Dalit Capitalism

I covered Dalit capitalism for Mint in its early days when DICCI as a chamber of commerce for the Dalit community had just come up. My boss at Mint, who is an economist, always felt proud of my work, especially on Dalit capitalism. Today, I spoke to Milind Kamble, founder and chairman of DICCI, in a decade and learned of the advances made by the community. This also prompted me to search for my stories on Dalit capitalism on the Mint website but a majority of them are missing! I am told that Mint had a website revamp which might have interfered with the articles. However, I found my report on a blog.

Anyway, I found this one (unedited) on my drive today. This report is a minefield for researchers (so proud to have written this story):

The rise of Dalit Entrepreneurship

http://www.livemint.com/2010/12/26190827/The-rise-of-Dalit-entrepreneur.html?atype=tp
Posted: Mon, Dec 27 2010. 1:00 AM IST

The community has found an escape both from the demeaning tasks
assigned to them by the caste system and the stigma of being branded
as non-meritorious beneficiaries of reservations in India
Pallavi Singh, pallavi.s@livemint.com

Around 40 years ago, huddled among a group of hungry children in his
native village of Vadgaon Budruk in Maharashtra, Rajendra Gaikwad had
an epiphany about how there was discrimination in a simple seating
arrangement.

It was a mass lunch thrown by upper-caste Marathas and the
nine-year-old was seated along with his mother in a corner of the
temple where Dalits of the village ate. “We were segregated from the
upper-caste Hindus, which was very humiliating. Even as a child, I
felt insulted and would cry each time my parents would talk of
visiting the village. I didn’t return after that,” he says.

Gaikwad is today based in Pune and runs a pest-control firm with
operations in India and Singapore. He is also a member of a growing
band of Dalit entrepreneurs who have eagerly grabbed the opportunities
offered by a booming Indian economy to break the occupational shackles
imposed on their community for centuries.

Atin Kamble is a third-generation Dalit entrepreneur from Mumbai who
has none of Gaikwad’s bitter childhood tales to tell. After eight
years in the business of marketing edible goods in Mumbai shops
through his venture Arti Enterprises, 36-year-old Kamble is
ambitiously pitching for two power-generation projects in Arunanchal
Pradesh, which would need an investment of a minimum of Rs.15 crore
initially.

His grandfather began with a modest business of leather goods, a
vocation traditionally allocated to Dalits, in Mumbai’s crowded Dadar
area; his father expanded the family business but Kamble chose to
strike out on his own.

“I somehow found sitting in my grandfather’s leather business shop
infra dig. I mean, it’s a peon’s job, if you are ambitious. I wanted
to do something that would give our business the status of industry,”
he says. And adds: “Today I am dealing with distributors and local
shopkeepers in the food business. When my children take over, they
will be dealing with super stockists.”

As opposed to Kamble’s pedigree and Gaikwad’s fortunes, Dashrath
Singh, who uses a surname mostly used by upper-caste Rajputs in India,
is still struggling in the garments business he runs from a rundown
garage in the congested Om Nagar slum in Delhi. Yet, from where he
stands today, it isn’t just a matter of miles covered, but it’s a
significant leap from his native village of Vari in Uttar Pradesh’s
Bulandshahar district to Delhi.

Singh’s work over a decade has included a series of humble vocations,
among them a helper at a grocery shop, an autorickshaw driver, a
door-to-door salesman of clothes, and a conductor in private buses,
before the idea of entrepreneurship struck him. Three years into his
business, he sometimes “earns lakhs in a month and sometimes just a
paltry sum”. But he insists things couldn’t get better. “Whatever it
is, I am on my own. I seek no favours,” he explains.

Gaikwad, Kamble and Singh are three faces of an emerging Dalit
capitalism that allows them an escape both from the demeaning tasks
assigned to them by the caste system and the stigma of being branded
as non-meritorious beneficiaries of reservations in education and
employment.

D. Shyam Babu, a fellow of the Rajiv Gandhi Institute for Contemporary
Studies (RGICS) in New Delhi, says Dalit capitalism is still at a
nascent stage, but adds that it will help create a Dalit bourgeoisie.
“It has the seeds of transformation for Dalits—from the lower class to
the middle class and beyond,” says Babu, whose research on Dalits and
the new economic order has highlighted the social advance of the
community in the wake of globalization.

“I know Dalit entrepreneurs who manufacture copper wires and cables
for use by the Indian Railways and the Delhi Metro, which proves that
these businesses are competitive, quality-oriented and efficient. This
is what Dalits in business want to prove today: they are good as
everyone else,” says author and activist Chandra Bhan Prasad, who is
currently compiling a database of entrepreneurs in the community.

Though the rise of the market economy has helped break many old social
barriers, Dalit businessmen still have to deal with several hurdles on
their chosen road.

“Most Dalit entrepreneurs face problems varying from difficulty in
getting enough supplies on credit, lack of social networks, absence of
kin groups in the business, and control of traditionally dominant
business-caste groups. These, along with other social variables such
as lack of social capital, make the Dalit situation in India more
complicated and vulnerable to homogeneous categorization,” says
Surinder S. Jodhka, a professor at the Centre for the Study of Social
Systems at Jawaharlal Nehru University in New Delhi.

Jodhka’s paper, ‘Dalits in Business: Self-Employed Scheduled Castes in
Northwest India’, drew insight on the expansion of private capital in
India during the post-1991 period and highlighted the discrimination
faced by Dalit businesses. The marginal status of Dalits and their
continued discrimination in the urban labour market also find
recognition in the 11th Five Year Plan released in October 2008. The
paper notes that “in urban areas, too, there is prevalence of
discrimination by caste, particularly discrimination in employment,
which operates at least in part through traditional mechanisms; SCs
(scheduled castes) are disproportionately represented in poorly paid,
dead-end jobs. Further, there is a flawed preconceived notion that
they lack merit and are unsuitable for formal employment”.

A poor economic and social background thus makes the beginning
difficult—only to be eased by outside help, mostly from the community
or well-off upper-caste individuals. “Forty years ago, when I began, I
would go on a cycle in rain and sun to various places—from a poultry
farm to an army cantonment, to kill rats and do odd jobs. I slowly
learnt that businesses need hard work and professionalism,” Gaikwad
says. In almost an afterthought, he adds: “A gentlemen called Mr.
Deshpande helped me get a loan from a bank by agreeing to be a
guarantor. The fact that he was an upper-caste man did help in making
my application appear serious.”

S. Galab, a professor at the Centre for Economic and Social Studies in
Hyderabad, who carried out research on the role and effectiveness of
self-help groups run by Dalit women in Andhra Pradesh, says most Dalit
enterprises suffer because of social isolation and the lack of
cooperation, and get over the initial hiccups only with help from
upper-caste individuals, since Dalits haven’t had a strong footing in
the social and economic sphere for centuries. “However, the upper
caste help also, kind of, co-opts the Dalits into the overall existing
structures, which is why they find it difficult to think about giving
back to their community later,” he cautions.

Various economic fora have also emerged over the years to help Dalits
overcome initial hurdles in setting up businesses. At the Pune-based
Dalit Indian Chamber of Commerce and Industry, formed three years ago,
its chairman Milind Kamble not just works on a database of Dalit
businessmen, but also helps them find linkages in industry.

And yet, argues author and activist Prasad, the emerging
entrepreneurship will need government help to thrive. “The government
ought to constitute a body, say, the ‘National Scheduled Caste and
Scheduled Tribes Supplier Development Council’, which should identify
Dalit/tribal entrepreneurs who are already supplying goods and
services to the government through middlemen, and connecting them
directly to procurement departments,” he says, citing examples from
the US, where a national body connects minority entrepreneurs with
large American firms.

To those who say that such a practice goes against the spirit of a
free market, Prasad argues that the Indian bourgeoisie itself would
not have thrived without state support and protection till 1991.
“Dalit businesses particularly need help since most of these are
small-scale operations,” he adds.

Explaining that economic standing is the only way Dalits can redefine
themselves, RGICS’ Babu likens the trend to the wave of Black
Capitalism in the US in the 1970s and 1980s. “There are strong
similarities. Like the black capitalists of America, most of the Dalit
entrepreneurs are first-generation entrepreneurs, people who were
never into businesses but mostly relying on agricultural labour. To
get into serious business from agriculture is a paradigm shift. And,
in both cases, here as in the United States, even though there have
been state interventions to promote entrepreneurship, individual
motivation and community help have come first,” Babu says.

Photo credit: https://bit.ly/2Ms0aiJ

 

The Week That Is

A landmark legislation, with a potential to change India’s polity and politics (for good or for bad), has been passed in a matter of a few days. Triple Talaq, purported as the legislation that will ensure gender equality and justice for Muslim women, is now a law and any Muslim man divorcing his wife verbally by saying Talaaq Talaq Talaaq will face criminal charges and a jail sentence. Its critics see a bigger BJP agenda behind this, while many find this regressive. Here is a list of countries where Triple Talaaq is banned.

In a tragic development, CCD founder VG Siddhartha decided to end his life in Netravati river in Mangaluru. He was reported to have been under enormous stress, as indicated in a letter media reports claimed, was penned by him. While this is utterly heartbreaking to see an entrepreneur and a successful one at that with an influential network (he was the son-in-law of former Kartanara Chief Minister SM Krishna) commit suicide, it’s also a grim reminder of the bad times Indian economy is going through. With bad loans mounting, banks have sapped entrepreneurs for funds, the tax regime has become too excruciating, and the government isn’t doing much to spur demand as was evident from the lackluster budget this year. Several conspiracy theories on Siddhartha’s murder are now doing the rounds; read them here, here, here and here.

In another development in the Unnao rape case which I had blogged about a couple of days ago, Unnao rape accused Kuldeep Singh Sengar has been expelled from the BJP and the SC has asked the CBI is the rape victim and her lawyer can be airlifted to Delhi.

Former RBI Governor Subir Gokarn has passed away. Read MostlyEconomics‘s opinion piece here. Other obituaries worth your time are here , here, and here.

 

 

Plan panel mulls ways to spur Dalit capitalism

The government has begun discussions with Dalit entrepreneurs on what can be done to promote business ventures set up by members of their community.

As a part of its discussions with various groups before it finalizes the 12th Plan for 2012-17, the Planning Commission has sought suggestions from the Dalit Indian Chamber of Commerce and Industry (Dicci), a business group, on what can be done to spur Dalit capitalism, how these business ventures can be funded, and how Dalit voices can be heard while charting out policies.

Narendra Jadhav, a member of the panel, said a proposal to introduce executive development programmes for Dalit entrepreneurs at some of the Indian Institutes of Management (IIMs) is also being considered. “(We are) very seriously contemplating the idea to have some kind of formal executive development programme for Dalit entrepreneurs. It can be outsourced to some of the IIMs. Most Dalit entrepreneurs have business skills, but they need polishing, particularly the younger ones. This will be considered, examined and polished in the 12th Plan. We will make a policy in this regard,” Jadhav said.

In a meeting held earlier this week, the planning body has also suggested that the chamber set up a venture capital fund to finance projects promoted by entrepreneurs born at the bottom of the caste pyramid and indicated that the government could consider picking up a stake in this fund, officials said.

The chamber will soon appoint a committee to formulate concrete suggestions. This is the first time that a Dalit business forum has been invited to make suggestions to the Plan panel.

“There are two things: one is promoting entrepreneurship that’s an end objective in itself. If there are difficulties faced by some communities, then you may need special interventions,” said Pronab Sen, principal adviser to the panel.

Jadhav said encouraging or creating situations for expansion of Dalit entrepreneurship also has an employment angle. “If there is a policy in this regard, it will also give fillip to employment of Dalits (by Dalit entrepreneurs). It is also about taking cognizance of the fact that there is a greater change taking place in society, and also about being open to voices from the ground while formulating the 12th Plan to make it more focused on the real issues from the ground,” he added.

Raising the funding limit for Dalit enterprises through the National Scheduled Caste and Scheduled Tribe Finance and Development Corporation (NSFDC), the apex government body for finance of small-scale businesses run by the weaker sections, is one of the suggestions Dicci made to the panel. The finance body grants a maximum loan of 7 lakh for Dalit businesses while its state wings mostly offer composite loans of a maximum amount of 50,000.

“Most government schemes for financing Dalit businesses expect them to be small-scale, such as buying cattle to set up a milking unit, or an autorickshaw. In the meeting between Dicci and the Plan panel, just one out of 35 Dalit entrepreneurs with businesses worth crores had availed of a loan from NSFDC and that 7 lakh loan took three years! Sadly, the government finds it difficult to believe that Dalits also could need a loan of 80 crore or so,” says Chandra Bhan Prasad, an independent Dalit activist and writer, who was a part of the Dicci delegation that met the Plan panel earlier this week.

The Plan panel’s deliberations with the Dalit business group seem to be guided by the changing socio-economic realities of India, and the steady rise of Dalit capitalism in particular. Considered the most underprivileged community in India, a section of Dalits are now engaging in large-scale businesses for the creation of wealth and employment that allow them an escape both from the demeaning tasks assigned to them by the caste system and the stigma of being branded as non-meritorious beneficiaries of reservations in education and employment.

“There are Dalit entrepreneurs who are into large-scale manufacturing and are also suppliers for government-run bodies such as the Indian Railways and the Delhi Metro, which proves that Dalit businesses are no less competitive and efficient than others,” said Milind Kamble, chairman of Dicci, who also attended the meeting.

The key demands that the chamber made to the Plan panel were to include Dalit entrepreneurs in priority-sector lending at special rates through institutions such as the Small Industries Development Bank of India and the National Bank for Agriculture and Rural Development. “We also asked for appointment of Dicci members on government panels, ministries and committees engaged in policymaking, just the way members from Ficci (Federation of Indian Chambers of Commerce and Industry) and CII (Confederation of Indian Industry) are appointed,” Kamble said.

D. Shyam Babu, a fellow of the Rajiv Gandhi Institute for Contemporary Studies in New Delhi whose research on Dalits and the new economic order has highlighted the social advance of the community in the wake of globalization, said government measures to promote Dalit capitalism will help create a Dalit bourgeoisie. “Most Dalit entrepreneurs face problems varying from difficulty in getting enough supplies on credit, lack of social networks, absence of kin groups in the business, and control of traditionally dominant business-caste groups. These, along with other social variables such as lack of social capital, make the Dalit situation more complicated and vulnerable to homogeneous categorization,” says Surinder S. Jodhka, a professor at the Centre for the Study of Social Systems at Jawaharlal Nehru University in New Delhi.

Jodhka’s paper, Dalits in Business: Self-Employed Scheduled Castes in Northwest India, drew insights on the expansion of private capital in India during the post-1991 period and highlighted the discrimination faced by Dalit businesses.

Prasad said the government should also formulate policies that favour grant of a certain number of tenders to Dalits. “Once Dalits are put in the supply chain, since the government is the biggest employer, discrimination in labour markets would also end,” he said.

First published in Mint.