While milk makes up a large portion of the Indian diet with growing incomes and urbanization, it is however by no means a luxury food. Milk or its products is something consumed practically by every class. Given a chance, even the poorest person would love to spread desi ghee rather than vanaspatti over his chapattis.
Household consumer expenditure survey data for 2007-08 (July-June) just released by the National Sample Survey Organization’s (NSSO) shows that milk and derived products accounts for 14.9 percent of the average rural monthly spending on food, while for urban India it is 18.3 per cent. It is next only to cereals but ahead of vegetables, edible oil, egg, fish and meat, pulses fruits etc. when accounted for individually.
During the recent past, the hype about flood of spurious milk and milk products in the market, created by print and electronic media lead to greater demand for packaged milk and milk products. Therefore more number of milk processing units is coming up in the country. The financial assistance for setting up of these units is being provided by various financial institutions including banks.
In the field of milk processing units for of following activities can be set up.
A project can be prepared by a beneficiary in consultation with technical persons from Government departments or private entities. Before preparation and submission of the Project report to the financing institution, beneficiary should also visit existing units, and discuss the profitability with the practicing entrepreneurs. Preferably beneficiaries himself/herself should undergo training on technical and financial aspects of the project.
The project report should include information on land, availability of portable water, machinery, processing details, marketing aspects, training facilities, experience of the entrepreneurs and type of assistance/subsidy available from state/centre Government. The project should also include information on the type of machineries with their capacities to be purchased, processing performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the entrepreneur, requirement of bank loan, estimated annual expenditure, income profit and loss statement, repayment period etc. can be worked out and shown in the project report.
Many a times, the project submitted provides all the required technical information, but the presentation of the project report may be such that it might confuse the banker or may not contain the required economic appraisal resulting in delay or even rejection. The project should be realistic financially i.e. neither over nor under estimated. While scrutinizing the loan application for sanction, the banks are required to examine the project for its technical and economic feasibility.
This would briefly include:
This would briefly include:
In order, therefore, to cut short the delay and obtain optimum finance by providing reasonable figures, the project should contain the following information.
During the recent past due to recession, financial institutions have become much more vigilant and want to put in maximum number of safe guards before sanctioning the loan. In that case the specific requirements from the financial institutions need also to be incorporated in the project report.