The state government’s proposed move to put Baba Ramdev’s Patanjali brand of products on sale at fair price shops has raised eyebrows in business circles and evoked criticism from trade associations.
Once formally approved, the distribution network of the Patanjali products will take a quantum leap as there are over 21,000 fair price shops in Madhya Pradesh.
The government says it aims to boost fair price shops that sell subsidised ration to the poor. However, the trade associations allege that the government will be flouting the guidelines of PDS (public distribution system) by allowing one company to sell maximum products.
Ahilya Chambers of Commerce president Ramesh Khandelwal said that move was arbitrary and in violation of the norms. “The government should float tenders and allow other FMCG companies to bid. Once the quality standards are met, the lowest bidder gets the contract,” he said.
The fast moving consumer goods (FMCG) companies are also miffed with the proposal. A senior official of Dabur, who did not wish to be named, said that government should ensure a level playing field instead of favouring one particular company. Dabur is also a major player in the Ayurvedic and healthcare sector. An email sent to Hindustan Unilever did not elicit any response.
The opposition Congress accused the Shivraj Singh Chouhan-led government of favouritism. State Congress spokesperson K K Mishra said that the government should not act like a broker for a particular company just because Baba Ramdev was close to the party.
However, minister of state for cooperatives Vishwas Sarang rejected allegations made by the Congress and said that Patanjali offers good quality products and the proposal has nothing to do with party and politics. “Our aim is to make fair price shops profitable so that they generate more employment,” the minister said.
Under the public distribution system, food grain and sugar are delivered to fair price shops run by cooperative societies.
Jai Solanki, a fair price shop owner, said that Patanjali products will boost the business but profits will also depend on the type of products supplied through PDS.
Notwithstanding the criticism, the government plans to go ahead with the proposal. Vindhya Herbals, a unit of the MP state minor forest produce cooperative federation, will be the only other FMCG company that can sell its goods alongside Patanjali products at the fair price shops.
The government has also allocated 40 acres in Pithampur for the Patanjali group to set up a food processing unit. The turnover of Patanjali Ayurvedic Limited grew 150% to more than Rs 5000 crore in 2015-16 from about `2,000 crore in the previous year.