The team is now looking to achieve economies of scale by mechanization and electrification of the production facilities, and to procure long-term contracts with potential demand avenues.
It’s hard to believe, but a classic triple-bottom-line project is unfurling at Nekpur village, once perhaps the most ostracized community in India. The project has significant social, economic and environmental impact. New employment opportunity has increased the overall income of the women by 544 percent, thereby empowering them and making them financially self-reliant. This has also inculcated in them the habit of saving, thus ensuring prosperity for future generations. The social impact has been the establishment of a community-owned microenterprise that has instilled in the women a sense of entrepreneurship, enabling them to lead a life of dignity, which has helped to transform the perception of the villagers toward the women. The sanitation conditions of the village have improved drastically, thereby enhancing the quality of life of more than 7,500 inhabitants. The increased income of the women will also lead to greater education opportunities for their children. And finally, the environmental impact is the complete abolition in the village of dry latrines. A breeding place for disease has been replaced with better sanitation systems (by building 128 two-pit toilets) that not only conserve an average of 69,120 liters (18,260 gallons) of water per month, but also supply nutrient-rich manure, boosting the agrarian economy of the area. Coming up next is the installation of solar panels at the production center in order to meet the electricity requirements of the entire detergent-making process in an eco-friendly manner and counter the uncertainties associated with irregular power supply in the area. The regular supply of electricity would massively push up production of detergent from 2,000 to 3,000 kilograms (about 4,400–6,613 pounds) to 54,000 kilograms (about 120,000 pounds). Project Azmat’s uniqueness lies in its ability to develop an alternative livelihood for manual scavengers in consultation with the community. In Nekpur, detergent making was chosen as it is relatively easy for the women to grasp and carry forward, considering they have no prior education or vocational training. Furthermore, since detergent is a necessity, it has a relatively inelastic demand in rural and urban areas. There is a dream now to expand the business and take it to neighboring villages where manual scavenging is still prevalent and identify the next community ripe for entrepreneurial transformation.
As Priyanka, one of the women, told me, “Everyone offers me tea now. Earlier no one would let me even touch their utensils.”
CONCLUSION: WAS THE MAHATMA A SOCIALIST?
Mahatma Gandhi would have been a good entrepreneur. He was a Gujarati, from the state that has produced India’s most successful entrepreneurs, including the Ambanis, and more recently the $8.7 billion Adani Group, whose owner, Gautam Adani, has been a close friend of Narendra Modi, the powerful Gujarat chief minister and now India’s prime minister after a historic victory in May 2014—much like the Ambanis are said to have close, and old, ties with the Gandhi family. He took a start-up, the Indian National Congress, to unprecedented and unimaginable heights.
Such ties were the subject of very critical attention in the run-up to the 2014 elections, and rightly so. Indian enterprise has a unique challenge at hand—for years, in the absence of clean and clear government regulation, it has been accustomed to doing business through stealth. Manmohan Singh, prime minister from 2004 to 2014, even described the country’s much-treasured economic reforms process as “reforms by stealth.” What the prime minister was trying to explain was that sometimes vested political interests could mar the process of economic development by focusing on short-term gain rather than long-term good. So perhaps, the prime minister seemed to suggest in his comment, it is better not to draw too much attention when reform is in progress.
This idea is not new. It was said, albeit in a different way, by the late BJP minister, Pramod Mahajan. During his party’s time in power between 1998 and 2004, he praised the rise of the Indian information technology companies as global powerhouses by saying that their growth was helped by the fact that they were based in the southern city of Bangalore (and not in the limelight of Delhi or Bombay) and that when they were growing, not many in Indian politics really understood the business of technology. He laughed and said, only half-jokingly, that had the Indian politicians known about the potential of the industry, its rapid growth would have been impossible.
There is even a phrase for this kind of stealth—“India grows at night.” But there is a flip side to this quietude, aptly described by another recent buzzword in Indian enterprise—jugaad. At its best, jugaad is a spirit of can-do-ness that empowers frugal engineering, a resource-scarce mindset appropriate for a world running out of resources and reeling from the excess of the boom years.
But more often than not, in practice, jugaad is an excuse for appalling incompetence, inefficiency and a complete inability to define and live by world-class standards. This mindset of jugaad is why India barely makes objects that match the best quality standards in the world. We provide some of the best software engineers to the world, but we have failed at world-class product innovation. The next Apple is not coming from India; neither is the next Microsoft or the next Samsung or Boeing. We did not build Amazon, and now Amazon is challenging even our copycat version, Flipkart, on our turf. Food, water and drugs have unprecedented levels of contamination and imitation in India. We have shown the world that India can buy and successfully run Jaguar-Land Rover, but the same company, Tata Group, has not been able to make a great car in India and failed miserably in their great jugaad project, the Tata Nano, the world’s cheapest car, which very few people bought. So much for frugal engineering. And in spite of the low-cost Mars mission that has astonished the world, there is little to suggest that India’s space prowess will lead to cutting edge low-cost projects elsewhere. This is a country which cannot yet make roads that don’t wash away at the first rain in its financial capital, Mumbai.
The “stealth” rule is exactly like jugaad. It has a nasty flip side: forced socialism, nationalization and a license-quota regime, all the things that destroy a quest for perfection in India, of getting things just right, of aiming for the highest quality, of pushing the indigenous to the greatest possible levels of global quality.
Each year, when I write Fortune India’s annual luxury issue and travel to Europe to interview CEOs of the world’s biggest luxury companies, I am newly impressed at their attention to detail. One year, at the Hermès headquarters store on rue du Faubourg Saint-Honoré, I watched a store assistant clean a glass display table top 15 times in 37 minutes, each time with silent, nearly invisible efficiency, as various customers placed their arms or fingers on it. One of the reasons I stopped writing about the business of Indian luxury and fashion is because, after two books, I realized we just did not have the quality focus—though we had history and handwork tradition in abundance—to create global brands.
Curiously, one of the most Gandhian things I have ever heard from a CEO came from Patrick Thomas, the CEO of Hermès. He told me that Hermès has never used the word “luxury,” and does not believe that “just because you can afford it, you should buy ten Hermès handbags.” He said, “We believe that our products are meant to last for several generations. That’s why we are Hermès. If everyone who could afford it started to buy many handbags, it would not be sustainable. Everything we use—from rare leather to super-skilled labor—is finite. There is only so much of it that is available. That’s why we have to produce and sell sustainably. The point is to appreciate the finest quality—but not hoard. Not be greedy.”
This is something that Gandhi, who defined the rules for engagement and advocated for sustainable empathy between classes and not for class war per se, would easily understand. He wrote, “The world has enough for everyone’s needs, but not everyone’s greed” and “God forbid that India should ever take to industrialism after the manner of the West. If [our nation] took to similar economic exploitation, it would strip the world bare
like locusts.” He would also comprehend easily the focus on restoration and preservation of handwork and handicraft. Gandhi might have been shocked at Hermès’s prices—but perhaps not, if he saw the prices through the lens of lifetime purchases and the skill sets they help preserve from generation to generation.
Thomas’s thoughts sound odd, even ironic, coming from the CEO of a luxury goods company. But then, Hermès is not just any luxury goods company, and its commitment to maintaining the finest quality of French handcraft has kept that country’s best traditions alive and its best craftspeople in business. It is, unfortunately, not something India can boast of—though there are increasing efforts to rescue what is left of our heritage. This failure to create enterprise in heritage also shows in tourism, where India gets barely one-third of the number of tourists that Thailand welcomes.
Lest this point be misunderstood, I want to explain that I feel no personal affinity for luxury brands. Even though I wrote two books on the subject, I have never bought luxury goods and have never used them. I have no intention of demeaning Gandhian austerity—which I personally revere—with a luxury brand comparison. What I do admire is what Europe has been able to do so successfully—take indigenous craftsmanship and preserve it by reinventing it into coveted global brands. With India’s near-infinite tradition of handwork—and with the love Gandhi had for handwork—I believe the Mahatma would have been happy to see the work of Indian artisans reach every corner of the globe. And he would not mind if the world paid top dollar for the painstaking handwork expertise as long as the business was honest and ecologically sustainable. That’s why my example is Hermès—and not the bling of many other brands.
While writing this book, I tried to learn whether Gandhi was really as antibusiness as many of our Marxist historians would have us believe. I discovered that I was not the only one who doubted this. The writer Rajni Bakshi, for instance, had been talking about how Gandhi’s idea of sarvodaya (progress and upliftment for all) in essence translates to the modern-day concept of sustainability in business.
In a Guardian essay,1 Bakshi pointed out an unlikely echo of Gandhian thought (at least as radical as Hermès’s). She claimed that Hungarian-American investor George Soros embraced Gandhian philosophy when he accepted that business is always created within a social, cultural and political context, not in isolation. Soros is also the founder of the New York–based Institute for New Economic Thinking. Bakshi pointed out several examples of Gandhian thought at work in modern economics—from Bhutan’s Gross National Happiness to the New Economics Foundation’s Happiness Index to the Voluntary Simplicity Movement in the United States. Indeed, organic food is a quintessential Gandhian idea—so Gandhi would understand Whole Foods and Trader Joe’s, but would also question their prices if they seemed too extreme.
Here’s the flip side: Gandhi never would have supported genetic modification of crops as an absolute requirement without questioning. It would have immediately been unsustainable in his eyes—as it is proving to be in state after state in India. He would have wanted a rigorous examination and a case by case approach.
In the same vein as Bakshi, the Indian columnist and writer Sudheendra Kulkarni has explained in detail in his book Music of the Spinning Wheel2 that Gandhi would have loved and embraced the idea of open-source software and the Internet.
In Gandhi’s lifetime, some of India’s biggest businesspeople were very close associates, starting with Ghanshyam Das Birla, in whose home Gandhi had been staying when he was assassinated in Delhi in 1948.
So was Gandhi a capitalist? Not quite. Was he, then, a socialist in the sense of seeking to remove private capital and ownership of the means of production? No. In fact, Gandhi wrote categorically,
I do not want to dispossess those who have got possessions; but I do say that, personally, those of us who want to see light out of darkness have to follow this rule. If somebody else possesses more than I do, let him. But so far as my own life has to be regulated, I do say that I dare not possess anything which I do not want. In India we have got three millions of people having to be satisfied with one meal a day…. You and I have no right to anything that we really have until these three millions are clothed and fed better. You and I … must adjust our wants, and even undergo voluntary starvation in order that they may be nursed, fed and clothed.3
From this came his definitive economic theory of trusteeship. Gandhi wrote,
The rich should ponder well as to what is their duty today. They who employ mercenaries to guard their wealth may find those very guardians turning on them. The moneyed classes have got to learn how to fight either with arms or with the weapon of non-violence. For those who wish to follow the latter way, the best and most effective mantra is: Enjoy thy wealth by renouncing it. Earn your crores by all means. But understand that your wealth is not yours; it belongs to the people. Take what you require for your legitimate needs, and use the remainder for society.4
There is a temptation to dismiss Gandhi as a Luddite when he talks (elsewhere) about India as a country of idyllic villages or when he opposes mass industrialization, but today more than ever, his warning about extreme industrialization and consumerism creating a labor crisis and destroying the ecosystem seems prescient. Like many of the people featured in this book, Gandhi saw entrepreneurship as the means and not the end. Certainly he did not believe that the ends of entrepreneurship can be evaluated through the accumulation of personal wealth. He wrote:
Supposing I have come by a fair amount of wealth—either by way of legacy, or by means of trade and industry—I must know that all that wealth does not belong to me; what belongs to me is the right to an honourable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community. I enunciated this theory when the socialist theory was placed before the country in respect to the possessions held by zamindars [landlords] and ruling chiefs. They would do away with these privileged classes. I want them to outgrow their greed and sense of possession, and to come down in spite of their wealth to the level of those who earn their bread by labour. The labourer has to realize that the wealthy man is less owner of his wealth than the labourer is owner of his own.5
In the same essay, Gandhi added,
For the purpose of my argument, I have assumed that private possession itself is not held to be impure. If I own a mining lease and I tumble upon a diamond of rare value, I may suddenly find myself a millionaire without being held guilty of having used impure means. This actually happened when the Cullinan diamond, much more valuable than the Kohinoor, was found. Such instances can be easily multiplied. My argument was surely addressed to such men. I have no hesitation in endorsing the proposition that generally rich men and for that matter most men are not particular as to the way they make money. In the application of the method of non-violence, one must believe in the possibility of every person, however depraved, being reformed under humane and skilled treatment. We must appeal to the good in human beings and expect response. Is it not conducive to the well-being of society that every member uses all his talents, only not for personal aggrandizement but for the good of all? We do not want to produce a dead equality where every person becomes or is rendered incapable of using his ability to the utmost possible extent. Such a society must ultimately perish. I therefore suggest that my advice that moneyed men may earn their crores (honestly only, of course) but so as to dedicate them to the service of all is perfectly sound.6
This is the social contract that has been broken in India. And yet, in spite of the corruption and crony capitalism, there appears to have been significant churn in Indian business. Recent research7 tries to ask the question—if there is so much crony capitalism in India, does that mean that for the last six decades pretty much the same companies have dominated India Inc.?
The research compared the current top 50 companies in India with the top 50 in 1964 and 1990 (the year before liberalization opened up the economy). Wh
at did it find? There were only 11 common names if you compare the top 50 companies list between today and 1964—Tata, Birla, Thapar, Goenka, Bennett and Coleman, Singhania, Amalgamations, Bajaj, TVS, Mahindra, and Wadia.
But how about between 1964 and 1990—was there churn in the top 50 list even before India’s economic liberalization in 1991? There were only 17 common names—which means that there was considerable churn even before liberalization.
“If 33 of the top 50 conglomerates now weren’t part of this league even 20 years ago, it represents a reasonable amount of churn at the top,” said The Hindu report.
But that’s not all. Take the top 10 companies in India today and compare them with the top 10 in 1990. Only three names are common—Tata, Ambani and Birla. Of the remaining seven, only Essar and Mahindra were in the top 50 list in 1990. So five companies in the top 10 list of Indian companies today—Vedanta, Jindal, Adani, Bharti and Infosys—either didn’t exist or were insignificant in 1990.
The other thing the report looked at was which companies were contributing to this churn. Were they only tech giants like Infosys or Wipro, companies that were growing because, as Mahajan had said, the political system had not discovered them? Not true, said the study. The churn included companies in infrastructure, like Jaypee, GMR, GVK, Lanco and Torrent (the first three are builders of roads, airports, townships and even Formula One tracks, and the last two are power companies); finance (Sriram, about which you have read earlier, and Kotak); media (the Sun Network of the Maran brothers in Tamil Nadu and Subhash Chandra’s Zee TV network); and organized Walmart–style retail, with Kishore Biyani’s Big Bazaar and auto ancillaries/forging (Motherson Sumi, Kalyani).
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