A summary of the Address delivered by Mr Ashok Vardhan Shetty at the MMA Seminar on “Corporate’s Role in Rural Development” held on 27th March 2007 at Chennai.

When I first received the invitation for this talk, I was reminded of two anecdotes that are circulating in the internet and some of you may have come across them. One relates to a bureaucrat who was idling away in the office came across the magic lamp. He rubbed the lamp and as the story of the Alladin’s lamp, the Genie appeared and said, “You have liberated me from the bondage; you may ask me for three boons. The bureaucrat said, “I always wanted a big private island, a private mansion with a big swimming pool, a tennis court, and a private plane”. The Genie said, “Done!”. The bureaucrat was shifted to the new island. The bureaucrat then said, “I always wanted to have the company of the beautiful woman of every nation”, the Genie raised its eyebrows, but having made the promise, granted that request as well. The bureaucrat then said, ”I want to spend the rest of my life doing nothing” and he was transported back to his government office ! Of course, that was the place where you can manage without doing anything.
The other story I wish to tell you is about the Corporate Executive who was traveling along the rural road with his WIFI laptop in his hands. When he saw a farmer attending a large number of sheep, he got down from the car and told him “If I can tell you as to how many number of sheep you have in your flock in exactly two minutes, will you let me take an animal with me?” The farmer said Yes. The executive did some quick calculations on his note book, and said, “You have 1638 sheep” and he took the animal walking towards his car. The farmer said, “Hold on! Are you a corporate executive?” The executive turned back and said, “Well, the number you said is right. But what you are taking with you is my dog, not the sheep!”. The point I want to say is “Do corporate really understand rural development? Do we really know what we are talking about? There is a famous saying by the Chinese Philosopher Lao Tse, which Annadurai was fond of quoting. He used to tell it to the King and to the bureaucrats, the Chinese Mandarins, that we should go to the people, live along with them, learn from them, serve them, love them, plan with them, start from what they know, and build with what they have. This is the saying of Lao Tse. The point here is that you cannot really do rural development unless you know what the people want. When it comes to the marketing of a product, of course, there is the first principle of marketing: “Find out what the customer wants and decide the processes accordingly”. And even in government, the most oft heard complaint is that people who hold the levers of power do not really know what the people want. I would like to draw your attention to 3 news items which you would have come across recently. The first was the Forbe’s list of Billionaires, and the news item said that India tops in Asia with 36 billionaires, more than even Japan and China. There was a news item today, about 9 farmers in Maharashtra having committed suicide and the total number of farmer suicides in the States of Maharashtra, AP and Punjab has crossed 5% in the last two to three years. There was another news item recently saying that the 225 out of the 500 odd districts in India are virtually under the control of Naxalites or Maoists. There is a Maoist arc from Nepal to Andhra Pradesh. You would have recently seen that the threat held by one of these outfits to disrupt those industrial projects. The reason as to why I am weaving these three news items together is to emphasise the fact that unless we have inclusive growth, there cannot be any peace or law and order. And unless we have peace and law and order, we cannot have industrial development. So it is important not only for Government, but also the corporate sectors to see what best we can see, not only to achieve growth but also equitable growth. The role of corporates in rural development comes under the broad spectrum of Corporate Social Responsibility which has become a buzz word these days. But this concept is deeply rooted in Indian culture. Kautilya’s Artha Shastra explicitly requires business to function in a socially responsible manner. The concept of trusteeship – i.e. the businessmen, should hold wealth as trustees for the society was Mahatma Gandhi’s answer to communism. Way back in 1931, addressing the 4th annual session of the FICCI, Mahatma Gandhi had said “I cannot forget the services rendered by the commercial class but I want you to make Congress your own”. Many people would say that he succeeded in this. And we will willingly consider the reins to you. The work can be done better by you. But if you decide to assume reins, it can be done on only one condition. You should regard yourselves as Trustees and servants of the people. Your commerce must be regulated for the benefit of the millions of the people. Perhaps, the very first seminar on Corporate Social Responsibility (CSR) in India was held in 1966 at the behest of Jayaprakash Narayan, and it was attended by the then Prime Minister, Lal Bahadhur Shastri. So, CSR and its sub-sect, role of corporate responsibility in rural development has a historic tradition as far as India is concerned. I would like to make a preliminary point and you should not mistake me for saying this. Doctors take, as what is called as Hypocratic Oath. i.e. first do no harm. As may be said in Tamil, it is better not to do any good than to do any harm! The corporate equivalent of the Hypocratic oath is : 1. Pay your taxes to the centre, state and local body properly, especially the local body. 2. Do not over extract the ground water. 3. Do not pollute your environment. 4. Please comply with planning laws. 5. Please pay fair price to farmers for their products and pay it in time. 6. Please pay the fair price for the land you acquire. 7. Please do not adulterate the food. 8. Please do not exploit labour, in particular, do not engage child labour. These are some of the things. I do agree that the lack of enforcement by the government is partly responsible for some of these problems. If some corporate companies get away without paying taxes or without enforcing pollution norms, while others who are more socially conscious and responsible have to do these things, the illegal players get a competitive advantage over those who play by the rules. So government is partly to blame for this. But I must point out especially where local bodies are concerned, as the Secretary of Panchayat Raj, I can talk with facts and figures. But I do not want to name the names. It is distressing to note that many people do not even pay their property taxes or professional taxes in time. If you merely pay the taxes in time, the urban or local body would be able to engage it in lot of Rural Development activities. In fact, we should also pay to the farmers in time. When I was a collector in Villupuram, and this is the problem faced by most collectors, one of the common complaints is that the private sugar companies do not pay the sugar cane farmers in time. And the need for paying a fair price to the land, we all know, we have seen the aggravated versions of these problems in different parts of our country. There is a school of thought which says that the business of business is business and the business of government if governance and each should mind its own business. CSR is the very anti thesis of this sentiment. It seeks to take business away from the single bottom line of profits to the triple bottom line of profits, people and planet. That is, apart from profit, corporate entities have obligations on people, viz. the society and the planet, viz. the environment. CSR has been criticized both from the left and from the right. Critics of the left think that it is nothing but a publicity stunt. It is to keep the critics under bay. Critics of the right say that corporates are not meant to do this. It results in a kind of split personality. CSR’s another expansion is Corporate Schizophrenia. So you really do not know what you are doing. The most staunch critic from the right was Milton Friedman, the Nobel laureate Economist. He said that there is one and only social responsibility of business – to use its resources and engage in activities discern to increase its profits so long as it stays within the rules of the game i.e. to say engages in open and free competition without deception and fraud. Make as much money as possible while conforming to the basic rules of society. Both those embodied in Law and those embodied in ethical custom. The general perception and the general expectation today is that corporates should do something to the society in which they function. As the saying goes, we should have a market based economy, but not a market based society. We should be sensitive to the needs of the people around us. We cannot function in isolation. Let me now go to what the government is doing in the filed of rural development. Let me identify the gaps and suggest in what possible ways corporates can supplement government efforts. In fact, I often say that the State of Tamil Nadu is to India what the state of California is to the United States. It is a kind of bell weather for the progressive social and economic legislation. Somebody was talking about Bharat Nirman. Rural electrification is one of the components of Bharat Nirman. 100% of the village panchayats we have 12816 village panchayats; 100% of the village panchayats in Tamil Nadu have been electrified in 1950s, during the time of Mr. Kamaraj himself. In fact each village has several hamlets. There are about 84000 hamlets and recently we took a survey as to how many hamlets have been electrified, in connection with the the colour TV distribution schem. You cannot distribute colour TVs if you do not have electricity or the village does not have electricity. We found that 99% of hamlets in Tamil Nadu have electricity. About only 1% of the hamlets in the hilly areas do not have electricity. And in course of the colour TV scheme, all the house holds which do not have electricity currently will be given electricity. Perhaps, Tamil Nadu will be the only state where 100% of the habitation, 100% of the houses will have electricity. This is not the case in most of the states. In fact, in my own native village, in Udipi district of Karnataka in the Reserve Forest, we got electricity only in 1988 whereas Tamil Nadu has achieved much earlier. The second is primary schools. Somebody also mentioned about Sarva Shiksha Abhiyan. But every village in Tamil Nadu Panchayat got a primary school in the 1950s in the times of Mr Kamaraj himself. You all know the Indra Awas Yojna scheme for constructing houses for the rural population, mostly the SCs and STs. This scheme was introduced by the Government of India in 1980. But Tamil Nadu introduced the housing scheme for the poor in 1972; 8 years ahead of Government of India. The noon meal programme was introduced throughout the country by the Government of India in 1990’s. But Tamil Nadu introduced the Noon meal scheme in 1950s, first at the time of Kamaraj; then it was discontinued and again revived since 1981 under MGR. The legislation for the protection of the disabled was brought out by the Government of India in 1995 earmarking 3% of seats in educational institutions 3% of posts. But Tamil Nadu issued an executive orders, way back in 1960s, the full 30 years before Government of India brought its legislation. Tamil Nadu introduced old age pension in 1950s. Tamil Nadu and Rajaji were the first ones to introduce Sales Tax. Tamil Nadu was the first in AIDs control. As far as rural development is concerned, though we are aware of our functional and structural weaknesses, Tamil Nadu is still considered as a state which is able to deliver. Year after year, we do the best in various rural development programmes of the centre and the State. The reason why I am saying this is the roots of rural development differ from state to state. Even though Tamil Nadu is one of the more most advanced states, we still have about 30% of the people below the poverty line. If the total population of Tamil Nadu is about 10.6 crores, it translates into 1 crore of people in the rural Tamil Nadu below the poverty line. So we need to do something for them. Rural development is like boiling the ocean. Whatever we do, the impact is not felt. The resources of the centre and the State are not sufficient to make the necessary impact. So definitely we need supplemental efforts from the corporates NGOs and other players. In this connection, I would also like to draw your attention to a new initiative of the Tamil Nadu Government which in Tamil called Anaithu Grama Anna Marumalarchi Thittam, or in English it translates as All Villages Anna Renaissance Scheme. This schemes takes up 1/5th of the village panchayats in Tamil Nadu each year, as I said earlier, we have 12618 village panchayats, it takes 2500 odd village panchayats each year, gives each of them a seed money (each village panchayat gets a money of Rs. 1 to 2 crores) and over a period of 5 years, the idea is to make every village panchayat in Tamil Nadu a modern one in its amenities. Our President always talks about the Provision of Urban amenities in Rural Areas (PURA). The All Villages Anna Reniassance Scheme precisely aims at that. Like the Buddha’s 8 fold path, this scheme has 8 components. It aims at providing a library in every panchayat village in Tamil Nadu. At the end of 5 years, Tamil Nadu will be the only state in the country which has a library in every village. It also aims at providing a community sports centre in every village. Again at the end of 5 years, I am sure, Tamil Nadu will be the only state in the country which has the sports centre in every village. Thirdly, we intend providing a water harvesting structure in every village augmenting the existing drinking water facilities, augmenting the existing street light connections, providing a modern burial shed in every village, providing cement concrete pavements for all the village roads, and providing upgrading village markets. So these 8 components under the Anna Grama Marumalarchi Thittam which is by far the largest of the centrally sponsored and the State schemes currently being implemented in the state. There is a prevailing impression that most of the rural development schemes are funded by centre; but as far as Tamil Nadu is concerned, it is not so. The top two biggest schemes are state schemes and central schemes come only third and fourth. Despite being all this, we do understand that there are certain weaknesses in government delivery. The first is that the rural development requires a missionary approach. But an average government servant adopts a mercenary approach. You cannot do rural development with this kind of an approach. Way back in 1956, Government of India started what is called a Community Development Programme and divided the country into various blocks. Tamil Nadu has 385 blocks. Each block was put under the Block Development Officer. You will notice that the name is very unfortunate. Block Development Officer, instead of developing the block, these fellows have been blocking the development. One of my former bosses Mr V Sundaram, you may be reading his articles in News Today and others, used to joke, that there are 4 kinds of human beings: males, females, eunuchs and BDOs. Something is peculiar about this category. They don’t seem to understand the problems of the poor. They cannot empathise with the problems of the very people with whom they are working. The second problem with the government is that it is very slow to change. In fact, the block level structure of the government, reflect the priorities of 1950s and the District level implementation structure reflects the priorities of the 1980s. We are in the process of overhauling the whole department. But the first point, that we are slow to change and the third column with government is that we are not good at social mobilization, NGOs are better in attitude. Bureaucrats are typically bureaucratic to look down upon the public. In fact in our department, every fellow, the Rural Welfare Officer, the Gram Sevak, upwards are called as officers; everybody is called as officers and there are no servants. Rural Welfare Officer, Extension Officer, Block Development Officer - so each fellow thinks like an officer, and does not think like a servant of the people. So these 3 weaknesses in government delivery are compounded by certain other weaknesses. For example, we are very poor at marketing. We have about 3,30,000 SHGs of women. Nearly one third of them engage in manufacture of various small time activities. But they are not able to market their goods. They are not able to grow. We are really at a loss to know that No. 1: Government is not good at marketing. No. 2 is our skills. We are not good at training. We do have training institutions and usually the Content officers are posted into the training institutions. And the mischievous ones are sent for training. That is our perception of training! So we are weak in training. No. 3: We are weak in communications. When I say communications, I don’t mean the advertisements and others, we are not good at taking things to the people. Why I mention these three weaknesses is because these 3 are precisely the strengths of the corporate sector. You are good at marketing; you are good at training and you are good at communication. Mr. Ranganathan rightly said a clear philanthropic approach will not be sustainable in the long run. Corporates do some charity and good work when their fortunes are on upswing. When things are not good, you have to obviously tighten the belts. And the first thing is to chop the CSR initiative. So only those initiatives that are mutually beneficial can be sustained. I would like to suggest these 3: A recent CII report says that there is an acute dearth of skilled personnel required for various industries and semi skilled personnel for various industries. At the same time, there is a large mass of rural youth who are dropped out of school in class VIII, X or XII, who can be trained and who can be used for the industry. Our problem is, we have the money for imparting training. But we cannot find good trainers. We cannot find good training facilities. And our request to corporate sector to come forward to train the rural youth in a big way. Many of them are already doing it. L&T is running a mercenary training for rural youth. I don’t want to name the companies as it would look like promotion of company brands. There is already corporate initiative for training the youth but we would like to see more of them. This is something which will be mutually beneficial. Because of you have a problem of dearth of skilled and semi skilled labour, and perhaps you can modernize the ITIS ; perhaps you can set up your own training institutes; perhaps you can identify master crafts men who can go into the villages and train them. Any number of initiatives are possible. But skill training is a major gripping hole in our rural development programmes which I think you can possibly fill in. The second is marketing. Marketing means improvising – you would be aware of the Project Shakti of Hindustan Lever who used the women Self Help Groups to market their products on cash and carry basis. I am sure, the other companies are also doing it. We have 3.30 lac women SHGs in Tamil Nadu. You can probably think of them as a marketing channel. The reverse is, the products manufactured by these women’s groups need a marketing outlet and they are exploited by the intermediaries and very shortly we intend bringing out a product wise brochure and also put on the website – brochure showing the various SHG with their respective products. We seek your assistance in the marketing of these products and that will go a long way in women’s empowerment and rural development. The third thing, as I said is Communication. You people are very good at communication skills. Especially in the field of sanitation, we have been having what is called “Total sanitation campaign´ for the last so many years in rural areas. But still 75% of rural Tamil Nadu is one giant toilet. We may build toilets in the homes, but they do not use them, but they just cover it up and use it as a store room. So how do we change the attitudes of people It requires a change in the mind set; it requires a communication campaign. Well, while we have the money to run such communication campaign, we don’t necessarily have the skills to run an effective campaign which can reach the masses and change their mind set. I feel that marketing, skill training and communication skills will give opportunity to be mutually beneficial for both the government and corporate sector. I would also like you to invest just not in the villages around you as it is, industries are closer to the urban hubs and many help only the villages around you, that some villages get richer while the large number of villages are still left in the lurch. We request you to adopt a broader perspective, help reach out to people in the unreached areas, and especially help people in the fields of education and health. You cannot engage in rural development unless people study. You can possibly identify villages where there are large drop outs of children, institute for meritorious rural children, endowments and do the like. I request you to kindly do this. Infosys has done a good initiative in the form of providing libraries in all the rural schools in Tamil Nadu, as I said we intend providing a library to every village. We may not need a similar initiative in Tamil Nadu. But education is one area where you can possibly help by instituting a large number of scholarships by addressing the problem of school drop outs and child labour. With these few words, I would like to conclude by quoting a parable Á grass hopper feeding on a cotton plant leaf said to a visiting bee, “Both of us dwell nourishment only from this plant”. But the bee said, “Yes, both of us survive in this plant; whereas you are ravishing this plant. I enhance it by helping it to pollinate”. So every corporate sector must ask itself “Are we functioning as a grass hopper or are we functioning as a bee?” I leave the choice to you. I would once again thank you for extending me this opportunity