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CHAPTER VI
PROBLEMS OF CONSUMER COOPERATIVE STORES IN KERALA
6.1 Introduction
As evident frorn the previous chapters, cooperative movement is a
distinct segment of the Intlian economy and it acts as an (effective mechanism o f '
socio-economic transformation of rural community The co-operative
movement successfully deals with the basic problems of the economy, by
promoting economic, r;ocial and cultural development of the society. (13th
Indian cooperative con;yess, 1997) wherever co-operatives have worked, they
have become a part of their members' lives and a source of strength to their
families, the community and the nation (Co-operative Initiative Panel, 1992)'
The International Labour Organisation (ILO) had adopted a
recommendation (No. 127) on the "role of cooperatives in the economic and
social development of developing countries" in June 1966 which stated: "The
establishment and growth1 of cooperatives should be regarded as one of the
instruments for economic, social and cultural development as well as human
advancement-- All appropriate measures should be taken to detect and eliminate
provisions contained in laws and regulations which may have the effect of
unduly restr~cting the development of cooperatives through discrimination.
~ -- -- I Cooperative Initintt\c Pa~nel (1992). Vision of ' India's Cooperat~ve.~ in the year 2000.
Intemat~onal symposium c'11 Management of Rural Co-operative December 7-1 1. Institute of Rural Management. Anancl. P2.
There should be laws or regulations specifically concerned with the
establishment and functioning of co-operatives, and withi the protection of their
right to operate on not less than equal terms with other forms of enterprise."
The past few decades have witnessed substantial growth of the
cooperative sector in diverse areas of the Indian economy. The number of all
types of cooperatives increased from 1.8 1 lakh in 1950-5 1 to 5.04 lakh in 1998-
99. The total membership of cooperative societies increased from 1.55 crore to
20.91 crore during the sane period covering about 67 percent rural households
and about 99 percent villages. (Draft National policy on cooperatives,
Government of India 2001). In the early nineties, India made a paradigm shift
towards market economji from the socialistic pattern. Fall of the western
ecoriomies which India, i~dolized for long, its own sluggish economic growth
rate; mounting debt burden, adverse trade balance, fiscal deficit, scanty foreign
direct investment have left the country with no other option than to seek a
change over to a market friendly economic policy. (Nitin Ghosh, 2000)'
To face increasing competition from private sector including multi-
nationals, co-operative organisations will have to make earnest efforts to protect,
preserve and project their identity in the market driven economy. (Nitish Kumar,
2000)~. In the era of liberalization, privatisation and globalisation the co-
operatives cannot operate without being efficient and viable. Unfortunately, in
~ p ~ - ~ ~ ~~~
Nitin Ghosh (2000). ..Restiucturing of the corporates and the co-operatives". NcZ)C' Bt~lletin, Vol.XXXIV. Nod. October 1'.13
' Nitish Kumar (2000) Htl;, C'aiknthhh~rr Mehta Memorial Lecture delivered at a function orgainsed b> the National Co-opcrat~ve Union of India at New Delhi on June 21. 2000. NC:DC Bulletin. Vol.. XX:YI'V'. August . p.35
most cases, they are neither efficient nor viable financially (Prabhu, 1994)~
Marly have become sick and doimant and exist only in records. Despite the
many problems facing co-operatives, opportunities also exist for a substantial
advance in their role within the world economy. [Edgar Parnell, 1999)~
The cooperative movement in India has carved out a niche for itself in
important sectors like credit (both rural and urban), banking, sugar, fertilizers,
dairy, agriculture marketing, consumers, handloom and handicrafts, fisheries,
labour and housing activities (Sisodia, 2001)~. Consumer cooperatives in India
have developed a network: of super market and department stores in cooperative
sector in different parts of the country, with visible success (Misra, 1995)~.
The gove~nment of India's Expert committee on c:onsumer co-operatives
(1993-94) headed by (j.IC. Sharma, the then Regional Director, International
Cooperative Alliance in its report has come out that .57 percent of primary
societies are either in loss or defunct condition. The remaining 43 percent in
profit, that too most often marginally.
Kerala, being a c:onsumer state with peculiar features of economic
development as mentioned elsewhere is expected to have a strong and viable
consumer cooperatives metwork. However, the number of profit making stores as
a percentage of total number of primary consumers stores is less than the
I Prabhu. P V (1904) -'Ch;~lle:nges before the cooperative movement". Encyclopaedia of Co- operative Mnnagemmt: I'vlrtaphy~sic.\ qf'Co-operative Movement (Ed) Vol.1. Deep & Deep Publications. Nen Delhi. 11.215. Edgar Parnell (1999). .'Global Cooperat~on in a New Century - A Situation Report", Review qflnternationul ('ooperalion, Vo1.92. No.2, p.73
6 Sisodia S.S. (200 1) '-Pubhc Fklations-Key for success of cooperatives in the present era: some issues": The ('oopercitor. Vol.XXXIX. No.2. August p.53.
7 Misra S.C. (IY9.i). op ~ l i l . p.40.
national average in K.erala. The investigations made by the researcher has
identified the following problems in the functioning of primary consumers co-
operatives in Kerala. ih~ attempt is also made to suggest some remedial
measures in this section.
6 .2 . Inadequate Share Capital Base
Capital is the life- 'blood of any business. The lack of a strong equity base
affects the long-term viability of the primary consumers societies in Kerala. The
average paid up capital of the selected 24 stores for the study period is presented
in table 6 1 From the table it is evident that nearly 55 percent of the samples
had an average paid up (capital below Rs. 1,00,000.
Table 6.1
Average paid-up share capital of the sample primary c'onsurners' stores in Kerala
'
Southern ' Central Northern '
Total Percen-
Lim~ts (Rs) Region Region Region (No.)
tage to total
~
25,000- 50,000
-p~
1 ,00,000- 1.50,000 .
1,50,000- 2,00,000 ~~~~ .... ~
20.00
2,00,000 - 3,00.000 ~ ~ --...
4.17
3,00,000-4,00,000 -- -~p
2 2 8.33
Total 8 8 24
Source: researcher.^ comp~ilation
Since the consumers' stores has no fixed charge commitment for the
share capital contribution, stores should try to optimise their capital base. Table
6.1 brings out that only 112.50 percent societies have share capital in excess of
Rs.2 lakh. With regard to adequacy of share capital the responses from the
officials of the stores are :;ummansed in table 6.2.
Table 6.2
Opinion about the adequitcy of share capital available with the sample primary consumers' stores in Kerala
percentage to Opinion about share cap~tal No.of societies the total
- - --.. . -
Fa~rly adequate i Adequate
~
Inadequate ~. ~
~~~ 1 Tot,al 24 100.00
Source: Researcher's compilation.
As revealed from table 6.2, 79.17 percent of the consumers' societies are
operating with inadequate capital. Hence the management may initiate measures
to enhance the equity base of the societies. Incentives may also be offered to
members in order to per:suade them to contribute more towards their share
capital and I-easonable return on the invested capital may also be assured to
them. The tierala Coojperative Societies (amendment) Act 1999, which came
into force with effect from 1-1-2000 has the provision to provide membership to
the local body institutions in the cooperative societies. The consumer
cooperative societies may initiate necessary measures to tap the resources from
the local body institutions towards the share capital of the societies
6.3. Limited Internal Resources
Business expansion has been a problem without much reserves
accumulated by the stores. Regarding the adequacy of internal resources in the
selected stores, 2 1 stores ((87.50 per cent ) reported that the internal resources of
these stores are inade'quate. Only one store (4.17 percent) assessed that its
internal resources are fairly adequate. The main reasons for the inadequate
internal resources were attributed to the limited profits and the incurrence of
losses resulting from trading operations.
6.4. Shortage of Working Cap~ ta l
Capital required for stock holding and for meeting the monthly
committed expenditure is called the working capital. This goes on rotating while
doing the business and the efficiency lies in the higher rate of turnover. The
response from the officials of the stores regarding the adequacy of working
capital is presented in table 6.3
Table 6.3
Opinion about the adequacy of working capital available with the sample prirnary consumers' stores in Kerala
Fa~rly adequate
Adequate
Inadequate
Opinion ab0u.t working capit;al
Source: Researcher's compilation
No. of societies
Percentage to the total
The inadequate working capital in 75 percent of the primary stores points
out the need for ~ncrea,sirng the working capital in primary consumers societies.
T h s was evldent from the earlier analysis on financial performance also.
6.5 High Cost of Borrowings
In the consumer stores of the developed countries, there is a strong equity
base. They borrow less and the rate of interest in those countries is
comparatively less In India most of the consumers cooperatives have a poor
equity base and they do not have a scientific management of bank borrowing.
(~isra,1995) ' Among the selected primary consumers' stores in Kerala, 19
stores (7917 percent) had availed loans and advances from the district
cooperative banks. and the interest liabilities mount pressure on the profitability
of these stores.
With the activation of members, internal financial strength of the
members can be tapped to overcome the problems associated with the high cost
of borrowing. Under the Interest Free Deposit (IFD) scheme formulated by the
Consultancy & Promotion cell of NCCP, members including nominal members,
who keep an Interest free deposit of Rs. 10,000 get goods worth Rs. 150 every
month free of cost. This scheme has helped to get capital with minimum cost,
and to earn loyalty and goodwill of the customers, apart from getting a sort of
free publicity (Misra. 1995)'. Though six sample stores (25 percent) had
introduced interest payable deposit schemes, none of the selected stores in
Yhisra (19%). o/).cir . p43 Y Ibid, p.43.
Kerala had nnplernented the Interest Free Deposit (IFD) scheme formulated by
the C& P cell of NCCF
6.6. Heavy Administrative Overheads
The ('onsultancy and Promotion Cell, NCCF stipulates that standard
nonns for cost structure percentage to sales (revised nonns, 1983) should be 6
percent for rural stores and 7 percent for urban stores. Establishment and
contingency charges as a percentage of sales (ten year average) was high in SR6
(9.35 percent) SR7(9.0 I percent) and SR4 (8.31 percent) in the southern region.
In the central region, it was high in CR4 (8.80 percent). In the northern region,
N R I had the maximum percentage (10.89 percent), foilowed by NR5 (10.29
percent) and NR2 (8.56 percent). .4s a consequence of this higher administrative
overheads, the profit margins are turning negative. The overhead expenses in
the case of private traders' business are comparatively low (Himachalam and
Narendrakumar. 1 9 9 4 ) ' ~ . In the selected stores, though the sales volume has
declined, there was no proportionate reduction in the number of employees. The
management of consumer cooperative stores should initiate measures to control
the establishment and c~~ntingency charges effectively.
6.7. Absence of Scientific Purchase Policy
All the selected stores were depending upon manufacturers, wholesale
dealers and local markets for the purchase of goods, except in the case of public
distribution system articles suppl~ed by the govenunent agencies. Three stores
used to procure ce~tain stationery articles from the State Federation and four
-- -- -- 10 H~machalarn D md Narendrrr Kumcir D (1994). op c l r . p 6
stores purchased certain gsoce1-y items and stationery items from the district
wholesale stores. The authorities of primary stores felt that there is no price
advantage or certainty of' prompt supplies by the state federation or district
wholesale stores. In practice there is no linkage between the different tiers of
consumer cooperatives in the matter of purchases. It wa:; also reported that the
non-availability of all the required goods from the state federation and district
wholesale consumers' cooperative stores force the primary consumers' stores to
make purchases from thse private wholesalers. beside:^, the credit facilities
extended by the prlvate i~holesale dealers are more attractive to the primary
stores, as these stores hiwe the paucity of funds.
15 societies (62501 percent) reported that there is no sub-committee of
the Board of Directors to monitor the purchases. Five societies (20 percent ) had
effectively fnnctioning purchase committees, which meet twice in a month and
four societies (16.67 percent ) had purchase committees, but it assembled
bimonthly or quarterly only.
Regarding the frequency of purchases, 21 stores (8'7.50 percent ) reported
that there is no specific plan or procedure for determining the frequency of
purchases for different items. In many cases, the purchases of specific brands of
some products were made only after the enquiries made by the customers. The
estimates of the quant~tie:~ to be purchased were not determined on scientific
basis. None of the societies under study had fixed minimum, or maximum or
economic order quantithes for the different types of goods; and commodities. The
quantities to be purchased on certain products were mainly based on the offer of
credit facilities extendemd by the dealers.
6.8. Low Volume of Sales
It is a common thing that unless sales performance is over and above the
break even point there will be loss in any organisation. Since we are living in an
age of inflation. cost structure is bound to increase, pushing up the break even
point. Hence the sales perfonnance has to be improved at least 5 percent or
more on annual bas~s over and above the rate of inflation. (Misra, 1995)". Over
the ten year study period, only one store in the southern region (SR3), two
stores in the central region (CR3 and CR6) and one store: in the northern region
(NR7) have recorded continuous growth in the sales turnover. The sales volume
of 83.33 percent stores have recorded fluctuations. In the southern region in
store SR6. the sales volurne is less than the ten year average since 1995-96. In
the northern region, the :;ales volume of store NR5 is less than the ten year
average volume of sales since 1993. The trends were mainly due to increasing
competition and the absence of scientific sales management procedures among
the stores.
The standard norms for sales per man day developed and revised (1983)
by the consultancy and promotion cell, NCCF specifies Rs.2500 for urban stores
and Rs. 1,600 for rural stores. Considering the ten year average sales per man
day (taking 300 days in a year) 1.3 primary stores (54.17 percent) had only less
than Rs. 1,600 sales per m.an-day.
6.9. Narrow Commodity Coverage of the Stores
The nature of p~oducts dealt with by the selected societies during the
initial year of stud) 1990-5) 1 may be grouped into:
~ .-
" Misra (1995) O I ) . L I / I) 4 I
Products dealt with
p~ - ~~ -
Food gralns. pr-ovisio~ns and stationery items
Food gl-alns. prov~!;ions statloner?. textlles and consumer durables
Food gralns. prov~:;ions stahonery. fertilizers flour mill and retail ration articles
Food grains. provisions textiles, stationery. fertilizers' and retail ration articles
Foodgrams. provlslons s t a t ione~ . canteen and consurner durables
Foodgra~ns, provrslons, stationery, leather goods, textiles. retall ration articles and consumers durables
Food grains, prov~sions, stationery, fert~lizers, gas stoves and LPG
Food grains. provisions, stationer)., vegetables and cold storage itenis
Food gralns. p~ov~sions, statlone1-y and wholesale ratlon goods
In the year 1990-'91 all the 24 stores had the trade in food-grains,
-
provisions and statlonely items Seven stores had managed retail ration shops,
-
Southern Region
1
3
-
3
-
-
-
1
-
-.
No.of
Central Region
1
2
1
1
1
-
1
-
2
Stores
Northern Region
1
3
-
1
-
1
-
1
-
Total No.
3
8
1
5
1
1
1
2
2
two stores had dealership in textiles and consumer durables, two stores had
traded vegetables and cold storage items, one store each had flour mill, canteen
in the name of .Sahakarana Bhavan' and dealership of lntlane LPG.
In the year 2001, the products dealt with by two stores in the ~entral
region have been totally changed. Stores CRl and CR3 had discontinued its sale
of food-grains, provisions and stationery items in the open market. While store
CRI which had 8 retail ration shops in 1988-89 confined its operations into the
running of SIX reta~li public distribution centres alone, store CR3 has limited its
business operatlolls Into the dealings of LPG, gas stoves and Servo engine oil.
Store CR5 has surrendered its licence for the authorised dealership in wholesale
rations articles and now runs a margin-free super market. In the northern
region, store N K runs eight retail public distribution centres, supermarkets,
footwear shops etc. While store NR2 had discontinued its sale of food grains
and provis~ons and now deals in stationery items and textiles. In the southern
region store SR3 has dropped its sales of vegetables. In the central region store
CR6 has introduced the processing of copra with the installation of copra drier
and the related machint:ries. In the northern region, store NR4 has modernised
the canteen and also started the self service type super rr~arket. Three stores in
the northern reglon ant1 one store in the southern region have undertaken the
sale of vegetables in 2001
The assortment policy of consunler co-operatives should be such that it
should meet the entrre requirements of the customers and the population within
the catchment areas. In the selected stores, only three stores are supplying food
grains, provisions. stationt:ry and vegetables to the consumers. The cold storage
items are sold only in one store. The non-availability of vegetables, cold storage
items etc. which are requured for daily use by the customers creates problems to
the customers.
6.10. Attitudes of Sales Personnel
The attitudes of the sales personnel play a significant role in attracting
the customers. According to Harish, a service consumer who has been dealt
within a personal manner is likely to absorb service failures (less than
competitive perfo~mance). The customer would give some amount of leeway to
the service providers for occasional failures. The human touch can add positive
bias to servlce evaluation. (Harish V. Verma, 2000)'~. The approach of sales
personnel in ce~tair~ stores are not motivating the customers to the stores.
Consolidated customer perception index towards the motivational approach of
sales personnel was 24.83., which signifies that consumer cooperatives are lying
in the least favourable re:gion. Sales personnel rnay be trained in the art of
extending courtesies to their customers and win their goodwill and confidence.
Lack of enthusiasm and non-cooperation on the part of the sales personnel lead
to loss of customers in the consumer cooperative store.
6.11. Lack of Trained and Experienced Staff
In India, most of the consumers' cooperative stores are employing
persons without any expertise, skills and experience in business line which
resulted in failure to compete with private traders who possessed better business
acumen, insight, and neces,sary vision of the business trends. (Himachalam and
-p ~ ~~ --
" Harish. V. Vcrnin. (2000:1. .'The Human Face of Service Quality". Productivily. Vo1.41. No. 1. April-JUIIC. p I ?h
Narendrakurnas. 1994)". Among the 24 selected stores in Kerala, none of the
stores had employed professional managers with MBA or similar qualifications.
Six stores have secretary with the qualification of degree and higher diploma in
cooperation. The employees of the 23 stores (95.83 percent) were not deputed
for any training programmes or inservice courses during the past ten years. The
secretaries w~th H.D.C qualification opined that training institutes should
redesign the courses with special emphasis to management practices. Private
sector marketing strategies are in conformity with the modem business practices
in the market, where as cooperative training designs are not that futuristic
I-I . . (Herath, 1999) . I he employees in the consumer cooperative stores should be
equipped with necessary skills, knowledge and experience so as to enable them
to take up tasks more efficiently and with greater sense of responsibility.
6.12. Non-Availability of Preferred Brands
In the customer survey. it was revealed that the customers are very
particular to get the specified brands of the product. While 45 customers (15
percent ) opined that availability of preferred brand and brand choice is better,
125 customers (41.67 percent) opined that it is poor in the consumers'
cooperative store. Regarding the reaction of the customer on the non-availability
of preferred brand from the store, only 32 customers (10.67 percent) were
prepared to purchase the substitute brand of the product from the consumer
cooperative store. As the customers are loyal to the brands, and not to the shop,
13 D. Hirnachalam aid D Narendra Kuninr (1994). op.cit.: p.6. I4 Herath. W U (1009). Ke,:.errt 7rend,s is~!f('on.sumer Cooperation in Asia and the Pacific;
International Coperntne Alliance Reyio~~al Office for Asia and the Pacific. New Delhi, p.65
the consumers cooperatives should pay more attention to make available the
brands demanded by the customers.
6. 13. Poor Display of Products
In the display of products. the consumer cooperative stores are lying in
the least preferred reglon (perception index 12.33). Proper display of stationery
items, consutner durables etc can attract the customers and result in the boosting
of sales volume In the display of goods, it is to be ensured that goods are
displayed attractively, practically and safely (Kambli, 1994) '~
To ensure that goods are displayed attractively, place the good in groups,
at eye level. show the faces of the packets, display the prices clearly and fill up
the front of the shelves attractively. Practical display means placing the groups
of goods which are most often requested within easy reach, place heavy items
near the ground and do not put different things behind each other. In the safely
display, attention is to be paid to keep strong selling products and food items
apart. Articles which attract shoplifters should not be displayed since they are
easy to be stolen
6.14 Absence of Prompt Service
In the present day circumstances, the customers cannot be taken for
granted. The customers want to receive prompt service from the stores. Among
the 24 stores studied. only two stores(8.33 percent) have adopted computerised
billing system. in order to avoid the delay in writing the bills it is necessary to
I5 Kambli P A ( 1 YC)4). Assortment. Pricing. Display of Goods and Sales Promotion", Report of
ICA:N('C"Sirh- tk!,yir~ntr/ Seminar on ('onszrmer Coopernfive llevelopment in India. P.46.
install computer for billing operations. The average cost: of installing computer
billing works out to less than Rupee one lakh only.
In order to speed up the delivery of goods to the customers, pre-packed
goods are prefened by the customers Among the 24 stores, 9 stores (37.50 per
cent ) have already rmplernented the sale of pre-packed goods.
The customers also desire the introduction of self-service system in the
consumers' stores Only two stores have the self service facilities and all the
customers interv~ewed in these two stores have strongly agreed to the statement
that they are receiving prompt service in the consumer cooperative store.
Regarding the consolidated custorners' perception index towards the availability
of prompt service from the consumers' stores, the average index was 28.33 for
all the three zones. signitying that the consumer cooperatives are in the least
preferred reglon. Trme for getting service from the store is also to be minimised.
6.15. Defective Pricing Policy
Way back in 1960. All lndia Seminar on consumer Cooperation held at
Bombay suggested that: the stores should sell the products at a price which
includes cost plus a reasonable margin of profit or at the prevailing market price,
whichever is less (Goyal, 1972)"'. Among 300 customer:j interviewed only 102
customers (34 pel- cent ) :strongly agreed with the statement that the prices are
reasonable in the consun~ers' stores. The store authorities has informed that
generally the prices for goods are fixed for a week and in certain cases for one
month. The consunler cooperatives should adopt the system of active price
.- ~ ~~~~ ~~~ ~ ~ --
16 Goyal. S K ( 1972). 01, c i r . p .72 .
policy in the fixat~on of prices for the goods and commodities. Under active
price policy. the purchaser gets a part of the economic advantage at the bme he
makes his purchases and the balance as purchase bonus or dividend at the end of
the accounting year. Hence the prices of goods in the store will be slightly lower
than the prevailing market price. The consumers stores can also adopt leadership
price policy and odd price policy for certain selected products.
6.16. Lack of innovative Sales Promotion Techniques
\ Consumer coope~:atives are functioning in a very cornpHithe
environment and hence these stores have to adopt a package of sales promotion
techniques, so that every day there is an attraction for. sustaining customers'
loyalty. Sales promotion drive should be intensified by resorting to home
delivery, free supply of cany bags with the message of co-operative advantages,
extending the credit facilities to all the members, those who are in regular
employment and also to the public within the ceiling of their trade deposits.
The Shree Warana Vibhag Sahakari Grahak Mandal Ltd. Warananagar in
Panhala Taluk of Kolbapur dishict in Maharashha state, popularity known as
'Wama Bazar' has adopted several innovative sales promotion methods,
(Varkey, 1994)" including, member discount-] to 5 percent, festival and
cooperative week discount - 3 to I0 percent, school season discount - 5 percent,
gift schemes, stock clearance sales, demonstration-cum-fiee sample distribution
from suppliers. several facilities to the customers are provided such as water
cooler, telephone-local and outstation, Xerox facility and other shopping
" Varkcy. V O(l99.I). .'Waram B a z a r - Successful Rural Consutr~er Co-operative". Report of IC4 N('( '7'.St~h-l~~.g1on~ri Seminar on consumer Cooperative Ue~rlopment in India. p. 155
facilities Unless new systems and techniques of sales promotion are adopted,
the prospects of consumer cooperatives will become bleak.
6.17. Unplanned Business Operations
Accu~nulation of slow ~noving items and launching upon uneconomic
ventures have adversely affected the functioning of consumers cooperatives. On
the basis of the discus:sian with the store authorities, it was revealed that 18
stores (75 percent ) had faced the problem of accumulation of slow moving
items and 7 stores (29.17 percent) had suffered loss in the past due to launching
of uneconomic business ventures. The authorities of primary consumers'
cooperatives should realise that decisions on crucial issues have to be arrived at
after taking into consideration the demand analysis, consumer behaviour, market
structure etc
6.18. Lack of Diversific,ation of Business
Lack of proper policy of diversification of business affects the growth of
consumer cooperatives. In the context of globalisation, because of free-market
economy and competition from private agencies, the diversification of business
is inevitable. Among the ;!4 stores. only 3 stores (12.50 percent) CR3, CR6, and
NR4 have successfully diversified their business operations. While store CR3
has secured the dealership of Indane LPG and Servo engine oil, store CR6 has
installed plant and machirrery for copra processing, and processes rice powder
through its flour mill and store N R 4 has setup a super market and runs a canteen
for the public in the name of 'Sahakarana Bhavan'.
6.19. Unscientific lnventory Management
The consumers' cooperatives should undertake standardisation of
inventory to be maintained so as to avoid injudicious and uneconomic
purchasing and stocking of unpopular and slow moving goods. Lists of goods
and commodities. sub-divided according to different varieties, components and
specifications should be drawn up. Economic order quantities are to be
determined by the stores. Regarding the scientific inventory management, 22
stores (91.67 per cent) admitted that their inventory management practices are
unscientific and 23 stores admitted that their inventory level was not at
optimum. Losses in storage is also a serious problem for eight stores (33.33 per
cent). Adequate attention should be paid to use insecticides to kill the various
insects causing damage to the goods stored
6.20. Lack of Co-operative Value Education and Dedicated Co-operative Leaders
Lack of dedicated leaders and lack of education or1 consumer protection,
welfare activities, member participation etc. are serious problems confronting
consumer co-operatives in Asia (Pradit Machima, 1994)" Our co-operative
leaders have developed with very poor models for leadership, we must help
them to lea~n the skills of true leadership and to relearn the values on which co-
operation rests (tiur~en. 1092)'' in the customer survey, it was revealed that
only 99 customers (33 percent) were influenced by cooperative education on
buying goods from the store. It was also made known that some office bearers
were not mak~ng any purchases of their requirements from their consumer store.
p ~ - ~ ~ ~
'' Pradit Machinla ( l Y'j4). o[p.cil. _ p.27 I n VKurien (1992). I.irleclic,'oiy Addrr.s.\ nt the Internatzonal .Sj~rnpo.sium on Mnnagrmen! clf
Rural Cooperotive.~ lnstitlrte of Rural Management; Anand. December 7-1 1. p.6 I
Regarding the leadership. all responsible in reviving the cooperative
movement have to adhere: to basic human values, principles of democracy and
social justice. Without ;a cadre of dedicated workers having faith in the
cooperative philosophy and efficient management, c:ooperative movement
canriot sustain in future (Mohan Dharia, 2 0 0 1 ) ~ ~ . Intensive education and
awareness progranlmes may be worked out and implemented through
cooperative unions. training institutions, panchayathi raj institutions, and
educational institutions. 'Whenever people are educated about the values of
cooperation, it will lead to the sustainable devel~spment of consumer
cooperatives in Kerala.
6.2 1 . Declining Government Assistance
'The 1 4 ' ~ lndian Cooperative Congress (2001) noted with great concern that
the effect of liberalization has been strongly felt in the cooperative consumer
sector. The government of lndia has transferred the Centrally Sponsored Scheme
to State sector with effect from 1992. Eventhough subsidies are not justified in
the context of liberalisation and globalisation, the consumer cooperatives
engaged in the implementation of various welfare measures like distribution of
essential commodities are to be adequately compensated.
As the decentralised planning process has been implemented in Kerala,
the panchayathi raj institutions should support the local consumer cooperatives.
(Thomas and Man,. 2001b)~' in the customer survey, 21 1 customers (70.33
.~ 20 Mohan Dhar~a (2001 ) '-Cooperative Movement in 21" Centun Challenges". N('DC Bulletin.
Vol.XXXV. No. I . .4pr1l. p.X " Thomas Paul Kattookaran and Man1.K P (2001 b). op .c i f . . p.34 1 .
percent) were in favou~ of granting assistance to the consumer cooperatives by
the panchyath~ rat institutions.
Table 6.4
Customers' oplnlon about the need for granting assistance to the consumer co- operatives by the panchayathi raj institutions
Required 60 73 1 78 211 7 0 . 3 3 1 . --
Need for Southern Central I Assistance Region 1 Region
rot rec1y.d : 1 I 65 I 21.67 I r
No reply 24 8.00 p ~ p ~ - ~ ~ ~ - ~ ~ ~~ - -
Total 11 00 100 100 3 00 100.00
Northern 1 No, % 1 Region
Source: Customer survey
Regarding the nature of assistance to be provided by the panchayathi raj
institutions, the 01-der of preference was (a) allotment of rooms in the shopping
complexes of the panchayathi raj institutions at a nominal rent (b) providing
furniture , fixtures and equipments required by the store ,and (c) financial grants
for specified purposes. ,4mong the 24 stores, only one store has received
assistance from the block panchayath. The consumer stores may prepare
appropriate proiects to receive assistance from the panchayathi raj institutions.
6.22. Excess Governme:nt Control
In the past. the cooperat~ves have tended to be viewed generally as
appendages of the government. rather than independent, democratically run
bodies of ind~vlduals pursuing a common goal (Surinder Sud, 2 0 0 1 ) ~ ~ . The
report of the taskforce set up by the Planning Commission to study self-
managed lnstltut~ons for integrated development (1991) said: "A cooperative as
an instltut~on had a lot of potent~al but was so regulated by the state government
through various legislative and administrative measures that it had turned out to
be a semi-government institution. Cooperatives have undergone a crisis of
identity being neither government nor private."
The exlstlng cooperative societies Act in most of the states have
restrictive provlslons which pre~ents the funct~oning of the cooperative as a
business organlsatlon. (Paranjothl and Pitchai, 2001)~'. The cooperative is the
only sector where bureaucratic interference and control ;are rooted deep. Given
the ongoing l~beral~sed environment and to protect the larger interests of the
members, it is necessay to adopt the legislation to suit the changing
circumstances (Ramesh, 2 0 0 1 ) ~ ~ The seminar on "I-uture of cooperative
legislation. Pr~nc~ples ;md prom~ses" organised by the Cooperative initiative
Panel at h a n d (2000) resolved that good cooperative law will define the role of
Reg~strar of Cooperatives solely as certification of registration and liquidation of
cooperatives. Cooperative Initiative Panel at its Anand Charter for Cooperatives
(1997) had opined that the cooperative autonomy was destroyed by excessive
official presence and control backed by draconian anti-democratic laws.
~ ~- -- --
'' Surinder Sud (200 I ). .-Coop~crati\cs i l l 2 I " C e n t ~ ~ " , NC'DC' Bzrlr'etm. vol. XXXV. No. 4 & f, October-Dcce~nher. p. 30.
" TParanjoth~ and C' Pltclnai (2001). ..Restructuring Cooperative Law in the contest of Marketisat1011 - cnsl: of ll-~dia". Muno,yemm/ Researcher. Vol.VI1. No.2&3. October, 2000- March 200 I . P 5 2
" Ramesh R S (2001) Neecl for fresh look at cooperative legislatio~i. Cooperative Perspective, Vo1.35. N o 4 Jaiuan- March, p.55
Within the per~od of ten years, the management committees of four
consumer stores ( 16.67 percent) had been superseded by the government. The
authorities of 19 prima~ry consumer's stores (79.17 percent) opined that there is
excess governnient intervention in the affairs of the :stores. As govelnment
control and overbearing, has weakened the growth and development of
cooperative leadership (Ramesh, 200l)*~, the legislation procedures of
cooperatives are to be am1:nded. Even though Kerala Cooperative Societies Act,
1969 was atnended in 1999, the Kegistrar of Cooperative Societies still enjoys
vast powers to control the cooperatives in Kerala.
6.23. Insufficient lnfras~tructural Facilities
Among the 24 stores selected for the study, the authorities of 19 stores
(79.19 per cent) ~.eportetl that ~rifrastructural facilities like floor space for
trading, warehouse space, furn~ture and fixtures etc are not sufficient. Eight
stores (33.33 per cent) even had no telephone connection. It is necessary to
initiate urgent measurer, to create the necessary infrastructural facilities in the
stores.
As the government of India has discontinued the Centrally Sponsored
Scheme with effect from 1-4-1992 the consumer cooperative stores will have to
seek assistance from the panchayathi raj institutions. The National Development
Council in its resolution on cooperative policy in 1958 recommended that the
responsibility and initiativ'e for social and economic development at the village
level should be placed fully on village cooperatives and village panchayaths.
pp . ~ ~ --
" Ramesh R S ( 200 I ) --(:oc8peratl~c Icadership- Some reflections". Kerolo Cooprrariw .lournol. Vol -13. No 12. April. p.23
The Working Group on I'anchayaths and Cooperatives under the chairmanship
of Mishra (1961) also recommended that panchayaths should provide
accommodat~ons In its premises, wherever possible and provide land for
building godowns and give licences to cooperatives for undertaking processing
activities on a preferential basis. After the 73'* constitutional amendment, Kerala
enacted a new legislation viz. The Kerala Panchayath Raj Act, 1994 to empower
the grama panchayaths. block level panchayaths and district level panahayaths.
In Kerala, the strengthening of existing cooperatives is one of the general
functions of the Panchayathi raj institutions. (Third schedule, Kerala Panchayath
Raj Act, 1994). As far as possible, the consumers co-operative may try to
mobilize the resources internally. without seeking assistance from government
or panchayatht raj institutions.
6.24. External business environment
In the case of perfect competition, the very competition among producers
and suppliers is a factor of safety in keeping prices down, eliminating the less
efficient, and preserving quality But perfect competition is a theoretical
condition which does not exist in real life (Gulshan, 195)4)2h. Evasion of taxes
by private tradel-s affects the intensity of competition (Saxena, 1988)" in the
trading operations. The office bearers of 17 selected stores (70.83per cent)
opined that while the consumer co-operatives have to pay sales tax, minimum
wages to en~ployees etc the private traders are in an adva~ltageous position.
~~ -~
2 G l ~ u l s l ~ ~ ~ S S ( I Y W ) ( 'onsumer ~~rofrct ion and .sotisfac!ion Legal and Managerial Di1nen.vlon.s. Wile! Eastern Ltd. p 3
"Saxena. A . K . ( I Q X X ) . opLl t . 1~189.
6.25. Absence of Effective Linkages and Integration Among Cooperatives
The government of india's Draft National Policy on Cooperatives 2001
admits that some federal cooperatives which were suppc~sed to guide and nurse
their affil~ate organlsat~ons are competing with them resulting in deterioration of
the health of the prlmary level cooperatives. The authorit~es of 20 primary stores
(83.33 percent) opined that the retail branches of district wholesale stores and
the 'Neethl Stores' and 'Trivenl Stores' managed by the Consumerfed are
competitors to then business. Regarding the sources of purchase, the authorities
of 21 stores (87 50 percent) revealed that they depend on private wholesale
markets for their purchase requirements. The Report on the committee on
structure and I-ole of Ni~ti~onal Cooperative Societies under the chairmanship of
Venkatappaiah had foumd overlapping in functions of the cooperative
federations and t11e1r constituent members. This overlapping of functions and
competition amongst the various tires of a cooperative sector has sounded the
death knell of many coopmeratives (Marathe, 2000)~'. The cooperatives among
themselves w~l l have to ecolve a closer partnership and alliance in order to steal
a competitive edge over the private firms (Sivakumar, 1999)"
Strategic alliances between processing cooperatives and consumer
cooperatives 1s another area where the Indian cooperatives are lacking (Herath,
1999)" The consumer cooperatives should try to procure the required goods
and commod~t~es from the producers' cooperatives, industrial cooperatives and
marketing cooperative:;. If there is a horizontal cooperation amongst
- ~~ ~- ~ ~
2"arathe.M S (2000). "Cooperati~cs in the New Millemhiurn". NC'DC.'. Btrlletin, Vol.XXXIV.No.4. Octobel-, p .12
'"ivakumar S ( 1949). '.Financing of Cooperativt: Services". Yqanu. Vol. 43. No. 4. p.41. "'Herath WU(i94'1). J [ ~ . C U . p.66
cooperatives. the rniddlennen and agents can be avoided and it will prove to be
beneficial. both to the producers and consumers.
6.26. Narrow Membership Base and Apathy of Members
In view of bringing about continuity, growth and strength to a consumer
store, the enrolment of new members plays a crucial role. As against enlightened
members, ignorant. slei:p!i, inactrve, non-participative and indifferent members
become a problem in thzrr~selves (Selvaraju, 1999)".
Table 6.5
pp-~-~ ~
31 RSelvaraji~. Y 'Members apath! towards their cooperatives". C'or~pwotive,~ in the New Miilrnittm (Ed1 V~kris Publislling House. New Delhi. p.2
Co~~solidated table showing number of members in sample primary consumers' cooperative stores in Kerala
-- -4. ~ - ~ - ~ ~ ~ - A - - +-
1993-94 t 6970 9488 -+ .--I E l 4 1994-95 ' 7063 1 9634 I 7719
1995-96 7212 9926 -- ~~~ ~~- i---~
~~~~ ~ ~~
795 1
1997-98 10410
1998-99
L . 11629
Kerala
21374
21683
22057
24078
24416
24967
24998
25497
271 13
27354
Source: Researcher's compilation.
As ev~dent from table 6 5 with respect to membership, the percentage
change ovel- the ten :ye,ar period was 27.98. In the southern region, the
percentage change was at a low level of 6.92 and it was at a high level of 56.30
percent in the central region.
In the customer survey conducted by the reseiucher, 161 customers
(53.67 per cent) were rine~mbers of the store. Regarding the nature of purchases
made by the member customers from the store, only 58 customers (36.02
percent) were regularly purchasing from the store. The patronage by members to
the consumer cooperative stores are to be improved.
The Kerala State Cooperative Societies (Amendment) Act, 1999 has
introduced the PI-ov~sion of active members in co-operatilie societies. In the case
of non- credit societies, an active member means, a member who has involved in
all or any of the objects of the society specified in the bylaws there of during the
period of five years immediately preceding the date of resolution of the
committee for the candluct of election. With the activation of members
especially women and youth, the members would become assets in giving health
and prosperity to their stores.
In the customer stuvey, it was disclosed that only 68 members (42.22
percent) regulat-ly attended the general body meetings of the store. The
percentage of regular attendance was at a high level of 45.90 in the northern
region and i t was at a lc~w level of 34.09 in the central region.
Table 6.6
Reasons for not attending the general body meetings regularly r p ~ ~ ~ . , ~ ~- ~p
I I 1
Regarding the rea.sons for not attending the general body meetings
regularly, 44 members (47.3 1 per-cent) disclosed that they are not interested in
the general body meetings of the stores. Eleven members (1 1.83 percent)
reported that absence of timely intimation and 38 members (40.86 percent)
assigned pre-occupied work as the reasons for not attending the general body
meetings.
Southern Central Reason
Region Region
% No. % pp~
No timel), 10.34 intimation
Pre-occupied work
55.17
34.49
100.00 ..~_--LPp-~
6.27. Lesser Involvement of Women
Housew~ves play an important role in determining the consumption pattern
Source: survey data
of tlie family. Hence thzir participation in consumer movement should be active
Northern Region
and meaningful (Malathirn Sar~n. 1989)'~. In Japan a major part of successes
No.
4
11
18
33
Total
achieved by the cooperatives part~cularly in connection with the group activities
%
1:2.12
33.33
54.55
100.00
No.
11
38
44
93
("Han") are certainly attributable to the energy and enthusiasm of the women
%
11.83
40.86
47.31
100.00
.. --
'' Malathi Sar~n (14XV). o(~.cit.. p.51
who have identified thenlselves with the task and in so doing have increased
their own sense of self-esteem. (Ciunther Vacek, 1989)"'. Though sex-ratio and
the degree of enipowement are favourable for women in Kerala (sex ratio 1058
as per Census 2001 provisional data), the involvement of women in the
management committees of consumer cooperatives are not encouraging. Among
the selected 24 societies, only seven stores (29.17 per cent) had female
representatives in the Board of Directors. The recommendation made by 1 4 ' ~
Indian Cooperative Congress (2001)'~ that cooperative law should provide for
reservation of at least 10 percent for women in the management committees of
the cooperatives at all1 levels deserves special attention. The provision for
reservation will not be the real solution, but the housewives should take active
interest as in the case of Japan.
6.28. Declining Role in the Public Distribution System
The mld-term appraisal of the Ninth Five Year Plan (2001)'~ suggests
that despite hefty increase in the annual food subsidy from Rs.2450 crore in
1990-91 to R 9200 cror,: in 1999-2000, all is not well with PDS in India. There
is 36 per cent dlvers~on o:F wheat. 3 1 per cent diversion of rice and 23 per cent
diversion of sugar from the system at the national level. In spite of food grains
production going up from 175 million tonnes to 206 million tonnes in the
1990's, growth rate in availabilitv of food grains per capita has come down to
.-
" Gaunther Vucck (IlIX')) (~'onsrrmrr (oop~.rative.s in '7 Changmg World. Vol.Z(Ed) Johann Brazda and Robert Schcdi~.+y. International Cooperative Alliance. F'. 1094.
31 14" Indian C'oopcrative Congress (2001) Resolution No.43. The ('ooperafor (2001); Vol.XXXIX. No 4. Octobcr . P.19X
' 5 Mid-term Appra~snl of thc Ninth FIVC Year Planl; quoted from 1?c'~.onomic Development in
India - Ann/j8.sis. Kc/~o~l.s, t'o.l~cy Doc1rmm1.s (200 1) (Ed). Academic Foundation. Ghaziabad, Vol.36. p.
-0.28 per cent per annum as compared to a growth rate in per capita availability
of 1.20 per cent pel anrlurn during the 1980's.
In the case of food distribution, PDS has often being criticised for
providing to the citizens food grams which are of extreniely poor quality. This
apart, corruption at various stages of the distribution channels often results in
deterioration in the quality of supplies. The low level of commissions paid to
PDS agencies in the distribution network force them to substitute good quality
cereals by poorer qualities and to sell the good quality cereals in the open
market.
Though the rnargin on dealings in the public distribution centres (ration
shops) is low. the majority of customers are satisfied with the public distribution
centres managed by the consumers' cooperative stores. 37 customers (12.33 per
cent) were receiving their. PDS supplies from the ration shops managed by the
stores. Of this, 36 custorners (97.30 per cent) expressed satisfaction with the
functioning of public distribution centres. 153 customers (61.94 percent)
receiving PDS supplies from pr~vate dealers opined that the involvement of
consumer cooperatives in the management of public distribution centres are
preferred by them
As the custorners have expressed their desire fisr the involvement of
consumer cooperatives in the public distribution system, the low margin on the
dealings in PDS items are to be compensated by the government or by the
panchayathi raj ~nstitu'tions. The presence of consumer cooperatives in the
management of public distribution centres will create a good image to the
consumers stores
6.29. Low Stock Productivity
A consumer cooperative store cannot survive unless it achieves a stock
productivity of at least 80 per cent and preferably 100 to 120 percent in the
present cost structure. In the developed countries, minimum stock productivity
has been kept around 500 per cent (Misra, 1995)". The average stock
productivity was less than 80 percent in eleven stores (45.83 per cent). The low
productivity in eleven !stores indicates that margin and stock turn rate are not
satisfactory in the consumer cooperative stores.
6.30. Stiff Competition
One of' the distinct characteristics of the nineties is the shift in the
economic growth paradigm from comparative advantage to competitive
advantage (Shanna and Nair, 1999)". With the adoption of economic reforms
in India since 1991 and .with greater emphasis on liberalisation, operation of
market forces. structural adjustment and overall stabilisation, the cooperative
sector has also to gear itself up to face this competitive environment
(Viswanathan. 1997)".
In order to compete successfully with the private sector, the cooperatives
have to function as business unlts and have to be cautious of cost and quality.
The priman consumers' cooperative stores in Kerala are facing stiff
competition from the private shops and supermarkets, margin-free shops, retail
~ - - ~ --
'6MisraS.C (1995). o j i c i ~ . p.41. " Shamla S S and Na~r h1.K. (1999). "Economic Reforms in India and Competitiveness",
Prod2ru1ivi1~~. Vol 40. No 3. October-December. p.355 38 Viswanathan B S (1997). Coopernt~ves vis-a-vis Liberalised. Economic Environment.
Solrvmlr, / 3"' Indlcln ('ooperatrvr ( ' l~ngress . National Cooperative Union of India. New Delhi. p. 17
outlets known as Maveli Stores and Supplyco Supermarkets managed by the
State Civ~l Supplies Corporation, department stores and retail branches of
district wholesale stores, Triveni stores and Neethi stores run by the
Consumerfed. As the government provides subsidy to the State Civil Supplies
Corporation. the pnces charged by the Maveli stores are comparatively low. As
long as goods supplied through the Maveli stores are subisdised, the consumer
cooperatives are to be subsidised by the government. The consumers
cooperative sector ha;s to evolve new strategies to face the increasing
competition in the liberalised economy.
6.3 1. Defective Accounting and Audit Practices
The accounting system adopted in consumer cooperatives are elaborate and
expensive. At the same time, it IS reported that it is not able to provide the
information for taking right decisions at right time. (Himachalam and
Narendrakumar. 1994)". In Kerala, the accounts and audit practices in
consumer cooperatives are regulated by the provisions of Kerala Cooperative
Rules. Anand Declaration 2000 (('ooperative Initiative Panel) has resolved that
the law must prov~de for the appointment of Chartered P~ccountants as auditors
of cooperative soc~eties.
Authorities of 18 consumers' stores (75 percent) revealed that the audit
of accounts are in arrears for more than two years. Elev~:n societies (45.83 per
cent) complained that the audit fees based on the turnover of the store affects the
profitability of the stores. 19 stores (79.17 per cent) opined that audit report
does not contain any suggestions for the improvement of business in the stores.
23 stores (95.83 per cent) are of the view that audit by chartered accountants
would be useful and less expensive to the stores than the audit held by the
cooperative department of the government. The present system of accounting
methods is to be replaced by the management accounting system. The audit
should be completed within three months after the end of the accounting year.
The critical assessment of the efficiency in the management of assets and
liabilities of the societies may also be one of the objectives of audit.
6.32. Lack of Professionalisation of Management
The National Conference on Consumer Co-operatives convened by the
National Cooperative Consumers Federation of India in association with the
International Co-operative Alliance in 1995 at New Delhi recommended that
development of professional of management in the consumer cooperatives
should be given first priority of the movement. In all the :24 selected store, there
were no managers or secretary wlth professional qualifications in management.
Among the members of the management committee there were no graduates in
five stores (20.83 per cent). The members of Board of Directors of all the 24
stores had not attended any h-aining programmes or management development
courses. T h ~ s supports our hypothesis that absence of sound policies and
professionalisln In management adversely affect the financial performance of
consumer cooperative stores and satisfaction of customers. The management
body and other supporting; staff need regular training to improve their skills and
performance (Amin. 2001)4~. Absence of books, reading :materials, management
courses in retail trade r:tc act as a hindrance for developing professionalism in
management. The draft National Policy on Cooperatives (govenunent of India,
2001) states that the government recognises the need to !support the cooperative
movement to develop human resources, cooperative education and training,
appropriate technolog~es and ~nfrastructural facilitie:~ so as to promote
professional management in cooperatives particularly at: the primary level for
their greater functional and operational efficiency. As primary consumer
cooperatives in Kerala lacks professionalisation in mana,gement, it is necessary
to impart profess~onal education and training.
6.33. Miscellaneous Issues
a) Inconven~ent working hours:- In six consumers' stores, (25 percent) certain
customers were not satisfied with the duration of working hours. Though it
would be expensive for the stores, the noon interval is to be removed.
b) L,ack of credit facilities:- The customers in eight stores (33.33 percent) were
not satisfied with the denial of credit facilities. The store authorities should
formulate appropriate schemes to grant credit, on the security of trade
deposits collected from the customers.
c) Lack of purchase rebate: The member-customers of eight stores (33.33 per
cent) revealed that they are not getting any purchase rebate as members of
the store
d) Absence of home delivery of the goods: One of the reasons for the
preference assigned to private shops is the home delivery made by these
shops. The consumer cooperatives should collect purchase orders from
customers over telephone and goods should be delivered at home. Only one
store (4.17 per cent) has implemented this method for t:he time being.
e) Irregularity in the payment of' dividend:- Members of 21 stores (87.50 per
cent) were not satisfied with the nature of dividend payment. Cooperative
laws should be amended to enable the consumer store,s to create reserves and
~rtilise these reserves for the payment of dividend, even in the years of
accidental loss
f ) Reluctance to collect the feed back from customers:- 298 customers (99.33)
had informed that they had not given any suggestions for the improvement in
c,ustomer services of the stores. The authorities of 17 stores (70.83 per cent)
admitted that they were not collecting regular feedback from the customers.
The consumer stores may organise annually the customers' meet on a day in
the co-operative week and the evaluations and suggestions of customers are
to be entertained.
g) Poor wage structure:- The wage structure in 13 stores (54.17 per cent) were
not attractive to the employees. The sala~y paid to the employees appointed
on a temporaly basls is very low. Though there are financial constraints to
the stores. it is necessary to formulate some attractive incentive schemes,
based on the productivity of employees so as to boost the volume of sales
and profitability All the primary consumer cooperative societies in the state
may fonnulate a plan to implement the uniform wage !structure in accordance
with the provisions of Section 80 in the Kerala Cooperative Societies Act.
h) Lack of preferential treatment:- The government of India's draft national
policy 011 cooperation (2001 ) recognises the need to provide preferential
treatment to the cooperatives engaged in consumer business, especially in
rural areas. The authorities of 22 stores (91.67 per cent) revealed that they
are not receiving ar~y preferential treatment in their business. The
government, seml-government and panchayathi raj institutions should give
some preferential treatment to the consumer cooperatives in the matter of
purchases.
Though consumer cooperatives are operating in the midst of problems,
for the protection of the interests of consumers in llndia, they are to be
strengthened Consumer is not the king in our country, but a vehicle
conveniently used by businessmen for driving towards the goal of profit
maximization. (Singh and Sah, 2001)'". Kurian, in his valedictory address at
the International Symposium on Management of Rural Cooperatives of Institute
of Rural Management, Anand (December 7-1 1, 1992) said, "When we have
provided unrestrained freedom to multinationals and big, business houses, is it
not essential that we have strong. vital and competitive cooperatives to ensure
that our economy retains a place for the poor and to ensure that something more
humane than the "market" has a place in our economy? For the market, 1 fear is
little more than another name for greed and exploitation". Whenever the
government and coopera.tive leaders pay attention to the above mentioned
problems and nnplen~ent appropriate remedial measures, the consumer
cooperatives can meet the: challenges of the market economy and can play an
effective role in the protection of consumer interests in India. 4
41 Singh. L P and R.K. Sah (2001). 'Business Ethics in India: An overview", Southern Economr.sl. Vol.40. No. 10. Scptembcr 15. p.5