Ganga Enterprises

Kewal Balana, Proprietor of Ganga Enterprises (Commission Agent firm) at Sriganga Nagar, Rajasthan, a province in western India, was worried about the government decision of abolishment of 2 % commission in May 2018, in ‘Kachi-Aadat’ line of business, due to the direct online transfer of money to farmer’s bank account. Due to the abolishment of commission the firm suffered a net reduction in profit of INR 1 million, 2% of INR 50 million of commodities sold by the business to the government every year. More than the abolishment of commission, he was concerned about the recovery of interest on credit which he had been providing to approximately 400 farmers for more than 40 years. Ganga enterprises provided short term credit to farmers on interest rates ranging from 15% - 18%. Considering the above situation, Bhushan Kumar, younger brother of Kewal Balana, wanted to quit the Kachi- Aadat line of business and move to Pakki-Aadat line of business. This would help the firm to sell commodities directly to the industrial unit and charge 1% commission on net sales. His son Shobhit Kumar Balana on the other hand wanted to enter into an entirely new line of business where in the firm would buy the commodities, store them and sell them later when the prices increase (stock trading). He wanted to enter the business of stock trading using his knowledge of agricultural market and commodity derivatives and trading.