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( MARCH 1998)

by S.Ananthanarayana Sarma
95, Double Street, Sholavandan Village,
Vadipatti Taluk, Madurai District.

(Funded by EZE, through DATA, 11, Kennet Cross Road, New Ellis
Nagar, Madurai -10)

Data is a training and consultancy organization initiated to support

community development initiatives towards sustainability. Data organized a
one day workshop on 16th November 1996, for developmental activists in and
around Madurai on the "Relevance, scope and status of community enterprises" -
in the context of the economic liberalization policies and their impact on
the rural poor. The genesis of the study lies in this workshop. A follow-up
workshop on "Enabling role of NGOs in promoting community enterprises"
on June 13-14 1997, attempted to define what is a community enterprise -
from the perspectives of economic/ business theory, sociology, and social
work. Based on the experiences narrated by five NGOs, a Community
Enterprise Development model was conceptualized.

The model states that a community enterprise has to be initiated from the
community. It's skills, and resources should be taken into account, while
designing the enterprise. The task of the NGO is to link the enterprise
with the market, with appropriate product design.

The workshop also conceptualized the distinctions between conventional

enterprise promotion and community enterprise promotion. Conventional
enterprises were focussed on markets, customer centric, with specific products
as focus. A package approach was preferred, with profit maximisation as the

Community enterprises worked with market as one of the variables. It was

community centric, working on the skills/ resources of the community. It worked
towards sustainable livelihoods with a process orientation.

This study objectives was to "ground" these concepts through

investigating the characteristics of live enterprises promoted by
NGOs, in South Tamil Nadu. The study used the casestudy method
due to the need to understand process elements and context, and
the inability to conceptualize all the variables before the
study. For reasons of access five enterprises promoted by the
Sarva Seva Gramudyog Samithi (SSGS) ( an organization affiliated
to Khadi and Village Industries Commission) , in Virudunagar
district, three enterprises promoted by village organizations in
Assefa Plan Kariapatti project (Virudunagar district) and one
enterprise promoted by an NGO in Theni district were studied as
cases. Eight caselets/experiences drawn from presentations made
by NGOs in the June workshop were also used for making

The analysis of the data validated the genesis of Community

Enterprises to lie in either strong village women groups, or
village based skills or village based resources. In terms of the
support provided by NGOs, a distinction was made between SSGS and
non SSGS promoted enterprises. For the SSGS units, the support
ranged in a continuum - from complete financial and
administrative autonomy with only the brandname as support - to
one where every activity excepting the physical production and
disbursal of wages was controlled by the SSGS. In the non SSGS
units, the continuum ranged from the NGO being a passive supplier
of working capital at market rates - to one where the NGO was an
"employer" and the community "labour" as in conventional firms.

The NGO provided support in areas like financial capital,

machinery, technology training, raw material procurement, quality
control, stock and financial accounting, remuneration of managers
and marketing.

The underlying differences in values between conventional

and community enterprises were also validated.

From the data, some definitions emerged for community

enterprises, such as -
(a) A minimum of five people directly drawing wages/salaries
(b) A minimum "physical control" over the production process
(c) Organizing collectively for economic benefits.

Community Enterprise Development Programmes (CEDP) were

inferred to be only a "process" - unsuitable for
"modules/packages" . However some key elements like money and
stock accounting, marketing concepts, economic/business behavior
theory, and relevant public policies could be standardized for
training NGO managers and community leaders for initiating
community enterprises.

Recommendations for action emerged for NGOs, bankers, and

village organizations (like women savings and credit groups). The
development of the concept of "CEDP" was found to be located in
an overall paradigm shift, in all fields of development - away
from blueprints/things towards process/people. While conventional
individual enterprise promotion could follow a blueprint model,
community enterprise development had to take people and process
into account.

In terms of developmental action, certain reversals appeared

necessary in conventional behaviour and action, for Community
Enterpises to succeed. NGO staff had to play down their skills in
"process" and become more disciplined in meeting the demands of
the open market. Government functionaries and bankers in turn,
had to become less task oriented in meeting targets and budgets
and learn to listen more to problems emanating from the field.
Enterprise trainers had to shift from the "modular" mode of
individual enterprise training - to playing a role of
accompanyment or facilitation - for the community enterprise to
evolve and grow.

Critiques of this report centred on its exclusive focus on

the "business" of community enterprise - to neglect of important
issues like gender, the politics of banking, etc.


About Data - Data ( Development Association for Training and Technology

appropriation) is a development organization - set up to support community
intiatives towards sustainability. It coor-dinates a network of ten Non
Governmental Organizations (NGOs) in South Tamil Nadu for working with palmyrah
workers and with women groups - called NEERA. This network is based on the
successful experiences of the Palmyrah Workers Development Society, Kanya

16 Nov.96 workshop Data organized a one day workshop for development

researchers, bankers and NGO functionaries on 16 Nov. 1996 at the Data office in
Madurai. The theme of the workshop was "Relevance, status, and scope of
community enterprises". Some of the key points that emerged in this workshop
were -

(*) The economic liberalization policy, globalization, and the Structural

Adjustment Policies could further hinder the survival of the already
marginalized rural poor. Competition from multinationals and big industrial
groups could pose a serious threat to the tiny and cottage industry sectors,
which depend on traditional skills, and local markets. The withdrawal of the
state from welfare programmes could further extenuate the problem. This also
provided an oppurtunity or a social space for NGOs for working on economic
issues of the rural poor,especially rural artisans.

(*) Two banks, the Canara Bank, and Bank of Majura discussed their
experiences with the small scale and the NGO sector. The bankers expressed
willingness to fund community initiatives provided an integrated support
system existed for training, marketing and technology.

(*) A further clarification of concepts resulted in coining the objective of

enterprise meant that the activity was a profit making one, not a charity.
Community enterprise meant that the profits went to the community as a whole,
and not restricted to individual proprieters or shareholders. Sustainable
implied that the activity should survive across time. Livelihoods implied that
the benefits of the activity should accrue to the traditionally marginalized,
especially the rural poor - who usually faced survival problems in terms of
access to food, clothing and shelter.
Some of the other issues that arose were -

- Provision of marketing support - in terms of brand, certifying product

quality, distribution systems etc.
- Working on behavioural barriers that prevented the rural poor from
organizing themselves.
- Support sytems which needed to work on unfavourable public policies and
enabling village groups to perform effectively.

An alliance of activists and organizations in Madurai was mooted to follow up

the workshop. The following people were made responsible for specific
tasks, to further develop the theme.

Creating model units - Shri Jayakumar

Consumer Awareness programmes - Shri Regi Chandra
Advocacy - Shri Paneerselvam
Training - Data team, headed by Shri Bhaskar and Shri John
Studies - Shri S. Ananthanarayana Sarma.

The present study is a result of the decisions taken at this



13-14TH June 1997 seminar

Data held a seminar on "Ennabling role of NGOs in promoting
Community Enterprise Development Programmes (CEDP)," at its
office on 13 -14 June 1998. Five NGOs - Assefa, PWDS, Seva Ni-
layam, Aroghyam, and CCD, all working in South Tamil Nadu, pre-
sented their experiences with Income Generating Programmes. The
Entrepreneurship Development Institute of India, the Bank of
Majura, and Data also presented training modules for income
generating programmes for NGOs. It was this workshop which
"floated" the term Community Enterprise Development Programmes to
the NGO community - as a sort of counterpart to the traditional
Individual oriented Entrepreneuship Development Programmes. To
understand the concept the following distinctions were made
between conventional entrepreneurship development programmes and
community entrepreneurship development programmes. The
distinctions were made in terms of the underlying "organizational
value" orientation for the various aspects of the programmes.






The workshop also attempted to define the concepts by working

through groups and a plenary on the following questions.
The objective of the discussions were stated to be to produce a
concept paper for the bankers - for developing a policy for
funding community enterprises. All the discussions and presenta-
tions were made by three groups, each well balanced, with academ-
ics, bankers and NGO activists. The discussions were structured
around the following questions.








The results of the group exercises are presented below.


A community enterprise is one which
- OWNS the pysical assets, the brand name and the personnel
- HAS DECISION MAKING POWERS ON Trade, Marketing strategy,
selection/termination of staff, and profit utilization.

The Companies Act specifies a maximum of twenty people (?) as

partners for an enterprise. In our case we could take this number
as the upper limit to start a community enterprise.

A Community Enterprise can be defined as any organized endeavour
at grassroot level intiated :
- to induce collective benefit
- to gain bargaining power, and
- to carry on income generating activities for promotion of
socio economic status.

(A) An enterprising enterprise owned, managed, controlled, and
run by the community either by itself or an organization re-
prsenting them for the benefit of the community as a whole. This
shall also include such enterprises run by socially committed
charitable development organizations for the benefit of the
community. The ownership could be by the group or a managing
committee/ office bearers of the groups, and members from the
NGO. The capital could be from finacial organizations, with equal
contributions from the group. The election of the commitee should
be after two years. The office bearers should include a Presi-
dent, a Vice President, a Secretary, a Treasurer and a represen-
tative from the NGO. The Managing Commitee should meet once in a
month. The profit sharing should be among the group members. An
administrative charge could be paid to the NGO at the discretion
of the group. An external auditor should assess profits. The NGO
role is that of a facilitator.

It can been seen from the above definitions that the first one,
is from conventional enterprise theory from management/
economics. It is a " legalistic" one - defining the community
enterprise in terms of powers and responsibilities. The second
definition, gives a more "sociological " orientation to the
concept - explaining it in terms of what it means to the communi-
ty as a social system. The third definition is a "pragmatic"
working definition - which also attempts to describe some attrib-
utes of a community enterprise.

It would appear safe to surmise, that defining a community

enterprise, depends on the frame of reference of the definer. In
the case of this workshop, three definitions - from the viewpoint
of economics/business management, sociology and social work


The sequence of selection of enterprise should be-




The enterprise should start with PEOPLE - with due consideration
on the available skills and with the focus on the market.

The enterprise should start from the community. - taking into
account the people and the environment. NGO role is to educate
the people regarding viable projects, and the group has to come
forward with project ideas.

All the three groups appear to have agreed that the community
enterprise had to start with the community and then move to the
market. An attempt was made to understand the role of the NGO in
facilitating this process - that of linking the enterprise with
the market.


The training process should be redefined as a "PROCESS FOR

The duration of the enterprise cannot be predicted.

The sequence could be as under -
- Assess the local resources (skills/ raw materials)
- Assess the market
- Design the product
- Motivate the community
- Equip the community to start production for skills,
linkages and systems.

The goal of the accompanyment process should be TO ENSURE


DATA's training module contents may be maintained. The duration
maybe extended to another two days. Business oppurtunities iden-
tification of enterprise, project preparation, should be includ-
ed. Accompanyment period should be long enough to allow for the
take off of the IGP initiated. This depends on nature of the IGP

GROUP # 3 The training input -


Information One day

Behavioural Three days
Business organization One day
Exposure visit One day
Project report One day
Accounts and Finance Two days
Marketing One day
MIS and decision making Two days

This would be a continuing programme with a one year accompa-


Though not directly relevant to the study, it is important to

note that training for CEDP was seen as a "process" extending
over time (one year in the case of the third group). This could
be contrasted with the "forty days individual enterpreneurial
development programme modules" which have been successfully
grounded by the EDI.

Though profit is the prime concern, this should not be at the
expense of ethics and values.


Both the groups which attempted to solve the question of ethics

verus social responsibility agreed that "profit" was a concern.
Social responsibility appeared to be relegated to the second
position, in the long run.( which position is however much akin
to conventional economic/ business management theory). The point
which seems to have been made, is that a Community Enterprise, is
primarily a profit making organization- no different in this
aspect from conventional business enterprises.



Savings ---> Credit ----> Enterprise. The same sequence of
activities can be adopted.

The SHG should be a homogenous one. The community should be
capable of handling the business. The project should be techni-
cally and economically viable, and environmentally friendly. If
alternate products are available, the more profitable ones should
be selected.

Both the groups which attempted this concept appear to agree

that a sound group (whether through savings or other activity)
was essential - before a community enterprise could be started.


Based on the above discussions, we could perhaps infer -

(A) A community enterprise can be defined in terms of economic/

business theory, or sociology or in terms of pragmatic attributes
of existing groups/ enterprises. Defining a community enterprise
depends on the frame of reference of the definer.
(B) Community enterprises had to start with the community or the
people. Their resources and skills had to be taken into account,
for deciding on the nature of the community enterprise.

(C) Community Enterprise Development Programmes can only be a

"process" - and not a " package" or a "module".

(D) Profit is the major objective for a community enterprise,

with social responsibility occupying a lesser position.

(E) Sound groups have to exist in the community, before a commun-

ity enterprise can be attempted.


Based on the discussions and consensus arrived at, the following
conceptual frame was agreed upon for starting "community enter-
prise development programmes(CEDP)". It was emphasized, that the
conventional business management theory had to be reversed, in
the case of community enterprises. THE COMMUNITY OR PEOPLE had to
be put at the center, instead of the "market or the consumer".
Hence, the model started with the community - their skills and
resources, had to be inventoried and used as a basis for starting
a community enterprise. The NGO had to primarily facilitate a
process, whereby the community enterprise gets linked to the
external market, through appropriate product decisions. This
constrasts with much of received business management wisdom,
which put the market and the consumer first, and then links
backwards to the setting up of an enterprise. This model was
represented as under -









To ground the "concepts" on Community Enterprises produced in

Data workshops it was decided to study existing income generating
enterprises of Non Government Organizations in South Tamil Nadu.
The reasons for this methodological choice were -

(a) The proposed CEDP programme was aimed at NGOs - who would
facilitate Savings and Credit Groups to evolve into Community
Enterprises. Hence a study of the existing income generating
enterprises of NGOs would provide insight into the "practise" of
running enterprises by the NGO sector.

(b) The bankers had reiterated that funding to community enter-

prises would be available only if adequate support structures
exist. In the present development context of South Tamil Nadu,
such support could be created immediately only from the world of
NGOs. The capabilities of the NGOs in providing support services
could be understood from this study.

(c) A study of existing income generating enterprises run by

NGOs, even if not stricty "community enterprises" would be useful
- further clarifying the concept of what is a community
- understanding the realistic field constraints, set by
organizational contexts - which would shape the development of
community enterprises.(especially if directed through NGOs).

Hence the RESEARCH OBJECTIVE for the study was framed as under -



By Income Generating Enterprise activities is meant "structured

tasks directed for monetary profit" - run directly by the NGOs,
or with NGO sopport.


CHOICE OF TECHNIQUES - A social science researcher has two

choices broadly of techniques - the quantitative questionnaire
survey or the qualitative case study and associated methods. It
was decided to use the qualitative case study method for the
following reasons -
(a) The indepth nature of the data that would be required on
income generating enterprises could be better gathered with the
case study method.
(b) All the variables thought pertinent to the study of NGO run
income generating enterprises could not be predicted before hand.
The casestudy method allowed the flexibility of collecting data,
which may earlier have not been thought relevant to the study.
(c) The study of the organizational contexts, was thought to be
of vital importance. The case study method allowed better study
of the contexts.
(d) The case study method allowed a better appreciation of
"process" elements.

CHOICE OF ORGANIZATIONS - The study of NGO run Income Generating

Enterprises, required frank disclosures by the NGO, of its
management practises and operational cultures. Given the history
of failures in income generation activities of NGOs, this need
not be necessarily forthcoming - unless the researcher had spe-
cial access to the chief executives. NGO cultures, definitely in
South Nadu had not been exposed to world of organizational

research - and could be justifiably be expected to resent part-
ing with information, much of it of its shortcomings, with no
material reward in return.

Since the researcher, Shri S. Ananthanarayana Sarma, enjoyed this

special access with Shri P.Rajarathinam, the then Project
Director of Assefa activities for South Tamil Nadu, it was decid-
ed to concentrate mainly only on Assefa units, under his super-
vision. Assefa also was the largest NGO in India, in terms of
budget, number of employees, and scale and diversity of activi-
ties. It origins lay in the Sarvodyan Bhoomidanam movement of
Acharya Vinoba Bhave. Being quintessentially South Asian in
culture, Assefa would also strongly reflect " charecteristic
strenghts and weaknesses" of NGOs in the subcontinent. This
further strenghtened the decision to concentrate on Assefa units.

Assefa had floated the Sarva Seva Gram Udyog Samithi(SSGS) as an

umbrella organization for certification from the Central Govern-
ment Khadi and Village Industries Commission (KVIC). Any unit
floated by any of the projects of Assefa could avail Central
Government subsidies from this registration. The following SSGS
activities in South Tamil Nadu were studied -
(a) Seva Agarbathi unit - Madurai
(b) Seva Steel Furniture unit - Mudianoor (Virudunagar district)
(c) Seva Cattlefeed plant - P.Pudupatti (Virudunagar District)
(d) Polyvastra spinning unit - Chinnapuliyampatti village
(Virudunagar district)
(e) Khadi Weaving unit - Valyankulam (Virudunagar district)
All these case studies were done by Shri S.Ananthanarayana Sarma

Three units floated by "people's organizations" in Kariapatti

block were also studied by other members of the Data team.
(a) Seva Vaniga Maiyam, studied by Shri John Chester
(b) Seva Nursery, studied by Kum.P.Nancy and Smt. K.Sridevi
(c) Seva Canteen, studied by Kum.P.Nancy and Smt. K.Sridevi

Also Shri Bhaskar and Kum. Nancy J. Anabel, who enjoyed special
access to Arogyaham, (an NGO in Theni district, unconnected with
Assefa) wrote a casestudy on its coir making unit.
Some of the experiences narrated during the 13/14 June '97
workshop by NGOs in running income generating enterprises, were
also used for drawing inferences and conclusions. The following
NGO experiences have been included.

(a) Assefa Plan T.Kallupatti project (Madurai district) rural

industrialization programme (presented by Shri Khadir Esmail)
(b) Arogyaham (Theni district) programmes for milk marketing,
herb collection, and poultry, using women groups.
(c) Palmyrah Workers Development Society (Kanyakumari/Trivandrum
district) programme for palm candy (presented by Shri Godwin
(d) Seva Nilayam (Theni district) programmes for pillows and
mattresses and tailoring.(presented by Shri K.Pandi)
(e) Covenant Center for Development (Virudnagar district) pro-
gramme for charcoal from Prosipis(karuvel) trees.(presented by
Shri Ravikumar)

RESEARCH MODEL- The "object" of study - NGO run Income Generating

Enterprises - were in essence enterprises, established with eco-
nomic motives. They could hence be studied with much of the
frameworks of conventional "business enterprises". Some addi-
tional questions needed to asked to cover the "developmental"
aspects. Keeping this perspective, the following "wishlist" of
desirable data was generated. The data collection broadly fol-
lowed this format - collecting whatever data was available within

this list. Where the researcher observed or heard data, which did
not fit into this "wishlist", he/she was free to investigate
further. Also lack of data, or its access, was not a constraint.
The operating principle used in data collection, was to collect
what was available, and would be shared with comfort by the NGO.

SOURCES OF DATA - To best preserve the "authenticity" of the

cases, all the cases relied mainly on field visits to the actual
"site" of the community enterprise. Interviews and non particip-
ant observation were the tools used for primary data collection.
Financial data collection relied on secondary data, like audited
accounting statements (where available) and trial balances, from
which profit and loss statements and balance sheets, were recon-
structed. The other NGO cases, (listed seperately) are the verba-
tim presentations made at the June 13-14 '97 seminar.


The following was the "wishlist" used -



Location of Enterprise
Inception(Who identified the enterprise? why was it started?)
Objectives (to be collected by asking project holder, staff,

Amount of capital invested
Use of capital
Who invested?
Grants and subsidies

Working capital
Has this been estimated?
Who funds?

How much ?
How is it distributed?
Sharing with the employees?
Cost break up of production, to find margins.

Audits and accounts

What are the books of accounts?
System of purchases and sales? ( Receipts/ vouchers, etc.)
Is there audit? who audits? when?
Copies of balance sheet and profit and loss since inception
Stock accounting systems?


What are the products marketed?
How was this decided? who decided?

What is the price of different products?
Who decides?
What are the competition prices?

Is there advertising? how is this done? who decides? costs?


Total sales for each year, broken up by product since inception
In units ( Physical quantity)
In rupees ( financial)

( If possible, sales, size, location of competition)

Total number of staff
Their background Age, sex, education, marital status, previous
work experience, salaries,
Who decides salaries? Who pays?
Structure of reporting and communication?
Style of decision making ( use instrument)
No. of human days employment generated? Wages earned?

What is the product/ products? ( Output)
Raw material needed? how procured? costs?(Input)
Machines/ technology? how decided? capacity?
Skills for using technology?
Their processes for production?
Break up of material use and their cost?
Production cost break-up?


Who are the beneficiaries?(customers,staff,employees,suppliers,
How was this decided?

Identify owners - through
Legal structure
Members of Governing committee/ board
Other important stake holders
How was this decided
Relationship between owners -> employees -> beneficiaries.
Review meetings for monitoring performance
( meetings, minute books, etc.)


Nature of support
( funds, technical expertise, supervision, sales, supply of
material, others?)





At the June 13/14 '97 seminar on community enterprises the first

half day was devoted to presentation of live field experiences by
participating NGOs. Mr.Jayakumar of Bank of Majura moderated the
session. The following NGOs shared their experiences
- ASSEFA (T.Kallupatti, Madurai district)
- SEVA NILAYAM (Theni district)
- AROGYAHAM (Theni district)
- CCD (Virudunagar district)

This experience started the presentation. Arogyaham found that
middlemen bought milk at Rs.5.50 and sold at Rs.8.00. Twenty
villagers organized under the IFAD programme were organized to
directly sell the milk to Andipatti. The capital investment in
the form of cans were provided by the NGO. The NGO also provides
accounting support and monitoring. The experiment had started
with two women groups. One had withdrawn and another continued.
Arogyaham also was experimenting with coir making and herbal
collection. In poultry two of the six sheds had been a success.
The major problems faced were as under.
- With Dairying accounting and sales realization from vendors
were a problem.
- With herb collection, the sales were done by the group. There
were twentythree members and sales for a season ranged from two
to ten tonnes. The turnover sometimes was one lac rupees per
year: and profits Rs.50,000. The profits were shared by the group
members on a per kilo basis. The working capital of Rs.70,000
given by the NGO had been paid back with 12% annual interest rate
in eighteen months.
- With coir, Arogyaham initially helped at all stages from raw
material procurement to marketing. Now the producers had taken
over most of the areas. Arogyaham now gave support for training,
problem solving and in motivation.
- With poultry, one unit consisted of two hundred birds. (Here
the moderator interjected and said that scale economies needed
ten thousand birds and own feeding units). The success here was
not up to the mark.


The PWDS presentation was made by Mr.Jackson. He stated that the
palmcandy unit was an Income Generation Programme. It was a
product diversification from palm jaggery to palm candy. The
production was a group effort. Since there were beneficial ef-
fects, social and economical, other palmyrah groups have started
asking for these projects. There was a high demand for palmcandy
which could not be met by the existing five units. While produc-
tion was seasonal, production was throughout the year. The work-
ing capital per unit was around Rs.120,000 per year. There had
been some initial problems as in jaggery there were immediate
returns. Profit sharing was by the amount of liters supplied.
PWDS took responsibility for mobilizing the community, ensuring
the quality of the new neera, monitoring the production, and
marketing for ensuring profits. PWDS assured market and gave
financial assistance for working capital (Rs.50,000 at 12% pa).
Children of the plamyrah workers were not going to school still
due to lack of organization and migration.

The ASSEFA presentation of the T.Kallupatti experience was made

by Mr.N.Khadir Esmail. There had been an initial problem of
corporate sector pragmatism versus Gandhian idealism. Mr.Keshub
Sen formerly a BITS (Pilani) professor, and a Toyota Managing
Director, had set up a small industries consultancy in Delhi. He
had sucessfully launched tomato ketchup processing in north India

(Uttar Pradesh). There had been heavy funding by PLAN
INTERNATIONAL, the funding agency. The problem arose, "Which IGP
to promote?". The funding agency reccomended Mr.Keshub Sen. A
project directors workshop had been held for two days for
identifying the NGOs and the beneficiaries. A clash arose here
between the Sarvodayan and corporate values. Mr. Sen asked the
Project Directors to list all the IGP ideas they had. The list
extended to fifty seven. Using the following criteria, potential
IGP areas were selected:
- IGPS which did not need advertisement for marketing
- IGPs which did not cater to local consumption
- IGPs which used intermediate technology for permanant markets,
connecting local production to city markets.
For instance, lungi manufacturing fitted these criteria.

The objective was mainly to reverse migration. Mr.Esmail stated

that problems arose mainly with the NGOs, (staff selection,
taking over control of the enterprise). The community had to be
prepared before funding. The profits were divided into five
parts: one part as savings, one part as dividend for the workers,
one part to the village, one part to the cluster committee, and
one part ploughed back into the unit. Out of the sixteen units
started, seven units were making profits. These were lungi
weaving, brick kiln, readymade garments (which specialized in
petticoats), PVC electric appliance, body toners (with an export
tieup), motor rewinding and notebook production. Four units,
honey processing, footwear production, silk weaving, and brass
vessels, were breaking even. Five units, spinning, dehusking, oil
extraction, silk reeling and iron works were making a loss. The
major problem was competing with the "underground" economy of the
other competitors. The moderator agreed with this assessment. He
stated that seriousness could be created if bank loans were given
for capital costs.

The presentation by Seva Nilayam began with the assertion that
IGPs were started since funds were made available. Since silk
cotton trees existed locally, pillow and mattresses were made as
a community enterprise. Since the women in the villages knew
tailoring, they were linked with a market retail outlet in
Kodaikanal for stitching tea covers. In a span of four years a
profit of Rs.20,000 had been made in the group enterprises.
Seva Nilayam also gave individual loans to those undergoing
Tuberculosis (TB) therapy - mainly for heifer rearing. The fear
of attachment (japti) engendered recovery.


CCD stated that IGP programmes could not be taken up in a large
scale, as they were working in a dry tract. SIDBI had sanctioned
a Rs.350,000 loan for charcoal production at 9 % annual
interest.(using the locally available karuvel (prosipis trees).
The funds were given to Kalasham the people's bank, which trans-
ferred the funds to individual women groups at 18% annual inter-
est. The final borrowers, usually women members, received the
loan at 24% annual interest. CCD was planning herbal units, and
palmyrah units.




The Sarva Seva Bathi unit, is a part of the larger industrial

wing of Assefa _ the Sarva Seva Gramudyog Samiithi. Assefa is a
large multisectoral NGO working in some 3000 villages in six
states in the Indian subcontinent. Assefa set up the SSGS to
ensure qualification for Central Government subsidies under the
KVIC (Khadi and Village Industry Commission). The SSGS "brand
name" was "franchised" to various units/ projects in Assefa.

The inception of the agarbathi unit (incense sticks) is dated to

I June 1988. Mr.T.Gourishankar is credited with the initiation of
the unit. Mr. Gouri was earlier with the Akhil Bharitya Sarva
Seva Sangh (Tamil Nadu branch) since 1956. He set up the
Tirunelveli vibhag of the Sangh, and was the founder - Secretary.
He later shifted to the Trichengode Gandhi Ashram in Salem

Mr. Gourishankar started an incense stick (bathi) unit in

Ambasundaram, which won statewide reknown. He started another
bathi unit in Trichengode, which was also successful. Assefa
invited hin in 1988, to start a bathi unit in Madurai, under the
SSGS banner which probably is one of the first such products of
the SSGS.


Mr.Ponniah the present manager of the Bathi unit stated the

objective of the unit to be:
"To provide employment oppurtunities to rural people (who may be
men or women). The only criterion for selection as a beneficiary
is that they should be poor. Specifically, we did not target
destitute or abondoned women for this unit." He also stated that
the choice of the product, in this case, bathi had been made by
Mr. Gaurisahankar himself."


Assefa through the SSGS granted Rs.7,93,000 to start the unit, in

1988-89 financial year. (April to March). Rs.16,000 had been
initally spent on furniture. The rest of the money had been spent
as working capital, for advancing trade credit and buying raw
material. Assefa granted another Rs.50,000 in 1995-96. The
accumulated profit of the unit from 1988- 89 to 1996-97 came to
Rs.7,88,000. The manager Mr. Ponniah specifically stated that not
a single paisa had been taken from the KVIC.

The Balance sheet as on 31 March 1997 was as under(Rupees in


Working capital 843 Furniture 80

Accumulated profit 788 Sheds 10
Payables 139 Receivables 1200
Reserves 99 Cash 120
Closing stock 459

TOTAL: 1869 TOTAL 1869


Mr.Ponniah stated that in the Bathi trade working capital needed

could be estimated to be 40% of sales. Given the the 1996-97

sales of around Rs.24 lacs he estimated the working capital to be
around ten lac rupees. He thus conceptualized the assistance of
Rs.8.43 lacs from Assefa as working capital: the remaining amount
of working capital being supplied from retained earnings.

The following table details the sales turnover of the unit since
inception and the payables and receivables.(In Rs.1000)



1988-89 150 (- 7) 19 35
1989-90 570 (+ 30) Nil 139
1990-91 755 (+ 99) Nil 207
1991-92 1111 (+ 62) 88 88
1992-93 1540 (+129) 9 361
1993-94 1608 (+172) 127 948
1994-95 2189 (+ 63) 101 866
1995-96 2694 (+177) 55 993
1996-97 2339 (+179) 139 1103


Profit: Mr.Ponniah stated that profit calculation occured in two

stages. In the first stage,
This figure could be calculated through what he termed the "first
account" consisting of purchases and sales transactions.
In the second stage,
These figures were termed "trading account". The "Establishment"
expenses consisted of transactions related to house rent,
electricity, cartage, periodicals, stationery and postage,
travelling costs, salaries (of core staff), audit fees and
sundries. The "Trading costs" consisted of transactions related
to railway freight, packing, trading commission and cartage.
Accounting system: The accounting system, prescribed by the SSGS
consisted of two "day books" and a ledger. All cash transactions
were entered into a cash day book. All credit transactions were
entered into a Journal day book. The entries in the day books
were then posted in the General ledger. For instance, sales
invoices were raised either for cash payment or on credit. Cash
payments were recorded in the cash day book, and credit sales in
the Journal day book. These entries were then posted in the
ledger. The accountant made a trial balance every month, as
Mr.Ponniah put it to "find the position of debtors".

Raw material were indented for and purchased in the first week of
each month. The purchase vouchers were entered into the day book
for credit transactions and in the cash day book when cash
purchases were made. These entries were then posted in the

An itemwise production statement was made daily. This statement

included the raw material consumed and the quantity of finished
products (including the packing size). Every month an approximate
profit was worked out as under:

Total finished products * sales value) = Total Income

Total raw material consumed + Wages = Total Expenses.

The difference between the Income and Expenses would be the

profit. To illustrate this Mr. Ponniah stated: " Suppose we have
a finished product value of Rs.7000 for a month. That month, we
spent Rs.4000 on raw material and Rs.2000 on wages. Thus that
month profit would be Rs.1000. I would start getting concerned if

this figure shows a loss."

An auditor appointed by the SSGS conducted an annual audit.

Mr.Ponniah also stated that he had no powers to raise loans from
the market. SSGS had to give him permission for this. He stated
that this was not the case with the "Sarvodaya" Sanghams started
in each district (in which he and Mr.Gourishakar had worked
earlier). Mr.Ponniah stated that his monthly "establishment" or
administrative cost to be around Rs. 25,000. He gave the
following breakup of expenses.

Salaries (ten corestaff)- Rs.14,000/-

Rent - Rs. 2,000/-
Newspaper - Rs. 75/-
Daily wages - Rs. 1,500/-
Travelling Allowance - Rs. 1,500/-
Stationery - Rs. 250/-
Postage - Rs. 150/-
Publicity samples - Rs. 1,000/-
Electricity - Rs. 800/-
- Rs. 2,000/-
Fixed Costs - Rs.14,000/-
(Salaries and rent) - Rs. 2,000/-

The Bathi unit had been sited since inception in a residential

house in a middle class locality of Madurai. The two storied
building and the boundary wall stood on around 4500 square feet
of land. The building itself accoupied around half of the land.
Thatched sheds had been put up in the remaining land. The Bathi
unit directly manufactured twelve products. These were-

(a) Agarbathis (incense sticks) - in seven varieties, with pack-

ing as per requirement(10 sticks to 100 sticks)
(b) Javadhu powder(perfume powder) - in 2gm and 8 gm packs
(c) Pooja powder and pills (for smearing on body)- in 20 gms pack
(d) Camphor - in 25 and 50 gm packs
(e) Instant sambrani ( incense) - in 25 gm pack
(f) Dhoop (incense) - in packs of twenty numbers
(g) Kumkum (powder used by women) - in 20 gram pack
(h) Vibhooti (powdered for smearing on body) - 50 gms. pack
(i) Dasangam (incense powder) - 100 gms. pack
(j) Snanam powder (herbal bathing powder)-
(h) Poosamanjal thool (turmeric powder)

This apart the unit also purchased some products from "Sarvodaya"
units for repacking and sale. Such products were:
(a) Ginger jam from Tutikodi Sarvodaya Sangh (in 200 gm jars)
(b) Saffron from Jammu (half and one gram)
(c) Rose gulkhand from Jammu(edible)- 300 gms pack)
(d) Rosewater from Jammu - in 150/250/500 ml. bottles.

Agarbathis accounted for two thirds of the production by value.

Instant sambhrani accounted for another fifth of total production
by value, and camphor for a sixth. The remaining products
accounted for the rest. Excepting in the case of the agarbathis,
all the other products involved sorting and repacking within the
premises. In the case of agarbathis, the bamboo sticks and the
agarbathi masala (or mix) were handed over to the workers
(beneficiaries?) in the morning. This was taken home, and re-
turned the nenext day morning- the process being rolling the

stick in the masala. A quality checker accepted the sticks and
sorted according to size and thickness. These sticks were then
dipped inside the units in various perfumes, to create the vari-
ous varieties. The "perfume composition" was stated by Mr.Ponniah
to be the MOST important part of the production process. The
business apparently entirely depended on this aspect, and wrong
perfuming could finish the unit. Hence he termed the skill a
"Chidambara rahasya"(an almost unavailable piece of information).
The final products were then repacked as per need.
For the other products, the production process consisted of
buying the raw material, sorting by quality, mixing, and repack-
ing. Mr.Ponniah stated that the groud floor was used for the
mixing and packing, and for storage of the finished products- the
first floor was used for packing material, and the terrace as a
drying yard.

Mr.Ponniah took all decisions relating to the products to be

produced. If a new product was introduced or an old one reintro-
duced, "average" production was undertaken and the orders re-
ceived studied. He gave as an example" In agarbathis there are
six to eight varieties, but only some move fast. I consolidate
all orders, see the trends and then decide what should be
produced". The unit produced a monthly stock statement for each
type of raw material to monitor purchases, consumption, sales and
closing stock.


Product: As mentioned, the bathi unit directly produced twelve

products: of which the most important, agarbathis had eight
varieties and flexible packing. All the other products were
standardized in terms of varieties, and had one or two packing
sizes. Thus in terms of product range, the bathi unit appeared to
have covered a large range of the "incense" market. Other non
incense products, were related either to prayer,(Pooja powder,
kumkum, vibhooti, camphor ) or to taking traditional baths
(usually before prayers (dasangam, sananam powder).

Price: The unit had a detailed price list, for the various pro-
ducts in varying packaged quantities. (this was only in Tamil).
The sales price unit had the following proforma:

ITEM Sales Price Maximum Retail Dealer Commission

(A) Price(B) (B) - (A)

Mr. Ponniah decided on the price of each product. He used a "Cost

plus 15%" formula for the sales price (or the invoice price). The
maximum retail price, printed on the labels was Sales price + 25%
for all products. This 25% margin was the dealer commission.

Advertising: Mr.Ponniah did not believe in spending for

advertising - apart from an annual gift of a shoulder bag to all
dealers, as a gift. Free Samples were also sent for creating new
sales. Any promotion,if occured in Mr.Ponniah's words,was mainly
"word of mouth, due to the reputation of Mr.Gourishankar and the
Distribution: Each district in Tamil Nadu had Sarvodaya Sanghs -
production and marketing organizations usually making village and
cottage products, and sometimes funded by the KVIC. The retail
outlets of the district Sarvodya sanghs accounted for ninety
percent of all sales according to Mr. Ponniah. The SSGS retail
outlets (some fifty odd in small towns in Tamil Nadu) accounted
for the remaining ten percent of sales.

Competition: Mr.Ponniah termed all the Sarvodaya Sanghs as com-

petitors - as each of them had agarbathi units. The Aurobindo
ashram (Pondicherry) in his opinion was another major competitor

- which also enjoyed special markets and funds due to its Euro-
pean contacts. Private agarbathi manufacturers in Banglore and
some major brands (advertised heavily on television like "Sugand-
hi" and "Chandan") were the other comeptitors. He also stated
that the "entry barriers" to the business was non existent.
Agarbathi rolling was a cottage industry. In Madurai there were
perfumery shops which sold bamboo sticks, the masala and the
perfumes. Ready made packs were available with these shops. An
initial capital of twenty rupees was sufficient to start produc-
tion. Almost all the major district capitals of Tamil Nadu like
Trichy, Tirunelveli, Erode, Salem and Thanjavur had such per-
fumery shops. He explained " In Madurai there are roadside idli
shops which give low cost products with low quality. There is
also Arya Bhavan which gives good food at a relatively high
price. My Bathi unit is like the Arya Bhavan restaurant."


The Bathi unit had ten full time salaried Staff- and
supported sixtyive part time artisans. Five to six artisans
usually came daily to the unit for dipping the agarbathi sticks
in perfume and for packing. These parttimers were paid daily
wages. The other artisans who daily rolled agarbathi sticks at
home, were paid on a "piece - rate" basis.

The details of the ten fulltime staff are as under :

Designation Age Education Work Salary
Experience (Rs./month)
General Manager 63 S.S.L.C. 40 years in
Sarvodhaya Sanghs Rs.1,700/-

Office Manager 47 S.S.L.C. 15 years in Rs.1,400/-

Sarvodya Sanghs

Accountant (Female) 22 + 2 3 years in Rs.800/-

private firm

Technician 28 + 2 8 years in Rs.1,400/-

(Perfume compounder) ASSEFA

6 assistants 25 & 10th & 2 years (two) 400 - (2)

below 8th etc. 3 years (three) 850 - (3)
8 years (one) 1125 - (1)

All the fulltime staff, excepting the accountant were male. The
General Manager, Mr.Ponniah, the office manager, and one of the
accountants were married and had children.

Salary decisions were made by the Head office of the SSGS, (sited
at Madras) and communicated through the Executive Director of
Assefa(who was also the managing trustee of the SSGS). Mr.Ponniah
stated that he had powers to recommend salaries which were
approved at Madras. The unit paid all salaries through internal

Mr.Ponniah stated that he reported only to the SSGS head office

at Madras. He usually gave indents, and reccomendations in
writing to the Madras office. He stated that all the ten
fulltime staff reported directly to him. These staff in turn
coordinated with the sixty five odd artisans who benefitted from
the unit.

Mr.Ponniah drew the following chart to illustrate the

organization structure.

Executive Director
| If necessary meeting
| (Mostly given in writing)
General Manager
Ten fulltime employees
65 artisans
Beneficiaries The sixty five artisans who rolled the agarbathis
were termed the beneficiaries of the bathi unit. Mr.Ponniah
stated most of the artisans were married and in the agegroup 30
to 40 years. There were some artisans in the 15 to 20 age group
and a few in the 40 to 60 agegroup. All the artisans were
already trained in this skil- for many of them this was a
traditional occupation. Around half of the artisans were Muslim.
Mr.Ponniah observed that this skill of agarbathi rolling was very
useful for Muslim women - since they observed the system of
"purdah", they could not easily go out to work. In this case,
they had to visit the unit, only to take out raw materials
(bamboo sticks and masala) and bring back the finished product.
Mr.Ponniah stated that he did not analyse whether destitute women
or abandoned women were being benefitted from the unit. He took
it as a moral binding not to ask about the personal details. He
said he was satisfied that the artisans benefitting from this
unit were economically weak.

The same number of sixty five artisans had been associated with
the unit since inception. The wages given to them since inception
is detailed below.

YEAR WAGES PAID(In 1000 rupees)

1988-89 53

1989-90 54

1990-91 68

1991-92 112

1992-93 134

1993-94 121 + 7 (Bonus)

1994-95 209

1995-96 187 + 8 (Bonus)

1996-97 140

Mr.Ponniah stated that " the piece rates has not been reduced,
only increased. The variations in wages could be due to
accounting. Also agarbathi gives lower wages than sambhrani. When
sambharani production increases, wages also increase. When bathi
production increases instead of sambhrani, the wages decrease".


Mr.Ponniah stated that the unit had no seperate registeration -

being a part of the umbrella of the SSGS. Hence there were no
seperate Governing Board for the unit. He stated the unit's
identity as a production branch of the SSGS.
Asked about the nature of support he received from the SSGS
Mr.Ponniah said," We received only initial working capital. The

Madras office sends an auditor annualy to check if their initial
investment is still protected." The SSGS had fifty odd retail
outlets of its own in small towns with Assefa projects and had
links with Assefa projects with other states. When asked whether
the unit received marketing support, Mr.Ponniah stated that only
ten pecent of the total sales were through the SSGS.


Mr. Ponniah stated in conclusion, "We have been growing slowly

and stabilizing. Automatically systems have been created".
On asked to name the three major problems faced by the unit he
(a) Collection of dues from Sarvodaya Institutions
(b) Lack of space ( A long hall would have been ideal. The house
was divided into small rooms)
(c) There could be some improvement perhaps in stock systems.

Asked what sort of training would be useful to him, he said: " I

would welcome training in perfume compounding. This is a
Chidambara rahasyam (a deep secret) which no one is willing to


LOCATION: At Mudianoor village, on the Kalakurchi to Virudunagar road, 12 kms.

east of Virudunagar, falling under the Kariapatti block, Aruppukottai Taluka
of Virudunagar district.

INCEPTION: Started by Mudianoor cluster committee, a federation of village

Grama Sabhas in 1994, with Plan funds. Handed over to the SSGS in 1994, after
running it for eight months - to avail of concessions for excise and sales
tax, which accrues from working under the SSGS banner ( which is registered
with the Khadi and VIllage Industries Commission (KVIC) banner). The unit was
originally started as there were some blacksmiths and carpenters in the
adjoining villages. Since these skills also formed a part of the KVIC mandate,
and since SSGS wanted to increase the "variety" of industries under it's
banner, it also accepted the offer to take over the enterprise. Initial
capital expenses were provided by the cluster committee.


The manager of the unit, Shri Sivamurugan, stated the objectives of

the unit to be -
(a) providing employment to local people
(b) providing additional income to the Sarva Seva Khadi retail shops.
(c) providing quality steel furniture to the Grama Sabah members of
Kariapatti,( who are also given credit facilities by the shops).
(d) generating profits for the umbrella organization the SSGS.

The accountant. Shri Govindasamy, a retired Sarvodya worker, added

that the objectives also included -
(a) fostering economic development in the area
(b) creating a name for the SSGS,by manufacturing and retailing quali-
ty products.

Mrs. Chandra, the SSGS incharge for Kariapatti stated that of the
twelve lakh odd sales per year, seven lakhs were rotated within the
Kariapatti block - which which would haave otherwise gone outside the
local economy to the corporate sector like Godrej. This activity had
also created employment and additional income oppurtunities.



EXPENDITURE: 1994-95 1995-96 1996-97

(two months) (unaudited)
Opening Stock
-Raw material ? 44 561
- Furniture 359 162

Purchases ? 785 867

Prodn wages ? 74 98

Other prodn exp. ? 40 40

Freight 6 14 21

Admn.salaries - - 30

Other admn. 1 26 3

Sales commission 29 82 110

Profits 142 53 118



Furniture sales 811 1102

Other income 5

Purchase comm. 12

Closing stock
- Raw material 359 561 527
- Furniture 44 162 394


94-95 95-96 96-97

(two months) (unaudited)


SSGS H.O. (Kariapatti) 403 778 916

Price margin 4 16 113

Furniture Depreciation 0 20 (deducted?)

Income from P & L 142 53 118

Stock Suspense - 62 -

------ ------ ------

549 929 1147


Furniture 13 21 41

Machinery 129 175 175

Electricity fittings 3 8 -

Closing stock
- Raw material 359 561 527
- Steel furniture 44 162 394

Cash in hand 1 1 10
------ ------ -----
549 929 1147

Working Capital Not estimated

Profits - All ploughed back into the unit.

Administrative salaries met from internal profits from 1996-97.

Accounting systems All accounts are kept in the Tamil language. Howev-
er the final audited figures are printed in English. The following are
the account books kept -
Purchase bill file
Cash voucvher file
Invoice book ( 3 copies made, for ThonugalHO, office, and buyer).
Cash receipt book
Journal + cash day book

A monthly audit is carried out by the SSGS office auditor, and the
KVIC auditor audits once a year.


Production Sales

1994 - 95 ? 92
1995 - 96 913 811
1996 - 97 1164 1102
1997 - 98 959 757

Finance : All accounts kept in Thonugal head office:

No knowledge in unit.




(A) Wardrobe ( 4'6" height) 3100

Wardrobe ( 5'6" height) 3650 (Optionals - Hanger 150
Wardrobe (6'6" height) 4200 - Mirror 120 )

(B) Double cot ( 6'x 4') 2150

Single cot (6'x 3') 1835

(C) Steel stool ( 1'x 1') ?

Steel stool ( 1 x 1'6") Steel top = 160
Mica top = 180

(D) S type chair ( 1'8" x 1'8") 250

(E)Television stand (2' x 2'4" x 1'6") 475

(F) Table (3' x 2') Steel top = 1700

Mica top = 1900

Table ( 4' x 2') Steel top = 1900

Mica top = 2100

(G) SSGS shop racks made to order

HOUSING MATERIAL ( as per orders)

(a) Steel door ( 6' x 3') and ( 7' x 3') @ Rs. 135/ sq. feet
(b) Steel windows ( 4' x 3') @ Rs. 135/ square feet
(c) Gate, grills, ventilators, shutters, girders.

All product decisions, by Mrs. Chandra and PE (Assefa)

All material made of 20"CR steel sheets.

Pricing decisions based on production costs. 10% margin for the steel
unit, and 10% margin for the retail shop is added to the production
cost, to arrive at the final retail price. This decision is taken by
the SSGS (Kariapatti) and the PE (Assefa). The prices are decided
yearly, by the PE and SSGS. In the market, 24" gauge and fifty kilos
weight wardrobes are available for Rs. 2500/ against the 20" gauge and
hundred kilo weight wardrobes of Assefa which cost around Rs. 4500.
Nippon and Godrej (from the corporate sector) manufacture 20" gauge
wardrobes with machine moulds and mettalic paints which cost Rs.10000
to 12000.


Advertisements are placed in the Assefe village Tamil monthly " Seva

madal". Two cinema theaters in Kariapatti display slides advertising
the brand name ( Seva Furniture). Boards are displayed in every SSGS
shop ( fifty in Tamil nadu) advertising the availability of Seva
Furniture. The key chains for the wardrobes have the SSGS logo. One
page printed "bit notices" are also circulated in the villages adver-
tising the products.


All the furniture is sold only through retial units under the SSGS
banner ( around fifty such units exist in Tamil Nadu). For housing
material, the sales are routed through the Kariapatti housing commit-


For the year 1996 - 97, the following were the product wise approx-
imate breakup by quantity and sales value.


( in rupees)
Wardrobes 100 400,000
Cots 60 200,000
Tables 20 50,000
Stool + chair 100 50,000
Housing ? 400,000


Wardrobes -The competition comes from two sources. Local production

units in Aruppukottai, Virudunagar, Madurai, produce wardrobes using
lower quality iron/ steel sheets, which retail at the half the price.
The market is primarily low income households, for whom a wardrobe is
an essential item of a bride's dowry. At the upper end of the market,
Godrej, Nippon and Allwyn use machine moulds and metallic finish,
using large scale capital intensive production techniques to retail
wardrobes at around Rs.12000. This brought mainly by the upper income
groups. The SSGS steel unit sold around half of all products within
the Kariapatti block area - and the other half through SSGS retail
outlets. The buyers were office staff, belonging to the middle class,
staying in small towns and villages, who were offered credit facili-
ties by the SSGS outlets.

Cots - There is no high income market for steel cots. Cots of value
Rs.10,000 and above are usually made of plywood, use stainless steel
pipes, beading, have decorative mirrors, etc. Only very high income
families buy this product. At the lower end, as in the case of war-
drobes, small units s\using lower quality sheets, produced cots which
retailed at half the price of the SSGS cots. These cots too catered to
the "seeru" market - with low income families purchasing these cots as
a part of the girl's dowry. The buyers of the SSGS cots, were usually
middle class and availed of credit facilities from the SSGS retail

Stools A wooden stool costed around Rs. 200- 300. The steel stools
were less in weight and price. There was hence not much competition.
But demand was also less, with the main buyers being shops.

S Type Chairs The chairs did not move, as the buyers were usually
offices and shops. Households used folding chairs, for which the unit
did not have machines. (the cost of dies for this chair amounting to
two hundred thousand rupees).

Tables Offices and shops usually purchased the tables. However demand
was not very high.

Housing material The beneficiaries who took loans from the Assefa

housing committee, had a choice to buy their construction material
from the open market. Around half of the beneficiaries opted to buy
from the housing commitee itself. These orders translated into demand
for the steel unit, for steel doors, windows, grills, ventilators,

STAFF The steel unit employed three full time staff - one manager, one
watchman and one accountant. There were around ten workers, who were
fitters and painters by trade and living in the neighbouring villages.
They were hired on piece rate basis. They were supplied the raw mate-
rial, the work space, the machines, and asked to deliver the final
product by a particular time. All the staff were men, in the age group
20 to 55 years, excepting the accountant - who was 68 years, and
retired from the Aruppukottai Sarvodaya Sangh. The following table
details the background of the three full time staff.

Designation Age Education Marital Experience Salary

status ( Rs./month)

Manager 29 Civil Eng. Married with 4 years in Rs.1600

diploma two children own workshop. + TA.

Accountant 68 SSLC " 35 years in Rs.1350

Sarvodya Sangh

Watchman 60 Illiterate Married with Private Rs.900

four children mill watchman

All salary decisions were taken by the Programme Executive and Smt.
Chandra. Salaries were paid by cheques and from internally generated
profits. The wages were paid piecerate, and worked to around 6.5% to
7.5% of the production value. Only men were involved in this work, as
it involved manual tasks like cutting, painting and welding. On an
average the unit provided twenty to twentyfive days employment per
month. Staff salaries were paid from retained earnings.

Reporting relationships All reporting relationships were with the

Thonugal head office of the SSGS. The following details the various
purposes for which reporting relationships existed.
(a) All purchases of raw material were made on the basis of quota-
tions gathered from three suppliers, by a committee formed by the
Thonugal office. Paint and Cold Rolled steel sheets, were purchased in
bulk, with postal quotations to avoid individual contact. Where quota-
tions were solicited in person, the Thonugal office, crosschecked with
the supplier on phone, to check veracity of the prices quoted. All
payments were made only by Demand Drafts and cheques, by the Thonugal
(b) Monthly production expense reports in money terms, were sent by
the steel unit to the Thonugal office. The items reported production
related expenses, broken up by heads -
Sheets and wires
Locks and screws
Electricty charges
Packing charges
Production wages
Production margin ( around 10% of total cost).
A monthly stock balance report included -
Number of days production unit worked
Opening stock, production, sales and closing stock for finished pro-
Target versus actual production in money terms cumulated for the year.
Stock reports for eight major items in money terms
A column was kept opeonended for special problems ( usually reported
problems included low sales, and material availability).
(c) A monthy trial balance was also sent to the Thonugal office.
(d) A copy of each sales invoice was also sent to the Thonugal office.

(No direct sales was undertaken. Only credit bills were issued on the
particular SSGS retail outlet).
(e) Cash receipts were sent to the Thonugal office for the amount
(f) Petty cash of Rs.2500/ wa sanctioned, which was reimbursed by the
Thonugal office, after particulars were sent.
(g) A one day monthly meeting, with all retail unit heads, production
managers, Mrs. Chandra and the PE (Kariapatti) was held for coordinat-
ing production activities with buyers requirements as reported by
The manager stated that he had to meet Mrs. Chandra atleast three
times a week, for cheques, follwing up material etc. The salaries
cheques were issued by the Thonugal office, only when the production
report, the stock report and the trial balance were submitted.
The SSGS Thonugal unit submitted to the Madras SSGS office, a
quarterly progress report, based on the monthly reports of the unit.


The steel unit was housed in a campus a little off the Kalakurichi
Virudunagar road. The campus of 100 feet by 60 feet dimension was
competely fenced. Some trees had been planted as a border plantation.
The layout of the campus was as under -

| East
| +-------------------------------------------------------+
| | +----------------------+--------+ |L |
| | | Main machine room | Semi | +--|
| | | + stock room |finished| |
| | | | | +-------|
| | |------+------------------------+ | Finish|
| | |Stores| Working shed . | ed |
| | |r.m. | (only roof) . | Stock |
Road | +------+......................... |-------|
to | |Office |
Virud| | |
nagar| +W+ +-------|
+-----------------------------------Gate ---+-----------+

Note : L = latrine, W = Watchman's shed, R.M. = Raw material

The semi finished stock room had a welding connection. The welding
was however done in the open in the working shed. Painting was done
both in the open working shed, and in the main machine room. ( It was
observed that painting and welding was being undertaken simultaneously
in the open working shed). Cutting and bending machines were installed
in the main machine room. Finished stock were kept both in the main
machine room and in the finished stock room.

Machinery The installed machines were as under

Bending machines- One corner bending

- One angle bending
- One bending machine for wardrobes.
One Sheet Cutting machine
One painting air compressor
One welding machine
One drilling machine
One hand grinding machine
One pipe bending table with vice.

The total value of these machines was estimated at Rs.175,000 in the

balance sheet.
Raw material The raw material shed kept the following -
Angles, sheets and bars ( for housing material) valued at Rs.18/kg.

20 gauge CR sheets valued at Rs.25/kg
One inch thick pipes valued at Rs.33/ metre.
Mica sheets valued at Rs.45/ square sheet.
Paint in cans, valued at Rs.120/ liter
Chair sets (handles, + frames) valued at Rs.250/ set
Locks, screws and hinges
The value of the raw material at any point in time appeared to range
around Rs.500,000 as per the balance sheet figures.

All material processing, irrespective of product followed the follow-
ing process flow.

Indent raw
material from ---->Cutting------> Bending ----> Painting --> Finished
stores goods

Stock accounting

Two raw material stock book are kept- one for sheets, angles and bars
and another for "other items"( paint, hinges, etc.)
Raw material is released as per JOB CARDS.( Production is on a "
batch" basis as per instructions from the Thonugal office, and as per
orders). The raw material required for each unit of production ( cot/
wardrobe/etc) is prefixed. The job card also contains
- the name of the contractor
- The tasks to be performed
- The starting and the closing date for the batch
- The wages paid
- The raw material returened to stores unused.
- The item of production, the quantity and the value.

The job card details are reentered into the Production register. The
final retail price as fixed by the SSGS also finds an entry. In this
register the various costs for electricity, wages, raw material ( as
per fixed heads like sheets, paint,etc) are calculated. The final
margin is arrived at be deducting the various costs from the retail
price fixed by the SSGS. A casual perusal of the register revealed
that while producing one wardrobe earned a 20% margin, producing three
wardrobes in one batch, earned a 26% margin.

After production, the finished product details are entered into the
Finished Stock register. Each item has a seperate page. The details of
the purchase order/ invoice number, the quantity of production, the
value, the sales quantity and the rate are entered.
Production cost breakup
An example of the details from the Production register, for a six and
half feet wardrobe with jewelbox and mirror frame.

Raw materials = Rs. 2316.25

Other material = Rs. 303.75
Paint = Rs. 255.70
Electricity = Rs. 50.00
Packing costs = Rs. 60.00
Wages = Rs. 346.50
Margin = Rs. 1137.00
TOTAL = Rs. 4470.00

The manager explained that the margin figure varied as per the cost of
raw material, with steel price ranging from Rs.25 to Rs.28/kg. ( The
quantam of raw material and the final price was prefixed by the Thonu-
gal HO).

The overall production cost breakup for the year 95-96 was as under -
Total Production value = Rs.913,000

Raw material = Rs. 512,000 ( mainly steel CR sheets)
Iron angle = Rs. 5,000
Iron pipe = Rs. 20,000
Locks = Rs. 1,000
Other expenses = Rs. 47,000
Paint = Rs. 37,000
Plywood = Rs. 5,000
Production wages = Rs. 74,000
TOTAL: = Rs. 703,000

Electricity = Rs. 9,000
Packing = Rs. 3,000
Production = Rs. 6,000
Interest = Rs. 14,000
Insurance = Rs. 9,000
Margin on Production = Rs. 170,000

TOTAL = Rs. 913,000

Production and sales

The following figures were furnished in monetary value for production

and sales. ( No individual product quantity wise figures are kept).


( In rupees)
94-95 ? 93,000
95-96 913,000 812,000
96-97 1164,000 1102,000
97 -98(9 month) 959,000 757,000

The manager stated that the following were the beneficiaries of the
steel unit -
- SSGS employees, who earned a salary because of the unit
- villagers who received quality products at a reasonable price.
- Production labour, who got an oppurtunity to exercise their skills
and earn an income

He stated that the SSGS sales branches found it very useful, as the
sales margins provided income- to pay salaries for salesstaff. Also
the profits of the steel unit cross subsidized the losses of the
spinning units.

The ownership of the land and buildings were vested with the Mudianoor
cluster committee ( a federation of village Grama Sabhas). Initially
Plan international funded the project, when it was run by the cluster
committee. After handing over of the unit to the SSGS, the concept of
of funding by retained earnings had replaced that of foreign funds.
The machinery belonged to the SSGS (which was a registered Trust, in
the Madras HO of Assefa, and had Khadi and Village Industries Commis-
sion (KVIC) certification).

NGO support

In terms of NGO support, from SSGS, the manager reported that

- Sales were taken care of through the retail units
- Cash was provided for purchases ( working capital?)
- A meeting was held once a year, with all SSGS staff in Tamil Nadu
- Accounting mistakes were pointed out during audit

From the ASSEFA Kariapatti project, the manager stated the support to

- Orders for housing material, for schools, community buildings,
housing committee beneficiaries, etc.
- Support from the Project Executive ( Mr. Rajarathinam) in terms of
administrative systems, product design, production and sales

Shri Perumalsamy, SSGS advisor at Thonugal, stated that there was no

support from Assefa. The SSGS support was the sales distribution
network and accounts auditing.

The problems listed by the manager were
(a) Sales - while the target fixed had been Rs,2,000,000 only half
could be acheived due to ow offtake.
(b) Labour - the private sector provided bonus and advances which
made labour sometimes unavailable.
(c) Raw material supply was sometimes delayed

The SSGS head, Mrs. Chandra stated that raw material could not be
termed a problem, as the production manager did not compute interest
carrying costs. Hence the SSGS deliberately delayed purchases to
reduce interest burden. In her opinion the major problems were
(a) An inability to supply material in the stipulated time
(b) improving the "finishing" of the products.

The SSGS advisor Shri Perumalsamy (who had retired after many years of
service in the Sarvodaya Sanghs) stated that labour was a problem - as
the skills of painting welding and cutting were mcuh in demand. He
stated that the manager needed to learn methods of manufacturing new
products. The labour had to be trained on painting, tinkering, fit-
The manager stated his major training need to be exposure to quality
producers to improve "finishing". Aslo quality control systems had to
be improved.

Mrs. Chandra concluding her assessment of the steel unit stated "Even
if we allocated an interest cost of 10% on the capital of Rs.1000,000,
a margin of Rs.40,000 remained, after deducting staff wages, salaries
and depreciation. Even allowing for a "market rent" of Rs.12,000, a
profit of Rs.28,000 is being made annually by the steel unit."


LOCATION: The Sarva Seva Gramudyog Samithi cattlefeed unit, lies some
12 kms. to the south east of Kariapatti town (which is the block
headquarter and is on the Madurai to Tuticorin State Highway. The unit
is located in P.Pudupatti village, which is on the Kallikudi to
Trichuli road, passing via Kariapatti. The campus containing around
ten cents of land, is located alongwith the Assefa cluster office. The
area is visibly a drought prone one, with straggly weeds and dry mud.
Around ten trees have been planted around the campus some six months

INCEPTION: The cattlefeed unit was started by the Dharmavaram cluster

committee, a federation of ten village Grama Sabahs, initiated with
Assefa's assistance. The unit was started to provide cattlefeed to the
five cattle farms kept by Assefa in the block. The unit was handed
over to the SSGS in February '96, within a month of in its inception,
as the cluster committee could not manage, the production - as also to
avail the excise and sales tax concessions available with KVIC regis-
tered units.

OBJECTIVES: Shri Bhaskaran, the manager of the unit, stated that it

had been initiated to mainly serve Assefa cattle farms. If cattlefeed
was purchased from the market, profits would be made by private trad-
ers. In this case the profits remained within.
Shri Perumalsamy, SSGS advisor stated the objective to be providing
employment to four people. He stated that the unit presented no man-
agement problem, as the raw material was available locally and the
market was a captive one. He specifically said that the cattlefeed
unit was not an SSGS idea - they had taken over the unit at the re-
quest of the cluster committee.


EXPENDITURE 1995-96 1996-97

(2 months) (unaudited)


Raw material 10 293
Cattlefeed 40 -
Packing material 3 2
Wages 5 20
Production cost 1 -
Margin on closing stock 8 3
Freightage 3 10
Sales commission 2 23
Salary - 21
Travelling 1 1
Stationery/others 1 1
Profits to b/s - 50

TOTAL 171 504


- Cattlefeed 80 468
- Packing material 1 -
Purchase commission 1 -
Closing stock 80 30

Price margins received - 8
Loss to b/s 9 -

TOTAL 171 504

( 1000s)
LIABILITIES 1995-96 1996-97
(2 months) (unaudited)

SSGS H.O 84 -
Margin on closing stock 8 3
Profit - 50

TOTAL 92 53
ASSETS 1995-96 1996-97

Loss as per P&L 9 -

Cash on hand 3 -
Furniture and fixtures - 10
Outstanding with SSGS - 13
Cattlefeed 78 2
Packing 2 -

TOTAL 92 92


The money accounting system could be depicted as under -

Money received from ------> Cash receipt-----> Money entered

SSGS(HO) as per indent given in cash book
Ledger <--|

The ledger had twelve account heads for expenses -

- Raw material purchase
- Cattlefeed purchase/ stock return
- Packing purchase
- Labour coolie
- Railway charges + freight
- Sales commission
- Salary to staff
- Conveyance
- Stationery
- Miscellaneous
- Post and Telegraphs

There were five account heads for income and receipts -

- Cattle sales to SSGS retail heads (all credit sales)
- Miscellaneous sales ( packing material,etc)
- Purchase commission
- Sales margin
- SSGS HO account

A monthly trial balance book was maintained for monthly reporting to

the Thonugal SSGS head office. This office in turn sent the report to
the SSGS main HO at Chennai.

The stock accounting flow chart could be depicted as under -

Purchase ----> Unload material----> Stock book----> Usage figure

order in godown entries recorded

There were nineteen stock heads in the stock register. The heads
relating to raw material was as under -

Kambu (maize)
Groundnut oilcake
Rice bran
Mineral Salt(two varieties)
Gingelly oilcake
Black gram dust

The stock heads relating to packing was under -

Polythene bags - 40 kg pack
- 20 kg pack
- 10 kg pack
- 45 kg pack

The remaining heads related to packed cattlefeed.

AUDIT - Audit was undertaken annually by a certified chartered ac-

countant sent by the Chennai office every March end. An inspection was
carried out quarterly by the SSGS Thonugal office.

COST MARGINS - The cost breakup for one batch of cattlefeed of 2500
kilos is given to get an understanding of the costs.

Raw material Rs.12,158

Wages paid Rs. 1,080
Freight Rs. 600
Packing Rs. 732
Delivery Rs. 310
Margins Rs. 1,239

TOTAL Rs.16,120 (Rs.6.44/kilo)


PRODUCT The cattlefeed unit produced powdered cattlefeed, as per the

nutrient formula suggested by Dr.V.Ramasami (Animal Husbandary advi-
sor) - a retired Government veterinary doctor. The product was avail-
able in five polyster sack packings - 5 kgs, 10 kgs, 20 kgs, 40 kgs,
and 50 kgs. Four fifth of all sales was with 50 kg packing. The market
trend in packing was however 40 kgs. The smaller packs had been creat-
ed apparently to meet the need of owners of one or two milch animals.
The nutrient mix was as per the standards set by the Tamil Nadu State
Government Center for Animal Husbandary Sciences (Chennai), which also
tested the product for certifying quality.
PRICING The following were the retail prices charged for the various
packs. The final retailer was allowed a 7% margin on the price.

50 kgs Rs.325/
45 kgs Rs.270/
40 kgs Rs.260/
20 kgs Rs.130/
10 kgs Rs. 65/
5 kgs Rs. 32.50

Pricing decisions were made by a committee consisting of Dr.Ramasamy,

the Programme Executive of Assefa Plan Kariapatti (Shri Rajarathinam),
the SSGS Thonugal HO head (Smt. Chandra) and the cattlefeed unit
manager. The committee met once a year to review pricing policy. The
manager stated an instance where the price had been hiked to Rs.7/ per
kilo which was later brought down to Rs.6.50/kilo due to market re-

PROMOTION The cattlefeed packs were sold under the brand name "SEVA
CATTLEFEED". This was advertised in the Tamil monthly newsletter of
Assefa Kariapatti "Seva madal" - which was circulated to all the 120
villages in the block. Both the cinema theaters in Kariapatti town
carried slides advertising the product. At the point of purchase,
usually SSGS retail outlets- a slate board was displayed indicating
availability of the product.

DISTRIBUTION All sales decisions were taken by the SSGS Thonugal

office. No direct sales were allowed from the cattlefeed unit. The
sales were mainly done through the SSGS retail outlets ( six in Karia-
patti block and around fifty in small towns in Tamil Nadu).


The competition for the packed cattlefeed ranged from loose cattlefeed
ingredients sold in grocery shops, for mixing by the individual farmer
( deoiled cake, husk, etc) - to " packaged products " by large corpo-
rate organizations, backed by media advertising. The manager stated
that he did not see competition to be a problem since most of the
sales were to a captive market - the Assefa dairy farms in Kariapatti
and milch animal owners belonging to Assefa village organizations.
Around a fifth of the total sales was done directly through the retail

Among the "packaged" products, the manager stated that SKM (from
Erode), Gem (from Andhra Pradesh), SKF (from Dindigul) and unbranded
packs from Virudunagar were the major players. He stated that "Godrej"
was a premium brand, which did not however sell in Kariapatti.

The competitor prices for powdered cattlefeed in gunnybag sacks, were

stated as under -
SKM (50 kgs) - Rs.300 (Rs.6/kg)
GEM (50 kgs) - Rs.300 (rs.6/kg)
Unbranded (50kgs) - Rs.275 (Rs.5.50/kg)
Only SKM sold "pelletized cattlefeed" which retailed at Rs.270 for a
50 kgs in gunny bag packing.


Shri Bhaskar, the unit manager also had the additional responsibility
of being a SSGS retail unit salesman, when the unit was not in produc-
tion. The unit directly employed two couples on daily wages. The men
were aged around thirty years, and women around twenty years. The men
had earlier experience of working in a flour mill. The men were paid
Rs.35/ day and the women Rs.20/day.

Processing 2500 kgs or raw material resulted in eight days employment

for both the men, and twelve days employment for both the women. In
the first ten months of the latest year, 212 male and 318 female days
of employment had been generated. This worked out to an average of
eleven days for each man, and sixteen days for each woman.

The unit manager had studied upto the 12th standard. He was in his
late twenties and was unmarried. He had been earlier a stores incharge
in the Kariapatti Plan Assefa office for seven years, earning a montly
salary of Rs.1750/.

Shri Bhaskar stated that he reported directly to Smt. Chandra at the
Thonugal HO of SSGS. He met her daily for feed related problems, like
purchase procedures, payment of wages and grinding charges, etc. A
monthly review meeting with the Programme Executive of Assefa Karia-
patti, Dr.Ramasamy, Smt. Chandra and Shri Bhaskar took place at the
feed unit itself. Once in two months a review meeting was held at the
Thonugal office to review production versus target figures. The SSGS

Chennai office, also coordinated an annual meeting for all retail
managers and production unit heads. Shri Bhaskar had attended a five
day camp on accounting last year, organized by the SSGS.

Officially the following reports were sent from the cattlefeed units
to the Thonugal office of the SSGS
a) Monthly Trial balance
b) Monthly stock balance
c) Monthly wages list
Only if these reports were sent were the salaries released.
d) Monthly grinding charges paid was also sent.


The cattlefeed unit being a mixing and grinding one, the crucial
function appeared to be purchases of raw material. As stated, the
cattlefeed was produced in four packagings, 40 kg, (80% of sales), 20
kgs,10kgs and 5 kgs. 50 kgs packs were also produced sometimes. The
raw materials used and the source was as under
Kambu (Bajra/Millet ) Kovilpatti/ Arupukottai
Deoiled cake (groundnut/ gingelly ) Madurai
Rice dust Arupukottai
Black gram dust Madurai
Mineral salt Virudhunagar
Jaggery Madurai
Salt Madurai
Polyster packing material Tirumangalam

The purchase procedure was stated as under ---

a) Indent to be sent to Thonugal SSGs office
b) SSGs office recommends asking for quotations
c) Purchase commitee formed (Manager, Smt.Chandra, one SSGs rep)
d) Three quotations directly asked from suppliers
e) Comparitive statement made
f) Smt.Chandra approves the supplier
g) SSGs Thonugal places the order
h) Unit manager takes stock from supplier directly
i) Unit manager unloads stock in godown
j) Unit manager reports compliance to Smt.Chandra.


The production unit was located in a 24 feet x36 feetx 12 feet

shed,which had a single phase current. The shed had been orignally
built for gem cutting unit. When gem cutting did not take off, the
shed has been converted as a cattlefeed unit. Excepting for
grinding,which was undertaken in a rice mill,opposite the campus all
other production activities took place within this shed. The unit
manager stated that production took place only after firm orders had been


The production process was as under -

a) Grinding all the material in a nearby rice mill.

b) Mixing of ingredients on the floor on gunny bag mats. Mixing is
done layer upon layer, in the following order -
1. Kambu
2. Deoiled groundnut cake
3. Rice bran
4. Black gram
5. Deoiled gingelly cake
6. Sugar
7. Mineral salt
8. Salt

The production process could be depicted as under -

Grinding -> Layering -> Mixing with ---->packing & --->stitching

Spade (8times) weighing

A tinplate was used for painting the following details on the polyster
---> Date of manufacturing
--> Price
---> Net weight

The polyster sacks were printed on one side with the SSGS emblem, and
production unit address. The other side had the date, price and

The following equipment was used in the mixing process.

a) Open cart ( 4 wheels) -> for taking grain/cake to grinding mill

b) 2 spades + 3 pans
c) Stitching machine
d) Weighing machine
e) Wooden floor frames for storage (to prevent dampness)

The manager stated that since the major process of grinding was done
outside, no major skill was needed for the mixing process.

Production costs

Production costing was done for each batch,2500 kilos. A batch costing
report of 26 January 1998, is reproduced below -

Quantity Rate / Kg. Value

Millet (32%) 800 Kgs. 4.60 - 4.20 1208 + 1641 =
Gnut cake (13%) 325 Kgs. 9.25 - 10.50 3006
Rice dust (20%) 500 Kgs. 1.70 - 2.00 850
Blackgram dust(24%) 500 Kgs. 2.80 - 3.10 636 + 1429 =
Gingely Cake (5%) 125 Kgs. 9.00 1125
Jaggery (5%) 125 Kgs. 10.30 - 14 1625
Mineral mix (1%) 25 Kgs. 25.50 638
TOTAL 100% 2500 kgs

The cost of packing came to Rs.11.80 per sack for 40 kilo packing.

The unit manager stated that no ratio changes could be made without
the prior approval of the veterinary consultant. He stated that in the
last year alone, three changes had been made. For instance, in June,
millet was substituted for ricegram dust, as the millet price rose.
This had resulted in lowering the milk output of cows. In August the
old ratios were again used - which however resulted in margins declin-
ing from 17% to 7%.

Production accounting was maintained per batch of 2500 kilos. The

accounting system could be depicted as under -

STOCK BOOK ----> PRODUCTION ----> BATCHWISE (with item rates,quantity

REGISTER and amounts)


The unit manager opined that the beneficiaries of the unit were -
- Four labourers who got employment
- SSGS who got profits
- Milch animal owners who got quality cattlefeed.

The building and the land was owned by the people's organization
cluster committee. The machines belonged to the SSGS.

The unit manager listed the following support received from the SSGS.
- Purchases
- Sales
- Audit and accounts, once a year
- Training,once a year.

Assefa Kariapatti project had taken the unit manager for an exposure
visit to the Dindigul SKF cattlefeed unit. He had also been taken to
Kerala to investigate raw material prices.


Shri Bhaskar stated that the following problems existed

a) Raw material - there were delays as sometimes purchases were made
from distant locations ( to take advantage of lower prices)
b) Labour - During the agricultural season, which existed for five
months in a year, labour availability was a problem.
c) Grinding - This was done at a private mill nearby. This was not an
"exclusive" unit for cattlefeed production alone. Due to "paddy mill-
ing" during the harvest, delays occured.
d) Promotion of sales remained a problem.

As one solution, Shri Bhaskar suggested that exposure visits be made

by him to other cattlefeed units, atleast twice a year. He did not see
any other formal training that could be of help.


LOCATION Chinnapuliyampatti village lay some 37 kilometres south of

Madurai, in Kariappati block( Aruppukottai taluk) of Virudunagar
district. It lay some four kilometres west of the Madurai Tutikodi
state highway, and was accessible by a kucha road.

INCEPTION The Chinnapuliampatti village has a well functioning women's

savings and credit group, under the aegis of a Mahilir Manram. It was
initiated around ten years ago, and has accumulated surplus of
Rs.130,000. The village was chosen as the first village to start khadi
spinning in Kariapatti on 25 Jan.1993- by the Assefa Plan Kariapatti
project. The initial objective in starting the unit was to provide
employment to the women members of the savings group. The unit was
handed over to the SSGS within four months - to avail of the marketing
facilities provided to khadi yarn and cloth. ( including rebates of
upto 40% of sales value). Initially the SSGS Thonugal office directly
supervised the activity. The supervision and accounts was handed over
to the Mahilir Manram from 1996. In the words of Shri Perumalsamy,
Khadi advisor to the Thonugal office, this was done to " increase the
sense of responsibility of the Madhar Sangham - to make them feel that
they are running the unit". Presently the Mahilir Manram formally
purchased the raw material (sliver, spares and bell Yarn) from the
SSGS and sold spun polyster yarn.

0BJECTIVES Shri Perumalsamy stated the following to be the objectives

of the spinning unit.
(a) To provide employment of women especially during the agricultural
lean season.
(b) To start a "Gandhian" activity in the village.




Opening Stock - 57 SALES

Carding tape 16
Yarn purchase from SSGS 40 Final tape 1
Final sliver 1
Roving - 2
Drawing - 1
Spinning- 29
Welfare fund - 3
Incentives - 3
Yarn prodn. - 3 41
(Rent, electricity,
stationery, t.a.,) 3
balance to b/s 9



SSGS HO 105 Furniture 1

Income from P&L 9 Spinner's advance 7
Closing stock 106



SSGS HO Kariapatti 108 Furniture 1
Depreciation 10 Charkas 106
Loss 11


Capital The village had donated the land for the unit. The shed had
been constructed using Assefa Plan funds. The SSGS had contributed
the machines (31 machines at around Rs.100,000 cost).

Accounting systems

The entire cash and stock accounting was done only at the Thonugal
head office. A day book, a ledger and a voucher file were kept by
the Thonugal accountant for this unit. The central godown maintained
stock books for slivers (patai) and hanks (chittams). The Mahilir
officially bought Pattais (slivers) at the rate of Rs.110/ kg. After
spinning into Chittams (hanks) the yarn was sold to the SSGS at the
rate of Rs.175/kg. The margin of Rs.65/ kg was used for paying wages
(at the rate of Rs.1.13 for each chittam, with 54 chittams being spun
from a kg.) and for the office expenses ( around Rs.4/kg). The final
cost of a chittam for the SSGS was Rs.3.56, of which Rs.2.00 was
material cost, and Rs.1.56 labour cost. Approximately 10,000 chittams
were spun each month, with the Madhar Sangam making an approximate
profit of Rs. 1000 to Rs.1500 monthly, according to Shri Perumalsamy.
The supervisor monthly salary came to around Rs.450/ and other fixed
costs were minimal.( for instance the electricity bill came to Rs.72
for two months).

The spinning unit supervisor, Smt. Vijaya kept only a "coolie"

(wages) book. This book had one folio for fifteen days production.
One side of the folio contained details relating to name of the
spinner, Slivers given, hanks spun, weight, waste, wage rate, and
amount to be disbursed.
The other side contained welfare fund and incentive payments,
deductions for welfare fund and advances, and the final amount
disbursed with the spinner's signature.

Smt. Vijaya physically lifted the sliver stock from the Thonugal
godown, with a village cyclist being hired by her for delivery. She
also physically transported the spun hanks to the godown, with a
cyclist being used for the physical transfer. She also disbursed the
cash wages to the spinners, after due entries in the "coolie" book.

MARKETING Being an "inhouse production unit" for the SSGS, the

question of marketing did not arise.

PEOPLE The unit supervisor, Mrs. Vijaya was a widow, 35 years of age,
with one son. She had finished her matriculation, and had previously
three years experience as a spinner in the unit. ShShe had undergone a
one month training on charka repair and maintenance from the SSGS,
before assuming this charge. SHe had been a unit supervisor for two

There were thirty women directly working in the spinning unit. All the
women were in the age group 20 to 35 years. Only 4 were married. The
unit six days a week, and was kept open from 7am to 4pm. The women
physically did the spinning in the center only.


Process The actual sequence of converting raw polyster/ cotton to

yarn was as under -

Cotton ----> carding tape ----> primary tape----> sliver --> yarn

Initially cotton was carded and sent by the SSGS. Two drawing machines
and two roving machines installed in the unit,were used for futher
processing before spinning on "AMBAR CHARKAS" ( a modified improved
technology). Since August 97, SSGS had being processing at the
Padiyoor Sarvodya Sangam, Coimbatore, to get "simplex slivers". Shri
Perumalsamy gave the following reasons for the changes.
(a) Quality of the yarn was less in the older method. Weavers
preferred the simplex slivered yarn. Also all other Sarvodaya weaving
units started using the "simplex" slivers. So the SSGS was also forced
to change accordingly.
(b) Processing was possible only with electric power. Disruption in
electricity in the village caused disruption in production.
(c) Wastages were high in the older method.
(d) It was easier to weave using "simplex" yarn.

Production unit The production unit was in a shed 20 feet by 40 feet,

with a sloped tiled roof of 15 feet height at the top. The unit had 8
windows and one door, but no electric lighting facilities. Another
small shed nearby had a table and chair for the supervisor, a stock
room and the unused drawing and roving machines.

The production unit had thirty spinning machines kept in three rows.
The machines were "Ambar charkas", hand operated using four gears.
Presently only "polyvastra" was spun (which consisted two parts
polyster and one part cotton). Six bobbins could be spun at the same
time, but presently only two were used. The wage rate wa 44paise for
ordinary yarn, and Rs.1.30 for twisted yarn. For the eleven months of
1997-98, 107 chittams of single yarn and 10,000 chittams of twisted
yarn had been spun.
Production accounting The basic unit of accounting was one "ghani"
which was a single thread extending to two hundred metres. Five ghanis
made a chittam or a hank. The cost of a chittam was Rs.3.56 of which
Rs.2.00 was the material cost and Rs.1.56 the wage rate. From one kilo
of pattai or sliver, 54 chittams could be produced. The purchase cost
of one kilo of pattai was Rs.110/ and the sales price of one kilo of
chitam was Rs.175/. The spinner actually received Rs.1.13 as the wage
rate per chittam. A perusal of the "coolie book" revealed that some
spinners had earned Rs.335 in fifteen days.

Production details To get an understanding of the comparitive

performance of Chinnapuliayampatti spinning unit with respect to other
spinning units in the Kariapatti block, the production report for
polyvastra yarn, for 1996-97 is reproduced below -

VILLAGE Charkas Charkas Count of Yarn Prodn Yarn wt. Yarn

issued running charka (Hanks) (kg) value(rs)

Chinna 29 28 56 129,260 2502 452,410

Tentia 29 16 56 26,680 509 93,380
Keelalig 29 17 70 43,305 597 149,306
M.Illup 29 20 70 36,621 532 125,577
Kaluvan 29 - - - - -

TOTAL 145 81 235,866 4739 820,403

VILLAGE Humandays Wages Welfare Incentives Total Average

fund wages wages/
Chinna 6182 121,504 12,150 11,638 145,293 23.59
Tentia 2229 25,079 2,507 2,414 30,001 13.40

Keela 2819 41,572 4,157 3,868 49,599 17.59
kulam 2818 35,165 3,516 3,267 41,948 16.60

TOTAL 13,748 223,322 23,331 21,189 266,842

Khadi yarn was also being spun at centers with 30 and 70 count cotton
yarn. The yarn production was 195,202 hanks from 105 charkas (from 195
charkas issued). The weight of the chitams was 5,717 kgs. valued at
Rs.761,692. 14,341 humandays employment were generated and the total
wages paid was Rs.224,808. ( of which Rs.17908 was for welfare fund,
and Rs.17968 was for as incentives).

It maybe noted that in terms of quality a high weight meant less

profits. For a 55 count yarn, one chittam needed to weigh 18 grams.
The optimal weight was 18-20 gms./chittam.
BENEFICIARIES Shri Perumalsamy stated that the beneficiaries of the
unit were the workers producing the slivers (pattials) the spinners
and weavers of the spun yarn. The spinners used the monthly Mahilir
Sangam (women's forum) meeting to discuss problems of the spinning
unit. All the spinners were members of the Mahilir Manrams. Smt.
Vijaya opined that the major problems that surfaced were allocation of
machines, and quality control of yarn.

Kumari Jaya, a spinner was interviewed to elicit her opinions. She was
nineteen years old, unmarried and had finished junior college (+2).
She stated that she had trained for two months before starting
production. She had earned around six hundred rupees monthly, apart
from the Diwali bonus of six hundred rupees cash and six hundred and
fifty rupees worth of cloth. She stated the major problem to be of
quality, which was sorted out in the meetings.

OWNERSHIP The land and buildings belonged to the Mahilir Manram. The
machines belonged to the SSGS.

SUPPORT SYSTEMS FROM SSGS The SSGS provided all the raw material,
training and ensured marketing of th produced yarn. It also kept both
the stock and cash accounts - which was expected in course to be
transferred to the unit.

TRAINING Smt. Vijaya the unit superviso stated that she did not feel
the need for any training, except perhaps in accounts (if the unit
accounts were transferred). The spinner interviewed Kum. Jaya also did
not feel the need for any training.


LOCATION The Valayankulam weaving unit is located on the Kalkurchi to

Virudunagar road, very near to the State Highway linking Madurai to
Tuticorin. The unit is 18 kilometres east of the district headquarter,

INCEPTION The unit was initially started by Assefa, with fund from
Plan International as an Income Generating Programme for weaving
turkey towels. In 1991 training was given to beneficiaries for weaving
turkey towels. Production commenced in 1992, and the unit ran for two
years. Due to a variety of reasons, Assefa decided to shut down the
unit - the major reasons being the doubling of the yarn rate, and
marketing problems due to competition from small scale industrial
units. Assefa decided to change the unit to a KVIC recognized one. The
Project Executive of Kariapatti decided to start a khadi weaving unit
for the following reasons -
(a) Traditional weavers living in the nearby Kalkurichi village
(b) Easy availability of the raw material ( khadi yarn), which was
spun in Assefa villages, under KVIC programmes.
(c) Existence of a market distribution network in the form of Sarva
Seva Gramudyg Samithi shops in Tamil Nadu ( which was a sister
organization of Assefa).


The Thonugal SSGS office ran two spinning units - one in Valaynkulam
with nine functional looms, and another under the control of
Kalakurichi SSGS shop with 17 looms. The Kalakurchi unit looms were
actually located at Karivalam Supplapuram village near Rajapalayam.
The looms belonged to the weavers and the only expense SSGS incurred
was a monthly salary of Rs.450 for the supervisor and Rs.300 for the
godown rent. SSGS gave yarn to these weavers and received cloth in
return ( at the ratio of 100 meter cloth for 530 hanks/chittams
given). The weaving wages were paid as per the KVIC wage chart.

The SSGS had also attempted to introduce weaving as an activity

in Periyapuliyampatti village. 25 looms were installed and training
given to women members of the Mahilir manram. According to Smt.
Chandra, the attempt was given up due to the competition for labour
from traditional agriculture, and the lack of traditional weavers in
the village.

OBJECTIVES Mrs. Chandra, the SSGS incharge of Kariapatti block stated

the following as the objectives of the weaving unit -
(a) Providing employment to local weavers
(b) A forward integration strategy to use the khadi yarn spun in
(c) Increase the sales revenue of SSGS retail units
(d) Creating a sense of solidarity and cooperation through "Khadi"
FINANCES (in Rs.1000)
(96-97 figures are unaudited)

BALANCE SHEET(as on 31 March)

LIABILITIES 94-95 95 -96 96 -97

SSGS HO Kariapatti 59 101 114

Net Income from P&L 2 - -
Price margin on stock - - 9
Depreciation reserve - 2 1

TOTAL 61 103 124

ASSETS 94-95 95 -96 96 -97

Building - 8 8
Furniture - 7 7
Electric Fittings - 7 7
Weaving advance - - 1
-Khadi yarn 44 41 }
-Poly yarn 17 25 } 92
- Packing material - - }
Cash on hand - 1
Net loss - 14 9

TOTAL: 61 103 124


EXPENSES 94-95 95-96 96-97

Opening Stock - 60 65

PURCHASES 80 162 80

Weaving wages 2 26 20
Incentives+welfare 1 4 4
Prodn expenses - 11 13
Interest+Insurance - 3 -

Yarn Dyeing - 6 -
Freight - 1 -
Sales/purchase commission 1 20 17
Price margin on stock - - 8
Other expenses - - 1
Depreciation - 2 1

Rent + Tax - 1 1
Stat,post,travel,etc - 1 2
Electricity - 13 7
Watchman wages - 5 9
Consolidated pay - - 2

TOTAL 85 316 228

Net income to B/S 2 - -


INCOME 94-95 95-96 96-97

- Poly yarn 14 7 -
- poly vastra 13 102 62
-Khadi yarn - 41 9
- Khadi vastra - 73 55
- Weaving accessories - 7 1
- Others - 8 -


TOTAL 87 303 219

Net loss to B/S - 13 9

TOTAL 87 316 228

Explaining the reason for the losses,for the last two years. Shri
Perumalsamy, stated the following -
(a) Around 200 teak trees, 50 neem and 30 savuku had been planted,

which required a watchman's salary be paid.
(b) Capital expenses had been undertaken on repair of main
gate(Rs.10,000), Electricity connection deposit(Rs.5000), Purchase of
new electric motor for water and its repairs(Rs.15000).
These expenses were not strictly under the purview of the weaving

Accounting systems -
The Valayankulam weaving unit maintained only stock accounts - with
the Thonugal head office maintaining cash books and ledgers. The stock
accounting took place through two books -
(a) The stock book, which detailed receipt of hanks (chittams) of
yarn, along with bill number, and value.
(b) The coolie book, which detailed issue of yarn to weavers. Details
pertaining to the variety, number and length of the cloth woven, the
wage rate, the weaving wages due, the deductions and the net wages
paid were recorded for individual weavers.

The accounting system could be represented as under


(Stock book) (Coolie book)


Product The major products marketed were khadi cotton and polyvastra
cloth. Khadi and polyvastra yarn and weaving accessories were also
recorded as sold, by the unit. The cloth woven from the unit, was
directly transferred to the Central godown of the SSGS at Thonugal.
Orders for grey cloth were directly sent by the SSGS. Sometimes, the
SSGS took the responsibility to print and dye the cloth for sale,
either through the SSGS retail outlets or through outside
The products produced at Valyankulam included the following--
10kal x 45" (towels)
10kal x 127" (dhotis)
6kal x 28" (towels)
7kal x 36" (shirt pieces)
(Note - one kal = 240 pieces or ends of yarn)

Price, Promotion, Distribution

Pricing was strictly not the concern of the Valayankulam unit. Its
responsibility had been clearly defined to produce cloth of given
dimensions, within stipulated timeframes - with the yarn and equipment
too being supplied by the SSGS. Similary distribution and promotional
issues were not the concern of the weaving unit.


The Valyankulam unit had three fulltime staff, with fixed salaries,
and presently nine weavers paid on an piece rate basis. The manager of
the unit, Kum.Muthulaxmi earned Rs.800/ month. She had finished her
matriculation and an one year course on Khadi. She was unmarried and
22 years old.
The watchman, Shri Velimuthu was 45 years of age, married and with
children. He was physically handicapped and earned Rs.25 per day as
daily wages. He was literate.
The Maistry, Shri Mohan was fifty years of age, married and with
children. He belonged to a traditional weaving community, and earned
Rs.35/ day as daily wages. He was literate.
The nine weavers along belonged to a traditional weaving community,
and were residing in a nearby village. They were in the age group 40-
60 years. 4 were men, and 5 were women. They could earn a minimum of
twenty rupees a day, from weaving. The manager stated that for
example, a 10kal x 45" cloth would be paid at the rate of
96paise/chittam. One piece would require 53 chittams, and would earn a
wage of Rs.50.88. A weaver could finish two pieces in three days.

Reporting The manager came to the Thonugal atleast once a week, which
facilitated reporting. Shri Perumalsamy was directly responsible for
all spinning and weaving activities under the Thonugal SSGS. He
stated that he expected a monthly trial balance, which was worked out
from the funds requested, expense vouchers, and indents of cash and
yarn, by the Thonugal accountant. This trial balance was consolidated
quarterly for submission to the Madras office of the SSGS. He also
stated that the Madras office expected a monthly stock and production
report. For this purpose, he directly took the data from the stock and
coolie book at the unit.

Production unit details - The production unit was located on a two
acre fenced campus off the Kalakurichi to Virudunagar road, very near
to Kalakurichi town (on the Madurai Tuticorin state highway). The unit
was located at the back of the campus - the front being planted with
200 teak, 50 neem and 30 savuku trees. The unit proper was housed in a
shed,with a sloping asbestos roof, with 30 feet width and 30 feet
height. The shed was divided into three rooms, each room having a
breadth of 60 feet. One of the rooms housed the weaving unit, and the
other was used as a godown. The third room was presently empty.

The production room was lighted with four tubelights - with enough
ventilation to allow working with natural sunlight. The only piece of
furniture in the room was a table and chair for the unit supervisor.
Each loom had a built in bench to facilitate sitting and weaving. The
unit had 11 frame looms, of which 4 were not in use. Apart from the
seven working looms in the campus, two looms had been installed in the
houses of the weavers.( making a total of nine working looms).The
looms were manually operated , mounted on a wooden frame, with all
parts made of wood. A manually operated sectional warping machine,
with gears, was used for wrapping the the thread around beams, before
weaving. Two hand operated bobbin machines (using cycle wheels) were
used for wrapping the yarn around spools ( instead of bobbins)
colloqially termed "dabbas".

Production process The production process followed the following

Yarn indented ------> Soaking in -----> Yarn spun --->Yarn spun

stockroom water for 72 around spool around beam
hours, boiling I
drying and I
starching(twice) I

Production over the years The following table details the production
and wages paid since inception, for both spinning units of Thonugal

YEAR CLOTH(sq.mtrs) VALUE(Rs.) Wages paid(Rs.) Looms

1994-95 Cotton - 8562 217,875 43,242 27

Polyster-16823 801,620 133,190

1996-97 Cotton - 7032 220,000 } 91,000 19

Polyster 8726 437,850 }

1997-98 Cotton - 10842 220,000 109,400 23

(9 months)Polyster 3964 437,850 51,000


Beneficiaries Both the SSGS head Smt.Chandra and the weaving advisor
Shri Perumalsamyopined that the beneficiaries of this activity were

the weavers. Shri perumalsamy also stated that potential existed to
increase employment oppurtunities for weavers - however the younger
generation did not appear to be too keen to take up this activity.

Ownership The Building and the land was registered in the name of the
Assefa Head Office in Chennai. The looms belonged to the SSGS. The
ownership of the trees had yet to be settled.

NGO support The SSGS provided the looms, the yarn, for many weavers
the physical space and the market for the spun cloth. The weavers
tasks presently related to only weaving the cloth according to
specifications set by the SSGS and collecting weaving wages in return.

PROBLEMS FACED Shri Perumalsamy stated that the weaving unit did not
face major problems. The only problem in his opinion was the
unwillingness of traditional weavers to continue this trade. He stated
that training other communities was not a solution.

(Community enterprise supported by Arogyaham - Aundipatti).


Arogya Aham indentified a village named Bodidasanpatti which is ten

kilometres away from Aundipatti to improve the weaker sections' socio
economic status through women self help groups.(SHG)


The SHG started two years ago (1995) with twelve members subscribing
ten rupees each. The people below the poverty line were identified to
start community enterprises. Among twelve SHG members, five were
selected for community enterprises and Arogya Aham identified
coirmaking unit for these people.


The beneficiaries are married, belong to lower socio economic status,

with the age group between thirty and thirty five years. Only one
beneficiary studied upto the sixth standard and the others are
illiterate. None of them had previous work experience.


After the selection process, these five members had undergone a three
months training on coir making which was arranged by Arogya Aham.
Exposure visits werw arranged for these beneficiaries to gain more
knowledge/input, to provide psychological support, trough motivation
and building self confidence.


The production of coir started one year ago in the village itself.The
land used for production of coir belongs to one of the beneficiaries.
Rent is not paid to use this place. The cost of the shed has been met
by Arogya Aham.


Raw material is being purchased from Devadanapatty for which tey are
spending Rs.150/ for a bale consisting of thirty kilos. Purchases of
fifteen bales is made at a time. Purchases are made either once or
twice a month. The transportation cost for purchasing the raw material
and marketing the product is Rs.500/. The raw material which is being
purchased now is poor in quality because of its less cost. Due to this
the wastage is high.

Two women are employed by each beneficiary and they are given Rs.15/
as wages per day. The hours utilized for production is eight hours,
including an one hour lunch break, which is not properly monitored.
The employees belong to the same village, and they were given
training in the initial stage.


For each bale of thirty five kilos, nine kilos becomes waste. The
remaining twentysix kilos are used for production. This is used for
manufacturing two hundred bundles.


The produced coir is marketed at Aundipatti in a wholesale shop for

Rs.120/ per bundle of eleven kilos. Retail marketing is also made at
the same price. Marketing is done only after discussions of the

committee consisting of the President, the Secretary, and the
Treasurer. The rule for marketing is that any two beneficiaries should
for physically marketing the product. Initially there were marketing
problems. But now marketing has become simple, and there is adequate
market for what they are producing.


There is only one unit working on coirmaking - which quality is higher

than this unit. The employees in this unit were all men, and the wages
paid are Rs40/ per day. This unit also produces various varieties.


Arogya Aham staff is helping them in accounting an monitoring bill

books and ledgers. The profit and loss account for May 1997, is given
as under -



Panchavarnam 35 2 Rs.15/ AroAham Self

Thavamani 30 2 Rs.15/ AroAham Self

Guruvammal 32 2 Rs.15/ AroAham self

Palaniammal 36 2 Rs.15/ AroAham self


Arogya Aham invested Rs.10,000 for buying five machines. The cluster
has provided a loan of Rs.3,700 as working capital for five people.
Repayment of the loans is Rs.190/ per month. Payment for machinery has
yet to start.


The group meets twice a month for taking decisions on purchase of raw
material, assinging people to go to the market, and keeping accounts.
The minutes of the meeting is also maintained by the group.


Profit is shared by the beneficiaries according to their monthly

investment. It varies from month to month. This variation is due to
lack of working capital.


There is no advertising for the products.


1) Due to inadequate training, they are manufacturing only two types

of coir which has marketability only in the local market.

2) Since there is no followup training, there is poor quality.

3) Since there is a lack of working capital, cheap raw material is

purchased, which results in more wastages.

4) Though all the units are under one roof, there is no cooperation
between the women in production.

5) There is no systematic planning for the following -

a) Purchase of raw material

b) Human(woman?) hours
c) Monitoring
d) Quality of the products
e) Working capital

6) There is some problem in motivation of the employees.




Assefa (Association for Sarva Seva Farms) is a Sarvodyan movement

working in the country since 1968. Assefa with funds from Plan
International started a project at Kariayapatti in 1986. Plan
International provides funds to help villages attain self re-
liance. ASSEFA-PLAN project basically works at Kariapatti with the
following objectives -

01. Organizing savings and credit groups

02. Educating the children and organizing health programmes.
03. Facilitating economic development through human resource

One of its attempts to improve the income of the community is the

Seva Vaniga Maiyam. Seva Vaniga Maiyam is an enterprise incepted
during the year 1994.


Seva Vaniga Maiyam is owned by the Kariapatti Central Educational

Committee (KCEC). Representatives from the village community and
representatives from Assefa Kariapatti teachers constitute the
committee. Seva Vaniga Maiyam is involved photocopying, typing and
selling stationery. The business was initiated with the following

01. Generating employment.

02. Easy access to stationery for the programmes of ASSEFA.
03. Service to the public.


a. Stationery (Pencil, eraser, Pen, Notebooks, etc.)

b. Photocopying
c. Typing

The need of the public, prompted the promoters to decide on the

above products.


Pricing is based on the prevailing trends.


Advertisements in souvenir has been the only tool of promotion of

the trade. This souvenir is for inhouse circulation, published
after ten years. The unit is located on the main road of
Kariapatti town, near the commercial center/bus stand.

Assefa is the major consumer of stationery and services. These

sales which account for 70% , is mostly done on credit.

Per day sales of photocopying/typing is approximately Rs.300/-.

The sales for the year 96-97 was Rs.2,75,000 - and gross profit
was Rs.90,000.


There are 3 photocopying/typing centres in that vicinity.


Two women staff have been employed of which one has completed
standard XII, and has half an year's experience in a Government
Office (temporary capacity). The other, has completed Standard X
and had been working as typist in a Government Ofice (temporary
capacity). The former who has joined a couple of years ago is
paid Rs.600/-. The salary for the latter who joined a month ago is
yet to be fixed.

KCEC decides the salary for the staff and pays it. The staff
reports to the office every week and the discussion regarding the
operation of the Vaniga Maiyam is taken by KCEC. The staff are
also invited to attend the KCEC meeting.

Beneficiaries (Planned & decided by KCEC)

a. Promoting agency, Government Offices and public are the

beneficiaries (in that order) of the services.
b. KCEC promoted educational institutions are the beneficiaries
of the profits.


KCEC is the legal owner of the business. The committee constitute

50% of Assefa teachers' representatives and and 50% of the
community. Investment and working capital till date is provided
by Assefa. KCEC also makes all the major decisions.

Audit and accounts

The balance sheet and Income/Expenditure statement is being done

every financial year by a qualified chartered accountant. This
means that the unit satisfies all the requirements for auditing.

Promoting agency's support:

* Capital Investment * Accounts Training

* Working Capital * Guidance and Psychological support


The Seva Canteen at Thonugal, located 40 kms south of Madurai in

Kariapatti Block, Aruppukottai district was started in the year
1993. The canteen was initially started with the objective of
catering to the food needs of Mandram leaders, workers and
facilitators( of the Assefa Plan Kariapatti programme) who conduct
meetings every month. The village of Thonugal was chosen for
setting up the canteen as they wanted a quiet place away from the
busy Kariapatti town - as also its location on the State Hoghway,
allowing easy accessability. In the beginning the unit was
started mainly for the workers which was later extended to the
local people also.

Initially funds were mobilised through the ASSEFA Plan free of

cost. The land for the building was procured at a cost of Rs.450
/ cent. The total investment including the land, building,
furniture and utensils etc. amounts to Rs.1.5 lakhs.
Members from thirteen villages from the cluster committee which
maintains the canteen now. The cluster committee is headed by a
Chairman, , Secretary and Treasurer. All the income and
expenditure will be monitored regularly by the office bearers.

The people from the village themselves work as the master

assistant cook and as Cashier in the canteen. In the beginning
the canteen was running on a loss but slowly business started
improving. As the canteen is located on the Kariyapatti -
Tuticorin highway road it is very beneficial to all the truck
drivers and passenger who pass by. The provisions for the canteen
are brought from Sarva Seva Gramudyog Samithi shop, which has a
wholesale outlet at Thonugal, which is also an unit of ASSEFA.
The canteen was getting a profit of 10%.

At present their business is quite dull and the reason is

attributed for the detoriation in business and the apathy of the
staff. Plans are underway to share a certain percent of the
profit with the staff and reduce the salary with idea of
increasing the volume of business. Measures are also taken to
evolve a strict system of monitoring when purchasing of provisions
are done. Profit from the canteen is deposited in a Bank as fixed
deposits. It is also planned to build an old age home in the near
future, from profits.

In the beginning tiffin and meals were served, but now it is

limited to just tiffin. The menu includes Idli, Dosa, Vadai, curd
rice and puliodharai. Curd rice and puliodharai is charged at
Rs.5/-. The staff feel that the prices are cheaper when compared
to other hotels at Kariyapatti. The prices for the food items are
fixed by the members of the cluster committee. Any change in the
menu is also decided by the organiser, master cook and office
incharge. Tokens are issued to customers for food.

In the inception slide - stills were used in the Cinema theatres.

But now the canteen is quite popular among the truck drivers who
travel from Madurai - Tuticorin route. Now only a display board
is used for advertisement. Soon a competetor is planning to set up
a catering unit opposite to the Seva Canteen. The total income
for year is Rs.4,00,000/- and the monthly expenditure is
Rs.30,000/- . There are five staff working at the canteen (4 + 1
accountant). The master has studied upto fifth standard, cashier
10th standard and the lady accountant is a graduate. Only two of
the staff are married whose family are settled in the nearby
village. The master cook earns Rs.70/- per day apart from free
food and maintenance. The other staff get Rs.35/- and the
Accountant paid Rs.900/- per month. The cook and the assistant
cook work for nine hours a day. The canteen remains closed on


The Seva canteen gets huge orders when there is a health day
meeting, children's function, village level meetings, school
functions, government functions etc. It's strategic position on
the highway also attracts truck drivers and bus passengers.

The canteen does not belong to any individual or group.
The cluster commitee of Chinnapuliampatti has an over all control
over the matters concerning the canteen. Whenever there is a
crisis ASSEFA comes to their rescue.

Books of Accounts:

The different types of books of accounts maintained by

the canteen unit are --
1. Cash Book
2. Bill Book
3. Cash Book
4. Ledger
5. Receipt Book
6. Credit Bill
7. Stock Register
8. Token

Once a month an auditor verifies the accounts and the stock is verified once in
three months.

Problems in improving the business:

a) Lack of commitment among the staff.
b) Less involvement from all the members of the cluster comittee.
c) There is no variety in the food that is served.
d) Non supply of meat and fish (non-vegetarian) is one of the main
reason for a slack in business.(ASSEFA's association with Vinoba
prevents them from using non-vegetarian ).


The Seva nursery was started in 1993 by ASSEFA at Kariapatti following the
Goverment Social Forestry Scheme in which trees were planted to enhance
rainfall. The resources for this scheme (i.e.)saplings were to be acquired
from a nursery and hence Seva Nursery was started to supply the saplings for
this scheme. The nursery was started with a capital of Rs 1 lakh from the
Kariapatti ASEFA plan.The rest of the financial contribution came from
the community.The capital was channelised into constructing a bore well for
water facilty, purchasing land to institute the nursery and in purchasing

PROFITS: A 10% profit is achieved. A part of the profit is used

for the Old Age Home Scheme that is underway.The rest of the
profit is used as salary for the personnelwho are seven in number.
Some proportion of the profit is also rotated as working capital.

All kinds of saplings -fruit trees, native varieties ,crotons, flowering
plants and indoor plants are sold here. The varieties are decieded upon by the
popular demand.
Price: The price of the saplings are based on the variety
of the plant. The common trees like neem and tamarind are sold for
just Rs.3 and Rs. 5 respectively and coconut saplings are sold at
a cost of Rs.20.The saplings sre sold sold at costs less than the
government rates.
Promotion: The services of the nursery are advertised in the
newspaper and through partipation in exhibitions.Quality test for
the saplings and the services of an agricultural consultant
ensures quality products.
Sales: An average of 1 1/2 lakhs of saplings are sold every
year. The nursery has recorded an annual sales upto Rs4 1/2 lakhs.
Competition: There is no other nursery in the vicinity which
rules out any competition.The saplings are marketed as far as

RELATING TO MANPOWER: Who are 7 in number - a Co-ordinator, an

Accountant. 4 Labourers and a Watchman.
Packing charges at the cost of Rs. 60 per thousand bags, are also paid as
wages. All the staff excepting the coordinator are from the neigbouring
villages. They are self reliant in nursery propogation techniques, coming
from traditionally agricultural families.

For the production of the saplings the raw materials required are:
1. The saplings are propagated at the nursery itself with seeds or cuttings.
Howwever if the requirement is high then saplings are purchased from other
2. 300 kgs. of plastic sapling bags per annum at the cost of Rs. 88 per
kg..The bags are bought from societies which produce them in small scale

3. Sand and humus.

4. Packing charges the at the cost of Rs. 60 per 1000 bags.

5. Electricity.


The benefeciaries are the villagers and the nursery is owned by the cluster



A study of the genesis of enterprises from the case studies

available can be useful in validating the CEDP model (presented
in chapter two). The model states that community enterprises
should start with the community - their resources and/or skills
should form the basis of a community enterprise, and not the
market and the consumer. The genesis of the enterpises studied
can be classified as under -


Deoiled cake and husk for Seva Cattlefeed
Silk cotton trees for pillows for Seva Nilayam
Palm trees for palm candy for PWDS (also related to skill)
Prosipis trees for charcoal for CCD


Weaving skills for Valayankulam weaving unit
Blacksmithy skills for Seva Steel furniture unit
Tailoring skills for readymade garments in Seva Nilayam
Agarbathi rolling skills for Seva bathi unit.
Herb collection, for herbal unit of Arogyagam.
Cooking skills with Seva Canteen.
Nursery propogation skills with Seva Nursery.
Palm tree neera collection for PWDS palm candy unit.


Spinning unit in Chinnapuliampatti village of Assefa.
Milk marketing in Seva Nilayam IFAD groups.
Coir rope weaving in Bodidasanpatti village of Arogyagam.
Seva Vaniga Maiayam for Kariappati Central Education Committee


Assefa T.Kallupatti industrial units.
Poultry unit of Arogyamgam.

From the above we can perhaps infer, that in most cases reviewed
the inception has either been
* a strong village based women's savings and credit group
* availability of raw material within the community(usually
* skill availability within the community.

There is strong evidence, that going outside this framework can

result in failures.
* The Tamil Nadu State Women Development Corporation sponsered
many artificial gem cutting units,across the state, as an income
generation programme for poor rural women. Almost all these units
seem to have failed, as neither the skill nor the raw material
was within the community. (The Seva cattlefeed unit is located in
a shed initially meant for gem cutting)
* The case of Periapuliampatti village is mentioned, in the
weaving case study - where a women's group though given intensive
training and free looms, failed. (Weaving units appear to survive
only amongst communities with traditional weaving skills, in the
case of manual weaving in village contexts?)

* Poultry (in the sense of largescale industrialized sheds using

feed) of Arogyaham appears to have failed, as the management
skills related to breakeven capacity did not exist within the
women's groups. Incidentally many big name NGOs across India have
attempted poultry units, with spectacular failures - which could
be again related to the lack of skill to manage industrialed
poultries, within village communities.

Notable successes,using survival as a financially self reliant
unit as a criterion, were the Seva agarbathi unit and Arogyaham
herbal unit. Both appeared linked to skills available
traditionally within the community.

The Assefa T.Kallupatti experience is an exception. The model

used was that of modern industrial small scale units, backed by
liberal funding from Plan International, and world class adminis-
trative expertise of Shri Keshub Sen. This sort of access to
funds and expertise, are charecteristic of highly industrialized
spatially concentrated units (small scale industrial estates
sponsored by the Government) or of large commercial
organizations. The relevance of this experience to the vast
majority of village contexts in the subcontinental context ,
needs to be examined. Many rural NGOs and women savings and
credit groups live in a context of spatial dispersion of units,
and low availability of funds, expertise and infrastructure.

We can hence perhaps infer that for most of the case studies, the
CEDP model has been validated as far as initiation of the unit is


It might make sense here, to distinguish between SSGS case stud-

ies and non SSGS cases studies. The Sarva Seva Garmudyog Samithi
was a "support service" organization, which catered only to
income generating enterprises in Assefa. Its recognition by the
Khadi and Village Industries Commission (KVIC) gave it access to
funds, and technology. It was also staffed by many ex employees
of KVIC and affiliated units. The following table attempts to
list the precise "support" provided by SSGS to the enterprises.


Agarbathi unit Sarva Seva brand name, annual audit

Steel furniture Purchases, production plan, initial

capital, marketing, audit.

Cattlefeed Purchases, working capital, production

ratios, markets, audit.

Weaving Yarn, weaving specifications, machinery

space,marketing(buy back) cash accounts

Spinning Slivers, accounting, machinery, quality

control, marketing(buy back)

Within the SSGS units, one could see a continium- from complete
self reliance in capital, administration and marketing, to one
where everything except physical production was dependent on the
SSGS. The agarbathi unit was completely self sufficient, and
could perhaps survive even without SSGS support. The only contri-
bution of the SSGS had been an initial working capital grant, and
the "Sarva Seva" brand name. The bathi unit had accumulated
sufficient financial resources now to pay off this grant if the
need arose.
In the case of the steel unit, the SSGS apart from the initial
capital and machinery, assisted in purchases, production plans,
and marketing. While the steel unit could perhaps be financially
and administratively self reliant, its survival appeared to be
presently linked to the marketing distribution network of the
In the case of the cattlefeed unit, SSGS ensured purchases, set

the raw material ratios, provided working capital, and ensured
marketing. However there was a potential for financial and admin-
istrative self reliance, with reliable market support.
In the case of spinning and weaving units, the status was almost
that of "captive production units". The SSGS provided the raw
material, gave the specifications, and bought back the output.
While the weaving unit was atleast self reliant in accounting,
the spinning unit presently had only the administrative capabili-
ty, of supervising the physical production process.

The following table details the support services provided to

other non- SSGS organizations.



Assefa Vaniga Maiyam Initial and working capital, market,

(Stationery) accounts.

Assefa Seva Canteen Initial funds, space, raw material,

partial marketing, audit.

Assefa Seva Nursery Initial capital, audit, space.

CCD Charcoal Working capital

Arogyaham Herbs Working capital

Arogyaham Coir Training, shed, accounts, machinery,

Working capital.

Arogyaham Milk Marketing, accounting, loans for cows.

PWDS Palm candy Community organization, quality control,

marketing, finance.

A similar continium, as in the case of SSGS supported enterprises

also appeared to exist in the other NGOs supported enterprises.
At one extreme, the community appeared to be completely self
reliant, with the NGO providing only working capital at what
appeared to be market rates of interest. At the other extreme,
the survival of the enterprise, appeared to depend on an equal
division of responsibilities between the NGO and the community.

Thus, in the cases of Arogyagam herbal collection group and the

CCD charcoal, the support was only working capital. The Seva
Nursery of Assefa also appeared to be more or less independent -
with Assefa providing only the space and an annual audit.
Assefa's Vaniga Maiyam (stationery), and Arogyaham's milk ap-
peared to be partially supported, with the assistance being
capital, accounts maintenance and marketing.
The third category, of what appeared to be an equal partnership (
in terms of division of responsibilities) between the NGO and the
community could be discerned in Arogyaham's coir unit, PWDS palm
candy unit and Assefa Seva Canteen. For the coir unit, Arogyaham
looked after everything apart from the raw material procurement,
physical production and marketing. In Palm candy, it appeared
that the community handled procurement of neera, production of
palm candy and accounting, leaving everything else to the PWDS.
In Assefa Seva Canteen, the canteen handled physical production
of food, accounting, and took care of most of its marketing.
Other activities were the responsibility of Assefa.

An inventory of the support services, which were provided by the

support institution/NGO appeared to be as under -
CAPITAL - for machinery, sheds, space and working capital.

TECHNOLOGY TRAINING - for updating old skills (palm candy) and
for new low technology enterprises like coir and spinning.
RAW MATERIAL PROVISION - which sometimes appeared to be also
linked to "buy back arrangements" for marketing.
QUALITY CONTROL - Of the final products, to ensure market accept-
ADMINISTRATION - Usually in the form of wages for the manager.
(which cost could be taken over by the unit itself in course of
ACCOUNTING - Either accounts training, or physical keeping of
stock and financial accounts.
MARKETING - Either buying the entire produce, or providing access
and/or linkages to markets, or providing partial marketing sup-


From the above we could perhaps infer that at the minimum, con-
trol/ supervision over the physical production process, was
necessary, for a unit to be described as a 'community enter-
prise'. In many cases the NGO had initiated the activity and had
provided technology training, the space, necessary machinery,
purchased the raw material, bought back the output, and kept the
accounts. The community enterprise's evolution to complete self
reliance, appeared to start with start with control over the
physical production. The community enterprise's financial ability
to "pay back" the inital contributions and then meet the adminis-
trative expenses appeared to be second phase in evolution. The
progress continued to being able to handle all the raw material
and marketing linkages. Usually at this stage, the NGO support
was restricted to keeping accounts and providing working capital.
Accounting capability, first physical and then stock accounting -
appeared to mark the next phase. Being to able to "pay" for the
space (in terms of rent), and for working capital at market
rates, marked another important evolution.

Final self reliance, to qualify as a functional community enter-

prise appeared to mean the ability to survive over time and at a
fixed location, with the same configuration of skills and re-
sources- without even this financial support.

(There could also be another frontier in this evolution, when the

community enterprise can also survive without the "brand name" of
the supporting NGO!)


From the above data we could postulate various "sorts" of rela-

tionships between communities working on enterprises - and the
NGOs facilitating the process. The relationship could be depict-
ed as under -
+-------------+ +------------+ +--------------+
| COMMUNITY | <->| COMMUNITY | <-> | NGO |
| | | ENTERPRISE | | |
+-------------+ +------------+ +--------------+

(A) NGO as owner and beneficiaries as labour like the Assefa

T.Kallupatti "industrial estate" experience. (using relatively
high technology and complex marketing arrangements)

(B) NGO and community as partners - with the NGO providing either
all or some of the following inputs - capital, machinery, train-
ing, space, accounts keeping, raw material and marketing ( as
was the case of most of enterprises studied)

(C) NGO being a passive facilitator, supplying working capital

(CCD's charcoal and Arogyaham's herbs), or space(Seva Nursery).

(D) Complete financial, and administrative autonomy from the sup-
port NGO - as was the case with the Bathi unit.

The relationship appeared to be determined by the following

factors -
a. The psychological disposition of the NGO manager and that of
the community leaders. (Participative styles by the NGO and the
community would probably lead towards autonomy)
b. The choice of product, technology and market. (complex produc-
tion technologies using sophisticated design for external mar-
kets, would probably give NGOs greater control)
c. The choice of skill and resource for production (local skills
and local resources would probably give communities greater

It could perhaps also be surmised, (with a high degree of conjec-

ture) that where the production and marketing of the "product"
depended on the "brand name" of the support organization (as in
the case of the SSGS) ownership or powers to influence tilted
towards the support organization. Where the units were self
reliant in transacting with the external environment (crucialy
for finance, technology and marketing), ownership in terms of
control and decision making power tilted towards the community.
This was the case clearly with the coir and herbal units of
Arogyagam and charcoal of CCD.


There could be some room for confusion between the terms bene-
ficiaries ( from the social work perspective), users ( technolog-
ical perspective) and clients/ consumers (economics/business
theory perspective).
To dispel this confusion the "unit of analysis" has to be de-
fined. For this study the analytical unit has been the "enter-
prise" run or atleast initiated by an support organization/NGO.
If the word "CONSUMER" implies the purchase of a commodity or a
service for a price, then the term is the same as defined for
conventional enterprises - the person in the market who pays a
price in purchasing the output of the enterprise. This also
implies that atleast for those transactions relating to the
market, "conventional marketing theories" appear to hold true.

If the word "BENEFICIARY" means all those who stand to gain from
the enterprise, the list appears to be wide. Apart from those
directly employed by the unit, the NGO staff who get paid for the
support services, the salespeople salaries paid by sales commis-
sions, and even suppliers of raw material need to be included in
the list of beneficiaries. This implies that beneficiaries should
not be narrowly defined to be only those whose salaries are
directly paid by the enterprise. For instance in the case of
smaller NGOs it is perhaps feasible for the entire administrative
and infrastructural costs to be met by profits made by community
enterprises it has supported. Perhaps there is merit in discard-
ing this term for a better word.

The word "USER" in the technological sense, means people who

directly physically access the services provided. If it means
user of the final product, this term is no different from that of
the consumer in conventional economic theory. If it means in
terms of using the production systems for some gain, say employ-
ment wages, then the people directly employed by the community
enterprise would be included, as they gain their salaries/ wages
from this association.


In none of the enterprises studied was there a clear legal struc-
ture to define "ownership". In the case of the SSGS supported
enterprises, one could generally say that these were owned by the
SSGS - as they depended on the SSGS brand name, if not machinery,
marketing distribution systems and administrative expertise.
Important variations appeared to exist in terms of ownership of
the physical infrastructure (land and buildings) and of people (
the power to hire and fire the administrative staff).

In the case of the non SSGS enterprises of Assefa,(Seva canteen,

Seva Nursery and Vaniga Maiyam) ownership was "nebulously" vested
with "people/community organizations". (cluster committees,
central education committee and the like). Practical powers to
disburse profits, hire and fire administrators, change the pro-
duct mix, appeared to rest on the relative "bargaining powers" of
the stakeholders at that point in time (stakeholders here being
the owning community, the employees of the enterprise and
In the T.Kallupatti Assefa enterprises, it appeared that Assefa
was in full control as the "owner" as in conventional enterprises
(which however is still a matter of conjecture without adequate

In the case of the other NGOs, Seva Nilayam, Arogyagam, PWDS, and
CCD, "ownership" did not even figure as an "issue". The NGOs
appeared to have confined their major tasks to be providing
initial capital, some lowtech technology training, and in some
cases market access. Ownership by default could perhaps be rest-
ing with the village group. ( which inference is a matter of
conjecture, subject to verification with field data).


If an inventory of problems stated is made, from the case stud-

ies, marketing appeared to be the most prominent. The steel
furniture unit termed it as "finishing" , bathi as sales collec-
tion, cattlefeed as sales promotion, milk marketing as sales
realization, Assefa T.Kallupati as competing with the prices set
by the "underground" economy, and Seva canteen as competing with
"non vegetarian food."

Technology appeared to come next as the significant problem. This

was stated as access to machine moulding (steel furniture),
perfume compounding (agarbathi) grinding technology (cattlefeed)
and controlling wastages (coir).

Availability of skilled labour appeared to be third in priority.

Steel furniture, cattlefeed,and weaving units all reported this
to be a problem. ( which from the viewpoint of the "beneficiar-
ies" could be termed an oppurtunity to increase their bargaining

Accounting appeared to be fourth in priority. Milk marketing and

bathi units mentioned it as a problem. Where the accounting was
being done on behalf of the unit by the support organization,
this would become an issue, only if administrative selfreliance
is perceived as one of the objectives.

Interesting only the charcoal unit of the CCD mentioned "capital"

to be a problem. It either implied that capital was taken as a
"free resource", or that fund constraints had never been an

Seva Canteen was the only unit to mention "management" as a

problem, in terms of low commitment of staff, and lack of in-
volvement of the cluster committee.

Social issues appeared to have been neglected as potential
"problem areas" - the exception being the PWDS palm candy units,
which mentioned lack of schooling to the children of the palmyrah


From an account of the problems it appears that no "capsule" or

"module" or "programme" can be developed for community enterprise
promotion. (which view was also evident in the conceptualizing
seminar of June 13 -14). The areas where training can be stan-
dardized atleast for the support organization/NGO staff, and
community enterprise managers could be

- ACCOUNTING - both physical stock and cash, and related concepts

of inventory contro, working capital management, etc.
- MARKETING - in terms of exposure to basic concepts of product,
price, promotion, distribution and environmental analysis.
theory - in terms of social behaviour of profit orientation ,
meeting consumer needs, etc.
- PUBLIC POLICY - Many of the units survive on subsidized capi-
tal and protected markets - which are decisions of public policy.
An orientation about public policy processes would enable an
appreciation of the issues involved. (even if influencing it is
not on the agenda).


The June 13-14 seminar had mentioned certain organizational

values as conducive to the development of community enterprises.
The case studies seemed to affirm the following values -

- OBJECTIVE of sustainable livelihood creation, rather than

profit maximization. Obviously the capital and managerial capa-
bilites of the support organizations/NGOs would have been devout-
ed elsewhere if this was the case (The funds could be invested in
share markets say, with the managers monitoring share trends).
- SOCIAL ORIENTATION towards the community rather than market and
consumers. Nowhere was an open market oppurtunity directly men-
tioned as the reason for starting or operating the enterprise.
However the presence of skills in the community like weaving,
blacksmithy, herb collection or of strong women savings groups
were explicitly mentioned.
- APPROACH of "process" rather than using standardized "packages"
No packages/ modules/ blueprints were discernable in any of the
case studies. Each enterprise appeared to present a different
process of genesis and growth.
- MANAGEMENT ORIENTATION - a developmental orientation of ensur-
ing administrative and financial self reliance,to benefit the
community working directly with the enterprise instead of ensur-
ing control, through financial and other tools. (the bathi unit
and the herbal units are casea, and so is perhaps the palm candy
- ACTIVITY BASIS - the community, its skills and its resources
rather than the "product".( the genesis and the nature of the
support provided to the units point to this bias towards the
community rather than to trade in commodities and their value
added products).



It might be perhaps useful to review the definitions produced in

the June 13/14 '97 workshop, with the data generated from the
case studies.

Economic/ business theory

The minimum number of people benefitting directly in terms of
rent/salaries/ wages appeared to be five (cattlefeed). It could
perhaps be surmised that this is the minimum number for an enter-
prise to qualify as a "community enterprises". In terms of ow-
nerhsip of brand names, staff and physcial assets, the facts
appeared to point to a mixed conclusion. At the minimum, control
over the "physical production process" could perhaps be the
criterion for a community enterprise. (or alternatively control
over the means of production also?)

The community enterprises had definitely engendered a degree of
economic empowerment, through providing alternate wage employ-
ment. Whether this translated into social empowerment, could not
be stated with certainty. Health, education and culture appeared
to be neglected as too was gender issues. Only in the case of
agricultural bonded labourers would there have been a social
empowerment, from bondage to being a free labourer. Bargaining
power would have increased in economic terms. This had been done
collectively- not as indiviuals.

Practical social work

Some of the enterprises were run "on behalf" of the community. If
we examine the precise transaction between the community and the
support organization/NGO, we can conclude -
(a) Ownership - defined in terms of control over physical assets
or means of production rested more or less with the community. In
terms of brand name and staff selection, it appeared to rest more
with the support organization.
(b) Capital - was usually free or subsidized. In some cases
working capital was being paid back with interest. But intrinsic
capability seemed to exist to pay back all capital with interest
by the community enterprises.
(c) Office bearers and meetings - did not exist where the unit
employed relatively higher technology and served geographically
dispersed markets. The presence of office bearers and meetings
appeared linked to the low complexity of technology and local
markets- with the NGO/support organization tasks being a low
profile one.
(d) Profit sharing - again appeared linked to control exercised
by the support organization/ NGO which in turn was linked to
complexity of technology and markets.
(e) Use of external auditor again appeared linked with the extent
of support organization/NGO involvement.
Therefore redefining the concept of community enterprises, from
an business/ economic perspective we can conclude with the fol-
lowing criteria -
(a) A minimum of five direct beneficiaries ( in economic terms of
salaries and wages or rent from means of production)
(b) A minimum 'control' over the physical production process by
the community (or alternatively control over the means of

Redefining community enterprises from a "sociological" perspec-

tive, we can conclude -
(a) Primarily economic benefits ( in terms of assured wages,
salaries, etc) will accrue.
(b) The benefits will accrue due to some collective action

Redefining community enterprises from a "practical social work
perspective", we can conclude that -
(a) The degree of control exercised by the comunity in terms of
ownership, capital, and profit sharing appeared to be determined
by the complexity of the technology and the market.
(b) In cases of relatively low technology enterprises based in
village contexts, community leadership form and structures could
be predicted.
(c) Use of external auditors appeared to depend on formalization
and control by the support organization.

Thus a common thread thus seemed to run across the disciplinary

divides of sociology, social work and economic/business theory
regarding the balance of power between the 'community' and the '
support organization/NGO. Low technology and local markets tilted
the balance in favour of the community. High technology and/or
geographically dispersed markets tilted the balance in favour of
the support organization/NGO.


CEDP could only be a process. Training programmes could be stan-

dardized for accounting, marketing and economic/business be-
haviour theories, and exposure to relevant public policies/laws
which ensused or threatened the survival of community enterprise.

In terms of inception, community enterprises tend to succeed,

when any of the following conditions existed-
(a) a well organized village group
(b) Economic skills of value addition existing within the commun-
(c) Resources existing within and accessible to the community for
value addition and marketing.

The possible tasks of the support organization varied.

At the minimum, the following could be listed -
(a) Creating awareness for the village group to start a community
(b) Providing start up capital.
Further support in terms of training, technology, administration
and marketing depended upon the organizational capability of the
village groups, choice of technology and choice of markets.(The
personal values and proclivities of the support organization/NGO
staff remained a variable outside the scope of this study - which
variable too however would exert a significant influence).


For NGOs
(a) Ideally select village groups which show some organizing
capability ( in terms of say, savings, frequency of meetings,
issues tackled, etc)
(b) If some local raw material exists and is accessible, build a
community enterprise on "value adding and marketing" this re-
(c) Build a community enterprise on existing traditional skills
within your community. If this is also linked with local avail-
ability of the raw material, the chances of success are very
(d) If you have to choose a new activity, keep it "low tech" and
ensure that marketing is your responsibility, atleast initially.
(e) Define your tasks in terms of your capabilities.
"Administrative capability" is a scarse resource in the
development sector. If you do not have the expertise, restrict
yourself to only being a passive provider of capital. Consider
"scaling up ", if you can ensure market access. This would imply

in administrative terms, building a brand name, formalizing
accounting systems, and optimizing production systems.

For bankers
(a) The systems of assessing "economic/financial viability" of a
community enterprise is no different than that of conventional
enterprises. Being hard headed here can save a lot of money!
(b) The chances of sucess depends critically on the capabilities
of the village groups and the support organizations. Consider
lending to the groups, if the technology is known and low, the
group is well organized and markets are known and assured. Con-
sider only lending to the support organization/NGO if the tech-
nology is relatively high tech and/or the markets are geographi-
cally dispersed and unknown.
(c) If you lend to the support organization/NGO, you need to
assess the administrative capabilities especially in accounting
and marketing. Spending on such expertise is an "investment" for
success, not a financial burden. This perspective may not be
always be appreciated by the support organization/NGO - who may
feel "uncomfortable" with the discipline demanded for competing
in the market.
(d) Lend to a community enterprise ideally if it uses local
material and available skills. If it uses either local material
or local skills, question closely the technology and the market-
ing strategies. Lending for a new technology with raw material
from outside is the most risky. (We have the example of gem
cutting for women groups in South Tamil Nadu before us).

For village groups, especially savings and credit

(a) Do not attempt a community enterprise, until you have sur-

vived atleast three years, built up your capital to atleast Ten
thousand rupees (say). Money saving and rotation is one indicator
of your administrative capabilities.
(b) Start with an enterprise for which you have the skills, the
access to raw material and for which you can undertake the mar-
keting. In such a case, you can ask your support NGO/organization
to just remain a linkage for access to formal credit from banks.
(c) If you get ambitious atleast ensure that you either have
"value addition" skills or access to the raw material. Ideally
buid on a skill which you already have- say weaving or tailoring
or milch animal rearing. Your support NGO must be able to ensure
markets if this is to become viable. Your job is to discipline
your production skills to the demand of the market place.
(d) If you are to build an available raw material, ( say tree
based like silk cotton or neem or palm) ensure that your support
organization/NGO has the capability to give you technical train-
ing, credit and provide market access. Be prepared for a lesser
degree of participation in such cases.
(e) If both the skill and the resource is from outside, you
cannot realistically hope for any degree of participation.
(f) In any case of community enterprise initiation, you will have
to upgrade your accounting and administrative skills. You must be
able comprehend aleast in a rudimentary manner, the concept of
margins, fixed and variable costs, production scheduling and the


Reproduced below is an extract from Robert Chambers "Whose reali-

ty count - putting the first last" (Intermediate Technology
Publications, 1997, pg 37). This difference in paradigms between
"things and people" apparently was originally evolved in Philip-
pines during the early 1980s - in experiments conducted to make
the irrigation system more farmers centred.


Mode Blueprint Process

Keyword Planning Participation

Goals Preset/closed Open/evolving

Decision making Centralized Decentralized

Analytical Reductionist Systems/wholistic


Methods/rules Standardized/ Diverse/ local


Technology Fixed package Varied basket

(table d'hote) (a la carte)

Professionals Enabling/
and local people Motivating Empowering

Local people seen as Beneficiaries Partners/Actors

Force flow Supply-push Demand - pull

Outputs Uniform Diverse

Infrastructure capabilities

Planning and
Action Top Down Bottom up

If we substitute "Conventional enterprise development" for things

and "community enterprise development" for people - a lot of the
differences in the approaches become clearer. CEDP appears to
lean towards the "learning process" approach, while conventional
enterprise development leans towards the "blueprint"
model.(especially those promoted by the Ford Foundation and the

We could perhaps infer that CEDP is one current in the overall

shift in development strategies from "blueprint" to "process".
Fields as diverse as agriculture, nutrition, forestry,
transportation, poverty alleviation, medicine, child education,
education, and energy, have been documented by Robert Chambers,
to be undergoing this shift in the above referred book.

The success of a CEDP appears to require some reversals in

attitudes of the people involved in the process. An attempt is
made below to list the probable changes.

Non Governmental Organizational activitists The NGOs will need to

discipline themselves to face the market, if they wish to suc-
cessfully facilitate enterprises. They have to specifically learn
to -

* Set realistic goals, achievable within a timeframe in terms

of volume and amount of sales, for particular product/s.
* Plan realistically with specific time and cost budgets for
these goals.
* Evolve precise implementation strategies for production
and marketing
* Evolve appropriate feedback systems, to quickly incorporate
changes, as reflected in market trends.

In a sense, they have to downplay the "process" elements of
discussions and participation" to become more "task oriented".

Formal delivery system managers(Bankers and Government officers)

Managers working in large systems like the Government and banks,
need to become less "Target oriented" and more "Process
oriented". Specifically,
* Invite participation from the NGOs and the village communi-
ties, before framing procedures
* Allow flexibility in programme objectives to suit local
* Delegate powers down the line, to enable the functionary in
the field to take decisions on budgets and targets appro-
priate to the particular village and group environment.
* Listen to problems emanating from the field, rather than
try to find fault for not sticking to procedures or acheiving

Trainers in enterprise management In community enterprise devel-

opment, the process of accompanyment takes precedence over imple-
mentation of standardized training modules. Traditional enter-
prise promotion define their responsibilities, to end with -
(a) the participants completing the predesigned standardized
training module successfully
(b) the project proposal of the potential entreprenur is accepted
by the banker for funding.
In the case of community enterprise promotion, the job of
the trainer starts AFTER the banker has agreed to fund the vil-
lage group. The trainer becomes more of a "facilitator" accompa-
nying the evolution of the community enterprise. For this to
occur the trainer/facilitator has to acquire the following skills
* The skill of listening to the community group, to evolve
ideas for starting the enterprise.
* Flexibility in allowing changing goals to occur as the
group progesses towards concrete implementation.
* Patience in allowing decisions to mature as and when the
group feels comfortable.
* Openess in fully disclosing all the facts at disposal to
allow better group decisions.

The trainer/ facilitator has to learn when to "intervene" to

untie knots - and when to "withdraw" to create the sense of
community ownership. Such processes while ensuring long term
sustainability do not lend themselves to time frames and targets.




RESOURCE PEOPLE - Dr. Belinda Bennet (Feminist perspective)

- Shri Manoharan (Banker's perspective)
- Shri Shyam Sundar (NGO and Technology perspective)

- Shri Muthu Velayudham (CCD - NGO working with rural women)
- Ms. Bimla and Ms. Kalamani (EKTA- activist feminism NGO)
- Ms. Amali, Shri Raja Samvel + three staff from Arogyaham (NGO)
- Fr. Xavier (Karmathur college - specialist in NGO management)
- Dr.(Ms.) Mary Alphonse (Nirmala Niketan College of Social Work,
gender aspects of rural development)
- Shri Jeyaraj (PWDS) (Income generation programmes)
- Shri Jeyakumar (AIRD)(Income generation programmes for women)


- Shri Reji Chandra
- Shri John Sunder
- Shri John Chester
- Ms. Nancy Premkumar
- Ms. Sridevi

Shri Reji Chandra introduced the theme of Community Enterprises
and facilitated the self introduction of participants. Shri John
Chester then spoke on concept of Community Enterprises and the
various activities connected with it. Shri S.Ananthanarayana
Sarma gave a gist of the various seminars which went into the
making of the CEDP study, the conceptual framework underlying the
study, the methodology and some important inferences.

The three resource people then stated their analysis and critique
of the study report. The other participants commented on the
presentations and raised various questions. It was generally
agreed that the theme for any community enterprise development
programme in the present socio economic context had to be sus-
tainable income security for rural women. (For sake of clarity,-
questions raised in the morning sessions and the responses formu-
lated in the afternoon is summarized in the following pages.)

After lunch, Shri Sarma listed the various questions raised under
the following heads -

Each question was discussed threadbare and the response formulat-

ed through a general discussion, which was facilitated by Shri
Shri Reji Chandra gave the vote of thanks.

THEME FOR CEDPs - Sustainable income security for rural women.

All participants agreed that the benefits of any CEDP should

directly help the marginalized rural women - whose social and
economic position was further deteriorating due to the structural
adjustment programmes, economic liberalization, and globaliza-



Penentrating questions were raised on gender in community enter-

prises, by internationally reputed gender experts Dr. Belinda
and Mrs. Bimla, who were participants. Most of the questions
while being extremely thought provoking had no answers from the
limited perspective which the study took (a techno managerial
perspective of viewing enterprises through frameworks of conven-
tional business management). It was explicity stated that fully
knowing this limitation, these gender experts were asked to give
their comments. The questions raised and the responses formulated
are detailed under seperate sub sections as under -


a) What sort of social expectations are engendered presently on

rural women?
b) Have values changed regarding women?
c) What has been the impact on the lives of the women?

These questions require a very different sort of study than what

was attempted. The study confined itself to the "community enter-
prise" as the unit of analysis - to answer the question "Why do
enterprises run by NGOs (for the community) succeed or fail?". A
seperate study, with more rigorous methodology is required to
answer these undoubtedly important issues for CEDPs and gender


a) Are NGOs gender consious?

b)) Are only men owning /managing the enterprises? If so, how to
change this?

The units studied were very much dominated by men, at the manage-
ment level. NGOs studied cannot be stated to be "gender con-
scious". How to change this is a difficult question. If CEDPs are
programmed to work with rural marginalized women, perhaps there
is a possibility of a change. Hence the importance of the "devel-
opmental vision" before embarking on an community enterprise
promotion programme.

a) What are the alternate employment opportunities available for

rural women? What is the rural wage structure for women?
b) Are equal wages disbursed for equal work for rural women?

The questions relating to employment and wages require a seper-

ate exhaustive field study with more rigorous methodology than
what was attempted. This study restricted itself to studying the
"community enterprise" as the unit of analysis.

In the available case studies, men and women undertook seperate

tasks. Therefore "equal pay for equal work" did not arise as an
issue. However it is unlikely that men and women receive equal
pay for equal work, even in enterprises run by NGOs. This asser-
tion however needs to be qualified with field data.


a) Can the language of the report be changed, making it more

"gender sensitive" ? (humandays instead of mandays, eliminate
words like destitute and abandoned, etc.)

The language of the study report will be suitably modified to

become more gender sensitive.


The following questions were raised regarding the definition of

Community Enterprises and the research models used. The responses
are given under each question.

a) Five as a number for the lowest viable unit is too low. Shoud
not the number be raised?

The problem was how to differentiate community enterprises, from

enterprises initiated by individual entrepreneurs, or partners.
The lowest number indicated from the available case studies was
five. Incidentally five is also the number for the "peer group"
in the Grameen bank rural banking programme. In practise, viable
group sizes would range from ten to twenty five - as is the case
of womens' and savings groups. These numbers would perhaps be the
working size of the group for NGOs, to initiate CEDPs. However a
size greater than twenty could attract provisions of the
Companies Act.

b)What is the concept of a "community"? Who are the members? What

is their relationships?

This question of what constitutes a "community" requires sophis-

ticated sociological theory for a satisfactory answer. From a
very practical perspective of functioning "enterprises" run by
NGOs and/ or by communities - the community in this case are all
those who directly benefit from the community enterprise in terms
of assured employment, or market for their products/skills.
The community is interlinked by functional tasks created by the
activity chosen for the community enterprise - in terms of mate-
rial skills/ resources/ products. Say a rural women savings and
credit group pools its savings to purchase neemseed - which it
processes and hands over to the NGO for sale. All the group
members who participated either through capital contribution or
through labour contribution, would be the relevant community in
this case.

c) Where do skills of group management figure in the model?

(Conflict resolution/ resource allocation?)

The model states that community enterprises which are successful,

evolve from resources/ skills available within the community -
within a context of a viable "community". The concept of a viable
"community" in the model assumes the existence of a group formed
around an activity - say savings and credit. This group would
have institutionalized mechanisms for group management of re-
sources, like say capital for S&C groups. Such mechanisms would
become "ennablers" for the group to handle more complicated
products- like say procuring neemseed for processing and sale.

d) Can this model be linked with the existing models of Sewa

(Ahmedabad) and Grameen bank (Bangladesh)?

The Sewa model and the Grameen bank model work on "MICRO FINANCE"
issues. The Community Enterprise concept works on "MICRO ENTER-
PRISE" issues.

e) How to understand "group enterprises" (where assets are owned

commonly or seperately?)

If the group is well formed BEFORE initiation of the enterprise (

the group did not come together for this enterprise activity), -
and if its works on its own skills or resources, group enterpris-
es can be technically classified as community enterprises. The

question of whether the assets are owned seperately or commonly
is not very relevant, as long as the group together takes some
responsibility for some part of the enterprise activities. (
either procurement, or processing or marketing). However where
"groups" were created specifically to take advantage of Govern-
mental subsidies, and assets created to fulfil financial targets,
the "group enterprise" cannot technically be treated as a commun-
ity enterprise.

f) Why is technology upgradation not mentioned?

Technology upgradation can only take place in the context of the

market that is served by the products created by the community
enterprise. Technological upgradation, by itself is not a relev-
ant issue. If the NGO finds it necessary to upgrade the process-
ing technology say, for ensuring marketing/ financial viability
of the community enterprise, than technology becomes relevant.
Decisions of technology are thus related to product design and is
subsumed under the NGO - community enterprise - market interface.

The question raised was whether "Ecology a concern for community


The response after much deliberation stated that being law abid-
ing members of a civil society no rural women group can ignore
laws regarding ecology. However when the issue becomes "ideologi-
cal" - should plastic be used for packaging, etc - the safe norm
to use would be that ecology is not that important a concern, if
it threaten survival of the community enterprises' products in
the market. When conventional enterprises can get away with
marketing blantantly anti ecological products and services (which
pollute the air, water, land and cause health problems in socie-
ty), it would be suicidal for rural women initiated community
enterprises to get into "ideological" positions regarding ecolo-
gy. Hence it could be inferred that if no environmental related
laws are broken, ecology is not stricty a concern for community
enterprises, initiated for and by rural marginalized women.


The question raised was "where are the psychological variables

studied in the case studies?"

The lack of psychological data is a limitation of the study. The

initiation and functioning of community enterprises, vitally
depend on the capability and the motivation of the managers, the
group psychology of the community concerned, apart from other
contextual cultural factors. This study took a very narrow
"techno economic " perspective, of studying enterprises only
using conventional business management concepts of production,
processing and marketing systems. Perhaps a seperate study
needs to be initiated purely on the psychological/ cultural
variables of community enterprises, by a skilled behavioural


The question raised was what are the "politics of credit" which
affect the funding of community enterprises?

This question was raised in the context of whether community

enterprises were gender/ environmental conscious. The deliberated
feeling amonsgt the participants was that conventional business
enterprises receive subsidized funds,from the formal banking
sector without any mention of gender and ecology. Then, why
should community sponsored enterprises, especially by the margin-

alized poor be asked questions, related to ecology and gender.
However it may be noted that the participants agreed that the
thrust of any community development programme had to be on rural
poor marginalized women - thereby ensuring a gender prespective.
It was felt however that bankers should not ask these questions -
the same norms for funding conventional business enterprises
alone should apply to community enterprises also.
The participants also noted that the "politics of banking" ap-
peared to be veering towards poor rural women. The 1998 budget
presented by the Finance Minister in the Lok Sabha spoke of an
appropriation of five hundred crore rupees for the National Bank
for Agriculture and Rural Development (NABARD)- towards helping
the formation of two hundred thousand savings and credit groups
over the next five years. It hence appears that the political
context appears to be right for funding of community enterprises
for rural women, by formal banking insitutions.


This issue raised the most number of questions - due to some

interesting comments offered by Shri Shyam Sunder. The questions
and responses have been segregated for sake of clarity.


a)Why do community enterprises need NGO support? Why cant we vis-

ualize a hundred percent owned community enterprise?

b) Given the banking norms of Group capability, and NGO strengths

for financing, what are the implications for CE - NGO relation-

In an ideal world, communities should be able to organize them-

selves and directly compete in the marketplace with conventional
business enterprises. Perhaps such enterprises do exist, where
the relevant community is well organized with visionary leader-
ship. However for the vast majority of the rural poor women in
South Asia, and perhaps in other Third World countries also,
economic marginalization and exploitation is the grim reality.
For these women to organize themselves economically to compete on
an equal footing in an increasingly global marketplace is a very
high expectation. The model presented by Shri Shyam Sundar, of
NGOs being in full control at inception, and slowly handing over
power, as institutional maturity sets, is perhaps more relevant.
The model was visualized as under -

P \ /
O / \ NGO
W E / \
E C / \
R / \
/ \

At the inception stage of a community enterprise, the initiating

NGO, would have full power. Over time, as the community internal-
izes the management of the various systems, power wouldget trans-
ferred from NGOs to the Community Enterprise.

It may be noted that bankers themselves assess NGO capability

before funding village groups. Bankers presently do not appear to
be comfortable with the idea of directly funding village groups.
Hence NGOs have to perfrom sort of facilitative function, atleast

initially to take off a community enterprise. The NGO could over
time, slowly move the community enterprise towards self reliance.
Such tasks presupposes, that the community enteprise need NGO
support, atleast in the initial stages. A 100% community enter-
prise can only emerge after some patient, participative work of
an NGO in most cases.( This should not discount the possibility
of a fully empowered group with very good leadership being able
to start an enterprise on its won and handle all financial,
marketing and technological linkages. Such instances, would still
remain an aberration rather than a norm atleast in the context of
South Asia).


a) How to conceptualize the issue of "subsidy" of NGO support?

Shri Shyam Sundar brought out an interesting concept of the NGO

support for the CE, being actually a 'subsidy'. If the support
given to initiate a CE and make it viable in the open market is
quantified, in terms especially of the mangerial inputs, there is
a definite subsidy involved. For instance the number of manhours
spent by the NGO personnel for various tasks could be quantified
in terms of consultancy fees or managerial salaries at market
rates - using the norms for similar jobs for conventional busi-
ness enterprises in the same or similar markets. The issue is
that this subsidy is not easily visible in the balance sheets -
but without this essential input the CE would probably have never
been initiated. More visible subsidies would be cheap or zero
cost capital, space, training, market research, systems creation,

The precise nature of subsidy can be even better quantified using

another framework commonly used in business enterprise analysis
(which was presented at the workshop by Shri Shyam Sundar). The
CE - NGO relationship can be understood in terms of the 5 M model

Money, Manpower, Market, Management, Machinery.

The exact division of responsibilities for each of these varia-
bles could be analysed - and market values assigned using the
real market prices. The difference between the "shadow" prices
for the services provided by the NGO and the actual price paid by
the CE could be roughly be quantified as the subsidy.

b) How are issues of ownership and profit sharing tackled in the

case studies? In terms of control and not access?

If the concept of an NGO subsidy is accepted for analysing the

CE-NGO relationship, the issues of ownership and profit sharing
gets shifted to the realms of political science. Where the NGO
subsidy is high, the NGO would make up by exerting control.
Where the NGO subsidy is low, the community would have more
control over the enterprise. For example, in the case of the
herbal unit of Arogyaham or the charcoal unit of CCD, the NGO
subsidy is very low - providing working capital at market costs.
Hence full control in terms of ownership and profit sharing would
lie with the Community. In the case of khadi spinning, or the
PLAN units of industrial enterprises, the NGO subsidy is very
high - in terms of training, machinery, quality control, capital,
raw material procurement, marketing, etc. Naturally the the
levers of control would be more in the hands of the NGO.


)What is the development vision underlying CEDPs?

This was a question raised by Father Xavier, a Professor or Rural

Development, who has also run an NGO - and is presently attempt-

ing a doctoral thesis on management of NGOs. The group agreed
that the development vision underlying CEDPs would vary, accord-
ing to the values of the relevant community and that of the NGO.
This vision would in the final instance, determine the relation-
ship between the NGO and the CE. However it must be noted that
there is no such thing as a "good" vision or a "bad" vision. In
many cases, the vision may not have been articulated - or
sometimes even fully comprehended. However from a strictly social
science perspective, the underlying vision crucially shapes the
direction the community enterprise would take.
The example cited was that of a multinational telecommunications
firm Ericcson- which directly subcontracted assembly of mobile
telephones for manufacture to Thai women groups. The underlying
vision, belongs to that of "supply side economics" - of highly
monetized economies, accompained by free global flows of capital
and labour. Similar industry to rural women linkages are also
being aggresively marketed in South Asia, by the British funding
agency Action Aid, and nearer home by the TVS group and its
allied institutions like the Gandhigram Rural Institute. The
question remains - of how much control these women groups would
have with a product, for which they have neither traditional
skills nor raw material. There always remains the danger of these
women groups being dumped with hazardous tasks, which unionized
labour may refuse to perform (as often happens in multinational
production units in Third World countries). Or the industrial
enterprise may try to solve its market problems of controlling
costs, by turning to the cheaper labour of the rural women groups
- who need not be insured, or given provident funds, gratuity,
medical benefits, as is the norm for unionized labour. These
issues, should not however detract from the fact, that any em-
ployment, howsoever exploitative, is perferable to starvation for
rural women in drought prone subsistence economies.
Shri Shyam Sundar presented the following graph for understanding
community enterprises - which can be used to understand the
underlying vision -

(Conventional to community enterprise on the Y axis, and welfare

to development perspectives on the X axis)


A village group being able to handle the market linkages on its

own steam would be the 100% CE.These units would fall in the
first quadrant. The examples from the study would be the herb
collection and sale by herbal gatherers in Arogyaham and charcoal
production and sale by the Kalasm women groups of CCD.

An NGO running a good Income Generation Programme on sound busi-

ness principles on behlaf of the community would come in the
second quadrant. The SSGS units and other units supported by the
KVIC would probably fall in this quadrant. While the reins of
control would be in the hands of the NGO, the underlying vision
would be the development of the artisans or the other village
groups these units would serve.

A nursery selling subsidized saplings for poor farmers, run by an

NGO would fall in the third quadrant. The underlying development
vision, would while being paternalistic in principle, have a
welfare perspective of providing charity.

When the community itself organizes a CE for providing welfare,

the enterprise would fall in the fourth quadrant. For instance a
community kitchen for providing free or subsidized food to the
hungry would fall in this quadrant.