Reliance wants to do good (and money is no object)21 min read . Updated: 16 Oct 2015, 11:37 AM IST
Nita Ambani is leading the effort at Reliance Industries to give back to society. And there's nothing holding her back
Nita Ambani is leading the effort at Reliance Industries to give back to society. And there's nothing holding her back
Agar/Mumbai: It is a question you would ask. Why? Why does Reliance Industries (RIL) want to do good?
So, it doesn’t come as a surprise that Shravan Kumar Singh, 42, had the same question. And try as hard as he did, Shravan couldn’t fathom why anyone would bother with him, or the godforsaken wasteland he called his farm in his village Bhanpura, Madhya Pradesh (nearly 300km from the capital city of Bhopal), where there was hardly any water. No electricity either. Ploughing his 1.5-hectare land was just enough for a hand-to-mouth existence. When guests came over, his six children, mother and wife would go to bed without dinner. For some months, Shravan and a few others would make their way to far-off villages, as far as 200km, to harvest crops in return for grain. If he harvested about 100 bundles, he got five.
Still, it wasn’t enough.
There were debts to be paid. To the tune of nearly ₹ 4 lakh.
In 2011, Dharampal Singh, now the deputy programme head at Reliance Foundation (RF), approached him. Dharampal was familiar with the village. He had worked there in 2009, during his stint with Reliance Life Sciences, where he had been trying to work with the farmers to grow Jatropha, a plant that could be converted into biodiesel. This project eventually did not take off.
Now he was back, going door-to-door claiming that RF would change the village, help all the farmers with seeds and fertilizers, help build canals and kitchen gardens, and what not.
Shravan was perplexed, but one thing he did know—nobody does anything for free.
So he wondered: maybe Reliance wanted to spend the money and then want it back with interest. When the Reliance officials began asking for land holding records, his suspicion deepened. Land, after all. Maybe they wanted to build a factory. Maybe take the grain to sell it through the company and in turn short-change everyone by not paying up.
For Shravan and others in Bhanpura, it boiled down to a simple question—why should we trust Reliance?
‘Nobody has called us Ambani agent’
Inside Maker Chambers IV, Nariman Point, Mumbai, the corporate headquarters of RIL, India’s largest private sector company with a revenue of $62.2 billion, B. Srinivasan isn’t very surprised by this perception. That there’s enough and more scepticism associated with a large corporate entity and much more so with the name Reliance. Chief of staff and executive assistant to RIL chairman Mukesh Ambani, Srinivasan has been with the company for more than 17 years. He has been involved in incubating several new businesses in the chairman’s office, before they were carved out. So he was neck-deep in retail, power, telecom and biosciences, among a few others, which also include corporate social responsibility (CSR) and the birth of RF in 2010.
Srinivasan, 47, has an affable, candid way about him. He speaks with a fair measure of humour, but he speaks very fast, as if running through his sentences. “I know," he says. “The unsaid question is ‘Are you looking at doing good so that some of your bad image issues that you have with RIL will get resolved.’ Honestly, if it happens, we are happy. But that is not the intent with which we started this foundation."
And then he adds a little more. “This perception challenge, we don’t want to bring it to Reliance Foundation. But most of the places we work, I don’t think it has been a big issue. Nobody has called us ‘Ambani agent’… We don’t work in Delhi, of course…
…On a serious note, the name Reliance has advantages in a certain aspect and disadvantages in a certain aspect. Every time we have gone to a geography, a fairly large number of people have been sceptical because a large number of people have come saying ‘I will do this and that’ (and not done anything). I think we have been blessed to have teams that want to do good."
Bhanpura is a good example of that. Compared to 10 years back, today a large part of the village is green. Like many others, Shravan’s life too has changed. His income has grown multifold, from an average of ₹ 30,000-40,000 to ₹ 1.62 lakh per year. He has a mobile phone, a motorcycle, a tractor and his youngest child is studying in a private school, in Agar.
What helped change Shravan’s mind? Shravan says it was Dharampal.
“People’s predominant fear was that we will take away their land," says Dharampal. “Since they knew me, I could reassure them. We had to demonstrate our intent, to win their trust."
And Bhanpura is not an exception. According to filings by RIL, in the last five years, RF has spent ₹ 415 crore on what it calls the rural transformation initiative. It has reached out to 50,605 households in 519 villages across 12 states in the country. Everything put together, 11,482 hectares of land has been made available for farming. And the soil and water conservation measures have taken crop productivity up by an average of 58% in the villages.
That’s just rural transformation. In all, RF spent ₹ 761 crore in fiscal year 2014-15, the highest by a foundation related to a company in India. That’s 3.35% of the company’s net profit. The government asked companies to set aside 2% of profits as CSR spend. And just to draw a comparison, No. 2 on the CSR spend ranking is state-run Oil and Natural Gas Corp. Ltd, which spent ₹ 495.2 crore. And still, it didn’t make the 2% cut. ONGC was short by ₹ 165.4 crore.
All of this brings us back to the question: Why? Why does RIL want to do good? And significantly more than any other corporate in India.
Nita Ambani, 51, founder and chairperson of RF thinks the answer is rather simple: because India needs it.
‘A more inclusive India’
If Ambani is tired, she doesn’t show it. It is about 6pm and she has had a straight 12-hour workday. She got to the Dhirubhai Ambani International School at about 6.30am and has been busy since. She has been on the road for the past few days, travelling for the kickoff ceremony of the Indian Super League (ISL) 2015 in Chennai. “It has been a long day," she admits. “But I love what I do. I am passionate about all the things we are doing and it drives me at 6.30 in the morning to the school or a drive to one of the villages and stay there."
Just being busy leaves her little time to delve into the scepticism associated with Reliance.
“In the sense that the work we do is so positively entrenched that there is no time for negativism," she says. “It is all about a mindset change. You can do a lot of good even if you don’t have a lot of wealth. But when you have the wealth, it helps you to do better. And wherever there is a need, we would."
For Ambani, the choice to exercise this intent comes by often.
“For instance, only today, I had a small example," she says. “One of our teachers is a young widow. Her mother has been diagnosed with Hepatitis B, which has led to the sclerosis of the liver. And she has a daughter studying in the ninth standard. She can neither afford her mother’s medical expense, nor her daughter’s fees, as she is a single mother. This didn’t even come up to me. People who are running the school said that the foundation will take care of your mother’s health and your daughter’s fees. So, it is about the mindset. And in that way, we have empowered people to make decisions."
It will be fair to say that this isn’t an exceptional example of benevolence. Most schools would do this.
Anyhow, the way Ambani looks at it, RF is anything but posturing. It is trying to solve a few important issues afflicting the country. Way back in 2010, Ambani decided that RF would focus on health, education, rural transformation and development of the arts and culture. In the last couple of years, RF has added a fifth cause—disaster relief. Ambani is aware that doing good is just too large a statement to make...and too vague.
“I would like to see transformational change," she says. “For me, in education, what would I like to achieve? If every child can read and write. In health, where every expecting mother and child get the healthcare they deserve. To bring quality healthcare at affordable prices and see that everybody gets treated equally. With Bharat India Jodo (rural transformation) I thought that the way forward was to work with small and marginalized farmers, to give them a sustainable lifestyle...for a more inclusive India."
All of this requires money. A lot of it. But for Ambani, that’s not a bother at all. Which is why the company has out-spent its nearest corporate by more than 50%. “At that moment, we found it is the need," she says. “I think what is important is that RF has become an identity which is getting everybody together. With me on the board, it has got everybody interested in all the CSR activities that RF is doing. And to get that support is very important. So in a board meeting, we do spend time talking about RF. I think that is quite an impact. And that more and more of this should be done."
It is another matter altogether that not a long time back, it was this very bit that wasn’t very clear. That is, how far Reliance would go to do good.
‘Whatever it takes’
The way Sudarshan Suchi tells the story, he wasn’t expecting much from Mrs Ambani. That is when she reached out to him in 2010 to put together a wish-list with no constraints, of everything that Reliance Foundation could do for farmers. Everything that Suchi would like to do.
At the time, Suchi was employed with Reliance Life Sciences, where his job involved working closely with farmers, helping them experiment with Jatropha. Initially, Suchi was sceptical. That’s because talk goes only so far. But then, he didn’t want to squander the opportunity—if the billionaire wanted a wish-list, then she would get one.
Another matter altogether though that his idea was a community-led plan, one that could only be firmed up after having people on the ground. To put it simply, there was no plan. Just the idea that Reliance would work with farmers on every possible need that might arise.
Take a step back to understand the rationale here. Suchi has been working in the development sector for over 25 years in organizations such as the National Dairy Development Board and the Institute of Rural Management, Anand.
And in his experience, there are two learnings he holds close. One, the life of a farmer in India is a cycle replete with risks—if something has to go wrong, it will go wrong. Two, piecemeal or compartmental approaches to solving a problem don’t work.
First, the cycle. The life of a farmer starts with the inputs, seeds. Then pre-monsoon showers, to sow the seeds. Then, after the monsoons, protection against pests and insect attacks. After that, fruition, which again is dependent on temperature. Then, harvest. If the yield is bad, more debt. If the yield is good, then prices drop.
Suchi firmly believes that this is one of the main reasons why the piecemeal approach to development doesn’t work, and while there is no shortage of non-governmental organizations (NGOs) or government schemes, there is little to show. “They see communities as parcels and compartments. So they see them as beneficiaries, a sort of top-down approach. I’ve always worked in boundaries where either the budget is defined, area of operation is defined, number of people is defined or the focus on subject. That’s why we said that our approach needs to be open ended," he says.
And then he adds more. “The other thing we said is that in the last 15 years, it has so happened that the last mile in a village is relegated to a village worker or resource person, which means that the best of professionals step only up to a certain point. Maybe the nearest town or city. The cost of it is that you are not close to the person who most needs you. It is one of the reasons why we don’t work with any NGOs."
Bhavani Das, head of operations at the Centre for Sustainable Agriculture, a think tank, believes that NGOs are essential partners. “You need a different kind of expertise at different levels of scaling up the initiative," he says. “One organization won’t be able to have all this expertise in-house."
But Suchi believes that RF is doing fine.
As fate would have it, Ambani loved the idea. Her only question, when they met: “You say this will take three years to achieve; can you do it one year?"
‘I’ve been living a dream’
Over the last five years, the foundation has worked in some of the remotest villages in India. Suchi says the organization has “liberated" the water woes of some 50 villages such as Sakpa in Gangakhed cluster, Parbhani district, Maharashtra, which have been hit by a severe drought. It has built as many as 7,368 new farm ponds and renovated about 2,000 more to solve the water woes of villages.
“Rejuvenating old structures like ponds can definitely add to the water security of a village as it increases the water availability. But regular maintenance is needed for these structures, else it can again become unfit ," says N.K. Ambujam, director at Chennai-based Centre for Water Resources, Anna University.
To ensure that villages own up to the issues afflicting them, 519 village collectives called the Village Farmers Associations (VFAs) have been formed.
VFAs are formed so that farmers can be responsible for decision-making, with RF supporting them. These VFAs are recognized by various development agencies and financial institutions such as Krishi Vigyan Kendras, the National Bank for Agriculture and Rural Development (Nabard) and the district administrations. Plus, VFAs have a village development fund where farmers contribute a fixed amount.
Of course, none of this has happened in isolation. There’s a huge Reliance machinery working towards it. The Foundation employs 232 people for the rural transformation initiative alone.
People work towards a target. So it is not surprising that Suchi had one in mind, the moment he came on board. He wanted RF to reach 15,000 households. In just one year. Except, the foundation managed a paltry 1,200.
The villages weren’t waiting for Reliance with open arms. “We thought we were offering the people solutions to the problem and that they would lap it up," says Suchi. But that didn’t happen. Villagers were sceptical. So the team had to gently ease their way. By identifying the power structures in the village and then appease them.
For instance, in Jalara, a village in Madhya Pradesh, RF had a tough time getting all members to be part of the VFA. Usually, the foundation waits for at least 50% of the households in the villages to be members of the VFA before starting work on the ground. But Jalara was different. The water-starved village had been chasing one government scheme after another for over five years to build a lake. “The district administration said it would take ₹ 3 crore to construct the lake, and that they don’t have the budget for it," says Rameshwar Singh, a farmer at Jalara.
Even if the government had the budget, It would have taken a long time to get the lake Jalara needed. Mukesh Bhatnagar, assistant project officer of the zilla parishad in Agar, says the government has its limitations when it comes to getting sanctions, and then allotting the needful for a project. “Companies don’t have such limitations and can take faster action," he says.
When Reliance said it would like to help build it, most of the villagers didn’t believe them.
Although only 15 members joined the VFA, Reliance went ahead and made the lake. It is the biggest the foundation has made in all the clusters it has worked in so far and cost ₹ 54 lakh.
Once the lake was done, all 200 households became members of the VFA. “Sometimes we have to go with the intuition of the team on the ground," says Suchi. “In this case, we had to demonstrate what we mean for them to believe us." More recently, Suchi has realized that his original plan of exiting from a village after five years may not happen. Since 2010, RF has not exited from any project. “The leadership in some villages is not confident to take it up on themselves," he says. “This slows down the handing over process and our engagement continues there."
Suchi doesn’t see these as setbacks but learnings for the foundation.
Rural transformation is just one of the many focus areas for RF—there’s also health, education and promotion of arts and crafts.
For instance, in the early days of the foundation, education was the biggest area of spending. It accounted for 45% of the total budget in 2010, and it now stands at 2.8% of the total budget. In fiscal year 2014-15, healthcare became the biggest spend area with ₹ 608 crore of the total ₹ 761 crore spent. In both health and education, the foundation has many initiatives for the poor—from free eye surgeries and HIV/AIDS treatment to mobile medical units for doorstep healthcare and scholarships.
Two things stand out in RF’s long list of initiatives in education and healthcare—Sir HN Reliance Foundation Hospital and Research Centre and the Dhirubhai Ambani International School. They stand out merely because of the kind of institutions they are and the kind of audience they serve. For starters, the Dhirubhai Ambani International School in its website calls itself India’s premier international school and is among the top five schools globally to offer International Baccalaureate (an international diploma programme).
Similarly, the hospital, which has been in the possession of Reliance since 1998, was renovated last year with a vision to provide affordable international healthcare for all. A whopping sum of over ₹ 500 crore went out of the CSR wallet to make it “state-of the art".
And state-of-the-art it is. It has equipment like a high-end CT scanner with 4D imaging and a top-of-the-line MRI machine, making it the few hospitals in Asia to have it. And not to forget, escalators and special trolleys to serve food for patients—the trolley maintains the temperature of a piping hot dish and a cup of dessert at their required temperatures, at the same time, on the same tray.
Enough people attest to the fact that Nita Ambani personally spent a lot of time looking at every detail of the hospital from deciding on what kind of specializations it would have to even picking out the curtains for the 345 beds. While the rates for the hospital are comparable or even slightly cheaper than other hospitals in South Mumbai, one wonders if it is open to one and all and for profit, then is it CSR at all?
This part is called scepticism.
‘Money can be spent better’
In the spirit of the law, it is all kosher. “Anything on preventive healthcare technically counts as CSR," says Noshir Dadrawala, chief executive of the Centre for Advancement of Philanthropy, who has been consulting with non-profits since 1986 and also helps companies strategize on CSR. “It does not say it has to serve the poor and needy. So technically, what they are doing is within the realm of CSR." But he says there are better ways of using the money.
The HN Reliance Foundation Hospital, on Grant Road, is in the heart of South Mumbai. It has other renowned hospitals like the Jaslok Hospital and Breach Candy within its vicinity. For Dadrawala, this is the curious bit. “So what’s the point of putting up a hospital here, when there are enough healthcare services around?"
T.V. Mohandas Pai, a former Infosys Ltd senior executive and philanthropist who has donated to various causes, feels the same way. “In health, the bigger need in rural areas is primary healthcare," he says. “The money can certainly be spent better. If the same money was spent on providing health insurance for the poor, millions could benefit. It is important to mitigate misery now by ensuring very wide spread benefits at low per capita costs."
Pai has more. “Well, the strategy seems to be a focus on image-building, too," he says. “But I do not think this will give Reliance an image makeover as people see through these things easily." Pai is critical on the rural transformation bit, too, where Reliance doesn’t work with NGOs. “For a big foundation, it’s a very wrong strategy, and not smart at all," he says. “They can never be as close to communities as NGOs can be. Further, the cost of delivery will be very high. What we need in India is thousands of problem solvers, capacity at various levels, not such concentrated power."
Suchi doesn’t agree. He firmly believes that to do good work, ownership is essential, down to the last mile. Whatever it takes.
Well, it does take a lot. More than 3% of Reliance’s profit went for CSR last year. And sure, it makes RIL come across as a company that wants to do a whole lot of good, but Pai questions the overspending. “It is a big shame in India that billionaires spend companies’ monies for such (CSR) activities to buttress their image rather than spending their own money," he says.
Here, a far more important question must be asked—what of the shareholders in RIL? Do they need to participate in decision making?
Pai strongly believes that they should.
In a way, this is the inherent conflict in the spend on CSR. In listed family-dominated enterprises, often the family decides on spending and has family members to lead such spending. “Contrast that with CSR spends of listed companies in other countries," says Pai. “And you see the difference where no individual image-building takes place with shareholders’ monies."
‘Let your work talk’
Back at the Dhirubhai Ambani International School, Nita Ambani isn’t too fussed over these questions. We’ve been chatting for a while now, about her idea of giving back to society, personal wealth, causes she is passionate about and of course, the criticism.
How do you explain the hospital investment as CSR?
“To have quality healthcare is a right all of us have," she says. “We took this hospital when it was going through a financial crisis. It is a heritage hospital that belongs to the city of Mumbai. We did the transformation and the core message is to bring quality healthcare at affordable prices and see that everybody gets treated equally. If you see the free beds or the paying beds, we give the same services. Everybody gets treated the same way. So that was the purpose of getting into this?
“And then we moved on to the static and non-static mobile vans, which has been a huge success. We started from a radius of 4km and then to 7km and now we are starting it in New Bombay where we have a large Jio campus. There, around the villages, we saw there was not enough healthcare. And I spoke to my doctors and the foundation team. They said that they were confident to add mobile health units. It was a decision which was implemented in seven days. With the backup of the hospital, it makes it so much better."
Sure. But is there a reason you don’t work with NGOs?
“We (do) work with NGOs. In ‘Education for all’, we are working with different organizations, like Drishti, where we have completed more than 14,000 cornea transplants. We also work with the National Institute for the Blind. In rural transformation—we learnt a lot from our own mistakes. With Sudarshan driving this, we took the whole area by ourselves. That has had a great success rate so we are happy doing it ourselves."
But why do you need 462 people (people employed by RF) out there, when there are so many NGOs there? What would you say to that?
“I would just say, come and spend two days at our Bharat India Jodo and see the work that we have done there. And talk to the villagers. Because you don’t need more proof than the villagers talking about the work that we do. But the foundation is just four-and-a-half-years old. All our concentrated efforts started then and everybody is welcome to see any of the work and talk to them, without me."
How do you feel about charity? Do you do any?
“Yes. But I like to keep quiet about that. That’s a part of me. We have been taught to do good for society and making societal changes, and that’s how all of us lead our own lives, in our own private ways. That’s something you hold very dear to your heart no.
“So, day before yesterday I was at the opening of the Hero ISL. I tend to visit schools for the visual and hearing impaired. So I said it would have been so much better if there were children involved with the disability foundation who work with the mute and the deaf. And I said why don’t we ask them to perform the national anthem. Not for anything but to make people aware that there are people with special needs. They have to be included, it has to be an inclusive India. And I cannot tell you the two nights they practised with so much rigour. I spoke to AR (music composer A.R. Rahman) and told him, ‘AR, why don’t we have them with you singing, children doing it?’
“They had a picnic of their lives. Those two nights, they were running all over the place… So that’s something you hold dear to yourself. You don’t do it for…for me, it is a lot of meaning. I am putting up a whole special school now, next to this school, for special children and that takes a lot of my time. But I think it is important. I also think it is important to let your work talk, no?"