This is an excerpt from an article i wrote for Economic Times recently.
According to a recent McKinsey report, 46% of Indian families cannot access or afford basic services, which include access to decent health services, sanitation, nutrition, social security, food, energy, housing and education. About 50% of public spend on basic services doesn’t reach the poor, marginalising 680 million people and pushing them down the poverty cycle.
Last year, UNDP ranked India at a dismal 136 out of 186 countries on its Human Development Index. Economic progress cannot come at the cost of social inequity. Today, most government initiatives are measured by spending, rather than outcomes. The new government will have to innovate and move away from the multitude of social schemes, which are designed to keep infusing taxpayer’s money forever. It will, instead, have to focus on creating sustainable ways to address challenges by leveraging the the expertise and commitment of external stakeholders: NGOs, citizen groups, industry and, most importantly, social enterprises.
In the last decade or so, across the world, various social enterprises have emerged that use a market-based approach to solve deep-rooted societal problems in a sustainable manner. It’s time for the government to mainstream this movement in India and work with these enterprises to strengthen government initiatives. However, social enterprise, as a sector, is still in its very early stages, with very few scaled up organisations. The government can change this by focusing on a few key areas.
First, set up a nodal body to support social enterprises, as Singapore has done, with an agenda to identify, support and scale social enterprises; a central agency that acts as a singlewindow clearing agency for all needs of social enterprises. Second, provide credit guarantee to banks that can provide access to capital— particularly limited at seed and early stage—to social enterprises. Lastly, strengthen the public-private partnership model between social enterprises and the government by ensuring a clear and transparent policy framework, timely payments and shared focus on outcomes.