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AN ECONOMIC EVALUATION OF INVESTMENT ON AONLA (Embalica officinalis G.) PROCESSING UNITS IN PRATAPGARH DISTRICT OF UTTAR PRADESH

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Title AN ECONOMIC EVALUATION OF INVESTMENT ON AONLA (Embalica officinalis G.) PROCESSING UNITS IN PRATAPGARH DISTRICT OF UTTAR PRADESH
 
Creator KUNDAN KUMAR SINGH
 
Contributor SEEMA
 
Subject costs, productivity, manpower, investment, markets, fruits, economics, capital, pickles, physical control
 
Description Aonla or Indian gooseberry (Emblica officinalis G.) is an indigenous fruit of
Indian subcontinent and its fruit is a rich source of vitamin C. It is highly valued among
indigenous medicines. Its hardy nature, suitability to various wastelands, high
productivity, and nutritive and therapeutic value has made aonla an important fruit. It
can be judged from the fact that area under aonla has expanded rapidly in the past
couple of decades in India as well as in the Uttar Pradesh state. It was being cultivated
mainly in the Pratapgarh, Allahabad, Raibarely and Banaras districts of Uttar Pradesh,
but during the past decade, its cultivation has spread over the entire state. Currently,
area under aonla in the state is around 8,000 hectares with the annual production of
about 56,000 tonnes. The present study has been carried out in the Pratapgarh district of
Uttar Pradesh. The study examined various economic analysis of aonla such as costs
and returns structure of aonla processed products, benefit cost ratio, economic
feasibility of small and medium scale aonla processing units and also evaluated the
problems and constraints in procurement of raw material and marketing of processed
products in the year 2013. A sample of 50 medium scale unit and 30 small scale
processing unit was drawn randomly from 5 tehsil of Pratapgarh. The study has been
done on evaluation of costs and returns from aonla processed products viz; murabba,
pickle, candy and powder under small and medium scale units. The study has shown
that total capital requirement for land and building together was around Rs.11.00 lakhs
and Rs. 20.15 lakhs for small and medium scale aonla processing units respectively.
Aonla processing requires a range of equipments and machinery in preparation of
murabba, pickle, candy, powder etc. so the expenditure for machinery and equipment
worked out to Rs. 4, 49,000 for small scale units and Rs. 9,35,000 for medium scale. A
total expenditure of Rs.16.09 lakhs and Rs.30.15 lakhs has been incurred toward fixed
investment for small and medium scale. The small scale processing units processed on
an average 30 tonnes of murabba, 10 tonnes of pickle, 7.5 tonnes of candy and 7.5
tonnes of aonla powder in total of 50 tonnes in a year but in the case of medium scale
unit they processed 150 tonnes of murabba, 90 tonnes of pickle, 36 tonnes of candy and
24 tonnes of aonla powder on an average of 300 tonnes in a year. The total cost and
return in processing of 30 tonnes of aonla into murabba in small scale unit worked out
to Rs. 23,07,763. Thus, the net returns per year amounted to Rs 8,12,237. The total cost
and returns in the processing of 150 tonnes of aonla into murabba worked out to Rs.
1,03,91,459. While, the net returns per year amounted to Rs 49,68,541. In case of small
scale total cost and returns in processing of 10 tonnes of aonla into pickle worked out to
Rs. 9,13,355. The cost and return in processing of 90 tonnes of aonla into pickle in
medium scale unit worked out to Rs. 55,16,723. The total cost of processing of 36
tonnes of aonla into candy in the medium scale unit worked out to Rs.30,60,697. In the
small scale processing unit the total cost incurred was Rs. 4,51,225 from processing of
7.5 tonnes of aonla into powder and for processing of 24 tonnes of aonla into powder in
medium scale processing units worked out to Rs. 18,70,157. So study on the economic
evaluation of investment on aonla processing units may help the extension workers and
policymakers to devise appropriate policy for the setting up of processing unit. It may
also be useful to the financial institutions for fixing scale of loan and subsidies, which
will ultimately benefit the new entrepreneurs.
The study was conducted in Pratapgarh districts of Uttar Pradesh with the
following objectives:
1. To estimate the investment requirement for setting up small and medium
scale aonla processing units.
2. To analyze the economic and financial feasibility of the processing
units.
3. To identify the problems and constraints in procurement of raw material
and marketing of the processed products.
Pratapgarh districts were purposively selected for the study, as the districts stood
first in area and production of aonla in the state. Samples of 50 small scale processing
units and 30 medium scale units were included in the study. And to know the need of
initial investment for setting up small and medium scale processing units, total 80 units
and to know the problems of procurement of raw material and marketing of processed
products, 10 intermediaries were interviewed to gather the information regarding the
objectives.
The major components for initial investment for setting up small and medium
scale aonla processing units are land, building and machinery cost incurred as a fixed
cost. The total capital requirement for land and building together is around Rs.11.00
lakhs and Rs. 20.15 lakhs for small and medium scale aonla processing units
respectively. It is obvious that as the plant size increases the capital requirement also
increases. The expenditure for machinery and equipment worked out to Rs. 4, 49,000
for small scale units and Rs. 9,35,000 in medium scale units which includes
miscellaneous expenditure of Rs. 65,000. Altogether the total capital requirement for
land and building together is around Rs.11.00 lakhs and Rs. 20.15 lakhs for small and
medium scale aonla processing units respectively.
The total cost and return in processing of 30 tonnes of aonla into murabba in
small scale unit worked out to Rs. 23,07,763. Thus, the net returns per year amounted to
Rs 8,12,237. The total cost and returns in the processing of 150 tonnes of aonla into
murabba worked out to Rs. 1,03,91,459. While, the net returns per year amounted to Rs
49,68,541. In case of small scale total cost and returns in processing of 10 tonnes of
aonla into pickle worked out to Rs. 9,13,355. The cost and return in processing of 90
tonnes of aonla into pickle in medium scale unit worked out to Rs. 55,16,723. The total
cost of processing of 36 tonnes of aonla into candy in the medium scale unit worked out
to Rs.30,60,697. In the small scale processing unit the total cost incurred was Rs.
4,51,225 from processing of 7.5 tonnes of aonla into powder and for processing of 24
tonnes of aonla into powder in medium scale processing units worked out to Rs.
18,70,157.
The NPV of small scale aonla processing unit at 14 per cent discount rate was
Rs 27.06 lakh (Table 4.20) and medium scale was Rs 158.08 lakh and the BC ratio of
the small and medium scale processing unit confined to 1.35 and 1.40 respectively at 14
per cent discount rate, which is more than unity indicating the worthiness of investment
on these units.
The Internal Rate of Return being 31.08 per cent for small scale and 84.84 per
cent for medium scale aonla processing units was higher than the interest rate at which
the processors could borrow from lending agencies and invest on these units.
The Pay Back Period refers to the time required for the net benefits to equal the
cost of the project. In the present study, it worked out to be 2 years 11 month for small
scale and 1 year 8 month for medium scale processing unit. Thus, it is calculated that
the investment in aonla processing units is financially feasible and economically viable.
 
Date 2016-06-22T14:51:54Z
2016-06-22T14:51:54Z
2013
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/67733
 
Language en
 
Relation D9426;
 
Format application/pdf
 
Publisher ACHARYA N.G. RANGA AGRICULTURAL UNIVERSITY