Recasting India (26 page)

Together the women and the students came up with a formula for a detergent. It is now sold in two varieties—Neki Supreme, which sells at the higher end at around Rs 70 per kilogram (2.2 pounds), and Neki Active, which sells at around Rs 50 for one kilogram. At both ends, Neki is as expensive as some of the most popular brands in the market, including Tide and Surf.

Initial testing of the product was done in several venues including the commercial washing areas or
dhobi ghats
, wholesale and retail outlets, department stores, hostels and residential areas in and around Ghaziabad.

The project in its first year sold about 2,000 kilograms (4,409 pounds) of detergent from 15 selling points in and around Delhi. The profit margin for Neki Active is around Rs 13 per kilogram and for Supreme around Rs 27 per kilogram.

The place where the detergent is made is a clean, single-storied house that has a large lawn, two rooms and a wide verandah. The women work on the concrete lawn or the verandah to mix chemicals for the detergent. They come in around 9:30 every morning and start the day with morning prayers—long kept away from temples of every kind, this is almost a re-induction of these women into normal society.

Rajni Walia, 25, told me that the biggest change that had come into her life in the past year has been that people have started inviting her into their homes in the village. “I thought maybe even after I stop doing the dirty work, no one will want to touch me. But it is not like that. People now know that I work with soap. So everyone thinks I am clean,” she said.

The women were earning an average of Rs 300 per month in their earlier occupation—this has gone up to an average of Rs 2,000. “The purchasing power itself has made a world of difference to their confidence,” says Sharma. “Now they no longer go to ask a shopkeeper to take pity and give them something. They bring hard cash.”

The team is now looking to achieve economies of scale by mechanization and electrification of the production facilities, and to procure long-term contracts with potential demand avenues.

It's hard to believe, but a classic triple-bottom-line project is unfurling at Nekpur village, once perhaps the most ostracized community in India. The project has significant social, economic and environmental impact. New employment opportunity has increased the overall income of the women by 544 percent, thereby empowering them and making them financially self-reliant. This has also inculcated in them the habit of saving, thus ensuring prosperity for future generations. The social impact has been the establishment of a community-owned microenterprise that has instilled in the women a sense of entrepreneurship, enabling them to lead a life of dignity, which has helped to transform the perception of the villagers toward the women. The sanitation conditions of the village have improved drastically, thereby enhancing the quality of life of more than 7,500 inhabitants. The increased income of the women will also lead to greater education opportunities for their children. And finally, the environmental impact is the complete abolition in the village of dry latrines. A breeding place for disease has been replaced with better sanitation systems (by building 128 two-pit toilets) that not only conserve an average of 69,120 liters (18,260 gallons) of water per month, but also supply nutrient-rich manure, boosting the agrarian economy of the area. Coming up next is the installation of solar panels at the production center in order to meet the electricity requirements of the entire detergent-making process in an eco-friendly manner and counter the uncertainties associated with irregular power supply in the area. The regular supply of electricity would massively push up production of detergent from 2,000 to 3,000 kilograms (about 4,400–6,613 pounds) to 54,000 kilograms (about 120,000 pounds). Project Azmat's uniqueness lies in its ability to develop an alternative livelihood for manual scavengers in consultation with the community. In Nekpur, detergent making was chosen as it is relatively easy for the women to grasp and carry forward, considering they have no prior education or vocational training. Furthermore, since detergent is a necessity, it has a relatively inelastic demand in rural and urban areas. There is a dream now to expand the business and take it to neighboring villages where manual scavenging is still prevalent and identify the next community ripe for entrepreneurial transformation.

As Priyanka, one of the women, told me, “Everyone offers me tea now. Earlier no one would let me even touch their utensils.”

 

Mahatma Gandhi would have been a good entrepreneur. He was a Gujarati, from the state that has produced India's most successful entrepreneurs, including the Ambanis, and more recently the $8.7 billion Adani Group, whose owner, Gautam Adani, has been a close friend of Narendra Modi, the powerful Gujarat chief minister and now India's prime minister after a historic victory in May 2014—much like the Ambanis are said to have close, and old, ties with the Gandhi family. He took a start-up, the Indian National Congress, to unprecedented and unimaginable heights.

Such ties were the subject of very critical attention in the run-up to the 2014 elections, and rightly so. Indian enterprise has a unique challenge at hand—for years, in the absence of clean and clear government regulation, it has been accustomed to doing business through stealth. Manmohan Singh, prime minister from 2004 to 2014, even described the country's much-treasured economic reforms process as “reforms by stealth.” What the prime minister was trying to explain was that sometimes vested political interests could mar the process of economic development by focusing on short-term gain rather than long-term good. So perhaps, the prime minister seemed to suggest in his comment, it is better not to draw too much attention when reform is in progress.

This idea is not new. It was said, albeit in a different way, by the late BJP minister, Pramod Mahajan. During his party's time in power between 1998 and 2004, he praised the rise of the Indian information technology companies as global powerhouses by saying that their growth was helped by the fact that they were based in the southern city of Bangalore (and not in the limelight of Delhi or Bombay) and that when they were growing, not many in Indian politics really understood the business of technology. He laughed and said, only half-jokingly, that had the Indian politicians known about the potential of the industry, its rapid growth would have been impossible.

There is even a phrase for this kind of stealth—“India grows at night.” But there is a flip side to this quietude, aptly described by another recent buzzword in Indian enterprise—
jugaad.
At its best,
jugaad
is a spirit of can-do-ness that empowers frugal engineering, a resource-scarce mindset appropriate for a world running out of resources and reeling from the excess of the boom years.

But more often than not, in practice,
jugaad
is an excuse for appalling incompetence, inefficiency and a complete inability to define and live by world-class standards. This mindset of
jugaad
is why India barely makes objects that match the best quality standards in the world. We provide some of the best software engineers to the world, but we have failed at world-class product innovation. The next Apple is not coming from India; neither is the next Microsoft or the next Samsung or Boeing. We did not build Amazon, and now Amazon is challenging even our copycat version, Flipkart, on our turf. Food, water and drugs have unprecedented levels of contamination and imitation in India. We have shown the world that India can buy and successfully run Jaguar-Land Rover, but the same company, Tata Group, has not been able to make a great car in India and failed miserably in their great
jugaad
project, the Tata Nano, the world's cheapest car, which very few people bought. So much for frugal engineering. And in spite of the low-cost Mars mission that has astonished the world, there is little to suggest that India's space prowess will lead to cutting edge low-cost projects elsewhere. This is a country which cannot yet make roads that don't wash away at the first rain in its financial capital, Mumbai.

The “stealth” rule is exactly like
jugaad.
It has a nasty flip side: forced socialism, nationalization and a license-quota regime, all the things that destroy a quest for perfection in India, of getting things just right, of aiming for the highest quality, of pushing the indigenous to the greatest possible levels of global quality.

Each year, when I write
Fortune India
's annual luxury issue and travel to Europe to interview CEOs of the world's biggest luxury companies, I am newly impressed at their attention to detail. One year, at the Hermès headquarters store on rue du Faubourg Saint-Honoré, I watched a store assistant clean a glass display table top 15 times in 37 minutes, each time with silent, nearly invisible efficiency, as various customers placed their arms or fingers on it. One of the reasons I stopped writing about the business of Indian luxury and fashion is because, after two books, I realized we just did not have the quality focus—though we had history and handwork tradition in abundance—to create global brands.

Curiously, one of the most Gandhian things I have ever heard from a CEO came from Patrick Thomas, the CEO of Hermès. He told me that Hermès has never used the word “luxury,” and does not believe that “just because you can afford it, you should buy ten Hermès handbags.” He said, “We believe that our products are meant to last for several generations. That's why we are Hermès. If everyone who could afford it started to buy many handbags, it would not be sustainable. Everything we use—from rare leather to super-skilled labor—is finite. There is only so much of it that is available. That's why we have to produce and sell sustainably. The point is to appreciate the finest quality—but not hoard. Not be greedy.”

This is something that Gandhi, who defined the rules for engagement and advocated for sustainable empathy between classes and not for class war per se, would easily understand. He wrote, “The world has enough for everyone's needs, but not everyone's greed” and “God forbid that India should ever take to industrialism after the manner of the West. If [our nation] took to similar economic exploitation, it would strip the world bare like locusts.” He would also comprehend easily the focus on restoration and preservation of handwork and handicraft. Gandhi might have been shocked at Hermès's prices—but perhaps not, if he saw the prices through the lens of lifetime purchases and the skill sets they help preserve from generation to generation.

Thomas's thoughts sound odd, even ironic, coming from the CEO of a luxury goods company. But then, Hermès is not just any luxury goods company, and its commitment to maintaining the finest quality of French handcraft has kept that country's best traditions alive and its best craftspeople in business. It is, unfortunately, not something India can boast of—though there are increasing efforts to rescue what is left of our heritage. This failure to create enterprise in heritage also shows in tourism, where India gets barely one-third of the number of tourists that Thailand welcomes.

Lest this point be misunderstood, I want to explain that I feel no personal affinity for luxury brands. Even though I wrote two books on the subject, I have never bought luxury goods and have never used them. I have no intention of demeaning Gandhian austerity—which I personally revere—with a luxury brand comparison. What I do admire is what Europe has been able to do so successfully—take indigenous craftsmanship and preserve it by reinventing it into coveted global brands. With India's near-infinite tradition of handwork—and with the love Gandhi had for handwork—I believe the Mahatma would have been happy to see the work of Indian artisans reach every corner of the globe. And he would not mind if the world paid top dollar for the painstaking handwork expertise as long as the business was honest and ecologically sustainable. That's why my example is Hermès—and not the bling of many other brands.

While writing this book, I tried to learn whether Gandhi was really as antibusiness as many of our Marxist historians would have us believe. I discovered that I was not the only one who doubted this. The writer Rajni Bakshi, for instance, had been talking about how Gandhi's idea of
sarvodaya
(progress and upliftment for all) in essence translates to the modern-day concept of sustainability in business.

In a
Guardian
essay,
¹
Bakshi pointed out an unlikely echo of Gandhian thought (at least as radical as Hermès's). She claimed that Hungarian-American investor George Soros embraced Gandhian philosophy when he accepted that business is always created within a social, cultural and political context, not in isolation. Soros is also the founder of the New York–based Institute for New Economic Thinking. Bakshi pointed out several examples of Gandhian thought at work in modern economics—from Bhutan's Gross National Happiness to the New Economics Foundation's Happiness Index to the Voluntary Simplicity Movement in the United States. Indeed, organic food is a quintessential Gandhian idea—so Gandhi would understand Whole Foods and Trader Joe's, but would also question their prices if they seemed too extreme.

Here's the flip side: Gandhi never would have supported genetic modification of crops as an absolute requirement without questioning. It would have immediately been unsustainable in his eyes—as it is proving to be in state after state in India. He would have wanted a rigorous examination and a case by case approach.

In the same vein as Bakshi, the Indian columnist and writer Sudheendra Kulkarni has explained in detail in his book
Music of the Spinning Wheel
²
that Gandhi would have loved and embraced the idea of open-source software and the Internet.

In Gandhi's lifetime, some of India's biggest businesspeople were very close associates, starting with Ghanshyam Das Birla, in whose home Gandhi had been staying when he was assassinated in Delhi in 1948.