Lead Story

Social Enterprises Missing in the Larger Picture: Anil Gupta

The fact that several niches remain unfilled ... shows that the existing social marketplace is not effective enough in clearing unmet needs

Illustration: Saahil Bhatia

When both the market and the state fail to clear the demand for certain services and products, the intervention of civil society organisations and social enterprises becomes inevitable. Whether such enterprises will indeed emerge depends upon the ability of local disadvantaged communities to articulate their unmet needs into some form of demand. They can also arise if the existing enterprises or new start-ups recognise these unmet needs and decide to meet them affordably and inclusively with or without third-party funding.

The fact that several niches remain unfilled in some of the most deprived regions, whether in tribal regions of the north-eastern, central or eastern India or some other pockets, shows that the existing social marketplace is not effective enough in clearing unmet needs. These gaps could be for education, nutrition, employment, skill upgradation, material upgradation for tiny fabricators, grassroots innovators or distributed community-level herbal pharmacies, etc. Shodhyatras by the Honey Bee Network in all the states of the country have made such gaps as well as creative solutions for some quite apparent.

Challenges in the Social Sector

Some serious challenges to social enterprises in many less economically developed regions are: a) The extremely low level of in situ value addition in agriculture. This is perhaps one reason for the persistent dissatisfaction among many rural regions; b) Abundant or abandoned biological resources. In almost all such areas and sectors, there is a huge opportunity for supporting local communities in setting up bio-enterprises by women’s self-help groups and other enterprising individuals and innovators. GIAN, a Honey Bee Network institution, is trying to do so with the help of DBT in Baramulla, Jammu and Kashmir, west Sikkim and Kiphire, Nagaland; c) Provision of risk capital for grassroots innovations and outstanding traditional knowledge; d) Lack of genuine impact investment. Not one community-level innovator has received the so-called impact investment or even angel funding; e) Lack of public procurement. Many start-ups meeting important diagnostic or other community needs at extremely affordable costs need the support of public procurement. There should be an annual report card about how many innovative start-ups approved by regulators got public procurement support. This will create pressure on public servants to pay greater attention to these frugal solution providers from or for the grassroots.

Innovation Amid Adversity

During Covid-19, it was realised that parents of as many as 60% children studying in government schools in many states either did not have a smartphone at all or had just one, while many children needed to study online at the same time. They were deprived of online education. They still have to catch up with the rest. There are not many toll-free helplines, like sahajpathonline.org in West Bengal, answering questions from such students about science, math or other subjects. Should not such sites providing a teacher on call be available in all Indian languages? We have two kinds of citizens in the country today; the first studies in the local language in government schools and the second is in private schools, often able to afford tuitions and thus access a better future. Social enterprises bridging the gaps, reducing inequity and making the world fairer and just with low overheads deserve much greater attention than what they get today.

Social enterprises, in a broad category, include social movements with or without commercial activities for initiatives which meet the unmet social needs through market and non-market-based instruments. Not all enterprises recover the full costs of the products or services they provide from the users or recipients. Some recover part of the costs and some do not recover any cost; for instance, MVSS providing Jaipur foot and artificial limbs to physically challenged poor people. Some recover in kind, such as Goonj which provides material cost and clothes for building community infrastructure like roads, ponds or bridges, and people contribute their labour. There is a school in Assam which recovers fees in the form of empty bottles and waste plastic which children collect and provide. It is implementing the NEP (National Education Policy) creatively. The exchange of different goods and services makes the social enterprise more inclusive.

The Honey Bee Network organises a traditional food festival, led by SRISTI and supported by GIAN, which has not only been promoting nutritional dishes and millets for around two decades but also provides space for social enterprises, including the groups working with HIV patients running a food stall to remove stigma. Organic farmers all over the country need such festivals to be organised in every city to help make a transition to sustainable biodiverse agriculture more viable.

Social Enterprise in India

The future of social enterprises is promising in India. While the promotion of low-cost insurance, distribution of generic medicines at affordable prices and strengthening of health infrastructure have improved the situation, there remains a huge gap when it comes to the facilities at a primary health centre (PHC). The Junagadh district administration recently installed health ATMs in PHCs in about 10 centres for low-cost screening and blood testing. One needs such facilities in all the PHCs covering 650,000 villages. One adverse health episode, and savings of five years in a poor household are lost, besides incurrence of debts. Even today, with all the microfinance and other financial institutions, the share of institutional finance remains low in the total borrowing basket of the poor and needs more barter-based lending and recovery systems. One needs to go beyond micro-credit and move towards micro-venture credit to trigger a widespread entrepreneurial upsurge in rural and urban areas.

The prospect of social venturing is very bright, provided regulators relax ploughing of investment in this sector by even middle-class well-meaning individuals, not just high net-worth individuals. Tax rebates for investment in formally registered enterprises, start-ups by individuals, trusts and public and private organisations might help. Similarly, at least 25% of CSR resources ought to be ploughed into innovation-based enterprises to improve future employment generation and provision of necessary social services.

The author is a visiting faculty at the Indian Institute of Management, Ahmedabad, and founder of the National Innovation Foundation