Rural Development: Creating A Better India

According to the 2001 census, 72.2% of the Indian population resides in the rural areas constituting about 638,000 villages. The CIA database says that atleast 22% of the entire Indian population is living under poverty line. Though the social scientists and the businesses interpret the entire rural population as a BPL population and try to target them as their potential customers for low cost products, these statistics refute the argument. For all practical purposes, it is safe to assume that the rural economy is an agrarian economy. And since rural population constitutes 72% of our population, it becomes imperative for the government to ensure the development of the rural sector for the overall growth of India.

In the Union Budget 2009, the Finance Minister Pranab Mukherjee laid immense emphasis on this issue and revealed the plans to build infrastructure across length and breadth of the country. Various schemes like NREGA, JNNRUM and Rashtriya Vidyutikaran Yojna are ambitious enough to ensure that the government is willing to promote infrastructure development in the rural India, fondly known as Bharat. This is something known as inclusive growth where the growth is targeted not only at the urban India or the business world, but also at the other members of the Indian population.

But more important than the role of the government, is the role of private organizations in the process. India has grown to be the IT hub for the world and that has opened new ventures for its citizens. But there was a minimal involvement of the government in the growth and development of IT sector or what I prefer to call as Bangalorization. A similar revolution is required once again in India to ensure the development of the rural community.

All said and done, the only way the private sector or the profit-sector can be attracted to this world is by showing them the market size and the market potential. Many organizations have already realized it and have started expanding their horizons to the rural markets through various innovative routes. Microsoft conducted a research in the villages to know why acceptability of computers was low in rural areas even when government had provided computers in every school for the students to access. It came to understand that only one student, usually a boy from upper class, used the mouse and nobody else was allowed to touch that. So, Microsoft came up with the solution in the form of multiple mouses connected to the same screen giving equal access to each student. This new research is being commercialized now. Similarly, Google tried to find out the reason for low internet penetration in India and particularly in villages and realized that people in villages did not understand English. So, it developed an Indic Transliteration Technology that helps the person use the Roman alphabet keyboard but the display comes in the local languages.

Many more similar examples like these and Unilever’s Shakti Amma are available to illustrate that the development of the rural India cannot be ignored if India wants to grow. And since we have ignored it for so long, we can start with the learnings from the mistakes that we made in the past. Instead of taking electricity to the villages from thermal power plants, we should plan sustainable energy sources like Solar or Wind Energy for them. Rather than taking products in polythene bags to villages, let’s encourage the use of jute bags from the beginning itself. Instead of building roads from petroleum byproducts, we should use the plastics and polythene to make roads that last longer and better.

We must realize that the growth of the Indian rural sector can prove to be instrumental in bringing up the pace of growth of India Inc. The unexplored markets and the moral obligations are both a financial and social justification for the corporate to participate in this growth story.

(Originally written for and published on Youth Ki Awaaz, http://www.youthkiawaaz.com/2010/01/rural-development-creating-a-better-india/)

The new face of Social Enterprise in India (III of IV)

Continuing with our journey through some of the most admired social entrepreneurial ventures across India and Pakistan, this last part of this series once again visits some of the ventures in India that have decided to take the unusual route to redefine the Social Enterprise.

Barefoot College:

Established by Bunker Roy, this unique set-up in Tilonia, Rajasthan, has become an example for the world. This Doon School passout is a very humble, down-to-earth man who loves the village and wants to transform it into a model for the entire world to emulate. When we were at TIlonia, the village people were very excited to greet us with the beats of dhol at the station. In this land, where scarcity of water is a major problem, a 5^th grade passout, middle aged woman handles the water management for about 200 villages through her computer. This was shocking enough for us to create enthusiasm and excitement to know more about the college. Bunker Roy introduced us to the various facets of his venture whose major focus is to train the locals in various fields of specialization for which we thought that professional degrees were a must. These trained villagers are the youth and the women who would otherwise have had no choice but move to the cities to earn a livelihood. The trained villagers are not awarded any degree or certificate, but they are trained to live in the village and practice. We met several Barefoot Engineers, Barefoot Doctors and Barefoot Architects during our visit. It was heartening to see two women who have been trained on welding skills, earn more than their husbands by making Solar Dishes and selling them out for about Rs. 25,000 each. No wonder that the Barefoot College has been recognized as Social Work and Research Center and has won numerous awards across the world. Besides equipping its own citizens, Barefoot College has been assigned the task of training women from African region as well. Women from the remotest parts of the world who do not understand the language of the villagers (just like the villagers don’t understand theirs) are sponsored by the government of India to visit, stay and learn the skills to earn a livelihood for themselves, back in their native countries.

I must say that to make India a super-power, more of Barefoot Colleges need to set up to give a confidence boost to the villages and reduce the wealth disparity that is always seen as a hindrance for India to achieve that goal. (Visit: http://www.barefootcollege.org)

Jaipur Foot:

Jaipur Foot is a live example of the level of motivation that can be provided by a cause. Mr. Ram Chander Sharma revolutionized the limb technology through his development of the artificial legs that have been categorized as good as the original ones except that they do not have blood. But the idea was put into the venture form by Mr D.R. Mehta who has recently been awarded the Padma Bhushan by the Govt. of India. Jaipur Foot, with technical assistance from Indian Space Research Organisation (ISRO) developed these limbs from very cheap but sustainable material that wasn’t used elsewhere in the limb industry. The major motive for the development of Jaipur Foot was to help the people in the war affected areas or border areas where the land mines were not removed and hundreds of innocent people turned handicapped because of them. This technology helps them regain not only their legs, but also their confidence and their ability to stand on their feet – literally and metamorphically. As compared to the cost of below the knee prosthesis in US which stands at around $2,500, this technology has reduced it to a drastically lower price of $30. At this cost, the Bhagwan Mahavir Viklang Sahayata Samiti is fitting about 20,000 artificial limbs every year besides 30,000 Polio Calipers and the other appliances fitted through their camps. The vision of Mr. Mehta is changing the way people walk and helping India to walk on the path of success and self-dependence. (Visit: http://www.jaipurfoot.org)

The Social Entrepreneurial ventures discussed in this series are, by no measure, the only or the best performing enterprises in India and Pakistan. But they represent a broad sense of changing preferences for the residents of these countries. Given the levels of poverty, corruption, illiteracy, lack of self-confidence, non-resourcefulness and healthcare, we need many such motivated organizations and role models to lead the sub-continent to the role of leadership on the world map. We salute the spirit of the patrons who have given up the luxuries of life to serve the people of the nation through whatever means they had.

(Article originally written for Youth Ki Awaaz, published at http://www.youthkiawaaz.com/2010/01/the-new-face-of-social-enterprise-india-part-iii/)

The new face of Social Enterprise in India (I of IV)

In an earlier post (Emergence and Growth of Social Entrepreneurship in India), I highlighted the way in which the social enterprises evolved over time in India and the world. This evolution was majorly driven by the causes of social justice, poverty, female upliftment and illiteracy which were also used as measures of political success by the critics of the governments. But over time, with the empowerment and awareness among the Indian citizens, the social enterprise grew in size, scale and scope. As a part of the Tata Jagriti Yatra 2008, I got a unique opportunity to visit and witness the work done by some of the social entrepreneurs who are working on some unorthodox social issues in different parts of India.

Goonj:

Founded by Anshu Gupta, a student of journalism, this Delhi-based NGO has targeted a very niche area to work and impact the society – clothing. As pointed out by Anshu in his session at SMU, Singapore, clothing is one of the three basic needs of mankind and still no policymaker in the world gives any importance to it. He was moved by the story of a rickshaw puller in Delhi who used to carry stray dead-bodies to the police station only to be given 2 yards of clothes and Rs 20 in return. And this rickshaw puller told Anshu that his “business” grew so much in winters that he had to keep some dead bodies at home for the night to deliver them in the morning. Such was the impact that Anshu started to champion the issue. But he also realised that for a poor person, his dignity is everything and he decided to combine the two. So, Anshu, along with his friend started this program of “Cloth for Work” where they went to villages and urged the villagers to “earn” their clothes for building up schools, roads, wells etc for their own village. Goonj collects “waste” clothes from cities across India through various campaigns like “Joy of Giving” and then segregated into various categories according to the usage. In times of need, these clothes are sent to places like Tamil Nadu at time of Tsunami, Bihar in times of floods and Kashmir in time of earthquake. In peace times, these clothes are used for promoting the infrastructure build up among the urban poor and the downtrodden villages of UP, Orissa, Bihar and other similar parts of India. Besides clothes, it also teaches the poor women about the importance of the hygiene of sanitary pads and how to make them at home. This initiative is targeted to reduce the incidents of pregnancy problems and basic hygienic problems leading to death of women in some extreme cases. (Visit http://www.goonj.org/)

Naandi Foundation:

With Dr K Anji Reddy of Dr Reddy’s and Anand Mahindra of Mahindra & Mahindra on its Board of Trustees, Naandi Foundation is growing fast as a social sector organization. On meeting Manoj Kumar, the CEO, in Hyderabad, we immediately realized that he did not want Naandi Foundation to be called an NGO because of the simple reason that he did not want his organization to be looked with sympathy. Founded in 1998, this organization has a three-point agenda of Child Rights, Safe Drinking Water and Sustainable Livelihoods. In the words of Manoj Kumar, “Naandi Foundation doesn’t believe in doing anything small because it’s wastage of resources.” With operations spanned over nine states (Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Chhattisgarh, Orissa, Nagaland and Andhra Pradesh), Naandi Foundation provides midday meal to lakhs of students everyday that have high nutritional value and are prepared with benchmark levels of hygiene. It is also involved in Organic Farming and Lift irrigation or coffee through which it provides livelihood for small and marginal farmers who otherwise could not sell their product in the international market. On Child Rights front, Naandi Foundation runs the programs like Early Childhood Care and Education, Schoolchild Healthcare Plan and Nanhi Kali covering thousands of schools in various states. With its clear focus on and proven success in creating a sustainable and scalable social enterprise, I believe that it can be a role model for other social entrepreneurs in coming times. (Visit: http://www.naandi.org/)

Aravind Eye Care:

An eye surgeon, retired from his government service, had the dream of eradicating the “needless blindness” from the world and decided to give up all his resources to the cause to establish a unique eye care facility by the name of Aravind Eye Care in 1976. The surgeon, fondly known as Dr. V dreamt of create a McDonald’s of eye care where everyone involved in the process, does only the part of it, enabling the system to increase the efficiency. Dr. V had the vision of creating an organization that will treat the needy with equal expertise and precision irrespective of whether he or she can afford the surgery or not. Those who can’t afford the treatment need not pay for it and those who can, compensate more than the free component. The uniqueness about Aravind Eye Care lies in this uniqueness of its Operational and Financial models which are very unorthodox. Today, Aravind Eye Care is the largest eye care facility in the world in terms of the number of surgeries and the number of patients treated. With the principals and values enforced by Dr. V himself till date, this eye care facility has grown from an 11 bed hospital to a facility that treats 1.4 million patients in a year. It is associated with many international groups like Clinton Global Initiative, World Health Organisation and Seva Foundation. In the last financial year itself, the AEC conducted more than 3 million surgeries, half of which were free of cost. This was in addition to around 373,000 free OPD patients and 2.75 million check-ups through camps for the entire year. This makes AEC a unique epitome of sustainable and scalable social organization whose fundamentals can be emulated by other social entrepreneurs in their future endeavors. (Visit: http://www.aravind.org/)

AS

(Part I and Part III, written by me for Youth Ki Awaaz http://www.youthkiawaaz.com/2010/01/new-face-of-social-enterprise-in-india.html)

Alternative Energy Sector: The new source of energy

The world just witnessed one of the biggest summits on one of the most important issues faced by the mankind – climate change. Just a few days back I talked to my parents back in Punjab, India who told me that it’s just mildly cold out there when it used to be chilling cold just 6-7 years back when I was a teenager. July showers were observed in late August and winter peak is expected only after mid-January and that too for a very short period.

Working on a project on the financing of renewable energy sources with a major bank here in Singapore, I realized that the nations are yet to understand the urgency of this issue. It was correctly pointed out in the latest Hollywood flick, Avatar that “there’s no green in our world. They kill their own mothers.” Industrialization of the nations and a race to get ahead of everyone else spoiled the sons of the land who never cared about clearing the forests for setting up industries that further polluted and depleted the environment. From my childhood, whenever I’ve been asked to draw a factory, it always had a smoke chimney releasing black smoke at the top of that factory and a water pipe releasing waste acidified water at the bottom.

Thankfully, we are much more aware about the consequences of our actions now. Environment ministries world-over have sprung into action and given confidence to the people that it’s in their own interest to help in putting a barrier to this climate erosion. One of the most important steps in this context is the encouragement being given to Renewable Energy projects that has got an equally overwhelming response from the private sector. There are various kinds of tax benefits that are being provided to the renewable energy projects in different forms by respective countries. In US, it is the Investment Tax Credit and Production Tax Credit that is the form of tax benefits to RE projects. India and China also have similar tax credit schemes along with power purchase agreements (PPA) for the RE projects. Today, India is one of the leaders in Solar Power in the world and is catching up fast in Wind Power.

Companies like GE Energy, Vestas, Suzlon and Mitsubishi have come up in the forefront to invest heavily in R&D to develop efficient wind turbines for the world. Since the largest damage was done by the industrialized countries like US and European nations, they were the ones who had to take the lead to reverse the trends, and they rightly did so. Today, Germany and US are the largest wind power producing nations in the world. But the developing world, as mentioned earlier, has not remained far behind in the league.

Besides wind and solar energies, another source of alternative energy that has become popular recently is the nuclear energy. Though India isn’t in a very good position in terms of nuclear energy, China already has planned to construct atleast 100 nuclear reactors by 2020. The US also has a considerable number of nuclear reactors under construction and even countries like Pakistan are working towards the same. Nuclear energy, as is obvious, has a very high upfront capital cost. But the new parameter that has evolved to measure the relative performance of power projects is Levelized Cost of Electricity (LCOE) which is an indicator of the per unit electricity cost from a project over its lifetime. On this measure, Nuclear energy projects are just as economically viable as any other source of energy. This has given a boost to the investments in this sector with many private players entering this arena as well.

Another major milestone in the journey of alternative energy development or the clean energy initiative was the carbon trading that was conceptualized and legalized in the Kyoto Protocol of 1997. The major constraint of this carbon trading is that US, the largest emitter of CO2 and other greenhouse gases, is not a signatory to Kyoto Protocol and hence, is not a participant in the carbon trading. If Copenhagen would’ve been successful in persuading US, under the regime of Obama, the carbon trading would’ve become stronger and encouraging factor for the world markets. Though the risk of speculations and exotic derivatives is attached with this form of trading, but returns are much higher than the risks. A major chunk of the revenues of RE projects is being provided by the carbon credits earned, that earns somewhere in the range of $15 to $25 per ton of CO2 avoided.

There are supporters and critics to the carbon trading in the market, but then there’s no technology, no innovation, no celebration in the world that doesn’t attract criticism. I believe that the road that we have chosen is correct but the destination is moving at a faster speed away from us than the rate at which we are moving towards it. We have an obligation to prove it to our future generations that there is a green world out there, out here, out everywhere.

(Originally published at Youth Ki Awaaz: http://www.youthkiawaaz.com/2010/01/alternative-energy-sector-new-source-of.html)

The Emergence And Growth Of Social Entrepreneurship

Social Entrepreneurship as the concept was coined long ago but has been in the corporate parlance in just the recent past. Traditionally, entrepreneurship has been associated with profit making individuals who aim high and achieve a lot for themselves in the world of tough competition. And the success of enterprise was and is being judged on parameters like ROI and Net Income margins. But, with the empowerment and awareness of the citizens of the developing world, a new revolution has started, particularly among the youth of the world. This revolution is the growth of Social Entrepreneurship – the form of entrepreneurship where profits are not the end result, but just the means to achieve the end result of social upliftment and further empowerment.

Initially, the concept of social entrepreneurship used to be associated with the Corporate Social Responsibility of the corporate houses that provided funds to the charitable institutions to run the philanthropic organizations at a small scale. These institutions or organizations did not have any business model of their own and largely operated with the funds from government or donations from the donors. Globally, non-profit organizations like SOS Children’s Village, however large they are, are funded completely by the donors who are the charitable trusts, individuals, governments or corporates. Though the objectives are noble and the achievements are incredible, the business model of these organizations is to be judged on two very important parameters: Sustainability and Scalability.

Can these non-profit organizations sustain on their own if the external funding from them are unplugged? Can this model be applied to other sectors successfully? As explained by CK Prahalad through his book “The Fortune at the Bottom of the Pyramid”, social cause has always been considered a moral obligation that cannot be fulfilled by means of business. But the paradigm shift took place when the entrepreneurs realized the potential of the untapped markets that could generate profits for them and provide a better way of life to citizens of the society at the same time. The biggest boost was given by the Nobel Prize winner Dr. Mohammad Yunus when his brain-child Grameen Bank became so successful in one of the so-called least developed countries, Bangladesh. It was soon realized that profits can be made along with serving the society, provided you treat profits as a means and not the end result.

Subsequently, initiatives like Casas Bahia and CEMEX in Brazil, and ITC e-choupal and Aravind Eye Care sprung up in India. Most of these initiatives are well into their second-generation, in business terms. In India, various other organizations like SEWA, AWAKE, Nandi Foundation and Jaipur Foot have been started by the awakened and empowered citizens of India. But as they say, Entrepreneurship is contagious and so is Social Entrepreneurship. This sector, called the “third sector” in the book “The Emergence of Social Enterprise”, has been growing at a very high pace even through the current economic downturn. Definition of social entrepreneurship has changed over time. From corporate philanthropy to non-profit and now to self-sustainability, Social Entrepreneurship has evolved and will keep evolving with time and needs of the world.

But the major challenge that Social Entrepreneurship faces today is the definition of the goals and the objectives. Unlike the corporate sector where the achievements are clearly defined and roles identified, it’s seldom to be seen in the social sector. Organizations like SEWA are content to provide employment to the women in downtrodden areas of India, but do not have any goals in terms of the number of employed women or the average salaries, if these parameters can be justified as relevant goals in the first place. Nevertheless, this challenge doesn’t hamper the progress of the third sector but infact makes it more challenging for the entrepreneurs to explore.

The above flow of thoughts can be summarized by approving the fact that intention is a critical parameter to distinguish between the two forms of entrepreneurship – Social and Business.

(Originally published at Youth Ki Awaaz, http://www.youthkiawaaz.com/2010/01/emergence-and-growth-of-social.html)