retail Shop / Showroom : Provided under SGSY Infrastructure by DRDA or taken on rent. Security deposit of SHGs with DSMS for allocation of retail extension counter Rs. 3. 25000.00 Trolley – Rs. 4. 10000.00 Show Rs. 5. 10000.00 WLL Rs. Phone Connection Room / Office Equipments 2 Nos. @ Rs. 5000.00


2000.00 Electricity Rs. 3000.00 Total Rs. 50000.00 Recurring Expenses per annum Fixed



1. Rent for Show Room @ Rs. 300.00 p.m. (expecting it to be available and no need to construct new one) Rs. 3600.00 2. Electricity Rs. 2400.00 3. Telephone & Postage, Xerox Charges @ Rs. 300.00 p.m. Rs. 3600.00 4. Stationery & Misc. Expenses @ Rs. 100.00 p.m. Rs. 1200.00 5. Depreciation Rs. 5000.00 6. Interest on Rs. 9900.00 7. Misc. Expenses Fixed and Working Capital @ 11% cost of fixed capital @ 10% Charges @ Rs. 200.00 p.m.

Rs. 3400.00 Total Rs. 30000.00 Working Capital Requirement 1. 3 Rs. 7500.00 2. 50 Nos. Rs. 10000.00 3. 90 Nos. of Gas Refilling @ Rs. 100.00 per filing Rs. 9000.00 4. 50 Regulators Rs. 5000.00 5. Spare Rs. 8000.00 Total Rs. 39500.00 Total Capital Requirement (Fixed + Working) Rs. 89500.00 Or Say Working Capital Requirement parts including pipes @ Rs. 100.00 per Regulator of Stove @ Rs. 200.00 per stove Months’ recurring expenses Recurring Expenses

Rs. 90000.00 YEAR-1 Income 1. Net Income from new connections connections @ Rs. 140.00 per Rs. 140000.00 2. Margin Income from Refilling for 6900 Cylinders @ Rs. 5.00 per refilling Rs. 34000.00 3. Net Income from spare parts @ 10% of total Rs. 60000/Rs. 6000.00 4. Service Rs. 6000.00 Total Rs. 196000.00 Expenses 1. Recurring Rs. 30000.00 2. Gross Rs. Income in 1st Year Expenses Income / Repairing etc. for 1000 connection PROJECTED INCOME & EXPENDITURE STATEMENT :

166000.00 3. Reserve for future business (10% of the net income) Rs. 16600.00 4. Net Rs. 148400.00 5. Income Rs. 14840.00 6. Income Rs. 1240.00 The income of each member in the SHG could go up with more and more gas connetion and adding the products of other corporate bodies. It would also earn through its involvement with insurance, e-sanchar, agricenters etc. it is expected that, at the end of three years, each Swarojagary would be able to earn about Rs. 1600.00 to Rs. 1800.00 per month. per beneficiary per month per beneficiary per annum Income of the SHG

THE ECONOMY : Receipts, Expenditure and Net Income per Cylinder in Rupees. Receipts A. New Connection – 5 Kg. Cylinders 1. Deposit per Cylinder 2. Deposit per Regulator 3. Blue Book (Membership) 4. Installation 5. Pipe (1.5 Mtr.) 6. Stove (Single Burner) 7. Filling of Gas Total Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 350.00 100.00 10.00 20.00 30.00 300.00 99.00 909.00

Expenditure B. Payments to DSMS – The Dealer 1. Deposit per Cylinder 2. Deposit per Regulator 3. Blue Book (Membership) 4. Pipe (1.5 Mtr.) 5. Stove (Single Burner) 6. Filling of Gas Total Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 350.00 100.00 5.00 20.00 200.00 94.00 769.00 140.00

Net Income per new connection (A – B) Refilling Margin to SHG per cylinder



SHGs COLLABORATED WITH IOCL THROUGH DSMS This is the first corporate initiative taken up by ORMAS wherein DSMS Ganjam is the distributor of IOCL and the SHGs are the extension counters. 25 SHGs involving 334 members have been selected in the district, which is spread over in 20 blocks of Ganjam. The extension counter functions from the Training cum Production Center in the block and few at some main market places. This project was formally launched on 7th April’2004. TRAINING TO SHGs Training programmes were held in collaboration with IOCL and RUDSET Institute in three phases in the three subdivisions of Ganjam. The Training covered various aspects of LPG Dealership, Book Keeping, Usage of LPG, Safety Measures etc. and RUDSET Institute imparted one day training on Entrepreneurship Development. Further training are been chalked out to horn their skills further specially on book keeping and sales technique.



For this project a Godown of 8000 Kg. capacity has been constructed at Chatrapur and one Showroom has been provided in the DRDA campus to DSMS by DRDA out of SGSY Infrastructure Fund. For transportation of Cylinders from the godown to various extension counters, one Mini Truck is hire on requirement basis for distant places and also one Tata Mobile that is provided by ORMAS is used by DSMS Ganjam. But analysis shows that transportation cost is quite high. Hence to reduce the transportation cost and fill the critical gap a proposal has been submitted for purchase of one Mini Truck.

REAL GROUP ECONOMY : An Insight into Maa Mangala SHG of Rangeilunda Block Maa Mangala SHG has been selected under Project Shakti Gaon & financed under SGSY in May-2004. This SHG works through the Extension Counter at the Training cum Production Center of Rangeilunda Block. This group is a progressive and cohesive group. Prior to taking of this activity the SHG members were involved in Badi, Papad making. This project will give them an additional income to their existing income of Rs. 300/- on an average earned from the sale of Badi/Papad. Profile of the SHG : Name of the SHG Name of the Village Name of the Block Date of Formation Total Member Savings of SHGs Credit Linkage Status : Loan availed from MASS 1st Loan taken on 17.01.2003 2nd Loan taken on 30.01.2004 Financed under SGSY Shakti Gaon Project Cost Maa Mangala Haladiapadara Rangeilunda Dec-2001 11 25000/-

Rs. 10000.00 (Cleared in 9 Months) Rs. 30000.00 (Cleared up to Rs. 23000/-) May – 2004 Rs. 90000.00

Profit from Shakti Gaon Project Profit from 14.2 Kg. New Connections Rs. 140 X 141 = Rs. 19740/Profit from 5.0 kg. New Connections Rs. 92.75 X 9 = Rs. 834.75 Profit from 14.2 Kg. Refilling Rs. 10 X 400 = Rs. 4000/Profit from 5.0 Kg. Refilling Rs. 5 X 122 = Rs. 610/Total Profit earned so far Rs. 25184.75 Out of the total profit they have repaid Bank Loan of Rs. 9000/The group actually started work from June’2004 and for a brief period during August and September, due to some crisis of Oil Companies, Regulators were not given at all. Restriction on cylinders had also been made. Hence new connections was given from October. Therefore the profit is based on 6 months. Therefore an income of around Rs. 400/- is being earned now. This income is substantiating their income of Rs. 300/- per member earned from Badi, Papad. An average income of Rs. 700/- is being earned now. MEASURES TAKEN FOR ENHANCING CONSUMERS  To increase the number of new connections, banks are coming forward to finance SHGs to purchase Cylinder.  For purchase of one new connection the amount required is Rs. 1965/and if a customer wants a double connection, cost comes to Rs. 3115/-.

 For SHGs to avail a connection is itself a prerogative option. Hence RGB has formulated a Loan scheme for purchase of Gas connection which has been transmitted to all blocks to implement the scheme.  To further improve their incremental income, discussion are on with other corporate houses like Colgate Palmolive, HLL etc.  Awareness campaigns for usage of LPG in remote areas and easy access to cylinders are being chalked out. A MODEST BEGINNING !! This project is an effective strategy for penetrating in rural areas and reduce drudgery of rural women. This is also a means of sustainable livelihood. This initiative further helps in reducing deforestation. This project is a stepping stone in the direction of creating self employment opportunity for rural women.


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