Introduction

Hindustan Unilever Limited (HUL) and its constituent companies have

been in India since 1931.Over these decades, while HUL has benefited
from the developments in the country, it has contributed equally to these
developments. The company’s main contributions include developing and
using relevant technologies, stimulating industrialization, boosting
exports, adding value to agriculture and generating productive
employment and income opportunities. HUL has been proactively engaged
in rural development since 1976 with the initiation of the Integrated Rural
Development Programme in the Etah district of Uttar Pradesh, in tandem
with the company’s dairy operations. So the company is contributing
towards rural India over three decades.

This Programme now covers 500 villages in the district. Simultaneously,

the factories that HUL has established in less-developed regions of the
country have been engaged in similar programmes in adjacent villages.
These factory-centred activities mainly focus on training farmers, animal
husbandry, generating alternative income, health & hygiene and
infrastructure development. The company has acquired a wealth of
experience and learning from these activities. The principal issue in rural
development is to create income-generating opportunities for the rural
population. Such initiatives are successful and sustainable when linked
with the company’s core business and is mutually beneficial to both the
population for whom the programme is intended and for the company.

Based on these insights, HUL launched Project Shakti in the year

2001, in keeping with the purpose of integrating business interests
with national interests.

HUL envisions the creation of 1,00,000 Shakti Entrepreneurs covering

5,00,000 villages, and touching the lives of 600 million rural people by
the year 2010.

Reasons for Project Shakti

There are mainly three important reasons why the company like HUL has
started with such a project:

1. Empowering women in rural India

The objective of Project Shakti is to create income-generating

capabilities for underprivileged rural women, by providing a sustainable
micro enterprise opportunity, and to improve rural living standards
through health and hygiene awareness. Several institutions like NGOs and
Government bodies have been working closely, for nearly five years, to
establish Self Help Groups (SHGs) of rural women in villages across
India. Their experiments clearly indicate that micro-credit, when carefully
targeted and well administered can alleviate poverty significantly. It was
also learnt was that rural upliftment depends not only on successful
infusion of credit, but on its guided usage for better investment
opportunities This is where HUL's Project Shakti is playing a role in
creating such profitable micro enterprise opportunities for rural women.

2. Catalysing prosperity in Indian villages

Under the project, HUL offers a range of mass-market products to

the SHGs, which are relevant to rural customers. HUL is investing
significantly in resources that work with the women on the field and
provide them with on-the-job training and support. This is a key factor in
ensuring the stabilization of their fledgling businesses.HUL imparts the
necessary training to these groups on the basics of enterprise management,
which the women need to manage their enterprises. This translates into a
much-needed, sustainable income contributing towards better living and
prosperity.

3. Risk-free micro enterprise that yields high returns

A typical Shakti entrepreneur conducts a steady business which

gives her an income in excess of Rs.1,000 per month on a sustainable
basis. As most of these women live below the poverty line, and hail from
extremely small villages (with populations of less than 2000), this earning
is very significant, and almost twice the amount of their previous
household income. For most of these families, Project Shakti is enabling
families to live with dignity, with real freedom from want. In addition to
money, there is a marked change in the woman's status within the
household, with a much greater say in decision-making. This results in
better health and hygiene, education of the children, especially the girl
child, and an overall betterment in living standards.

The most powerful aspect about this model is that it creates a win-win
partnership between HUL and the consumers, some of whom will depend
on the organization for their livelihood, and builds a self-sustaining cycle
of growth for all.

The Current Scenario

The model was piloted in Nalgonda district of Andhra Pradesh in 50
villages in the year 2000. The Government of Andhra Pradesh took the
pioneering step of supporting the initiative by enabling linkages with the
network of DWACRA Groups of rural women set up for their
development and self-employment. Most SHG women view Project Shakti
as a powerful business proposition and are keen participants in it. It has
since been extended to in Andhra Pradesh, Bihar, Chhattisgarh, Gujarat,
Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa,
Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal with the
total strength of over 40,000 Shakti Entrepreneurs.

Other activities: To improve the business skills of the SHG women,

extensive training programmes are being held. Such workshops have
already covered a large number of Shakti Entrepreneurs in Andhra
Pradesh, Karnataka, Gujarat, Madhya Pradesh, Uttar Pradesh, Tamil Nadu,
Chhattisgarh and Orissa.

As part of their training programme, all HUL Management Trainees spend

about 4 weeks on Project Shakti in rural areas with NGOs or SHGs.
Assignments include business process consulting for nascent enterprises
engaged in the manufacture of products such as spices and hosiery items.

Advent of i-Shakti
A key factor that has inhibited the development of rural India has been
lack of access to critical information and services. As we know, India has
large geography and weak infrastructure; it is often difficult to reach out to
the rural areas.

In order to impact both livelihood opportunities and living standards of

rural communities ‘i-Shakti’ - an IT-based rural information service has
been developed to provide information and services to meet rural needs in
agriculture, education, vocational training, health and hygiene. The
premise of the i-Shakti model is to provide need based demand driven
information and services across a large variety of sectors that impact the
daily livelihood opportunities and living standards of the village
community. The i-Shakti kiosk will be operated by the Shakti
Entrepreneur, which further strengthens the relationship we have already
cultivated and builds new capacity. HUL expects that the information
provided would improve the productivity of the rural community and
unlock economic and social progress.

Introduction
e-Choupal is an initiative of ITC Limited (a large multi business
conglomerate in India) to link directly with rural farmers for procurement
of agricultural / aquaculture produce like soybeans, wheat, coffee, etc. The
company has initiated an e-Choupal effort that places computers with
Internet access in rural farming villages; the e-Choupals serve as both a
social gathering place for exchange of information (choupal means
gathering place in Hindi) and an e-commerce hub.
e-Choupal is a Hindi word which means “village meeting place”. Market
is a meeting place where vendors and customers come together to do
transactions. e-Choupal is a virtual market place where farmers can
transact directly with a processor and can realize better price for their
produce. e-Choupal has the advantages of the market but spans very large
varieties of vendors and customers. Geographical distances do not restrict
participation in the e-Choupal. The main disadvantage of conventional
market is that information asymmetry is inherent in the market where as e-
Choupal provides for transparent transactions. This enables the
participation of smaller as well as larger players. Elimination of some
layers of intermediaries allows for larger share of profits to reach the
lower end of value chain. The main attractiveness of e-Choupal is that it
can be used for connecting large producers/small producers and small
users/large users, thereby eliminating the need for hierarchy of brokers.
Internet is used as a low transaction cost backbone for communication.
Physical delivery of produce to the processor is still done through the
existing intermediaries. e-Choupal does not attempt total elimination of
intermediaries, as intermediaries are indispensable in economy like India
where intermediaries are adding value to the every step of value chain at a
low cost. Intermediaries have the expertise in storage, transportation,
quality assessment and counter party risk reduction, which are difficult to
replicate. e-Choupal provides farmers with all the market information and
this helps them to become market oriented. In e-Choupal intermediaries
are leveraged but they are disintermediated from the market information
flowing to the farmers.
Unique Business Model: e-Choupal

The e-Choupal model has been specifically designed to tackle the

challenges posed by the unique features of Indian agriculture,
characterized by fragmented farms, weak infrastructure and the
involvement of numerous intermediaries, who block critical market
information from passing to the farmers and use that information for
getting a big margin for themselves. The intermediaries capitalized on the
economies of information and economies of physical things, which are
tied together in a bundle. Due to this, the farmer does not get the proper
price of its product & they continue to live below the poverty line. But e-
Choupal sets things in order as it smoothens the flow of information to the
farmers by disinter mediating intermediaries from the chain of information
flow and at the same time leverages the physical transmission capabilities
of the them as they deliver critical value at every link for a very low cost
in a weak infrastructure environment. The structure of e-Choupal is shown
in figure.
The project e-Choupal is ITC’s unique click & mortar initiative e-Choupal
is an ICT (Information and Communications Technologies) platform for
carrying out trade at a number of locations. In this, ITC sets up a back-up
physical service support at the village level, called Choupal, through
Sanchalak: a lead farmer, who acts as the interface between computer and
the farmer. ITC accumulates information regarding weather, modern
farming practices, and market prices from sources like Meteorological
Department, Agri-universities, mandis (regional market) etc., and upload
all information on to e-Choupal web site. All information is customized
according to local farmers requirements and provided into the local
language through computer set up by ITC in Sanchalak’s house. Sanchalak
access this information and facilitates its dissemination to farmers.
Information regarding weather and scientific farming helps farmers to
select the right crop and improve the productivity of their farms.
Availability of market information helps farmers to become market
oriented. They know what price ITC is quoting and the price prevalent in
the local market, thereby helping better price realization for farmers. If
farmer decides to sell to ITC, Sanchalak works as the aggregator of small
farmers produce to sell them to ITC. Sanchalak also aggregates farmers
input purchase orders for various items like seeds, pesticides and places
them directly with the suppliers through internet and facilitate supply of
high quality farm inputs as well as purchase of farm produce at farmer’s
doorstep with the help of intermediaries as shown in figure previously. It
can be deciphered that e-Choupal has added critical value to the existing
supply chain through innovative application of information technology.
ITC-IBD has successfully reached the vastly scattered farming villages of
India and facilitated the smooth flow of rich information to them by
disintermediating the intermediaries in flow of information. Power of
information is working as the catalyst of transformation of the life of
farmers by helping them to get improved yields from their farms and
better price realization. Usually it is tough to maintain the expanding scale
of reach and richness into the products or services but e-Choupal is
achieving it easily and we find that overall value chain has been shifted
horizontally on the scale of reach and richness. e-Choupal is an ICT
platform that facilitates flow of information and knowledge, and supports
market transactions on line.
• It transmits Information (weather, prices, news),
• It transfers Knowledge (farm management, risk management)
• It facilitates sales of Farm Inputs (screened for quality) and
• It offers the choice of an alternative Output-marketing channel
(convenience, lower transaction costs) to the farmer right at his
doorstep
• It is an interlocking network of partnerships (ITC + Met Dept +
Universities + Input COs + Sanyojaks, the erstwhile Commission
Agents) bringing the “best-inclass” in information, knowledge and
inputs.
e-Choupal is, thus, distributed transaction platform that brings together
sellers, buyers along with information and service providers. e-choupal is
a model with a number of non-conventional characteristics namely:
• customer centric
• capable of being used for many commodities and multiple
transactions
• easily scalable once it is verified
• uses local talent and local people and develops local leaders
• can be extended to local as well as global procurers
• stimulates local entrepreneurs to extend their innovativeness
• uses all the existing institutions and legal frameworks and
• many others can join the market as transaction time is low.
Critical Success Factors

The e-Choupal experience highlights that ICT platforms can provide rural
connectivity and e-commerce support. These platforms have enormous
potential provided they are conceptualized for the specific needs of the
community and business. Some of the elements that helped the e-Choupal
to work successfully are discussed below:
Comprehensive knowledge of rural markets: Rural markets are both
economic and social networks and there is a strong connection between
the operation of social and economic transactions. Understanding the
operations is vital before the systems are conceptualized. Use of local
population, as much as possible helped the network to get the acceptance
closely.
Designing a Win-Win transaction model: The success of e-Choupal
comes from the condition in which both the farmer and the processor share
the benefits coming out of the elimination of middle men and hence due
to timely information availability.
Leveraging the logistics channels: The existing logistics of the rural
markets are leveraged but they are not able to exploit the information
asymmetry (unlike that in a conventional market). In that sense e-choupal
uses the local institutions but eliminates the information asymmetry that
they used previously.
Selection of Sanchalak: Both the selection of Sanchalak and the
acceptance of Sanchalak by the community are very critical for the
success of e-Choupal. ITC used a trial and error method for developing the
procedure for selecting Sanchalaks. In the platform terminology Sanchalak
is the interface for maintaining the platform. For the farmer the Sanchalak
is the e-Choupal. Training and sensitizing him for the crucial role has been
the main reason for the acceptance of the Sanchalak by the farmers.
Sanchalak, thus, acts as the coordinator of the knowledge community, and
a representative of farming community.
Evolving an appropriate user interface: The Technology interface used
in rural areas has to be very simple. Interface has to be tried for rural
settings and only after its validation it has to be used. Firstly, one has to
understand the user pattern and secondly, it has to be tried, tested and
validated. For example, farmers do not understand the concept of
insurance. e-Choupal evolved a simple interfacing arrangement that a
farmer can understand.
Bottom-up model for entrepreneurship: e-Choupal encourages
enormous amount of creativity at the local level along with local
entrepreneurship stimulation. The farmer and Sanchalak are free to use the
e-choupal and develop new uses. e-Choupal unleashes the creative spirit in
the rural India.
Introduction

While no definitive date has been determined for the actual conception
and propagation of SHGs, the practice of small groups of rural and urban
people banding together to form a savings and credit organization is well
established in India. In the early stages, NGOs played a pivotal role in
innovating the SHG model and in implementing the model to develop the
process fully. In the 1980s, policy makers took notice and worked with
development organizations and bankers to discuss the possibility of
promoting these savings and credit groups. Their efforts and the simplicity
of SHGs helped to spread the movement across the country. State
governments established revolving loan funds which were used to fund
SHGs. By the 1990s, SHGs were viewed by state governments and NGOs
to be more than just a financial intermediation but as a common interest
group, working on other concerns as well. The agenda of SHGs included
social and political issues as well.
The spread of SHGs led also to the formation of SHG Federations which
are a more sophisticated form of organization that involve several SHGs
forming into Village Organizations (VO) / Cluster Federations and then
ultimately into higher level federations (called as Mandal Samakhya (MS)
in AP or SHG Federation generally). SHG Federations resulted in several
key benefits including:
• Stronger political and advocacy capabilities
• Sharing of knowledge and experiences
• Economies of scale
• Access to greater capital
NABARD defines SHGs as a group of 20 or less people from a
homogenous class who are willing to come together for addressing their
common problems. They make regular savings and use the pooled savings
to give interest-bearing loans to their members. The process helps them
imbibe the essentials of financial intermediation including prioritisation of
needs, setting self-determined terms for repayment, and keeping books
and records. It builds financial discipline and credit history that then
encourages banks to lend to them in certain multiples of their own savings
and without any demand for collateral security. To this definition can be
added the affinity dimension and the need to acquire the 6 organisational
characteristics of Vision/Mission, Organisational Management Systems,
Organisational Accountability Norms, Financial Management Systems,
Learning and Evaluation Systems and Networks and Linkages with other
institutions.
Generally all members of the group should belong to families below the
poverty line. However, if necessary, a maximum of 20% and in
exceptional cases , where essentially required, upto a maximum of 30% of
the members in a group may be taken from families marginally above the
poverty line living contiguously with BPL families and if they are
acceptable to the BPL members of the group. This will help the families of
occupational groups like agricultural labourers, marginal farmers and
artisans marginally above the poverty line, or who may have been
excluded from the BPL list to become members of the Self Help Group.
However, the APL members will not be eligible for the subsidy under the
scheme. The group shall not consist of more than one member from the
same family. A person should not be a member of more than one group.
The BPL families must actively participate in the management and
decision making, which should not ordinarily be entirely in the hands of
APL families. Further, APL members of the Self Help Group shall not
become office bearers (Group Leader, Assistant Group Leader or
Treasurer) of the Group. The group should devise a code of conduct
(Group management norms) to bind itself. This should be in the form of
regular meetings (weekly or fortnightly), functioning in a democratic
manner, allowing free exchange of views, participation by the members in
the decision making process. The group should be able to draw up an
agenda for each meeting and take up discussions as per the agenda. The
members should build their corpus through regular savings. The group
should be able to collect the minimum voluntary saving amount from all
the members regularly in the group meetings. The savings so collected
will be the group corpus fund.
The SHG Model

Structure of SHG
A SHG is a group of about 10 to 20 people, usually women, from a similar
class and region, who come together to form savings and credit
organization. They pooled financial resources to make small interest
bearing loans to their members. This process creates an ethic that focuses
on savings first. The setting of terms and conditions and accounting of the
loan are done in the group by designated members.

SHG Federation
As mentioned previously, SHGs have also federated into larger
organizations. In Figure below, a graphic illustration is shown of a SHG
Federation. Typically, about 15 to 50 SHGs make up a Cluster / VO with
either one or two representatives from each SHG. Depending on
geography, several clusters or VOs come together to form an apex body or
an SHG Federation. In Andhra Pradesh, the Village Organizations, SHG
Clusters and SHG Federations are registered under the Mutually Aided
Co-operative Society (MACS) Act 1995. At the cluster and federation
level, there are inter-group borrowings, exchange of ideas, sharing of costs
and discussion of common interests. There are typically various
subcommittees that deal with a variety of issues including loan collections,
accounting and social issues.
As already described, SHG Federations have presented some key benefits
to SHGs as a result of their greater scale. Increasingly, SHG Federations
are being seen as a key interface with the SHG movement because of their
formal registration under the MACS and recognition from bankers. But, in
addition to the benefits of SHG Federations, there are some drawbacks, or
constraints, that should be noted. An SHG Federation is a formal group of
informal common-interest groups. As a result of its rather informal
members, there are internal constraints that it faces. Namely, it has a poor
capacity for self-governance, average to low quality managers and systems
and process are poorly defined. Further, there is significant financial cost
to organizing and registering a SHG Federation which has been estimated
to be about Rs 7,000 per SHG member. To bridge these internal
constraints requires savvy external assistance and there are few good
quality NGOs to provide this assistance to a burgeoning number of SHG
Federations.
SHG Bank Linkage
A most notable milestone in the SHG movement was when NABARD
launched the pilot phase of the SHG Bank Linkage programme in
February 1992. This was the first instance of mature SHGs that were
directly financed by a commercial bank. The informal thrift and credit
groups of poor were recognised as bankable clients. Soon after, the RBI
advised commercial banks to consider lending to SHGs as part of their
rural credit operations thus creating SHG Bank Linkage. The linking of
SHGs with the financial sector was good for both sides. The banks were
able to tap into a large market, namely the low-income households,
transactions costs were low and repayment rates were high. The SHGs
were able to scale up their operations with more financing and they had
access to more credit products.
Advantages of SHGs (Self Help Groups)

An economically poor individual gains strength as part of a group.

Besides, financing through SHGs reduces transaction costs for both
lenders and borrowers. While lenders have to handle only a single SHG
account instead of a large number of small-sized individual accounts,
borrowers as part of an SHG cut down expenses on travel (to & from the
branch and other places) for completing paper work and on the loss of
workdays in canvassing for loans.

In other words the organization provides micro loans and a package of

services, including self help groups (SHG) for economic empowerment,
education, sharing lessons learned and presumably networking.

Additionally, they are used to create an “ecosystem for wealth creation”

and bear some elements of self-organizing, given they are bottom up in
nature. These groups can help overcome some of the pitfalls of launching
a new business and are sometimes integrated as part of the overall debt
repayment model.
Introduction

According to Jammu and Kashmir’s former Chief Minister Jb.

Ghulam Nabi Azad, the revolutionary Roshni Act passed under his regime
i.e. the Congress-Led Government had far-reaching effects and it had gone
beyond the expectations of the people, particularly farmers. Free
ownership rights of 16.60 lakh kanals of state land costing Rs 20,000 crore
were being given to poor farmers with a definite goal to achieve self-
sufficiency in agriculture production.

The Government through the same Roshni Act will be able to retrieve
huge amounts from those who have illegally encroached on various parts
of Jammu and Srinagar cities and were using the land for commercial and
non-agricultural purposes.

Jammu and Kashmir Government has received over 2.5 lakh applications
for grant of proprietary rights to the people who are possessing
unauthorised government land in the state this year only.

As many as 2,55,222 applications have been recieved from public for

grant of proprietary rights to unauthorised occupied government lands for
decades under the Roshni Scheme.
Key Features

Under the act, farmers have been granted ownership rights of government
lands which were in their occupation for several decades. However, the act
prohibits them from selling the land for commercial purposes.

The refugees of 1947, 1965, 1971 and others have been debarred
from this Act while as for the benefit of peasantry class, the Government
has fixed a slab of 12.5 acres which was sufficient for farmers. The classes
fall under LB-6 and LB-7 categories have been already exempted from
this Act.It has been urged upon the State Government to exempt all those
who have been living Below Poverty Line (BPL) from the purview of the
Roshni Act. Many a times various flaws in the erstwhile Roshni scheme
formulated by the previous National Conference regime has been
pinpointed.

It has been argued upon by various members in the legislative assembly

that market prices should be fixed for land which has been utilized for
commercial purposes as well as encroached by land mafia.