A.     Share Capital


   3.1    TRIFED was set up with an initial share capital of Rs.20 Crores.  Subsequently, this was increased to Rs.50 crores in 1990-91 and later on to Rs.100 crores in 1993-94.  Its paid up share capital as on date is Rs.99,98,55,000 wherein Government of India has provided major contributions.  Besides, contribution made by the Government the other sources of income of TRIFED are Bank borrowings, Reimbursement of loss under Price Support Scheme and Internal Accruals.  Since its set up the Government of India has provided financial contributions in the following manner :


Year                 Amount contributed                  Year                 Amount contributed

                        (Rs. In Crores)                                                             (Rs. Crores)

1988-89                       7.00                             1994-95                       9.00

1989-90                       3.00                             1995-96                       10.75

1990-91                       8.00                             1996-97                       10.75

1991-92                       7.00                             1997-98                       23.00

1992-93                       7.00                             1998-99                       6.00

1993-94                       8.00                             1999-2000                   0.025

3.2       During the course of evidence when the Committee pointed out the allocation  of  fund  by the Central Government to TRIFED right from 1998-99 as very small, the Managing Director explained:-

“We are trying to push up the share capital of this particular cooperative corporation.   We are trying to make out a case.  This is a matter, which has been seized of by the Government.  We are trying to convince them by saying that if we depend on borrowed capital for collecting surplus Agriculture Produce and MFP, the prices to be paid will suffer.  The Ministry of Tribal Affairs and TRIFED are trying hard to get around Rs.300 crores so that we are able to play a decisive role in the entire thing.”


3.3              As a long term measure to mobilise funds for implementing its objectives, schemes and programmes TRIFED has submitted a proposal for enhancement of its authorised share capital from Rs.100 crores to Rs. 150 crores in instalments by 2004-05.

3.4              According to present and perspective action plan of TRIFED, the extent of financial resources required during the next three years is as follows :


Year                Budgeted                    Requirement for         For Other                    Total

                        Procurment                 Commercial                activities                     (Rs. Crores)

                        (Rs. Crores)                 Operations                   (Rs. Crores)                

                                                            (Rs. Crores)


2001-02           220.00                         108.00                         39.35                           147.35


2002-03           253.00                         115.00                         53.95                           168.95


2003-04           291.00                         124.00                         64.15                           188.15



B.        Financial Performance

3.5       TRIFED has been steadily expanding its activities. From a modest turn over Rs. 9 Crores in 1988. TRIFED has been albe to achieve a turnover of Rs. 25 Crores in 2000-2001 (upto 30.11.2000). There has been a steady expansion in the number of commodities dealt with by TRIFED as also the tribal areas covered. The details of annual turnover of TRIFED since 1988-89 is given below:

Financial Year                          Turn Over (Rs. In Crores)

1988-89                                                           9.26

1989-90                                                           18.43

1990-91                                                           13.84              

1991-92                                                           25.64

1992-93                                                           43.28

1993-94                                                           47.81

1994-95                                                                                                                     87.02

1995-96                                                                                                                     111.15

1996-97                                                                                                                     132.58

1997-98                                                                                                                     109.80

1998-99                                                                                                                     49.18

1999-2000                                                                                                             66.28

2000-2001                                                                                                             25.60

(upto 30.11.2000)


3.6       During the evidence when the Committee desired to know the reasons for the decline in annual turnover, the Managing Director explained:

“About the downward trend in the turnover, one of the important reason is that we are trying to shift our emphasis from collection of surplus Agriculture Produce to Minor Forest Produce to a very great extent. It may appear to us as if there is no particular input. In agriculture produce, we have to put many inputs like fertilizer, manure, chemicals etc. But the cost of collection of MFP is the labour of the tribals, which is very important. Sometimes he has no other go. He or she has no other source of income available apart from having to collect them from the plants and trees. The other reason is that we have become very strict that collection of items should be from the tribal sources only. We are extra particular about getting it from the tribals. There is a lack of organizations like the Tribal Development Corporation, LAMPS and so on. They are not in existence in many places. We are trying to accommodate the alternative organisations like Samraksha Samitis, Gram Sabhas. Sometimes NGOs of good repute are actually working for tribals or tribal organisations themselves in collecting it. Again we have become very quality conscious because in the past whatever was being done, people unscrupulously were taking advantage of the system. Another reason is also slightly the availability of finances and the question of training the tribals in the particular aspects. In doing such things, may be our turnover has also suffered a little. But, we shall certainly keep your comments in mind. We will certainly mount and try and see that the turnover does not drop down and that we really serve the purpose for which we have been created.”           

3.7       When enquired about the difficulties faced by TRIFED in its financial operation, the Committee were informed that in addition to its share capital, TRIFED has to  depend largely  on bank borrowing at commercial rate of interest.  The Federation has paid a sum of Rs.10.04 crores in the year 1995-96 and Rs.6.07 crore in 1996-97 as interest and a payment of Rs.2.10 crores was expected in 2000.  At times TRIFED had to restrict its operation because of non-availability of funds mainly because of erosion of its net worth by abnormal losses and on account of exhausting its bank limits.  The attitude of bankers to such venture is not very positive and unless Government supports by (i) extending Government guarantee against TRIFED’s borrowings and (ii) by enhancement of its share capital and its release, the operation of the perspective plan will not be possible.

3.8       In the post evidence reply to a question of inadequate resources at the disposal of TRIFED and TDCCs, the Committee were informed by the Ministry of Tribal Affairs that resources at the disposal of the TRIFED are  not inadequate.  In fact, it is more than adequate.  What is required is proper utilization of resources in a professional manner to ensure that while proper remunerative price is given to the tribals, TRIFED is also able to make some profit to sustain the establishment due to its national scale of operation whereby products from one place can easily be transported by TRIFED to another part of the country where these would fetch much better price.  TRIFED has already a paid-up capital of Rs.99.98 crores.  The Government has in addition paid so far an amount of about Rs.13 crores under the price support scheme which is an additional amount to the paid up share capital.

3.9       As regards TDCCs, the State Governments are supported to ensure that the TDCCs function properly.  The Ministry also has a scheme of providing assistance to the TDCCs for enhancement of working capital, construction of godowns, setting up of processing units and share capital contribution.


3.10     The Committee note that the present paid up share capital of TRIFED is Rs.99, 98,55,000 wherein Government of India has provided major contributions.  TRIFED’s other sources of income include bank borrowings, re-imbursement of loss under Price Support Scheme and internal accruals.  As a long term measure TRIFED has also submitted a proposal to the Government of India for enhancement of share capital from Rs.100 crores to Rs.300 crores.  The Committee feel that the Federation is too much dependent on Government funds and borrowed capitals and to translate its objectives into practical reality TRIFED will require adequate capital at its disposal.  The Committee, therefore, urge upon TRIFED to explore new vistas of mobilizing funds by launching Public Deposit Scheme, subscribing to the share  capital of other Cooperative Institutions as well as Public/Joint Sector enterprises.  The Committee  recommend that TRIFED should also invite wealthy tribals, other tribal cooperative societies and institutions to subscribe to the share capital of TRIFED and should not hesitate to amend its bye-laws wherever necessary so as to raise funds from the capital market.

3.11     The Committee also feel that the turn over of the TRIFED has been declining during the last three years.  The Committee, therefore, strongly recommend that the Government of India  should enhance the share capital of TRIFED suitably to tide over its present financial crisis.  The Committee also recommend that in order to sustain TRIFED financially Government should extend guarantee against TRIFED borrowings in the event of exhausting its bank limits.

3.12     It is seen from the present and perspective action plan of TRIFED that the outlays for Budgeted Procurement for the years 2001-02, 2002-03 and 2003-04 are Rs.220 crores, Rs.253 crores and Rs.291 crores respectively. Whereas the total outlays for these corresponding periods (2001-02, 2002-03 and 2003-04) for commercial operations and for other activities are Rs.147.35 crores, Rs.168.95 crores and Rs.188.15 crores which clearly shows a differential amounts of Rs.72.65 crores, Rs.84.05 crores and Rs.102.85 crores.  The Committee feel concerned about the occurrence of such a big differences in the Budgeted Procurement and total outlays of expenditure when the Federation is facing financial problems and desire that such an outlay plans should not be envisaged in future.  The Committee recommend that allotment of funds should be sector specific and funds should also be allotted to socio-economic welfare scheme for the tribals.