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Coop societies hit by funds crunch

Priti Narayan

Photo: T. Singaravelou

pitiful: Racks of several cooperative consumer stores in Puducherry are empty. —

PUDUCHERRY: Funds crunch has affected cooperative societies in Puducherry, leading to shortage of stocks and delayed disbursement of salary to staff.

According to an official of the Bharathi Cooperative Consumer Society, “Until 2002, there were 31 fair price shops employing 54 persons as part of our cooperative society. After the fair rice shops were separated, only 21 of the employees were taken away to be employed in the fair price shops. The remaining are on our payroll without any work.”

Officials said that according to the Cooperative Administration Report 2009, there are 20 cooperative societies in the Union Territory, employing 918 people, who are paid a salary of over Rs. 875 lakh every year. Cooperative societies, which are expected to pay their employees and run their business based on profits, are unable to make ends meet. Many of the staff members complain that they have not been given salary for five or six months.

Funds crunch also affects the societies’ ability to stock essential goods in their stores. “Although we have 6,300 government servants as members of our society, only three or four persons buy products from us, owing to shortage of stock. We sell goods to the tune of Rs. 8,000 to Rs. 10,000 a month. But our expenditure on salary, rent and other essentials amount to around Rs. 3 lakh a month,” an official of the Pondicherry Public Servants Cooperative Stores said.

The goods that have low shelf life are often destroyed because they have no takers. An immediate change in the business model is required, the officials said. “The concentration of authority in the hands of a few in the cooperative consumers’ federation must also be scrutinised,” an official opined.

Welfare Minister M. Kandasamy, who also holds the cooperatives portfolio, said that he has requested the Registrar of Cooperative Societies to file a report on non-performing societies so that alternative business models could be developed.

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