Subhasini Vs HLL

Amiya Kumar Bartia | April 07,2014 11:45 am IST

Analysis
The SHG is a very good concept in bringing about the habit of thrift among the villagers who are living in absolute poverty. These people are not in a habit of saving because they do not find any surplus to save, so all that they spend is to meet their consumption need.

In that case the SHG plays a vital role in initiating the habit of thrift where they start saving in very small amounts on a frequent basis i.e. weekly or monthly cutting their expenditure in the consumption heads. The saving varies from one rupee a week per member to ten rupees as per the capacity of the members to save. This amount looks very small but when saved collectively in a group fund it takes the shape of a larger volume after a period that further enables the funding agencies and the banks to mobilize the fund to the group. But, this habit may be jeopardized if big consumer based companies start spreading their business in these villages taking the help of these SHGs. Earlier in this case study it is mentioned that sellers like Subhasini cater to the consumption need of those people as per their requirement and ability to pay. The villagers in these villages are of the farming community and most of the time they stay in the village doing the farming exercises. For them the whitening of their clothes by the branded and costlier washing powder carries no meaning because after all they have to toil in the field soiling their clothes. More over they are getting their required items like washing powder in desired quantity by spending half a rupee. But, now HLL is trying to capture the market by creating artificial purchase power by its pompous advertisement and promotional measures, where the poor consumers are lured by the advertisement campaign and wish to go for it. They may be tempted to go for Surf excel pouch that cost them Rs.1.50 instead of the local brand 'Nihar' where he may loose the valuable one rupee that he could have saved in the collective fund of the SHG. This is the stage that the villagers are learning the value of saving. The saving may help them in long run in getting return by investing in any type of income generating activity or to meet the bigger and vital expenses like Medical expenditure in future. If the saving is lost among them then they may again fall in the trap of local money lenders in those crucial times.
 

Appreciation of Rupee in the local economy
Now all are talking of Globalization and having a perception that it is hard to survive unless and until we become a part of that. But, in case of a small village the localization of the economy may also play a vital role in appreciating money if that amount of money could be spent in that village. It means that the expenditure of a person in that village may become the source of income for others if the earlier one purchases the service or the product given by the latter. For e.g. a person who spends fifty paise of his one rupee buying the local products or services produced in the local economy by a local producer and the latter again spends fifty percent of his earning buying the locally produced goods and services by a different producer and the process goes on then the earlier one rupee can appreciate to the extent that this chain of purchase and expenditure goes in the same village economy. This process not only enriches the financial condition of a person but that of the village as a whole, if the rupee is not allowed to go out side of that village because the product or service that it is meant for is available in the village itself.

Concluded. 

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Amiya Kumar Bartia holds an M.Sc. (Agriculture) degree followed by PGDM from XIM, Bhubaneswar. He is currently working as Six Sigma & Competitive Intelligence Leader at Dow Agro-Sciences India Pvt. Ltd., a subsidiary of Dow Chemicals....