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1. Introduction
National milk output during the year 2007-08 reached the level of 104.8 million tonnes
(provisional). This has not only placed the country on top in the world, but also
represents sustained growth in the availability of milk and milk products for the
burgeoning population of the country. Dairying has become an important secondary
source of income for millions of rural families and has assumed the most important role
in providing employment and income generating opportunities. The per capita
availability of the milk is 241 grams per day.
2. Objectives
Financial assistance is extended for establishment / renovation of milk booth i.e. Dudh
Sarita etc. to the educated unemployed youths with the following objectives.
• To provide good quality milk and milk products to the consumer of the area under
hygienic conditions.
• To provide employment to the youths in urban area.
• Renovation/Replacement of old milk booths to maintain neat and clean condition
in the booth.
3. Scheme Area
4. Beneficiaries
The milk booth (8’x6’) is made of MS steel, the booth will have a small size show case/
cupboard (3’x3’x1.5’) and a platform (5’x1.5’). The unit cost is Rs.56300/- and the
details are given in Annexure-I. Upto 90 litres of milk per day sale is a part time job
and the booth owner can utilise remaining time for other works like sale of bread, eggs,
biscuits, snack packets, magazine etc. He can also run a STD-PCO booth and earn
more income.
6. Financing Bank
For obtaining bank loan, the beneficiary should apply through the dairies to the nearest
branch of a commercial / Cooperative / Regional Rural bank in their area in the
prescribed format which is available in the branches of financing banks. The technical
officers attached to the bank or the bank manager can guide the beneficiary in
preparing the project report for obtaining the bank loan. Banks can avail refinance for
this project from NABARD. Since the beneficiaries are educated unemployed, a margin
of 15% of Total Financial Outlay (TFO) is considered. The loan amount works out to be
Rs.48000. However, down payment & bank loan shall be decided by financing bank as
per RBI guidelines.
7. Working capital
The dairies will sell/supply the milk and milk products to the booth owner on “cash &
carry” basis for which there is a need to provide working capital. The requirement of
working capital for a booth selling 90 litres of milk per day is worked out at Rs.37000/-
(Annexure-II). However, the banks may assess & extend working capital on the basis
of need of each booth.
8. Interest rate
The rate of interest on both the term loan & working capital shall be decided/fixed by the
concerned financing bank to the ultimate beneficiary. Here for calculation of cash flow
and repayment an interest @ 12% per annum has been assumed.
The assumptions and various techno economic parameters for working out the
economics of the milk booth are given in Annexure - III. The detailed economics of the
scheme is given in Annexure-IV.
The cash flow analysis covering the Benefit Cost Ratio (BCR), Net Present Worth
(NPW) and Internal Rate of Return (IRR) has been worked out for the project model
presented in Annexure-IV. In brief, the financial parameters are as under:
BCR:1.83:1
NPW:Rs.84508
IRR :>50%
DSCR : 1.78
11. Security
The repayment period depends upon the gross surplus generated. The loan shall be
repaid in suitable monthly/quarterly installments within a period of about 5 years without
any grace period. From Annexure-V it is observed that after repaying bank loan and
interest thereon, sufficient amount (avg. Rs.21000/year) is left to the beneficiary during
the project period besides the stock value of assets Rs.19000/- at the end of project
(after 5 years). For assured repayment a tripartite agreement between the financing
bank, dairy and the borrower may be executed.
13. Insurance
The financing bank may ensure that the borrower takes adequate insurance of assets
created, subject to availability of insurance cover.
14. Conclusion
Annexure-I
Establishment of "Dudh Sarita" Milk Booth
Project Cost
No. Items of investment Amt. Rs.
1 Steel Booth (8'x6')
a) Booth 20000
b) With small size 3'x3'x1.5' show 3500
case/almirah & 5'x1.5' platform
2 Fridge 200-250 lit. (1) 13000
3 Ceiling fan (1) 1000
4 Furniture - stool or chair (1) 300
5 Deposit with Dairy 6000
6 Electrification 1000
7 Margin money for working capital 9000
8 Miscellaneous/contingencies 2200
Total Project Cost 56000
9 Margin money (15% ) 8500
10 Bank loan 47500
Total project cost 56000
Note
Item-wise costs are average & indicative costs only. Banks are at liberty to vary
the costs and also the items of investment to any extent depending upon the local
conditions and subject to financial viability/bankability.
Annexure-II
Requirement of working capital - Dudh Sarita
Note
1. The Dairies sell milk to booth owner on cash & carry basis. Margin money for working capital has been
capitalised @ 25%. Cash Credit limit is to be given for the remaining amount
2. For the purpose of calculation of interest on cash credit, the outstanding amount of Rs.22400 (80% of the limit) has been
assumed throughout the project period
A.
Income criteria per booth
Quantity Commission
i (Rs)
ii Liquid Milk 90 L/day 1.5
iii Ghee 1 Kg/month 10
iv Shrikhand 1 Kg/month 10
v Table butter 1 Kg/month 10
vi Paneer 1 Kg/month 10
vii Curd 1 Kg/day 10
viii Peda 1 Kg/month 10
Note: Seasonal products like flavoured milk, lassi, butter milk may also be included based on demand
B.
No. Income calculations
Product Amount
i (Rs)
ii Liquid Milk 4050
iii Ghee 10
iv Shrikhand 10
v Table butter 10
vi Paneer 10
vii Curd 300
Peda 10
Total income per month 4400
Total annual income 52800
C.
No. Expenditure per annum
Annexure-IV
Annexure-V
Repayment Schedule