Benefit from helping the needy

Jayanta Das

The idea of corporate social responsibility has always been restricted to building schools, roads and a couple of hospitals. This approach has two drawbacks. First, corporates took it as charity, not as social responsibility. Second, such practice was limited to areas around where the offices or factories existed.

The government had the role of primary allocator of resources till the nineties and it failed to meet the bare necessities of the people.

The advent of liberalisation implies a steady reduction in the role of government. This is all right for the developed countries like India, the comfortable with the idea of government taking the backseat.

It is in this context that corporate social responsibility became the cynosure of the business world. The vacuum caused by the exit of state is what corporate citizens like ITC, Hindustan Lever, Birlas, Tatas and Reliance are trying to plug.

In these columns, we have discussed that CSR activity should not be based on charity, but should have an inbuilt element of self sustainability.

For example, the ITC model of dovetailing social responsibility initiatives with business goals and strategic planning is an interesting option.

ITC’s social initiatives, like Integrated watershed development and farm and social forestry, have been undertaken to strategically enrich the larger socioeconomic context in which the company operates, thereby contributing to its businesses.

The watershed development programme seeks to mitigate the moisture deficiency in some of the drought-prone districts of India. In two years, nearly 400 water harvesting structures have been built in Andhra Pradesh and Karnataka, providing critical irrigation to nearly 7,000 hectares of land.

Over the next decade ITC aims to bring 50,000 hectares of land under irrigation. Now how does the company make this sustainable?

ITC constitutes water user groups in villages. It trains these groups to plan and build water - harvesting structures like contour bunds, check dams, percolation tanks and farm ponds. The trained farmers then use their knowledge of the terrain to identify locations for building water structures and formulate and implement related micro-plans.

ITC provides 75 per cent of the cost of building a water body. The user-group provides the rest. The slit from excavation is used to enhance soil fertility in the surrounding farm lands. The user groups raise funds from the farmers to meet the maintenance cost of the structure. The programme is completely participatory and thus sustainable.

Similar measures are being adopted by various NGOs in places in Gujarat where participants are trained to earn for themselves as well as create an asset for the village.

Nobel Laureate Amartya Sen once said the opportunities presented by market-based reforms are critically circumscribed in a nation where large numbers cannot read, write or count.

Education has been a priority objective for over four decades now. Despite this, the fact remains that the objective remains unaccomplished in most of the states. With many Asian countries accomplishing literacy rates of over 90 percent, development process would not take off in a country where almost 40 per cent of the population is literate.

Going back to our corporate examples, ITC Ltd’s supplementary learning centres, which help poor students cope with their lessons and improve their abilities, reflect a different approach. This scheme also benefits educated local youth who serves as tutors.

ITC-sponsored nongovernmental organisations also conduct teacher training programmes to raise the standard of teaching in government-run primary schools. It also helps NGOs to organise summer camps, sports and other extra-curricular activities.

While most corporate sponsor schools directly through books, infrastructure and financial support, a focused approach would help in sustaining and accelerating such activities.

Micro credit to rural areas, in the Grameen Bank model, is also gaining ground. However, just providing credit doesn’t ensure any progress. Independent studies show that with no training, micro credit is normally spent unproductively.

ITC’s intervention leverages micro-credit and skills training to generate alternate employment opportunities. Increased income in the hands of rural women means better nutrition, healthcare and education. Working with NGOs, ITC has organised, village women into microcredit groups. Group members make monthly contributions to create a savings corpus. The corpus is used to extend soft loans to group members, thereby weakening the role of the moneylender. The system of mandatory contribution further strengthens the savings habit, leading to capital augmentation.

Empowered groups function autonomously and take their own decisions, including sanction of loans and collection of repayments. Well-managed micro-credit groups receive further support from ITC in the form of seed money for self-employment activities.

Venture funds provided by the company have already spawned hundreds of women entrepreneurs. Their earnings, ranging from Rs 70 to Rs 150 per day, not only supplement household incomes, but also significantly enhance their self-esteem.

Many NGOs have directly followed such models which helps eliminate wrong targeting to create a self-sustained model of income generation. Training normally can be in as diverse areas as pickle-making, fish-processing and agarbathi rolling in rural areas and garment-sewing, driving and computer-aided secretarial training in semi-urban areas.

This results in a win-win situation in which corporates are able to source their products directly. In the near future, they may have access (to sell) to a new income group in these areas.