Letting HUL Own a Bunch of Villages Maybe Just the Solution We Need

One side of the paper carried an article on how over 65 million people lived under conditions where they were forced to survive on less than Rs 365 a month and the other side carried a story on how a global consumer goods giant was eyeing India as its main platform to meet its target of doubling its sales and acquiring a billion new customers worldwide. Certainly there is something wrong with the picture. How can a country with so many millions of people, forced to sell their subsidized food grains just to survive, be a source of customers who are able to pay for “luxury” items such as branded bathing soap and toothpaste? But then that is the grand paradox called India.

If we want we can look at this paradox and shake our head in despair, certain of the failure of both our Government and the ambitious MNCs to change the conditions. Or we could be innovative and see the opportunity. There are a hundred schemes that are currently being run by both state and Central Governments to improve the lot of people who live in these conditions. These schemes provide funds for everything from subsidized grain to affordable Life Insurance for the chief wage earner of the family. The intent is right and the schemes are needed. The failure occurs at the last mile- the level of execution and successful distribution and awareness.

If we recognize this, surely we can bring in experts who can help us solve this very problem- that of distribution and execution. And then we will see that the juxtaposition of the two stories in the newspaper is actually a happy coincidence because it shows us a whole new possibility of Public-Private partnership.

What I am proposing here is that Consumer goods giants such as Coca Cola, HUL, P&G, Godrej and others be give the opportunity to fulfill their ambitions. What if they were allowed to bid for groups of villages and given the responsibility of implementing the schemes that are being run by the Government? These companies certainly have the know how and the distribution reach to ensure that the schemes are implemented correctly. After all distribution and accountability of assets is their life blood. In exchange they could be given tax-credits and also the opportunity (for a limited time) to be the exclusive supplier of goods they would like to sell.

The “rural” and the “bottom of the pyramid” opportunity has been acknowledged by almost all of these companies and they have responded by taking out more affordable an suitable variants of their existing products (e.g. a vitamin boosted tea, shampoos in Re.1 sachets, smaller bottles of beverages). If the Government is able to put together an attractive enough incentive for these companies which is commercially viable, I am certain that we can make a sea change in the lot of rural India, implementation of aid schemes and see whole new era of public-private partnerships.