An evening with Mr Nagaraja Prakasam
Introduction
On Friday, Aug 17, we had an inspiring session by Mr Nagaraja Prakasam, a leader in the field of impact investing. Mr Prakasam is an advisor and partner at Acumen, a leading impact fund. He is also a resident mentor at IIM Bangalore’s incubator, NSRCEL (N. S. Raghavan Centre for Entrepreneurial Learning, set up by Mr NS Raghavan, cofounder, Infosys.). Mr Prakasam spoke about how we can make India a vibrant economy with entrepreneurs thriving in the remotest parts of the country.
Back to Bharat
Mr Prakasam drew heavily from his book, Back to Bharat: In Search of a Sustainable Future. Written in an engaging and anecdotal style, with inspiring case studies, the book summarizes Mr Prakasam’s experience as a professional, investor and mentor for entrepreneurs across the country. Mr Prakasam believes that India's strengths are its people, problems and technology (PPT). The need of the hour is to look at more sustainable alternatives to patterns of production and consumption. And these examples are already there in different parts of the country.
Understanding Bharat
We are a country of 1.5 billion people. Our focus is usually on the 500 million who are relatively affluent, know English and have internet connectivity. For Mr Prakasam, it is the remaining 1 billion who constitute Bharat.
When Mr Prakasam uses the term Bharat, he also has in mind India’s glorious past. People like Vasco da Gama, based in far off countries had heard of India’s glory in a world where communication was limited. They risked their lives and came to India for pepper and other spices. In fact, till the 1700s, India accounted for 23% of the global GDP.
Mr Prakasam explained another key dimension of Bharat: how we can contribute to solving important global problems. There are two key problems that the world faces today whether it be a developed country like the US or an underdeveloped country in Africa: income inequality and climate change. Take the case of the US. The recent Texas flood is a good example. Also, in the US, some 16% of the population is considered poor. Maybe the billion people who constitute Bharat can help us to solve these problems. That is Mr Prakasam’s hope.
UN Self Development Goals
GDP alone does not convey the full story. Just like a car has many dials, we need multiple metrics to gauge a country’s progress. This is where the UN SDG (Sustainable Development Goals) become relevant. Earlier, we had the millennium development goals. But we could not achieve the goals by 2000. So, we came up with SDG and gave ourselves 30 years more. In the 5 years left, it is unlikely we will be able to reach the 17 goals. But it is heartening to note that when it comes to SDG, there are excellent examples in the country. We can draw inspiration from them.
Lessons from Meghalaya
Women empowerment is one of the key SDGs. In the East Garo Hills in Meghalaya, women are fully empowered. The society is matriarchal. After marriage, the groom goes to live in the bride’s house. The eldest daughter is the head of the family. The youngest daughter inherits the property. The head of the village is a woman. The entire society is driven by women.
Another SDG relates to the environment. In the East Garo Hills, the residents keep the place clean and protect the environment. The place looks like a resort. People lead a simple life. This way, they minimize the carbon footprint. In contrast, 80% of the country’s power comes from coal.
Elon Musk earns some $ 1.4 bn by selling carbon credits to companies like General Motors and Fiat who cannot meet the emission standards. It is heartening to note that good deeds such as those of Elon Musk are being recognized and incentivised. But at the same time, we should be disappointed at what we are giving to the people in East Garo Hills who are practising a sustainable living. We need to change our mental paradigm. Instead of describing these people as poor, we must celebrate them and reward them.
Entrepreneurship in rural areas
It is one thing to lead a sustainable life. But money and livelihood are also important.
Manipur
Elijah Raiveio from Manipur joined IIM Bangalore (2016-18) with aspirations of going abroad. But when he visited the N. S. Raghavan Centre for Entrepreneurial Learning (NSRCEL), he got the idea of solving important problems in his village.
Manipur has an abundant supply of wild apples. Only about 30% is consumed and the remaining is wasted. Elijah took advantage of a local cold storage and began to use the apples during the off season. He also tied up with the Indian Institute of Horticultural Research to make candy out of the apple. Later, he replicated the idea with plum and began to make nectar. Elijah has motivated two of his brothers and a sister to join his venture.
In 2019, when Mr Prakasam visited Manipur, Eljah was the only customer for the cold storage with some 5 tons of wild apple. If more locals use the old storage they will benefit. They can also avail of warehouse receipt financing to get bank loans. Then there will be no pressure to sell the produce immediately.
Mr Prakasam mentions in his book that we need more Elijahs in the hinterlands to identify the hidden treasures, collect, preserve and add value to commodities with technology and then market to the world.
Buntu, Jharkand
Buntu is located near Ranchi. It is rated as one of the 10 spots for extremist activity. The place is famous for lac from which bangles are made. But over time, they went out of fashion. The loss of livelihood has fuelled extremist activities. Indian Institute of Resin Research has now come up with a process for repurposing the lac for the pharma industry. This is a great example of repurposing ancient knowledge in a modern way.
Now the locals see an opportunity in lac. Their incomes are going up. Mr Prakasam gave an example of a local who has accumulated Rs 1 lakh in the bank. He leads a simple lifestyle. He feels mentally happy that in case of a health exigency, his family will not face any problem.
This example illustrates that we can leverage the wisdom in the villages and combine it with modern scientific techniques to create livelihood opportunities. If people have enough income, they can meet health contingencies which are the main cause of people sliding into poverty.
Amale, Maharashtra
Amale is a small tribal village about 112 km from Bombay. The last kilometre is not covered by road. So, one must walk. When Mr Prakasam visited the village, he picked up key insights even as he thoroughly enjoyed his stay in the company of the locals.
The residents would do well during the monsoons. They would grow paddy. But during the dry season, they had no source of income and were forced to migrate to the urban areas.
Mr Prakasam found out from the villagers that those who had migrated to the city did not quite enjoy the living conditions. Given a good mobile network, electricity and some livelihood opportunities, they would rather stay in the village.
One of the residents Raju Bharat would go deep sea diving to locate the right spots for sand mining without any proper equipment. This way, he would put his life at risk while trying to earn some additional income.
IIT Bombay developed a treadle pump. The villagers have leveraged the pump which ensures availability of water for farmers even during the dry season. The villagers have also built toilets sensing tourism opportunities.
Thanks to the work of Rohit Pillai of Rural Caravan (RC), Raju and his fellow villagers have made clean cooking stoves with technology from IIT Bombay’s Centre of Technology Alternatives for Rural Areas (CTARA). The sale of cooking stoves is an additional source of livelihood.
Today the village is self-sufficient. There is no need for the villagers to migrate to the cites during summer or put their life at risk as Raju was doing earlier.
Individual Social Responsibility
A Harvard study reveals that 70% of greenhouse emissions can be controlled if we are individually more responsible while buying things. We should embrace the philosophy of reduce, reuse and recycle. Sustainable future is in our hands provided we embrace individual social responsibility.
We should pursue simplicity when it comes to food, clothing and shelter. We should give up our current extravagant style of living. We should encourage the use of organic food, handlooms etc to promote sustainable living.
In the eastern ethos, simplicity is celebrated. We are the land of Buddha and Gandhi. But today, we are giving more importance to extravagance and conspicuous consumption.
Rewarding carbon preventers
Developing countries should not chase rapid GDP growth while damaging the environment. India has a great opportunity to build a sustainable future. We must reward the carbon preventers like the residents of East Garo Hills. We should celebrate their achievements. Mr Prakasam feels the rest of the country should pay an oxygen tax to the North East so that they can continue to preserve their natural surroundings.
Today we reward the carbon fixers such as people who recycle waste. But we do not reward the carbon preventers, like the residents of Meghalaya, who do not generate waste in the first place. Otherwise, they may cut trees to set up factories to pull people out of poverty.
Mr Prakasam provided another example in this context. There are 9 million handloom weavers in the country. They make sustainable products without the need for machine or electricity. We should incentivise these weavers by enabling them to sell carbon credit to the companies which use power looms. Geo tagging of the garments is a good initiative in this regard. Scanning the QR code will tell us where the garment is coming from: Kanchipuram, Meghalaya, Pochampalli, etc and all the processing activities involved. This way, we can calculate the carbon credits.
Q&A
Many villages in India are empty today. Youngsters for leaving their villages for the cities. But without the stamp of a degree, they cannot get a good job. Many of them do not do well in academics. So, they return to the villages. Also, as mentioned earlier, life in the cities is not easy. Thus, youngsters do not like the urban lifestyle (2 million people live in slums in Bangalore.) But they also do not want to do what their parents are doing, as it will doom them to a life of poverty.
Mr Prakasam described the pandemic as Bharat saying bye to India. Migrant labour began to return to their homes. Mr Prakasam thought: Can we use the returning workers to rebuild the villages? The result was Kissan Mitra. Today, it hosts over 1650 technologies from CSIR, the IITs, ICAR, etc. In collaboration with NASSCOM and NSRCEL, 32 awareness sessions have been held so far. With the help of 675 Krishi Vigyan Kendras, several vernacular sessions have been held for farmers without internet access.
Youngsters like technology. Can we give them the technology that enables them to make their livelihood. For example, Prof Sanjay Mahajani of IIT Bombay has come up with a sugarcane machine that directly converts sugarcane to jaggery. Youth have been trained and the jaggery is being sold to brands. Instead of selling sugarcane, the villagers are selling a value-added product. This way, the entire value chain stays within the village. Gandhi described this as self-sustaining villages.
Nativelead is a one-of-a-kind platform for enabling established business leaders in small towns to interact with aspiring local entrepreneurs. Through Nativelead, the leaders can invest their expertise, knowledge, contacts, wisdom, time & money in the entrepreneurs to reap good and satisfying returns. The core philosophy of Nativelead is: Local problems, local solutions, local entrepreneurs, local investors. Remain in your place and succeed.
Nativelead has a four pronged strategy.
Enabling: Help small business owners devise innovative and scalable business models. Create a culture of innovation and entrepreneurship in academic institutions.
Nurturing: Coach Startup founders on business model transformation and personality transformation.
Incubating: Guide and handhold startups as they build their products and help them gain market traction.
Investing: Provide a platform for startups to pitch their ventures to potential investors and help them scale up.
Nativelead has launched Native Angels Network, an Investment Arm, with around 20 Angel Investors. This is India’s first Angel Network to be started in a Tier 2 City.
The Government of Tamil Nadu has recognized Nativelead’s unique model of "inclusive mass entrepreneurship development" and its contribution to the creation of "small town ecosystems." It has appointed Nativelead cofounder and CEO Mr. Sivarajah Ramanathan to lead the newly created Tamil Nadu Startup and Innovation Mission (TANSIM). His mandate is to make the state a preferred startup destination on the global map. He has already made good progress.
Happy Hens is a striking example of what Native lead Foundation and Native Angels Network can do. The venture, founded by Ashok Kannan faced financial challenges in the early days. But thanks to the funding of Rs 50 lakhs from the Native Angels Network in 2015, the venture took off.
Ashok Kannan is wheelchair bound. Only his head and one of his hands can move. The rest of his body is paralyzed. He has never been to school. A self-taught expert in traditional herbs and natural farming, he would feed the herbs to chickens. To his surprise, he found that the colour of the yolk in the egg was orange. His curiosity prompted him to understand why this was so. On testing in the labs, it was found that the colour was due to extra minerals and nutrients.
Along with Manjunath, a textile trader based in Bangalore, Ashok started Happy Hens farm for free range eggs. On the farm, hens are free to roam and forage as they like. Hence the name free range.
Seeing the business potential, Ashok has moved from Madurai to Trichy to set up a 25 acre farm. Today, he works with three partners to produce 7500 eggs per day. One of the partners is Madhavan, who left his IT job in Chennai to rear 200 chickens in Ayyanperaiyur. Today, he earns more than his previous IT job.
Thus, Ashok Kannan who has never been to school is providing livelihood to the educated. Happy Hens has become India’s first and Asia’s third company to receive the Humane Farm Animal Care Certification. Kannan has been featured in Forbes magazine.
The National Rural Livelihoods Mission has already trained lakhs of women in Karnataka in entrepreneurship. These programs are run in Kannada.
NSRCEL has also launched a training program. Some 40,000 women applied for the one-year incubation program and 280 were selected. They have gone back and started to create ventures in their villages. Despite little education, they are doing well.
The movement is now spreading to many states. Women are now being exposed to various DST (Department of Science and Technology) technologies.
This initiative of NSRCEL is designed to equip new and existing emerging incubators with guidance, contextual program design, training, mentorship, and access to NSRCEL products and methodologies. The aim is to support and accelerate the establishment and enhancement of incubation centres in systemically underserved regions of India, including the North East, hilly regions, and Tier 2-3 cities. IIT Palakkad, IIM Trichy, IIM Jammu are some of the institutions covered by this program.
Course in Alliance University: A course, “ Solving for Bharat” has been launched in Alliance University based on his book. The course involves mostly field visits and no exam. At the end of the course, students must present a business plan or start a venture. The first batch had 60 students. A second batch has started. Next year, it will be a mandatory course and offered to for all the 12,000 students. A similar course is being launched in IIM Bangalore to teach social entrepreneurship and impact investing.
Fellowships: Mr Prakasam has conceptualized a post-doctoral program to create frameworks out of the book.
VISTA: This program is targeted at PhD students in private universities. They can convert their PhD into a venture with a multidisciplinary approach. In India, reputed institutions in different areas like AIIMS, IITs and IIMs work in silos. Private universities have the potential to offer multidisciplinary programs just as Stanford has done with its Stanford Bio Design. Mr Prakasam believes that research should have a practical orientation. Thus, researchers must not just be studying poverty. They should also be solving the problem. In this context, he added that the NSRCEL has created a Climate Fellows program. Researchers are expected to go into the field and understand the problem and then create ventures.
Shakti of Madurai wanted to create a rainwater harvesting system for Madurai. Coming from a humble background (His father is a fruit seller) Shakti cannot speak English but he can decipher a thousand-year-old poem in Tamil. If we put him in Chennai or Bangalore, people will say that he has a communication problem. And that is the problem in India. We must speak in English. If we speak in our own language, we are in trouble! Who better to support Shakti than people from his own place. Madurai investors have funded his venture.
Investors must send the message: don't worry about your background, what you studied, etc. As long as you have a drive, we will support. There are a lot of successful people from Madurai. For example, TVS, the billion-dollar company was built from Madurai. Mr Prakasam and a few likeminded people have created a system to bring them back to invest in these places.
VB Grip is a company making hundreds of crores of revenue. It makes a belt that is used in a range of appliances across the country. The founder is a tenth class fail. When he comes and talks to the students, he makes an impact. They realize that so much is happening in their own town. That's what we need to do in every part of the country, celebrate the local entrepreneurs.
Now the government has put together an inclusive fund. For example, the fund has invested in the Sathyamangalam Forest. The tribals are removing an invasive bush called lantana which is killing the local biodiversity. They are cutting and creating a briquette. Investors are now helping them to create a biochar out of it, so that they can earn carbon credit as well.
We should teach entrepreneurs about building a profitable business. The VC model, which is about growing, without profits, and raising money to cover the loss, is not sustainable in India. Considering we have lakhs of ventures in the country, we don't have that much money available.
We should motivate more of the local HNIs to invest. Mr Prakasam has observed that people are driving Audis, close to even the poorest villages. So, the money is there. But today it is going into gold and real estate.
But things are slowly turning around. Some 240 investors Tamil Nadu are now investing in local entrepreneurs. Now, there is even a reality show featuring them on Star TV.
We need multiple support systems to support people in the rural areas. They need not migrate to the cities. We must assure them that wherever they are, they can be successful.