Money Saver Scheme's
MGP’s Unique Distribution System

Mumbai Grahak Panchayat's Unique Distribution System not just provides quality goods to its members every month but also helps them become aware and alert consumers.

On Gudhi Padwa Day (Maharashtrian New Year) in April 1975, this distribution system was inaugurated by distributing Coconuts to 25 families. 29 years later, this system distributes about 300 items to about 20,000 families.

MGP’s purchase distribution arm, Janata Madhyavarti Grahak Sahakari Sangh (JMGSS) was registered in 1978 and has a monthly average turnover of two crore rupees. Its principle is purchasing only as much as the demand. It does not have a shop anywhere but leases few warehouses within as well as outside the city. There are 4 distributions in one month (one per week). This means that the cycle of ordering the goods by members; the purchasing, billing, receiving cheque from members; picking up the goods from the market and paying the traders is managed well within the credit period of 8 days !

Thus, MGP has eliminated the ‘middleman’ and established a direct link between consumer and seller. This ensures best quality goods at reasonable prices for the consumer.

The large order (15-16 trucks of wheat, 19,000 kg of chilly powder) per month attracts many traders. But MGP deals with only those who are sales tax payers. MGP also pays sales tax to bring the goods to the warehouses. The goods are distributed on a No Profit No loss basis. About 6 to 6 ½ % of the total turnover amount is retained for distribution expenses.

There are committees and sub-committees which monitor this system.

A comparatively new purchase and distribution arm, Thane Grahak Mahasangh, caters to those buying groups, outside the city limits

A member saves about 15% to 20% on his household budget.

Purchase Committee

The enormous responsibility for purchasing monthly household items for 20,000 families is ably borne by JMGSS Purchase Committee.

The Purchase Committee has 12 voluntary women activists and a full time Purchase Officer. This helps maintain transparency in the purchases.

Priority is given to direct purchasing but the enormous quantity required cannot be obtained just from a couple of farmers. So, wheat is purchased directly from the wholesale market at Gondal, Saurashtra. Turmeric is purchased from Sangli, Chilies from Guntur, Hyderabad and Hubli, Jaggery from Kolhapur, turdal from Madhi, pulses and legumes from Mumbai Wholesale Market.

Certain items are manufactured according to requirements – like Shaving cream, washing soap, detergent, jaggery and single polished rice.

While purchasing, some guidelines are followed:

  • Good quality item
  • Its price
  • Timely availability
  • Shelf life

The items are first tried out by the Purchase Committee and even tested on occasion. Sensory evaluation is done for food items, at times cooked at home.

Small producers are encouraged for items like soap, shampoo, ghee, floor cleaner etc. Health items like soyabean, plain jaggery, unpolished rice, dry fruits, ayurvedic tonics are also given from time to time.