Mall Gaon

Fair price shops in Gujarat turn malls, for a new shopping experience

Shopping in villages has never been this convenient. Nor has it looked this different.

Take Narubhai Khatik8217;s fair price shop in Alipura village, for instance. For the past 20 years, he sold wheat, rice, sugar and kerosene among other necessities. Now his shop offers a baffling choice of packaged food, cosmetics, mobile recharge coupons, non-subsidised LPG cylinders and fertilisers. And, his modern fair price shop now goes by another name: rural mall.

Malls like this were set up in April this year following the state civil supplies department8217;s initiative to promote new-look retail stores in rural areas where villagers could get everything under one roof. Earlier, the department had imposed certain restrictions on business from FPS premises.

Narubhai8217;s rural mall is not the only one in Gujarat. Since the scheme was launched in April 2006, 520 fair price shops across the state have been upgraded into malls. The state government plans to convert another 1,000 of these shops by the end of the current fiscal year. There are a total of 15,993 fair price shops in the state.

To encourage more shop owners to upgrade their stores, the state government has tied up with Dena Bank, Bank of Baroda and State Bank of India to advance loans at 9.5 per cent for Rs 2 lakh and 10.5 per cent for loans above Rs 2 lakh. Principal secretary, Food, Civil Supplies and Consumer Affairs SK Nanda says the scheme is finding many takers. So heartened is he by the response that he hopes to achieve his target of bringing another 1,000 FPS within the scheme by March 2007.

Competition is finally becoming a practice too. In a bid to attract customers, these newly converted shops have slashed the rates of some of the goods as they are able to sell below market price, having got their supplies directly through the distributors of manufacturing companies. For instance, a pack of six Wheel soap cakes sold by a provision store owner for Rs 31 is available at the rural mall for Rs 29. 8220;We share the profit margin with the rural customers,8221; says Narubhai.

It8217;s also meant that the income of FPS owners has shot up. Narubhai says he earlier earned about Rs 2,500 as commission from selling subsidised goods. But ever since he8217;s transformed his shop, his income has more than doubled. Now, two of his sons have joined his business as well.

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The state has already reserved 50 per cent of the FPS licences for self-help groups in rural areas. Hindustan Lever Limited, Indian Tobacco Company are already supplying their products to rural malls while Videocon is eager to join, says Nanda. The Centre has now approved a proposal to study Gujarat8217;s rural mall experiment to replicate it in other states.