The Future is Bright for Indian Social Enterprise - Here's Why | Startup Grind

The Future is Bright for Indian Social Enterprise - Here's Why

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19 (/u/mgtbmn/)
Rohan Potdar (/u/mgtbmn/) | 2015-08-11T18:39:27+00:00

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India is one of the world's most populous nations, and despite India's influence on the global economy and Sign up for the global event and story digest.
innovation sector, India's public and private sectors continue working on challenges to bringing the nation's
almost 180 million residents currently under the poverty line to a healthy and safe way of life. The on-theSubscribe
ground realities of running a social venture remain daunting (https://www.startupgrind.com/blog/the-socialSubscribe
entrepreneurs-dilemma-impact-profit/), but high level are pointing to a bright future for India's social

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Digital India Initiative

The government of India under Prime Minister Narendra Modi launched the Digital India program
(http://digitalindia.gov.in/) worth INR 1,13,000 crores (or approximately USD 18 billion) with an aim of
transforming India into a digitally empowered society and a knowledge economy by 2019.
Some of the focus areas include providing broadband internet connectivity to over 200,000 villages, making
mobile connections and bank accounts available for digital and financial inclusion to 42,300 villages, and
universal digital literacy. These movements will become game changing leverage for social entrepreneurs. In
an article in Forbes magazine, Tom Watson opines
(http://www.forbes.com/sites/tomwatson/2014/01/15/net-neutrality-and-social-entrepreneurship-whyfreedom-to-create-and-share-matters/) that the rise of social enterprises in America from the mid-90s to
present correlates almost perfectly with instant communications, access to vast knowledge, and the sharing
of data and applications by many millions of people through open, freely-accessed yet commercially viable
internet. This is the goal of Digital India: to create the foundation for social entrepreneurs in India as it was
built in the United States.
With infrastructure like this, many social enterprises like Tana Bana
(http://www.tanabanacrafts.com/), who work with artisans, traders, weavers, and other creatives in rural
areas, will be able to substantially increase their business prospects by reaching out to national and
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The Future is Bright for Indian Social Enterprise - Here's Why | Startup Grind

international buyers through online channels. This will eliminate the need for middlemen and bring obscure
rural handicrafts, textiles, and arts to the fore. Multiple ventures focused on knowledge gathering will also
benefit, such as Project ECHO (http://echo.unm.edu/), which works on the creation of networks of rural and
expert healthcare providers; AISECT (http://aisect.org/about-us/), which bridges the digital & educational
divide between urban and rural India; and InVenture (http://inventure.com/), which uses mobile technology
to create a digital financial record of the rural poor. Deeper penetration of the internet in the Indian countryside will accounts for bringing almost 68% of the total population online.
Solving a complex social problem most often demands the involvement of many stakeholders. Large scale
adoption and usage of digital technology as envisaged in the Digital India campaign will significantly aid an
entrepreneurs cause of bringing about social innovation and inclusion of remote populations in the
mainstream economic and human development.

Growth of a Favorable Investment Ecosystem

Here again, the Government of India is playing a crucial role in igniting the entrepreneurial spark within the
country. Under the Twelfth Five Year Plan (2012-2017), government has accorded priority to Bottom-of-thePyramid (BoP) focused enterprises and social good ventures by declaring the period between 2010 and 2020
as the Decade of Innovation. It is committed to help social enterprises in capacity-building by investing seed
capital through a new fund called India Inclusive Innovation Fund (IIIF) in areas of healthcare, energy,
urban infrastructure, water and transportation. IIIF has been capitalized to INR 5000 crores (USD 780
million) and will be allocated to social enterprises over the 10 year period starting 2010. 20% of a social
ventures funds will come from this fund while the remaining 80% will have to come from private investors.
Parallel to governmental intervention, the private investment ecosystem has significantly improved over the
last decade, particularly in the last five years. Impact investors, social business incubators, and donor
agencies are emerging as key players in the game. For one, according to a study conducted by German
Society for International Cooperation (http://www.giz.de/en/downloads/giz2012-enablers-for-change-indiaen.pdf) in 2012, 70% of impact investors and 56% of incubators were within the first 5 years of their
operations in India. Although overall figures on number of investors, both domestic & international, dont
compare favorably to developed countries, there is a flurry of activity in the impact investment space in
India. The "Leveraging CSR Policy to develop the impact Investing Market in India
(http://globalpolicy.iipcollaborative.org/)" report states that the social good sector in India received impact
investments to the tune of USD 1.6 billion in last ten years, funneled to support more than 220 enterprises.
As per the new Corporate Social Responsibility guidelines in Section 135 of Companies Act 2013 (http://
http://www.mca.gov.in/MinistryV2/companiesact.html), organizations have to spend at least 2% of their
average net profit of last 3 years on CSR activities. Currently these guidelines prohibit investment in forprofit business models. However, this will still result in availability of an estimated USD 2.5-3.3 billion of CSR
funds every year for Indian social ventures. With an estimated finance demand of INR 32.5 trillion
(http://www.giz.de/en/downloads/giz2012-enablers-for-change-india-en.pdf) (USD 650 billion) as of 2010,
The Indian social good sector is grossly underserved and points to a humongous potential for impact
investors in India and all over the world.

Myriad Opportunities to Create Impact

India has pledged commitment to 8 Millennium Development Goals
(http://www.in.undp.org/content/india/en/home/mdgoverview.html) to be achieved by 2015 as mandated by
United Nations Development Program (UNDP). Indias achievement on these goals is a mixed bag. While it
has exceeded targets on some indicators like halving the percentage of population below the poverty line
and net enrollment ratio in primary schools, many other indicators like share of women in non-agricultural
employment and proportion of population with improved access to sanitation are matter of concern. This
situation presents an excellent opportunity for social entrepreneurs to identify avenues of positive impact in
line with the MDGs and thus assist national effort.

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The Future is Bright for Indian Social Enterprise - Here's Why | Startup Grind

India is a vast country with multifarious arts and handicrafts that have been practiced for centuries. It is
estimated that there are more than 6 million artisans in the country; most of them being women and people
from economically disadvantaged sections of the society. Out of these almost 77% are from rural
areas, according to E&Y. Low literacy rate, lack of access to financing or modern production
techniques, and international markets compounded by exploitative middlemen combined with competition
from mass produced goods have virtually handicapped this industry. However, this offers several
opportunities to effective social entrepreneurs to connect artisans to the mainstream economy, harness their
unique talents, and ultimately bring prosperity to their households.

The Sun is Rising for India's Do-Gooders

With its diverse and complex socio-cultural environment, high economic inequality between urban and rural
areas, and low human development index, India definitely demands skillful navigation of its
unique challenges. But in challenges lie opportunities: focused government policies, quickly rising investor
interest, and a raw entrepreneurial energy waiting to be unleashed has positioned India to take these
challenges head-on. The sun is indeed rising here!

New Delhi (/blog/category/new-delhi/)

Policy (/blog/category/policy/)

About the Author

19 (/u/mgtbmn/)
Rohan Potdar (/u/mgtbmn/)
(https://www.facebook.com/rohanpotdar.photography)
(https://twitter.com/RohanPotdarsays)
(https://www.linkedin.com/pub/rohan-potdar/6/800/b18)
(https://plus.google.com/u/0/104429608705300347265/posts/p/pub)
Monotony kills creativity. Routine resists change. Competition is overrated and collaboration is undervalued.
Challenging the stereotype is healthier than conformity. Intellectual bankruptcy is worse than going under.
Strength of honest and original ideas is better than patronage and the search for them never ends. Being
Creatively Unsettled is the way of life. Hi I am Rohan Potdar. I am an indie lifestyle photographer who is
passionate about telling real, positive & meaningful stories by blending my photography with written
narrative and other visual media. Through my photography project 'One Life, One Passion' I meet upcoming
social & creative entrepreneurs and create their visual stories. I am also a zealous writer, a thinker, a
continuous learner and a hands-on dad! Riding on a country-side road and sleeping under the stars is my
rush.

Comments
630 (/u/PatrickMaloney/)
Patrick Maloney (/u/PatrickMaloney/) | 2015-08-11T23:50:48+00:00 (/blog/3-reasons-why-sun-will-shineon-social-entrepreneurs-in-india/#comment-1738)
You bring up the great point that the social ventures proposed by the government will have a higher chance
of succeeding if the digital infrastructure is also improved. Could see plenty of unique solutions to social
issues aided in part by connectivity and technology.
Reply 1
19 (/u/mgtbmn/)
Rohan Potdar (/u/mgtbmn/) | 2015-08-13T10:40:10+00:00 (/blog/3-reasons-why-sun-will-shine-on-socialentrepreneurs-in-india/#comment-1746)
https://www.startupgrind.com/blog/3-reasons-why-sun-will-shine-on-social-entrepreneurs-in-india/[7/24/2016 12:37:39 PM]

The Future is Bright for Indian Social Enterprise - Here's Why | Startup Grind

Thanks for reading Patrick! Yes, and this unique combination of government policy, investor sentiment and
push towards digital technology makes India a strongly emerging destination for entrepreneurs and
investors alike. Don't forget we are a country of many complex social issues, so no dearth of problems for
entrepreneurs to solve :)
Reply 1
630 (/u/PatrickMaloney/)
Patrick Maloney (/u/PatrickMaloney/) | 2015-08-13T19:53:34+00:00 (/blog/3-reasons-why-sun-will-shineon-social-entrepreneurs-in-india/#comment-1748)
Well if I ever start a social enterprise hopefully you can help show me the ropes in India!
Reply 1
19 (/u/mgtbmn/)
Rohan Potdar (/u/mgtbmn/) | 2015-08-20T10:14:01+00:00 (/blog/3-reasons-why-sun-will-shine-on-socialentrepreneurs-in-india/#comment-1781)
Hehe..yeah..I can show you around, there are very bright people here who can help you.
Reply 1
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