Political And Bureaucratic Interference Business Essay

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The small scale industries are achieving greater importance day - by - day. Starting a small scale business is a reality that has created wide open opportunity and success for those who decided to take the plunge just it can for you. Setting up a small scale business is the easiest and least expensive way. By starting a small scale business a person can easily become an entrepreneur. An entrepreneurship has many potential rewards and carries unique challenges. To start a business on your own the thing which has to be understood is the environment to set up an enterprise of your own and to run a successful business it is necessary to learn the existing and potential customers, competitors, economic conditions of market place. An entrepreneur requires a continuous flow of funds not only for setting up of business but also successful operation as well as regular modernisation of industrial unit. To meet the needs of small scale industries the government is undertaking several steps like - setting up banks and financial institutions, formulating policies and schemes, etc. the government has announced a series of steps to promote small scale industrial development by way of rationalisation of the policies to encourage the new entrepreneurs as well as existing units. Any unit or new entrepreneur establishing or implementing the project needs a complete set of plan and finance for making it successful.

AMUL - The Taste of India


AMUL (Anand Milk Union Limited) is an Indian dairy product company based on Anand in the state of Gujarat, India. Amul is a word that is derived from the Sanskrit word Amoolya, means invaluable. The dairy product company AMUL was formed in 1964. AMUL is a brand which is managed by a cooperative body - Gujarat Cooperative Milk Marketing Federation Limited (GCMMF) which is today jointly owned by 3.03 million milk producers in Gujarat. The India's White Revolution spurred by AMUL made India the world's largest producer of milk and milk products. AMUL in its process has become the largest food brand in India which has ventured into overseas markets also. The cooperative body (Kaira District Cooperative Milk Producers Union Ltd.) formed by Polson dairy in small town of Anand (Kaira District of Gujarat) was registered on December 1, 1964 for the response to exploitation of marginal milk producers by traders and agents of the only existing dairy and the producers of milk had to travel long distances to deliver milk which often get soured in summers. At that time monopoly rights are given to Polson to supply milk to Bombay city by collecting it from Anand. These unfair and manipulative trade practices angered the farmers of Kaira and these angered farmers approached Sardar Vallabhbhai Patel under the leadership of local farmer leader Tribhuvandas K. Patel. Tribhuvandas K. Patel advised these angry farmers that they should form a cooperative body and they should supply milk directly to Bombay Milk Scheme instead of Polson who supply milk to Bombay at lower prices.Morarji Desai was sent by Tribhuvandas K. Patel to organise the farmers. The cooperative body to collect and process milk was setup in 1946 when the milk farmers of the area went on a strike. Cooperatives were formed for villages too and since most of the producers were marginal farmers therefore the milk collection was decentralized. Marginal farmers are those who could deliver atmost 1 - 2 litres of milk per day. Success at the cooperative's dairy soon spreaded in Anand's neighbourhood in Gujarat and within a short span, five other unions in other districts - Mehsana, Banaskantha, Baroda, Sabarkantha, and Surat were setup.

Amul milk Model is a three - tier cooperative structure which was setup to delegate various functions. Milk collection is done at - Village Dairy Society, milk Procurement and Processing, and Milk Products Marketing at the State Milk Federation. It ensures that economies of scale is achieved and also helps in eliminating the internal competition. The model was evolved in Gujarat and then replicated over the country. Amul Model is responsible for:

Collection of milk

Milk production

Procurement and Processing of milk

Marketing of milk and milk products

Functions of Amul

The main functions of Amul are:

It supplies milk to the District Milk Union

It collects surplus milk from milk producers of the village

Make payments based on quality and quantity of milk

It sells liquid milk for local consumers of village

Amul Brand


Amul is the largest cheese and pouched milk brand all over the world and it also the largest exporter of dairy products in the country. It is exporting a variety of products that includes Ghee, Cheese (Paneer), whole and skimmed Milk Powder, UHT Milk and Indigenous Sweets. A few countries of South African countries, Hong Kong, Australia, USA, West Indies, and Africa are some of the major markets. Amul was named as the Most Trusted brand in the sectors of Food and Beverages in the year 2011and "among India's top 20 brands Amul is at the No.1".

Amul Products


The products of Amul range includes milk powders, ghee, cheese, Masti Dahi, Paneer, flavoured milk, buttermilk, ice cream, Amul Pro brand others. India's first sports drink - "STAMINA" was launched by Amul in January 2006. Amul introduced a chocolate milk brand Kool Koko in August 2007. Amul's sugar free Pro - Biotic Ice - cream won The International Dairy Federation Marketing Award for 2007.

Hardships and Obstacles Incurred in the journey of AMUL


The dairy cooperative is now required in competing the open market as with opening up of economy the preferential treatments of yesteryears are no more available with the cooperative body. In the early years of Amul in its journey it had to face a large number of problems and with each and every problem came an opportunity. The milk products and supplementary drinks that had suffered from lack of marketing and distribution facilities became encumbrance. These obstacles and hardships instead of letting them down used as stepping stones for its expansion. Some of the problems faced by Amul are as follows:

Political and Bureaucratic Interference:

The dairy cooperative bodies are required to function as independent business entities as the cooperative laws are unable to provide the protection to these cooperative bodies. In addition with the developed countries minimum laws are required to control the affairs of the cooperative bodies and therefore this dismal state of affairs was ended up by the most important intervention needed for professionalising the functioning of the dairy cooperative bodies, i.e., to liberalise them from the clutches of the archaic cooperative laws enacted to establish State control over the affairs of the cooperatives.


The quality of the products is the biggest challenge for the dairy cooperative bodies as in today's world where the highly competitive markets exist the demand for superior quality products is on the top. To meet this demand is a great challenge for these dairy cooperative bodies as they are aware of this trend. As India is the highest producer of milk at lower cost there is a very large scope for these dairy cooperative bodies to enhance their share in the world market. The product quality to match the international standards is of the biggest need to capture the world market and to retain their share in domestic market also the improvement in the quality of the products are required to be enhance.

Manpower and their Skills

One more problem that is faced by the dairy cooperatives is the excess of manpower and their low level skills. In order to meet the market demand the dairy cooperatives need to shed excess flab in manpower but the skills of these employees need to be improved to benchmark the desired performance. The employees are needed to be educated about the merits of scientific and modern management as the dairy cooperative bodies do not have the capacities to hire high calibre professionals.

Cattle - from Stumbling to Building Blocks

For the farmers of Kaira district dairying was a subsidiary occupation and even then the contribution to the farmer's income of Kaira district was not as prominent as his attachment to dairying as a tradition handed down from one generation to another generation. The milk yield from animals, that were maintained on the basis of the by - products of the farm was decidedly low. The little produced together with the lack of facilities to market rendering to the scientific practice of animal husbandry was irrational as well as unaffordable. The Kaira Unions broke the vicious cycle reinforced by generations of beliefs by not only taking the responsibilities of collecting the surplus milk from market but also by providing the members with every provision to enhance production. Thus the Kaira Unions has full - fledged machinery geared to provide animal health care and breeding facilities.

This is how AMUL was ranked among top by defeating the challenges faced by them in their journey.




Submitted To: Submitted By:

Mrs. Reema Das Gour Sonali Trehan


BBA - B (2nd Sem.)