‘We need to restore balance’
VIJAY MAHAJAN, the father of micro finance in India, now CEO of Rajiv Gandhi Foundation, speaks to Anjuli Bhargava on the role of civil society and social action as an agent of change when the state and market are failing to deliver an equitable society.
What prompted you to write a paper on the state of social action in India?
Many people, including those who work in the social sector, don’t have enough historical view of where we are. One thing that strikes you, as you chronicle it, is how so many people have tried to make a change in different ways over the decades. Yet, society progresses in fits and starts.
The historical perspective allows you to be humble on your own contribution, as well as, forgive yourself for being a tiny cog in the wheel of change.
How is this relevant today?
Even a major state sector can make only a minor impact on social change. Compared to that, civil society actions can make very slow and limited difference. Even when we say Mahatma Gandhi made a huge difference, what we don’t realise is that he explicitly used both political action ( satyagraha) and constructive work ( rachanaatmak karya) to trigger social change.
As I see it, for Indian society to move forward, we need to restore the balance between the three institutions: The state, the market institutions and the civil society. The state and the market institutions have become so overwhelming and yet they are not delivering. Inequality is on the rise. The poor may be better off but at a snail’s pace.
If you read the Constitution of India, it makes a large number of social statements but the instruments available to achieve these goals are only through the state. Directive principles are a set of around 10-12 desirable goals that are the duty of the state but these were not at the same level as a fundamental right.
Take for instance, right to life. This began to be interpreted as livelihood, as life without livelihood had no real meaning. The directive principle is that the state will do its utmost to provide livelihood opportunities for its people but it’s not a fundamental right.
How can the poor state guarantee something as dramatic as that? Even the richest state can’t guarantee livelihood for each and every citizen?
Yes. That’s how even the most powerful states like the United States said, the market would deliver what citizens needed. So the state started conceding to the market institutions. This happened 1980s onwards to the point, where by the end of Communism, the fall of the Soviet Union, there was this overriding view that this is it: The market will offer the panacea to all problems. This continued right till the crisis of 2008.
Then again the state had to jump in to rescue many market institutions.
This grand battle tells us something; that a third balancing force is vital. But this vital force can’t be the NGO sector as we know it today.
Is it because the NGO sector itself has acquired a bad name today that everyone is wary of it… how will the misdirected lead anyone to salvation? Let us divide civil society bodies into three clear categories. There are the organisations that are morally and ethically corrupt who are not there for the right reasons. Then there is the second lot that means well but is unable to deliver much. They lack the capability even if the intent is there. And there is a third — and I’d say this is just 10-15 per cent — who both mean well and are able to deliver.
What percentage of the total funds available to the sector are available to this 10-15 per cent in your estimate?
I would think 30-40 per cent. The more credible and proven organisations tend to corner a larger proportion of the money available.
But the sector itself needs to reform. It needs to subject itself to a greater scrutiny. If we want to take over a large part of the state money, we should subject to the same norms and guidelines. Comptroller and Auditor General of India or Central Vigilance Commission should be able to audit the books of anyone seeking to use public funds. If we have nothing to hide, why should we fear anyone or anything? A lot more self-regulation is called for. The boards of civil society organisations need to become far more active.
That’s true as much for the corporate sector?
Yes, expecting the Reserve Bank of India and Securities and Exchange Board of India to do the job of the company boards is unreasonable.
But let me say here that the boards of NGOs and civil society bodies are even more lax. The governance issue cuts across sectors but in the NGO sector, its as much a capability problem. Barring a few people at the top, there is a lack of quality and talent in lower staff. As a result, the overall effectiveness of the organisation suffers. The ability of a good leader to lead is limited by the vehicle he employs.
Another critical change that’s needed is to reduce the dependence on grants. Some part of social action that is amenable to market-like solutions should be restructured as social enterprises. For instance, if you are running an affordable private school, there’s no reason why it should be totally free. Even very poor families can pay a small amount and they will value it more. It will bring in more accountability.
Once it reforms itself, will it be taken more seriously?
We need to incorporate it into the design of our Constitution. The Constitution of India has a great vision but limiting the instruments to achieve what is set as the goal to only the state and market institutions is a flawed one. It should give legitimate place to all — market, state and civil society — So I am keen to push for an amendment to the Constitution to legitimise the role of civil society organisations in helping to achieve the vision of the Constitution. The place for that amendment is embedded in the directive principles.
I think it’s necessary so that the political and bureaucratic leaders and managers concede some ground to other well-meaning institutions instead of controlling everything like it is presently. Social action over the years has become trivial and partly corrupt. I am suggesting social action as a balancing piece but for it to balance anything, it needs to have a gravitas of its own.
To sum it up, I’d say one of the three wheels of the tricycle is missing. The second wheel (the market) has been brought in as sectoral legislation, not by design. To build a nation, we need all three wheels to work in conjunction with each other.
If you read the Constitution of India, it makes a large number of social statements but the instruments available to achieve these goals are only through the state