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Inclusive India, Innovative India: YC Deveshwar
The Financial Express - 20 Jan 2011

The  India growth story will captivate global business and government leaders as  they congregate at the World Economic Forum at Davos later this month. CII's  theme at Davos, 'India Inclusive', is indeed apt. It also flags a critical  component of growth strategy that will determine the country's future progress.  Global analysts and national policymakers have been one in their opinion that  India will continue to demonstrate high GDP growth rates over the next 5 to 7  years. However, this stellar growth will only be meaningful if a vast majority  of the country's population who live in poverty get gainful opportunities to  contribute to the productive mainstream of the economy. And that is indeed the  challenge of inclusive development that India faces today.

It  has taken more than a century of material wealth creation to realise that the  economic model pursued by the world for so many years was terribly inadequate  in creating equitable and inclusive societies. This also brings home the  unquestionable fact that economic development and sustainable development are  not necessarily the same thing. Nor is sustainable development only about  creating green economies. Progress and development is about creating  sustainable and inclusive societies. Economic growth models must, therefore,  sub-serve a larger need to create greater societal value and not material  wealth alone. That requires a far larger focus on the creation of sustainable livelihoods.

For  developing nations like India, growth models and corporate strategies will need  to make the creation of sustainable livelihoods the central and perhaps the  most important component of economic policy. This is even more critical, given  the fact that nearly 15 million young people will enter the job market every  year. Unless opportunities for sustainable livelihoods are created, rising  discontent and frustration could well lead to a situation of dangerous social  unrest and anarchy, destabilising future growth prospects.

An  overwhelming majority of the country's poor live in rural India. Predominantly  living off the land, they are also the most vulnerable to problems arising out  of environmental degradation, including climate change. In the best of  circumstances, they are served by inefficient and fragile market systems. At  worst, they are at the mercy of exploitation by market intermediaries. Either  way, they are trapped in a vicious circle of poverty. An approach that views  this disadvantaged population only as a market for low-cost low-value products  and services contributes precious little to improving their lives or their  future. It only implies a 'race to the bottom' to garner a small share of a  deplorably small wallet. A more enduring and meaningful approach lies in  co-creating new economic opportunities that empower them and build their  capacity to earn meaningful livelihoods. In essence, increasing the size of  their wallet and integrating them with the economic mainstream. It is this creation  of a fortune 'for' the base of the pyramid that can make a fundamental  difference to ensuring a secure and sustainable future.

The  question is: can business play a meaningful role in catalysing this process of  sustainable and inclusive development? I firmly believe it can. Private  enterprises, through their operations, have a large number of touch points in  society that constitute the front line of engagement with civil society. Their  physical presence in communities around their catchments gives them an  opportunity to directly engage in synergistic business activities that can  create sustainable livelihoods and add to preservation of natural capital.

The  key to the creation of sustainable livelihoods by business lies in innovation.  I have said, in an earlier publication, that innovation is the elixir of growth  in a competitive global economy. Innovation that is inspired by a vision to  sub-serve larger societal needs is, to my mind, one of the most meaningful  contributions that businesses can make and also the most fulfilling. The  innovation challenge is, therefore, to craft business strategies that not only  deliver unique customer value propositions but also enable twin impact-of  ensuring a positive environmental footprint and creating sustainable  livelihoods.

Our  own experience at ITC, through innovations like the e-Choupal, R&D in  clonal propagation for afforestation by poor tribals, community engagement for  watershed development and many other such societal interventions demonstrates  that it is eminently possible to create larger social value in the pursuance of  sustainable wealth creation for all stakeholders. It is indeed heartening that  today we have a growing number of such innovative interventions in the country.  These also exist in a diverse range-from the GCCMF example of a co-operative  movement exemplified by the Amul brand to self-help groups of rural women  entrepreneurs rolling agarbattis and marketing through ITC's Mangaldeep brand,  or in the hosiery clusters in Tirupur. Philanthropic engagements from corporate  India have also been on the rise with innovative interventions by business  leaders, including Azim Premji, Narayana Murthy, Ratan Tata, Sunil Mittal and  many others.

The  need of the hour today is to encourage such innovation in corporate strategies  and business models that will enable companies to co-create, with local  communities, opportunities for sustainable livelihoods. At the same time, civil  society, including customers, investors and media, need to be made more aware  of the tremendous change they can bring about by encouraging a preference for  responsible companies. Preferential and differentiated fiscal and financial  incentives for such companies with measurable societal contribution will  encourage corporate innovation in creating opportunities for sustainable  livelihoods. Public-private-people partnerships in projects that create larger  societal value will need to be encouraged through appropriate policy frameworks  at the national and state levels.

An  inclusive India will be an empowered India capable of realising its potential  to be the powerhouse of a new growth paradigm in the global economy. Growth  that is driven not only by wealth creation alone, but more by the value that  can be created for the larger society and the nation.

(Guest Column by Mr. Y. C. Deveshwar)