The Hindu : Tamil Nadu News : When hopes of self-help crumble

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Monday, Jul 21, 2008
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Tamil Nadu

Tamil Nadu

When hopes of self-help crumble

The prices of jute, cotton, and rexin - the raw materials used in the bags - have gone up. So has the cost of transportation because of the rise in price of fuel. Though the transportation costs are borne by the Government’s Mahalir Thittam, the number of people purchasing the products has gone down, writes Anasuya Menon

PHOTO: S. SIVA SARAVANAN

TALE OF ENTERPRISE: N. Anarkali at her shop selling jute bags at the SHG Complex near Town Hall in the city. —

“Profit is less these days,” N. Anarkali says, sitting in her shoebox of a shop selling pretty jute bags near Town Hall. She leads a women’s Self-Help Group (SHG) that specialises in jute-bag making. Anarkali’s bags are quite popular in town but, now price rise seems to be eating into her business.

“The public is not willing to buy the bags at a higher cost. The business comes down drastically if we increase the price of the products,” Ms. Anarkali says. Though the cost of raw materials has increased almost two times, the bags are being sold at the same rate as before.

“A lunch bag that cost Rs.10 two years ago is still sold at the same rate. The bag remains unsold if it is priced at Rs.15,” she adds. With the steady rise in prices of raw materials, the going has got really tough, she remarks.

The seven-member SHG makes fancy jute bags, mobile phone pouches, folders, water-bottle and lunch bags and even suitcases.

The prices of jute, cotton, and rexin - the raw materials used in the bags - have gone up. So has the cost of transportation because of the rise in price of fuel. The SHG sources the raw materials from Kolkata, Puducherry, Chennai, and Bangalore. Though the transportation costs are borne by the Government’s Mahalir Thittam, the number of people purchasing the products has gone down.

Though a large share of the operational costs of SHG’s businesses is borne by the Mahalir Thittam, their profit margins have reduced drastically. According to M. Sundaram, Project Officer, Mahalir Thittam, the SHGs are finding it hard to survive because the purchasing power of the public has gone down. The demand for the products too is less, he notes. “The SHGs are burdened with the bank loan interest. The amount plus the operational costs leaves behind little profit,” he adds.

Rani Ranganathan is part of the Thendral SHG, which operates a share-auto service in Coimbatore. Started in 2007 with the support of the District Administration, the group hoped to make a huge profit in the city where there were few share autos. But, the unprecedented rise in fuel prices has dampened their prospects. “We used to make close to Rs.50,000 a month. But, ever since the rise in diesel prices, the amount has gone down. We have to pay Rs.10,000 every month towards the bank loan. The driver demands Rs.3,000 as salary,” Ms. Rani says. The rest of the amount gained as profit is put in a corpus which is shared among 13 other group members, she adds.

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