SHGs set to play major role in commodity market

Eyes Rs 1,000cr turnover in procurement of agri commodities by 2007

The rural self-help groups' (SHGs) network in Andhra Pradesh is poised to emerge as the biggest operator in the agricultural commodity market in near future.

According to Vijay Kumar, project director of the AP Rural Poverty Reduction Project, the SHG project aims at increasing village procurement centres (VPCs) to 6,000 from the existing 610 in the next couple of years to fully tap the business opportunities in the commodities market.

Making a presentation on the initiatives in the rural livelihood sector at the national conference on "Emerging Opportunities at the bottom of the pyramid "� transforming the Indian rural economy through profitability," Vijay Kumar said that they were now looking at Rs 12,000-crore business potential in procurement of essential commodities for consumption of rural SHG families.

"If we could establish linkages with urban self-help groups for supplying essential commodities to them, an additional Rs 2,000 crore business will be available to rural SHGs," he said.

The opportunities in collective marketing were also equally exciting, he said. According to him, the self- help groups were aiming at achieving a turnover of Rs 1,000 crore in procurement of agricultural commodities by 2007, as against Rs 100-crore turnover expected during this year.

The SHG project has also tied up with companies like Dabur to supply agricultural products used in medicinal formulations. Instead of incurring huge expenses to reach out to rural markets, the companies could now directly deal with SHGs to buy agricultural products, Vijay Kumar said.

Over 78 lakh rural women, covering 87 per cent of the rural population, have enrolled in SHGs in the state. The project officials are planning to increase the coverage to 100 per cent rural population in the next couple of months in an effort to extend the benefits arising out of the SHG movement to each and every family.

The financial transactions within SHGs have also grown substantially. Along with bank linkages, the savings of SHGs too are growing at Rs 600-700 crore a year.

According to Vijay Kumar, the SHG members had so far saved Rs 150 crore among themselves and this was expected to increase to as much as Rs 2,500-3,000 crore by 2008. The loans from banks are also estimated to increase to Rs 15,700 crore from the present Rs 1,200 crore.

H1FY6 expenditure up 17%

The state government today presented the macro economic framework statement for the second quarter of the current financial year in the state legislative assembly.

According to the report, the total expenditure in the first half of the current financial year has increased by 17.01 per cent while the revenue receipts have shown just 5.82 per cent increase in the same period.

Fiscal deficit stood at Rs 3,362.59 crore as compared to Rs 1067 crore in the corresponding period last year while the revenue deficit increased to Rs 670 crore from Rs 26 crore in the first six month period last year.