Boiling the social enterprise ocean

[Editor’s Note: A few months ago, I started a new blog (Techsangam.com) focusing on social enterprises in India. This post was published on TechSangam a few days ago and am reposting it here to introduce you to my new blog. I intend to still blog in this space though the frequency is a bit non-deterministic at this point.]

Two months into my new gig, my view into the world of social enterprises is getting a little crisper. While it’s still a vast ocean, my method to navigate the waters has become more deterministic. There’s no danger of boiling the ocean anytime soon but initial trends of focus have emerged and I’d like to describe them in this post.

The Great Migration: There are anywhere between 300 to 400 million Indians who will be migrating from villages to cities in 25-40 years. And let’s not forget that there are already 100 million Indians today who are in a partial state of migration – partial because they work 90% of the year in urban India as cooks, drivers, construction workers, etc. to support their impoverished families in rural India, whom they visit a few times a year. In spite of contributing to India’s economic growth in a non-trivial way (excess of $500 million of remittances by Bihari and Oriya migrants alone in 2006-07), migrants are sadly the missing link in India’s Development. Notwithstanding innovative rurbanization initiatives from states like Gujarat (see Rurbanization in Gujarat – early signs of success), much of the globalization trends point to increased urbanization world-wide, not just in India, whether current city-dwellers like it or not.

A fresh look at the migration narrative takes a closer look at this trend. While nearly everyone still keeps repeating “70% of India lives in its villages“, few have bothered to look at the latest numbers. Tamil Nadu, Maharashtra, and Gujarat (states with the highest urbanization percentages) are already at 46%, 45%, and 43% respectively.

Rural Development: Even after accounting for the most aggressive migration forecasts, a very sizable percentage of India will continue living in its villages. The largest economically disadvantaged group is the impoverished small-scale Indian farmer. Improving the livelihood metrics of this group is the only sure way of bucking the migration trend. A key learning from this Duke University poverty alleviation study is that income diversification is the top correlating variable for households escaping poverty. The leading reasons for households descending into poverty are related to critical health expenses and high-interest private debt.

Much as the ruling Congress government would have us believe that the MNREGA scheme is a rousing success, the reality is far from that. There’s even growing evidence that far from improving the economic condition of India’s villagers, the scheme is contributing to inflation. This is not to say that all government schemes are missing the mark. The Ministry of Labour & Employment’s RSBY (Rashtriya Swasthya Bima Yojana) program, rolled out in April 2008, provides a free health insurance card (including hospitalization costs upto Rs. 30,000) for Below Poverty Line (BPL) families. 23 million families are already benefiting from this program and the best part is that it has created a demand for healthcare services in areas traditionally considered unprofitable. This demand is creating an environment for a slew of private hospitals to compete with public hospitals in providing healthcare services to BPL families.

You can read the rest of this post here on TechSangam.