I was invited a few weeks ago, as a token representative of the voluntary movement, a role I now wear like a well-worn, comfortable jacket, to an International Conference on good governance at IIM Calcutta. The third day was devoted to the power session on Corporate Governance, with cross-cultural perspectives being offered by a galaxy of distinguished European professors.
Since normative concerns formed a recurrent theme during the three-day conference, I ventured to suggest that a good augury of socially supportive corporate attitudes was signaled by Mr. ‘Vinki’ Banga, Chairman of HLL, during his speech at the company’s AGM. Insisting that crop yields must go up while input costs came down, he had created a small project to take marketing services to the doorstep of the Punjab farmer, tying in input supplies from Rallis India and credit from ICICI. While the project would only increase incomes for the already better off Punjabi farmers, I felt, at long last, here was a corporate house that was beginning to take the plight of Indian farmers seriously. Most small farmers can only depend on the local moneylender for timely credit before the rains, and have to pay back interest rates that reach up to 60%. Inputs, mostly of questionable quality, are available only from local dealers, who are also the only advisers on agricultural technology within reach of farmers. Since successive governments have neglected agriculture and reduced departmental budgets, every extension official has been given the impossible task of serving several thousand farmers all at once.
Sound agricultural and rural development seem to have been at the heart of the economic success of the East Asian Tigers, especially that of China’s, since increasing rural incomes gave the masses the purchasing power to create vast internal markets for industry to supply. Indian finance ministers on the other hand have followed the will-o-the-wisp of an export-led growth strategy, with unattractive high costs caused by limited local markets hamstrung by lack of purchasing power with the masses. Mr. Banga’s strategy seemed to me the beginnings of imaginative corporate involvement in creating a much-needed rural infrastructure of finance, inputs, marketing, communications, transport and other farmer-oriented facilities. Some support to this belief was given by Dr. Panjab Singh, DG of ICAR, calling for partnership between government, the private sector and NGOs, to strengthen the agricultural sector.
However, far more radical professors at IIM Calcutta said they were not interested in what HLL did for farmers, since the multinational had consistently stolen a march over smaller swadeshi producers of soaps and toiletries, through aggressive marketing in rural areas. By HLL adopting the cheaper sachet for rural marketing, small competitors had lost out, and later the company had doubled the prices of its soaps. Was this socially responsible corporate governance, it was asked? A participant from Partners in Change, an NGO that promotes business linkages with civil society, also reminded me that HLL pushing its products through village women groups, as it is doing in Karimnagar, Andhra Pradesh, could not be called development. It was to the company’s advantage to save on its distribution costs by giving the women a small fee. What was needed was an agreement to purchase village products, maybe even soaps, for niche marketing through the extensive HLL system.
Fellows like me are placed in a dilemma. The HLL project to bring services to the farmer’s doorstep seems vitally in the farmer’s interest, even though of little concern to professors. At the same time, all of us are nostalgic about our lost swadeshi movement, and most are scornful about the effects of advertising on so-called consumer choice. Is it right that rural people should be beguiled by dreams of beautiful film stars, even as we have been? Corporate leaders may say it is the logic of business to capture markets, but somewhere we feel they are over-compensated for success, though we ourselves fight for professional salaries twenty times higher than a small farmer’s income.
Indian middle-class culture is a mish-mash of modernistic longings superimposed on a bedrock of brahmanical injunctions not to do this, or that. We much prefer to impose purity and simplicity on others, while recognizing our own inability to be that pure or simple. So, ideological correctness offers a convenient escape from having to take hard decisions in real life. We can refuse to take Banga’s hand, as we have refused Musharraf’s. But if we do courageously accept the chances offered for dialogue, maybe tomorrow will be less poverty ridden, and less full of conflict.
Dr. Vithal Rajan
Chair, Governing Body
Confederation of Voluntary Associations
Hyderabad.
