Lijjat Papad: simple rules, open books
In March 1959, seven women in Mumbai started making papads on a building terrace, with ₹80 borrowed from Chhaganlal Karamsi Parekh, a social worker. The organisation they started, Shri Mahila Griha Udyog Lijjat Papad, was registered as a society in 1966 and grew into a worker co-operative with about 45,000 members by 2021 and a turnover of more than ₹1,600 crore in 2019.
Lijjat's money rules are famously simple. Members are paid daily for the papads they roll. The organisation does not run on credit. Account books are open to all the member-sisters, and profits and losses are shared equally within a branch. From the start, the founders refused to take donations, even when they made losses.
- Settle cash every day; never let it build up
- Make the numbers visible to the people they concern
- Keep rules few and simple enough that everyone can follow them
Chapter 6: Controls for a small team
Controls are not about distrust. They are simple rules that make honest mistakes rare and dishonest ones hard, so you can delegate without worry.
- Split key jobs between people, even in a small team
- Set approval limits by type of spend
- Protect bank payments and supplier details
This article is adapted from the book. Examples marked “Example” use invented names and numbers; company stories are based on public sources listed in the book. Education only: not investment, tax or legal advice.
