Kuldip Maity

Have you heard of Srabani Bera? I will not be surprised if your response were, “Srabani who!” So let’s hear Srabani’s story first. Like many other families like hers, Srabani’s husband had to migrate to distant Bengaluru to earn a living.

Such migration always tends to be fraught with pain, pain of separation from immediate family. More often than not, the families suffer more due to the absence of an able male support. Kids miss their fathers, wives their husbands.

Why did Srabani’s husband migrate? This is a non-starter as we all know what does poverty and lack of opportunities to escape the vicious grip of penury do.

Srabani was artistically inclined and she wanted her husband back home but she didn’t know how. Could she have done something with her natural inclination and monetise it?

The help came in the form of microloans. Srabani has set up her own artefacts making unit. She is expecting to scale it up big enough to support the entire family so that her husband will not need to work away from home.

Srabani is an example of what grit and right kind of help may achieve for the person concerned. Everybody has some skill. How one puts that to use differentiates that person from the rest. Srabani by turning her artistic inclination into an earning source for the family is showing others how to ride over the economic bumps.

Srabanis of this world are the actual influencers in the nation’s quest for rural uplift. This is a dynamics that needs reiteration. Why do the poor remain poor? That’s the question that keeps dodging us and has been dodging us ever since we won our freedom.

Subsidy, in the initial days of struggle with development, was thought of as a way of helping the poor out of their predicament. But for decades, the subsidy route failed to yield sustainable gains. The key word in development is sustainable. But the subsidy route proved to be non-sustainable. The idea of empowerment by providing micro capital through the microfinance route started catching up from the seventies.

The foundation of the idea lay in accepting the natural entrepreneurial spirit that is inhered in the poor. Life for them means innovating to survive on a daily basis. What if this spirit was harnessed as the springboard for putting the poor on prosperity cycle? By turning into micro entrepreneurs, Srabanis of this world not only defines a route for self-transformation, they also act as the model for others to follow. They are the real heroes of new India by paving a sustainable development path.

Not all persons are equal. Neither are our financial needs. Yet all of us need banking services – from the very basic to the more complicated commercial needs.

For a migrant labour living outside there is a need to send money back home to his family. He needs a bank to keep his money and send across to his family. The family also needs an account to receive the money. The basic purpose here is send and receive money.

Previously, the same service used to be delivered through the postal department. The instrument of transfer then was money order. With the evolution of the banking services and with the availability of modern technology this mode though exists has transmuted into eMO or electronic money order. One can still send money orders but they have to be between Rs1000 and Rs50000. But it cannot be sent from any post to any post office unlike previously.

However, for those with remittance needs, a savings account ought to be the preferred route, be that in bank or post offices for the simple reason that one doesn’t need to keep cash at home in excess of need anymore. The same account can also serve the needs of a piggy bank and to deposit and transfer there is no need to visit banks anymore as all the basic needs can be satisfied by pushing a few buttons on the mobile.

But banks cannot survive on the remittances alone. And as we start going up the ladder our financial needs also expand. Loans, the primary earning instrument for the banks – they take money from us as savings and lend the same out against higher interest with the difference remaining as their primary source of income, are our second most important needs with the growth in income.

As we climb the ladder of prosperity we need to own houses, cars or even loans for other consumptions. This society survives on credit. We spend now only to make it up from our expected future stream of income. We also save alongside to cover the needs that may arise in future and may need to be covered not through loans but with own assets. The banks are the primary destination for our rising and spreading financial needs.

We need to remember that the bouquet of services that we now get from banks has not been there always. For example, banks are now selling insurance. But this was something that we couldn’t even imagine a few years back. Neither could we think of buying mutual funds, which incidentally are also of very recent (recent as in few decades of existence if we discount UTI products) origin, directly online within a specific bank’s online operational environment.

The same is true for banks’ engagement spectrum with businesses of various hues. From basic current account related operations, overdrafts or LCs to consortium lending and many other services, banks engagement spectrum with the business entities is no longer just a handful. It’s a huge spread.

While the banks have grown in response to the ever spreading needs of the customers, the regulators have also been facing challenges to anticipate the needs and place control mechanism in place lest events should overbear the legal bounds of operations.

It has long been in discussion whether banks can have similar focus for all types of customers or different formats of banks catering to different needs of the pyramid. But this is a different discussion.

The huge rural spread of Indian market has always remained a dream research area for corporates as well as academic researchers. Ever since Professor Prahlad theorised on base of the pyramid – that largely refers to the rural segment of India given the characteristics – rural market has remained the buzz. The corporates have also played with different marketing strategy to penetrate the market to grab the share. However, the reverse, i.e. marketing the rural products in the urban and global market has yet to take the spurt that it so deserves.

The major struggle for the corporate marketing teams has been to overcome the local logistics support. Various innovative ways have already been developed to address the issue. The result has been a phenomenal growth in the rural consumer expenditure.

All the consumer dipsticks are pointing out the trading up of the rural consumers. The organised consumer spend in the rural sector is projected to reach a whopping $100 billion by 2025 or even before – a figure that one could never think of even a few years back.

A Credit Suisse study looked into the reasons behind this transformed consumer preference for branded products in the rural market. The likely reason for such a trading up, the study finds, is the increasing industrialisation in rural areas. It finds 75 per cent of the new factories located in the rural areas.

Such industry proximity tends to spurt a transformation in the consumer behaviour as it brings in its wake an urban connect that the areas lacked hitherto. Penetration of televisions also plays its role through saturated marketing through ads and at the same time providing access to the products through innovative sales and marketing strategies. The growth has been so huge as to have already eclipsed the growth rate of urban consumer demand for branded products.

Unfortunately, however, the reverse has yet to show an inspirational growth rate. Rural products are not getting upscaled to the desired extent. Processing of local products keeping global quality standard remains an issue. As a result, the agrarian and the local artefacts, despite having a huge potential for being a craze on the global market are failing to realise the potential.

The authorities are now aware of it. The tag of food safety authority’s certification is becoming popular and people are demanding products with FSSA tag before putting their money into it. Unfortunately in the global market our products have repeatedly shown up in bad lights due to the presence of various contaminants. Being aware of the issue, the regulatory authorities have sharpened their vigil. It would take time to reverse the trend but it will happen with the awareness about quality also percolating down to the base of the pyramid.

Seized of the issues, the Centre has initiated steps to better organise, market and awareness programmes to create a demand for our rural products that could upscale the entire base of the Indian market. It is expected that by 2025, the rural market will not only surpass our expectations about consumer demand, it will also provide a similarly encouraging trend in marketing its products.

The issue with any buzz is its tendency to get far too generalised with time. Once generalisation takes place, an illusion turns into reality. The issue with pollution and environmental concerns are precisely these. People now are coming round to the view that it’s the industry as a whole that’s responsible for killing the environment.

Is it true? The answer is both yes and no. Industry per se is not the culprit, but it is the wanton destruction of nature as an easy way to raise productivity that inflicts the harm. All the studies that have deeply studied the issue have come up with the same conclusions – compromising on protective measures to cut costs has remained the single most important issue in this regard.

Various agencies of the United Nations have looked into the issue from various aspects to evolve a solution set. What’s now part of common sense has been borne out by all the studies without exception. A careless emission of effluents is a major cause. While there are measures available to cut down the impact to benign, the owners tend to take the shortest cut and leave the nature to sort out the issue on their behalf in the name of cost optimisation.

The studies have repeatedly pointed out practices that at one point of time were seen as tolerable glitches are now, in hindsight, being seen as blunders. For example the practice of littering an open field with toxic chemical containers to save on closed safe warehousing facility. Spilt chemicals inflict enormous damages to the ecology, including us. But for long it has not been taken care of. Persuasion failed and legislative actions were needed to compel the owner to comply with the requirements to protect the environment.

Another culprit is the mining and the mineral exploration firms. Despite the availability of technologies owners tend to cut corners at the cost of environment little realising that the backlash of the harm would spare none.

The working papers of the various global bodies have, therefore, stressed on putting continuous monitoring mechanism in place. In India, we now have Green Rating of industries. Each unit is scored on the basis of a set of predetermined parameters that are sector specific. We also now have in place environment impact analysis of industries. All these assessments are geared toward assessing the compliance and implications in terms of their carbon footprint.

At the onset I said that the answer to the question of environmental impact of industry was not an unequivocal yes. I said so because it’s not the industry but the attitude and the ways industry is managed that inflict the arm. The blame therefore rests at the door of the management and not the industry per se. The answer to improving carbon footprint may therefore lie in creating greater awareness about and commitment to preserving the environment amongst the management.