MAXQDA WORKSHOP

SEIED BENIAMIN HOSSEINI
PG STUDENT IN MBA
UNIVERSITY OF MYSORE
2016-2017
MAXQDA WORKSHOP
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abstract There is increasing recognition that private sector development has an important role
to play in poverty reduction. The private sector, including small enterprises, creates and
sustains the jobs necessary for poor people to work and earn the income needed to
purchase goods and services.
A consensus is emerging in the area of small enterprise development (SED) about
what is needed to support the creation and expansion of enterprises. Key areas include: a
policy, regulatory and legal environment that is simple, fast, inexpensive and free from
corruption; finance that is accessible at low cost and does not require the poor to provide
physical collateral; access to affordable business development services; workers who are
trained in appropriate skills; basic health and education that strengthens human capital; a
culture that supports and rewards entrepreneurship; access to domestic and global markets
on a fair and equal basis with large enterprises; and reliable infrastructure (transport,
energy, telecommunications, etc.).
impact of
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business
on poverty
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abstract ABSTRACT
Social ventures are innovative businesses that operate with social purposes to provide
services to disadvantaged individuals or the community that the market does not. While
typically established as not-for-profit organizations, they compete with for-profit businesses
that produce similar goods or services. They have been used to reduce poverty through job
creation for the chronically unemployed, help impoverished communities produce their own
products rather than importing them, create markets for products produced by impoverished
communities, and provide job training to help the chronically unemployed acquire
employable skills. The operation of social ventures is fraught with challenges that constrain
their viability. This chapter describes diverse types of social venture models that contribute to
poverty reduction and explores various innovative business strategies used to improve their
business performance.
impact of
social
business
on poverty
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abstract This thesis explores the concept of poverty, the promise of the poverty reducing effects of
FDI, and MNCs business strategies in developing countries. The world’s population is rapidly
increasing and the rich people are getting richer, whereas the poor people are becoming even
more marginalized. During the years of liberalization the belief was that this led to economic
growth, and hence was good for development. FDIs have boomed the last decades, and this
flow of capital has been the main proxy for MNC activity; consequently the question has been
centered on FDI is bad or good for the poor
impact of
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business
on poverty
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abstract Abstract: Poverty is one of the major problems around the
world. Prof. Dr. Muhammad Yunus has come up with a
revolutionary idea to solve that problem by introducing the
social business concept which emphasizes a combined and
organized effort of poverty alleviation through selfsustaining business mechanism. This paper attempts to
overview of the idea, discuss current practice of social
business in Bangladesh; and compare social business
model with other existing business models.
impact of
social
business
on poverty
1
author Paul Vandenberg impact of 1

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social
business
on poverty
author Muhammad Yunus, Bertrand Moingeon and
Laurence Lehmann-Ortega
impact of
social
business
on poverty
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author Mohammad Yunus impact of
social
business
on poverty
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author Milton Friedman impact of
social
business
on poverty
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author Lisa Easterly, Ph. D impact of
social
business
on poverty
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author Fernando Mistura impact of
social
business
on poverty
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author Camilla Ackermann impact of
social
business
on poverty
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author Brad Barham, Eric Giordano and John Hoffmire impact of
social
business
on poverty
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author Sayema Hoque impact of
social
business
on poverty
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case study Case Study of a Chronically Poor District in India’, paper presented
at the Second International Conference on International Law, New Delhi
poverty
reduction
in india
126
case study “Applying the comprehensive LED
approach: the case of Mozambique”. Case Study Paper
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on poverty
case study the case of Croatia”,
Case Study Paper
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social
business
on poverty
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case study “Case Study of Area Responses to Globalization: Foreign Direct Investment, Local
Suppliers and Employment in Györ, Hungary” (Series on Globalization, Area-based
Enterprise Development and Employment), Maarten Keune
impact of
social
business
on poverty
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case study A Case Study of the Bakery and Confectionery Sub-sector in Kenya” (Series
on Representation and Organization Building), Gregg J. Bekko and George M. Muchai,
2002
impact of
social
business
on poverty
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case study A Case Study of Street Trading in South Africa”
(Series on Representation and Organization Building) Shirin Motala, 2002
impact of
social
business
on poverty
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case study A Case Study of the Clothing Industry in South
Africa” (Series on Representation and Organization Building
impact of
social
business
on poverty
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case study Case Study of the Building Industry in South
Africa” (Series on Representation and Organization Building)
impact of
social
business
on poverty
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case study A Case Study of the Minibus Taxi Industry in
South Africa” (Series on Representation and Organization Building)
impact of
social
business
on poverty
65
case study A Case Study of the Municipal Waste Management
Industry in South Africa” (Series on Representation and Organization Building
impact of
social
business
on poverty
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case study Appendix 1. Case studies
Case study 1: Grameen phone
In 1996, in partnership with three foreign companies,
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the Grameen Bank created a mobile phone
company, Grameen Phone, to extend telephone services across Bangladesh, where it was one of four
companies licensed by the government to provide mobile phone services. With no land-line service
in most of the 80,000 villages in Bangladesh, mobile phone technology was essential to bring the
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country into the age of electronic communication. A UK-based consultant estimated the market
in 2005 would be 250,000 mobile phones e in fact, it turned out to be about 8 million, and
grew to 40 million subscribers by 2008: by challenging conventional wisdom and rules of the
game, Grameen Phone had created a new market.
case study Veolia Water (a subsidiary of Veolia Environnement), is the world’s leading provider of water services with
a 2008 turnover of V12.6 billion. In March 2008, Veolia Water created a joint venture
with the Grameen Bank e Grameen Veolia e with the aim of providing affordable access to drinking water
for rural populations in Bangladesh, many of whom had previously been obliged either to
buy bottled water, or to drink polluted surface water or even water tainted with arsenic. For several
years previously, Veolia Water had been developing solutions to allow access to drinking water for
vulnerable people in urban areas, but had not yet tackled the problems of isolated rural areas. As
with other developed country water service operators, Veolia Water’s conventional business model
consisted of recycling and purifying unclean water and billing consumers for their water
consumption.
But the rural people of Bangladesh cannot afford water points in their own homes, so Veolia and
Grameen shared their knowledge and resources to experiment with a new business model. By the
end of 2008 they had built a factory and a whole water supply network in Goalmari, a fairly densely
populated rural area. The value proposition was to provide safe drinking water at an affordable
price to the inhabitants. The value constellation challenged Veolia’s conventional business model
in several ways. First, the cost of water treatment was to be reduced as much as possible in order
to offer the cheapest price, so the factory was kept simple, and it was decided to recycle surface water as
a less costly option. While the drinking water it produced would not meet current US or European norms,
it did nonetheless meet World Health Organization standards. Second, three
different water access modes needed to be implemented: inside people’s homes, at the village’s public
drinking fountain, or by distributing water cans, which were dispatched to the most isolated villages by
rickshaws driven by Grameen-financed entrepreneurs (a distribution mode that was a first
for Veolia). Finally, new payment facilities needed to be implemented and a system of prepaid cards
is being established. Grameen Veolia is currently fine-tuning this business model, and expects to roll
it out over Bangladesh and other countries in the coming years.
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case study Case study 3: Grameen Danone
Created in 2006, Grameen Danone is a 50-50 joint venture between the Grameen Group and the
French Groupe Danone, one of the world’s leading healthy food companies. (Number one in the
worldwide market for fresh dairy products and number two in bottled water, Danone had 2008 revenue
results of V15.2 billion.) Danone has been involved in a dual commitment to business success
and social responsibility for the past 30 years, over which its mission has evolved from: ‘bringing
health through food’ in early 2000 to ‘bringing health through food to a maximum number of people’
currently.
Echoing its two partners’ mission statements, Grameen Danone’s goal is to ‘help the children of
Bangladesh to be healthy’ by offering them ‘a nutritious and healthy product which they may consume on
a daily
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case study They encountered the Grameen examples while looking for new case study possibilities. The idea
of the research was to confront conventional literature on business model innovation with the social
business experiences implemented by the Grameen Group, to test whether the Grameen
experimentations were actually business model innovation, and to find out if building social businesses
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resembled conventional business model innovation. The most appropriate method seemed to be the case
study, since the objective was to highlight the process of building social businesses.
25
As the literatures on both business models and social businesses were nascent, a qualitative approach
provided
the best methodological ‘ﬁt’: thus, research relied on data collected through interviews, and its design
implied an iterative, exploratory, back and forth process between the literature and the ﬁeld.
2
concept of
social
busines in
india
The growth of social entrepreneurship has been celebrated as a phenomenon in business schools in the
West.
Social entrepreneurship sits at the intersection of, and blurs boundaries between state, society and
market. A
recent study (Milway & Goulay, 2013) shows that there has been a greater than ten-fold increase in cases
produced
and student enrolment in social enterprise courses at Harvard Business School from 1995-96 to 2010-11.
Academic
contributions to the field in India are modest even as there is an increase in the number of programmes
on
social entrepreneurship. More knowledge is generated outside formal academic spaces and groups that
are keen
on pushing their perspectives. A global alignment ensures a free flow of ideas but also a dominance of
certain
perspectives on the social entrepreneurial space and how social problems need to be solved.
While there is an acknowledgement of the energy and dynamism in the sector, there have also been
concerns
voiced on the sidelines of many of the forums. One concern relates to models being promoted, even
propagated,
on a scale that cuts across local and even national geographies. While growth has been acknowledged,
concerns
on its inclusive nature include “what” and “who” gets included, and those bits that get excluded, in
current
models. Another concern relates to the changing role of how India has been seen in the global landscape
of social
entrepreneurship. India has always been a site for experiments. Ashoka began operations in India in
1980; Indian
fellows still outnumber fellows from the rest of the world. Social entrepreneurship is one field that has
benefitted
from globalisation in terms of infusion of financial capital, donor funds and talent in substantial ways even
as
conversations with earlier Ashoka fellows indicate an ambivalence and discomfort with regard to
globalization.
social
business in
india
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concept of
social
busines in
india
Market-based solutions to poverty are transforming the face
of development and spurring inclusive growth in India and
the world over. They are connecting dairy farmers in Orissa
to urban markets in Mumbai, bringing clean toilets to urban
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slums and reliable power to off-grid villages. As the limitations
of government and NGO solutions to India’s development challenges have become clear, the critical need
for private-sector
participation in building and scaling sustainable solutions has
emerged. For-profit social enterprises driven by a clear social
mission hold great potential for driving the delivery of these
innovations.
While part of a global trend, India today is one of the world’s
largest breeding grounds for these mission-driven companies called “social enterprises” (socents). These
socents are
operating across sectors, regions and stages of development.
Continuously innovating new and creative business models,
they are including the poor into India’s growth process as both
consumers and producers.
concept of
social
busines in
india
A social business is a unique combination of
traditional for-profit businesses, which focus solely
on maximizing profit, and not-for-profit entities,
which relies solely on charitable donations.
3
Social
business came into existence to fill the void that was
created, mainly, due to two factors:
￭ extremely slow pace of human development
despite high growth and GDP;
￭ insufficient government participation in
providing basic public, social and economic
infrastructure to its less privileged citizens
A social business is not contrary to the idea of
business, yet is different in its approach. Its main
objective is to engage every stake-holder concerned
and provide for a sustainable growth and/or
development alternative based on sound and ethical
business principles. The main idea of social business
is to empower people, to grant them agency and
to make them less dependent on externalities that
are not within their control. Such empowerment
provides ‘capability’
4
and ‘freedom’ to those less
privileged to choose their development path.
According to Prof. Yunus there are two kinds of social
business.
One being a non-loss, non-dividend company devoted
to solving a social problem and owned by investors
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who re-invest all profits in expanding and improving
the business. The second kind is a profit-making
company owned by poor people, either directly or
through a trust that is dedicated to a predefined
social cause. Since profits that flow to poor people are
alleviating poverty, such a business is by definition
helping to solve a social problem.
Social business, as propounded by Prof. Yunus,
advocates the following concepts:
i. The most important objective for a social business
is to remove poverty and other socio-economic
problems that society is beset with. The idea is
to reduce or eradicate such problems using a
business model.
ii. Such business models should not exist solely for
profit maximization.
iii. The company engaged in social business will
be able to achieve economic and financial
sustainability.
iv. Investors would be eligible to only take back their
investment money and would not be allowed to
take back the dividend. Thus, profit stays with the
company which is further invested for expansion
and improvement of the business.
v. The company engaged in social business must be
conscious towards environmental concerns.
vi. Workers should be paid at the market wage and
provided with better workplace conditions.
vii. Such social business should be done with
pleasure, dedication and with an objective.
However, when applying the Yunus principle
into an Indian context
5
we should also keep in
mind other determinants such as:
￭ Relevant or existing taxation and financial
incentives for such social businesses or
enterprises
￭ Existing economic conditions and purchasing
power parity of the target group
￭ Legislations or regulatory framework
supporting such social business models
Social business is different from social
entrepreneurship or charitable trusts or a foundation

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established for social welfare. While social business is
purely on a no-loss-non-dividend model with a social
cause, social entrepreneurship is more individually
driven either modeled on for-profit or not-for-profit
initiatives. Although the ultimate objective for both
the kinds of entities would be same, the models on
which they are structured are distinctly different.
Similarly, social business also differs a lot from a
foundation. Foundations are incorporated largely to
disburse funds and grant donations to various social
sector organizations. Foundations don’t generate any
profit on their own and are mostly run by people
with deep pockets. It could thus play a vital role
in incubating and channelizing a social business
impact of
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conclusion
Conclusion: A possible strategy
The review of activities in the previous chapter suggests that SEED’s work does
address key aspects of the broader concept of poverty and that the poor are, in many cases,
the intended beneficiaries. At the same time, a number of suggestions have been made
regarding closer collaboration with other ILO units in a number of areas, notably microfinance and
vocational skills training. The need to strengthen impact assessment was
suggested in an earlier chapter, which noted that SEED has and continues to be active on
the stage of the project cycle.
By way of conclusion, the paper provides a possible strategy on poverty reduction
through small enterprises development. It is a possible strategy that officials of the SEED
programme may wish to use as the basis of the discussion and development of an official
strategy.
A. Goal
The ILO seeks to reduce poverty, in part, through the development of vibrant and
productive small enterprises that provide decent work for their owners and employees.
B. Principles
1. Small enterprises make a positive contribution to poverty reduction when they
provide:
a. employment,
b. adequate levels of job quality, and,
c. low-cost goods and services used by the poor.
The poor often lack adequate employment. Those who start small enterprises create
employment and generate income for themselves and those they hire. The informal and
formal small enterprise economy is the main non-agricultural employer in most countries.
The poor may work but the income, benefits, rights and social security related to their
employment is often not adequate to lift them from poverty. They are the working poor
and many of them work in the informal economy. Improvements in job quality are needed
so that that their work can reach an acceptable level of decency.
The poor benefit when enterprises, operating in competitive markets, produce basic
goods (food, clothing, etc.) at low cost, thereby keeping down the cost of living. The same
principle applies to services. In many cases, small enterprises provide basic services such
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as water, sanitation and education that are not provided by the public sector. Given the
public good nature of many of these services, the small enterprise sector can often work in
collaboration with the public sector through franchising, sub-contracting, out-sourcing and
other forms of private-public partnerships.
2. Entrepreneurship, combined with productivity increase, is a key ingredient for
poverty reduction through small enterprise development.
Entrepreneurship is the creative act of spotting a market demand and marshalling the
factors of production in an efficient manner to meet that demand. It leads to investment
and job creation. For the poor, their entrepreneurial skill is often one of the few resources
they have with which to earn a living
impact of
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Conclusion
By comparing the business model innovation literature and the Grameen experience, we have
shown five lessons that can be learned about building social business models. We have also designed
a social business model framework and demonstrated its value to our understanding of social businesses.
We believe these findings not only concern MNC’s wishing to engage in pro-active CSR policies, but can
also be generalized to all entrepreneurs seeking to create social businesses.
We consider this article as a first step in shaping the concept of the social business model, and
further field experiment and research are needed for researchers and practitioners to study and develop
this self-sustaining type of business. Indeed, many questions remain unsolved. For instance,
how should the performance of social businesses be assessed? While return on capital employed is
an accepted measure for conventional business models, social profit is difficult to measure with
such standard ratios. Relevant indicators will probably suffer from greater time lags than those
used in financial performance management: the impact of Shoktidoi yoghurt on children’s health,
for instance, will not become measurable for a couple of years. Certification procedures, such as the
one developed by the Global Reporting Initiative, might be helpful, but are still under construction.
However, we believe strongly there will be a growing interest in building social business models
for three main reasons. First, humans have an instinctive, natural desire to make life better for their
fellows if they can. Given the chance, people would rather live in a world without poverty, disease,
ignorance and needless suffering. These are the causes that lead people to donate billions of dollars
to charity every year, to launch NGOs and non-profit organizations, to volunteer countless hours to
community service, and (in some cases) to devote their careers to relatively low-paid work in the
social sector. The same drivers will lead many to create social businesses, once this new path is
widely recognized and understood.
Second, unlike conventional businesses, social businesses are not engaged in a contest. Their objectives
are social, so they can learn from one another and best practices should spread rapidly. The
effort involved in creating and refining social business models is, in a sense, a ‘donation’: they are
unlikely to be seen as intellectual property in any sense, and so can be easily copied and rolled out
by other global partners e and may even merge to become a stronger social force in the world.
Last but not least, there is another set of reasons why these cases studies should encourage businesses
to engage in this type of initiative. We believe, although small, these new ventures can play
prominent roles within MNCs. While disagreement remains as to their effects on firm performance,
several studies have found a positive relationship between CSR and firm reputation,
21
while research has also consistently demonstrated the advantageous effect of CSR initiatives on current
and prospective employees.
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Building social businesses could be seen as a ‘learning lab’, offering
an arena where managers can challenge their conventional wisdom and develop dynamic capabilities that
could in turn be helpful to an MNC’s main business.
impact of
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CONCLUSION
Through the use of innovative business approaches, social ventures have challenged
and redefined the traditional roles of not-for-profit organizations at reducing global poverty.
The examples given here demonstrate how social ventures add value to impoverished
communities throughout the world through job creation for the chronically unemployed,
fostering community self-sufficiency through production of their own products rather than
importing them, creating markets for products produced by impoverished communities, and
providing job training to help the chronically unemployed acquire employable skills.
Although social ventures often target markets or hire employees that for-profit
companies would typically find unattractive, thereby putting them at a competitive
disadvantage, many succeed at achieving their mission of reducing poverty. They do so
through a strong mission focus, performance measurement, business plan development,
market awareness, avoiding highly price-sensitive markets, skilled management, networking,
financial oversight, risk management, complying with the laws governing the business, and
engaging in ethical business practices. Although constrained by legal limitations, lack of
resources, and conflicting stakeholder demands, social ventures that have applied innovative
business and strategic management practices have reconfigured the wealth generation
dynamics within several impoverished communities in areas where charities and for-profit
businesses have failed.
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impact of
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business on
poverty
conclusion
CONCLUSION
Social Impact Investing breaks the traditional boundaries of business investment by
proposing investments which aim at social impact, rather than profit maximization.
This new investment vehicle was born to support the development of social
businesses that also break the traditional business paradigm. In the first section of this
essay, social entrepreneurship and social business were briefly discussed. This essay
explored the multiple definitions and terms, which seems to be a barrier to its further
development, since the lack of consensus tends to dissipate efforts of players; it has
also discussed the evolution and history of the sector, starting with the cooperatives
movement in Italy until the appearance of the social business concept in recent years.
It is visible that nowadays what is driving social entrepreneurs is their ambition to
achieve high scale social impact, while being financially autonomous.
In the second section, the social impact investing model, as well as its context and
opportunities, were discussed. Main take aways were: (a) the context is favourable for
the development of social business, since there is an increasing attention and interest
given to social businesses around the world, with government agencies, mainstream
business and social entrepreneurs working together for its development; (b) there is a
high market potential for social impact investing throughout the world. This is due to
the development of potential investees around the world in terms of scale and
capability, but as well as because of new players that are coming to the market with
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already the values of financial sustainability and social impact embedded in their
model; (c) there is capital available for investing in the sector. Investors become more
and more committed to social and environmental issues and increasingly look for
opportunities to diversify their investment portfolios. Moreover, social impact
investing appears as a more sustainable alternative for traditional philanthropy, which
may steal resources once dedicated to philanthropy.
In the third section, the social return on investment (SROI) methodology was revised,
since it appears to be the most widely used tool for assessing the return on investment
in the social impact investing industry. Although the SROI has its limitations, it
serves well in supporting investment decisions, as well as in comparing returns across
impact of
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business on
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14. Conclusion
The idea of social business is still in its nascent stage. Being a very
new and incomparable subject, it may take some more time to assume
a full-fledged and mature structure in both conceptual and operational
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impact of
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business on
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conclusion
dimensions. Considering the immense need of poverty alleviation and
the perspective in which poverty exists, it can be said that winning the
war against poverty in Bangladesh requires innovative efforts like
promoting the idea of social business model and proper
implementation of them.
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business
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interview It included interviews with both
entrepreneurs and employees (in some cases). However, the small sample (5 trainees per
country,
plus control groups of the same size) limits the usefulness of the results. The
methodology needs to be applied to a much larger, random sample (i.e. about 500
trainees).
impact of
social
business
on poverty
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interview interviews with programme participants or the analysis of independent
experts. The focus is on enterprises rather than households because the latter are less likely to
be aware of whether the programme had some impact on their well-being. Enterprises might
be asked about the increase in the hiring of unskilled workers. Care must be taken, however, to
ensure that entrepreneurs can distinguish between hiring that has resulted from the SED
intervention and hiring that would have taken place anyway. There are three important caveats:
enterprises would not have received BDS in the absence of the SED programme; enterprises
must be able to determine net effects of SED; and it does not account for displacement (an
increase in employment or income in one enterprise results in a loss of employment or income
in another).
impact of
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interview The small business programmes are a mix of investigative reporting, interviews, live debate and phone-
ins that create, among
other things, a strong platform for debate and analysis about policy issues affecting the micro and small
business economy. For
example, in early 2000 the Ugandan Government announced that it was banning the small-scale vending
of milk. Nekolera
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Gyange, a small business radio programme in central Uganda, investigated the issue on behalf of the
thousands of milk traders,
transporters and dairy farmers who would lose their livelihoods as a result of the ban. Due to the media
coverage and a consequent
public outcry, the Government embarked on a plan to regulate and improve safety standards thus
ensuring public health, allowing
the vendors to stay in business and saving thousands of jobs.
interview The empirical study was, in many ways, well conceived, examining such issues as
income and employment generation effects, but also changes in health service use
(switching from public to better, private health care), education, productive asset
accumulation, dignity, status, involvement in networks, membership in business
associations and even philanthropic contributions to the community. The study was also
designed with a control group of equal size and sought to interview both entrepreneurs and
workers.
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interview The other two authors’ original research focus was on business model
innovation, particularly in established firms and low-tech industries, which led to an in-depth study
of about 30 cases. Their interviews with leaders involved in the process highlighted three main steps
of business model innovation from the literature: challenging conventional wisdom, finding
complementary partners and undertaking a continuous experimentation process.
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interview The most appropriate method seemed to be the case
study, since the objective was to highlight the process of building social businesses.
25
As the literatures on both business models and social businesses were nascent, a qualitative approach
provided
the best methodological ‘fit’: thus, research relied on data collected through interviews, and its design
implied an iterative, exploratory, back and forth process between the literature and the field.
26
The three case studies were written based on narratives by the first author, the founder of the
Grameen Bank concept.
impact of
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business
on poverty
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interview new data has emerged through extensive
interviews with managers involved in this venture (at Danone as well as those in the field in
Bangladesh). Less data is available about the Veolia case, which builds on Grameen’s experience
of the Danone venture, but is more recent and as yet less well advanced.
impact of
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business
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interview London and Hart did a study where 24 cases were
investigated, most of them interviews with the companies, in addition to in-depth studies of
four companies (London and Hart, 2004).
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interview The interviews with MNC managers gave valuable
information on the limitations of the transnational model for companies
impact of
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business
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interview An Interview – Guest Speaker: Pamela Hartigan, Executive Director, Skoll Centre for
Social Entrepreneurship, Saïd Business School, Oxford University (or replacement)
impact of
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business
on poverty
keyword Key Words: Poverty alleviation, social responsibility,
social business, business model
impact of
social
business
on poverty
1
methodology This report seeks to complement earlier work examining
India’s social enterprises by providing a landscape review of
the industry that is rooted in a survey of social enterprises and
in-depth interviews.
2
We hope the findings will help a diverse
group of supporting stakeholders better understand the depth
and breadth of the field, as well as the primary barriers that
socents face as they seek to scale. We address the report to all
stakeholders who can encourage and strengthen enterprises’
market-based solutions to improve the lives and livelihoods of
India’s poor. These include impact and commercial investors,
grant-makers, incubators, consultants, industry organizations,
academics and policymakers.
social
business in
india
8
methodology This research paper tries to summaries the current state of knowledge about poverty, problems created
by
poverty and to study national policies, plans and programs for poverty eradication in India. The relevant
secondary data is collected through various sources such as websites, Economic survey, books and
journals.
MEASUREMENT OF POVERTY: POVERTY LINE:
Poverty line is a cutoff point on the income distribution, which divides the population as poor and non-
poor.
People below poverty line, are poor and above that line are average or rich. Poverty line is therefore a
derivation
poverty
reduction
in india
2
methodology from inequality of income distribution. However cut-off level of income or expenditure is determined
differently in different countries and regions.
According to Planning Commission of India, “Poverty line is drawn on the basis of barest minimum
desirable
nutritional standards of 2400 calories per person per day in rural areas and 2100 calories for urban
areas”.
poverty
reduction
in india
3
methodology 4. Methodology of the Study
Data and information: This article is based on information collected
from various secondary sources including books on social business
authored by Dr. Muhammad Yunus, different articles on social
business, business ethics and social responsibility, and a few related
websites.
Analytical framework: The analysis will be mainly based on
description. In case of necessity, simple tabular presentations may
impact of
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appear. Statistical and econometric analyses are not feasible options
due to the fact that the social business is a new concept and necessary
data are not yet available.
poverty
reduction
author
Department of Rural Development
Ministry of Rural Development
Government of India
poverty
reduction
in india
1
poverty
reduction
author
Lalita Kumari,
Junior Research Fellow
Commerce and Business Management Studies
Guru Nanak Dev University, Regional Campus, Sathiala,
Amritsar, Punjab, India
poverty
reduction
in india
1
poverty
reduction
author
Kaushik Ranjan Bandyopadhyay poverty
reduction
in india
1
poverty
reduction
author
Jayati Ghosh poverty
reduction
in india
1
poverty
reduction
concept
Defining Poverty
Poverty, droughts, underdevelopment, different sorts of
inequalities and domination have been the age old problems or
phenomena observed from the past to the present and across the time
and space.
Poverty is a very vague concept with varied connotations and
facets. As Bhalla Surjit S. (2000:1) notes, “there is a rich history of
formal definitions of poverty, going back to the mid nineteenth
century. It is an attempt to capture the bottom-half of the population,
the have-nots, the poor”. Traditional definition of poverty is
constructed with one dimensional approach of income and food intake
capabilities. The minimum acceptable income level was determined in
terms of ‘nutritional deficiency’ by Dandekar and Rath (1971).
Social Scientists distinguish between ‘relative’ and ‘absolute’
poverty. Relative poverty is defined by the general standards of living
in different societies and what is culturally defined as being poor
rather than some absolute level of deprivation. A
poverty
reduction
in india
1
poverty
reduction
concept
The international community has established a broad definition of poverty which
includes material and service deprivation (food, shelter, basic services, etc.) as well as
issues related to voice, representation and power. At the same time, it uses more narrow
income measures, as set out in the MDGs, which defines poverty as the condition of
struggling to live on $1 per day or less. The ILO does not have a specific definition of
poverty. However, there are close similarities between the broad definition and the
elements of decent work (rights, productive employment, social protection and social
dialogue). Because the broad definition is, in fact, rather broad, any activities which
support improved conditions, rights and representation of workers can be classified as
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poverty reducing
poverty
reduction
concept
The concept of poverty
The concept of poverty includes material deprivation (i.e. food, shelter) and access to
basic services (i.e. health, education). It now also tends to encompass a range of nonmaterial conditions,
such as a lack of rights, insecurity, powerlessness and indignity. The
combination of these two types of conditions provides a more complete understanding of
poverty. It also makes it more difficult to measure poverty and to evaluate the effectiveness
of poverty reduction activities. Even finding an adequate definition is difficult and many
policy statements prefer to describe the nature of poverty instead of providing a specific
definition.
In Working out of Poverty, the ILO notes that poverty is a “vicious circle of poor
health, reduced working capacity, low productivity and shortened life expectancy” (ILO,
2003, p. 1). The OECD’s Development Assistance Committee has defined poverty as
comprising multiple “dimensions of deprivation that relate to human capabilities, including
consumption and food security, health, education, rights, voice, security, dignity and
decent work” (OECD, 2001). It notes that poverty reduction should, in addition, be
conducted in the context of environmental sustainability and gender equity. In Attacking
Poverty, the World Bank accepted the view that poverty encompassed “not only material
deprivation (measured by an appropriate concept of income or deprivation) but also low
achievements in education and health” (World Bank, 2001). It broadened further the notion
of poverty, however, to include “vulnerability and exposure to risk, and voicelessness and
powerlessness”. The notion of power and voice has also been accepted by a number of
bilateral development agencies. For example, SIDA (2002), in its poverty reduction policy
paper, notes that poverty “robs [people] of the opportunity to choose on matters of
fundamental importance to themselves [and] the essence of poverty is not only a lack of
material resources but also lack of power and choice”. It is not always clear whether the
lack of voice and power should be considered part of the definition or condition of poverty
or, more specifically, as one of its causes. It is probably both.
impact of
social
business
on poverty
16
poverty
reduction
concept
There is a
definition of extreme poverty and it is defined in narrow income terms ($1/day). It is not
clear what non-extreme poverty is (i.e. is it also based on income but only with a higher
threshold?). As such, it is not clear whether the other MDGs should be considered poverty
reducing. Indeed, the same governments and agencies which endorse the MDG extreme
poverty target also have policy statements that expressly argue that poverty is more than
income.
impact of
social
business
on poverty
23
poverty
reduction
concept
The broad definition of poverty includes the lack of access to basic health care, clean
water, sanitation and education. In other words, the poor are by definition under-serviced.
In many developing countries, governments are unable to adequately deliver basic
services. This occurs in unplanned settlements on the fringes of urban centres (i.e. slums)
but also in most rural areas. The lack of services is a direct outcome of underfinanced and
weak local and national authorities but is often also a function of a lack of representation –
the voices of poor slum dwellers and the rural poor are not heard when public budgets are
allocated.
When governments do not provide services, the private sector often steps in to meet
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local needs. This is a common phenomenon in the developing world where the private
sector is a key provider of a range of services from telephony and water to education and
waste collection. Between 15 and 90 per cent of primary education is provided by private
schools and 60 per cent of expenditures on health care are made privately to clinics,
dispensaries and hospitals in poor countries (CPSD, 2004, p. 8). The difficulty with private
provision is that it is often not properly regulated to ensure an adequate quality (and decent
working conditions). In addition, the service may be sporadic, depending on the decision
of private providers and their ability to make money.
poverty
reduction
concept
2.1 Definition of poverty
The understanding of poverty has been a major human debate for many centuries. Since the
1880s, three alternative conceptions of poverty have evolved as a basis for international and
comparative work, and they depend principally on the ideas of subsistence, basic needs and
relative deprivation (UNDP, 2006).
impact of
social
business
on poverty
12
poverty
reduction
conclusion
12 CONCLUSION
12.1 This Paper proposes a strategy for poverty eradication by 2015 based on the rural
household as a unit. The rural poor primarily comprise of small and marginal farmers,
especially in rainfed areas, landless labourers, fisher-folk, herders, women-headed
households. Households below poverty line subsist on multiple sources of income. The
current poverty line is of the order of Rs. 22,000 per annum for a household of five
members. The proposed strategy envisages that through a Mission Mode approach to
implementation of the poverty reduction schemes it is possible to lift the 4.5 crore BPL
households above poverty line by 2015.
12.2 Under the Mission Mode approach the SGSY scheme would be restructured to
provide self-employment to at least one member from about 1.4 crore households. In
addition one member, especially youth, from about 1.7 crore households would be
provided skill development and placement. The latter would be made possible partly
through the up-scaled SGSY scheme and partly through the National Skill Development
Mission. Moreover, one member from each of 1.4 crore households would be selfemployed as a result of
on-going schemes of Ministries other than the Rural
Development Ministry.
12.3 It is envisaged that as a result of the SGSY restructured scheme wherein selfemployment created
from credit-linked micro-enterprises and the skill-development
based placement in labour-intensive fast-growing sectors of the economy would yield
income of around Rs. 24,000 - 36,000per annum. In addition, this income would be
supplemented by wage employment from NREGA. The average supplementary income
could be around Rs.5000- 8000 crore per annum per household. The number of
households under NREGA expected to be employed in a year is about 4.5 crore. If there
are persons above 65 years of age in a household, the pension under IGNOAPS is about
Rs 2400 per annum. This support from the Government of India poverty alleviation
schemes would be over and above any programmes of the state governments as well as
from normal income generation from agriculture and allied activities. The income effects
of schemes of infrastructure creation, namely, PMGSY, IAY, TSC, Drinking Water
poverty
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Mission, though not directly quantifiable, lead to income benefits through improved
access to education and health facilities, input and output markets etc.
12.4 The additional fund requirement over the next seven year period can be met
through a combination of additional budgetary support to the restructured SGSY, better
coordination with employment generation and social security schemes of other
Ministries, project support from multi-lateral funding agencies, enhanced credit
mobilization, National Skill Development Corporation/ Fund and Public Private
Partnersh
poverty
reduction
conclusion
CONCLUSION:
Debate on poverty in India has remained mostly in the domain of economists. Poverty is defined in terms
of
income, expenditure and nutritional value (calorie intake). Social dimension of poverty is a neglected area
of
study. Poverty is more of social marginalisation of an individual, household or group in the
community/society
rather than inadequacy of income to fulfill the basic needs. Indeed, inadequate income is therefore one of
the
factors of marginalisation but not the sole factor. The goal of poverty alleviation programme should aim
merely
increasing the income level of individual, household or group but mainstreaming marginalised in the
development process of the country. The country cannot claim economic growth when sections of the
people
are marginalised to the periphery of the society. The rapid economic growth process should accelerate the
access to services like education and health services for all, especially the marginalised citizens. The
government should also aware the rural population about the importance of small family and mortality
rate.
Poverty give birth too many other problems. The link between ignorance and poverty and ill health and
poverty
are well-established. There are diseases of poverty such as malaria, tuberculosis, diarrhoea and
malnutrition.
Having fallen ill due to poverty, the poor do not have the resources to seek quality health care, for which
he/she
has to borrow money for treatment. Indebtness due to hospitalisation leading to poverty has been well
documented. Poverty therefore is a complex phenomenon of many dimensions not merely the economic
dimension. So government should provide better medical facilities, drinking water facilities and education
so
that people living below poverty line can improve their lives [9]. Yesudian (2000) also suggested that
Poverty
alleviation programmes should also address the issue of poverty from broader social and economic
perspectives.
poverty
reduction
in india
11
poverty
reduction
conclusion
Conclusion
These differing stories of poverty reduction in the two countries that were among the high-growth
economies of the past three decades provide some important lessons. The first is that economic growth
per se need
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not deliver either income poverty reduction or improvements in the conditions of human poverty. Instead,
what matters crucially is the nature of the growth: the extent to which the growth is associated with
growing inequalities that do not allow the benefits of growth to reach the poor; the extent to which the
structural
change involved in the growth process generates sufficient opportunities for productive non-agricultural
employment; the extent to which markets and states function in ways that ensure the provision of basic
needs
and universal access to essential social services. All this also means that government mediation of the
process
of global economic integration matters in affecting the processes that will ultimately determine the extent
to
which economic growth delivers better conditions for the poor.
It should be clear that for China, the egalitarianism that the Chinese revolution ensured and the
control the state could continue to exercise because of the persistence of substantial state ownership of
and
investment in capital assets as well as the continuance of the earlier financial structure and system,
meant
that the process of global economic integration was carried out under fundamentally different premises
from
that which occurred in India. To a significant extent, some basic development issues, including ensuring
adequate food supplies and universal primary education, were already dealt with. The domestic market
for
consumption goods was also significantly larger than proved to be the case in India. The control retained
by
the Chinese state over financial institutions and the activities of state owned enterprises (SOEs) allowed it
to sustain high levels of investment and to deal with volatility, to prevent undesired levels of inflation
from
persisting beyond relatively short periods. In the event, the state ensured that cyclical fluctuations
occurred
around a high overall trend rate of income growth.
The early phase of economic reforms in China, which essentially involved increasing remuneration to
farmers, operated substantially to reduce poverty and deprivation. Subsequently, the heavy emphasis on
infrastructure development, combined with some “controlled” trade and investment liberalization, created
much
greater possibilities for employment generating, export-oriented industrialization, which became the next
engine of growth. As this occurred in a context of still heavily regulated and monitored imports, it ensured
that export employment provided a net addition to aggregate manufacturing, rather than having to
balance
for losses in employment in other domestic sectors, since these did not really have to face import
competition
on par with other countries that underwent trade liberalization in that period. When import liberalization
accelerated, some devaluation of the yuan in 1994 limited import competition. Thereafter, entry into the
WTO
required more sweeping import liberalisation, but to some extent, that impact was counterbalanced by
access
to other markets that enabled the continuous expansion of exports with a cheap currency policy.

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poverty
reduction
keywords
Keywords: Poverty, Plans, Programmes, Poverty Eradication poverty
reduction
in india
1
poverty
reduction
methodology
METHODOLOGY:
This research paper tries to summaries the current state of knowledge about poverty, problems created
by
poverty and to study national policies, plans and programs for poverty eradication in India. The relevant
secondary data is collected through various sources such as websites, Economic survey, books and
journals.
poverty
reduction
in india
2
poverty
reduction
methodology
SEED recently commissioned a study on the relationship between Start and Improve
Your Business (SIYB) and poverty reduction, including a methodology for impact
assessment. The methodology was pilot-tested on trainees in Zambia, Zimbabwe and
Uganda. Many aspects of the study were well designed, considering both monetary
changes, access to social services, job quality and rights. It included interviews with both
entrepreneurs and employees (in some cases). However, the small sample (5 trainees per
country,
plus control groups of the same size) limits the usefulness of the results. The
methodology needs to be applied to a much larger, random sample (i.e. about 500
trainees).
impact of
social
business
on poverty
23
poverty
reduction
methodology
SEED is supporting the decent work country programme in Ghana with activities in
two regions. There is currently an effort to design an impact assessment methodology to
capture the poverty reducing effects of SED interventions measured against nonprogrammed regions.
This will allow for both the use of a control group and the evaluation
of effects on household poverty, rather than firm-level performance. The main concern is
whether the impact of SED can be measured statistically in this way (see below).
impact of
social
business
on poverty
24
poverty
reduction
methodology
The first objective is to explain and define important terms, since a main part of the thesis is
based on economic history and development of FDI, underpinned by known economic theory
and recently developed business strategies. Secondly, the purpose of the paper is to establish a
base where business strategies in connection with poverty reduction can be understood with
the aim of applying them in a real world business context. The thesis approaches the research
question primarily with an explanatory approach. An exploratory study is best suited because
the paper aims to understand motivations behind business strategy decisions and illustrate
how MNCs engage in poverty reduction efforts in developing countries. This field of research
is still young, and Sekaran defines exploratory studies as a way of better comprehending the
nature of a problem since little information is available in that area (Sekaran, 2003).
In the selection of data a deductive methodology is utilized, using already established
scientific theory to substantiate the research question.
impact of
social
business
on poverty
9
poverty
reduction
obstract
Executive Summary
1. India entered the 11
th
Plan period with an impressive record of economic growth. After a
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reduction
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lacklustre performance in the 9
th
Plan period (1997-98 to 2001-02), when GDP grew at only 5.5%
per annum, the economy accelerated in the 10
th
Plan period (2002-03 to 2006-07) to record an
average growth of 7.6%, the highest in any Plan period so far. Besides, there was acceleration
even within the 10
th
Plan period and the growth rate in the last 4 years of the Plan averaged 8.6%
making India one of the fastest growing economies in the world. The growth target for the 11
th
Plan is 9% with focus on broad-based inclusive growth. As a result of the global financial crisis,
there is likely to be a slowing down of economic growth. Due to the inherent strength of
economy, the impact of the global financial melt down is expected to be much lower than
experienced by other countries. Various experts estimate growth rate to be around 7% to 7.5% per
annum
2. The percentage of population below the official poverty line has declined from around
55% in the mid-1970s to 36% in the mid-1990s to 27.5% in the mid-2000s. In absolute terms, of
the 30 crore persons below poverty line (BPL) in the country, about 22 crore, i.e. 73% live in
rural areas. These translates into approximately 4.5 crore BPL households. The official poverty
line based on consumption poverty (2400 Kcal) is estimated by NSSO 61
st
round at Rs 356.30 per
capita per month in rural areas, i.e. Rs21,378 or say Rs 22,000 per annum for a household for
five members.
3. In order to eradicate poverty by 2015, (based on national poverty line) as contrasted with
mere poverty reduction, this paper examines the features of rural poverty, its magnitude, trends
and geographical distribution, past and present programmes for poverty alleviation and proposes
strategic interventions designed with rural households as a unit.
4. Some of the causes of rural poverty include: dependence of livelihoods on natural
resources (land, forest, water) which are coming under increasing biotic and abiotic stresses,
including climate change; fragmentation of land-holdings; low productivity of agriculture due to
inadequate access to factors of production (land, irrigation, technology, extension, credit);
unemployment and underemployment; inability of the secondary and tertiary sectors to draw
away surplus agricultural labour into productive off-farm activities; lack of physical
infrastructure such as roads, power, markets, communication etc.; weak social infrastructure such
as education, health, drinking water, and sanitation.
5. While agriculture’s contribution to GDP has declined to 18%, yet over 60% of population
continues to depend upon agriculture for livelihoods pointing to low productivity and high
unemployment and under-employment in the sector. The original poverty alleviation programmes
designed as direct attacks on rural poverty – to counter the weak trickle down effects of growth --
in the mid-1970s in response to the call of Garibi Hatao, have since undergone several
modifications. These programmes are broadly categorized as (i) wage employment (ii) self
employment and skill development (iii) rural infrastructure – roads, markets, housing, sanitation,

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drinking water and (iv) social security and safety nets.
6. The wage-employment scheme has been transformed into a rights-based
programme through the path-breaking, historic legislation, the National Rural Employment
Guarantee Act, (NREGA) 2005, which guarantees 100 days of wage employment to every rural
household whose adult members are willing to do manual work. Implementation of NREGA on
an unprecedented scale, across the country has led to significant wage income increases in rural
poverty
reduction
obstract
INTRODUCTION:
The present empirical study deals with the EGS and SGRY as
poverty eradication programmes. Therefore, it is logical to begin with
the understanding of the concept of poverty, extent of poverty and an
overview of poverty eradication programmes in India. This chapter is,
therefore, designed to make clear the concept of poverty, its
international concern, and extent of poverty and to outline the
evolution of poverty eradication programmes in India.
poverty
reduction
in india
1
poverty
reduction
obstract
At the beginning of the new millennium,
260 million people in the country did not have
incomes to access a consumption basket which
defines the poverty line. Of these, 75 per cent were
in the rural areas. India is home to 22 per cent of
the world’s poor. Such a high incidence of poverty
is a matter of concern in view of the fact that poverty
eradication has been one of the major objectives of
the development planning process. Indeed, poverty
is a global issue. Its eradication is considered
integral to humanity’s quest for sustainable
development. Reduction of poverty in India, is,
therefore, vital for the attainment of international
goals.
poverty
reduction
in india
1
poverty
reduction
obstract
ABSTRACT
In almost all underdeveloped countries where per capita income is very low, income inequality has
resulted in a number of evils, of which poverty is certainly the most serious one. Poverty infact is a
socio-economic phenomenon that is intimately associated with inequality. It adversely affects
human health, efficiency and productivity which in turn affect their income. It deprives a segment
of society of bare necessities of life- food, clothing, housing, education and health. Poverty is more
of social marginalization of an individual, household or group in the community/society rather
than inadequacy of income to fulfill the basic needs. Indeed, inadequate income is therefore one of
the factors of marginalization but not the sole factor. The goal of poverty alleviation programme
should aim merely increasing the income level of individual, household or group but
mainstreaming marginalized in the development process of the country. The country cannot claim
economic growth when sections of the people are marginalized to the periphery of the society. The
rapid economic growth process should accelerate the access to services like education and health
services for all, especially the marginalized citizens. In India, even now in spite of all the
development during the past five and a half decades, 34.3% of the population was getting less than
poverty
reduction
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$ 1 (PPP) a day. This percentage of population was considered to be poor on an international
criterion suggested by World Development Report. So this paper is an attempt to study national
policies, plans and programs for poverty eradication.
poverty
reduction
obstract
The planners and policymakers in India have been underscoring higher
economic growth as an outcome as well as a prime-mover of development
policies. However, while discussing about the economic growth both as an
instrument and outcome, the question that inherently arises is whether economic
growth has actually been pro-poor and inclusive in nature. In order to understand
the nuances of poverty alleviation process in Indian context, an assessment of propoorness of economic
growth is all the more essential.
It may, however, be mentioned that the poverty reduction process in India
is quite complex. Although, at the macro-level, it may not be very difficult to
identify an inverse correlation between economic growth and poverty reduction,
the picture at the micro-level is quite disparate and heterogeneous. This is owing
to web of deeply ingrained social, political and structural factors which have a
very large bearing on the pro-poorness of development policy, in general, and on
the efficacy of the economic growth, in particular.
In view of the much-felt need for assessing the pro-poorness of economic
growth, the present monograph attempts to examine whether the economic growth
in India has actually been accompanied by a commensurate improvement in
economic and social inequality. The monograph tries to explain ‘pro-poorness’
and ‘inclusiveness’(or otherwise) of economic growth in terms of some of the
proximate determinants, like, quantitative and qualitative pattern of employment;
gender inequality in well-being; right to land and institutional reforms related to
land; and connectivity through all weather roads.
The second element of India’s poverty reduction strategy is the targeted
poverty alleviation programmes. The rationale for introducing the targeted
programmes for the poor came to the fore in the late 1960s when the government
policies had to face severe criticisms because the much anticipated benefits of
economic growth was not percolating to the poor and the disadvantaged. The
targeted poverty alleviation programmes are basically supply-side interventions
on the part of the state in response to the needs of the poor and the disadvantaged.
poverty
reduction
in india
11
poverty
reduction
obstract
China and India are generally regarded as the two large countries in the developing world that are the
“success stories” of globalisation. This success has been defined by the high and sustained rates of growth
of
aggregate and per capita national income; and the substantial reduction in income poverty. Further, both
China and India are seen as heralding a major shift in the international division of labour through changes
in their own output and employment patterns: thus, China is typically described as becoming the
“workshop” or “factory” of the world through the expansion of manufacturing production, and India as
becoming
the “office” of the world, in particular because of its ability to take advantage of IT-enabled services
offshoring. These results, in turn, are viewed as the consequences of a combination of a “prudent” yet
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reduction
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extensive
programme of global economic integration and domestic deregulation, as well as sound macroeconomic
management. Consequently, the presumed success of these two countries has been used to argue the
case for
globalisation and to indicate the potential benefits that other developing countries can reap. The
importance
of these two countries spills over into discussions of international inequality as well.
1
This makes comparison
of the extent of poverty reduction in India and China, and the possible causes of the revealed patterns, of
particular current relevance.
It should be noted, however, that despite the similarity of the current international hype about their
future economic prospects and also despite their obvious differences, both China and India face rather
similar economic problems at present, especially with respect to the sustainability of growth and the
emerging inequalities. These concerns actually predate the current global financial crisis and the
associated slowdown in
many economies, which have obviously also affected growth prospects in China and India. In both
countries,
the strategy of development had delivered relatively high income growth without commensurate increases
in
employment, especially in the organised sector; the bulk of new employment has been in lower
productivity
activities under uncertain and often oppressive conditions. In both countries, the growth has been
associated with sharp increases in spatial and vertical inequalities, greater fragility of incomes among
marginalised
groups and adverse shifts in certain human development indicators. In both countries, 2004 marked a
shift
in declared political priorities towards more inclusive growth, with varying effects.
poverty
reduction
title
POVERTY ERADICATION IN INDIA BY 2015
RURAL HOUSEHOLD CENTERED STRATEGY PAPER
poverty
reduction
in india
1
poverty
reduction
title
POVERTY ALLEVIATION IN RURAL
INDIA – STRATEGY AND PROGRAMMES
poverty
reduction
in india
1
poverty
reduction
title
POVERTY ERADICATION IN INDIA: A STUDY OF
NATIONAL POLICIES, PLANS AND PROGRAMS
poverty
reduction
in india
1
poverty
reduction
title
Poverty Alleviation and
Pro-Poor Growth in India
poverty
reduction
in india
1
poverty
reduction
title
Poverty reduction in China and India:
Policy implications of recent trends
poverty
reduction
in india
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references REFERENCES
Anheier, H. K. (2013). The Nonprofits of 2025. Stanford Social Innovation Review.
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on poverty
social
busines
conclusion
he social sector industry in India has grown
manifold. New forms of business have emerged and
with it new and young breeds of entrepreneurs have
come to the fore-front. These young leaders will
provide several social and technological solutions to
many of India’s social sector problems in the coming
days and years. At the same time, one also needs
to look into the administrative and professional
side of carrying out charitable activities in India.
Companies, organizations and individuals have
become more structured and professional in their
approach to philanthropy and charitable activities.
Gone are the days when doling out cheques was
considered philanthropic and charitable. In today’s
world, charity has become more strategically linked
to a company’s balance sheets and visibility. Legal
and market reforms in the last two decades have
enabled private players to participate in national
building through charitable activities with much
vigor. While tax implications are clear and well
explained in ITA, a need for greater clarity is required
under the Companies Act and the Regulations
thereunder with regard to investment and
expenditure of CSR funds for charitable purposes.
social
business in
india
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The recent CSR provision in the Companies Act
has the potential to usher a new era in the field of
corporate and institutional philanthropy in India.
The challenges faced by the philanthropy sector,
however, remain manifold. Social business as a
concept has found strong footholds in India. The
time is ripe to take social business to the next level
and CSR can provide the crowding-in effect for such
business. Corporates and not-for-profit entities must
engage more and participate regularly with civil
society organizations so that capacity building at
the grass-root level is strengthened. In the absence of
democratization and decentralization at the lowest
level, the trickle-down-effect model may be difficult
to achieve.
Central and State legislations regulating non-profit
sector need to be more open and accommodating
of genuine demands made by the donors. Under
the existing laws, it is almost impossible for foreign
donors to have any direct administrative control
or direct say in the functioning of the recipient
organization. In such a situation it becomes
difficult for such donors to ensure transparency
and accountability of their funds. Owing to a very
wide ambit of FCRA, genuine foreign contributors
or donors often face a lot of legal and regulatory
compliances to adhere (to), which eventually leads to
donations either getting denied or unduly delayed to
reach the intended beneficiaries.
The definition of terms like ‘education’, ‘relief
of the poor’ etc. needs to be expanded under the
ITA. Judicial pronouncements on the above terms
have proved to be very restrictive and counterproductive. Fiscal laws and regulations need to
be more accommodating to the demands of social
sector. Governance issues should be given due
importance as compliances can go a long way in
ensuring corporate governance of donor companies.
At the same time, non-profit organizations should
also consider engaging with market players
with a renewed vigor and not just looking at the
arrangement from a donor-recipient perspective.
Successful social business models can only be created
and replicated when such organizations are more
professional, transparent and wish to scale up.
The CSR provision may prove to be a game-changer
for corporate and institutional philanthropy.

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Although, more clarity is required with respect to
CSR Rules and other compliance requirements,
corporate India has come a long way from being
a corporate citizen to becoming a responsible
corporate citizen. With the rise of globalization and
de-regulated market, we may begin to see many
Indian companies setting up non-profit entities in
the US as well. Companies across jurisdictions are
looking to enter into new forms of market, develop
new models of social businesses and practice
innovative models of corporate governance aimed at
optimizing social returns on such investments.
social
business
absract
This chapter provides an overview of social entrepreneurship in India within the larger frame of social
innovation
globally and its historic roots in India. India is often seen as the hotbed of social enterprises globally and
has
been hosting several forums to promote social entrepreneurship in the last decade. This chapter situates
the fast
changing and dynamic space of social entrepreneurship from multiple lenses. The chapter begins by
examining
the landscape of social entrepreneurship in India and is followed by an analysis of the actors in the
ecosystem
and some broad trends including a greater emphasis on social enterprises recently. Drawing on insights
from
recent literature on social innovation globally we present the case for looking at social entrepreneurship
as
part of a larger process of social innovation. We follow this by examining the evolution of social innovation
in
India, suggesting a closer role for civil society traditions of constructive work, experimentation and
innovations.
We show how awards for encouraging innovations have had precedents in the Gandhian movement before
independence and the role of people’s science movements in promoting technology for development in
the
eighties and nineties. We conclude by providing suggestions for rethinking social innovation in India by
arguing
the case for a closer read of both the historic and cultural roots of social innovation and the emerging
strands
globally that focuses on citizen participation, democratization of innovation, and ideas for socio-political
change. We make a case for exploring India, not just as a space for some of the exciting social
innovations from
an emerging market perspective but also an exploration of approaches, theories and concepts, that draws
upon
practitioners’ perspectives and rooted in Indian intellectual traditions of creative dissent.
social
business in
india
3
social
business
EXECUTIVE SUMMARY
Mission-driven businesses that improve the lives of the poor
social
business in
6

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