WORK AND EMPOWERMENT
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Management of Women’s Economic Activities
(A Manual for Activists)
G
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NEW DELHI
1991
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ACKNOWLEDGEMENT
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This material has been produced under the project entitled "Strengthening
the Organisational and Managerial Capability of Women's Income
Generating Programmes" carried out with the support from the International
Labour Organisation (I.L.O.). We are grateful to I.L.O. and its consultant Ms.
Celia Male for their sensitive and strong support towards completion of this
project.
This document is based on field visits, discussions, workshops, camps and
training programmes conducted in collaboration with various individuals
and organisations and participants over the entire course of the project;
in particular, Self Employed Women's Association, Ahmedabad and Dr.
Usha Jumani; Development Dialogue, Calcutta and Abhijit Dasgupta; IDS,
Dharwad and Vagesh; CAST, Tirunavalli and Sushila Pandian; PRAYOG,
Raipur and P.V.Rajgopal; ADITHI, Patna and Viji Srinivasan; Taj Mahal, West
Bengal; Tezpur Mahila Samiti Assam and Monisha Behal; Prof Ramesh Bhatt,
Prof. Rajesh Dhingra, Ms. Manju Raju, Ms. Nisreen Zafar Ebrahim, Ms. Nitya
Rao, Mr. Prem Chadha, Mr. D. Thankappan, Mr.Anil Charnalia, Ms. Rajani
Patni and Mr. Pradeep Kakad.
i
CONTENTS
INTRODUCTION
I
11
- Status of Women
- PRIA's Role
- About this Manual
II
WORK AND EMPOWERMENT
19
- The work of the Poor
- Perspective on Poor Women's Work
- Tenets of Empowerment
- Some observations about Women's Work Reality
- Interventions to enhance women's income
- Exercises
III
MARKETING
- What is Market?
- Marketing Plan
- Excercises on Preparing a Marketing Plan
- Marketing Considerations for each type of intervention
53
IV
PRODUCTION
89
- Production Plan
- Additional Aspects of Production Plan
V
MATERIAL MANAGEMENT
105
- Procurement
- Recording
- Storage
- Transportation
- Exercises
VI COSTING AND FINANCE
- Costing
- Break Point Analysis
- Cost Benefit Analysis
- Capital
- Budgeting
127
- Accounts Keeping
- Systems of Account Keeping
VII ORGANISATION: WORKING TOGETHER
- Why work in Collectives?
- Meaning of Organisation
- Need to form Organisations
- Processes of Forming an Organisation
- Process in an Organisation
- Issues for us
197
VIII ADDITIONAL ASPECTS
225
- Quality
- Environmental Analysis
- Policy Linkages of Women's Economic Activities
- Information Systems and Use
- Project Proposal Formulation Guidelines
- Where to look for Financial Resources?
- Tips on Reporting to Funding Agencies
Introduction
Homemaker
INTRODUCTION
In trying to understand women's issues, we find that some of the earliest efforts took
place in 19th century. This was a period when a number of social reform movements
took up issues like widow re-marriage, child marriage, women's right to education and
property, etc. It was, however, realised that these efforts were mainly confined to
reforming the position of women, as they were largely the recipients in the whole process.
The reformist movement was mainly led by educated male leadersand women started
getting actively involved only when the independence movement gathered
momentum and expanded its base beyond the middle class. Women's organisations
were, at that time, a
part of the nationalist movement like
other sectoral
organisations, the different trade unions, student organisations, etc. We find many urban
middle class women in the forefront of the independence struggle, but they were not
looking at women's issues separately, as a result of all this we find that in India the right
to vote has been granted to both men and women at the same time and Indian
women, unlike women in different parts of Europe, have not had to struggle for it
as a women's issue. The women's organisations believed that a government of "our"
choice would definitely take into consideration women's needs and development, while
formulating policies and programmes for the country.
The period immediately following independence, witnessed mainly welfare programmes
and some legal enactments against social evils under the auspices of the government.
The approach in various schemes was mainly a welfarist one. Women's role in the family
as a mother, wife, daughter-in-law, etc., was the most predominant and recognised
one, and government policies and programmes were geared only in this context. As
most of the programmes were conceived by top level officials, problems and issues
of middle class women were considered as concerns for all women and this was
reflected in the approach of the government. This was also a period when there
was a general lull, as people awaited expectantly for the government to fulfill all their
dreams.
In the sixties there were a few struggles of the rural poor, tribals and a few others around
problems like price-rise in which women were also involved. However, by the seventies,
disillusionment with government policies really started setting in and critical questioning
regarding developmental policies started taking place.
In different parts of the
country, it was being realised that the position of the disadvantaged group of people
had not changed much, inspite of two decades of planned development. The urge
to do something about it was being felt by a number of groups, forums and individuals
11
in different parts of the country. During the same time, some women also started
questioning what specific difference independence had made to the lives of Indian
women. It was against this backdrop that a committee, on the status of women,
was set up in the early seventies. This committee for the first time, recognised women
as workers, producers and highlighted how technology was displacing women from
sectors like agriculture, textiles etc.
This document also brought out women's
contribution to the economy and its non-recognition till date, particularly in the domain
of planning for women's programmes. The presentation of the report coincided with
the declaration of the Decade for women and all this provided a push to the women's
movement.
The soul - searching, which started in the early seventies, led to an upsurge of students,
trade unions, women and other such movements in the mid-seventies.
The entire welfarist approach which views the poor women and other disadvantaged
groups of people as targets and objects of development, with the outsider coming
in as a doer, was being questioned and people were looking for an alternative
approach. This was the time when the conscientization approach was evolving
and being experimented in some of the developing countries, specially in Latin
America. In India too, a lot of young people started working with this approach and
a number of voluntary organisations were formed in both urban and rural areas.
This was also the time when a number of women's organisations, mainly in the urban
areas, were formed and were focussing on issues specifically affecting women. At
the same time, a lot of discussion and debate was taking place on the whole issue
of whether women's issues and development needed to be looked at separately or
could they be seen as a part of the class struggle. A school of thought believed that
the problems of the disadvantaged (that is, both men and women) were similar
and a more equitable system by itself would help improve the condition of women
also.
By the end of the Decade for women's development, it was more or less clear that
it was imperative to look at the issues of women's development separately and more
and more voluntary organisations started doing the same in their own work.
Status of Women
According to the 1991 census, the sex ratio for women is 929 per 1000 men; this has fallen
from the 1981 figure where it stood at 933 per 1000 men. The lileracy rate is 39.42 percent
for women and 63.86 percent for men. The literacy rate for both men and women
has gone up when compared with the 1981 census. Women's work participation rate
according to 1991 census is not yet available, but the 1981 census showed that it was
13.99 percent and men's work participation rate was 51.62 percent. The definition
12
of a woman worker has been changing and it would be interesting to see what the
new figures are. Inspite of some of the changes in the government's thinking about
women's work participation and status, which can be seen through the five year plans
and other schemes, we still find
that women's participation in the labour force
has been declining and the status of women has not improved much over the years,
and they continue to remain a disadvantaged group.
Women have been playing very important and significant economic roles in both the
urban and rural areas. We see that both in the organised and unorganised sectors
of the economy, be it agriculture, industry or services, woman has been contributing
substantially and yet very often her contribution goes unnoticed by both the family
and society. Her work remains mostly "INVISIBLE".
Women play dual roles, one as the paid worker and the other, as an unpaid worker.
Involved as a part of the family labour in the fields, family trade, craft, etc.
Through
her labour, she also contributes in running the family by doing different domestic
chores.
This work of hers in the family by virtue of her being the mother, wife, daughter,
daughter-in-law and home maker takes up a lot of her time and very often, she is the
sole contributor in running and keeping the family going. Yet, this contribution of hers
is not recognised in the economy.
Even her contribution as a worker on the family lands, in traditional household crafts,
etc., is not recognised. Thus, although woman does double the amount of work and
contribute doubly to the economy, she is still considered a burden and instances of
female infanticide and foeticide (which are not uncommon even today) bear testimony
to this.
The World Conference of the U.N. Decade for Women held at Copenhagen in July,
1980 defined Development as the total development, including development in the
political, economic, social, cultural and other dimensions of human life, as also the
physical, moral, intellectual and cultural growth of the human person. "Women's
development should not be viewed as an issue in social development but should
be seen as an essential component in every dimension of development", according to
this definition.
Thus when we talk of women's development and women's status, it is important for us
to recognise that interventions at all levels namely,
social, cultural, political,
economic are required and are possible (real changes) only if changes take place
in the existing systems and social structures, which are not at all, favourable to the women
today.
13
PRIA's Role
The situation of women is being challenged by women's groups, voluntary
organisations, women's trade unions, women's studies and researchers. A large number
of people are getting involved in working on women's issues and getting women's
contributions recognised.
Groups have been involved in helping poor women themselves, recognise their
own contribution and help build their self-esteem. Voluntary organisations have also
been involved in organising women around health, housing, environment, water,
women's rights, economic activities, etc.
Experiences of different voluntary organisations have shown that although points of entry
of the intervention could be any of the issues mentioned above, but the need does
arise to intervene on the economic activities front, as our work is mainly with poor
women for whom the family's survival is the most crucial guestion.
Even when groups are involved in larger struggles, the need for something concrete
in terms of economic benefits to sustain the movement is felt, at some point or the
other.
As woman's work is not recognised and she does not (very often) get paid for her
work, she has no control over any resources, assets, money, etc. Interventions through
economic activities try to change this situation to some extent. If we are talking of
a change in women's status, then it is essential that any intervention aimed at raising
income or getting income in women's hands is accompanied by a process by which
they understand
the forces of the global economy, its influences on the general
economic situation and how these affect their lives. It is also important to help them
analyse their class situation and within that, aspects specially affecting them because
they are being "women".
Within the family also, mere cash in her hand does not by itself give her a higher status.
Conscious efforts have to be made towards increasing her participation in the
decision making process.
Any intervention that does not contribute substantially towards women's active and
critical participation in the overall development process of the society, needs to
be relooked at as women's development in the real sense can take place only when
the systems or structures of the society are changed in favour of women.
With the involvement of voluntary organisations in organising women's economic
activities steadily increasing, certain issues are being constantly discussed and debated.
Since women's role in the economy is generally seen as secondary to that of men and
supplementing the family income, how much should a woman be able to earn, when
involved in an income generating activity needs to be looked into, at the planning
stage of the activity itself. Experiences in the field show that women are mainly
14
responsible for maintaining the family, looking after the children's education, health,
etc. Whatever money she earns, she largely spends it on the family whereas, many
a times men spend a substantial amount of their earnings on themselves in gambling,
drinking, etc.
We also see that women work for very long hours and hence, it is important for us to
plan income generating activities in such a manner that women are able to earn
substantially and at the same time ensure that the labour they put in, and the
economic activity, does not add to their already burdened work schedule.
Some of the other issues that keep coming up at voluntary organisations (as most
of the times they are the initiators of the economic activities) are - Should these activities
be organised in a group or should individual women be helped to start their own
economic activity phase ?
If women's collectives are organised, should they be
involved only in economic activities or should their involvement also be in other social
issues ? The answers to both these questions are located in the perspective as to
whether more income in the hands of women will lead to a change in their status or
women's control over the entire economic process accompanied by their involvement
in other larger issues will lead to a change.
If we accept the latter argument then it is essential to organise women collectively, as
the collective would give them the support and space to manage and control the
income—generating activity. Many voluntary organisations have been involved in
initiating a process of organising women's economic activities with this thinking. The
challenge for voluntary organisations is to transfer the skills of managment and control
of the economic activities to the women's group over a period of time, to enable
women to feel confident and empowered.
With women slowly gaining control and being involved in the decision making of
various aspects affecting them directly, and as
members of the society, real
empowerment will emerge and a change in women's status will certainly take place.
From the women's empowerment perspective, it is important that the women's
economic activities are economically viable and the capacities and competencies
of poor women, individually and collectively, are enhanced to organise and manage
the economic activity.
Our understanding is based on the world-view which recognises the contribution of
people's own knowledge, learning experiences and the belief that people learn and
can learn through their own experiences; thus, the need to share information with
others. It is in this context that we have been trying to understand the linkages between
income and empowerment.
Based on this understanding, we have been working on this issue tor the past tew years
15
We have been involved in organising a number of workshops in trying to understand
the different angles of this issue.
With our understanding of the various dimensions of the issue, we have been involved
mainly in organising trainings to enhance the managerial capacities of voluntary
organisations, activists, workers, functionaries and also holding camps for women group
leaders. We have been doing this as various voluntary organisations have felt the need
to strengthen themselves around the managerial aspects of women's economic
activities.
The real challenge is to be able to link and move beyond women's involvement and
struggle through economic activities, where they are basically involved in trying to
cope with the existing market systems in a better manner, to a process of being involved
in the struggle against the exploitative forces. Empowerment in the real sense would
be attained when they are actively involved in the larger struggle for social change.
About This Manual
This manual is an outcome of our learning experiences, mainly
programmes.
in the training
This manual begins with an attempt to understand a woman's situation, work and her
involvement. Using this as one of the most important bases for the choice of the
economic activity, we try to
understand the different aspects of Marketing,
Production, Quality, Material Management, Costing and Finance plus Organisational
issues.
An attempt has been made to understand each of these aspects in the various
sections, not just from the angle of economic viability but from the poor woman's
point of view also, and to initiate a process which facilitates women to take control
and feel empowered.
The preparation of this manual has been a collective exercise and a large number of
people have contributed by way of materials, examples, exercises, etc.
We hope this manual would prove useful to activists, organisersand managers involved
in managing women's economic activities and contribute in some ways towards
women's empowerment.
This manual can be utilized as a resource guide by field workers in their efforts towards
strengthening women to manage their own economic activities in a much more viable
manner.
16
Work and Empowerment
'HI
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4
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WORK AND EMPOWERMENT
Work, in its literal sense, means application of efforts to a set purpose. Based on this
premise the meaning of work thus, acquires different connotations . Work as
constituting efforts for the purpose of survival is definitely different from the work for the
purpose of creative use of time.
For those, committed to strengthen a poor woman's work and her limited capacities
to exert control over her situation, it is essential to understand the meaning of work as
an application of efforts for survival and for earning a basic
livelihood.
Understanding the concept of work in this context will help in developing a perspective
in congruence with the process of enhancement of the self-esteem and self
confidence of poor women. This is an integral component of empowering women.
THE WORK OF THE POOR
There are different ways by which the poor make the two ends meet. The common
factor in the different ways of earning a basic livelihood is that in each of their
occupations, return occurs for those engaged in one activity or the other. The returns
could be in kind or in cash depending on the nature of the activity. For example,
farming activity will yield the return in some kind of crop, while, providing services would
result in cash leturns. The return in kind can be converted into cash through transactions
in the market.
Ways of Earning Livelihood
*
Farming on a small piece of land
*
Raising livestock
*
Fishing, collection of forest produce
*
Manufacturing at home or in sheds
*
Hawking, vending, trading
*
Providing services
*
Selling manual labour
It is essential for us to differentiate at the outset, situations where the returns from an
activity are primarily used for consumption by the family and the situation where the
19
returns are used to generate cash, to be further recycled to generate more cash. The
first is termed the subsistence economy base while the second is known as the market
base of the economy.
The subsistence base of an economic activity is characterised by less accessibility to
the means of production, low level of technology and ambiguous relationships
between different actors involved in the process of the activity. While the market base
of economic activities, by and large, involves relatively more access to the means
of production, high level use of technology and a defined set of relationships between
actors involved in the various processes of this economic effort.
While looking at the macro-economic level of our society today the base of economy
can be termed as the market base. The majority of our population is struggling to
survive in a micro sense under the situation specific to the subsistence base of
economy. Though more and more people are getting absorbed in the market base
economy and the meaning of work for them is still working for a wage or a salary, with
well-defined employer-employee relationship, a large segment of the population does
not have an employer-employee relationship, regular salary or wages.
The working population is divided into low, middle and high income groups. We also see
that in our country the number of people in the high income group is very small and an
overwhelming majority belongs to the low income group. Representation of people
having an employer-employee relationship can be found in all the three classes in the
society.
The people belonging to the low income group do not hove any recognition as workers,
they are not visible, they do not have enough income to be able to meet the
contigencies and exigencies of life on their own. The work these people do is neither
understood nor recognised. Their problems are not given any priority by the policy
makers. To them, work means a struggle for survival of the family.
This vast majority of population has to fend for itself. These people are not entitled to fixed
wages, or even facilities like toilets, creches, leaves and holidays, compensations and
other benefits.
The people in the low-income group (who do not have an employer-employee
relationship) are mainly contract labourers, marginal farmers, piece-rate workers, artisans,
forest-produce collectors, sweepers, transport providers, home-based workers, vendors,
hawkers, domestic helpers and other serevice providers, etc.
The Poor “Workers”
From the above we see, there are workers without the security of work, without the
regularity of work and without the level of income available to workers who have an
20
employer-employee relationship. They have to find work on their own, whenever and
wherever they can. They have limited access to material and financial resources.
They, mostly, own skills and knowledge of their traditional occupations.
They all have to eke out a meagre living, many of them living below the poverty
line. Their incomes do not bear any relationship to the number of hours they work,
to the market price of goods they produce and the service they provide in relation
to the cost of living. They neither have the protection of labour legislation nor
do they have their own representative organisations.
As a result, they have a
low bargaining power. A large number of them are illiterate and are not familiar
with modernisation, new skills, technologies and new markets, etc.
Women's Work
In this larger picture of work in the economy, we must also understand the work
of women. Women have to perform multiple roles of wife, mother, homemaker, worker
and citizen. The first three roles of women are recognised by society but not the worker
and citizen role.
Only 5-6 percent of the working women have an employer-employee relationship. These
are across the three income groups. There are some women who are engaged only
in household work for their own families. These women mainly belong to the middle
income groups. The women in the low income group cannot afford not to earn some
returns for fending the family, so they have to combine household work and return
earning work. The women in the high income group rarely do their own household work
themselves; they engage other people to do it for them. It is the women in the low
income group who are fending for themselves, without a regular job,an employer
employee relationship which constitutes the majority of the female workforce iry
our country.
Poor Women’s Work
Poor women are engaged in multiple occupations the year round in an effort to earn
a livelihood.
Three broad types of their activities are:
Production which entails transformation of some inputs into outputs;
*
Trade which implies providing goods at a certain place and time for a price;
★
Service which entails provision of facilities to support production, trade or human
populations at a price.
21
Production activities can be broadly classified into three categories: (a) land-based
(b) livestock-based (c) manufacturing based . For poor women, all these types of
occupations and activities are intermingled. Thus, for part of the year, a woman
may be engaged in agricultural labour (during cropping season); other times, she
may be engaged in some manufacturing activity, like weaving, and also raise
some poultry simultaneously for the remaining part of the year.
The different production relations are also combined in these multiple occupations.
'Own-account work' may be combined with piece-rate work and with wage labour
work at different points of time during the year. Thus, agricultural work may be done
on daily wages, weaving on piece-rate and poultry as own-account work. These
production relations also keep changing for the same activity, as well as across activities.
What we are trying to imply is that all these different ways and a combination of ways
to earn a livelihood constitute the work pattern of poor women in our country.
Poor women are engaged in a variety of occupations: small farm agriculture,
livestock tending, processing livestock produce, gathering and processing
fruit produce, tree — growing, small trading and vending, producing
manufactured items such as garments, bidls, shoes, food stuff, etc., at home
or In small worksheds. They also provide manual labour in fields, at construction
sites, In factories and worksheds, providing services such as — domestic
labour, washing, cleaning, transportation, child care, etc.
Activities which do not generate return, and/or which are done for sustaining the
members of the family, and/or which are done for supporting work which generates
cash return are also work. Filling water, cooking, washing, cleaning, looking after
the children, bringing fodder, fuelwood, tending to old people and looking after
the sick in the family are activities which are done for the well-being of the family and
to support activities of other family members, which generate cash returns. This is also
work.
Similarly, barter-trade-relationships also entail work for the poor women in our
economy. Goods produced by one family are exchanged for goods produced by
another family, viz., farmers exchange grains for pots from potters; Or, goods produced
by one family are exchanged for services provided by another family, viz. farmers
exchange grains for the services of grazing animals provided by shepherds. All such
activities are also included under work. Much of this 'barter' work is also done by the
poor women themselves.
We need to know these various kinds of work relationships that obtain work for these
poor women. We need to understand the reasons why their work is invisible, why they
22
are not recognised as workers, why their contribution to the economy is not recognised
and why they are deprived of their due share in returns from the economy.
Any intervention to strengthen the work of poor women and to make it more sustaining,
visible, appropriate and effective needs to be placed in this perspective and carried
out with sensitivity to all related issues.
Women’s Work Status
MEN
WOMEN
1/2
1/2
MEN
WOMEN
9/10
1/10
POPULATION
CASH
INCOME
WOMEN
MEN
2/3
1/3
MEN
WOMEN
99/100
1/100
HOURS OF WORK
OWNERSHIP OF ASSETS
The time spent on fulfilling these roles is considered legitimate, though the 'work'
that is entailed in these roles is under - valued and undermined. However, with respect
to the 'worker' (wage-earning) role of the woman, it is considered peripheral and
subservient to that of man.
PERSPECTIVE ON POOR WOMEN’S WORK
Woman's biological and social reality has created several distinct roles for her
in society: that of wife, mother, daughter, homemaker, worker, citizen, etc. These
multiple roles of woman make several diverse demands on her time. The social system
in our country recognises wife, mother and homemaker roles as the paramount roles
of women.
As elaborated earlier, poor women living at sub-subsistence level, have no choice
but to be primary wage-earners and assume responsibility for the livelihood of their
children. Any attempt to change the situation of poverty for the vast majority of the
population in our country today, needs to recognise and validate the ‘worker role' of
poor women, and enable them to meet their basic livelihood needs over which they
have no control.
Visibility
Lack of visibility in the worker-role is essentially an issue that needs future interventions.
Nevertheless, it must be recognised that one cannot isolate the economic analysis
23
of the worker-role of poor women, without a social-cultural and political analysis.
The patriarchal form of society has persistently been undermining women and their
worth. Therefore, supportive structures for their worker-role are abysmally lacking.
It is important that this recognition takes place both at home and work fronts.
Organising
It is impossible to even think of affecting the situation of the poor people in today's
economy. The forces against the poor are so many and the social system so biased
in favour of the rich that it will not respond to the demands of the individual poor
woman. In the economy, the various forces that work against the poor are highly
organised. It is so-far the poor 'self-employed' workers, as well as the poor women
workers, who are not organised as workers. To be able to ameliorate the situation of
poverty of women workers, some direct interventions have to be made in the economy
as it exists today.
This is possible only by organising the women workers and
enhancing their collective strength. Their strength lies in numbers and these need to
be brought together.
Organising is a slow and continuous process of enabling a group of people to perceive
common interests and act collectively. All of us in voluntary organisations, who are
working with poor women, are organising them in some way or the other. When we
are trying to affect the income levels, we are organising women around work issues
directly. Organising around work has both occupational and locational aspects.
Occupational aspects involve dealing with the specific problems of each occupation
separately and focussing on specific occupations as the basis of organising people.
Locational aspects involve dealing with the issues of particular geographical locations
and focussing on the specific needs of that area as the basis of orgaising people.
We take into cognisance the variety of activities that poor women do to understand how
we can organise them around work.
By understanding the various occupations in which poor women workers are
engaged, we are able to recognise the multiple occupational base of poor women
workers as well. And this helps strengthen their position in these occupations by
organising them around work. The problems they face in these occupations become
issues for bringing them together. The problems of women in the same occupations
across different locations become a focus when the numerical strength of women is
necessary for collective action.
Similarly, all the occupations in a given location can be organised to create strength
for women in a geographical region.
Empowerment
Why do we want collective strength? When we are discussing of role of women, we
are talking of changing the equilibrium of social forces to treat them as equal partners
24
in the society and to bring recognition to all their roles. When we are concerned
with poor women, we are seized of changing both social and economic forces in
favour of their worker-role in particular and other roles in general. Such a perception
of poor womens' work places, their empowerment as the central thrust of the desired
goal, which is beyond increase in income levels, and, in financial terms.
Empowerment entails struggle; it entails learning to deal with the forces of oppression;
it entails having a vision of a new society; it also entails conscious and delibrate
interventions and efforts to enhance the quality of life. Collective strength is necessary
for building solidarity and support among workers to achieve empowerment. On the
one hand, a struggle against existing forces of oppression has to be undertaken and
on the other, support for women workers has to be generated through collective
strength. Empowerment through organising helps to sustain both the struggle and the
support base.
Our Perspective
It is in this context that we need to discuss what our perspective is in respect of
women’s workand empowerment. This perspective has several components. We are
concerned with poor women who are fending for themselves; the component of
labour in their work is predominant. It is clear that we are not dealing with individual
entrepreneurs or dealing with the type that middle class women are trained for.
Secondly, our perspective includes focus on activities that are carried out for survival,
subsistence, and for viability of the family of poor women and not activities which
are visualized as 'income-enhancing' in their narrow sense. It is like swimming against
the stream that requires more strength than what a set of professional and
managerial skills alone can provide.
Such a strength comes from the process of
empowerment. Empowerment in this context entails gradually increasing control of poor
women over the entire economic process and not merely as producers of some
products and services which are otherwise controlled through other intermediaries. Our
perspective includes those activities of poor women which have regenerative potential
in the location and area where they live and work. Transplanting alien activities
which do not have the long-term regenerative and self-sustaining potential do not
make the kind oT*activities that lead to empowerment. Thus, economic intervention is
posited not only for enhanced income but also for increased empowerment of the
poor women.
The importance of collective activity in this context also needs to be emphasised. This
collective activity could assume several forms. It is possible that a group of women could
carry out one single activity together. It is also possible that each individual member
of a group carries out an activity on her own, perhaps even at home, but relates to
the group and gets some common inputs and services through a collective forum, like
inputs of raw materials, marketing, credit, management, record-keeping, accounting,
solidarity, etc. It is possible that women may work in cooperatives. It is also possible
that within a group, women could be carrying out several sub-activities which they
25
do jointly and separately. We are clearly visualising empowerment of women through
collective action in the process of carrying out the economic activity.
It can be argued that various voluntary organizations which adopt intermediary roles
in this regard are perhaps reducing the possibility of women's empowerment by not
deliberately attempting to transfer control of the economic activity to those poor women
over a period of time. In fact, it is in this background that the need to substantially
enhance the capacity and the competence of poor women is felt as an important
intervention towards their gradually taking control over the entire economic process.
Since wider coverage and increased income are both important characteristics of
this kind of perspective, the focus of efforts in this direction is required to be
extensive and Intensive.
This perspective further implies that the issue of generating surplus through the
economic efforts of poor women is both the consequence of improved internal
management efforts and also changes in the economic policies of the country. Poor
women are operating ata level where many of the policy frameworks, laws and market
forces act against them and despite their best efforts at improving internal management,
they may not succeed in generating a surplus and making that activity viable. Thus,
long-term viability by generating consistent surplus from economic efforts by poor
women entails the simultaneous focus on improving internal management and struggle
for changing policy frames in favour of the economic efforts of such poor women.
Thus, a comprehensive framework and perspective on women's economic efforts
has to be included both in the short as well as in the long-term. Even short-term
interventions geared at improving economic returns should be placed in a long-term
perspective of empowerment and greater control by the poor women themselves.
The concern for increased income and increased empowerment of poor women can
be translated into reality through the joint action of struggle and development
efforts in economic activities. Organizing poor women creates the basis for struggle
as well as for development. And it is this perspective that guides the interventions that
follow in this volume.
TENETS OF EMPOWERMENT
Having outlined the significance of working towards empowerment as a necessary
part of any intervention to enhance women's income, it is essential to understand
some of the critical tenets of empowerment. These are:
1.
Collectivisation
Bringing a group of women together at a base to become an integral part of
an economic activity is an important part of the strategy towards their
26
empowerment. The coming together of poor women provides them an identity
which is different from their other identities and helps highlight their worker role.
It also provides them a sense of belonging in a totally different power equation
- that is, of mutuality. Both of these are empowering experiences in themselves.
For providing support to each other, the group of women can meet periodically
and there is a reference available for each woman. For bargaining and
negotiating activities, like bulk buying and selling, bulk acquisition, credit and other
facilities, necessary for economic activities, collectivisation can be there. This
collectivisation also brings in the possibility of pooling and sharing resources, skills,
time-frames, space and other facilities. Pooling is an important way of strengthening
the capacities of the poor women to work together and to develop a sense of
strength.
2.
Capacity Building
Once women start coming together, the next step is to enhance their capacity
to work as a group and play different roles, necessary for development and
maintenance of the group.
It is important from the point of view of empowerment that women are not only
capable of functioning as a group but also are able to effectively participate in
the process of economic activity. This may entail their capacity -building in the skills
required for the economic activity undertaken by the group of women.
Capacity building of women in the areas of planning, executing and monitoring
all aspects of the economic activity is equally desired in this context. This
will include capacity to use legal framework to their advantage and the capacity
to build as well as sustain a culture of the economic activity compatible with the
realities of the women involved and to the nature of their activity.
3.
Ownership and Control
Once women start acquiring the capacity to work as a group, planning, executing
and monitoring the activities, the issue of taking control over the whole activity
becomes critical. A sense of belonging and owning good and
bad
consequences of their own activity, is the first step in that direction. It implies that
women begin to consider the group and the group activity as their own. Taking
responsibility of more and more functions in the entire process of economic
activity helps them gain control over their ventures. So, managing different
components, apart from operational aspects of activity, like record-keeping,
accounts-keeping, handling cash, being signatory to bank accounts, etc., are
helpful in building this control.
27
4.
Mediation
Another important aspect of empowerment of women is to strengthen their
capacities to mediate with the external world. Mediation entails relating with the
outside world, with the markets, with financial institutions, with competitors,
with suppliers, with a host of policy-makers and other important segments of
external environment, i.e., politicians, bureaucrats, officials, etc. Mediation also
requires mediating with experts, with those who can provide some technical
assistance in the conduct of the economic activity.
Women's sense of
empowerment gets a concrete base and mediation becomes an integral part
of women's work in that economic activity.
Working towards the empowerment of a group of poor women is an ongoing and
gradual process, which cannot be short-circuited under any circumstance. Therefore,
it is important that these different aspects are dealt with through a series of carefully
planned and deliberately made interventions over a period of time, keeping specific
requirements of a particular group and the economic venture it has undertaken, in mind.
SOME OBSERVATIONS ABOUT WOMEN S WORK REALITY
During various discussions and workshops by field workers, followed by a close
analysis of women’s work reality, the following observations have emerged.
They have double work and multiple responsibilities towards the household
and of generating income for the household.
They work sometimes for as long as 16-18 hours a
day.
They have very little or no control over money.
They are not involved in all the processes of work in an activity.
Domestic work takes up a lot of their time.
They are oppressed as women and, doubly so, as poor women.
Womens’ work is invisible.
Womens’work is not valued. It is not considered work.
Women do not pay attention to themselves, even when they get sick.
In some cases, it is found that there is a deterioration in womens’ mental
and physical conditions due to excessive work.
In most cases, It is found that women spend all their income in maintaining
the family.
They are engaged in cooking food, bringing up children, collecting fuel wood,
water and other outdoor activities.
28
In some places, both men and women get less than minimum wages for
their work. And, women get less wages than men.
Women do not own any assets.
There is not much reward for their work.
Women have very little or limited interface with the market and the outside
world.
Women are considered to be weak.
Women are considered to be consumers. Men are considered to be
providers. This view persists even when women bring in money by working.
INTERVENTIONS TO ENHANCE WOMEN’S INCOME
Types of Activity
There is a need to understand the various types of economic activities that are
taken up by voluntary organisations to improve women's incomes. Having looked
at the range of occupations in which poor women are engaged, we may try
to categorize them into three sections: production, trade and services. Production
involves use of some inputs and raw materials to transform them into other kind
of outputs or goods. Trade involves exchange of goods and services for cash or/
and kind. Services involve providing some facility for a price. Poor women are mainly
engaged in production, trade and services which are of small size, generate small
returns, involve very few verbal transactions with others, and are in a vulnerable
situation in the economy.
Since majority of voluntary organisations, as part of their effort to improve womens'
income, are dealing with the activities that fall under the category of production, we
will confine ourselves to these in the following pages.
There are three different bases of production in which poor women are
engaged;
these
are
land-based.livestock-based and manufacturing-based activities.
Agriculture, social forestry, wasteland development, horticulture, etc., are all land-based
production activities where the inputs are transformed into outputs through land.
Dairying, poultry raising, fish-farming, bee-keeping, sericulture, piggery, goatery,
etc., are all livestock-based production where inputs are transformed into outputs
through living beings.
Manufacturing-based production activities include crafts, sewing, weaving, embroidery,
carpentry, pottery; industrial goods, engineering goods; dyeing, printing, paper
29
\
NEW ACTIVITY
When done for the
first time.
/ seeds for vegetab/e/crops
f
raisedby one group
a
suppiiedto anothergroup, f
Waterfaci/itiesjointiy
purchasedby one
group andsoidto
.
farmers, othergroups A
forirrigation.
f\
Planting
Saplings
Go
O
.
I
Harvesting
f
Ownershayaccess to
iand. Shift from
tenancy share
/
’cropping to ownership //
fiT //
P/
/ Gold, controi/edf supportprices being
estao/ished forbuying.
cropproduce.
L
/ Sapi/ngsgrown by one
' group suppi/edto another
group forp/antation work A
Getting raw
materiais//nputs at
cheaperprices.
yArsv—
Planting
I\1 \
Cropproduce soidto
co-ops.
Manuring /
A,
||R|
IIIIIIIIIIIUIIIIIIIl [
Getting high
yielding varieties
of seeds.
Shift in land-use
Getting treepattas.
UPGRADING
Contour bunding.
Getting irrigation
facilities* /,
)
IIIIIIIIIIIIIIIIHlII
Shift in crop mix.
Developing
wastelands.
Learning new
kind of nursery
raising.
BETTER
RETURNS
manufacture, electronics, etc., where inputs are transformed into outputs through
machines and tools, and with human and/or mechanical energy.
These three production bases — land, livestock and manufacturing — are
by far the most critical areas in which women are engaged in large numbers in the
economy. The first two categories — land- based and livestock-based — are organic
forms of production and have a lot of interdependence with nature. The complexity
of the activities here is unique and one has to be sensitive to ecological and animal cycles
and related practices, procedures and laws if one wants to earn a livelihood from these
activities. The last one — manufacturing -based — is a non-living form of production.
It has its own complexity which has to be understood well if one wants to earn a
livelihood from it.
Types of Interventions
Initiating, supporting and strengthening economic activities of various kinds is one way
which has helped in influencing the socio-economic realities of poor women. There
are many types of.interventions in this direction which can be initiated to increase
incomes. It is useful to classify various interventions of this kind undertaken by voluntary
organisations.
These are:
1.
Activity Networking
One set of intervention can be activity networking, whereby the existing work of
women, spread and fragmented in different places, is networked and linked in
an input-output process. For example, if some women sweepers are using brooms
in their role as sweepers and some other women workers are manufacturing
brooms at home, then they could be linked in such a network such that the sweepers
31
NEW ACTIVITY
When done for the
first time.
S'
/ Woven shawis ofone
' group suppfiedto others
forembroidery, dyeing,
bandhni, etc.
Fi
Becoming owners by
forming coops, to ,
keep margins of //
business themse/res. //
Embroidery
Making thread
Piece rate workers
getting higherpiece
rate.
Yam spinning ofone
group suppfiedto
anothergroup of
wearers
g ar
f*/
tr /
CK>
Getting cheaperraw*
materials andcredit.//
Weaving
P/
' Stitchedgarments ofone
group suppfiedto another .
forsafes.
1
Getting betterprice
in the market for
existingproducts. >
Embroidered, printed
products ofone group
supp/iedto anotherfor k
sewinggarments. A
Reaching new
markets to merease
safes.
Block printing /
Getting t/censes.
llllllllllllllllllll
Weavers, block printers, working on
piece ratesduring a particular phase of
the manufacturing process, learning the
whole process themselves.
UPGRADING
Making higher
value added items
from the same skill
(Design).
Using time saving and productivity ‘
increasing machines and technology/
energy.
Using different
raw materials for
the same skills.
could buy their brooms from these women producers. Similarly, if some women
are making ropes out of some weeds sitting at home and some other women are
growing those kinds of weeds, then these two could be linked together. This activity
networking helps build an economic'link between two sets of, as yet, unlinked
women — individuals or groups.
2.
Upgradation Interventions
The second type of intervention focuses on upgradation of current activities being
carried out by the women. Instead of allowing their activities to continue at the
current levels, certain interventions are made to upgrade them and thereby
enhance* their economic potential. Upgradation interventions imply several things
like the process increasing the scale of operations and providing quality inputs
to increase productivity. Upgradation could also include improvements in skills.
Thus, several types of upgradation interventions are possible in support of women's
economic efforts.
3.
Generating Better Returns
A third type of intervention could be to focus on generating better returns from the
same activity without necessarily upgrading it. This may mean reducing the cost
of inputs or processing of inputs or increasing the price of outputs, or increasing
sales.
This may also mean struggling to acquire inputs and credit facilities at
cheaper rates; getting
better prices for women's products and services; to
improving the compensation being paid for women's labour put in the process
of production. In case of women involved in part of the production process
through various kinds of intermediaries, this may mean a more favourable time
rate and piece-rate link, such that women are able to get more payment for the
same amount of output produced during the day. This will also include the struggle
to improve the wage-rate or the minimum wages being paid to poor women.
Creating ownership of land, livestock, equipment, licenses and gaining access to
new markets — are all part of the interventions for generating-better returns from
the same activity.
4.
Initiating New Activities
And finally, a set of interventions could also entail initiating completely new
activities by the poor women themselves. These are the activities which were
not practiced by the women and are not necessarily very common in the area
in which they live and work. A variety of examples of new activities are available
from experiences in the field.
The following illustration depicts an example of live-stock-based activities. (Similar
illustrations are provided on page 30 and 32, illustrating land-based and manufacturing
based activities, respectively).
33
NEW ACTIVITY
When done for the
first time.
/ SZ/kworm cocoons ra/sed
/ by onegroup so/dto
anotherforyam sp/nn/ng.
Gett/ng ownersh/p of
//uestock.
/
/ Woo/producedby one
group so/dto another/or
sp/nn/ng.
Gett/ng cheaper
uy/ng cred/tfor
/fvestock.
. - Fisheries
J
Gett/ng cheaper
fodderandfeed.
F/sbf/ngs so/dto
anothergroup
BETTER
RETURNS
Go
4^
Gett/ng betterpr/c
fort/vestoc/c
/ Eggsproducedby one
group so/dto anolber.
Form/ng co-operat/ues
to getbetterpr/ces. /
Sheep farming^
Ch/cks so/dto
anothergroup to
ra/se hens and
cocks.
/ncreas/ng ss/es.
Iiiiiiiiiiiiniiiiii
Getting higher
yielding varieties
of livestock.
UPGRADING
Getting cross
breeding facilities
for livestock.
iiiiiiniiiiiiiiiiil
Getting better
fodder facilities.
Getting veterinary
care facilities.
Implications
Each of the four types of interventions has its own implications, in terms of relating to
the economy and the outside environment; and, in terms of structuring our own
work
inside the organisation.
In a new activity, the emphasis is on learning and acquiring proficiency in that
activity. Allowance has to be made for mistakes and delays till sufficient proficiency
and experience is generated to deal confidently with that activity.
In upgradation of current activities, the emphasis is on backward and forward linkages
of the activity; on understanding the basis of productivity in that activity; and, how it
can be increased. Taking over more aspects of the production-process and new
techniques and methods of doing the same work becomes important.
In getting better returns from the same activity, the emphasis is on costs and prices and
the terms of trade with the economy. Knowing the economy and how it works around
our activity is important. It is necessary to grasp as to how to negotiate for the best
returns in the situation by working on costs, prices and margins at different points in the
work process. An adversative posture vis-a-vis other actors in the economy and
regular pressurising and lobbying may be necessary in this aspect.
In a networking activity, the emphasis is on building linkages with other users and
producers of goods and services. Here, more and more extension work as well as
working out mutually acceptable arrangements become imperative. A collaborative
posture towards other groups and organisations assumes an importance here.
Choosing an Appropriate Intervention
The information generated by exercises forms the basis for the first and most crucial
step of choosing an appropriate intervention. Only a well thought out, conscious
and deliberate choice can ensure appropriateness of intervention in the context of the
poor womens' life situation.
The following four considerations are necessary in making such a choice :
1.
Start from Women's Work Reality
A detailed analysis of women's work reality based on a sensitive understanding
of their work and life is a critical starting point. Having identified a group of women
that an organisation or a field worker is working with, the first step is to understand
the daily life and work reality of women. It becomes necessary to understand
the kind of work they have to do from the time they get-up in the morning to
the time they go to sleep, as well as to understand the seasonal variations in
35
the nature of their work. Classification of the work, based on whether
it is production, trade or service-oriented, and the nature of the production activity
may also help at this stage. A detailed anlaysis of the skills that women have
acquired over a period of time in continuing the work that they are doing also
helps in choosing an appropriate intervention. A sensitive and detailed listing
of the resources that women may have (individually and collectively), both in
terms of ownership as well as accesses, is of importance at this stage.
The crucial issue is to use the in-depth and sensitive understanding of women's
work reality as a starting point to decide on the possible interventions needed to
enhance their income.
2.
Assessment of Organising Base
The second step is to look at the organizing base of that group of women. An
understanding of the nature of collective efforts that a women's group might have
experienced in the past, either on social or political or economic issues, would
help in assessing its organising base and the starting point for a future economic
intervention. In situations where little or no organising’has been carried out,
a starting point may well be to initiate some process of organising the group
of women. This organising may be around social issues which could also involve
work-related issues. The new experience of working together may provide the basis
for assessment. So, an assessment of the organising base of that group of
women and the kind of organising potential that exists in that group of women
may be useful in making an appropriate choice of intervention.
3.
Understanding the Environment
A detailed assessment of the environment in which such an economic intervention
will be located can also help in making appropriate choices. Environmental
analysis may entail looking, at the economic, political, legal, policy and socio
cultural segments of the environment, particularly in its micro manifestation as they
may directly affect the economic activity, preliminary analysis of the larger micro
environment also helps in making due assessment of possibilities of success of
a particular intervention in that given reality. Details about environmental analysis
have been mentioned subsequently in this volume.
4.
Perspective and Competence of the Organisation
An assessment of the perspective and competencies of the organisation which
is initiating such an effort is also important. Any activity or intervention that seems
to be in contradiction of the organisation is not likely to succeed. Hence, the
choice of an appropriate intervention must betaken into account in the current
perspective, in the philosophy and competence of the Organisation which is
taking the initiative.
36
Based on the above criteria, a short—listing of appropriate interventions for a variety
of activities can be developed. It is important at this stage not to choose only one
intervention, because the act of choosing itself is an ongoing process and should not
be cut short. Other considerations like market, cut pricing, costing availability of credit
and other resources, etc., may have to be availed of in finally narrowing down the
choice to a single viable intervention.
■
37
4
Notes
38
Exercise I
ffie purpose oftfiis exercise is to enhance our sensitivity to womens' wor((reality within our own
contents. It helps us focus up on all the wor!(that women do: at home and outside the home, (paid,
unpaid, earning in cash, !(ind, for consumption needs, etc.).
i.
‘Prepare a list ofwhat worh^ women (wham we worl(with in the community) do on a typicah
day (whole day). ‘What wor!(do they do when theyget up ‘What do they do after that
during the course of the whole day, both inside and outside home (‘Their daily routine).
for example:
*
*
*
*
cleaning home
fetching water
worthing in the field
Iool(ing after the animals, etc., etc.
39
2.
‘Based on the worUjtHe women do on a typicalday, can you ma/^ a time-scfiedufe ofa typicalday.
Jor example :
5 a.m.
‘Wafe-up, clean Home
6 a.m.
Clean animals, cooHJood
40
3.
'Try to ma/(e a hist ofchanges in activities that tahe phacefor the women during different seasons and
times of the year, the agricuhturahcyche, festivahseasons etc.
Jor e^ampCe :
* 'During tfie ftawestingperiod, major time is spent on these activities (7 a.m. to 6 p.m.)
* Marriage in the famity means (ess time for economic activities.
41
4.
Can you nia^e out a Cist of various sfytfs (major sUjfts) that women possess:
Jor exampfe :
Sowing, transp[anting
* CooQng
‘Taking care of children
42
5.
Can you prepare a (ist of resources that women have in terms of the quantity, Cocation, nature
of access to the resource (ownership, controC, Cease etc.), CH^eCy vaCue of the resource, etc.
Jot example:
Mouse
*
Land
*
^uJoc^cart
*
Mand cart
*
‘Water
*
Llectricity
*
Any other resource
43
6.
Can you fist out the probfems and constraints that women face in doing different types ofworfig
‘E'^ampfe :
*
$(ct avowed to go out of the house
Child care responsibility
*
Inhibition to spea^to outsiders, (men)
44
Exercise II
To understand different types of activities.
1.
9da!(e a bist of abb tfie activities that your organisation does to enhance women's income and
cbassify them according to the type of intervention they represent.
Jor example :
*
‘Bee fyepiny
new activity
*
•Dairy
upgradation
*
•Banana fibre products
better returns
Veyetabbegrowing and
vegetab[e vending
networking
45
*
Exercise III
i.
from tfie fist of activities identified by you in tbe previous exercise, cfwose any three and write
them down. List reasons wfry your organization started these activities.
Jor c^ampfe :
'MZe started to do bee -f^eepin^ as no one was doing it in tfie area. ‘Women do not ftave to spend
much time, in tfiis activity and fbowers also grow in abundance in tbe area.
46
e
2.
List the impact these activities fuwe had on the tvorhers' income.
Jor example : 'Ey doing hee-fyeping, individual women are ahhe to earn %s. 40/- to 50/-
47
<5
a
3.
Refa-te these activities with the analysis ofreality ofwomen's wor^ (Do you findany mismatch?
Ifyes, why ? If no, why not ?
48
Notes
49
Notes
%
50
Marketing
I
Whats wrong
with our product?
WHO SHOULD
WE SELL IT TO?
How much
will
it cost
What do
>
to
produce?
customers like 'i.
Who are our
competitors?
Are we priced right?
V.
‘V/
w
O ■Zs-’Zo
I .
53
MARKETING
A cooperative society decided to undertake blanket weaving as an economic
activity. The organiser arranged the required training for members, and also
secured the necessary raw material. The production began, and the quality of
blankets was quickly accepted as very good. Encouraged by this, the production
tempo was increased, and the average production capacity was stepped up to rupees
one lakh per year. However, the sale proceeds in the first year totalled Rs. 20,000/
Undeterred, the organiser kept the pressure on production for the second year but
unfortunately, the sales income for the second year did not exceed Rs. 30,000/-. Stocks
in the godown at the end of the second year were approximately worth Rs. 1.50
lakhs, and production came to a grinding halt.
A Beedi-rolling cooperative was set up with 100 women members. The first year
was spent in preparatory work, such as registration of the cooperative society,
securing production and sale permits, renting and furnishing the production shed,
enrolment of members etc. The raw material was easily available at the market place.
The workers did not require training as they already had long experience in making
Beedis. The production started soon and picked up quickly.
The
organisers
approached
the
local wholesale/retail markets to lift the Beedis produced but
they were not able to succeed due to other commitments of dealers and loyalties
with other established large-scale Beedi manufacturers of the area. Efforts were made
to sell Beedis outside their area but this effort was also not successful. At the end
of six months, only 10% of the Beedis produced were sold and stocks worth Rs. 1.75
lakhs were piled up in the godowns. In desperation, the co-operative made a loss
sale of Rs. 78,000 to the local Mela Stall owner at 60% of the normal price. Frantic
efforts with distributors in other districts of the state resulted in orders at only half the
normal price. This situation brought disillusionment amongst the members and resulted
in a substantial number staying away from work.
What had happened in both the cases? In both activities, there were adequate skills,
funds, raw materials and finished goods but 'No Sales'!
We, in voluntary
organisations, are quite familiar with such examples, because many a times adequate
attention has not been given to a very vital area — Marketing.
What is “Market”?
The term market used here is different from the "market place" or "bazaar". Most
of the times when people say "I am going to the market" they really refer to the market-
53
place or bazaar, which is a place where products are sold and bought. But this
place is not a "Market". In the context of an economic activity, Market is defined as
a group of customers for a given product or service.
Hence when we say that the market for school uniforms in Delhi is very large, what
we really mean is that there are a large number of customers for school uniforms in Delhi.
What is ‘Demand’?
The customers give rise to demand for products or services. For example in the above
case, we would say that there is a large demand for school uniforms in Delhi.
Demand is generated because customers have a need and the product satisfies this
need.
The demand for a product arises when potential customers are either aware of an
existing need, or made aware of a need (through, say, advertising), and the
customers have the purchasing power or money to buy the product.
What is ‘Marketing’?
Marketing is the process of understanding customers' needs, their demand and then
taking steps to fulfill these demands by designing, producing, supplying the product or
providing the service to the customers.
Marketing function involves:
(D
understanding customers, their needs and preferences;
(H)
estimating the existing demand, anticipating the future demand and making
attempts to expand and generate more demand;
(iii)
rating one's own product in comparison with similar other products already in the
market;
(iv)
taking steps to fulfill this demand by introducing the required changes and
(v)
setting up efficient channels of supplying the products.
Difference between*Marketing’ and ‘Selling’
Marketing is different from selling. The concept of 'sales' implies the task of just "disposing
off" stocks of products at, of course, a profit. On the other hand, marketing implies
54
coordinating efforts to mould products/programmes according to the needs of
existing/potential customers' needs. It is assumed that profits will build up only after
adequate customer-satisfaction is achieved. The above concept is illustrated in the
following chart:
Focus
Means
End
The Sales
Concept
Product
Selling
or
Pushing
Profits through
Sales
ii) The Marketing
Concept
Customer
Needs
Set of Products/
Programmes
based on customers'
need.
Profit through
customers’
satisfaction.
I)
Vs
When to begin thinking about it?
In any economic activity, it is very important that adequate attention is given to
marketing before starting the activity. It is important because if the raw materials are
already purchased, other arrangements have been made and then we think of
marketing, there are chances that we have selected a product or service which
has already many suppliers in the market, or customers may be looking for an entirely
different quality of product or they may not be willing to pay the price we expect.
As a result, our activity may never become feasible.
During the initial stages, it may be necessary for us to take up the responsibility for
marketing but we need to involve the women and train them to gradually take
on this responsibility.
MARKETING PLAN
If organisations have to initially assist women groups in developing a marketing plan
and eventually train women to carry on the task on their own, we need to know of
the steps involved in doing so.
For developing a marketing plan for an economic activity, we need to collect
information regarding the market of the product(s)/service(s) we intend to provide as
well as some information of our own product. The first set of information that
we require for this purpose relates to customers, their characteristics and special
features, their needs and their preferences.
55
The second set of information relates to the same product(s) or service(s) already
available in the market. It includes the information regarding the special features
of the products and the consumer benefits that they offer; their capacities to meet
the requirements of the market; the customer-opinion about these products, and so
on.
The third set of information relates to our own product(s) or service(s) concerning its
special features and the customer benefits that it can offer.
A. Market Estimation
Once we have this information it needs to be organised, consolidated and
analysed to estimate the market, The estimation of the market has four essential
components : the market size; the market potential; the supply situation; and the
competition.
Sources of Information
1.
1.
Consumers
2.
Market survey done by the group by talking to other people
(other than customers).
3.
Other organisations
4.
By travelling and visiting markets
5.
By going to banks, finding about all schemes and talking to bank
employees
6.
Through TV, Radio, Newspapers
7.
Through training programmes
8.
Newsletters of other NGOs, magazines,
notifications, etc.
9.
By being in touch with producers of similar products.-
bulletins, government
Market Size
Every product has its own market size at any given point of time and place. If
every day, in a particular city, two lakh eggs are consumed, then the market size
56
-UTZ__ W
11 • I I I I
l r 'tasga]
I !
o
o
□
Bank
Other Producers
Media
INFORMATION
is collected from many sources
NGOs,
Newsletters,
Reports.
Other markets
Consumers
Other People
for eggs in that given area is two lakh eggs. We need to have an approximate idea
of the market size of the product we are planning to produce or are already
producing.
Here is an example I A milk co-operative is set up in a village of 500 families. In
a village, there are 500 families and a milk co-operative is set up. In order to find
out the market size, we try to find out the quantity of milk that could be consumed
in the village. After that, we try to make an estimate of how much milk the
government dairy or any other institution can buy from the village. The total of
all these would constitute the market size.
2. Market Potential
Market potential refers to the demand that could be generated by the
market at some time in the future. This is because new customers may emerge
on the scene, or we may be able to persuade more customers to use our products,
more frequently. Hence, we need to look at whether our product has the
capacity to exploit the market, which may not be there today but may emerge
in the future.
The future of our product depends upon the market potential of the product
If the market potential is high then we may think of a larger group of women
working on the activity in future, and, we do not have to worry a great deal about
marketing.
3.
Supply
Supply means the total quantity of a product normally available in a given area
or state. For example, if a city gets bread from 3 bakeries, then the total supply
of bread to the city is the sum total production of these 3 bakeries. Estimation of
the supply situation, when matched to the market size and market potential, gives
an idea of the scope for our product/service in the market.
4.
Competition
It is important to be aware of the number of competitors operating in
a given market.
A competitor is a person/organisation which supplies the
same product(s) or service(s) to the same market as we do and fulfill the same
need of the customers. Estimation of the quantity of competition's well as the
strengths and weaknesses of competitors is essential to develop a marketing plan.
If there are too many competitors in a market, the supply may exceed the
demand and selling may require tailoring the gap between the customer's
needs and performances and the existing nature of supply.
58
B.
Planning
The estimation of the market in this way will provide us the first—cut picture of the
standing of our product(s)/ service(s) in a given market situation. Now we can
move on to develop our marketing plan in this context. The essential aspects
of marketing plan are described as follows:
gives the
Market Size
Milk
consumed at
the villages
Milk
bought by
the Government
Milk
needed by
any others
>■: l»t •««
•••
Jims
» tt ««
• M »•
« i • it
•»**>
•kJ
^1* ♦»•
1.
Milk
to Institutions
(Potential Market)
Market Segmentation
Market
segmentation basically
means
dividing
prospective customers into different groups in order to
be
able
to
fulfill
their
expectations
more
systematically. These different groups of buyers may be
called market segments that we are trying to cater to.
For example, when women sell vegetables to prospective
customers like vegetable retailers, office canteens,
restaurants, hotels, domestic consumers, the market has
been divided into so many various segments.
Milk
to Hospitals
(Potential Market)
increases
the Market size
Each segment of the market is a market by itself,
because it has its own requirementsand peculiarities. For instance, vegetable
retailers may want the full range of vegetables and may want it every day,
while canteens and restaurants may require only certain vegetables and
not of a very high quality, while hotels may choose to buy only certain
vegetable and that too of high quality.
In asimilar way, a tea-shop owner's market segments may comprise of office
workers, college students, casual visitors, commuters, roadside labour,
regulars, etc.
The Basis for segmenting markets
A large number of variables can be used to segment the markets,
following four criteria are normally used:
59
However,
the
(i)
Regional segmentation, involves choosing a particular region for selling. For
example, we may
choose
to
sell
our
vegetables, eggs\bidis\creche
facilities in the rural areas only; or we may want to increase our regional
segmentation by including the nearby town also. We may choose to sell our
product in one locality or may cover the adjacent area also.
(ii)
In demographic segmentation, we make an attempt to differentiate groups on
the basis of their age, sex, family size, income, occupation, education, religion,
social class, etc. For example, in a tailoring project, we may like to distinguish
between the sex of buyers - male/female. Is it the working women who will buy
? What is the average age of these buyers? What is the average income of
their family? What is their social class, culture etc.? The answers to such
questions would provide valuable inputs to the kind of product that we are going
to market as well as its success.
(iii)
The personal segmentation is basically concerned with the lifestyle of the buyer
groups or their personality traits. For instance, we need to know whether a
particular buyer group is going for tasty food, likes variety and does not mind
paying for it, or is content with the same food every day and cannot pay for
the taste and variety in food.
(iv)
Segmentation on the basis of buyers' behaviour or consumers' benefits, implies
differentiating on the basis of their preferences and benefits that they are looking
for, from the products or services. For example, in a- bag-making project, one
prospective buyer may be seeking
the design, another the colours, and the
third one, its utility and size.
60
Examples of segmentation of the Market are given here on the basis of
three different types of Activities.
1. “Manufacturing” (Product - Chappals)
Segment Number
Segment Description
Similarity between members
of Segment
One
Local shops, weekly
market, consumer
co-operative society.
Regular but small quantity orders
Same locality, same price and
quality, easy to understand
the taste.
Two
Wholesalers, factories,
boarding schools,
colleges, orphanages,
hospitals, army, police,
offices, organisations,
Government.
Large quantity.
Orders not regular, customers
give own specifications
and 'designs
Three
Exhibition
Large quantity
Four
Export
Large quantity customers
give specifications and designs
2. “Livestock” (Product - Milk)
Segment Number
Segment Description
*
Similarity between members
of segment
One
Hotels, Hostels,
Hospitals, Schools,
Colleges, Creche,
Sweetshops.
Bulk and regular order
Two
Dairy, Co-operative
Society,
consumers
Bulk, particular about
quality; not direct
Three
Houses
Smail quantity, regular order
61
3. “Land” (Product - Fodder)
Segment Number
Segment
Similarity between members
of segment
One
Dairy farms,
Co-operative Societies
Large, regular orders
Two
Individual animal owners
Small quantity
Three
Bazaar
Large quantity, not one buyer
Segments are made on the basis of similannes which exist between customers. The
similarities could be one or more.
The segments get made or constructed when
groupings of customers are done on these similarities. Customers having same/
similar features are grouped in one segment.
2. targeting
The segment(s) which we choose to focus on for our activity
Market. We need to understand:
is called Target
1.
The needs of the target-market.
2.
3.
Details of the special characteristics of people of the target-market.
How do they buy the product - in bulk or in small lots? What is the frequency
of their purchase ?
4.
The special preference of the target market. Do customers want products
to be delivered at their doorstep or are they willing to collect these from the
place of operation ?
5.
Are there certain things they do not like for example, certain colours, perfumes,
sizes, kinds of packing, etc.?
6.
What price can they pay ? What price are they willing to pay?
7.
How committed are they to our products?
them to our organisation/our products ?
How committed can we make
The above information is needed, so that we can satisfy the needs of our market and
are able to provide the services and goods to the satisfaction of our customers.
62
Example of different levels/scales of market that could be
targetted and their advantages and disadvantages.
Different Markets
Advantages
Disadvantages
Local/ Neighbourhood
Markets
- Buying habits and
purchasing power more
easily known
- Minimises problems
with distribution
and transport
- Becomes saturated
quickly
- Increases the number
of buyers and thus
creates potentially
greater surplus
- More difficult to know
buying habits and likes/
dislikes
Countrywide/
National Markets
- Generally cannot afford
to pay for higher-priced
items
- Requires national distri
bution of products.
- May require channels of
distribution in selling
Export/lnternational
Markets
- Provides access to
buying power of
wealthier countries
and consumers.
- Creates dependency on
intermediary importers
to translate markets,
trends and requirements.
- Creates large
population of
consumers
- Extremely complicated
requirements of quality
control, licensing,
shipping, etc.
- Requires far more sop
histicated control of
financial and production
systems.
WE COULD CHOOSE THE MARKET BEST SUffED TO US DEPENDING ON OUR CIRCUMSTANCES
AND RESOURCES.
63
«<
3.
Outlining the Product/Service Decisions
Once we are clear about the target market, its size, market-potential, competitors and
their products, we need to focus on what exactly we will make. We need to outline
decisions in relation to the range, quality, level, designs and costing, etc., at this stage.
Such decisions are called product/service decisions. The rationale of such decisions
lies in pitching our product/service to the requirements of the market that we are
targetting at.
For example, if we are making handicrafts,
answering the following questions:
then
the product-decisions
involve
i)
Should we make all kinds of handicrafts - paper, wood, clay, cloth, etc., or,
should we restrict to one or two items only ?
ii)
Should we make expensive type of handicrafts of the medium/inexpensive
variety ?
iii) Should we specialise in making one item, that is, dolls or decoration pieces?
Or, should we make a larger variety?
iv) If our decision is to make wall-decoration pieces of cloth, and in Rajasthani
style, then
* of what sizes ?
* of which patterns and colours ?
* what quality of cloth, colours and other raw materials to use ?
In the above example, the product decision involves a detailed decision on the
range, the raw material, the kind of handicrafts, etc.
Product Features and Consumer Benefits
Product features are the characteristics or properties of the product. For example,
a plastic bucket has the characteristic of being made of plastic. The benefits to
its consumers are: light as compared to a steel bucket and so easy to carry, colourful,
good looking; also does not get so hot in the sun and is easy to clean.
Consumers normally buy things because of their benefits and not because of their
features;.
Product Features
and Consumer Benefits have a cause-and-effect
relationship. Product Features are the causes and Consumer Benefits, the effects.
The above point can be illustrated with the following examples of manufacturing
activit
64
4>
Examples of "Manufacturing Based Activity"
Number 1
Foot-operated Spinning Wheel to make Wool
Product Features
Consumer Benefits
*
*
Foot-operated
Self-winding mechanisms
No chest and back pain
500-600 gms, extra production
per day.
★
Made of Mild Steel
Long-lasting
Good quality of yarn
produced.
Number 2
Hand Made Grass Mats
Product Features
Consumer Benefits
Length 7 feet. This is more
than machine made mats.
★
Any person can sleep
comfortably without his
legs sticking out of the mat
Good colour combination
*
Looks nice
Smooth, thin grass used
★
Does not hurt while sleeping.
Good careful weaving (No holes)
*
Long life.
Fast colours used
Not easily broken
Will not fade
EXPLANATION: We will need to talk about the specific benefits and features of
our grass mats and justify the high price.
65
J
Number 3
Dining Table Mats
Consumer Benefits
Product Features
*
Made of sisal fibre
will not burn
Smooth finish, shiny
good-looking
Washable
Easy to keep clean
*
Hand-made
Life of mat is 2-3 years
EXPLANATION: We will have to explain the specific benefits that the customers
will get If they buy our dining table mats.
Examples of “Livestock” based Activity
Number 1
Poultry - Chicken
Consumer Benefits
Product Features
*
Light Weight
*
You get a good price
Tenderness
*
Easy to cook, digest and tasty
Safe to eat. You will not fall sick
No Disease
Number 2
Eggs
Consumer Benefits
Product Features
You get a good price
Big Size
★
Fresh
★
You get good quality
★
Clean
★
Eggs will not dirty your hands
at the storing place.
66
4^
4.
Marketing Consideration in Pricing
While deciding the selling price for our products/services, we need to
know—apart from the cost of our product - the number of competitors and
prices of their products, and the extent to which the customers can bear the .
price, i.e., ability and willingness of the customers to pay the price. (Details of
how to calculate the price is dealt within the finance section).
While pricing, we can follow one of the
following pricing methods:
Cost Plus Pricing
In the first method, we calculate all costs and add some margin in order to give
a profit and a surplus, e.g.,
Cost + 20% of cost as margin = selling price.
Competitive Pricing
In competitive pricing, we determine the price of our product after considering
other similar products in the market. We can then choose to price it at the same
price; a lower price, or a higher price. Each has its merits/demerits. For example,
if milk is being sold at Rs. 6.00 per kg and we are pricing it at Rs. 6.90 or Rs. 6.10
per kg, we can say that our price is competitive.
Penetration Pricing
In the penetration strategy, we consciously keep the price of our product low
as compared to others. This way we attract a lot more customers and penetrate
into the ^market. For example, a women's group which supplies fresh food
to office-goers, keeps its prices low and is therefore, able to capture many
more customers. Larger output and smaller margins add up to bigger profits.
Discount
Discount is given to serve a particular purpose at a given time. To further our sales, or to get rid of large stocks, we give discounts. These may be cash
discounts, i.e. 1% or 2% or 5% on cash payments; or quantity discounts, i.e., the
customer buying in large bulk gets a discount.
)
5.
Distribution Channels
Distribution channels include all the activities and steps which are required to make
our product reach the customers. If the customer is supplied directly by the
producer, it is called Direct Distribution. If the supply is through some intermediary
67
The Milk Supply is
Distributed
„>fT
CANTEEN
.NI
to
individual homes,
through Co-operatives
to individuals
through Canteens, and Restaurants
to individuals
like a distributor, a dealer, or a marketing agency or networks -i.e. KVIC etc., then
it is called Indirect Distribution.
One example of Direct Distribution is selling of bed-sheets directly to customers
at the production centre itself. Direct distribution can also be done by buying at
a shop in a market place. Another way of direct distribution is to participate
in exhibitions, melas, etc. These exhibitions can be organised by us or we may
participate in exhibitions organised by others. There can also be exhibitions
organised jointly by a number of NGOs.
We could also participate in
exhibitions organised by DASTAKAAR, SIRA, Government/Semi-Government
departments like CAPART, the Central Social Welfare Board, etc.
However many a times, it is not possible to deal with and sell directly to all
customers. In such cases, it is advantageous to have Indirect distribution i.e. use
a channel of distribution. For example, when we are making handicrafts we
may find it very suitable to sell to the State Handicrafts Emporium.
The decision to choose a particular channel of distribution will depend on
such factors as our target market, product, sales volume which we wish to
achieve, how widespread our market is, distribution arrangement of our
competitors, the present capacities and skills available in our organisation, etc.
There is an imperative need to work out the details of distribution channels as part
of the marketing plan.
6.
Order Taking and Selling
Order-taking and selling constitute the most important components of marketing.
We need to receive orders regularly . Some one has to be responsible for meeting
customers regularly and keeping them satisfied. We could have one person
or a team to look after this assignment. Usually, this person or the team could
consist of an organiser of the activity - anyone from the NGO staff, the group
members, or, leaders, etc.
Order-taking and Selling means
1.
Co-ordination between customers on one hand and production and delivery
personnel on the other.
2.
Acknowledging orders of the customers, answering all their queries, including
detailed queries of technical nature.
3.
Keeping a systematic record of all customers' orders, including despatches made
against each order.
69
4.
Making delivery challans and bills (sometimes these functions are allocated to
the delivery/despatch/store section).
5.
Collecting payments from the customers and keeping a record of these.
A list of concrete decisions and a detailed design for all these functions is an important
component of the marketing plan.
FEEDBACK
Following Information is essential to keep up the activity in tune with the dynamics
of the market:
*
Customers’ forecast of orders for the next few months.
Change desired by the customers in the products.
★
Customers’ level of satisfaction with our products.
*
Those who
level is.
*
Do customers know about us sufficiently? (feedback on our promotional effort).
*
Do the customers find our distribution arrangement adequate?
are
using
competitors' products and what their satisfaction
People involved In selling and order-taking may be the most appropriate for
providing such information because by nature they will be In constant touch with
the customers.
7.
Test Marketing
Test marketing means marketing the produce on a test basis. We need to test
the market in order to find out if the customers find the product and the price
acceptable
It is essential to test the market when we are entering it for the first time,
when launching a new product, or, when we have changed some of the features
of our product.
Test-marketing consists of two stages:
Stage 1 is doing a Pilot Test. In the Pilot Test, we produce a few (15-20 at least)
samples of our product and give them to our consumers for use. After they
70
4
have used these, we ask them: Are you satisfied with our product and its
performance? Does it meet all your expectations? If not, what improvements
would you like us to make ?
After getting the responses, we implement
to make the product more acceptable.
the suggestions of the consumers
Stage 2: is producing more quantity of the product than in the Pilot Test, This
quantity is then sold in a limited area, which is called the 'Test Market'.
At this stage, we have to put the product under actual market conditions. Samples
are not given, as in the case of the Pilot Test. The product is sold at a specified
price, at chosen shops and given some promotional support, if required. In
this process, we get to know the strong and weak points of our product, its
distribution, its price, promotional efforts needed, etc.
Test marketing is done before buying the raw material in bulk or buying all machines
for production,
If test-marketing results show that sale of the product is not encouraging, we may
even decide against starting that particular activity.
I
EXERCISES ON PREPARATION OF A MARKETING PLAN
An important aspect of marketing is the preparation of a marketing plan. This
needs to be done before we start producing in bulk. The Marketing plan is our own
thinking, understanding of the various aspects of marketing of the activity which we
are thinking of and putting this down on paper.
Once the group has decided what activity to get involved in, we may make a rough
plan of marketing based on formats 1-5, provided in the following pages. This could be
done by 2 to 3 organisations, involved in a similar activity, sitting together and discussing.
The organisers could also collect/obtain information from the markets/other knowledgeable
persons, by deputing people or going themselves.
This rough plan could be discussed in a meeting of women members or their leaders
and their views sought on this matter.
The final Marketing Plan is made after including changes which have been suggested
and accepted in the above-mentioned meeting (The final Marketing Plan is also made
in Formats 1-5).
A review of Marketing Plan every three months, and to assess whether it is working
alright, is also very important.
Change the Marketing Plan when necessary but major changes should not be done
frequently. If we find ourselves changing our Marketing Plan very frequently, something
is certainly wrong with our planning and setup. This would mean that we need to
think afresh.
For illustration purposes we have filled Format 1-3. Detailed Marketing Plans can
be filled only after getting in-depth information on the particular activity we are trying
to start.
72
Marketing Plan Format 1
Products we. wild nuil^e
1.
2.
3.
Specialfeatures of these products
2.
3.
Competition
Our ‘Product
(blame
1.
2.
3.
Competitor's
‘Their (Product
(Price
features
Ours Theirs
Ours Theirs
i
(For illustration purposes we have fitted (Format 1-3. Details of Marfeting Plans can 6e fitted on(y
aftergetting in-depth information on the particular activity we are trying to start.
Marketing Plan Format 1
—‘Nursery
‘Products we witt ma/(e
(Pipitt
Mango
Quava
Z>enia
tKpse
Money Mant
Amranthus
Stfosia
Special features of these Products
1.
‘Evergreen, Joliage
2.
No ‘Damaged Leaves
3. 2.5 to 3 ft. Long sapling wfiicfi tneans it is farely wellgrown, hig and therefore good.
Competition
1.
‘Evergreen Np^ery, their Prices are 15% lower
2.
Nalindi Nursery, then ours
*
‘The competitors do not have a partial sun shade as we have
*
‘We do frequent sprinkling of water over plants. ‘They (the competitors) de it only once in
the morning
74
Marketing Plan Format 2
Target ‘Market
Our customers are companies andhotels in ‘Delhi. Delhi is only 40 hgi.from here andhig companies
and hotels need a lot ofplants and saplings from our nursery. Also big farm houses in gurgaon
(10 Iqn from here) ta/(e plants from us. Then there are small individual customers who ta^e 25 or 10 plants from us for their houses backyards, etc.
Marketing Plan Format 2
Target Marl^et
*144 are going to seT our products to:
States
Cities
Age group
Tducatwnal group
Economic
Class
(Tlidcone)
*
Upper
Upper fMiddle
* Middle
* Lower
Very quality conscious/somewhat quality conscious/price conscious (Tic^one out of the three in the
above sentences)
If we are selling to organisations, co-operatives, OQVlC, etc., ‘Write down:
9{ame of the organisation
Their annualpruchase
of die product
efse is supplying tfiis product to them?
If you are selling to wfwfesalers, dealers, etc.
‘Names of tfie wholesalers
•Dealers
‘Their approximate annual purchase of the item we are malting
Any specialfeatures wfiicfi they want
76
Marketing Plan Format 3
Our customers are very quaCity conscious and so are we. Our customers are wiCCing to pay a higher price
to us but they are satisfied with our deaCing because we provide them fuCC range of pCants, saplings.
Our products are heaCthy and we also give guidance and expertise to our customers. These things our
competitors are not able to provide. In fact now we have buiCt up such a good reputation that more
and mere organisations are inviting us to set up their Cawns, gardens, farms on a project turn t^ey basis.
‘We find such project wor^quite profitable.
Marketing Plan Format 3
(Put down on paper aCCfactors wfiicfi customers consider as important when buying products of the type
which we are mating.
*
(Tfien Cist of a£C important competitors and categorise (pCace) tfieir products Cased on the above Cist of
factors
Competitor
Category (position) they beCong to
2.
3.
4.
77
(Position of tfie. Product
Posed on tfie. target market cfwsen in format 2
‘Determine position of our product
‘Wfiat wi£C our product be fqiown as (tic^ one of these)
*
Pfigfi quadity
*
fffigfi quadity
*
(Medium price
‘Reasonable quadity
*
Medium price
‘Reasonabfe quality
*
Low price
Pfigfi price
*
Jresft, pure, naturad ingredients
*
Jutf range/medium range/Cow range (in case ofjob-worf^ weCding, etc.)
*
Md sizes/few sizes
*
Standard products/products made to order/bo tb.
78
9
I
Marketing Plan Format 4
Tricing
0
*
Have a (oof^at our competitors, tbeir products and prices given in format 1.
*
CatcuCate fixed, variable and totab costs for each of our product
Troduct 1
Product 2
!bX^d cost
‘Total cost
Variable cost
a
a
a
Product 3
Calculate breal^even point for each of our products
Product
‘Brea/(:even point
1
Units
2
Units
3
Units
Select a (selling) price for each of our products based on
Competitors' prices
*
All costs of product
*
Customers' capacity/willingness to pay
*
Image of our product
*
discounts we Have to give to our dealers/distributors/marfeting agencies
Product
Selected price
1
2
3
79
I
Marketing Plan Format 5
Jor the sales arrangements to be used here, list all details in terms ofpersons, contacts, etc., to be used
by us.
‘Wfwfcsafers/dealers
tyime
(Discount allowed
(Product
transportation arrangement.
Order taking and sales handling
Mill 6e done by
‘Billing to be done by
Sales recorded by
Advertising/Tromotion to be used by us
80
V
PROMOTION AND ADVERTISING
Promotion
means making our customers aware of
our produce/products,
their features and highlighting the good points. Advertising is the most popular method
of promotion.
The objective of any advertisement is to inform the potential customers of the product.
Once they have the information and are aware of the product, we need to persuade
them to buy the products. The advertisement should be able to build an image of
the product in the minds of the consumer by talking about the product-features and
consumer benefits. The advertisement should appeal to the customers either rationally,
emotionally or through humour.
Rational Appeals
Emotional Appeals
★
*
*
*
★
★
★
*
★
Economy-low Price
Return on investment
Profit
Better designs
Good looks
Smooth finish
Credit
Durability
Early delivery
Better packaging
Tasty
Better finance
Good quantity.
★
Status
Prestige
Image
Women’s group
These appeals conform to various consumer benefits from various segments. Hence,
if these appeals are used along with the identification of consumers in each of the
four segments, it would be very helpful in marketing.
An advertisement should be able to attract customers by one or more of these :
slogans, illustrations, photographs, colours, style of letters, etc.
Before deciding on using a particular type of advertisement, its cost-effectiveness needs
to be looked into. This means asking the question -How much extra sale will we get
by issuing this advertisement?'
If the benefit is more than the cost, advertising
should be adopted. While applying this principle, it also needs to be kept in mind that
advertising has a long-term effect and some amount of advertisement has to be done
by any group to make the potential customers aware and respond favourably
to a product/activity.
81
/
This is usually done by:
meeting the present and future customers regularly and giving them all the
required information.
making leaflets, booklets and posters about the products showing
of sizes, patterns, illustrations/photographs of the products.
all
details
whenever necessary, getting a wall poster painted on a house, or by the roadside,
in a village.
if the customers are spread over a large area, then putting advertisements in local
and state newspapers. For example, Lijjat papads are sold all over India and
they are advertised in newspapers and magazines and even on TV.
The advertising medium and the style of advertising would depend on who the target
customers are.
If the target customers belong to the upper middle class (income being the basis of
classification) and live in a city, then it may be necessary to use good quality printing
for posters and to advertise even on TV. Once we are clear in our minds about who
our customers are, what places they visit, and, what they see/read, it becomes easy
to decide the medium and style of advertising.
Any economic enterprise can advertise its products and promote them through
different mediums, such as exhibitions, weekly melas, markets, permanent shops,
stalls and by door-to-door selling. One can also use the medium of announcement
on cycles, rickshaws, wall writings, cinema hall slides, radio, posters at railway stations,
bus-stands, etc. We can also promote our product at the Seminars, Conferences, in
the colleges, schools, government offices, NGO offices, etc.
MARKETING CONSIDERATIONS FOR EACH TYPE OF INTERVENTIONS
In the four types of interventions, mentioned earlier, the marketing considerations
for each type are as follows:
(1)
Upgradaticn of Activity
Upgradation of an activity implies improving or upgrading the current activity with
the help of new machines, technology, facilities, resources, funds, etc. For
example, if milk is sold by a co-operative, provision of better feed for cattle, or
provision of transportation of milk to far-off places, or vaccination of milk cattle are
different ways in which the activity of milk production is upgraded. As a result
82
J
of this upgradation, several issues concerning marketing arise. Two main issues are
the following:
a) Increased production as a result of upgradation: Marketing plans need
to be revised and reviewed as a result of increased production and strategies
adopted to market the extra produce in time.
b) Increased and better quality as a result of introduction of upgradation:
Marketing plans may require reviews in areas of revision of price or change
of customers, as a result of better quality of the product or the service.
(2)
Better Returns of Present Activity
This implies ways to manage our present activity in such away that it yields better
results (gains). Lowering the input costs, or increasing output costs, or better
organisation may be some of the ways to achieve the goal. Again, as in
measures to create upgradation, here too, several marketing issues emerge.
These are:
(3)
a)
Marketing for increased production (as mentioned above)
b)
Search for new markets for higher prices (as mentioned above)
c)
Selection and training of women from within
over the marketing tasks.
d)
Planning and monitoring the marketing strategy as per the customers'
requirements. In other words, if we have forecast a customer demand for our
product/service and production is undertaken at a matching speed, then,
perhaps, all orders have to be executed in time leading to better returns from
the same activity.
the
organisation to take
Activity Networking
It implies establishing contacts with similar organisations engaged in similar
activities, i.e., the produce of one organisation is consumed by the activity
of another organisation. For example, wool produced by one group is sold to
the other for spinning, or saplings from one
group are sold to the other for
plantation, who in turn sells forest produce to a third group, etc. In this category
of interventions, since a chain is established by a link-up of two or more
organisations, marketing concerns have to be carefully monitored till the end
of the chain. In the example of wool, if spinning produces low quality stuff, or
it is difficult to market spun goods, then there will obviously be less demand for
wool and our group as a producer group of wool will suffer. Hence, for the
83
marketing plan to be effective, we have to bear in mind the following:
(4)
a)
behaviour of the end link in the networking chain.
b)
marketability of the end product of the networking chain.
c)
Price controls of the end product.
d)
Consumer preference of the end product.
New Activity
Groups venturing out to initiate entirely new areas of economic activity to
women, need to begin with a marketing plan. This comprises of:
demand
the product
to be
a)
estimating carefully the
produced.
b)
establishing
c)
satisfying consumer requirements, i.e., ensuring price and range controls.
d)
setting up distribution channels.
e)
promoting and advertising the product.
contact
potential
with
prospective
for
buyers, individuals, groups, etc..
Thus, it may be concluded that whatever the nature of intervention with a
group, the marketing concerns generally coalesce in the same areas. If a group thinks
through all these concerns before initiating any activity and prepares exhaustive
marketing plans, there is no reason why its efforts should not succeed.
■
84
Notes
85
Notes
86
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■ 1
PRODUCTION
Involvement in any economic activity entails a series of operations through which
a set of inputs undergo a process of transformation, to yield a set of outputs. The
resultant output fetches returns to the activity and, thereby, income to the group
members.
The production function of an economic activity refers to planning, operating,
integrating, supervising, contracting and evaluating the entire process of “creating”
goods and services, at the 'right' cost, time,quality and quantity.
Such transformation of input into output or 'creation' of goods and services, takes
place by application of labour and skills and with the help of machines and tools and
in a given frame of time and space. Lack, in terms of quantity and quality, of any
of these factors will affect the production process correspondingly.
Ensuring production at the 'right' cost and time, quantity and quality constitute
the backbone of any activity and thus, requires rigorous prior-planning.
Developing a detailed production plan helps a lot whether we desire to make
a choice among the short-listed activities, that women can undertake, or, we wish
to intervene in whatever activities women are already involved in. It helps in terms
of anticipating the quantity and quality of labour and skill requirements; the
implications of machines and tools required; and the related dimensions of time and
space.
Such anticipation is important from the point of view of not assessing the
requirements in congruence with the womens' capacities and assessing the financial
and other non-financial requirements.
PRODUCTION PLAN
Since production is a process that involves several stages, the first step is estimating
the scale of production and determining the requirements of raw materials, machines,
tools, labour and skills. The second step entails appropriate sequencing or routing
of different stages of the production process. The third step involves scheduling^ which
coordinates operations at various stages in such a way that the rate of production
corresponds with the customer demands. Besides, a production plan also includes
allocation of work to women; identification of points of supervision as well as
monitoring the coordination between different stages and aspects of production. The
production plan should also propose ways and means of expediting the tensions that
might come in the way of the production process.
89
Fuming 3
Determining the material requirements, tools, labourers, etc. (e.g.,
yarn, looms)
Selecting the most appropriate path of manufacturing/produc
tion
ScheduHng
Preparation of product orders and timetables (working out how
many hours women will work)
Monitoring
Supervision of work in progress and allotting work to women
Exoediting
Eliminating any snag in the production system (e.g., absen
tee women, irregular work, poor quality, etc.)
Estimating
Our concern here is specifically focussed on women. In order to determine the
scale of production or how much a group of women is going to produce, we need
to look at the following factors:
i)
Capacities:
In previous sections, we have talked about the real life situations and
marginalised the social conditions under which poor women work. In the
case of a commercial enterprise, the starting point for determining the scale
of production may be the market features — like competition, competitive
prices and the need to break-even. Subsequently, while entering the
new market, it becomes necessary to evaluate the quality of labour and
their skills. In the case of a group of poor women, however, considering
the life situation and the work capacity, this evaluation for deciding the scale
of activity-and-rest needs become difficult to follow. Nevertheless, their
capacities in terms of the time they can spare for the proposed economic
activity, the skills they possess or given the opportunity can develop, form the
basis for deciding the scale of production.
ii)
r
Market Requirements
Other set of factors that influence decisions about the scale of production
are the requirements of the market that we are targeting at. These include
sizing up the targeted market and its specific preferences etc.,
and
matching it with the capacities of the group of women who are to be
involved. Because, producing more than the requirement of market or
producing something different from the preferences of the targeted market
90
i
is likely to effect the economic activity adversely and thus, create problems
for the already marginalised group of women.
iii)
Resource Requirements
We have already observed that women or women groups have very little
access to and control over financial and non-financial resources. This needs
to be taken into account while deciding the scale of production. It also relates
to the assistance women can get from a wide network and their capacity
to negotiate for assistance.
iv)
Additional Factors
The other significant factors which decide about the scale of production are
geographical location and transportation; infrastructural facilities like storage;
etc. For example, a group of women in a remote village in the hilly areas
will have different constraints, which will affect the decision on the scale
of production, compared with a group of women in a village at the periphery
of a metropolis.
How many women are ready to take part
in the economic activity?
I
1
Given the time
they can spend
each day on
the economic
activity, how
much can be
. produced?
Can the amount produced, be sold?
Is the raw material available and accessible?
No
Reduce size
of activity
or
No
No
Make
arrangements to
sell this much
1
GO
Reduce size
of activity
AHEAD
or
Make
arrangements to
get raw materials
WITH
Reduce size
of activity
T H I
91
SIZE
OF
No
Reduce size
of activity
4
The envisaged scale of production will give us the first clear-cut idea about the
requirements of all the three sets of factors essential for production —labour and skill;
time and space; and machines and tools.
The next step is to assess how much a group of women needs to produce every
month/season/year. Though there cannot be any hard and fast rule about it, yet
experiences show that it is helpful to look at this issue on a yearly basis. Since the demand
in the market as well as the time available to the group of women, we are concerned
Fixed production Fluctuating demand - Shawls
Month
Demand
Production
April
500
300
300
300
600
1500
2000
1500
1500
1100
1100
500
750
750
750
750
750
750
750
750
750
750
750
750
May
June
July
August
September
October
November
December
January
February
March
Backlog
Stock
250
500
750
750
1100
350
900
1650
2400
2750
3100
250
These figures illustrate that it has not been possible to cater to the demand even
though we have been collecting stock in the first five months. We see that it gets
consumed mainly in the 6th month and is able to ease the situation a little bit in the
7th month, but the stock is not enough to satisfy completely the demand of the 7th
month and a backlog starts from the 7th month and goes on to the 11 th month.
with, have seasonal fluctuations, planning for at least a year helps in making adjustments/
balances between production and demand.
In the table, given above, we also observe that the backlog of demand increases
every month. If we are not able to cater to the demand in time, people will go to some
other source for their demand-satisfaction, especially if the demand is seasonal in
character. Therefore, we have a stock of 250 in the month of March.
Most of the time, in our type of activity, it is not possible for us to increase our
production as the number of women in our group is fixed. The table shows us the
scope of the demand which exists at a particular time.
92
I
Fluctuating production Fluctuating demand - Shawls
Backlog
Stock
Month
Demand
Production
April
200
300
100
May
150
300
250
June
150
300
400
July
200
400
600
August
450
500
650
September
650
700
700
October
1100
750
450
November
1500
750
300
December
2000
750
950
January
1500
750
1700
February
750
750
March
500
750
250
From the above, we can see that both demand and production are fluctuating
as the demand is less in the first few months and we are able to build up a stock. Inspite
of this, during the peak season, we have a backlog in the first year.
If we are able to continue at the same scale of production in the second year, like
in the first year and our demand is also at the same scale, then we will find that there
will be no backlog but a surplus stock. That means we shall have to actually increase
our demand in the second year.
Fluctuating production Fixed demand - Shawls
Stock
Month
Demand
Production
Backlog
April
100
60
40
May
100
50
90
June
100
40
150
July
100
30
220
August
100
55
265
September
October
100
100
130
150
November
100
200
30
50
150
December
100
210
260
January
100
115
275
February
100
90
265
March
100
100
93
I
In the above chart, we can see that there is a fixed demand but the scale of
production is fluctuating. In the first few months, there is a backlog and then we are
able to build stock in
the next few months as we are able to increase our
production.
In the second year, this stock will help us to fulfill the entire demand even though the
scale of production in the months of April, May, June, July, August is less than the
demand.
This, however, may not be possible, especially if we are producing
perishable items.
Fixed production Fixed demand - Shawls
Month
Demand
Production
April
150
200
50
May
150
200
100
June
150
200
150
July
150
200
200
August
150
200
250
September
150
200
300
October
150
200
350
November
150
200
400
December
150
200
450
January
150
200
500
February
150
200
550
March
150
200
600
Backlog
Stock
The figures given above show that both the scales of demand and production are
fixed. A stock is getting accumulated. In the second year we would have to try to
increase our demand, as it is not possible for us to reduce the production since the
number of women in our groups is fixed.
In all the afore-mentioned cases, the discrepancy between production and
demand can be handled by either involving more women, if possible, in the months
when the backlog is increasing; or, by inventory-planning and control; or, both. Most
of the time, for our kind of work, periodical involvement of women does not work well,
and is also not advisable policy-wise. Hence, we need to concentrate upon inventory
planning and control.
We will be dealing with these various aspects in great detail
in the following sections:
94
I
Routing
Many a times, the production process involves various steps/stages and
each step/stage has its own specific requirements that need to be anticipated and
planned in advance. Working out details in the production-process ensures that no step
is likely to be forgotten or over-looked. It also helps in modifying and improving
the steps, wherever possible. The first step for routing is to identify and list all the steps
involved in a production-process in a logical sequence, and thus, create a process
flow-chart. The process flow chart of a bidi unit is shown below :
PROCESS FLOW CHART
Purchased
leaf, tobacco,
thread &
other
materials
Bidls tied in
bundles
of 25
♦
Checked by
the
Store Keeper
Brought to
the Site
Weighed and
issued leaf
tobacco and
thread to
women
Checked by
Supervisor
Bidis rolled
using leaf
tobacco
and thread
Next
morning
leaves were
cut on a
frame
Dipped leaf
in water for 2
minutes and
kept In the
basket
Checked by
Supervisor
Basket full of
bldls in the
sun dried for
4 aays
Baked in the
oven
Checked
by Supervi
sor
V
Bidis kept in
a basket
T---------------------
Despatch
Store
Checked
95
Wrapping of
Bidis in
Bundles of 25
each
Put in the
Store
I
Such a process flow chart will help us estimate space, time, machines/tools and
labour required at each step in a production- process. It will also explain to us the
nature of linkages between different steps and their interdependence, etc.
Questions to be asked at the time of routing :
★
Is the step really necessary ?
*
How best can this step be combined with another?
*
How best can the lag/distance between the steps be
reduced or removed ?
*
How best is sequencing affecting the smoothness of the process ?
Scheduling
On one hand, the process of flow-chart will help us to estimate the time taken and
the labour required at each step of the production-process. On the other, we will
know the time, quantity and quality of the labour available with the group of women
that we are concerned with. The next stage is to work out detailed arrangements so
that time and labour could be used to the optimum level. This will mean working out
who, among the group of women, will work on each of these steps, how many of
them will work together at a time on each step, and how much time will they require
to put in at each step, etc. It implies working out details to the extent that every one
understands what needs to be done by whom and by what time.
Example
In a bidi-making unit, where certain processes of
the production take place at a centralised
place and the rest are done by women at their
own homes, the scheduling of this unit could be
done in the following way:
Parveen and Farida go to the market once a
week to buy all the raw materials and give it
to Hasina - the store incharge, who checks the
material and puts it in the store.
In the morning, 15 women come to the centre
to take leaves, tobacco, thread, etc. These are
weighed, counted and distributed by Hasina
and Farida.
96
Women, then take these materials to their homes and make the bidis. Individual
women cut the leaves at their homes, roll it with tobacco, tie the thread, put it in
the basket to be brought back to the centre.
They bring the bidis back after two days. These are checked by Parveen and Farida
and the new raw material is released to them by Kasina.
After the women go back, Parveen and Farida put the bidis in baskets for drying
for 4 days. The dried bidis are then checked by Kasina who puts them in the oven
for baking. She checks them after they are baked.
Parveen and Farida, then wrap the bidis in bundles of 25 each. Kasina checks
the bundles and stores them. Arrangements are, later, made for the despatch of
the bidis.
In a bidi-making unit where 18 women are involved in making bidis, the scheduling
could be done in the following way :
Leela and Mala (two women) go to the market once a week to
tobacco, thread and other required materials.
buy leaves,
After coming back from the market they give all their purchases to Geeta, the store
keeper, who checks and keeps it in the store.
In the evening, 10 women involved in making the bidis dip the leaves in water for
2 minutes and place them in the basket. This is a pre-requisite for making the bidis
the next day.
Next morning Sudha, Prabha and Arti cut the leaves and give them to 10 women,
who roll the bidi-leaf and tobacco. Leela and Mala check the rolled bidis before
Sudha, Prabha, Arti tie the bidis into the bundles of 25 each. These bidis are then
kept In a basket. This basket is kept for drying out in the sun for four days.Before
this is done, it is checked by Mala.
After the bidis have dried up, Geeta puts them in the oven for baking after which
she checks them and puts them in the store.
Kala and Anjali then wrap the bidis in paper, making bundles of 25 each. This is
again checked by Geeta before they are put in the store and are ready for
despatch.
Taking again the bidi example : if one individual woman is involved in the entire
production process, then the scheduling would have to be done by the woman
in such a way that the production does not stop. She has to set aside time for
buying the raw material; she needs to cut the right amount of leaves for the whole
day as only then can she spend the rest of her time in making the bidis, putting
them in the.sun for drying, making bundles, etc. The important thing for her would
be to have the right quantity ready, at the right time, so that she can move from
one stage of production to the next in a systematic manner. She does not have
to waste time going backwards and forwards from one stage to another.
97
I
4
Monitoring
Looking at the interdependence at different stages in the production-process, and
its implications on the success of an activity, it is essential to give extra attention to
the issue of coordination at different stages. If we look at the process flow chart
starting from purchase/collection of leaves and purchase of tobacco, to the final
stage of packing and despatch, more than a dozen steps line up in sequence.
For the purpose of understanding, we may call this as ‘Production Line'. This
production line needs to be balanced in such a way that :
i)
it does not allow for more than an optimum inventory (stock) at each step;
ii)
it reduces the possibility of production hold-ups to a minimum;
iii) it ensures accomplishment of the desired production rate.
Example
In a bidi-making unit, which has an order for producing 80,000 bidis
a day, a total of 85 women are involved —80 women in making bidis
and 5 women in the inspection and stores department.
One woman is able to make 1000 bidis every day — so at the end of the
day, we have 80,000 bidis.
After the bidis are rolled by the women, they have to be baked. One
oven can accomodate 40,000 bidis. Five women working for 8 hours are
able to, on a sample basis, inspect and put bidis in a store.
In the above example, the production line will be balanced when the
bidis rolled by 80 women can be baked in two ovens. Otherwise, there
will be a stock pile-up at the baking stage. Similarly, at the inspection
and storage stages we need 5 women; otherwise, the stock for inspection
will get piled up and the production line will get affected.
In case there is any change in the number of women involved in rolling
bidis, or inspecting the bidis, then changes at all stages of production
will have to be made, in order to ensure balanced and ongoing
production.
if one of the ovens is not functioning properly, then again, we would
have to see how production can be balanced and what adjustments have
to be made.
Working out details, on one hand, of ‘Line balancing' at the planning stage will help
improve our decisions of scheduling; and, on the other, help us identify points of
monitoring at different stages in order to sustain balance in the production line.
Requirements of line balancing will also create several roles for women, other than their
tasks.
98
Expediting
Under any circumstance, the whole process of production - despite rigorous
estimation, routing, scheduling, and monitoring — is bound to be subjected to snags,
bottlenecks and exigencies of circumstances. There is a need to adopt some
corrective mechanisms in order to deal with such issues. These issues are of two types
- those related to women engaged at different stages; and those related to machines
and tools. Issues of the first type are : absence of women from work, irregularity
of work, inadequacy of work, etc. We need to plan systems and procedures to cope
with them.*
Issues of the second category relate to the proper functioning of the machines and
tools as well as their maintenance. The maintenance of machines and tools need
to be understood in two spheres — preventive and corrective. We need to plan for
both.
The preventive maintenance planning will imply planning for every day routine check
up; where it needs to be done; who will do it; who will be responsible to ensure that it
is done, etc. Planning for corrective maintenance will entail arrangements to look after
break-downs in machines and tools.
In case of the livestock based activity of production, preventive as well as corrective
maintenance is likely to be complicated since it relates to the maintenance of animate
rather than inanimate machines. Here, the maintenance function entails ensuring clear
and hygienic conditions in the sheds, cleanliness of the livestock, their periodical medical
check-ups, etc.
We need to plan ahead for all these exigencies due to their labour, time and financial
implications.
Additional Aspects of Production Plan
An important aspect of production-plan is the layout of the work place. There are three
major considerations in lay-out planning:
i)
It involves arranging the lay-out in such a manner that it facilitates entry of
production output from one stage into the following stages with the utmost
convenience.
ii)
The sitting arrangement or the location of steps is arranged in such a way
that matches with the involvement of individual women in the different steps
of the production-process, and their convenience.
iii)
The third set of planning issues relates to the basic needs/requirements of
different functions and women: e.g., lighting, air, cleanliness and other environ
mental factors; basic amenities, water, sanitation, etc.
99
Notes
100
l
1
Material Management
A
i
a
. =-
/
MATERIAL MANAGEMENT
Once we have determined the scale of our activity and prepared a production plan,
we know approximately the requirements for commencing the production. Planning
the most critical components, labour and skill, is already enumerated in various steps
of our production plan.
The other materials required for production fall into two
categories : of consumable materials, i.e., cotton for spinning, colour for dyeing, dyed
threads for weaving; and, non-consumable materials, i.e., spinning wheels, pots, looms
and other allied tools.
Non-consumable materials are bought at one go, yet we need to plan for their
availability in the right quantity, at the right time and in a similar manner as in the
case of consumables, which have to be bought regularly. This entire process is termed
Material Management.
In a way, Material Management, begins with the procurement of consumable and
non-consumable materials of the right quality and in the right quantity.
PROCUREMENT
Material Procurement is a very crucial function in an economic activity because it has
bearings on all the other components of any economic activity, e.g., financial planning,
production and marketing, etc.
Hence, procurement of materials needs to be
meticulously planned beforehand.
Experience shows that the following five
considerations are essential for appropriate procurement :
1.
Quantity
The production plan gives us a fairly clear idea of the quantity of non-consumable
and consumable materials required for the scale of activity we have planned for,
but for the purpose of procurement-planning we need to take a second look
at it.
The total quantity of different materials needed for uninterrupted
production can never be bought (procured) at one go because it is likely to
have other implications. The following factors influence the decisions regarding
procurement :
105
r
(i)
Nature of Material
Some materials (because of their perishable nature) cannot be procured in bulk,
and only a systematic procurement plan can ensure the availability of adequate
quantity of such materials at the right time. Whereas, non-perishable materials
can be procured in bulk in order to meet the requirements over a longer period
of time.
(ii)
Availability and Accessibility
Another factor, which influences the decision about how much to procure and
when, is the availability of the material. All the material is not easily available
all the time, and our procurement plan needs to take care of that contingency.
Some materials, like machines and tools, may take a long time to be delivered after
an order has been placed; while some raw materials might have seasonal
availability only. Hence, procurement process has to be planned accordingly.
Sometimes, material may be available but at a far away place and procuring
it entails transport and other costs. This needs to be taken into account while
taking procurement decisions.
(Hi)
Cash Flow
The procurement of material in bulk necessitates blocking money for an indefinite
period of time. Hence, despite the knowledge of requirement and availability
of material in the market, it may not be possible sometimes to procure material
in bulk. Before making procurement decisions, it is necessary to look into this issue
carefully.
(iv)
Space and Maintenance
Even when the nature of material is suitable for bulk purchase, also that the
material is available, and there are no cash flow constraints, the other aspects
to look into very carefully are storing-space requirements for the material and
its maintenance.
2.
Quality
The quality of equipment and raw material affect the quality of the final product
which we want to sell. Hence, while making purchases we need to be particular
about the quality of the materials purchased. For instance, if any livestock has
to be purchased for a dairy unit, quality in this case would mean milk-giving
capacity and health of the livestock, etc. In a tailoring unit, the quality of cloth
would mean durability, fastness of colour, etc.
Quality in the context of an economic activity does not necessarily mean buying
the best available material in the market. The best quality purchases mean very
106
high costs and high prices. We may not be able to market high price products
in our targeted markets, at least not always. That is why our aim has to be to
procure the material of a suitable quality, which may or may not be the
best.
To illustrate our point, suppose we use a cloth of Rs. 60/- per metre in a tailoring
unit for stitching a salwar-kameez. The cost of each salwar-kameez will come to Rs.
300 - 320. After adding our profit-margin of Rs. 20-30 to each unit, the selling
price will come to Rs. 350/-. We may not be able to sell a large quantity at this
price unless our target-market is of well-off or fashionable urban clients. If this
price does not suit the requirements of our target market, we have to revise our
decision of procuring this quality of cloth to our tailoring unit.
3.
Price
The price of the raw material is a very important dimension. The selling price
of our product/produce depends to a large extent on the cost incurred by us on
purchasing the raw material. If we have paid an unreasonably high price for
our raw materials, then our product is likely to be costlier compared to the other
similar product in the market. This will affect our sales. Or, we will have to cut
down the cost by paying very low wages to the women involved in our activity,
which may not be desirable at all.
4.
Timing
This is another important dimension affecting procurement. Keeping the stock
ready always costs money. This involves taking decisions about when we need
to purchase our raw materials, formulate a schedule or a deadline on which our
products need to be ready, etc. Take an example : If 100 bags have to be made
by the 15th of the month; there are 10 women and each one of them makes
two bags a day. They would require 5 days (10 women x 2 bags x 5 days =
100 bags) to comply with the order of 100 bags. Working backwards, we will
need to buy raw materials at least 10 days before the 15th, incidentally, allowing
for 2-3 days for unexpected hazards.
5.
Source
The purchase function needs to ensure that raw materials are procured from the
right source, from a supplier who can provide quality material at a reasonable
price. We should also explore whether this source is ready to supply us on credit,
give discount and other benefits. We should also see that this supplier is not very
far from where we are located.
One th;ng to be clear about is as to who will be responsible for purchasing. Such person/
persons should keep all the above factors in mind as well as be aware of the
alternative procurement sources, so that the production does not get hampered.
107
r
EXAMPLE OF RAW MATERIAL PROCUREMENT
The following example illustrates decision-making for stocking raw material needed
for an activity and the forces which influence such decisions:
A group of ten women, in South India, is involved in making shoulder bags. They
spend 25 days every month in making these bags. Each woman makes 2 bags a
day; thus 20 bags are made each day and 500 bags in a month. The bags are
made of yarn/thread; the other materials used in the production are stitching
thread and plastic bags for packing. All the three materials - yarn, stitching thread
and plastic packing bags - are easily available. The work is carried out on
looms, located in a workshed.
Question : How much of the raw material should be stocked for the activity ?
Answer
: Since there is no difficulty in getting the material from the market
anytime, it will not be advisable to stock huge quantities. At the same
time, a lot of time may be wasted if the purchasing is done each day.
Hence, one possible solution is:
Keep one week's stock of the yarn
Keep two months’ stock of the stitching thread, because it is a low cost
item. Stocking it will not involve making an elaborate inventory or locking
up money, unnecessarily.
★
Plastic bags used for packing can also be stocked for one week.
Suppose, a big order for 500 bags is received. This is in addition to the regular
weekly sale of approximately 100-125 bags. In such a situation, there is no harm
in buying a large quantity of yarn and plastic bags. You may decide to buy the
total requirement of 500 bags at one go. This will save you money because you
may be able to get quantity-discounts on the bulk purchases. Also, you will be
saving a considerable amount of time and travel expenses if instead of four weekly
visits to the market for purchase of raw materials, you are now making one visit
only. This time can, instead, be spent in producing extra bags.
In this example, you will notice that decisions have to be changed to stock
the raw material for 500 bags in response to the increase in demand and
consequently, the need for a system of buying one week's increased requirements
of the raw material.
This happened because :
★
a large confirmed order of 500 bags was received. Thus, there was no risk
in stocking one month's requirement, in terms of yarn and plastic bags.
the sooner the order of 500 bags is executed, the better it will be because
money will be recovered soon. Therefore, there is logic and reason behind
buying all materials at one go and raising the production by various means.
108
If our economic activity Is based on networking-intervention, then the
system changes. We procure raw materials from some other women’s economic
activity or supply our product to another group to be used as a raw material
by them. If we are buying raw materials from another group then we need
to see that:
★
the group has adequate production capacity so that we get sufficient supplies
of raw materials in time.
★
quality of the material they produce is good, constant, and is what we need.
★
we pay them a price which is fair, reasonable and acceptable to them;
as well as
which
ensures
a
reasonable return/surplus to them.
CONSIDERATIONS FOR MATERIAL PROCUREMENT
1.
Purchase should be for a particular and well defined need.
2.
Purchase should be made mainly on the merit of goods and services offered
by the suppliers, who are competing against one another to supply. The price,
quality and regularity of supply should be the other considerations in the
selection of suppliers.
3: The decision about what to buy and when to buy should be guided by
market trends, price-movement and demand-supply position in the market.
4.
The purchases should be made when the prices are the lowest and on terms
which are the most advantageous in terms of price, quality, volume of material
and the delivery date.
5. The purchase should be made in the light of future market trends, which the
purchaser must forecast.
6.
A large number of goods and services are available on seasonal basis.
Purchase should be made in that season when prices are the lowest.
7.
While making purchases, quantity-discounts
suppliers) should be availed of.
8. The
(which are given by many
purchases should be made keeping the availability of funds in
mind. Purchased goods need storage space, insurance cover, etc., which
need to be attended to. All this costs money, and, therefore, while purchasing
raw materials or goods, we need to see how much space (storage) we have
and how much money we can spend on it, without harming other activities.
Money can be borrowed if we assess that we will be able to buy the material
at low rates now, consume the material in time, and mqke large enough
profits to repay the money.
109
RECORDING
Once the raw material is purchased, we need to evolve mechanisms to keep track of
the purchases in order to ensure availability of material in the right quantity and at the
right time.
Such an exercise is known as INVENTORY MANAGEMENT. Inventory
Management involves the following aspects :
1.
Knowledge of the quantity and quality of stocks required at different stages and
the time of the production process.
2.
Keeping track of the consumption of stocks. How much raw material is being
consumed everyday and how many finished goods are being produced daily
need to be known. Keeping record of all the material is essential in this context.
We need to keep the record of each item of non-consumable and consumable
materials, of goods in the process of making as well as the finished goods. These
records should indicate the amount procured at a particular time, the amount
of material put into use and balance left in stock. To sum it up, we need to plan
for four categories of items : the non-consumable materials, raw materials, goods
in the process of making and the finished goods.
Keeping Inventory Records helps in :
★
Regular monitoring of the raw materials and finished goods; and draws
attention to the production performance, a comparison with productidn
targets and performances; taking stock of the other problems arising in
the production process, etc.
Maintaining an inventory of the finished goods in the store draws attention
to sales and marketing problems, if any.
*
The trend of prices of raw materials and inputs can be analysed from the
inventory register. It can draw attention to market changes in the costs,
prices, and may involve a revision in costing of our products.
Shortages of raw materials in the market could also be identified through
the trend analysis.
Registers and Forms for Inventory
A separate register has to be maintained for all the four types of inventories : nonconsumable materials, consumable materials, goods in the process of making and
the finished goods. After drawing a complete list of items under each category, we
may allot separate pages in the inventory register to each category.
no
Formats enclosed show how the columns in the register could be maintained. The
columns may vary slightly, depending on our own requirements of production and sale.
They can also be changed to suit our requirements. As there is no format which is "the
best" for all purposes, it can be designed according to our own requirement.
Enclosed are two suggested formats:
Format 1 : Raw Material Inventory Register
The register should provide accurate information on:
★
★
Total purchase during a particular period: say, one month.
Balance at any given time and its value/quantity.
The name of a particular person or department during a given period of time and
the value of the material issued.
*
Rate fluctuation in the raw material over a fairly long period of time.
Format 2 : Finished-Goods’ Inventory Register
This register gives accurate information on:
The quantity of goods received from
particular period
the
production department during a
Quantity of goods dispatched in a given period
sales as well as customers.
which provides an index of
We come to know the following :
★
The exact quantity in stock in the finished or saleable form. This helps us in making
commitments to our customers, - in planning our production for the next month
or coming months. For example if the stock of finished goods is already very
high, we may not like to undertake the production of that item for some time.
*
Finished-goods' inventory register helps us to tally actual stock with quantities listed
in the register. This exercise is called physical verification and is very necessary
at regular intervals of, say, once in 3 months or so.
★
If the finished goods' inventory register is scrutinized carefully, all unsold products
lying in stock for a long period are taken note of. Efforts are then made to sell
off or liquidate such stock.
111
FORMAT 1
RAW MATERIAL INVENTORY REGISTER
Name of Raw Material
PURCHASE
Date of
Purchase
Supplier
Bill No.
CONSUMPTION
Name of
Supplier
Quantity
purchased
Rate or
Price
Rs.
P.
Total
value of
purchase
Rs.
P.
Balance
Quantity
Value
Rs.
P.
Date
Requisition
Slip No.
Name of
Person
Taking
material
Quantity
given
Rate or
Price
Rs.
P.
Total
value of
Issue
Rs.
P.
Balance
Quantity
Value
Rs.
P.
J
4
FORMAT 2
FINISHED-GOODS’ INVENTORY REGISTER
Date
Name of
Person
Quantity
coming in
Quantity
sent out
113
Balance
Signature
of the
Person
Name of
the finished
item
Inventory Management is also closely linked with the
working capital and the
operating cycle, explained in other sections of this manual. The operating cycle makes
estimates of the number of days required to convert cash through raw material - through
finished goods—through sales to cash again.
It accordingly, estimates the cash
requirement. Inventory management is matched with the calculations of the operating
cycle in order to ensure smooth functioning.
Periodic physical verification of inventory is a useful practice to ensure that the
information in the stock registers is correct. A quarterly/periodic review is hence
recommended At the annual audit of the economic activity, physical verification
of inventory is done by the auditor.
Raw materials and finished-goods' inventory records are kept in the respective stores
while goods-in-process inventory stays with the people engaged in the work-process of
the economic activity.
114
STORAGE
Planning for storage is another important step in Material Management. Appropriate
space to keep stock and measures to prevent the stock from being damaged are
essential once we decide to procure some materials. It also applies to the goods
we produce for marketing.
The type of storage facilities will differ according to the nature of the goods being
produced and the raw materials being stored. For example, the kind of storage facility
required for storing milk is different from that of the facility required for storage of cloth
or animal-feed. It is necessary to demarcate spaces for different items, as this helps
save time and money. In the same vein, different grades of stock need to be stocked
separately, according to the quality of stock.
A few examples of items that need to be
land-based and livestock-based activities are:
stored
under manufacturing,
Manufacturing
Land-based
Livestock-based
Raw material
Wool
Seeds, fertilizers
Feed
Goods in process
Wool on loom
Standing crop
Chicken
Finished goods
Shawls
Grain
Eggs
Important aspects of Storage
★
Storage space needs to be located as near the economic activity as possible.
If women take work home, then the store should be at a central place, which
is convenient to reach for the majority of the women.
★
The size of storage facility will depend on the number of items to be stored and
the quantity to be stored.
★
Separate space needs to be kept for each item to avoid confusion.
A tag/slip needs to be fixed to each item so that identification is easy
and we can find the right thing at the right time, Item name, code number,
tags or slips help in the identification.
The
store layout needs to take
into
consideration environmental
requirements, i.e., air and light specifically needed for the goods being stored.
One person needs to be in-charge of the store, to
are not stolen, spoiled and soiled or wasted.
115
keep a check that
goods
It is necessary to plan and carefully assign responsibility for the maintenance of the
store and items in it.
The store records need to be maintained, in order to know what is entering, leaving
and what actually is in the stock at the end of each day.
In order to protect the store against any damages or losses, it should be covered
by adequate insurance.
TRANSPORTATION
In most situations, transport requirements need to be taken into account at the planning
stage of material management because transportation facilities are required at various
stages in the production process, as well as at the time of sales. To illustrate the
point, once the raw material is purchased, it needs to be transported to the place of
production. Sometimes it becomes necessary to transport goods from one production
site to another, while in the process of being produced. Invariably, transport is
required at the packing stage, when goods are produced, when the finished product
is to be taken to the market for selling, etc. At times the group decides to store the
finished product for sometime at a central place in order to get a better price, later.
Transport may also be required for carrying out repairs and maintenance of machines
and equipment used for production; for advertising, etc. An autorickshaw, a bicycle
or a bullock cart could be used for these purposes, as well as to acquaint people with
the product.
Choice of Transport
Transport facilities should be of such a type that the cost of transportation is minimised,
goods are moved from one place to another safely, in good condition and on time.
The different types of transport that could be used are: local bus, bicycle, truck, head
load,
auto-rickshaw, cycle-rickshaw, bullock-cart, jeep, train, van, ship, aircraft.
Transport could be hired from outside agencies or owned by the women's group or
by the NGO.
The choice of transport would depend upon the condition of roads, availability of
transport, distance, cost, time, quantity, type of material, funds, etc. If we are producing
perishable items like milk, vegetables, eggs, etc., then the choice and availability
of the quickest type of transport at the right time is crucial for the success of that
productive activity.
The effects of different seasons on the availability of transport and the type that can be
used has also to be considered. We need to ensure that the transport agent or
contractor is not exploiting or overcharging, by cross-checking with other people
involved in the transport trade and NGOs.
116
6
Exercise - I
After going through this section on Material Management,
our minds are:
(2-
the basic questions fifety to arise in
1:
In our economic activity, wfiat quantity of the raw material should 6e ordered each
time
2:
Mow much stoc^of the raw material should we maintain?
117
a
gor answers to questions 1 and2, calculate the quantity of the raw material to be purcbased each
time, by following the steps given below:
Step 1:
Prepare a Production Plan for one year, based on (ww many women are going to
be involved in the activity.
Step 2:
Chedf whether the sale of the produced quantity is possible. If a higher sate is
possible and more women are willing toget involved in the activity, ma/(e a revised
production plan. Also mafic a revised production plan with lower output
if less sale is expected than estimated in Step 1.
Step 3:
•Divide the finalised Production Tian into quarterly plan periods (4 plans for
4 quarters). Divide the first quarter's plan into 3 monthly plans.
Step 4:
Decide how much of the raw material you want to store
in order to fieep the production going, as per the answer to above plan.
Step 5:
Decide how much raw materialyou wish to buy each time. Use your individual
judgement. 'There is no formula for this. Tafie your decision based on
1. seasonality, funds' availability, price advantage and easy or difficult access
to the raw material.
118
Q.
3: 9fow much stocff offinisfiedgoods sfioufd we fgep with us I
yor answer to question 3 follow tfie steps given 6efow:
Step 1:
Cafcufate tfie totaf pending orders from customers and add to tfiem an estimate of
tfie new orders expected in tfie ne^t 3 montfis.
Step 2:
Qo tfirougfi steps 1, 2, 3, of tfie previous answer.
Step 3:
(Decide on tfie 'finisfied-goods’ inventory.
Use your own judgement, and
answer. Dfiere is no formula for tfiis. 9(eep to QSfp.3 customer-satisfaction and
service in mind. Avoid Cost safes on account of tfie non-avaifabifity ofmaterials.
Avoid e\tra-Carge inventories.
119
Exercise - II
Q. 1
‘Wfiat prob fans are faced 6y your organization witfi regard to raw materials?
Q .2
In wfmt way could you provide a better supply- service
120
‘Wfwse bebp woubd you see^
LSI
•uvjd v
aiou ffutyutyi styi
ywvdjdj. zyi iuojJ
IdffiwH Rduoui vyi puddspynotn nod moy fo^tjutyi osjy eUdddvyjpoi^uty^ nod op im/in^iois
fo ditiunnb vyi vonpi-i nod noddns '^oo^ ut^dnp^ n
dzuoui fo ninouw zyi /o^my^
/
/
Notes
122
Notes
123
Notes
124
Costing and Finance
LC^
I
COSTING AND FINANCE
In any economic activity it is crucial for women to understand the financial planning,
analysis and record keeping. Without proper understanding of the financial aspect
of any economic activity, women will not be able to fully control and carryout any
economic activity. Many a times we have seen that this aspect of managing an
economic activity is generally left on to NGOs. Such a practice may be desirable in
the initial stages of the development of Women's Group and their economic activity,
when their understanding and skill of managing the finance (of their activity) is limited;
but we should aim at developing them to learn and start taking care of this aspect
also as this will lead to a greater self-confidence and self-esteem of poor women.
9
During the initial stages, an economic activity depends, to a large extent, on external
sources for funds. However, as the activity gets established and a surplus is generated,
the economic activity (Coop, or production unit) should depend more and more on
its own resources.
Right through the life of an activity, a balance has to be maintained between the
use of external resources and members' own resources. Equity (or share) plays a very
important role in this as women feel more involved in the activity and treat it as their very
own.
Another aspect of empowerment of poor women is achieved when the surplus
generated from the economic activity is used to create'facilities and supportive services
for the members who have contributed in generating the surplus. For example, child
care facilities, skill training, subsidized raw materials, credit facilities, health care,
housing, transport, insurance, exposure and training — all these efforts also create a
greater stake for the women members in the economic activity and encourage them
to participate more actively.
Financial Management involves:
i)
Assessing the money required to start an activity and arranging the funds
for it.
II)
Management of working capital and investment in the fixed assets.
127
«i)
Costing each activity and relating these costs to
generation of surplus.
selling prices and
Iv
Planning, operationalising and monitoring the use
of surplus
v)
Keeping record of the accounts of the economic activity and using this
information to improve the performance.
In this section, we will focus on: Costing, Break even analysis, Cost-benefit analysis,
Capital, Budgeting and Accounts Keeping. Each of these topics are dealt with
separately.
1.
Costing
When something has to be produced - whether it is a commodity (e.g. woolen
shawl, cocoons, vegetables) or a service (cleaning or transport) - a number of
inputs (resources ) are used for producing it. These may be raw materials (e.g.
wool, mulberry leaves, seeds or broom), hours of labour (for weaving, feeding,
planting, sweeping), other
efforts (selling shawls, cocoons, vegetables,
or getting cleaning contracts). All these inputs (resources ) involve expenditure
of various kinds. 'Cost' simply implies measuring these inputs and giving their
value in terms of money.
For example:
Cost of woolen shawls
= Money spent on purchasing wool
+ Money spent on wages for weaving
+ Money spent on hiring the equipment.
+ Money spent on selling shawls
Cost of Vegetables
= Money spent on purchasing seeds,
fertilizers, pesticides
+ Money spent on getting water for the plot
+ Money spent on wages for sowing,
tending and selling.
Cost of eggs
= Money spent on buying chickens
+ Money spent on getting food.
+ Money spent on transportation
+ Money spent on wages
128
r
Cost of the cleaning service
= Money spent on purchasing brooms
and other required materials.
+ Money spent on wages for sweeping
and swabbing.
+ Money spent to obtain the cleaning
contract.
Costing involves keeping a systematic record of expenditure incurred, classifying
and allocating it appropriately to arrive at the actual cost of a product or service.
Costing is an important tool:
s
1)
to determine cost price
2)
to determine selling price
3)
to control costs
4)
to determine profit\ loss
Doing costing on a regular basis helps in making realistic decisions for planning
and implementing
an
economic activity.
The tendency to make these
decisions on a hunch is not helpful in making the activity self-reliant.
Types of Costs
All costs incurred in running any economic activity can be classified into two
types:
1) Fixed Costs
2) Variable Costs
Fixed Costs
Once in business, you have to incur these costs/expenses. Whether you produce
1 unit or 100 units of a product, these costs will have to be incurred. For example,
if you have taken a room or a shed for making leather chappals, then the
rent of that room is a fixed cost. Even if you do not produce any chappals, you
will have to pay the rent.
129
Variable Costs
Variable costs are those which vary or change in proportion to the units produced and
sold. For example if leather chappals are being produced in an activity, then the cost
of leather, cost of chemicals, colour, etc. will constitute the variable cost.
Variable
cost increases with every additional unit of a product produced.
Total Cost
This is the sum of fixed costs and variable costs. As you will notice the total cost
will keep changing at different levels of production. Let us take an example. If
we are producing an item whose variable cost per unit is Rs. 10/- and fixed cost is
Rs. 2,000/- per month then the total cost will be:
Unit Cost
Units
Manufactured
Fixed Cost
Variable Cost Total Cost
(cost per unit)
0
Rs. 2000.00
0x10=0
Rs.2000.00
100
Rs. 2000.00
100x10=1000
Rs.3000.00
Rs. 30.00
200
Rs. 2000.00
200x10=2000
Rs.4000.00
Rs. 20.00
300
Rs. 2000.00
300x10=3000
Rs.5000.00
Rs. 16,67
400
Rs. 2000.00
400x10=4000
Rs.6000.00
Rs. 15.00
500
Rs. 2000.00
500x10=5000
Rs.7000.00
Rs. 14.00
As can be seen from the above table, the cost per unit keeps on falling as more and
more units are produced. Why does this happen? It is because the fixed cost gets
distributed over a much larger number of units and therefore the cost incurred per
unit decreases. Although the variable cost per unit remains the same, the total cost
per unit reduces because it is the sum of variable cost per unit and fixed cost per
unit.
It must, however, be said that fixed cost does not remain fixed for ever. It is fixed
for a certain range of production. Beyond that level of production, it goes up. For
example in the business of making leather chappals, one room may be sufficient for
making 2000 pairs of chappals a month but beyond that level of production another
room may be required. Another machine may also be required beyond a certain level
of production.
130
r
t
Hidden Costs
A piece of land Is donated to a group of women for sericulture by
the village panchayat. When determining the cost of cocoons produced,
do we Include the value of this land ?
Bamboo is available to a womens’ craft co-operative at subsidized
rates. Do we take into account the value of the subsidy when determining
the cost of the product ?
*
A common marketing facility for all products is provided by an organ
isation. Do we take into account the expenditure incurred in marketing
a particular product from amongst all the products while determining the
cost ?
Many a times we find that in womens' economic activities in examples
like the above and other similar examples we tend not to include such
costs In determining our total costs. We tend to ignore these costs as
they are not very visible. However, it is important to Include these costs
otherwise economic activities would never become self-sustaining.
NGOs could decide that in the initial stages of the economic activity such
costs could be borne by them but it is important to recognise and
be aware of such costs while determining the cost of our products.
Cost Price and Selling Price
As mentioned earlier, cost is the sum total of resources used in the activity,
in monetary terms. The total cost, divided by the number of units produced gives
the cost price per unit.
Once the cost price is known, all those involved in the activity will have to
decide at what price to sell the product or set the selling price.
The difference between the selling price and the cost price of a product is called
the margin. There are several ways of determining the selling price of a product.
Some of them are as follows:
The
selling price may be fixed taking into consideration the price
at which the same or similar products are sold in the market.
131
Or, if it is under a government scheme, the price may be prescribed by
the government.
The policy of adding some percentage to the cost price to arrive at a
selling price is also followed at times. This is called a 'cost-plus' pricing
policy.
If the product is new, it may be worthwhile to sell it at a low margin or
on a low-profit no--loss basis (here, cost price will be equal to the selling
price). This is called a 'market introduction' or 'penetration' price. The
selling price may be gradually increased once the product is established
and visible in the market.
If the product has some unique features, we may be able to demand a
high selling price.
Whatever the considerations may be while fixing the selling price, due care must
be taken to ensure that the cost price is accurately arrived at, taking into,
account not only the fixed and variable costs but the hidden costs also. It must
be remembered that ultimately it is the mark-up that is made on the cost price,
which will generate a surplus. This will enable the economic activity to sustain and
develop.
132
Exercise
In a vidCage, a richfarmer donated 4 acres ofwasteCand to the MahiCa MandaL The JdandaCmembers
decided to ta/(e up agriculture. They cCeaned the pCot, andfenced it, deveCoped the band, pCanted
muCberry sapCings, and dug a rveCC for irrigating the sapCings - incurring an expenditure of ^{s.
69,000.00. They bought equipment worth Rs. 3,000.00 and constructed a roomfor rearing siCf^worms
for Rs. 10,000.00. iVhen it was time to harvest the muCberry Ceaves, women bought 1200 patches
of eggs @ Rs. 900.00 per 100 patches. Jour women were invoCved in picfqng Ceaves, cutting them
andfeeding the sifl^worms. Jor each crop the feeding period Costedfor 2 weefe during which each
woman was paid @ Rs. 13.00 per day. The salary of the person responsibCe for irrigating the pCot
was Rs. 100. Other misceCCaneous expenses incurredfor the crop announced were Rs. 130.00.
List tfie fixed costs and variabte costs in tfie. above exampCe. Is there any hidden cost in this
examphe
133
Breakeven Point Analysis
Breakeven Point is that level of production when you make neither a surplus
nor a loss. At this level of production, the income from the business just covers
all the costs of the business.
Example
Suppose, selling Price/Unit (Revenue)
Rs.
12
Suppose, variable cost/unit
Rs.
10
Fixed cost
Rs. 2000
e
(Here 1 unit = a pair of chappals)
Units
Manufactured
0
100
300
500
800
1000
Income
Total Cost
Surplus or Loss
0
1200
3600
6000
9600
12000
2000
3000
5000
7000
10000
12000
(2000) Loss
(1800) Loss
(1400) Loss
(1000) Loss
(400) Loss
BREAK EVEN
Breakeven level of production as seen from the above table is 1000 units of
production per month. Below this level of production, there will be a loss and
above this level, there will be a surplus. For example, if 1500 units are produced
per month then:
Income
Total Cost
surplus
Rs.
12 x
Rs.
10 x
Rs. 18000 -
Rs. 1500
Rs. 1500
Rs. 17000
+2000
Rs. 18000
Rs. 17000
Rs. 1000
It is interesting to note that the breakeven level changes with the change in
selling price. For example if the selling price rises to Rs. 15.00 per pair of chappals,
or unit of production, then let us see what the breakeven level is.
134
s
✓
=
Rs.
15.00
Variable Cost/Unit =
Rs.
10.00
Fixed cost
Rs. 2000.00
Selling Price/Unit
How many units of the product need to be produced to cover its Total cost
i.e„ Fixed cost + Variable Cost.
We know that when we sell each unit of the product we can earn Rs. 5.00 over
and above its variable cost.
(Selling price - Variable Cost = Rs. 15.00 - Rs. 10/- = Rs.5/-)
order to cover the fixed cost the number of units that need to be
produced
Now in
Fixed Cost
Selling Price per unit - Variable Cost per Unit
2000
2000
15-10
5
= 400 units.
Therefore, we see that the breakeven level has fallen very sharply from 1000
to 400 units of production per month at this new selling price.
Hence, the basic factors which affect these calculations are the variable cost
and selling price of the product. The business world usually computes break
even point on these two factors. For instance in a big industry, the variable
costs and selling prices of a product are estimated keeping in mind the return
on investment which is desired by the owners. The break-even point in the
business therefore becomes that level of production (assuming 100% sales)
where the total costs are covered by the total income. If it takes three years
to reach this level of production, then arrangements are made to cover the
losses till that time and make the business viable.
Factors Affecting Breakeven Point
However, when we are talking of women's economic activities for increasing
the income and increasing the solidarity of poor women then certain other
considerations also come into play while determining the break-even point.
135
The first consideration is that of
the Employment Generation. Most of
the women s economic activities are started to generate'employment'for poor
women, unlike in business where the purpose is to generate the maximum profit.
Hence, this factor also comes into play while doing the breakeven analysis.
Similarly, the associated consideration of how much wages these "women
should earn” from this activity also comes into play.
These two factors
number of women getting work and
wages earned per women
Influence the breakeven point in the women's economic activities in the
following manner :
1.
When the number of working women (and therefore the level of
production), and the variable cost is constant, the selling price will
determine the break even level. In the same chappal manufacturing
example, if the selling price per unit (which is Rs. 12/-) is raised to 'Rs. 15.00
per unit, the break-even point which was earlier 1000 units now falls to
400 units. In such situations, the focus of the activity is on employment
creation. The breakeven level is determined for making it possible
to create a certain quantum of employment.
2.
When the number of working women and wages per woman is fixed, then
the selling price and the variable cost of inputs will determine the break-even level of production. A higher selling price and lower variable
cost of inputs will lower the breakeven level. If 12 women have to be
provided work to earn Rs. 15.00 per day, then 2.28 lakh saplings is the
breakeven level for the selling price of 30 p. per sapling and the variable
cost of 12 p. per sapling. If the selling price is made 40 p. per sapling,
the breakeven level will comedown to 1.46 lakh saplings, Here, the
focus is on maximising the selling price to bring down the break even
level.
r
3.
When the number of working women (and therefore the level of
production) and the selling price is constant, then the level of variable
cost of inputs will determine the breakeven level. The economic
activities where government schemes are implemented such as nursery-
136
-raising for social forestry, are examples of this situation. Variable cost
of inputs may be controlled by reducing the wastage, looking for
cheaper materials etc. This would lower the break even level of
production. For example, in the nursery case given at the end of this note,
the break even level of 2.28 lakh saplings is needed to provide work
to 12 women, when the selling price per sapling is fixed at 30 paise. If
the variable cost per sapling is reduced from 12 paise to 10 paise, then
the break even level of 2.28 lakh saplings comes down to 2.05 lakh saplings.
In situations 1, 2 and 3, the employment creation is of important concern.
The level of production, the level of work, the size of the activity, the volume
of business needed are the various terms used to determine the break even
level which, is sufficient to support the extent of employment to be created.
In such situations, the classification of fixed and variable costs is different.
Wage for labour, which is usually counted as a variable cost becomes a fixed
cost in situations 2 and 3. We have to understand such adaptations when we
estimate the break-even level in our economic activity.
Lowering the breakeven level of production is important because before the
break-even is reached, the economic activity runs at a loss and only after the
breakeven level of production is crossed does the activity start generating a
surplus.
Contribution
Contribution per unit is defined os the excess of selling price over variable cost.
Contribution per unit = Selling price per unit - Variable cost per unit.
Contribution per unit x units sold = Total contribution.
The contribution therefore, serves to cover the fixed costs. The greater the
contribution per unit, the fewer will be the units of production needed to reach
the break-even.
Sometimes during th© initial introductory stages of an economic activity, selling
price of a product is fixed so that it covers only the variable cost. In such a
situation the contribution per unit is zero. This is done to enter the market at
a lower price.
But, this is essentially a short term strategy and later, the price per unit must be
set so as to cover a part of the fixed cost per unit also.
137
SURPLUS;
REVENUE LINE
[P-12]
K000
13000
12000
BREAK EVEN PT.
11000
VARIABLE COST
cn >0000ui
o
s
8000
7000
<5000
in
o
o
5000
4000
3000
FIXED COST
2000
1000
0
8 8
QUANTITY
M I §
PRODUCED IN
UNITS
If we try to understand the Break Even analysis in a graphical form we will see that the X axis
depicts quantity produced in units and the Y axis depicts the revenue and Costs in Rupees.
The variable cost line (Rs. 10/Unit), revenue line (Rs. 12/Unit) and total cost line are depicted.
The total cost line and revenue line intersect each other when production is 1000 units. For
production lower than this, loss is incurred as depicted in the shaded deficit area as the total
cost line is above the revenue line. When production is 1000 units, total cost equals revenue
earned. So this is the Break Even point. When production is above this, there is a surplus.
138
Once the demand has been analysed and a demand schedule made, you
should calculate all costs of carrying out that activity which is under
consideration. Divide the costs into fixed and variable costs. Calculate the
breakeven point at 2-3 different market prices of the product. While considering
costs, take all costs into account.
The following costs are usually present:
Cost of raw material
Depreciation of any machine installed.
Electricity, water cost
Wages and salaries
Cost of transporting finished goods
Cost of transporting raw material to the place of activity.
Rent
Payment of interest
Fee for any technical advice or training
Taxes (if any)
Supervisory cost
139
Break Even Point and Hidden Costs
Many economic activities use the facilities which are provided by some
voluntary organisations, helping to initiate or supporting the economic activity.
These can be either fixed or variable costs for the economic activity but are
not considered while determining the cost price of the product, since they are
usually given free to the women's group. Land, workshed, machines,
administrative expenses
like transport, office space, stationery, postage,
telephone, electricity, furniture, skills training, stipend, exposure-training, interest
-free funds in the form of grant are some such hidden costs. The selling price
arrived at by ignoring hidden costs is never based on the actual total cost but
includes as an unconscious element of subsidy, and therefore leads to an over
-estimation of surplus. Actually, the value of the hidden cost should be estimated
and taken into account in the cost price and helping price so that when the
support from the voluntary organisation is withdrawn, the economic activity can
still sustain itself. Breakeven point should be determined keeping in mind the value
of hidden costs.
Some General Rules
Some general rules which emerge from break-even analysis are:
When selling price goes up then break-even level comes down. When
variable costs go up then break-even level goes up. When fixed cost
goes up then break even level goes up.
Following is an example of Break-even Analysis:
Masala grinding and selling
Various Masalas (Spices) like Red Chilli, Garam Masala, Haldi,
produced in this economic activity.
etc. are
Average selling price
Rs. 18.00/ Kg.
Average price paid for Raw materials
Rs. 10.00/ Kg.
Total quantity of Masala per year
12000/Kg.
Labour charges paid for one Kg. of Masala
Rs.
140
2.50
Details of Costs
Raw material cost per year = 12000 xlO
Rs.
Labour per year
Rs.
= 12000 x 2.5
Packing material per year
Transportation charges per year
Rs.
Rs.
Electricity per year
Rs.
Rent for house per year
Rs.
Taxes per year
Rs.
Rs.
Rs.
Rs.
Rs.
Bank Charges per year
Miscellaneous per year
Repair & Maintenance per year
Stationery per year
120000
30000
3600
3000
500
3600
200
50
200
2400
1200
Salary of staff/storekeeper, salesman
Coordinator per year
Rs.
Equipment (Chakki)
Rs.
Rs.
18000
10000
2000
Rs.
12000
Moped
Depreciation @ 10 % = Rs. 1200 per year.
Now, let us classify the costs into fixed & variable costs.
Fixed Costs(Per year)
Electricity
Depreciation
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
500.00
3600.00
200.00
50.00
200.00
2400.00
18000.00
1200.00
1200.00
Total:
Rs.
27350.00
Rent
Taxes
Bank charges
Miscellaneous
Repair & Maintenance
Salary of Staff
Stationery
141
Variable Costs (Per Kg.)
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Raw material
Wastage @ 5%
Labour
Packing
Transportation
Total/Kg
10.00 1 kg
0.50 1 kg
2.50 1 kg
0.30 1 kg
0.25 1 kg
13.55 1 kg.
Commission 10% on sale.
Commission/Kg. = Rs. 1.80
Total variable cost/kg. Rs. 15.35
Total Cost
For Breakeven Point Sales Revenue
Let us assume N. Kg. are sold per year.
Rs. 15.35 = Variable cost/Kg.
Rs. 27350 = Fixed cost/hear
Selling Price/Kg = Rs. 18.00
Break even
Fixed cost
SP/Unit - VC/Unit
Rs. 27350
Rs. 18 - 15.35
Rs. 27350
2.65
10,320 kg/Year or 860 Kg/Month.
Since they are producing 1000 kg/month, they are making surplus.
At 1000 Kg/month, Fixed cost/year
Rs. 27350
Variable cost/year (Rs. 12000 x 15.35)
= Rs. 184200
142
Total cost/year
Revenue Rs. 18 x 12000
Surplus
Rs.
Rs.
Rs.
211530
126000
4470
When Selling Price Is Fixed
A voluntary organisation has been organising women of a village to take
up alternate economic activities. Twelve women members were keen on raising
saplings to earn a living. The local forest Dept, was buying 1.5 feet tall saplings
of forest species at the rate of 30 paise per sapling. Nursery-raising is a seasonal
activity (January-June). The details of costs incurred are as follows:
Cost of Polybags
7 Paise/bag
Cost of Manure
= Rs.225/-tractor
(one tractor load of manure is sufficient for 7,500 saplings)
Cost of Pesticides
= Rs. 1000.00 - 10000 Saplings
Cost of Seeds
= Rs. 1000.00 - 10000 Saplings.
Cost of Tools for20 women
= Rs. 2000.00
Rent for Plot and Shed on
Plot and water
= Rs. 500.00/ month
Salary for watchman
= Rs. 500.00/ month
Salary for Supervisor
= Rs. 600.00/ month
Stationery
= Rs. 200.00
Repairs & Maintenance
= Rs. 500.00
Cost of constructing water tank
= Rs. 1800.00
Now let us classify these costs into fixed and variable costs.
Fixed Costs (for 6 months)
Rent for premises & water
Water tank
Salary of staff
Stationery
Tools
Repairs and maintenance
Wages
=
=
=
=
=
=
=
Total:
143
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
3,000.00
1,800.00
6,600.00
200.00
2,000.00
500.00
27,000.00
Rs.
41,000.00
Variable costs (per sapling)
Polybags
Manure
Seeds
Pesticide
.07 Raise
.03 Raise
.01 Raise
.01 Raise
Total:
0.12 Raise
In this case it is very important to ensure that the 12 women taking up the
activity, earn sufficient income (i.e., a minimum of Rs. 15.00 per day). We know
the fixed costs and the variable costs to be incurred for a nursery. Now, we
need to know how many saplings these women should raise so that this activit\
breaks even.
Income per Sapling
Variable costs/saplings
= Rs. 0.30 ps.
= Rs. 0.12 ps.
Contribution per unit
= Income per unit - variable cost
= 0.30 - 0.12 = Rs. 0.18 p.
Total fixed cost
= 41,100.00
Noumber of saplings that need to be raised to cover the fixed cost of the nursery,
Fixed Cost
Fixed cost
Contribution per unit
Income/Unit - Variable Cost/Unit
41,000
= 2.28 lakh saplings
0.18
Therefore, the women need to raise 2.28 lakh saplings so that the nursery break!
even. If they raise more than 2.28 lakhs saplings they can make a surplus.
144
Exercise
1.
^fiat would 6e the breaHgven point if 5 more u)omen join worf^on the yfursery ?
145
Cost Benefit Analysis
The cost benefit analysis involves an evaluation of all the costs that are incurred
or are likely to be incurred, against the benefits that accrue or likely to accrue
from a particular economic activity.
The costs and benefits which are expressed in monetary terms can be called :
Economic costs which are the expenses incurred. Economic Benefits which are
the accrued profits.
There are other costs and benefits which may not be monetary in nature, but
. are just as vital in determining the feasibility of an economic activity.
They can be called:
Social costs (e.g. unemployment, under utilisation
of available resources)
Social benefit (e.g. reduction in drudgery, increase in empowerment, solidarity)
Feasibility
Having weighed the economic costs against economic benefits we know that
an economic activity generating a surplus is giving a net economic benefit while
one undergoing a loss is giving a net economic cost.
Similarly, we need to analyse and weigh the social costs against the social
benefits. When the social benefits are greater than the social costs for an
economic activity we can say it has no social benefit and when social costs
exceed social benefit we can say that the activity incurs a net social cost.
On examining the social and economic costs and benefits of an activity we
find that any economic activity could fit into one of the boxes (A,B,C,D) shown
below:
NET ECONOMIC COST
NET ECONOMIC BENEFIT
Net Social
Cost
A
B
Net Social
Benefit
C
D
146
A. Categorizes an activity whose social and economic costs out-weight social
and economic benefits.
For example, a land development co-operative leaves its land (asset) idle
due to a dispute among it's members. The members lose/income for this
period (economic cost) and this land is not available to the rest of the
community (social cost).
Some economic activities in their initial stages could fall into this slot (e.g. a
skill upgrading training programme for artisans has the objective of
increasing the income). The transition phase and related problems create
an imbalance in the community (social cost). The trainees have to forego
the present income for a nominal stipend during the training period
(economic cost) for future economic benefits. Often these result in future
social benefits through reduction in drudgery also.
B. Categorizes an activity whose economic benefits are more than economic
costs; but social costs outweigh social benefits. Some activities may have
to go through this phase before they reach the ideal position of slot D.
For example, use of chemical fertilisers and pesticides help increase crop
yield considerably.
Immediate economic benefits are high. However,
continuous use of such inputs, degrade the resource base and posterity
suffers, (social cost). Mechanisation of the textile industry has also made
the cheap cloth available (economic benefit) but has displaced the labour
(social cost).
C. Categorizes an activity where the economic cost outweighs the economic
benefit, but the social benefit is more than the social cost.
The net economic costs may decline with time or increase in the activity base,
moving the activity towards Slot 'D'.
For example, powerloom cloth is cheaper than the handloom cloth. But
a hand block printing and a patchwork unit uses the latter at a higher
economic cost, to generate income for a handloom weavers’ unit.
D. Categorizes an activity which is feasible and ideal, as both economic and
social benefits outweigh economic and social costs.
For example, mechanisation of the grinder (Chakki) has brought about a
net social and economic benefit by reducing the drudgery In women's
work; increasing productivity; and allowing some time for leisure or other
pursuits.
147
When a women's cleaning services co-operative acquired a vacuum cleaner,
the women got more remunerative cleaning contracts (like cleaning confer
ence rooms) for which they were earlier considered unfit.
This also reduced drudgery in their work.
148
Exercise
i)
List the economic costs, economic benefits, social costs and sociab benefits for an economic
activity undertal(en by your organisation.
ii) Does it faff under Shot Zl, (B, C, or D of the martin shown earbier? If it does not fabb under ZD’,
what steps wibbyou ta/(e to bring the activity to bo^ (D’ ?
:
‘
■ 'I - '
f'
pn
il.:
^ri'.hoW
Z
149
Capital
The funds required to start any business activity is called capital.
classified into fixed capital and working capital.
This capital is
Fixed Capital
I he funds needed for investing in "items" (like land, machinery, etc.) which
are going to be used in the business on a long term basis fall under the category
of Fixed Capital.
Working Capital
The funds needed for investing in "items" (like raw material, wages, etc.)
which are going to get consumed in the process of manufacturing and will
be converted into cash (after sale) fall under th category of Working Capital.
Working Capital Management
The accurate estimation and efficient management of working capital
utmost importance for any income generating activity.
is of
Working Capital Management is defined as the management of'current assets'
of an economic activity. To be able to understand the working-capital
management, we should first take a stock of the assets and liabilities of any
economic activity.
Assets are what an enterprise or the unit owns.
Liabilities are what the unit owes to others.
This means that liabilities indicate the money which has been made available
to the unit from various sources. These are the claims of outsiders on the unit.
Assets show how the unit has used or employed the monetary resources
available to it.
Both assets and liabilities can be either long term or short term.
Long term assets and liabilities are called 'fixed'. Examples of fixed assets
are: land, building, machinery, etc. for which the unit has spent money for its
utility to the activity over a long period of time. Fixed liabilities are those funds
which have been made available to the unit for a long period of time, e.g., long
term loans or borrowings.
150
Short term assets and liabilities are termed 'current'.
Current Liabilities have to be met or paid usually within the accounting year
of the activity. These would be unpaid expenses, trade creditors, bank overdraft,
etc.
Current Assets are those assets which are held in the form of cash or are
expected to be converted into cash during the accounting periodoroperating
cycle of the economic activity, whichever is longer.
While the accounting period for an activity is usually one year, the operating
cycle may be more or less than this period.
What assets of the activity would one consider ‘current’?
These are:
Cash: Which is readily available to the unit e.g., for raw material procurement,
to meet various expenses of the unit like wages, salaries, rent, electricity etc.,
or to meet future exigencies.
Inventories: These would be raw material stocks which are to be converted into
finished goods. The unit will have to decide what level of raw material it wants
to hold to ensure smooth production.
This would depend upon their
availability, price fluctuations, economic lot size, etc.
The unit will also have finished goods stocks for sale. Again, the unit will have
to decide how much of it's finished goods it would hold as stocks or what would
be the level of these stocks at different points of time considering 'peak'
and 'off' seasons, etc.
Debtors: are those persons or institutions to whom credit sales are made. The
unit may set terms of payment and specify a time within which payments are
to be made. But it often happens that when goods are supplied to Government,
Corporations or large institutions, they set the terms and have their own policies
and systems.
Bills Receivable: These are payments which are due to the unit. These current
assets, if not cash, are expected to be converted into cash during the operating
cycle of the economic activity.
It is the management of current assets and current liabilities that constitute
the management of working capital i.e., the capital that the unit requires for
its day to day working.
COJViMU; \ y
ALTH CEli
151
326, V
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Korarri' nr
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BangaiGro-560034
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RD (I’ * J
When an activity is started, money is required for raw materials. It is also blocked
in work-in-process, finished goods and debtors. The unit it may have made
purchases on credit or borrowed money for a short period of time. Hence,
current assets and current liabilities are generated from the time that the
income generating activity starts. The unit may not have fixed assets or liabilities
at this point of time. It may choose to rent a workshed and the desired
machinery. It may not make a long term borrowing. This may be done gradually
as the unit establishes itself, but current assets and liabilities are instantly
generated when work starts and its
proper management is of utmost
importance.
Operating Cycle
Each activity requires funds for it's day to day functioning because money
that is used to procure raw material takes time to come back to the unit in
the form of money realized from the sale of finished goods. The time required
for the conversion of cash-out to cash-in in an economic activity is called
the operating cycle
For a manufacturing unit the operation cycle would be:
0
U//
Of
1
°^O3HSIN^
The following sequence is evident from the above:
1)
Conversion of cash into raw material.
2)
Conversion of raw material into work-in-process.
152
3)
Conversion of work-in-process into finished goods.
4)
,
5)
Conversion of finished goods into debtors and bills
Sales.
receivable through
Conversion of debtors and bills receivable in cash.
In this operation cycle there would be a value addition at each stage
i.e. ,when raw material becomes work-in-process, which results in the
production of finished goods, the value of production would be added.
Progressive addition of value, including the profit margin, will be reflected
in the sales value. It should also be kept in mind that there is a cost
attached
to capital also.
This is because
monetary resources
available to the unit are being used by it. If these have come in the
form of grant-in-aid, organisations often do not feel compelled to
provide for the cost of capital. If this has come through borrowings from
banl<fs or financial institutions the unit will have to bear interest on that
amount which will be its cost of the capital. On the other hand, if the
Organisation has some surplus funds which it has provided for this
particular activity, it does not mean that there is no cost attached
to these funds. Because, if it had not been used for this activity the
organisation had the choice to invest it e.g., give it to someone else
who would pay interest for the use of this money or even put it in a
savings account in a bank where also it would earn interest. This simply
means that money when put to some productive use is expected to
earn a return, just as one pays for the use of a commodity or service
(e.g., salary to staff, rent for workshed,) money also has a price. All
engaged in economic activities should be conscious of this.
Similarly, the sequence of activity will determine the operating cycle of
other types of economic activities like land-based, live-stock based, etc.
So far, we have focussed on current assets in the discussion on working capital
i.e. Gross Working Capital. Just as there are people or institutions who owe
the unit money; there may be others to whom the unit owes money. These
claims of outsiders which are expected to mature for payment within the
accounting year of the unit are called it's Current Liabilities. These include
Creditors and bills payable (i.e., those from whom purchases have been made
on credit), bank overdrafts and outstanding expenses.
The difference between current
Working Capital.
assets
153
and
current liabilities is called Net
A cash surplus (positive net working capital) arises when current assets exceed
current liabilities. A cash deficit (negative working capital) arises when current
liabilities exceed current assets.
Factors to be considered for the estimation of Working Capital requirements
Various factors influence the working capital needs of an economic activity.
These vary in importance and the importance changes over time. The
following factors generally influence working capital requirements.
I)
Nature and Size of the Activity
The type of activity the unit is involved in influences it's working capital
requirements' e.g., units that provide services or undertake job-work
require less working capital than manufacturing units. Also, the larger
the size of the unit, the greater the working capital it requires.
Working capital requirements will differ again for land based and livestock
based activities.
ii)
Operating Cycle
The longer the sequence of the operating cycle, the greater will be the
working capital requirement.
ill)
Seasonal Fluctuations
Most income generating activities are influenced by seasonal fluctua
tions. more working capital will be required during an approaching peak
season e.g., land based activities require more funds with the
approaching monsoon, while handicraft units require more funds to
meet the festival season demands and less funds during monsoon as this
is the 'off' season and also certain types of production are not possible
when the weather is cloudy e.g., block printing.
iv)
Production Policy
The unit will have to decide if production is to continue at the same
level throughout the year, or it will fluctuate with seasonal demands,
or, whether members will be given breaks in the festival season and other
social commitments, etc. This will determine the working capital require
ments.
154
Some organisations decide that women involved in an economic
activity should earn at least a certain amount as piece rate per day.
Hence, this is also one way of setting the production targets.
V)
Credit Policy
How much time should be allowed to debtors to make payments.
The longer the time, the greater will be the working capital requirements
as it will take that much more time*for cash to flow back into the activity.
The unit should be firm and prompt in making collections to avoid
unnecessary block up of funds.
Vi)
Availability of Credit
How much time is granted to the unit to meet it's dues? This may be
from it's bankers, suppliers, etc. The longer the time available, the lower
will be the working capital requirement.
Voluntary organisations can also avail of working capital assistance,
soft loans and special schemes for specific groups and/or for certain
types of activities.
vii)
Growth and Expansion Activities
With the growth of the unit, the working capital requirements will also
increase. More working capital will be required for raw material, to pay
wages, etc.
viii)
Profit Margin and Appropriation
The prevalent market trends and the degree of competition will
determine the profit margin that the unit will fix. The higher the margin,
the greater will be the contribution towards the working capital pool. But
this will depend on whether the women members decide to share the
profits among themselves or use the funds to create or use them for further
development of the activity.
ix)
Price Level Changes
The greater the fluctuations in the price levels, the more difficult becomes
the task of estimating working capital,
if the cost of inputs (raw
materials and other costs) increase, more working capital is required.
If this increase cannot be fully incorporated in the price, a still further
increase in the working capital is required.
155
X)
Operating Efficiency
The higher the efficiency, the shorter will be the length of the working
capital cycle, leading to more effective use of working capital. Hence,
lower amounts of working capital will be required.
Estimation of Working Capital Requirements
The operating cycle of an activity will depend on factors discussed previously like,
the nature and size of activity, seasonal fluctuations, production and credit
policies, growth and expansion activities, profit margins and appropriation,
price level changes, operating efficiency, etc.
Example I
Manufacturing based. The unit has been set up by a voluntary organisation
for it's women members. It is housed in the premises of the voluntary
agency. The land and building cost is Rs. 50,000.00. The unit has a fibre
cleaning machine, two and three ply yarn rafts, a set of corridor mat frames,
a mesh mat frame and a 2 metre steel matting loom.
The equipment has cost Rs. 1,29,400.00
The land and building belongs to the voluntary agency, but the unit does not
have to pay any rent. The equipment has come as a grant and hence, there
is no repayment nor an interest burden. In all 30 women work in this unit. They
are assisted by a trainer-cum-unit-incharge and an assistant trainer.
Raw material is easily available. It is procured at the end of every month. This
costs Rs. 5,950.00 and is procured in one day. So the conversion of cash to
raw material takes one day.
This is one month's supply of raw material, and the conversion to finished
goods takes 30 days. The value added to raw material is that of wages (piecerate— Rs. 9000.00 and other overheads— Rs. 300.00). Hence, a value of Rs.
9,300.00 is added in 30 days.
For the conversion of finished goods to sales, cost of sales (Rs. 750.00 i.e.,
transport to sales centre, salary of sales person ) is added. The average
sales figures are Rs. 18,000.00 per month. The organisation has established
contacts with local traders and those in the nearby towns. It takes 3 days
for the goods to reach these traders and sales value is immediately realised.
156
Hence, the conversion of finished goods to cash takes 3 days. Thus, the
operating cycle of the coir weaving unit is 34 days. During this period it has
used Rs. 16,000.00 for 31 days and Rs. 18,000.00 has come back to the unit
after 34 days.
Fixed Capita!
Land-building
Equipment
Rs.
Rs.
50,000
1,29,400
Rs.
Rs.
Rs.
Rs.
5,950
9,000
300
750
Rs.
16,000
Rs.
18,000
Working Capital
(Funds Invested)
Raw material
Wages
Overhead
Sales cost
Funds received from sale
The working capital in this case is Rs. 16,000.00 the money that is used during
the operating cycle.
Now, estimate the working capital required in your activity.
Example II (Livestock based)
Samuben took a loan of Rs. 5000.00 from the bank to purchase a buffalo,
in the month of March'86. The animal gave milk for one month, then got
pregnant and calved in the month of October.
During the period of March 1986 to February, 1987, the expenses incurred
on rearing the buffalo were as follows:
1.
In Summer
i)
Green fodder for 30 in milkdays
20 Kg. per day @ Rs. 7.50 per 20 Kg
Concentrates for 30 in milk days.
3 kg. per day @ 95/- per 70 Kg.
Grazing expenses during 30 milk
days.
ii)
iii)
157
Rs.
225.00
Rs.
122.00
Rs.
25.00
iv)
Green fodder for 90 dry days,
10 kg. per day @ Rs. 7.50 per
20 kg.
Rs.
338.00
v)
Dry fodder for 30 dry days, 2 kg.
per day @ Rs. 20.00 per 50 kg.
Rs.
24.00
vi)
Dry fodder for next 60 dry days,
7 kg. per day @ Rs. 20.00 per 50 Kg.
Rs.
168.00
vii)
Concentrates for 90 dry days, 1kg.
per day @ 95.00 per 50 kg.
Rs.
122.00
viii)
Grazing expenses for 90 dry days
@ Rs. 25.00 per month
Rs.
75.00
2.
In Monsoon
i)
Dry fodder for 90 days, 3 Kg.per
day @ Rs. 10.00 per 59 Kg.
Rs.
54.00
ii)
Concentrates for 90 dry days 1 Kg.
per day @ Rs. 95.00 per 70 Kg.
Rs.
122.00
iii)
Grazing expenses for 90 dry days
@ Rs. 25.00 per month.
Rs.
75.00
iv)
Dry fodder for 30 in milk days,
3 kg. per day @ Rs. 10.00 per 50 Kg.
Rs.
18.00
v)
Concentrates for 30 in milk days,
day per 70 Kg. @ Rs. 95.00
Rs.
122.00
vi)
Grazing expenses for 30 in milk
days @ Rs. 25.00 per month
Rs.
25.00
3.
In Winter
i)
Concentrates for 120 in milkdays,
3 Kg. per day @ 95 per 70 Kg.
Rs.
489.00
ii)
Grazing expenses @ Rs. 25.00 per
month.
Rs.
100.00
iii)
Interest on loan of Rs.5000 for
12 month @ 4%
Rs.
200.00
158
Besides the expenses mentioned above,Samuben has spent a fair share
of her time in tending the buffalo, milking the animal and collecting green
fodder and dry fodder for it.
The income earned by Samuben during these months was:
1.
Sales of Milk average 6 liters day
for 180 days of lactation @ Rs.
80/-20 litr.
Rs.
4320.00
2.
Sale of farm yard manure (before
monsoon)
Rs.
300.00
3.
Sale of calf (in November)
Rs.
400.00
Now let us take a look at the cash income earned by Samuben, against
the cash expenditure she has incurred, during each season for maintain
ing the buffalo.
No.
Season & Months
Expenditure
Rs.
Income Surplus/Deficit
Rs.
during period/
cumulative
1.
2.
3.
4.
5.
Summer March(in Milk)
Summer April-June
Monsoon July-September
Monsoon October
Winter November-February
372
827
251
165
789
720
300
720
3280
+348
-527
-251
+555
+2509
-179
-430
+ 125
+2634
Considering the above example of buffalo, let us look at the following aspects:
1.
Operating Cycle
From March 1986 to February 1987 we see a definite sequence of events. The
buffalo gives milk for 30 days, goes dry for 6 months, calves and again gives milk.
This sequence ofevents'is likely to get repeated again and again and is known
as the operating cycle and in this case it is for a period of 12 months. In livestock
based activities, the operating cycle generally tends to correspond with the
natural productive cycle of the animal concerned.
159
The operating cycle of Samuben's buffalo rearing activity may be shortened
by decreasing the dry period of the buffalo, with a technological intervention
like embryo transfer. On the other hand the operating cycle of the activity
may get lengthened, if the buffalo falls ill and is able to conceive only after
recovering.
2.
Current Assets
During the operating cycle, the buffalo produces a calf, milk and farm yard
manure. These products get converted to cash during the cycle and are termed
the current assets of the activity.
3.
Current Liability
Samuben has to‘spend money to maintain her buffalo in the period
corresponding to the operating cycle (on green fodder, dryfodder grazing
etc.). These expenses can be termed as current liabilities.
4.
Net Working Capital
In this case, the value of the current assets is more than that of the current
liabilities (+2634) Hence the activity has a net positive working capital.
5.
Working Capital Requirement
If we take a closer look at Samuben's buffalo rearing activity, we find that
she runs short of money during the months of April-September when she has
to spend money to maintain the animal (which is going through a non
production phase). To tide over this period, Samuben requires at least Rs. 430.00.
This amount may be termed the required working capital.
Example III (Land Based)
Let us take a look at the activity in which 15 women are working to raise 3 lakh
saplings of various forest species, under the scheme, the forest Department will
buy the saplings in the first week of June @ 30 paise per sapling. The women
begin their nursery raising activity in the first week of December. Since the Forest
Department will pay money for the saplings only after they are ready, the women
need money to get the activity started.
Land, with sufficient water supply, is available at a monthly rent of Rs. 500.00. The
women will need:
160
1) a helper (Rs. 600.00 per month) who will purchase
keep records and liase with the Forest Department.
2)
raw material, inputs,
a watchman (Rs. 500.00 per month) to guard their nursery.
At the onset, women have to purchase seeds, farm yard manure, pesticides
and polybags worth Rs. 36,000.00. Besides, Rs. 1000 is also required for stationery,
repair of tools, the fence and water tank. The wages of women working on the
nursery for the duration of the activity is Rs. 33,600.00 . Thus, we see that the
women have used Rs. 80,200.00 from the first week of December to the first week
of June (6 months). The payment from the sale of saplings (Rs. 90000) is realised
in the first week of July. Hence, the Operating Cycle of the activity is seven
months. (December 1st week to July 2nd week). The working capital required
for the activity is Rs. 80,200.00
Budgeting
A budget is a financial plan. It specifies how much money an organisation thinks
it will take in and how much it will spend. A budget is generally laid out in two sections
that are grouped under two main headings: lncome(or Revenue) and Expenses (or
Expenditure). Planning the activities of the business culminates into a budget.
The main purpose of preparing a budget is to have an instrument with which to monitor
a business. It is useful only ifyou'follow up'the budget, constantly keeping an eye
on income and expenditures to see whether or not they agree with the estimates
made. This variance helps one judge what targets were set and what the actual
position is. This acts as an internal pressure. Timely review and monitoring helps the
activity attain it's targets as planned.
The Budgeting Process
If budgeting is a form of financial planning then it is important to know what specific
procedures are involved in doing it effectively. There are a few important
considerations:
Budgeting should always be related to the overall planning process of the
organisation. No one is in a position to plan for the future without a clear sense of what
the available resources are. Conversely, sensible budgets or financial plans cannot be
put together without knowing where the budget is going. Simply allocating money
is not enough, using it strategically is what the budgeting process ideally should be
about.
161
It is important that the members be involved in the budgeting process, both in the
forecasting stages and later when the budgets are monitored. Beyond the above
consideration, the actual way of estimating the budget can be illustrated through the
example of Rainbow Handicraft group.
It is important to 'plan' the business, but how can you 'plan' a business like a handicraft?
How can you tell in advance what the members will produce, how much of their
handicraft will be sold, the amount of the gross surplus and the running costs ? The
steps are as follows:
1)
Estimating Sales
2)
Estimating Costs
1.
Estimating Sales
Rainbow Handicraft Group (RHG) has received a large order and signed a
delivery contract for 100 rugs with a company in the city. The members of the
economic activity feel that they will certainly produce 100 rugs. A production
plan has already been worked out with them, some promising to make two rugs,
others three. The selling price of a rug has already been fixed after careful
calculation and negotiation with the buyer. It will be Rs. 100.00 Members will
receive Rs. 1,080.00, when the group has taken its commission of 10%. The
cost of the raw material will be Rs. 550.00. It will mark up 12% and charge the
members Rs. 616.00. A member will earn Rs. 164.00 for weaving the rug.
Here the total estimates for the income next year, are shown in the table 1 and
table 2.
162
Table No. 1
Estimates for Next Year
Income
Supply Business:
Sale of Raw Material (100 x 616)
Cost of Raw Material (100 x 560)
Rs.
Rs.
61,600.00
55,000.00
Gross Surplus
Rs.
6,600.00
Sale of Rugs
(100 x 1200)
Payment to members
(100 x 1080)
Rs.
Rs.
1,20,000.00
1,08,000.00
Gross Surplus
Rs.
12,000.00
From the supply Business
From the Marketing Business
Rs.
Rs.
6,600.00
12,000.00
Total Gross Surplus
Rs.
18,600.00
Marketing Business :
Total Income:
If everything goes as planned, RHG, will earn a gross surplus of Rs. 18,600.00
next year. All the costs of running the RHG will have to be paid out of the
total amount of Rs. 18,600.00.
Table No. 2
Manager's Wage
Rent
GROSS
SURPLUS
18,600
Travel
Interest
Insurance
Other costs
163
2.
Estimating Costs
To estimate expenses, a table(Table No.3) showing all the costs during the present
year (which is now coming to an end ) is prepared. Every Item is thoroughly
discussed in the Management Committee of the economic activity. Before
agreeing on a figure it is useful to ask "Will this cost be the same or higher next
year ?" Items like travel and other costs are slightly uncertain. Underestimating
such costs show higher surplus. However, it may happen that travelling has to
be undertaken, then expenses would show a negative variance. (A negative
variance is there when the actual is more than what is estimated. A positive
variance, on the other hand, taken place when the actual is less than
estimated).
Table No. 3
Costs
This year
Estimates for next year
Wages
Rs.3200
Rs.3400
Rent
Rs. 1600
Rs J 800
Travel
Rs. 468
Rs. 600
Interest
Rs.2012
Rs. 1800
Insurance
Rs. 744
Rs. 800
Misc.
Rs. 576
Rs. 1000
Total:
Rs.8600
Rs.9400
164
Finally, after consensus, a table of cost estimates is prepared which is given
below:
Table No. 4
Operational Budget of
Rainbow Handicraft Group.
Income
Sale of Raw material
Cost of Raw material
Rs. 61,600
Rs. 55,000
Rs. 6,600
Sale of rugs
Payment to members
Rs. 1,20,000
Rs. 1,08,000
Rs. 12,000
Rs. 18,600
Rs. 3,400
Rs. 1,800
Rs. 600
Rs. 1,800
Rs. 800
Rs. 1,000
Rs.9,400
Running Costs
Wages
Rent
Travel
Interest
Insurance
Miscellaneous
Estimated Net Surplus
Rs. 9,200
The Quarterly Budget
The circled figures (table-5) indicate the number of rugs or sets of raw material to be
bought or sold during each quarter. We can see that most of the rugs will be delivered
and paid for in the third quarter (50). Clearly, supplies must be available much earlier
for the members. Hence, we must plan to buy 20 sets of raw materials in the first
and 40 in the second quarter. But the members cannot pay for this expensive material
on delivery. They must get credit until they bring the finished rugs for payment. As seen,
only 10 sets of material are paid in the first and 25 in the second quarter, corresponding
to sale of and payment for rugs.
Certain expenditures are spread over the whole year, like travel. It is difficult, to gauge
how much and when travel money will be used. Other costs like rent and interest have
fixed dates of payment.
165
Table No. 5
Rainbow Handicraft Group
Quarterly Budget
Jan.-Mar.
Income
July-Sept.
25
50
10
6160
Sale of Supplies
Sales of handicraft 12000
Total income
Apr.-June
10
15400
30000
25
50
90800
45400
18160
30800
60000
OctJan.
Total
9240
18000
61600
120000
15
181600
27240
Expenditure:
10
55000
Cost of supplies
11000
90
22000
40
16500
30
5500
Paid to members
for handicraft
Wages
Rent
Travel
Interest
Insurance
Miscellaneous
10800
10
27000
25
54000
50
16200
108000
850
900
100
1800
100
850
900
100
250
800
350
250
250
3400
1800
600
1800
800
1000
Total Expenditure
23000
51900
71900
25600
172400
Net
(4840)
(6500)
18900
1640
9200
850
850
300
When the budget is ready, it is obvious that during the first quarter, the income is not
enough to pay for the expenses. We see a negative balance for that period indicated
by the brackets in the line 'Net'. Fortunately, RHG has some money in, the bank. To
cope with the large expenses during the first two quarters, that money has to be
used. But will it be enough? Suppose for instance, all the first quarter expenses
(Rs. 23,000/-) has to be paid before the expected income is received.
The above possibility has to be planned carefully. A cash flow budget has to be made,
showing exactly month by month, how money will come in and will be paid out. We
will have to see whether there is a need for additional cash. Whether a short-term
loan is required or whether we need to ask for on-supplier credit.
166
<
It is now apparent why budgets are so necessary for the smooth operation of an
economic activity in the future. A cash flow problem for instance, will not come as
a surprise. Thanks to the budget, we can know about it in advance and can plan
accordingly.
All the figures then,are put together in a 'budget' i.e., a projection of the business
results expected for in the coming year.
Table No. 6
Estimated
Actual
Variance
Sale of supplies
Sale of handicraft
6,160.00
12,000.00
4,928.00
9,600.00
+ve
Total Income
18,160.00
14,528.00
+ve
10,800.00
8,640.00
+ve
850.00
850.00
Budget Follow-up
1st quarter.
Income
Expenditure:
Paid to members for
handicraft
Wages
Rent
Travel
Interest
Insurance
Miscellaneous
Cost of supplies
100.00
142.00
ve
250.00
11,000.00
182.00
11,000.00
+ve
Total Expenditure
23,000.00
20,814
(4,840)
(6,286)
Net
However, the annual budget shown above (Table-5) lacks the precision needed
to check business results on a monthly or quarterly basis. It is very difficult to judge
whether the business is going as planned, because the budget shows only the total result
167
for the whole group. It says for instance, that sales of rugs will be Rs. 1,20,000 but
not how much money will come in during the first month or the last month of the year.
This knowledge or information is essential to control the development of business
according to the desired plan.
The Follow-up
Regular meetings should be held, with all the people concerned with the economic
activity so that the budget could be discussed against the actual performance.
A table (no.6) showing the estimated and actual targets should be prepared and
also a column indicating the negative or positive variance should also be shown.
This table should be then analysed and the variances discussed. For instance in the
first quarter, 10 rugs were to be produced, but only 4 were actually produced. The
reason should be known and the corrective measures taken accordingly. Whether the
differences will affect the overall result for the year should also be known.
By checking the progress each month like this and taking corrective actions
accordingly, we can guide the economic activity towards its goal of achieving the
desired results, as planned in the budget.
A word of caution: the planned budget is not the 'gospel'. It may be changed/revised
in the budget meeting. The performance is analysed after one quarter, and if the
members feel that the targets set for the next two quarters is unrealistic then the
necessary changes can be made in the budget.
Few budgets can hold up over time unless they are amended and modified to
accommodate new information and new conditions as the years move on. Thus, we
must set up a process by which the budget can be revised when necessary and
changed.
Other Uses of Budgeting
Budgeting can be a useful tool for the following aspects also, in addition to planning the
logistics of day to day work.
1.
As a basis for expansion of the economic activity.
2.
As a basis for enabling government developmental programmes to be
designed along the lines of grassroots experiences.
3.
As a basis for negotiating suitable policy changes of the government in
the areas of prices of raw material; selling price fixed in the government
schemes, facilities like marketing, workshed,training, etc., which can help to
make our economic activity more viable.
168
4.
c
To explain the women members the periodic performance of the economic
activity as well as to initiate them to interpret these data. The importance
of making such calculations can also be explained.
Notes
169
Notes
9
170
lu
u
I
z
ACCOUNTS KEEPING
Accounting is a system of keeping track of how financial and monetary transactions
occur. It records, classifies and summarizes financial information.
Systematic and regular account keeping is necessary for any activity because:
It creates the data-base that will provide quantitative information about
the activity
*
This information will help monitor the progress of the activity in terms of
Is expenditure in accordance with the budget ?
Is members' income as targeted?
Is the activity breaking-even; is there a surplus or a deficit ?
Over and above this, maintaining accounts
is a statutory requirement also.
Types of Accounts
Various types of financial transactions (Exchanging money for any services or goods
offered) occur in the course of running an economic activity. Different rules of
accounting have been developed for different types of transactions. Such a
classification of all transactions helps in the proper application of accounting
rules.
Broadly speaking, there are three types of financial transactions:
Personal Accounts
When an organisation is dealing in financial terms with persons, (like Suresh Chandra,
B.D. Reddy, etc.) or other organisations (like Samaj Sevi Sangathana, Mahila Vikas
Samiti, etc.) on a regular basis, it becomes necessary to record all the transactions
in their respective names. This facilitates in locating financial information with
respect to
these people\organisations.
171
For example, an organisation deals with another organisation called "Gram Sudhar
Sansatha, which provides raw material to this organisation at least three times in a
month, worth about Rs. 30,000/- . The organisation makes payment only once in three
months. Hence, to locate the information, every third month, regarding how much
payment has to be made becomes very important. If recording is done in the name
of 'raw materials', the organisation will not be able to locate information regarding
to whom, and how much payment has to be made, as it would contain information
regarding different raw materials from different suppliers,. Hence, it becomes easier to
record the transaction in the name of the supplier i.e., Gram Sudhar Sansatha.
Real Accounts
Many organisations own assets like land, building, machines, furniture, etc. Similarly,
they also have liabilities like loans, advances, etc. In these accounts, an in-flow or out
flow does not take place on a regular basis. For example, if land is bought for a
social forestry programme, then it will remain with the organisation for a long period
of time and if a loan is taken, it is paid back within a specific time.
Hence, those accounts where an in-flow or out-flow of money takes place only
occasionally in an organisation's life-time are called Real Accounts.
Nominal Accounts
Every organisation has some accounts where an in-flow or out-flow of money takes
place on a regular basis e.g., monthly rent, salaries, interest, postage, wages,
commission. These accounts generally involve a small amount of money, but a
regular transaction and relate to the day-to-day running of an organisation.
Such accounts are labelled Nominal Accounts.
SYSTEMS OF ACCOUNTS KEEPING
Single Entry System
Domestic accounts are maintained by the lady of the house mentally, or in an old
diary or notebook.
This type of account may look something like this:
1st August
received for household expenses
Rs. 750.00
2nd August less
paid milkman
Rs. 100.00
172
t
2nd August
paid newspaper vendor
Rs. 45.00
4th August
paid Grocer's bill
Rs. 165.00
5th August
paid for children's school books
Rs. 50.00
9th August
paid electricity bill
Rs. 114.00
10th August
BALANCE
Rs. 276.00
This system of keeping accounts is convenient for domestic accounts, and is
appropriate where one just needs to know how much money came in and on what
it was spent. It is called the Single Entry System, because the inflow and outflow of
money is recorded in a single account.
One may maintain accounts in this manner in an activity where transactions are very
few and are placed in an informal manner. However, in any set-up where accounts
need to be formally maintained, final statements will have to be prepared. For this
purpose, information will have to be pooled together. For instance in the above
example under the single entry system, total money paid to the milkman through the
year will not be available at one place. Thus completeness of records and
comprehensive information is unavailable under this system.
Other limitations of the single entry system of maintaining accounts are:
1.
It does not enable us to prepare the 'trial balance', which helps in checking the
arithmetical accuracy of accounts.
2.
In the absence of real and nominal accounts, the Receipt and Payment
Statement, Income and Expenditure Statement and Balance sheet cannot be
prepared.
3.
Any information obtained under this system may be dubious, as it will not be
free from doubt. It has to be checked several times.
4.
No Asset Account is maintained under this system. Hence, if an organisation wants
to sell some old assets, it will be unable to fix a proper price.
Double Entry System
This system enables compilation and recording of complete
information through systematic bifurcation of transactions.
173
and comorehensive
Just as there are two sides to every coin, there are two aspects of every transaction.
For any financial transaction, something comes in, while something goes out. This
system operates on the basic principle - 'without an outflow, there cannot be any
inflow and vice-versa'. For example :
If seeds are purchased for Rs. 500 in cash
Seeds have come in
Cash has gone out.
Example: If seeds are purchased for Rs. 500 on credit
seeds have come in
correspondingly,
increased.
liabilities
have
increased
because obligation to pay has
(Cash has not gone out immediately, but payment will have to be made in the future).
Debit and Credit Rules
Suppose an organisation receives cash from ABC Agency
Here
- cash has come in
- from ABC Agency.
From this, we develop the rule
DEBIT THE RECEIVER
CREDIT THE GIVER
Hence, the above transaction will be entered as:
Cash A\c Dr.
To ABC Agency A\c Cr.
Example: If furniture is purchased in cash:
Here - furniture comes in
- cash goes out.
The entry for this transaction will read
Furniture A/c Dr.
To Cash A/c Cr.
174
I
This leads us to the rule:
DEBIT WHAT COMES IN
CREDIT WHAT GOES OUT
Now suppose one organisation has to pay a loan taken by it.
In this situation - Interest expense is incurred
- Cash has gone out.
Hence, the book entry will be:
Interest A\c Dr.
To cash A\c Cr.
Hence, the rule:
DEBIT ALL EXPENSES AND LOSSES
CREDIT ALL INCOMES AND GAINS
Summarising the three different types of accounts (Personal, Real and Nominal), the rule:
can be put down as:
Nature of Account
Concerned Account
Debit
Credit
Personal Account
Party's Account
The
The
Receiver's
Giver's
Account
Account
Real Account
Tangible Assets
What
comes in
What
goes out
Nominal Account
Income and
Expenses
Incomes
Expenditure
and losses
and gains
175
Example
For the following transactions list the debit and credit aspects.
1.
Grant received from ‘A’ deposited in Bank
Rs.
50,000.00
2.
Withdraw money from Bank
Rs.
10,000.00
3.
Rent paid
Rs.
1,200.00
4.
Travel expenses
Rs.
100.00
5.
Purchased Machinery (By cheque)
Rs.
12,000.00
6.
Purchased cloth
Rs.
2,000.00
7.
Purchased other raw material
Rs.
300.00
8.
Stipend to trainees
Rs.
1,000.00
9.
Salary paid through bank
Rs.
2,000.00
Solution
Debit
Credit
1.
Bank A/c
Grant A/c
2.
Cash A/c
Bank A/c
3.
Advance Rent A/c
Cash A/c
4.
Travelling A/c
Cash A/c
5.
Machine A/c
Bank A/c
6.
Cloth Purchase A/c
Cash A/c
7.
Raw Material Purchase A/c
Cash A/c
8.
Stipend A/c
Cash A/c
9.
Salary A/c
Bank A/c
<
176
Steps in Double Entry System of Accounting
In the double entry system of Accounting, several sequential steps are involved. They
can be listed as:
1.
Collection of information and its classification. For each transaction, a
document (like bill, cash memo etc.), is collected and classified in its 'debit' and
'credit' aspects of accounting. This is done mostly through a process of filling
a form called a 'voucher'
2.
Posting of accounts to the book of prime entry, i.e., Journal and Cash Book with
the help of these vouchers.
3.
Posting of accounts from the book of prime entry to the respective accounts
maintained in the 'ledger'.
4.
At the end of an accounting period, balances of all accounts maintained in the
ledger are extracted, and a ‘Trial Balance' is prepared.
5.
Preparation of final statements of Income and Expenditure and the Balance
Sheet.
Voucher
A voucher is an account document, which helps the Accountant analyse each and
every financial transaction.
Each voucher should have a supporting document as evidence of the transaction
having taken place.
Two types of vouchers are normally in use. These are receipt vouchers and payment
vouchers. One should always remember this and ensure:
that for expenditure above Rs. 20/-, the recipient must sign the voucher on a 20
paise stamp.
that no cash payment should be made for any amount exceeding Rs. 2,500.00
that as far as possible all vouchers should have the respective
evidence.
supporting
that each voucher should be approved by the concerned authority of the
organisation.
177
Journal
After vouchers are prepared, each transaction is recorded chronologically in the
book of prime entry - the Journal, following the double entry principle.
While some organisations still maintain the Journal for credit transactions and adjustment
entries, the Journal is slowly being replaced by the Cash\Bank book.
Below is an illustration of a Journal entry (Refer transaction of Exercise 1.).
Date
L.F.
Journal
Particulars
Amount
Debit
1.
Bank A/c Dr.
to grant A\c
(Grant received from A)
50,000.00
2.
Cash A\c Dr.
to Bank A\c
(Cash withdrawn from bank)
10,000.00
3.
Advance Rent A\c Dr.
To cash A\c
(Cash paid for rent of 6 months)
1,200.00
4.
Travelling A\c Dr.
To Cash A\c
(Cash paid for travelling)
Amount
Credit
50,000.00
10,000.00
1,200.00
100.00
100.00
5.
Machine A\c Dr.
To Bank A\c
12,000.00
6.
Cloth purchased A\c Dr.
To Cash A\c
(Cash paid for cloth)
2,000.00
7.
Raw materials purchased
A\c Dr.
To Cash A\c
12,000.00
2,000.00
300.00
300.00
8.
Stipend A\c Dr.
To cash A\c
(Stipend paid to participants)
1,000.00
9.
Salary A\c. Dr.
To Bank A\c
(Salary paid by cheques)
2,000.00
1,000.00
2,000.00
178
Cash Book and Subsidiary Books
In practice we find that most of the transactions of a financial nature are related to
cash and bank. Such transactions, often become innumerable in a single day. Hence,
journalising for each and every transaction becomes a laborious job. To avoid this,
separate books are maintained for each group of transactions. (Example: Cash Book
for cash\bank transactions; Purchase Book for credit purchases; Sales Book for credit
sales).
Similarly, other books like Sales Return, Purchase Return, Bills Payable, Bills Receivable,
etc., can be maintained, depending on the nature of dealings of the organisation.
This is, in a way, a bifurcation of the Journal. Due care must be taken to see that a single
transaction is entered in one book only.
System of Recording Entries
Cash Book: Cash book is meant to record all transactions in which cash\bank receipts
and payments are involved. Normally, cash in hand and cash in the bank will be written
on the left hand side (Debit side) of the cash book. The Debit side represents
receipts and Credit side, the payments. Hence, usually, the debit side total will be larger
than the credit side one. The amount of difference between the two side is put on the
side with the lesser total and each book is balanced.
If the debit side total is
larger, it is called a debit balance and a larger credit side total is called a credit
balance.
An illustration would make this clear:
179
Cash Book
Month
and Date
Particulars
1
Grant A\c
By grant received
from 'A' and depo
sited in bank
2.
Bank Contra A\c
Folio
Cash
Rs.
P.
Bank
Rs.
Total
P.
50,000.00
10,000.00
180
Rs.
P.
Cash Book
Month
Particulars
and Date
Folio
Cash
Rs.
P.
2.
Cash Contra A\c
To cheque paid for
withdrawal of money
3.
Advance Rent A\c
To cash paid for rent
to six months
4.
Sewing Machine A\c
To cheque paid for
purchase of machine
5.
Travelling A\c
To cash paid for
travelling
6.
Cloth Purchase A\c
To cash paid for cloth
purchased
7.
Misc. Raw Material
Purchase A\c
To cash paid for
raw materials
300.00
8.
Stipend A\c
To cash paid for
stipend to
participants
1,000.00
9.
Salary A/c
To cheque paid for
staff salary.
Total
Bank
Rs.
P.
10,000.00
1,200.00
12,000.00
100.00
2,000.00
2,000.00
181
Rs.
P.
Purchase Book
The extent of detail will depend on the nature of transactions, but
purchases are recorded in the following format:
Date
Supplier's Name
In Ward
Invoice
No.
usually credit
L.F.
Amount (Rs.)
L.F.
Amount (Rs.)
Sales Book
Credit Sales are recorded in the following format:
Date
Customer's Name
Out Ward
Invoice
No.
Similarly, other subsidiary books are maintained depending on the organisations'
requirements and transactions recorded and the extent of detail deemed necessary.
Ledger
A ledger is a record of final entry which contains accounts of all types. This is written
from books of prime entry, i.e. cash book\journal. Since all the financial statements are
extracted only through the general ledger balance, it is called the principal book.
The ledger helps us to get all necessary data at one place, since all types of entries
are recorded in it. Unlike the cash book, ledger entries are recorded under their specific
heads. Hence, if we want to know how much we have spent under certain heads, like
travelling during the entire month\year, we can get this information, which is not
possible in a cash book.
The cash book has a unique position. It is a subsidiary book because cash entries are
originally entered therein. But a cash book also contains the two accounts - cash and
bank - itself hence, no cash account is maintained in the ledger; the cash book itself
is treated as a cash bank account. Therefore, a cash book is both a book of original
entries as well as a principal book, or, a part of the ledger.
182
Posting to Ledger
First of all, the opening entries should be posted, as it indicates the balance of
assets and liabilities with which an organisation starts the new period. All the opening
entries of assets should be written on the debit side of the respective accounts - 'To
Balance B\F' (Brought Forward) and then the amount in the debit column. Similarly for
credit entries of all liabilities and the capital account, one writes - 'By Balance B \F' and
then the amount in the credit column. In case of cash and bank balances, balances
are written in the Cash Book and no separate account is opened.
Posting the Cash Book in the Ledger
The debit side of the Cash Book shows receipts in cash and receipts in bank, and
credit side of the Cash Book shows payment of cash or payment from bank.
So to complete the double entry, one has to open all the accounts for which cash has
been spent or received. For example, on the debit side of the cash book one finds:
Kasi Ram A\c Rs. 1000.00
This means cash has been received from "KASIRAM", which, in turn is entitled to a credit.
One will open an account of KASIRAM and make the entry on the credit side.
Just to further clarify, we can make a Journal entry of the same transaction:
Cash C\c Dr. 1000.00 (What comes in)
Kasi Ram A\c Cr. 1000.00 (being the giver)
In the Cash Book we entered only first part - (what comes in), but to complete the
entry we have to open the account in the ledger and give it a credit - which is the
second part.
Similarly, the payment side of the Cash Book shows to whom or for what purpose cash
has been paid. Therefore, all accounts mentioned on the credit side will be debited
in the Cash Book.
183
Ledger
Date
Particulars
L. F
184
Debit
Amount
Credit
Amount
Balance
For
example, when credit side of the cash
Book
shows: "Travelling A/c 300.00"
That means Rs. 300.00 is being spent on travelling.
Let us do the Journal entry:
Travelling A\c - Dr. 300.00 (Expenses)
Cash A\c - Cr. 300.00 (What goes out)
In Cash Book we wrote the cash aspect, that is second part "Credit - what goes
out", but we have to record the expenses in the ledger which will be debited according
to the first part of the Journal entry.
It is important to note that in posting the Cash Book, no cash account or bank account
should be opened, the cash book itself consists of these accounts. All entries marked
'C' being contra items should be ignored while posting because the corresponding
debit or credit already appears in the Cash Book itself.
Sub Ledger
Many Organisations have a practice of maintaining the sub ledger. Sub ledger is an
Account Book devised to bring down the burden on the Ledger. For example, every
day postage is recorded in Cash Book and Ledger , these books will have hundreds
of entries only about postage but if a sub ledger is created and ail postage is recorded
first in the sub ledger and then at the end of the month posted to Cash Book and Main
Ledger then there will be only few entries for recording.
In a Sub Ledger, unlike Main Ledger (where all types of transaction, are recorded)
only one type of transaction is recorded i.e., Postage. Hence for different types of
transactions we can have different sub ledgers, i.e., salary sub’edger, sales sub ledger,
raw material sub ledger, etc. These sub ledgers provide us with specific information in
detail at one place. Many organizations with multiple projects keep independent
projectwise sub ledgers also. Some of the sub ledgers have been described in the section
of additional aspects.
Posting the Journal in the Ledger
Posting of journal is done to the accounts as stated in the entry on the same side with
the same account. For example if journal entry is:
Traveling A\c Dr. 300.00
To travel agent A\c Cr. 300.00
185
Then in posting, both the accounts will be posted as it is in the ledger.
One major difference between a cash book and a journal is that in the journal both
the aspects of a transaction are written at one place, while in a cash book it is only one
aspect (which is effecting the cash) is written. Hence, while posting from a journal,
entries are posted as it is, but while posting from a cash book, all debit of cash book
are posted in credit of ledger and all credit will go to the debit side of the ledger
to complete the double entry, because only one side of entry is recorded in the cash
book.
Trial Balance
Under the double entry system, we have seen how a transaction is recorded-once by
debiting an account and then (while posting) crediting a corresponding account.
Since every transaction is recorded both as debit and credit, then if we prepare a list
of all the accounts under the classification of debit and credit, and the total of both
the sides match, it proves the books are arithmetically correct.
By way of illustration, let us take the example of the organisation Sangathana.
Trial Balance as on
Name of the A\c
Folio No.
Grant A\c
Rent Advance
Sewing Machine
Travelling
Cloth Purchasing
Miscellaneous Raw
Materials purchase
Stipend
Salary
Cash in Hand
Cash in Bank
Dr. Balance
Cr. Balance
50,000.00
1,200.00
12,000.00
100.00
2,000.00
300.00
1,000.00
2,000.00
5,400.00
26,000.00
50,000.00
186
50,000.00
This list of debit and credit accounts is known as Trial Balance.
It helps to know whether books are arithmetically correct or not. If the total of debit
balances is not matching the total of credit balances, then there is definitely some
mistake in the books. That is why Trial Balance would be prepared every month to
check that the books are properly written.
Final Statements
As the final step in the accounting process, summarised and aggregated information
is presented in three statements - Receipt and Payment Account, Income and
Expenditure Account and Balance Sheet.
Receipt and Payment Account
As is clear from the name, in Receipt and Payment Account, all the transactions
(receipts of money and payments of money) are recorded under major heads of
accounts. It is a kind of summarised reproduction of Cash Book, but no provision
of money to be repaid or money to be received, i.e. debitors or creditors, is recorded
in Receipt and Payment Account. It is a statement of total money received and total
money paid in a particular period of accounting. It includes both capital and
revenue transactions.
Opening balances of cash in hand and cash at bank are shown at the beginning
of the period an the receipts (debit) side of the statement. Closing balances of cash
and bank are shown at the end of the payment (credit) side. Then, all the receipts
during that period are recorded on debit (receipts) side and all the payments are
recorded on credit side (payments).
At the end of all recordings, the total of both sides (receipts and payments) should
match.
This is generally prepared annually, for the accounting year.
Income and Expenditure Account
Under Income and Expenditure Account, one summarises the total income and total
expenditure of the year. Unlike Receipt and Payment Account, here one also includes
all the provisions made for income and expenditure during that period. For example,
all the debtors, creditors, depreciations, amount payable, etc., will be included in this
statement. Income and Expenditure A\c covers only the incomes received for the year
and not the income for the previous year received in this year, or any advance
income received for the coming year. The same goes for the expenditure also. In the
187
Receipt and Payment A\c, any income (whether for previous year or for coming year)
is included under Receipt and Payment Account after making necessary adjustments.
Difference Between Receipt and Income
Many a times we face a problem in differentiating the Receipts from the Income.
The common belief is whatever we receive is income. But this is not true.
Receiptis whatever money we receive in a particular period, say in one year. This money
could be an advance for the next year, received this year. It could be reimbursement,
or any direct income. Hence, whatever money comes into an organization is called
Receipt.
But all Receipts are not called Income.
Income is something which the organization receives only for the particular period of
one year. For example an organization has received a cheque of Rs 3,00,000 from one
customer. Out of this 3,00,000, Rs. 2,00,000 is the payment for settlement of this year's
bills and Rs 1,00,000 as advance for his next year orders. Then only Rs 2,00,000 will be
called "income" for this year. While the total Rs 3,00,000 will be called Receipt of this
year.
Similarly, if some Income has accrued like interest on fixed deposits during the year
but has not been encashed, it will also add up to the Income of the year. But it will
not be treated as Receipt of the year. Another example is regarding sale on credit.
Some raw material has been sold to M.M. & Co. but the payment has not come. Then
this sale will not come under Receipts (since money has not come) but will be
considered as an income because sale has taken place in that particular period.
Hence, credit sales do not come under Receiptsand Payments A\c but will be included
in Income and Expenditure Account.
Difference Between Payment and Expenditure
Similar to the Receipt and Income, the prevalent belief is
expenditures, which again is not true.
that all payments are
Payment is something which goes out of the pocket. Like, all the advances paid are
called Payments. This could be an advance for the coming two years. If an
organisation paid an advance for raw materials to be purchased the next year, this
will be called a payment, because money has gone out of the organisation.
Similarly, if a machine which will work for next ten years has been purchased and
payment has been made, this will come under payment.
Hence, all the money paid is called Payments.
188
But all Payments are not called Expenditure.
Expenditure means what has finished or gone out during the year.
It does not cover such payments which will help the organisation in the coming year.
Like, a machine which will provide service to the organisation for the coming ten
years will not come under Expenditure.
Similarly, if payment has been made for some raw materials to be purchased over the
coming three years then the cost of raw material during this current year only will be
called Expenditure.
Hence, the payments done for current year only will come under Expenditure.
Difference between Receipt and Payment Account
and the Income and Expenditure Account
Points
Receipt and
Payment A\c
Income and
Expenditure A\c
1.
Opening balance
and closing
bank balance
Opening and Closing
balance of cash and
Not to be shown
2.
Capital Receipts
and payments
To be shown
Not be shown
3.
Revenue Receipts
To be shown
Not be be shown
4.
Outstanding
Expenditure
and income A\cs
Not to be shown
To be shown
5.
Advance payments
and receipts
To be shown
Not to be shown
6.
Depreciation and
provisions etc.
Not to be shown
To be shown
7.
Credit purchase
and sales
Not to be sown
To be shown
189
Balance Sheet
A Balance Sheet is a statement which presents a picture of the total financial position
of an organisation on a particular date of a year (generally, end of the year). A Balance
Sheet tells us what all an organisation owns (Assets) at the end of the year and what
all it owes (liabilities which have to be paid off). All the transactions in an organisation's
life are either of Revenue nature or of Capital nature. The transactions of a Revenue
nature come under Income and Expenditure Account and the transactions of a
Capital nature come under Balance Sheet.
A Balance Sheet is divided into two parts:
Liabilities and Capital
This covers all the money which the organisation has to pay off. Like, sundry creditors,
rent payable, salaries payable, etc.
Under Capital comes the amount for which the organisation is accountable. In an
organisation, it is accountable to share holders, members, and their investment in the
organisation which is shown as Capital. To summarise, we can say that liabilities and
capital side of the Balance Sheet primarily forms the list of sources from where the money
has come in the Business, or to whom Business is liable to pay on the date of making
the Balance Sheet.
In this part of the Balance Sheet, all that the organisation owns on that particular date
of the year is recorded; like - furniture, machinery, building, securities, land, cash,
bank balance, etc.
In other words, it depicts where all the money is invested on the date of preparing
the balance sheet.
Additional Aspects
Some additional aspects about accounting are discussed here.
Various Books of Account Required
According to various statutory requirements, we must keep the minimum of Cash Bpok
and Ledger.
There are some other books of accounts for other specific purposes. The most
common of them are mentioned here:
190
Postage Register
This helps us to avoid recording daily postage in Cash Book. We can easily record dayto-day postage in the Postage Register. An advance should be given to the concerned
person and at the end of the week or the month, the total postage of that period can
be transferred to the Cash Book. Hence, it reduces unnecessary work of writing Cash
Book for each and every postage item. Besides, it also helps to maintain a detailed
record of postage carried out during the period.
Salary Register
This becomes necessary when more than three persons are drawing regular salary in
an organisation. It helps in monitoring the monthly salary. And the risk of losing
salary vouchers kept separately can also be avoided. If even a single salary voucher
is missing, an organisation could be held responsible for not paying salary for that month.
That is why it is important to keep the Salary Register.
Assets Register
It is very useful to keep track of the assets owned by an organisation. It helps
to give the current position of every individual asset item, practically on a day to
day basis. Whenever an organisation purchases any asset, it is recorded in this register.
At the end of the year, a depreciation is charged and the balance is carried forward
to the next year. In case of sale of the asset, it helps to decide the price for sale.
Stock Register
This gives a clear idea of how much stock of various things (consummables) is being
held by the organisation. Is there any need to buy immediately or can we wait fora
while? It also helps in monitoring the stock. Whenever anything like writing pads or
other raw material is purchased it is entered in the Stock Register. Whenever we issue
these items, it should also be entered and the balance left is mentioned.
It also helps us to plan whether there is a need to buy more raw material or not. It gives
us an idea about how many raw material items we consume in a month, and on that
basis we can decide the total quantity necessary for stocking these items. It helps in
monitoring as well. For example, every month there is a consumption of 30 writing
pads but suddenly in one month it goes upto 50 pads. Then we can check the reason
for such an increase. It helps in keeping a check on any possibility of pilferage or loss.
Stipend Register
If an organisation is running training programmes, where trainees are paid a stipend, this
register is maintained. This will have the trainees' names, how much they are paid each
191
month and their signature on a twenty paise revenue stamp. This can be cross-checked
with the attendance register.
Sa/es Register
This will record the itemwise sale and the amount each item is sold for.
If the
organisation is involved in more than one income generating activity, it is better to
maintain separate sales registers for each. This will help one know how much money
is coming in from each activity and the sales deducted from finished goods stock, will
give the ready stock position. It will also help decide what to produce as one will know
what sells more.
Production Register
This can be maintained in two ways:
Itemwise daily production can be recorded
Personwise records can be maintained i.e., namewise details of who has made
what and how much each day. This will help keep track of each person's
efficiency also.
Wage Register
If members are paid on a piece-rate, a wage register will have to be maintained. This
will have the member's name, amount of wages and member's signature that this
amount has been received. For this, the Production register will serve as a base.
192
Notes
193
Notes
194
I'
Organisation: Working Together
ORGANISATION:
WORKING TOGETHER
Why Work in Collectives
We have been discussing about organising women's economic activities not just
for a better income but, for women's control over the entire economic process. We
have seen that a mere raise in income does not automatically bring about a rise in
the status of women and therefore, economic activities have to be organised such
that they keep in raising womens' own self-esteem and confidence, leading to
empowerment.
For women to be able to take control over the entire economic process, we find
that women working together in a group (as a collective) are able to support each
other in their struggles, whether it is in the family or the society at large.
While working as a collective, women find that they are not alone and that there are
others like them. This gives them the strength to work on issues and struggle for a better
life.
Members in a group/collective have differential skills, capacities, competencies. By
being in a group, they are able to supplement/complement each other and the
collective is able to achieve much more than the individual woman.
When
women are involved collectively in working on an
economic activity,
responsibilities of managing different aspects like marketing, purchasing, supervision,
financial management can be taken up by different women according to their
capacities and competencies and thus, they could support each other mutually.
By working in a collective, women also learn to play leadership roles at different
points of time. In dealing with bankers, financial institutions and funding organisations,
women feel more confident and are able to work more effectively when they are in
a collective as they can depend on each others' support and responsibilities
are divided amongst themselves to meet different people and fulfill other requirements.
The collective thus, provides a secure environment for women to manage their
economic activities.
It is therefore, important for us that the women's group, organised with the help
197
and Initiative of a voluntary organisation, slowly moves towards an organisation with
its own identity which is different from the identity of the NGO. This is imperative to
accomplish our objectives of enhanced income and empowerment.
Meaning of Organisation
An organisation has a well defined set of objectives and goals. It has a certain structure
in which there are tasks and there are people involved in carrying them out. Through
an organisation, efforts are made by the collective (members) to systematically
achieve the objectives for which the organisation has been set up.
When individuals decide to come together and start working collectively (through
a group), we have a set of individuals deciding to work towards a common objective
but they will remain as a group only as long as the objectives/goals/mission of the
individuals synchronize with that of the entire group.
When the objectives/mission is conceived conceptually by individuals as part
of an organised group then an organisation is formed. An organisation thus, has an
identity which is different from that of an individual or group of individuals and
an identity which is determined by its objectives, tasks and its structure. It also
has a life of its own, independent of its individual members.
Thus, we can see that there are various aspects of an organisation like identity, mission
and objectives and structure. We need to understand these aspects to help us find
ways to design and run an organisation to accomplish the objectives we set out
to achieve at the time of organising. In our context, the objectives are of increased
income and enhanced empowerment for the women with whom our organisation is
working.
Identity
We need to clearly understand and determine an identity for our organisation. Let
us take the example of a voluntary organisation working with a Mahila Mandal.
The voluntary organisation is one organisation and the Mahila Mandal is another. The
two may be working in close collaboration and in an inter-connected fashion, but
they have two distinct identities. Similarly, a voluntary organisation promoting a
union of women construction workers will be more effective if it is able to distinctly
preserve its own identity, and also allow the union of women construction workers
to preserve its own. Only then can the two organisations relate to each other
as distinct but interdependent organisations. If the Mahila Mandal or the union of
workers, as the case may be, tends to, (or is allowed by the voluntary organisation)
to merge its identity with the voluntary organisation, the whole relationship will tend
o be counter-productive. For example, it is more likely to empower the voluntary
198
organisation rather than the Mahila Mandal. Besides, it will make the ultimate
identification of the voluntary organisation almost impossible.
Mission and Objectives
Each organisation is created to accomplish certain broadly defined missions. These
missions are hopes of the future which the organisation attempts to realise. From
those missions, specific goals and objectives get elaborated which may be relevant
for the time being. The important question that we need to ask is, how clearly is the
mission of the organisation (and its goals or objectives) stated and understood by those
inside and outside the organisation?
In the event of any confusion about the mission, the people from outside the
organisation may see it as one type of. organisation while it is intended to serve an
altogether different purpose. People inside the organisation may at times seem to
be working at cross purposes, because they view the purposes in two-three different
ways. An important aspect of building strong organisations is establishing a clearly
stated mission of the organisation, with well defined shared goals and objectives and
from time to time, making sure that members inside the organisation and people
outside understand them clearly and concretely.
This is where voluntary
organisations need to continuously work with the women themselves to help them
explore why they have come together in the Mahila Mandal, - or why have they
formed this women's organisation to pursue economic activities? It needs also
to be understood that unless a Mahila Mandal has established for itself an objective
for its empowerment, merely an objective on the part of the voluntary organisation
to aid and assist the Mahila Mandal in its empowerment may end up in nothing.
Structure
The structure of an organisation has to be appropriate to people constituting the
organisation, the goals and objectives it has to accomplish, and the tasks it has to do
to achieve these goals and objectives. To this extent an organisation is a mechanism
created to accomplish a broad mission and specific goals and objectives. It has
to be structured in a manner that helps accomplishment of those goals and objectives
and achievement of that mission. Therefore, no single structure can be appropriate
to all organisations, or for the same organisation for all times. It is possible for us
to design or re-design a structure appropriate to the task at hand and to the goals
and objectives that organisation wishes to accomplish for the time being. This gives
us an opportunity to look at the structure of the organisation and the need to
create it flexibly.
Structure of an organisation essentially means the division of work and systems of
coordination, accountability and decision-making. In order to design an appropriate
structure we need to first split the tasks to the minutest possible level and then group
199
these tasks on the basis of a set of criterion evolved from the core value of the
organisation. In the process of establishing a structure, the requirements of tasks
and the capacities available with people performing those tasks have to be carefully
kept in mind. In this sense, the structure of an organisation created for dairying
by a group of women need not be the same as that of the trade union of women
construction workers. In fact, the two structures will be quite different in order to
be able to efficiently accomplish these two different sets of activities.
The key considerations mentioned above in structuring of the organisation, also
help us in understanding and continuously examining the existing structure in the light
of whether it is serving the task and the purposes at hand and (if necessary) modify,
elaborate, change or alter it. It also implies that as the mission gets modified or as the
objectives and goals change, or, as new tasks get added, the structure may cease
to be operational and effective and may need to undergo changes.
Changes in
technology, in techniques of doing the work and in the people working in the
organisation may also necessitate changes in the structures. It may be pointed out
that structures not only give emphasis, but are also the outcome of the human element
in the organisation. Consequently, changes in the nature and number of people
working within an organisation would necessitate a corresponding change in
its structure. To that extent, the structure of an organisation is a dynamic concept,
and
not a static one.
Need to form Organisations
1.
An organisation helps to achieve objectives/mission/goals which are larger than
the goals and aims of individual members.
2.
Through an organisation, we are able to bring together resources, people,
ideas towards the fulfillment of the goals.
3.
An organisation provides continuity over an extended period of time and. beyond
the individual i.e. efforts towards fulfillment of the goals can carry on even
when an individual or individuals are not interested or not able to carjy the effort
further.
4.
An organisation can have new members without it affecting the larger goals
whereas the goals of the group could get influenced by the changing membership
of the group.
5.
The organisation can provide synergy and super-coordination. It encourages
individuals to undertake tasks which are beyond one person's capacity and
thus, help in fulfilling tasks which contribute towards the accomplishment of the
larger goals.
200
Process of forming an Organisation
Women working together may, after sometime, feel the need to form themselves into
an organisation.
In order to form an organisation initially, it is essential that all of them are able to identify
the objectives, mission of the organisation, with what they would like the organisation
to achieve. Once this has been done, then there is a need to jointly articulate the
strategy and the programmes which would help them achieve these objectives. It is
very essential while forming an organisation that the members are clear and definite
about what they want to do. This articulation is not just for their own sake but
also for the outside world.
Once, members are aware and a consensus is reached amongst themselves about
the objectives, strategy and programmes and this is then articulated, then one can
say an organisation is formed. This will however, remain an informal organisation till such
time that they decide to go for a formal registration.
As members of the organisation, they individually and voluntarily agree to give and
surrender certain things to this organisation. Empowerment comes from learning
not only about ones
own capabilities but also about others who would be
contributing and developing their potentialities. This helps in demonstrating the true
value of working collectively.
Once we realise the importance of the organisation, of the power that we get in return
of what we surrender then it helps us to be a part of the organisation and not withdraw
from it, without thinking of the implications it would have on the larger interest of the
organisation and thereby our own individual interests.
Statutory Forms of Organisation
In the course of promoting women's groups, Mahila Mandals, Mahila Sanghams,
Women's organisations and economic activities for women's groups, there comes
a time in the growth of these organisations (like in the case of any other organisation)
when they need to become a legal entity. This need to have a legal status arises
mainly when the group becomes interested in relating to the larger environment
as a body of its own. When the group is interested in acquiring resources, benefits
from various sources and schemes, then also arises the need for a legal status.
It has been seen that first, it is important to build a women's group and even though
this is time-consuming, only after the group is strong enough and the members are
able to work together should we think of its registration.
201
As each legal entity has its own requirements to be fulfilled, members need to first
learn to work together before trying to fulfill legal requirements of an external
environment, which they may not be in control of.
After a group has acquired a legal status, that is it becomes a registered group, the
registration makes demand on the group in terms of filing of returns and meeting
various statutory requirements. The various forms of legal entities prevalent in India
are:
--Society, under the Societies Registration Act 1860
--Trust, under Indian Trust Act 1882
(or Charitable and Religious Trust Act 1920)
--Trade Union, under Trade Union Act 1932
--Company, under Companies Act 1956 (or
Section 25 of Companies Act) and
--Co-operative, under Co-operative Societies Act.
1
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e
The Society
Act
Provision
Advantages
Limitations
The Societies Registration Act
1860 - The Central Act was
created for the registration of
literacy,
scientific
and
charitable societies. However,
the purposes of this act have
been broadened to include a
variety of other public purposes
in the amendments made by
the different States.
The main provision of the Act
is that seven persons who
subscribe to a Memorandum
of Association can register a
Society under this Act. The
membership of the society can
be open to all those who
subscribe to the aims and
objectives of the society.
Society is one of the most
democratic forms of organisa
tion available. It can have a
broad membership which elects
periodically a governing body
for managing the affairs of the
society. The governing body is
accountable to the general
membership and can delegate
its day to day functions to
some full-time staff of the society.
Society
as a form of
organisation in its original
purpose and concept was
conceived as a form meant to
be utilized to provide services
to a set of beneficiaries who
were not the members of the
society.
Therefore, if we are
thinking of utilizing this form for
women's economic groups,
then women
themselves
become beneficiaries of the
society as well as its members
and are represented on the
governing body, which could
lead to a conflict of interests.
The Societies Registration Act
is flexible and the members
can easily make changes,
amendments, alternations to
its purposes, rules regulations,
bye-laws.
However, the important thing is
to distinguish between the role
of the member as a member
of the society, its general body
and governing body, as well as
the same person playing a fulltime or part-time role in
performing the activities of the
society and being compen
sated for the same.
The Trust
Act
Provision
Advantages
Limitations
Trust can be of several types: a
Private Trust which is governed
by the Indian Trust Act of 1882
or a Public Trust. There is no
central law which governs the
constitution of public Trusts in
the country but a formal
document of public Trust
can be registered under the
Registration Act.
However,
there are some other legislations
which affect public religious
and charitable Trusts in certain
parts of the country.
The Indian Trust Act 1882 is a
Central Act that governs the
constitution and the functioning
of a private Trust. It suggests
how a Trust can be created
and what are the rights and
obligations of the trustees. As
per this Act, a Trust is
"an
obligation annexed to the
ownership of property, and arising
out of confidence reposed in
and accepted by the owner, or
declared and accepted by him,
for the benefit of another or of
another and the owner". The
person who reposes or declares
the confidence is called a author
of the Trust; the person who
accepts the confidence is called
the trustee.
The Indian Trust Act is extremely
Members of the Trust and the
board of trustees cannot become
full-time staff of the Trust or in
any way derive income from
the activities of the Trust. Thus
a women's income generating
group or a grassroot organisation
with the full-time staff intending
to create a Trust of its own
members may not be considered
as a Trust under the provisions of
the Act.
The other legislations governing
Trusts in this country are:
Charitable Endowment Act,
1890
Charitable and
Trust Act, 1920
Religious
Official Trustee Act, 1913
Section 92 of the Code of
Civil Procedure
Bombay Public Trust Act,
1950
The
liability of trustees for a
breach of trust is unlimited and
the trustees' private property and
assets can be attached, should
there be a need for recovery
due to loss or breach of trust. The
trustees are both individually as
well as severally liable in case
there are more than one trustee.
The Act does not specify how
many trustees can there be.
Trustees cannot be changed
unless they resign or retire.
flexible
and
minimum
provides
government
for
inter
ference and regulation except
the Bombay Public Trust Act
applicable
to
Maharashtra
and Gujarat.
The mode of creation of a
legal entity is very simple and it
does not specify the number of
trustees.
Trust is a highly closed organisation
and once appointed, trustees
cannot be ordinarily removed.
It is not a democratic set-up.
The instrument of the Trust created
and the rules mentioned therein
become binding since the Act
does not specify any such rules
or bye-laws. However, the Trust
rules and its deed can be
altered, if it is so provided for
in the original deed.
The liability of the trustees is
individually and severally unlimited
and, therefore, they have to be
very careful in managing the
affairs of a Trust; otherwise
personal property and assets can
be attached in the case of a
breach of trust.
The Partnership
Act
Provision
Commonly used in commer
cial and trading sectors is a
Partnership Firm. A Partnership
Firm constitutes of three
elements:
The
Partnership Act, 1932
lays down the definitions
and regulations of partnerships
in this country.
Partnerships
have been
utilised
by
smaller
commercial
and
profit-making
organisations
where two or more partners
enter into an agreement and
pool their resources.
An agreement entered
by all persons to form
partnership.
into
the
An agreement for sharing the
profits or losses of the business.
A business which is carried on
by all or any of them acting for
all.
In law, a partner cannot be
employed by his own firm and
therefore,
cannot
be
compensated
as
an
employee. The partners derive
benefits or face losses from
the conduct of the business. If
any honorarium or regular
payment is made to the
partners, it is construed as a
share of the profit of that
particular partner and is taxable
as such.
The liability of a partner of the
firm is jointly and severally with
all the partners for any act
conducted by the firm.
Advantages
Limitations
As it allows for business to
take place with much legal
restrictions it seems that a
Partnership Firm, though hardly
used in
the promotion of
development programmes,
could be one of the possible
forms for women's economic
programmes. Thus, a women's
economic
programme of
group members themselves,
could be structured within a
Partnership Firm.
A Partnership Firm cannot be
construed as non-profit and,
therefore, is subject to tax liability
on profit and tax will have to
be paid. The partners, in this
case of women themselves, will
get their share only if there is a
profit because they cannot be
paid a salary.
The Company
Act
Provision
Advantages
Limitations
A company can be of two
types: Private Company of a
Public Company.
The procedure for registration
of a company is very elaborate
and requires a printed
Memorandum of Association
and Articles of Association to
be filed with the Registrar of
Companies with
all the
provisions as prescribed in the
Act.
It is the most appropriate form
for any economic
activity.
Company are elected by the
shareholders and themselves
can be shareholders. Thus, it is
possible to create a Company
comprising of women involved
in an economic activity who
among themselves constitute
all the shareholders and some
of them are elected as Board
of Directors of the Company.
A
Company cannot claim
and non-profit status and will
have to be subjected to the
various provisions of the Income
Tax Act, 1961. However, it is
possible to take to advantage
of the various
provisions
available within the Income
Tax Act (which provide for tax
exemptions).
A Private Company is one
which restricts the right to
transfer its shares and limits the
number of its members to 50. A
Public Company is otherwise.
In case of a Public Company
any seven or more persons
and
in case of a Private
Company any two or more
persons, by subscribing their
names to a Memorandum of
Association, can incorporate
a Company, with or without
limited liability.
The Companies Act, 1956 lays
down, in considerable detail,
a variety of provisions with
respect to the governance of
a Company. Clearly, it is a
form that has been desired
and used to carry
on
commercial and, for profit,
economic activities.
The
women Directors can
receive a remuneration and
compensation
for the time
spent; other women can be
full-time staff of the Company
without any difficulty.
The Companies Act is very
comprehensive and cumber
some. The reporting require
ments are very strict under this
Act. As a result, the number
of returns and the frequency
of
filing those
returns is
enormous in comparison to
other forms of registration.
The Cooperative
Act
Provision
Advantages
Limitations
The Cooperative as a form of
organisation has been in
existence in India for about
100 years. The first Cooperative
Act was introduced in 1904.
Since then the law has been
changed
and modified in
several states in different ways
and has resulted in a very high
degree of control in the hands
of the government and its
nominees.
The Cooperative as a form of
on
organisation is based
certain principles,
It is the
implementation of these
principles in an organisational
form that defines the practice
of Cooperatives.
Registration as a Cooperative
provides access to certain state
and central government funds
which have been earmarked
for cooperatives as well as of
having certain tax exemptions
under the income Tax Act.
Registrar of Cooperative
Societies of the state may be
able to exercise a great deal
qf influence and control over
the
functioning
of
the
Cooperatives
It provides the opportunity of
equality of shareholding and
right to decision-making for
each
member
of
the
Cooperative.
The
registration as a Co
operative means following the
rules and procedures laid down
in the laws of different states.
There is a separate Act in
each state.
Membership of cooperative
societies is heterogeneous and,
therefore, unequal members
become cooperators.
As a
result, the rich, particularly in
the rural areas, have dominated
and manipulated cooperative
societies.
Government regulations have
come to control cooperative
societies and utilise them as
vote banks, as well as a source
of funds for party workers.
Trade Union
Act
Provision
Advantages
Limitations
The Trade Union Act, 1926
provides for the registration of
Trade Unions and defines certain
rights and obligations of the
registered Trade Unions.
Trade Union is a temporary
or permanent combination
formed primarily
for
the
purpose of regulating the
relations between workmen
and employers, or between
workmen and workmen, or
between employers
and
employers.
Thus even
employers can form and
register trade unions. The Act
also covers a federation of two
or more unions.
Trade Unions are associated
with
empower-ment and
collectivization. No other form
of organisation captures the
essence of, or represents
the
meaning
of,
collectivization, demo-cracy,
organisation, empow-erment
and struggle.
As most trade unions in the
country are highly politicised,
trade
unions
can accept
grants from foreign sources
only after prior permission of
the central government under
Foreign
Contributions
(Regulation) Act. Besides, for
initiating new economic
activities for women, it may
require additional resources
which even government
departments may hesitate to
provide to a Trade Union.
Under
this Act, any seven
persons can apply for the
registration of a Trade Union.
A registered Trade Union is
required to send to the Registrar:
annual
income
and
expenditure statement
any changes in names or
rules within 15 days, or any
changes in office-bearers or
the address of the union.
If a union has more than 500
members, its annual accounts
must be audited by a Chartered
Accountant.
To enhance economic status
of workers engaged in wage
labour, it can be a powerful
and effective form.
Thus,
enhancement of the income
of women workers through
their struggle for increased
wages, can be effectively
accomplished through this form.
It has the capacity as a form,
to work with a large number
of members.
This allows for
relating to issues of a large
number of people within one
legal entity.
Dues
generated through
membership of extremely poor
women may pose constraints
on the ability of a Trade Union
to engage in a variety of
activities and
programmes.
As
a
representative
organisation of members, it can
also limit the possibility of
utilising certain types of
professional skills that may
be needed for
initiating
economic programmes.
Processes in an Organisation
When an organisation begins to function it is faced with a number of questions. Some
of these may be: How are the ideas, skills and commitment of members going to be
conveyed to each other? What is the best use of the available resources and time,
or how do organisations establish dynamic relationships between decision making
members ? The answers to these lie in a series of processes that take place in
an organisation. These processes need to be carefully looked into and appropriately
planned as these would help in the effective functioning of the organisation.
Some
of these processes are
communication and team building.
leadership,
decision-making, supervision,
Leadership
One of the major aspects of any organisation is the question of leadership. Leadership
is not merely the group of persons as leaders.
It is the motive force that moves
the organisation forward. It is like the power behind a machine, it is the power that
moves the work of the organisation from one step to another.
Leadership has various purposes in an organisation.
Most significantly, it helps
to elaborate the mission/objectives and not only informs people inside and outside
the organisation about that mission, but also makes the mission understood and
accepted to the members, specially those who join the organisation later on. One of
the important functions of leadership is to inspire people to commit themselves to the
work of the organisation. Leadership is also responsible for ensuring decisions and
seeing that differences and conflicts are appropriately resolved and managed, and
do not develop into dyfunctional proportions. Leadership must lead the process,
bringing in the necessary resources and demonstrating their effective utilisation. In short,
leadership must help evolve an appropriate culture and climate in the organisation,
and sustain it.
Leadership gets exercised at different places, by different people, in different ways
and on different aspects of the organisation.
It is important that organisations help build their members to exercise leadership, and
that many people exercise leadership in different ways and at different stages in the
life and work of the organisation. It is important that a new generation of leadership
is constantly being prepared to take on the roles from those who have been playing
them for a few years. This helps revitalize the organisation. Leadership is exercised
in various ways. An autocratic leadership is the one wherein all authority is in the hands
of a leader or a small group of leaders. Ideas, plans, as well as decisions come from
just one source, whereas members are given neither the time nor the opportunity to
put forth their own ideas.
209
Diametrically opposite to this is, democratic leadership - leaders give members the right
and opportunity to offer their ideas, to give suggestions or put forward questions.
Decision and work - plans are worked out together and everyone shares an equal
responsibility for them. This style is the most appropriate as it fosters dedication to
the organisation and a sense of responsibility for its development. Though it is slow
and time consuming, it establishes loyalty and understanding and the progress of
the organisation is largely guaranteed.
QUALITIES OF A GOOD LEADER
★
Forceful
★
Imaginative
Self confident
Decisive
★
Helpful
★
Friendly
Adaptive
Cautious
Agreeable
★
★
Tactful
Intelligent
Courteous
★
Cooperative
Commands Respect
★
Kind
Likable
Cheerful
Nurtures the group
Brave
Charismatic
Has Initiative
Dominant
Self Assuring
Aggressive
Supervisory Ability
You could identify any other quality/qualities found in the leader of
your organisation and add those to the list
Decision-Making
In performing any work in an organisation or conducting various tasks and sub-tasks,
decisions have to be made regularly and continuously.
In fact, decision-making
is the basis of continuity in the work of an organisation. Organisations which fail
to make decisions effectively will be unable to move, leave alone accomplish their goals
and objectives. The key issue here is, how is decision-making carried out in the
organisation? Are decisions made on the basis of requirements of the task? Are
decisions made on the basis of performances of individuals ? Are decisions made to
please those who are in higher positions in the organisation? Are decisions made
on the basis of complete information and through analysis? Are decisions made
on the basis of conjectures and partial information? Are decisions made in a timely
manner? Are decisions made at a level and at a place where the problem exists, or
further removed from there? Thus as an activity and a process, decision-making
encompasses everything from making major changes in the objectives of the organisation,
210
to choosing what should be served to a visitor. It is important to be clear as to who
has the power to make what decisions and who has the responsibility to implement
it. Some members (collectively) may take a certain decision (e.g., what work to choose
for the economic activity), while some decisions could be made by any member (eg.,
buying stationery).
These are some of the issues in decision-making in an organisation. The important
thing to keep in mind is that the manner in which decisions are taken, or are not taken,
affects, the motivation, the commitment, the enthusiasm, and the competence
of the members of the organisation. If decisions are perceived to be unfair, irrational
or not serving the task at hand and mission of the organisation, then it leads to
tensions, conflicts, confusion and inefficiency. A good decision-making process adds
to organisational clarity. If most people in the organisation can anticipate decisions
of others, as also assess the kind of organisational support they can expect on
the decisions they are entitled to take, then there is total identification between
the individual and the organisation. This leads to a greater efficiency and satisfaction.
Fn any organisation, decisions need to be taken around division of tasks, distribution of
roles, accountability and people/personnel related issues. In each of these--which level
of people will be involved and when, that is, at the policy level or at the maintenance
level (to whom the responsibility will be given, who is accountable to whom, who
will do a specific task, who should be given leave, who will play a specific role, etc.)
or on a routine basis (day to day, when decisions have to be taken immediately
and cannot wait, seeing if the tasks are being done, leave-records are being
maintained, etc.), will depend and get influenced by the core values, the mission,
the culture, the structure and also the statutory form of an organisation. One of the
ways of seeing a pattern of decision making in an organisation is to use the following
chart. The pattern which would emerge would basically depend upon the factors
mentioned above. By looking at the pattern we could then decide whether we would
like to continue with the same pattern or make some changes to facilitate in our
context—enhanced empowerment of women.
Keeping your own organisation in mind, fill in the relevant block (on the next page;
to check the pattern of decision-making.
Supervision
Inherent
in the division and sub-division of tasks and
creating its
corresponding
structures is the concept of supervision. Supervision is critical to the process
of co-ordination. It involves ensuring meaningful completion of the allocated sub
tasks through and with different individuals and groups attached to the supervisor.
As different individuals constitute work-groups responsible for different sub-tasks of the
organisation, they have to be accountable within the organisation with respect
211
TYPES OF DECISIONS/
LEVELS IN AN
ORGANISATION
GOVERNING BODY
CHIEF EXECUTIVE
ACTIVIST/ORGANISER/
SOCIAL WORKER
SUPERVISOR
WOMEN WORKERS
GENERAL BODY
ADD ANY OTHER
LEVEL DEPENDING
ON YOUR STRUCTURE
ACTIVITY
ORGANISATION
POLICY
MAINTENANCE
ROUTINE
(DAY TO DAY)
POLICY
MAINTENANCE
ROUTINE
(DAY TO DAY)
to the responsibility for the allocated sub-task. This accountability need not be to
a person, instead, it is invariably to a role and the person occupying that role becomes
the focal person for purposes of accountability. Accountability can also be to
a group. For example, the Governing Body, Board of trustees, Board of Directors as
a group becomes the focus of accountability for the entire work of the organisation.
Viewed in this context, supervision essentially ensures that the assigned responsibility is
discharged in a fashion appropriate to the accomplishment of the tasks and goals of
the organisation. It is in ensuring accountability of those individuals and groups which
have been assigned a certain responsibility that the
purpose of supervision is
important.
4
In practice, supervision is effective when it is done in a supportive manner, that
is the supervisor understands what the likely problems, challenges, difficulties the
person who is working will experience while organising and working on women's
economic activities and based on that, helps and supports organisers/workers.
Supervisors need to help and support in the identification and analysis of the
problem based on which they then help the workers/organisers in making an informed
choice.
On supportive supervision, the supervisor needs to look at his/her role as supportive,
as opposed to judgemental, assisting as opposed to bossing; and give primacy to
the roles assigned to the persons who are being supervised, as opposed to an
issue of relationship between persons.
For effective supportive supervision to take place, the supervisor needs to have a set
of competencies to play his/her role effectively. The supervisor plays multiple roles
vis-a-vis the person who is being supervised. A supervisor may need to be a guide,
motivator, educator, leader, friend-counsellor, as well as a team member - all these
different roles require specific set of competencies which a supervisor will need to
develop to be able to play an effective supervisory role.
Effective supervision is the key to ensure accountability. Wherever supervision is
not carried out effectively and accountability gets diffused, fulfillment of tasks
and achievement of goals invariably suffer. To avoid confusion in the mind of the
person being supervised, it is always advisable that the organiser/worker has only one
supervisor.
Comm unic ation
Communication is the life-line of an organisation. Communication occurs orally as well
as in writing.
Communication occurs
one-way, two-way,
and in multi-ways.
Communication helps in ensuring coordination. Through communication flow the
ideas, the goals, the plans, the decisions, the values, the information, the power and
213
I
influence, the feelings between people-individuals, groups, departments and so on.
Therefore, communication is critical to the health of an organisation.
There are many problems in communication that all organisations face. These problems
arise due to several interpersonal tensions and difficulties, likes and dislikes, inappropriate
systems and procedures.
Sometimes communication problems arise because
communication is taken for granted and careful, deliberate attention is not paid
to ensure effective communication, i.e. timely, relevant, and accurate communication.
The process of communication in an organisation is also the process of ensuring
common understanding, shared perspective and collective responsibility. In situations
where communication is controlled, distorted or otherwise ineffective, sustaining
people's commitment to the work of the organisation becomes a difficult task. It
is in this context that information, its flow and use becomes of considerable
importance.
Information is required for planning, decision-making, supervision etc. We need
to know if we are to achieve objectives, targets that have been set up. We need to
know about the problems, difficulties and unplanned, unforeseen events that may
occur.
Information and sharing of information is a very important part of communication.
Each organisation needs to have its own information system which is developed
according to the specific need of that organisation. This system will help in transferring
and sharing of information such that the work of the organisation is carried out effectively
by all its members which in turn helps in the attainment of the larger goals/mission
of the organisation.
HOW IS COMMUNICATION USEFUL
★
It spreads understanding of the aims and objectives of the organisation.
*
It facilitates the organisation to run in line with its structure.
It promotes
a sense of natural responsibility between members.
*
It strengthens mutual understanding between the organisation and external
environment.
★
It helps to cultivate assistance from outside sources.
214
OBSTACLES IN COMMUNICATION
*
Time (If it Is inappropriate)
*
Lack of concentration
*
Habit (if used to demonstrations,
lecture will not work)
Experience in life '
*
Difference in Education
*
Relative Importance of Things
★
Differences in Status
*
Tradition: Different Backgrounds
Team Building
Every organisation has its own set of objectives and mission. When different members
of the organisation work together on different tasks, task teams get formed for the
accomplishment of these objectives. However, merely having different members of
an organisation working on a particular task, does not constitute a team. Members
may begin to work in a team but each team and its members go through their own
processes, stages and build their own characteristics which help in their functioning as
a team. Jhe starting point for members to be working in a team would be when
members equally understand the task and its importance. Thus, they also have a
clear and shared understanding of how the tasks need to be done.
When members work together in a team, each member can contribute according
to his/her capacities and the tasks gets accomplished in a better manner. If the task
to be completed is immense, then the different members working on it help to
accomplish it quicker and faster. As different members are working on the tasks
no individual member is burdened and responsibilities get shared. Members also draw
support and strength from each other and are able to work in a much more confident
manner This factor is very important, specially when we are working with poor women
who begin from a very low level of self-confidence.
215
CHARACTERISTICS OF AN EFFECTIVE TEAM
Some of the characteristics of an effective team are :
*
All members understand, share and are committed to values, norms, goals of
the organisation and their own task teams.
*
All members have been involved in articulating the values, goals and tasks.
★
Members are clear and share an understanding of how the task needs to be
done. Members trust and respect each other.
★
The potentials of each member is recognised, valued and tasks are allocated
accordingly.
There is flexibility and sensitivity to the needs of different members.
*
The team has been in existence sufficiently long enough to develop a relaxed,
Informal,
comfortable working relationship among all its members.
*
There is a shared learning.
★
There is a shared leadership.
Appropriate procedures for taking decisions and doing
developed by the leaders and the members.
work are jointly
There is openness in communication amongst the members and there is
discussion in which practically everyone participates but the discussion is
pertinent to the task of the team.
Thea members are conscious and have the ability to examine their own process
so as to constantly improve itself as a team.
The members provide support to each other and share responsibilities
amongst themselves for the effective completion of tasks.
When we want to understand team-building, it is necessary for us to understand the
various group processes. Members of a team initially come together as individuals, it
is only when they work together over a period of time that they start functioning as
a team. Just as members in a group go through different stages of development
where they initially test each other, build relationship with only similar others; then
move towards challenging differences amongst members with some members trying
to control and influence the group; from this stage the group then moves to working
in collaboration for completion of the task. Similarly in a team, we find members going
216
r
through these stages and its only when they reach the stage of working in a
collaborative manner and have the characteristics of an effective team (which have
been mentioned earlier) can it be said that the team has been built.
At times, it may be necessary for us to play an active role in helping build the team.
We may need to have frequent meetings of all team members even if it is for a very
short time.
*
Certain teams, because of the nature of their tasks, may meet more frequently than
the others but team members need to meet to help build a sense of identity.
The size of the team and the type of leadership we need to build are two other factors
we need to look at while helping build a team. We also need to constantly re
check with the members, their understanding and clarity of the tasks that need to be
done. If there is more than one working team (which is very often the case) then
we need to see that while each team has its own autonomy in taking decisions about
its own work-plans, yet there is a coordination between the functioning and decision
making of ihe different teams.
Issues for us
While creating our own organisations as well as while altering, modifying, and,
revitalizing them from time to time, we need to keep in mind aspects which are distinct
and unique to our work in womens' economic activities. We have, been talking about
the principle of enhanced empowerment of the women themselves. Thus, they may
have to be involved significantly in the creation and recreation of their organisation
and its different aspects ^nd processes. Detailed discussions with the women
themselves may be necessary for ensuring this. The current capabilities and limitations
of a particular group of women will need to be kept in mind in designing the structures
and procedures, systems and processes of the organisation they create for themselves.
If many of the women members are illiterate, communication may have to be
essentially oral. If they have limited skills in performing certain types of tasks (like
accounts-keeping), the additional competencies may have to be inducted. But
such inducted competencies must be kept accountable to the organisational
leadership in the form of women themselves. Special interventions may be needed
to expedite strengthening of the internal leadership of the women. Mechanisms may
have to be created for dealing with differences among women. Retrospection of the
processes used to allocate resources, responsibilities and roles among different members
may also help.
Thus, all these principles and issues need to be specially related to the requirements
and constraints of a specific group of women who are creating a new organisation,
or are revitalizing an existing one. The principles of widespread participation, the
principle of shared leadership, the principle of involvement in decision-making with
217
respect to those decisions that affect the'life and work of different members, the
principle of equity and fair-play; all these and many others may need to be woven
into the fabric of the organisation, comprising its various components, structures,
rules, procedures and systems.
Similarly, depending on the type of economic activity
some special emphasis
may be needed in relation to the creation of revitalization of the organisation.
Mentioned below are some of the specific considerations that may have to be kept
in mind with respect to organisations based on four different types of economic
activities:
1.
Organisations created to initiate a new economic activity may have to pay
a greater attention to the question of training and skill-building of those
working in the organisation. This will be necessary because the activities may
be new and very little past-experience or relevant expertise is available.
Similarly, it will have to be reckoned with that the speed of performing the
task could be slow, as many women would be learning while working. This
may have implications on tne outcome. The outputs will be slow in the initial
period. Working on a new activity may entail making mistakes and the culture
of the organisation, as well as the systems of supervision, may have to ensure
that there is always space for committing mistakes and learning from them.
2.
Organisations involved in upgradation may have to focus on their re-orientation
to new markets and new strategies. They may also have to pay special
emphasis on improving and upgrading skills and techniques. Bringing new
technologies, new designs, new machinery, new techniques and new ways
of doing work may have implications on the structure of the organisation as
well as assignment of the roles and responsibilities. In such a situation, the
organisation may have to learn to change and adapt. The members working
in the organisation may have to acquire the capacity to learn and grow. This
happens only in a culture that promotes learning, growth and change.
Upgradation may also entail bringing in new human resources with new skills and
capacities. The questions then would be how these new people could be
integrated in the existing culture of the organisation; how is the existing culture
reviewed with a view to facilitate that integration; and, how the tensions and
differences between the old and the new are kept in check.
3.
Organisations involved in networking activity place greater emphasis on
establishing links and relationship with others outside the organisation who are
relevant. This is where coordination needs to be emphasised. This is where
processes, systems and procedures need to be created or reoriented for
ensuring smooth linkages between different sectors of this organisation and of
others with whom it is networking. A fair inter-sharing of the culture and structure
218
of the networking organisation and its mission, objectives, current tasks, etc.,
prove useful in identifying partners with whom wholesome relationships are
likely.
4.
Organisations which are trying to get better returns from the existing activity, may
have to learn how to influence their environment more significantly. This is
where
their capacities to influence external decision makers,
the
government, the market, suppliers, etc. may be invaluable. Ability to mobilise
members collectively, and, to optimise the existing system may considerably
add to the economy. Therefore, the leadership will have to gear up
its capability for conducting these tasks. Organisations involved in this type of
work may also have to occasionally bring in special expertise and skills which
may be needed for lobbying and advocacy functions. The challenge for the
organisation would be how those additional experts or people remain
accountable to the current leadership and the goals and objectives of the
organisation.
These are only some general principles. Depending on a specific type of
organisation, we may have to assess its specific requirements. The important
thing to keep in mind is that an organisation is a mechanism to attain certain
goals and objectives and thereby accomplish its mission. As a mechanism,
therefore, its structure must be appropriate to the task at hand. Building a new
organisation, as well as modifying and revitalizing an existing one thus, requires
focused attention, dedicated time and energy, and a deep understanding
of how organisations function and survive.
219
Notes
220
Notes
221
Notes
222
QUALITY
POLICY
LINKAGES
ENVIRONMENTAL
ANALYSIS
INFORMATION
SYSTEMS
PROJECT
PROPOSAL
FINANCIAL
RESOURCES
ADDITIONAL ASPECTS
QUALITY
A quality product is that which meets the expectations of the customers. Maintaining/
controlling quality is an important area of production and plays a very crucial role
in the survival and success of any economic activity. Quality control ensures that
the output of the production system is in conformity to the needs of the target market.
A standard/norm is set in the production guideline which keeps in mind the expectation,
agreement with the customers. A product produced on these lines can be said to be
a quality product. For example, customers are buying bidis made by a particular
women's group since they expect a particular standard/quality. If they do not
find the expected quality of tobacco, leaves' dryness, packing, number of bidis, etc.,
then it is very likely that they will shift to some other brand. Expectation of
quality in a product is also linked to the price the customers pay for it. If a packet
of 25 bidis cost the customers one rupee they expect a particular quality which they
neither expect from a 0.75 paise packet nor Rs. 1.50 packet; but when this expectation
is notmet with then the customers get disappointed and are likely to change their
brand.
Therefore, quality signifies a certain level of one or more properties,
characteristics and benefits of a product. It is a concept which is relative in nature.
There is generally no absolute level of quality.
DEFECTS VERSUS DETERIORATING QUALITY
A defective product is that which does not meet the desired standard/norm/
specification in terms of one or more dimensions. For example if a table was to
have a top of 3'x2' and it is actually 3'xr, then this table has a defect. Some defects
can be rectified but not others and thus, the product has to be rejected. Defective
pieces need to be simply removed from the good lot during the quality checks.
Deteriorating quality is a gradual decline in implementing the quality standards. This
may happen due to carelessness, lack of supervision, inadequate training, etc., and
needs to be rectified immediately. Since quality is a conformance on a continual
basis, we need to check, test and adjust the quality at each stage of the
production.
225
Importance of Quality
Quality is important because :
it attracts customers
*
it fetches continuous orders from customers as they have full
assurance that our product will serve the desired purpose.
faith and
it is a selling proposition - a reason for people to buy our product in contrast to
others available in the market.
For example - Masalas grinded in the machine and those which are commonly
available in the market are much cheaper than the masalas made by women's
groups. This is because the groups use pure and high quality raw material, whereas
the usual bazaar variety is not so pure. In red-chilly grinding, the bazaar businessmen
usually grind the stick along with the chilly and sometimes add dust to haldi. To avoid
such adulteration, some customers are willing to pay a higher price to buy masalas
from the women's groups.
Perception of Quality
This means how customers perceive the quality of our product. It is quite possible that
the quality of the product produced in our activity may be good but the customers
may not perceive it so. In such a case, we have to correct/modify the perception
of the customers by communicating to them/convincing them/influencing them.
There are several factors which affect the perception of quality of a product. They
are :
Price : Higher price is generally associated
with better quality.
Packing : Good packing enhances (improves) the quality image of the product.
Packing need not be very expensive but it should be neat, attractive and
functionally effective (should protect the product packed in it).
a State Government
Place of selling : Products like handicrafts sold in
Emporium have acquired a good quality image, while the same product
sold on the footpath in the weekly market may give the impression of a low
cheap-quality product. In case of eatables, the place of selling should be clean
and hygienic (without flies). This will help to enhance the quality-image of our
products.
226
★
good
Reputation of the manufacturing organisation/group. People expect
quality
product
from
reputed organisations/groups, so if we want our
products to sell well in the market, our organisation/group should be well
known.
Why do Quality Problems Arise ?
Generally, quality problems arise because of one or more of the following reasons :
absence of quality-consciousness and quality-culture
★
Insufficiently skilled group members
★
poor quality of raw material
★
outdated/old production machines and tools
low commitment of group members to the activity and quality
lack of quality-checks at various stages of production
★
poor storage leading to rats/insects spoiling the produce
★
Inadequately-timed marketing and aging of products which become
lustre, colourless or tasteless.
lack-
Strategies to Overcome Quality Problems
Quality, means the identification and correction of various causes, defects and
variations from the set standards in terms of specifications of a project.
The objectives of every quality-control, therefore, must be both:
*
Remedial
and
Preventive
The Remedial objective in quality control values the sorting out of the defective pieces
at the final stage of production so that only "good" products reach the customers
e.g., we weed out the defective bidi bundles once they are rolled and ready for sale.
227
The preventive aspect is concerned with all the possible defects that may occur at
the various stages of production and try to minimise these defects, e.g., before the
bidis are rolled out, we remove the defective leaves, or inspect the quality of
tobacco, inspect the bidis rolled out before making them into bundles, etc.
The following steps could be adopted as a means to overcome quality problems:
Use good quality raw material and check it as soon as it enters the place
of production.
Use good machinery, tools and better methods of production.
Build
quality-consciousness among
group
members
and organisers.
Make a few "ideal" samples of the product and ensure that the production
matches this "deal".
Train group members adequately in the production process, to avoid the quality
deterioration due to lack of understanding and skill.
Provide good supervision, guidance, and assistance to women to help them
maintain the quality.
Have quality checks at 2-3 important stages of production.
*
Group members can be given
production.
rewards/incentives/appreciation for quality
Good coordination between various people involved in the production and
timely information.
*
An inspection system must be set up and activated i.e., ask questions like who
is responsible for ensuring the quality of raw materials used? Who is responsible
for the quality at the different stages of production? Who will check the final
product, etc.
Once these and
similar questions have been
quality of products gets automatically ensured.
answered satisfactorily,
the
MAINTAINING A CONSISTENT QUALITY
This means all or most of the produce has the desired level of properties. For example,
if the group produces salwar-kameez, it is possible to check each and every piece after
cutting, sewing, and button-making, piping, etc. (finishing). This is an example of a
100% quality control by a 3 stage inspection.
228
Example of a Quality Check at Different Stages
Production of Salwar Kameez
Cutting
Stage 1
Cutting
Stitching
of each
Stage 2
piece,
whether cut
properly
Inspection
of each
piece
whether
stitched
properly
Inspection,
buttoning
piping
Stage 3
Inspection
of each
piece, whether
finished
properly
It may not be possible to have a 100% inspection in all economic activities. For example,
a women's group supplying cooked food to officers goes in a city to buy a lot of
raw vegetables. Before cooking, the vegetables are inspected but not 100%
Suppose, 100 Kg of bhindi is purchased one day. Ten percent of this i.e. 10 Kg is
selected for inspection. This quantity of 10 Kg is the sample. If the acceptable level
set by the group is 'not accepting more than 5% of bad vegetables' then out of the
10 Kg, 500 gm of bad vegetables is acceptable. If after sortingout, the bad portion
is more than 500 gm then the group rejects the whole lot of 10 kg and also the whole
supply of 100 Kg.
It is not possible to have 100% quality-consistency in all production
specially land and livestock based activities.
processes
For example: On the same tree, mangoes of different quality grow: And, grading
of mangoes will need to be done under the classification Grade a. Grade b and
Grade c.
The aim should be to reduce the level of defects to such a low-level as is economically
possible and maintain a consistent high-quality. This consistency in quality can be
increased both through regular inspection as well as with the help of the steps
mentioned earlier.
—
229
Notes
230
ENVIRONMENTAL ANALYSIS
We all exist in a given situation and context.
What is around us and affects us
isour environment. Any economic activity, any production process or any productive
unit also has a given environment around it. That environment affects the economic
activities in various ways. Thus before planning and starting any economic activity
with the poor women, it might be useful to systematically understand the various aspects
of the environment and how they affect. In this case, such analysis can help us plan
the economic activity in a way that makes use of the various possibilities presented
by the environment, at the same time being aware of the various threats to the
activity posed by certain aspects of the environment.
Segments of Environment
fl-ie environment can be understood in various
an economic activity,
For
ways. Different aspects of the environment may have different bearings on an
economic activity. The following are some of the major aspects of the environment
which may require our attention while we are planning an economic activity with
the poor women.
1.
Economic Environment
The economic parts of the environment primarily comprise of two major segments. The
first relates to the Market, where goods and services are exchanged, or sold and
purchased. Thus, market provides a basis for acquiring a variety of raw materials which
may become necessary for the economic activity and thereby helps sustain the activity
over an extended period of time. An analysis of the market from the point of view
of use of the output of the economic activity has been dealt with in some detail in
the section on Marketing. An important thing to keep in kind is that the trends in
the Market for the product and services may give us the possible hints about ways in
which our activity will develop.
Similarly, a detailed discussion on the acquisition of raw materials from the Market has
been presented in a subsequent section.
The important thing to remember is that
economic forces affect the functioning of the Market and therefore, the availability
of supply and demand of various goods and services which in turn significantly affects
the supply of raw materials for the economic activity and use of its outputs.
The second major aspect of the economic environment is finance. It is this aspect
from where the capital is obtained for the economic activity, that part of the
environment which could provide subsidies or loans to finance long-term investments
231
and assets as well as purchase of consumable raw materials to run the activity. Various
financial policies of the government are also included here (like interest rates, differential
rates of interest for weaker sections/women, subsidies, use of capital for current as well
as fixed assets, etc.). A detailed description of this is available in the section on financial
management.
2.
Political Environment
Political aspects of the environment can vary from the local village power structure and
political dynamics to the national and international political situation. The important
thing is to decide which aspects of this range of possibility from the environment have
a direct or significant bearing on the economic activity per se. The local political
process can affect an economic activity of women, favourably as well as unfavourably.
Sometimes, the local vested interests are threatened by any effort which leads to the
empowerment of poor women since local traditional leadership is generally male.
The political trends at the state and national level can also affect the general climate
in which the women's economic activities could be initiated. They tend to set the
general tone which may either create favourable conditions for the implementation
of such economic activities or hinder the process. The dominant political leadership
and ideology prevalent at a given place at a given point in time may lead to either
recognition of the importance of such efforts as women's economic activities or their
undermining.
3.
The Policy
The policy segment of the environment is that which relates to the State policy in general
plus policies related to women and development in particular. Various policies of the
government at the national and state levels have a significant impact on the possibility
of succeess of women's economic programmes. For example, a decade ago very
little explicit policy formulation existed with respect to development of women and
whatever little programmes and schemes were available focussed on the role of
woman as a mother and home-maker and, therefore, entailed programmes of health
and education only. It is only in recent years that the productive and economic roles
of women, (women as producers and workers) have been recognised by the policies
of the government and therefore, corresponding schemes and programmes have been
initiated.
Similarly, an analysis of the segment of that Policy Environment which directly affects
the work of a voluntary agency also becomes important. There are periods in the
history of State policy where due encouragement to the role of voluntary agencies has
been provided. There have also been periods where State policy has not been
so encouraging towards the work of voluntary agencies. Therefore, both analysis of
232
general policies of the State as well as specific policies in programmes related to
women's economic activities can provide useful insights into the possibilities of
implementing women's economic activities successfully.
4. Legal
Legal segment of the environment is that segment which relates to various laws, rules
and procedures. Various laws in general, and some legislation in particular, directly or
indirectly, affect the possibility of successfully implementing women's economic
activities. For example, legislations related to ownership of assets by women and the
rules and procedures to be followed for the same can either facilitate women's
ownership of assets (like land, cattle, worksheds, instruments and tools, etc.) or can
hinder that. Similarly, legislations like Minimum Wages Act provide some reference point
for the level of income that poor women should be able to generate from an economic
activity. Laws related to the registration of women's groups and organisations
as Societies, Trusts, Cooperatives, Trade Unions or Companies also have a bearing
on their internal functioning. Thus, a variety of legislations comprise of legal segments
of the environment affecting women's economic activities.
5. Socio-Cultural
Finally, a broad category of the socio-cultural segment of environment has a bearing
on any economic activity per se. This includes values, norms, taboos, habits, cultural
roles, prejudices, attitudes, world-views of that segment of the population, of that area
Where such an effort is being initiated. At some places, women have been relegated
to traditional home-maker roles, for example (with restrictive norms about their public
mobility.) Thus, planning economic activities to bring women out of their homes
at a common place may have to be taken into consideration. The women in certain
parts of the country do not get involved in agricultural operations, while in other areas
they are playing a central role in it. In many parts of the country women are expected
to continue to play the role of home-maker and also continue to be involved in the
economic spheres? The specific context of a given situation has to be understood
for understanding the impact that socio-cultural segments of the environment are likely
to have on the success, or otherwise, of women's particular economic activities in that
location.
The above are only suggestive categories of segments of environment which need
to be understood in specific and concrete terms while planning an activity with women.
There are other aspects which can also be highlighted. The idea is that a
comprehensive and systematic analysis of the environment is carried out at the stage
of planning an economic activity with women. This will help us identify opportunities
and threats from the environment.
233
Types of Analyses
The manner of analysis that can help in planning is to look at each specific segment
of the environment and to identify those trends or aspects of the segment which appear
to be favourable to the growth of women's economic activities and to identify those
which appear to be unfavourable. Of course, identification of segments of environment
as favourable or unfavourable is a matter of judgement to be exercised by those who
are involved in the planning process.
However, this judgement has to be based on some concrete and authentic
information regarding the various segments of the environment. Some of this information
is easily available in a variety of published documents, some be obtained through the
media (like newspapers, journals) Some of it may have to be specifically obtained
through special efforts at the planning stage. The important thing to remember is that
assessment of the environment and its specific segments has to be done in a way that
can help us in using those segments either favourably or neutralizing their
unfavourable impact while planning the women's economic activity. This assessment
is essentially based on the judgement of those involved in the planning process but
must be based on some systematic and authentic information obtained about
those segments of the environment.
Second thing that needs to be kept in mind in this regard is that environmental analysis
range from a very rudimentary to an extremely sophisticated form. From the kinds
of economic activities (with poor women) that we are involved in, it appears, that
preliminary analysis itself may be a useful starting point. Also, the initial analysis may
focus that the levels are proximate to the location of the economic activity. Initially,
it may be very difficult to analyse the international political trends and their impact
on the economic activity of a group of women in a small hamlet. However over a period
of time, through constant analytical approaches, those involved in economic activities
with women must develop the capacity to infer the impact of national and international
macro forces —economic policy, policy etc., — which affect their micro experiments
and efforts and in ways that they do so.
The purpose of doing the analysis is not to stop at that but to utilize the favourable
segments of environment in support of the economic activity. Also, we analyse to
think of ways by which the potentially negative, unfavourable impacts of certain
segments of the environment can be minimised or neutralised so that an economic
activity does not get derailed.
Another thing to keep in mind is that environmental assessment can be made on
the basis of our current understanding and assumptions. But, there may be serious pit
falls in this. Our understanding and assumptions may be dated, may be based on past
and historical facts and may not be in tune with the emerging forces and trends.
234
Therefore, it is important to state those assumptions explicitly in the process of
environmental analysis and to test them against the current reality. This is a skill which
we acquire through practice over a period of time. But we can begin even today by
taking a single activity that we are involved in and examining the different aspects of
its environment in some detail that will help us to begin to focus on the environment
as a major source of influence on the future aspects of that activity.
H
Notes
235
Notes
236
POLICY LINKAGES OF WOMEN’S ECONOMIC ACTIVITIES
Profits are earned in any economic activity when the two forces come together - one
is the good and efficient management of an activity itself (in its day to day functioning),
and second is the supportive and appropriate policy framework.
Good and efficient management of the economic activity is in the hands of the people
who initiate the activity. A supportive policy framework is provided by the policy makers
in our economy, who are usually the government departments and regulating
institutions for different activities. Sometimes, a supportive policy framework already
exists and we have to only use it to the advantage of the poor but more often, a
positive policy framework has to be created by the people who are working with the
poor.
To create a supportive policy framework, we have to first know the concerned policy
making bodies. An illustrative list of policy making bodies for the grid of economic
activities (we have developed) is presented in the box. For all the four generic types
of economic activities, the policy making bodies are the same. The differences are
basically between the three bases of activities.
POLICY FORMULATING STRUCTURES IN OUR ECONOMY
AFFECTING POOR WOMEN’S WORK
Land Based
Livestock Based
New Activity
Revenue Ministry,
Department of
Women and Child
Development
Animal Husbandry
Department,
Various Livestock
Boards
Industries'
Ministry,
Central Social
Welfare Board (CSWB)
Upgrading
Existing
Skills
Rural Development
Ministry,
Credit Institutions,
NABARD
Skill Board
Khadi Board
KVIC,
Collage Industry,
Handlooms Board,
CSWB
Networking
activity
Irrigation Dept.,
Marketing Feds.,
Agricultural
Produce Proce
ssing Depts,
and Ministries
Dairy Board,
Rural Development
Ministry,
Cooperative
Department,
Fishermen's Board.
Handloom and
Handicrafts
Board,
Coops. Dept.
Better returns
from existing
activity
Forest Department
Credit Organisations
Forest Development Corp.,
Various Bcfirds,
Anti Poverty Programmes.
Sales Tax Dept.
237
Manufacturing
Based
Policies which Affect Women’s Economic Activities
The main areas of policy formation affecting women's economic activities are Pricing,
Raw material use, Land ownership, Credit availability, Membership of organisation,
Training Criteria, Minimum wages, Licensing policy, Assured markets, Export
industrialization, Forest Produce use, etc.
When establishing the policv linkages we have to be
implications:
aware
of
the following
Implications of Establishing Policy Linkages
(1)
Constant analysis of the situation
(2)
Awareness of the areas where we have to accept somebody else's terms of trade
(3)
Not taking the existing terms as given
(4)
Cultivating a relationship with concerned officials of the department.
(5)
Studying the legal basis on which the present terms are fixed.
(6)
Finding out the other interested forces which benefit from present terms
(7
Who gets the most out of the present margins
(8)
Readiness to lobby for change
(9)
Building the numerical strength of members as well as the political clout to
influence the policies
(10)
Lobbying for the change we want by documentation, research, meetings, use of
the media and creating pressure.
(11) Understanding the larger national and global context which is creating the status
quo and how the situation at the grass-roots is the consequence of these larger
forces.
(12)
Enabling similar activities across regions to come together and present a united
front.
Different Policy-Influencing Levels
Grass-roots
(Village, city,
Block, District)
State \ National
238
International
We have to start at the immediate grass-roots level because that is the direct interface
which affects the group members' lives and incomes. Every day is a struggle here. The
various officials here are the starting point of the spiral through which we can get an
access to higher levels in the hierarchy, who can help us to influence policies in our
favour. "We must also understand that at the lower levels of the public policy
infrastructure, the officials are only trained to administer and implement the policy laid
down in terms of various procedures and formalities. They are not usually aware of the
context in which the overall policy has been made, which is creating the status-quo
for us, nor are they interested in changing anything to help the poor.
It is at the state and national level (sometimes district also) that the policy is formulated,
keeping in mind various priorities of the government. Here, we can create pressure,
visibility, and understanding of the nature of problems faced by the poor women at
the grass-roots level in their day to day work of earning a livelihood. We can also
give various inputs, suggestions, ideas, and data to the officials at the decision-making
level to consider for change in the policies. Officials at this level usually have an open
mind and are willing to listen to the problems faced at the grass-roots. They are not
always in a position to change the situation altogether in favour of the women's group
butthey can certainly help. This is a process of sensitisation and it takes some time before
any change occurs in the policy. The need here is to keep pressurising. The officials
keep changing and getting transferred. We have to keep track of all these changes
and also
maintain close contact with the new officials who come in. We have to
discover influential contacts who can also influence these officials. We must be aware
of the various committees which may be constituted from time to time by these various
government machineries and build a relationship with them, and even acquire their
membership.
This level forms the crucial link between the grass-roots and the
international level, and our constant interaction here develops our understanding of the
state\national priorities. And, all that brings us into direct contact with the international
levels of policy formulation.
The world has become such a small place that everything happens in the global context
today. All the international agencies in the UN, the country forums, the trade federations
and associations, the unions, the academic bodies, the funding agencies, all
constitute an international element to policy formulation. Here, it is the conceptual
framework, the ideas, and the fundamental analysis which becomes the inspiration for
policy formulation. .Our country is a member of many such international forums and
the decisions made here affect the nature of policies formulated inside the country.
The international level also can be influenced when our work reaches a stage
where there is a strength of concepts and knowledge of how things need to be done.
As groups develop and grow in number and size and gain capabilities of generating
information in their area of work, they can create a platform to voice their concerns
and that of similar groups and also have a major influence on policy questions, causing
the government to take more interest.
239
INFORMATION SYSTEMS AND USE
In the note on Environmental Analysis, we have discussed the importance of
understanding the various forces in the environment which have to be taken into
account in managing our economic activities. The process of analysis automatically
leads to the generation of information which has to be utilised in different ways to
strengthen the economic activities. Information systems and their use therefore
becomes an ongoing aspect of our work in organising/managing economic activities.
Information does not come automatically. We have to understand the importance and
use of information and the ways of developing and improving our information systems.
Some of the aspects of information use are:
Importance of Information
Information is power. In our changing environment today,
new information is being
generated everyday, processed and used in many different forms. While we are
attempting to strengthen our organisation, and economic activities for women, we need
to know how the situation/environment outside our organisation is changing. We
can take action only when we have the information. In the absence of such information
we are unable to take decisions about our work or take appropriate steps to protect
our organisation against the outside forces. Also, our attempts to develop our
organisation further are hindered. The overall objective of increasing income and
empowering the poor women can be achieved only with the help of adequate
information about various aspects. Herein lies the importance of information.
Developing Information Systems
Here we have to identify what kinds of information are needed, who will generate
this information, how often will it be generated, and the sources of this information.
Kinds of Information Needed
Information by itself has no value. It is useful only when it serves a purpose. Hence
from the environment, we need information about the economic, political, policy,
legal and socio/cultural aspects discussed in the section on ‘Environmental Analysis'.
An illustrative list of the kinds of information dealing with these aspects is given below.
However, greater details regarding a particular type/category of information will
depend on the nature and type of activity adopted by an organisation. For Example:
1)
Budgetary allocations of the Central and State Government.
2)
Existing policies and programmes favouring the poor.
240
3)
Special programmes for women
4)
Sources of raw materials-local, regional national
4?
Prices of raw material
6)
Competitive prices of products and services in the market
'■O,
7)
Transport systems and their cost
8)
Service charges and terms of borrowing
9)
Sources of short term and long term borrowing
W)
Special government schemes for support and promotion of particular economic
activities and specialised institutions set up for them.
11)
Local state and national taxes which affect costs and prices.
12)
Sources of technical guidance
13)
Insurance plans available
14)
Political parties in the area
15)
Local leaders and their influence
16)
Elected representatives in the village block and district Panchayat.
17)
Activist groups unattached to political parties
18)
District administration sef-up
19)
Land distribution pattern of the area
20)
Caste distribution of the areg
21)
Infrastructural facilities available like electricity, roads, water supply, health care
22)
Other voluntary organisations working in the area
23)
Religious groups and their activities
24)
Various religions in the area and their following
25)
Total population (with percentage of males/females )
26)
Crops grown
27)
Occupation and skills of the people
28)
Other Resources.
G:--
241
i ■'
Who will Generate this Information
Everybody associated with our organisation, in some way or the other, would be in
a capacity to generate one or the other aspect of such an information.
However,
people having the overall responsibility of the economic activity will have to generate
this information more consciously. In addition, people interacting with similar kind
of agencies based in the outside environment will also be in a position to generate
more information.
How often will the Information be Generated
Information collection of this kind is a continuous process. The periodicity of information
collection is difficult to determine, however when situations/events are changing rapidly,
there is a more critical need for recording that information than when no changes
are occurring.
Sometimes, the periodicity will depend on and coincides with the periodicity with which
the outside agencies bring out their information such as government plans and
documents which may be annual or of some other periodicity. Information from the
environment is thus generated more through constant vigilance and interaction than
through a pre-set periodicity.
Source of Information
some of the possible sources of such information are:
1)
Central and state government plans and documents
2)
Allocations in government budgets
3)
National and state level agencies, organisations, corporations and boards,
set up to promote development activities.
4)
Funding organisations
5)
Government officials
6)
Political leaders and representatives
7)
Federations of various kinds (e.g., of local people, traders, etc.)
8)
Newspapers,
periodicals.
9)
Radio
10)
Television and video cassettes
11)
Official committees, meetings, informal gatherings, public gatherings, speeches
of public figures.
general
magazines, research
242
journals and
special interest
Use of Information
This information can be used mainly to capitalize on various opportunities in the
environment, take advantage of various facilities and services available and increase
the strength of our organisation. It help us make judgements on the environment
to determine a proper place for our work. It is utilized in protecting our work from being
destroyed or undermined and create visibility for the women we work with, and
promoting the achievements which have been possible. It is also used in negotiating
with various other agencies we deal with, to derive the maximum benefit for our
women.
B
Notes
243
Notes
£
244
PROJECT PROPOSAL FORMULATION GUIDELINES
There are no hard and fast rules about project formulation. Many donors, however,
specify their own format and guidelines to prepare a proposal. An attempt has been
made to present a framework for writing a proposal. However, a proposal needs
to encompass the specific context and situation of the organisation writing the proposal.
1.
Overview or Introduction
This provides a background and sets the stage for elaborating the goals and activities
subsequently. Brief information regarding the socio-economic, geographical and
cultural aspects of the area & the people could be mentioned. If a base line survey
has been conducted, or a needs' assessment has been carried out, then that data
could be shared. Information from secondary sources such as the Census Reports
may be utilised in the preparation of this section.
The basic purpose of this section is to place the activities \programmes of the
Organisation in a context. The information provided should present a rationale or
a justification for the organisation's objectives\goals\mission. The rationale for doing
a particular type of work should be clearly mentioned.
2.
Goals or Objectives
The specific goals of the organisation need to be presented here under two heads.
- Long term goals.
- Short term goals.
3.
Activities
This outlines the specific activities the voluntary organisation is going to be engaged
in. In writing out the activities we need to mention as to:
- How the organisation attempts to accomplish these goals and objectives.
- Sequencing of activities i.e., which activity follows which.
- Time frame of each activity as well as the overall duration of the total project activities.
We need to mention the nature of the activities, the amount of time they are likely to
take and their inter-linkages.
245
Expected Outcomes
It is always useful to outline some of the outcomes that may emerge as a result of
the project intervention. These expected outcomes become the basis for evaluation
and monitoring. They also serve as a guide to motivate and inspire the members
of the organisation.
How Is the Project to be Monitored
It is important to specify in the proposal itself how the progress of the project is to
be evaluated or monitored. May be some dimensions, outcomes or accomplishments
could be spelt out along with the stage at which they are likely to occur.
Administration and Management
Just exactly how the project is going to be carried out and managed needs to be
spelt out. If recruitment of the additional staff is required it should be mentioned.
If certain roles and responsibilities need to be created that also needs to be elaborated.
This then becomes the basis for outlining a collaborative arrangement between the
Organisation and an external\support organisation.
Budget
This needs to be commensurated with the activities of the project.
A realistic and reasonable statement of expenditure and resources needs to be
stated.
Future costs have to be anticipated and projected. They may exceed the present
costs and hence inflation has to be taken care of.
Include costs of carrying out the evaluation of the project planned; cost of staff
development and training (including field visits, attending other programmes,
conducting specialised training programmes, acquisition of learning material, etc.).
Estimate costs of infrastructure i.e., the building, office equipment, support staff,
accountants, auditors, governing body members, etc.
Mention hidden costs like the contribution of the organisation itself in terms of
financial, material and human resources.
—
246
WHERE TO LOOK FOR FINANCIAL RESOURCES
Sources of Financing
If we look at the sources from where financial assistance can be obtained we can classify
them in the following categories :
a)
Donations by individuals, corporate bodies and organisations in cash,
or service.
b)
Subscriptions, interest, fees.
c)
Income from - rent, sale proceeds, etc.
d)
Grants-in-aid from Government:
kind
Central Government,
State Governments,
Autonomous Bodies,
Local Bodies such as Corporations, Municipalities, Panchayats, etc.
e)
Autonomous organisations like CAPART, KVIC, NABARD,
f)
Assistance from international agencies, foreign aid.
The schemes mentioned in the following pages refer to
(')
Credit
(ii)
Employment and
(Hi)
Training
The majority of the sources listed above function all over the country. Some
however, may be limited to specific geographic areas due to the traditional
concentration of a particular activity geographically e.g., tasar silk, fishing, mulberry
growing, etc. These schemes provide assistance to the general population and not
just women. This is not an exhaustive list but we have attempted to cover some major
schemes.
247
Funding Sources
i.
Central Ministries
1. Ministry of Human Resource Development (HRD)
Under the aegis of the Ministry of HRD, the department of Education and the
department of Women and Child Development have initiated numerous training
programmes for women.
The department of Education emphasises educational transformation,
reduction
of disparities, universalisation of primary education, adult education and scientific/
technological research. A Technology Mission for eradication of illiteracy is also set up.
The aim of the scheme is to eradicate mass illiteracy, develop the sensitivity of people,
implement socio-economic development programmes and promote national unity,
equality of genders, secularism, democracy and inculcate a scientific temper amongst
the people.
Under the Directorate of Adult Education,
development of women:
two
schemes are earmarked for the
a) Adult Education Programme
Additional Director,
Directorate of Adult Education
b) Instructors' Training
Department of Education,
Block-10, Jamnagar House,
Shahjahan Road,
New Delhi-110 001
The department of Women and Child Development, aim to mainstream women in
the process of national development. Its schemes aim at providing training and
access to employment for women through :
in the various
aspects of
a) Creche Workers' Training
To sensitise workers
child development.
b) Balsevika Training
Training in the integrated child development service
so that they can look after Balwadis, Child Welfare
projects and other welfare services for children.
c) Anganwadi Workers' Training :
To equip grassroot level functionaries of ICDS
with requisite knowledge and skills to run pre
school education, health and nutrition services.
248
d) Support to Employment
To
integrate
assetless Programme (STEP),
marginalised women, migrant laboui, tribals and
unpaid family workers through action projects in
eight sectors viz. agriculture,
small
animal
husbandry, dairying, fisheries, handlooms, handicrafts,
khadi and village
industries and sericulture.
e) Setting up Women's Develoo- :
ment Corporations in states \
unions Territories
Aim to procure collective, technical, managerial,
marketing and financial skills for the weaker
sections of women so that they can generate
sustained income for themselves.
f) Employment and Income
Generating Training cum
Production units for Women
Objective is to organise income generating activities
for poor women so that they can achieve economic
independence.
g) Training Centres for Destitutes:
Aim is to rehabilitate and ensure employment to
women in distress so that they become economically
independent.
h)
Schemes of assistance for setting up womens' training centres for rehabilitation.
For all the above, contact
Director(Women Development),
Department of Women and Child Development,
Shastri Bhawan, New Delhi - 110 001
2. Ministry of Labour
Ministry of Labour under the Director General, Employment and Training, operates
various programmes on vocational training and employment services through
employment exchanges, ITI's and other specialised institutes (both at the Centre and
in the States). A National Vocational Training Institute for Women at Delhi and
six Regional Vocational Training Institutes (RVTI) at Bangalore, Bombay, Trivandrum,
Hissar, Calcutta and TURA meet the training needs of women in urban and rural areas.
The schemes are :
a) Basic Skills' Course
:
Provides vocational training like
dress
making,
electronics, secretarial practice, data preparation,
etc., to women to enable
them +o become
economically independent.
249
1
b) Advanced Skills' Courses
: Provides specialised training to trainees who have
already acquired basic skills in a craft/activity in NVTI/
ITI.
c) Instructional Training
Courses
: To train the instructors so that they can train the
trainers in skills in a craft/activity more effectively.
For all the above, contact
:
3.
Director General
Employment and Training
Shram Shakti Bhawan
Rafi Marg, New Delhi - 110 001
Ministry of Health and Family Welfare
The focus is on Mother and Child Health Care. It has the following schemes :
a)
Female Health Workers' Training
b)
Female Health Assistants' Training
c)
Training of Dais
(Traditional Midwives)
Deputy Nursing Adviser
Ministry of Health and Family Welfare
Nirman Bhawan, New Delhi - 110 001
Contact
4. Ministry of industry
The office of the Development Commissioner of the Small Scale Industries (SSI) attached
to the Ministry of Industry is the apex body and the nodal agency for formulating,
coordinating and monitoring the growth of the SSI in the country. It has initiated
the
following schemes ■
a)
Training in technical trades for workers in SSI : Aim is to improve the existing skills
of
th© workers
and broaden their competence to match
the changing
requirements of SSI.
b)
Training in Industrial Management for Small entrepreneurs and their supervisory
personnel. : Aims at improving the managerial and technical skills of small
industrialists and
their supervisory staff.
250
Director (IMT)
Office of the Development Commissioner
Nirman Bhawan, New Delhi-110 001
For these two, contact
c)
Entrepreneurial Development/Programme for women : Aimed
at generating
awareness and motivation, regarding opportunities for self-employment; and
imparts needed skills/training.
Contact
d)
Director (Womens' Cell)
Ministry of Industry
Nirman Bhawan, New Delhi - 110 001
Training in Khadi and Village Industries : The work of Khadi and Village Industries
is spread over more than a lakh villages in all states and union territories. The
schemes are implemented through 26 Khadi and Village Industries' Boards. The
scheme was launched in 1956 to provide employment opportunities and create
self reliance amongst the masses, especially in rural areas. Major areas include:
manufacture of all kinds of Khadi, dyeing/bleaching/printing, processing of
cereals/pulses/masalas/oil, palm products, hand-made paper, bee keeping, pottery,
carpet-weaving, biogas, fruits and vegetable processing, preservation/canningjime
manufacturing.
Contact
Director
Khadi and Village Industries Commission,
A-l Baba Kharak Singh Marg,
New Delhi - 110 001
OR
State office of KVIC in your state
(For details of schemes refer to 'Patterns of Assistance', or'Handbook on Training'
brought out by KVIC).
5 Ministry of Textiles
Handlooms, Handicrafts and Silk Boards constitute the three important sectors of textile
industry.
They provide employment and training for weavers/artisans/farmers.
Schemes include:
a) Weavers' Training : Improves knowledge/skills of weavers in weaving, dyeing,designing/
printing/increasing their production and improving earnings.
251
I
b)
Decentralised Training of Weavers : Aims to generate income and higher
productivity for the weavers, dyers and printers by providing technological
inputs.
c)
Bunkar Sevak Scheme : Set up in the 7th Plan to interact with the weavers'
community so that benefits of various schemes reach their community. (Liaison
Work).
d)
Diploma Course in Handloom Technology and Post-Diploma Course in Textile
Chemistry :
Indian Institute of Handloom Technology at Varanasi, Salem and
Guwahati train technical persons for handloom industry.
e)
Member
Education Programme for members
of
Weavers' Cooperative
Societies (MEP): Aims to acquire weaver members with the intricacies of cooperative
laws and cooperative development.
For all the above, contact
Development Commissioner for Handlooms
Udyog Bhawan, New Delhi - 110 001
0
Training in Carpet Weaving : Aims to enhance the skill/quality/productivity of
the weaving industry (especially hand knit carpets)
g)
Training in Hand Block Printing Textiles : Equips the trainees with better technical
and productive skills to meet the growing demands.
h)
Training in Cane and Bamboo : Provides strong production base and high quality
designs.
i)
Training in different crafts like wood, ivory, dolls, toys, shoes, leather, embroidery,
chappals, pottery, jewelery etc. Aim is to preserve a dying craft by ensuring
transfer of skill from one generation to another and also increase production.
j)
Training in Metal Wares : Increase production and quality of brassware by design
and technical inputs.
Development Commissioner for Handicrafts
West Block - 7, Sector-1
R.K. Puram, New Delhi - 110 066
For the above, contact
programme
Helps
farmers to procure higher yields of
k)
Farmers' Training
cocoons
I)
Special Training Courses for Unaergraduates : Training in all aspects of sericulture.
252
m)
Training in Post Cocoon Technology :
For the above, contact : Director (Technical)Central Silk Board
II Floor, Mahatma Gandhi Road
Bangalore - 560 001
6.
Ministry of Food and Civil Supplies
Under the aegis of Department of Food, a Food and Nutrition Board was set up
in 1963 to look after the nutrition needs of people. The various schemes under this
are :
a)
Food, Nutrition and Conservation Education : Generates mass awareness
regarding values of nutrition, food, defining personal hygiene, clean drinking
water, environmental sanitation and general health.
b)
Training in Canning and Preservation of Food : Conducts short courses in
preservation at the Community Canning and Preservation Centres (CCPC)
Deputy Technical Adviser,
Department of Food,
Food and Nutrition Board,
Jamnagar House
New Delhi - 110 001
For the above, Contact
c)
Training in Scientific Methods of Foodgrains Storage and Pest Control
d)
Institutional Training for Food Functionaries at Indian Grain Storage
For the above, Contact
7.
:
Joint Commissioner (S & R),
Department of Food,
Krishi Bhawan
New Delhi - 110 001
Ministry of Science and Technology
The department of Science and Technology is one of the three major departments
of Ministry of Science and Technology.
a)
Science and Technology for women : Aims to improve life and status of women
through Science and Technology. The scheme operates in all states except
Jammu and Kashmir.
253
I
b)
Science and Technology - Women
Entrepreneurship Programme : Aims to
generate self employment. Scheme began in 1984.
Senior Scientific Officer
Science and Technology for Women
Department of Science and Technology
Technology Bhawan,
New Mehrauli Road
New Delhi - 110 016
For the above, Contact
8. Ministry of Agriculture
a)
Vocational Training to learners through Krishi Vigyan Kendras: Imparts need
based and skill oriented, vocational training for increasing productivity.
For the above, Contact
b)
Deputy Director General (A.E),
ICAR,
Krishi Bhawan
New Delhi - 110 001
Farmers' Training through Farmers' Training Centres: Launched in 1966 aims to train
rural women skills in agricultural production.
Director of Extensions
Department of Agriculture
West Block -8, III Wing,
R.K. Puram,
New Delhi - 110 066
For the above, Contact
c)
Training of Rural Youth for Self-employment(TRYSEM)/(IRDP): Provides technical skills
to allied fields.
d)
Dairy Development - Women Dairy Development Coops.
e)
Fisheries - Small Scale Fisheries Project
For the above, Contact
Director
Department of Rural Development,
Krishi Bhawan,
New Delhi - 110 001
254
9. Ministry of Energy
Non conventional sources of energy (biogas, solar energy, etc.)
10. Ministry of Environment and Forests
For involving people in afforestation and social forestry,
National Wastelands Development Board (NWDB) provides funds to voluntary
agencies for programmes like land reclamation, community awareness social
forestry, training and extension services, development of nurseries, etc.
Project proposals to be sent to
The Subject Matter Specialist
NWDB
Block 2, Phase II, 6th Floor
CGO Complex
Lodi Road,
New Delhi
11. Ministry of Rural Development
a)
Assistance to Horticulturists under IRDP: Provides assistance for low cost seedlings,
inputs, land levelling, digging of pits, garden tools and appliances - open to women
also.
b)
Purchase of Agricultural Implements under IRDP: Provides a subsidy for items like
fertilisers, tools, storage bins - open to women also
c)
Farm forestry under Drought-Prone Areas' Programme (DPAP) : Seedlings are
supplied free of cost for planting in areas brought under drought. The programme
is open to women.
d)
Setting up of Poultry units under IRDP : Assistance is generally offered to
beneficiaries in clusters so that some facilities like feed production, health cover
of birds and marketing etc., may be delivered to the group as a whole. Women
can apply also.
e)
Individual Minor Irrigation Works under IRDP : Aims at giving assistance to individual
cultivators to invest in digging and renovation of wells, for purchase of
pumpsets, electric motors, diesel engines and for energisation of pumpsets.
Scheme open to women of identified households.
f)
Subsidy for purchase of storage bins under IRDP : Aims at giving assistance to
individual cultivators to invest in purchase of storage bins. Scheme open to women
who wish to improve their storage facilities.
255
i
g)
National Rural Employment Programme (NREP): Provides employment to the
needy in rural areas in slack periods when agricultural production is at a low key.
Guidelines for implementation lay stress on the execution of special projects under
which rural women may be gainfully employed.
h)
Scheme for subsidy for Inputs Under IRDP: Subsidy for purchase of potashic and
phosphatic fertilisers to farmers under IRDP. Scheme open to women.
i)
Assistance to Bee-Keeping under IRDP : Offers subsidy. Technical know-how and
marketing facilities are offered to groups of bee keepers. Women may avail of the
subsidy.
j)
Scheme for Serlculturists under IRDP : Subsidy is granted to an investment made on
rearing and reeling activities like giowing host trees and improving reeling.
k)
Purchase of Milch Animals, Sheep, Goats and Pigs under IRDP : Aims at
strengthening the dairy sector. Subsidy provided. For women beneficiaries, the
scheme is monitored separately.
I)
Fisheries Development to Individuals under IRDP : Subsidies given for fishing
nets, finger lings, boats, etc. to identified fisherfolk. As women are traditionally
involved in marketing, the formation of a co-operative by them would fetch
higher subsidy along with marketing facilities..
m)
Growing of Fuel and Timber spices on Private Lands In Drought Prone Areas: Aims
at giving free seedlings, subsidy to help them tide over the difficult period and
a loan at a reasonable rate of interest. Scheme open to women also.
n)
Pasture, Fodder and Fuel Development on Private Lands : This relieves pressure on
the public land. Open to both male and female beneficiaries in identified
households. Scheme likely to reduce pressure on women for fuel and fodder
collection. Subsidy provided.
o)
Trysem and Selected beneficiaries (at least 1/3 being women) are trained under
NAEP (National Adult Education Programme) in a variety of traditional and
industrial areas. Help is given in the preparation of self-employment schemes
availing bank loans and subsidies.
In all the above schemes under IRDP, beneficiaries are selected from identified
households. This identification is done of the Block level. The beneficiary should
approach the Gram Pradhan or BDO to file the application for subsidy/loan.
256
I
Additional information may be obtained from :
Assistant Commissioner, IRDP
Ministry of Rural Development
Krishi Bhawan,
New Delhi-110001
Or the State level office of
Krishi Vigyan Kendras.
13.
Ministry of Works and Housing
a)
Provision of House Sites-Under Construction Assistance to Landless Workers in Rural
Areas : Aims at providing land as well as grants for construction of huts/houses
to landless workers of all categories. A woman may apply for an independent site
as head of the family. A significant feature is the decision taken by the department
in 1980 to give the titles for house sites in joint names of husband and wife.
For identification, applicants can approach BDO or the Tehsildar of the villages
directly or through Village Panchayats.
Contact
Deputy Director (Monitoring)
Ministry of Works and Housing
Nirman Bhawan,
New Delhi-110001
Or State Level office
II.
of
Housing Secretaries
AUTONOMOUS BODIES
After independence, a number of autonomous bodies were set up under the aegis
of different ministries of the Government, to give financial and technical assistance
for a vpriety of programmes. Some of these are :
1.
Central Social Welfare Board (CSWB) :
The CSWB was created with membership drawn from government departments
dealing with social development, both the Houses of Parliament, voluntary workers
and experts who would administer finances in the form of grants-in-aid to
voluntary agencies. This helped in enabling the voluntary agencies to improve,
expand and develop their programmes.
Then, CSWB created State Social
Welfare Boards - thus reaching out closer to the applicant agencies.
The types of grant$-in-aid available are : One Year Grant Plan-Period Grant
Maintenance Grant Development Grant, Non Recurring/Capital Grant, etc.
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Discretionary Grant; Emergency Relief Grants; Grants for innovative and Baptal
Projects; Administrative Grants; Grants for Meeting Deficits; Grants for Appointing
Trained Staff.
Assistance to villagers engaged in Child Welfare, Women Welfare, Welfare of the
Handicapped, Community Welfare/Service, etc., is provided. It also promotes and
supports programmes in the uncovered areas.
For details, contact
[Note :
2.
Director (CSWB),
New Mehrauli Institutional Area,
South of IIT, New Delhi - 110 016
The State Social Advisory Boards
contacted separately.]
have
independent funds and can be
Council for Advancement of People’s Action and
Rural Technology (CAPART)
With the initiative and assistance from FAO of the UN, an organisation called
Freedom from Hunger Campaign was set up. It established its branch in India
too for the purposes of assisting projects of food production to combat hunger.
Later, this organisation was renamed People's Action for Development, India
(PADI) which functioned as a registered autonomous society initially under the
Ministry of Rural Development. With the merger of Council of Rural Technology
with PADI it is now called CAPART. Its assistance is available for a variety of
projects to voluntary agencies such as the use of appropriate technology for
agriculture, programmes of water and sanitation, women development,
voluntary action, bringing the weaker sections above the poverty line,
strengthening the existing institutions, research and training in agriculture and allied
fields etc.
Contact
Director General
CAPART,
58, Pankha Road
D-Block, Institutional Area,
Janakpuri, New Delhi - 110 058.
3.
NABARD and Other Banks
Such banks provide loans on viable income generation projects, self-employment
areas, or purchase of raw-material/machinery for enhanced income.
Contact various banks in your area of operation and for NABARD,
Contact
National Bank of Agricultural and Rural
Development, 10, Bahadur Shah Zafar Marg,
New Delhi-110002
258
4.
Khadi and Village Industries Commission (KVIC)
Khadi and Village Industries Commission (KVIC) is a statutory organisation
set up in 1957 for promoting and developing Khadi and rural industries with
a view to generate employment opportunities in rural areas. Its various schemes
are specially aimed at reaching women, scheduled castes and scheduled tribes.
KVIC seeks to strengthen rural economy through promotion of more than 25 rural
industries that can broadly be classified as agro-based; livestock-based; forest
based and service-oriented.
The functions of KVIC include training of artisans, supervisory and managerial
personnel; building up of reserves of raw materials and tools, implements
and equipments and making these available at reasonable rates at implementing
agencies; assisting in production of Khadi and village industries' articles as well as
their marketing; and encouraging cooperative efforts among Khadi and village
artisans.
The KVIC programmes are implemented largely through State Khadi and Village
Industries Boards; institutions established under Societies Registration Act 1860,
public charitable trusts and cooperative societies. In addition, it also has a provision
for assisting individual artisans engaged in rural industries.
The package of assistance extended by KVIC covers extension of finance right from
procurement of raw materials and tools and implements to the production of
goods and their marketing. While loans for promotion of Khadi are interest-free,
those for village industries are extended on an interest of 4 percent per annum.
Khadi and Village Industries Commission
Gramodaya, Irla Road
Vile Parle (W), BOMBAY - 400 056.
III.
FOREIGN FUNDING
In addition to the sources of financial assistance mentioned earlier, there are a
number of organisations based outside the country, which are commonly called
foreign funding agencies. These agencies give funds to voluntary agencies for a
number of activities. Economic activities form one such type of activity. Many of
these funding agencies have their counterparts in India. We could send a proposal
to their Indian offices directly. In case there is no India office then we would
have to send a proposal directly to the head office of the funding agency.
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Tips on Reporting to Funding Agencies
Whenever we receive funds from any source we need to periodically report to our
funders. The periodicity of reporting is normally decided by the funders. Many a times,
funders also suggest the format of receiving the reports.
A generic reporting format could be as follows:
Project Title
Reporting Period
★
Name of the Organisation
★
Activities undertaken during the reporting period
An analytical description of experiences at the time of implementation i.e., what
happened, why, success, failures, problems encountered and reasons, for this would
help the funding organisation to know what is happening in the project.
Financial Statement
Reporting of the Actual Expenditure (item-wise) as allocated in the project proposal,
it may also be good to mention if there is any difference between the allocated amount
in the budget and the amount spent.
Future plans
— activities planned for the next period.
Appendix
— Any other information e.g., annual report, case study, etc.,
which we may want to share with the funders, to enable
them to get a better idea about our work.
—
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ABOUT US
Society for Participatory Research in Asia (PRIA), New Delhi is an
educational support organisation, which works with activists, individuals,
grassroots groups and organisations so as to strengthen their capacities
in the areas of participatory research, participatory training, evaluation,
and organisation-building to help them deepen their understanding of the
issues they are working on.
I
Participatory Research implies an effort on the part of the people to
understand the role of knowledge as a significant instrument of power
and control. It gives value to individual and collective experiences, and
gives credit to the existing popular knowledge. It therefore, challenges the
monopoly over knowledge and its tools in the hands of the few, and
contributes towards the empowerment of the oppressed and poor.
f"
In the last ten years of its existence, PRIA has focussed on wide-ranging
issues such as adult non-formal education, problems of deforestation,
land alienation and large dams, women and work, women and
sanitation, occupational health hazards and management issues of
NGOs. In the coming years, PRIA's focus would be on looking at the issues
of women's empowerment, people's access to control over natural
resources, occupational safety, workers' education and enhancing
competencies of activists and groups in individual and organisational
areas.
*
PRIA is constantly involved in efforts to promote the understanding and
practice of Participatory Training philosophy and methodology by
holding workshops and documenting several efforts in the country. The
Training of Trainers programme aims at the capacity building of grassroots
activists and educators.
*
PRIA's Popular Documentation and Resource Centre aims at preparing
and disseminating popular materials on a variety of issues so as to
facilitate a wider access to the grassroots and contribute towards social
and political changes.
At PRIA, Nandini Narula, Rajesh Tandon, Anil Chaudhary and Rajesh
Pandey have worked on the text of this manual.
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Society For
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Participatory Research in Asia
42, TUGHLAKABAD INSTITUTIONAL AREA, NEW DELHI-110062
PHONE : OFF.: 645-1908 TLX.: 31-71477 ARPN-IN FAX: 91-11-6442728
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