Sowing the seeds of a farm revival

Very few sectors are as important, yet as beleaguered as agriculture in India. Engaging more than 50 per cent of the country’s workforce, it offers livelihoods to 75 per cent of the population living below the poverty line. It consumes 80 per cent of the nation’s fresh water resources, a quarter of the total electricity and more than 70 per cent of central government subsidies. However, it accounts for just about 14 per cent of GDP. Woefully therefore, the farmer’s per capita income is less than one-fifth of the rest of the country’s average.

A four-pronged policy agenda in agriculture has the potential to achieve the much desired ‘inclusive and sustainable’ growth of Indian economy.

Weather-proofing production, and conserving life-giving natural resources

 

Arguably, there has been significant progress in making Indian agriculture resilient to recurrent droughts. Nonetheless, it remains a stark reality that the vagaries of nature can potentially cripple the sector at any time. In addition, dwindling natural resources like groundwater can have disastrous consequences. Therefore, any solution will have to weather-proof production, and replenish and conserve life-giving natural resources, using the right technologies.

The entire technology spectrum — from better seeds to precision-farming practices, from micro-irrigation to watershed development, from renewable energy to power-saving farm equipment — will have to be fully harnessed. Over the years, among other policy initiatives, liberalisation of imports of improved varieties and breeding lines has revitalised the availability of high quality seeds. The Indian seed market, estimated at over $1 billion, has grown at double the pace of the global seed market. However, there is a long way to go in developing and deploying seeds that will address extreme weather variations and poor soil conditions, besides serious biotic stresses.

A policy framework that encourages investment in research, and streamlines regulatory processes for accelerated introduction of new technologies will enable sustainable intensification of Indian agriculture.

Making farming remunerative, and enthusing NextGen in agriculture

India’s young demographic profile is a great source of strength. Unfortunately, a future in the agricultural sector does not seem to evoke enthusiasm among the youth. Income from farming is not only unattractive but also not commensurate with the risks and drudgery associated with the farm sector. This has led to farmers moving away from farms to non-farm livelihoods in villages, besides migration to urban areas.

The next horizon in agricultural progress cannot be conquered without harnessing the vitality of the youth. This will require a policy impetus that encourages two vital components: one that enables greater mechanisation of farm operations to mitigate drudgery and enhance efficiency; and the other that enables larger value creation through farming that blends traditional knowledge with new technologies.

Aligning production to changing consumption trends, and linking farmers to markets

Rising disposable incomes and growing urbanisation has brought about a dimensional change in the pattern of consumer demand. The share of cereals is reducing in the diet, in favour of vegetables, fruits, milk, and meat. Besides more variety, today’s consumer demands superior quality, enhanced safety, and added convenience while shopping or using products. This dictates a fundamental transformation.

Producing what the consumer demands is an entirely different ball-game from consuming whatever is produced by the farmer. It is a re-orientation from production-driven supply chains to demand-driven value chains, and will entail huge investments in creating appropriate infrastructure in post-harvest, logistics, processing, packaging, retailing, and information systems.

Corporate involvement through vibrant agri-businesses and food-processing can considerably enhance value for farmers by linking them to the value-seeking markets. However, a variety of policy constraints deter any sizeable investment by the corporates today. Foremost is the non-implementation of the ‘Model APMC Act’ by many states. In addition, the ‘Essential Commodities Act’ imposes stock limits, and curbs movements from time to time, further affecting the viability of agri-businesses. ‘Forward Contracts (Regulation) Act’ also requires reform.

Currently, critical risk management tools, such as Options, are not available. Farmers can realise better prices without undue risk, by buying Options, either directly or through aggregators. This gives them a right to transact at a future price and not just an obligation, as is the case when only the Futures are available. Trade and marketing policies in agriculture will need a significant overhaul, if the farmers have to benefit from the huge consumption dividend offered by the country.

Sharper targeting of social subsidies, and vital investments in soft infrastructure

Over the years, subsidies in the farm sector have certainly played an important role in aiding resource-poor small farmers. However, subsidies can be significantly market-distorting. There is also a concern that systemic leakages significantly dilute the quantum of subsidies that finally reach the intended beneficiaries. Direct transfers of subsidies are perceived to be a more effective alternative. Policies need to sharply target the subsidies to ensure social security but in a way that does not distort markets. In the current global and national economic context, market forces are key to unleashing the true potential of the agricultural sector.

While past investments in rural areas have enhanced the quality of hard infrastructure, such as roads, telecom and irrigation, we need to invest in the complementary ‘soft infrastructure’ now. It is important to create the equivalents of ITIs in the farm sector to train rural youth and enable better implementation of best practices. Investments are also needed in soil health and other natural resource management systems, as also in the emerging agri-services.

Orchestrated action for sustained resurgence

The policy priorities outlined here need to be carried out in a concerted manner to create a springboard that can propel Indian agriculture into a higher orbit.

The ITC e-Choupal experience in empowering millions of farmers lends confidence that a synergistic and integrated rural programme can significantly raise incomes and secure a better quality of life in rural India.

Given the right policy impetus and effective public-private-people partnerships, there is enough reason to believe that the giant agriculture sector can be re-energised to offer a new promise for tomorrow’s India.

 

This article was published in the Business Line print edition dated May 14, 2014 with modified sub-heads http://www.thehindubusinessline.com/todays-paper/tp-opinion/sowing-the-seeds-of-a-farm-revival/article6006734.ece

 

Indian Agriculture: Value Creation Opportunities

Earlier today, I spoke on the subject at a Conference in Delhi. In essence, this is what I said: 

India has successfully transitioned out of an era of food shortages, with the help of giant strides taken by Indian agriculture over years.

With the increasing per capita incomes and growing awareness, today’s consumers are seeking better quality and more variety in their food products. They prefer products that offer convenience while buying and using. Food safety is another area of concern. Much like the agricultural production system responded to the growing demand in the past, there is an opportunity for the agri-business system to respond and deliver these requirements to the consumer.

Besides adding value through conventional processing and packaging, today’s agri-businesses can also explore a number of additional sources of value creation.  For example, 

Supply Chain Management: Through supply chains that preserve product identity from farm gates to the retail shelves, or even better, supply chains that trace products to farm practices, product integrity can be maintained and safety can be assured.

Backward Integration: Through tighter integration of production systems into their value chains, agri-businesses can transmit demand signals to the farmers, transfer modern crop management technologies, coordinate delivery of farm inputs, and share production & market risk with the farmers; this will help produce crops and varieties more sharply aligned with the market demands.   

Risk Management: Through new market based risk management institutions such as Commodity Derivative Markets (Futures & Options) and Weather Based Crop Insurance Products, the production and market risk inherent in agriculture can be transferred into the broader marketplace for more effective management.

These steps will deliver value to the consumers, improve farm profitability and create sustainable opportunities for the enterprises that connect the consumers with farmers.

On its part, the Government must facilitate this transition by reforming the currently restrictive agricultural laws such as Agricultural Produce Marketing Act, Essential Commodities Act and Forward Contracts Regulation Act.    

Role of Corporate Sector in Inclusive Growth: Importance of Business Model Innovation

Earlier today, I spoke at the SMF-IIMA Conference on "Challenges to Inclusive Growth in the Emerging Economies".

My talk posed and answered four questions.

Q1: Who is "excluded" from the current growth process, that we now want to include?

Two sets of people are excluded, may be are even short changed, from the exciting growth story of the emerging economies in general, and India in particular, in recent times.

1. Some sections of our population, because they suffer from certain inherent disadvantages, are excluded from the new economic opportunities and growth (e.g. farmers, rural crafts persons, people with physical disabilities etc)
2. Some other people are excluded from the economic equations, because they don't have a say today! I am talking about our grand children and their grand children. The decisions taken by our generation have a bearing on the availability of natural resources (e.g. water) and the quality of ecology (green house gases) when they are around on this planet.

Q2: What can Corporate Sector do in this context?

Traditionally inclusive growth has been the domain of Government, Civil Society Organisations, Multilateral Institutions. Although there has been some progress over all these decades, none of us can feel satisfied with today's position of either of these excluded segments. For example, per capita GDP of an Indian farmer is just about 1/4th of that of rest of Indians. And, the concerns on climate change are at a level we have never seen before.

Programmes of these agencies miss out on one or the other aspects of three crucial areas.

1. Sustainability - where the programmes are subsidy based, their long term sustainability is suspect
2. Outcome effectiveness - for the target segment of people is weak, as the programme focus is typically on outlays
3. Scalability - is often the most challenging aspect of a successful programme

Call these SOS, if you will, by the first letters of the three areas. That's the message to the world.

On the other hand, by the very nature of enterprises, Corporates survive & thrive by doing these three things right...

1. Profit, the key metric of financial sustainability is the core objective of any commercial enterprise
2. Value Proposition to the target group of customers is the essence of market and competitive strategy, and guarantees outcome effectiveness.
3. Growth, the other metric by which Corporates swear, is what goes into determining market capitalisation of an enterprise

In other words, Corporates have the specific wherewithal to engage in inclusive growth agenda by applying these capabilities and deal with the SOS challenge.

Q3: Why is Business Model Innovation important?

Despite such a case for Corporate involvement in inclusive growth, there is widespread skepticism too!

Many in Government and Civil Society are skeptical about the intentions of Corporates. They simply see such engagement as a lip service, since they believe that 'profit' and 'inclusive growth' are at cross-purposes

Even the Financial Investors see a conflict between a company's profit objective and its social or environmental engagements.

On the other hand, if Corporates stay out, the SOS challenge unlikely to vanish. If the income divides expand and the ecological insensitivity continues we will have a serious problem. No business can succeed in a failed society, or in a world where natural resources are exhausted.

Then, there is also a huge business opportunity in selling products & services to the poor, and in selling eco-friendly products.

How do we reconcile these conflicting realities? The only answer is Business Model Innovation.

If we are able to innovate business models in a way that the profit objective of Corporates is enmeshed with the social or ecological benefits to the community at large, the new goal will be well aligned.

While many Corporates create shareholder value indifferent to society, and some even do at the cost of society, the conflict can be resolved if shareholder value is created "through" serving society. That's where business model innovation comes in!

By calling it business model innovation, I am distinguishing it from product or service innovation that can help inclusive growth. Renewable energy, micro finance, mobile phones, and road infrastructure are some examples of such product & service innovations.

Q4: Is there a special tool kit for business model innovation for inclusive growth?

Based on my experience in building the many phases of ITC eChoupal, and having observed several other inclusive growth initiatives of ITC from ring side, I see three important tools in a kit that will help innovate business models and deliver inclusive growth.

1. Co-creation together with the Communities: Both design and execution. This makes up for the missing infrastructure (eg individual credit rating, dispute resolution) through infusion of social capital. This also cuts costs. More importantly this co-opts lead consumers and helps accelerate product & service innovation. Two of the new institutions innovated under ITC eChoupal system viz. Sanchalak and Samyojak are vital components of a co-creation platform.
2. Leveraging Technology: Technology helps in remote delivery of services (eg eLearning, Telemedicine) and overcomes the physical access barriers as well as the knowledge concentration barrier. Technology can multiply productivity. Technology can also personalise solutions to individuals, so important given the heterogeneity of the target segment we are talking about. Technology helps in precision, leading to better resource usage and improve quality of the output.
3. New Revenue Models: Integrating the micro producers into value chains that connect them to the markets, is one way in which their share of a consumer price can be taken up. The principle of "Third Party Pays", as in Media business, is an important way in which the burden on the low-income producers or consumers can be reduced. This leads to rapid market expansion. Platforms that can carry products & services of several other organisations can create "increasing returns ecosystems" and deliver exponential growth, once the network effect sets in.

Wish you good luck, in co-creating a new world order :)

Corporate Social Responsibility (CSR) - A socially responsible investment?

Yesterday, the Net Impact Club of ISB hosted a Panel discussion on "Corporate Social Responsibility (CSR) - A socially responsible investment?" PS Narayan (Wipro), Janet Geddes (KPMG), Unmesh Brahme (formerly with HSBC), Mudit Kapoor (ISB) were my co-panelists.

I was the first speaker; this is what I said in my opening remarks. Highlights from what other panelists said in their remarks, as well as the questions & comments by the audience are mentioned in italics, integrated into the text of my remarks for the sake of seamless reading thematically...

Is CSR good, bad or ugly? Actually, it is not one CSR and therefore there can't be one view. I see four steps in the CSR ladder. Pick your step and stick your label :)

Step 1 in the CSR Ladder: Earn Profits. Pay Taxes. Leave the rest to Governments.

Traditionalists argue that the focus of business enterprises should be strictly on satisfying the shareholder desire for a return on their financial investment to the exclusion of other non-financial stakeholders.

Are Corporates economic citizens? Or socio-economic citizens?

Corporates as artificial entities should have no social responsibility, real individual people must have a social responsibility.

Generating profit by servicing consumers in a competitive environment is the most socially responsible act of a Corporate.

Is CSR a way circumvent the society's perception that profits are bad?

Step 2 in the CSR Ladder: Implementation of Core business activities with broader responsibility towards all the stakeholders.

Demonstrate positive economic, environmental and social performance over long term. Triple Bottom Line Reporting along these lines. Since these activities are cost / investment intensive in the short run, these are typically supported by the market mechanisms such as Green Taxes, Emission Trading etc. Many times there also conflicts in trading-off interests of one stakeholder vs another. At a threshold level, typically such responsibility is driven by statutes too. Many companies go beyond those threshold voluntarily and adopt higher standards.

Are the three bottom lines mutually exclusive or reinforcing?

Most ethical companies are also the most profitable, per a global survey...

Corporates must look at all their spheres of influence viz. workplace, local communities, environment and supply chain & marketplace

Step 3 in the CSR Ladder: Poverty and environment focused social investment and philanthropy programmes.

Approaches vary from a simple Write-a-Cheque, to Venture Philanthropy, to Strategic Philanthropy. While write-a-cheque simply brings financial resources from Corporates, Venture & Strategic Philanthropy approaches bring other corporate resources such as management & entrepreneurial skills multiplying the impact. Any which way, scale & sustainability of charity is limited. Most typically

How do you decide how much money you put into CSR programmes?

What are the metrics of success of a CSR programme?

CSR is a social license to operate in backward districts, especially if you are in industries that extract from community resources, such as mining.

Is CSR a license to kill? As in extractive industries harming the environment!

Corporates have an ability to do good. They should see this as a responsibility to do good, because society is in dire need of good deeds.

Trying to solve world's problems, just because we have capability is arrogance! Patronising!

Isn't the best way to deploy CSR funds through supporting Social Entrepreneurs?

How many CSR initiatives are really scaled? To make any meaningful impact?

Doesn't a lot of employee volunteer work end up as a picnic, without any real work on the ground?

Even a picnic is good; better than not doing any good at all...

CSR funds are no more than a "tax" by Corporates on the market - by raising consumer price, paying lower salaries to employees, lower dividends to the shareholders or lower prices to vendors. This is more true in non-competitive markets, where corporate have such pricing freedom.

Focus of my talk today is to share ITC's experiences in adding the Fourth Step to this CSR Ladder: I refer to ITC's innovative business models, wherein our need for creating shareholder value is enmeshed with that of local communities in a mutually supportive, interlocking and interdependent partnership… ITC's eChoupal, Farm Forestry are in this league. Agarbattis is another business on similar lines!

Emerging economies, in particular, offer a low hanging opportunities to create such enmeshed models. Typically small producers have constrained access to markets, whether for information or knowledge, for inputs or output. As a result issues like low productivity, low share of consumer price, high transaction costs limit the incomes of these producers. Demand signals also aren't transmitted to these producers effectively, for them to be able to respond to changing consumer needs. On the other hand, corporates who source from these small producers suffer too, from high transaction costs, poor quality and delivery schedules, lack of traceability to product source point and so on... Corporates can invest in R&D, appropriate infrastructure and integrate these producers into their value chains to improve coordination, cut transaction costs, enhance quality, increase productivity to create win more - win more relationships. Higher the Corporate efforts to increase incomes of the poor, more the profits for Corporates themselves from such relationships. As a result scalability ans sustainability of such models is never a strategic challenge. Value chain integration can effectively deal with several environmental aspects too.

In ITC's eChoupal and farm forestry examples, the social impact is through better livelihoods to small farmers and poor tribals. Conservation Agriculture and Carbon Sequestration deliver environmental benefits, while competitive sourcing of high quality farm / forest produce bring the economic benefits to ITC.

While executing such initiatives, it is very important that the communities themselves are fully co-opted into the design and execution of the business models. This ensures relevance of the solutions as well as lower costs. On the other hand, one has to work closely with Governments to ensure that subsidies do not unduly distort the markets.

Typical drivers of CSR: Enhanced Reputation, Employee Motivation, Economic Advantage, Risk Management, Innovation & Learning, Statutory Compliance

Consultants help in CSR strategy formulation, due diligence, monitoring & evaluation, organisational development

If companies are indeed genuine about CSR, they shouldn't be part of Corporate Communications or Corporate HR...

CSR strategy gets formulated by corporates based on their perspective of themselves; whether they are Pure Capitalists (markets will deal with all issues), Social Contractors (explicit & implicit expectations from society) or Ecologists (we are but one of the species on this planet living at a point of time)

Mobius strip can be seen as a metaphor for the complex global challenges

Push factors for CSR: Environmental Conflict & Climate Change; Pull factors for CSR: Opportunity for inclusive business growth

Is regulation the path go down in India? Or leave to the discretion of Corporates?

How do we rope SMEs in to CSR mindset? Even workplace fairness, to start with...

Is India ready to buy green products at higher prices?

How to bring CSR & sustainability thinking into B-schools?

Is bringing affordable consumer goods to BoP CSR?

Isn't dealing with Naxalism a business agenda? How many CEOs want to have a serious action plan for this?

General bias of the hall, as sensed by me, at the end of the panel discussion was " Corporate Philanthropy is bad CSR. Making profits is good CSR. Models that enmesh business & community interests is the best CSR! "

Evolving Landscape of Rural India: Role of Mobile Devices

Mobility will play a central role and significantly influence the very evolution of rural India hereafter. Therefore, rather than suggesting a plain list of ‘many ways in which mobile devices can be used in rural areas’, I would like to start with a quick look at the underlying drivers of rural India and then propose a framework to visualize the consequent strategic role that mobile devices can play.

My presentation is set in four parts:

1. Aspirations of rural people
2. Fundamental characteristics of rural India and how they come in the way of fulfilling those aspirations
3. Components of value in general, and their relevance to rural India vis-à-vis the aspirations and characteristics
4. The role mobile devices can play in this backdrop

Over the thirty years I have been working in rural India, the most remarkable facet I observed is the transformation of rural mind-set from one of ‘resignation due to deprivation’ to ‘aspiration arising out of empowerment’!

• This transformation occurred as the rural infrastructure improved (especially roads and telecom) and their incomes rose. And the sources of income expanded too - within agriculture diversification helped, while the non-farm activities multiplied (livestock, sales & services in rural markets). Several Government schemes as well as remittances from the kin who migrated to towns brought in more money into rural hands.
• The aspiration is primarily for better basic services (education and health), and superior quality of life (access to consumer goods used in urban India, financial services and entertainment). People, naturally, are also looking for opportunities to step up their incomes further (new livelihood sources and appropriate production inputs are the needs here) to be able to afford such products & services.

However, three characteristics of rural India come in the way of realizing these aspirations…

• The wide geographic dispersion of our villages constrains access to products & services mentioned earlier, in terms of timeliness, quality and cost - if they access at all. Because villages are a long way away from the centres of action (urban areas) where specialists reside or these products & services originate.
• Extreme fragmentation in terms of the size of rural production units reduces their bargaining power when they buy their inputs or sell their output. This is true even for financial services and consumer goods as well, as the ticket size of their purchases is very small. Aggregation can empower them, be it in the form of cooperatives, or self help groups; whether physically or virtually
• Wide heterogeneity in circumstances of the people across rural India requires products and solutions that are personalised to their unique needs. Delivering such solutions is expensive as is, and is further unattractive when the unit volumes and paying capacities are small.

Value has three components. Value Creation, Value Delivery and Value Capture

• By a logical extension of the three characteristics already described, it is obvious that value can be created in rural India by delivering services remotely (overcoming dispersion), by personalizing solutions (that address heterogeneity) and by democratizing access (neutralizing scale / class disadvantage, eg. for poor people & women).
• What is not commonly appreciated is the fact, that the same three characteristics constrain rural people from taking advantage of even the available products & services unless they are delivered as a complete end-to-end solution. For example farm productivity won’t rise unless relevant agri advisory, real-time weather / market information, credit, seed, nutrients, crop protection chemicals etc are all available in a coordinated fashion. So, a well-orchestrated ecosystem is needed for actually delivering the value created by using the ideas mentioned in the first bullet.
• For any enterprise to scale and sustain over time, some of the value created & delivered must be captured for its financial investors. All of you know the famous examples of many dotcom companies that created value for their customers, yet went bust as their business models could not capture enough value for themselves! In case of rural markets, plain vanilla business models that try to capture more share of the small wallets find it difficult to sustain. Innovative models leverage aggregate volumes of these markets and get interested third parties to cross-subsidise (much like the media business), besides capturing some value from the rising incomes (having facilitated such rise in the first instance)

Interestingly, with their wide-ranging capabilities, mobile devices can play a central role in all the three components of value in rural India

• Remote delivery of certain virtual elements in areas like education, health, entertainment; both information & transactions in income generating areas like agriculture, financial services, governance & citizen services; exchanges for employment and matrimonial; social networking platforms etc are all already happening at some basic level using mobile devices by extending the applications designed for Web.
• Additionally, by integrating features like unique identification, crowd sourcing, GPS, GIS, visual mapping, text-to-voice, multi-player collaboration etc., several other value creating applications can be developed which wouldn’t be operationally feasible without mobile devices.
• Finally, with targeted delivery of content & advertisements mobile devices will facilitate the value capture process.
• Remote delivery at door-step, personalized solutions for relevance, virtual aggregation for economies of scale, collaboration for putting end-to-end solutions together, unconstrained access even for the disadvantaged – all so necessary for development of rural India, are now possible due to mobile devices

Let me now illustrate these propositions with some specific uses of mobile devices along these lines

• In education, e-learning will morph into m-learning; further moving to potentially deliver books over mobile devices as the screen sizes expand; with the ability to stay in touch on an ongoing basis, life-long delivery of continuing education is possible
• Last mile access in health services, drawing upon experiences from web based tele-medicine services. Mobile device itself as a medical instrument (eg pulse reader) is not a distant dream.
• Entertainment applications do not need much elaboration; will have instant demand
• Location based information services like Yellow Pages (eg doctors, agri input stores) can morph into mini meta markets
• In agriculture and other livelihood activities, starting with elementary services like information provision - delivered as text or voice - (eg. weather forecasts, market prices) to transactions (eg e-procurement through auctions, negotiations) to sophisticated applications like precision farming through personalized crop management advice (with the ability to click and transmit photographs on one hand, and integration with GIS on the other hand)
• Banking transactions
• m-commerce transactions like railway ticket booking
• Calendar integrated notifications and alerts
• Remote monitoring and activation of farm automation systems (eg irrigation, fertigation), some of which is already happening as a grassroots innovation
• Supply chain management applications in rural marketing (for FMCG, medicines etc) like order taking, promotions, information uploading, remote stock management in rural outlets
• Governance applications like voice / text alerts of Government Scheme; or operational activities like uploading of local data by Village Accountants, Anganwadi Workers, Warehouse Keepers etc
• Citizen reporters generated news and other local information, or even poll based market research, visually mapped by integrating with GPS for reading patterns & movements and re-casting for local action

In short, a mobile device can become a hand held transaction platform, a personalized bank branch, a retail store, a cinema screen, a teacher, a doctor and many such, besides being the good old communication tool. Thereby, playing the role of a key enabler in taking rural people forward with rest of India; delivering the much desired inclusive growth :)

PS:

1. This blog is a summary of my talk at the Nokia Strategy Summit in Amby Valley (Lonavala) on 29th April 2010.
2. I am thankful to so many friends (a record fifty four in all) who shared their thoughts via Twitter, Facebook and LinkedIn as valuable inputs for this talk.

Panel on “Rethinking Sustainable Growth: New Ideas and Approaches”

Panel on “Rethinking Sustainable Growth: New Ideas and Approaches”
at the ICC Regional CEO Forum on “Globalisation and Inclusive Growth”
Delhi, 4th December 2009

The Panel was chaired by the well known Professor of IMD Mr Jean-Pierre Lehmann. He set the stage by underscoring “poverty and sustainability’ as two of the greatest challenges identified by ICC as part of its agenda covering five dominant themes in all (which include ethics, values etc). He also suggested that India has to succeed if world has to succeed in 21st Century; and India will succeed if its “inclusive growth” strategy succeeds!

Economist Surjit Bhalla (Oxus) who spoke before me, recounted per capita income statistics over time (from around the world; and India & China in particular) and said he was skeptical of any improvement. He provoked the Panel by saying “Inclusive Growth” is a sequel of the same movie with similar unhappy endings of a rich and a poor world each time! First the world called it “Poverty Alleviation”, then “Bridging Inequalities”, thereafter “Pro-poor Growth”, and now “Inclusive Growth”

I had combined the points made by the two opening speakers, to argue that (1) Great challenges are big opportunities for business, and (2) Because Business is participating in the “inclusive growth” paradigm, there is hope for a different ending this time :-)

In the context, to me “inclusive growth” meant (1) including the poor in the growth process, by bringing them access to basic services viz. education & health, and empowering the producers among them to participate in the value chains to raise their incomes (2) including the people from our next generations in our thinking and actions, in a manner that we don’t aggressively consume non-renewable natural resources that belong to them, while we work on economic growth and superior quality of life of this generation

I highlighted three approaches and several ideas (primarily illustrating ITC’s actions) whereby Business can enmesh its financial objectives with the societal objective of “inclusive growth” defined as above…

Approach A: Product / Service innovations serving either or both dimensions of “inclusion”

Idea 1: Platforms such as ITC eChoupal that leverage ICT and Social Capital to deliver an end-to-end solution to small farmers and empower them by improving information flow, market signals, decision support, reducing transaction costs, raising productivity and improving quality. Extending the same platform to deliver end-to-end solution in non-farm employment space now.

Idea 2: Weather based Crop Insurance Scheme for yield risk reduction

Idea 3: Smoke less, energy efficient “Oorja Choolas” of BP Energy, now transferred to First Energy

Idea 4: Solar lighting and Cooking products developed by several companies

Idea 5: Micro finance with customized repayment cycles

Idea 6: Relevant applications (e.g. Nokia Life Tools) on low cost mobile phones

All these products / services are delivered through ITC eChoupal platform, so we know how appropriate these products are in “inclusion”.

Approach B: Process / Business Model innovations that extend along the whole value chain

Idea 1: Process innovations that reduce negative impact on environment , while improving efficiency or reducing costs of manufacturing (e.g. Wind Energy project of ITC Paperboards business)

Idea 2: Green Supply Chains (e.g. ITC Hotels, Sustainable forests integrated into ITC Paperboard business)

Idea 3: Recycling Waste: (e.g. WOW – Wealth out of Waste – initiative of ITC to recycle paper in urban areas)

Idea 4: Integrating rural people into the sourcing and / or marketing activities (e.g. ITC eChoupal)

Idea 5: Promotion of Conservation Agriculture through ITC eChoupal (viz. practicing minimal mechanical soil disturbance through Zero Till, managing organic soil fertility through mulching, crop rotation to minimize pests & weeds)

Approach C: Improve Corporate Governance & Transparency:

Idea: Publish Audited Sustainability Reports (as ITC has been doing for several years now) using GRI guidelines, to be accountable to all stakeholders beyond financial investors

Bottomline: I am very optimistic that the “inclusive growth” sequel will have a happy ending because businesses are driving this paradigm. More companies have to adopt this approach and do on a larger scale to be able to deal with the magnitude of the challenge. And this can only be done in partnership with Governments and Communities :-)