India and Impact, at 70
Today, India celebrates its 70th year of independence. Jawaharlal Nehru, India’s first Prime Minister, described India’s independence as a “tryst with destiny” in his first address to the nation. Seventy years later, that tryst with destiny has taken India on a remarkable journey of growth. Today India is one of the largest economies in the world, with a population of 1.2 billion people, with an average age of 27.6 years old.
In the seven decades since independence, India’s per capita income has grown six times over. Yet India remains a developing nation. Nehru’s original economic plan for India, all of those years ago, centered on nationalized industrialization projects. This plan, unsuccessful, contributed to a stagnant GDP growth rate from 1950 to the late 1980s. While many of India’s East Asian peers underwent rapid industrialization in the same time-frame, India was left behind, dealing with all of the problems of an underdeveloped economy: instability, poverty, and inefficiency.
Following the liberalization of the economy in 1991, foreign direct investment (FDI) has been the single largest driver of economic development in India. FDI has been a key component in India’s exponential growth over the past quarter-century, and U.S.-originated FDI has jumped 500% since the election of Narendra Modi in 2014.
Despite robust growth, 680 million Indians struggle to find access to essentials — food, housing, clean water, education, and more. These essential services are best provided by small and medium enterprises (SMEs), many of which lack access to capital.
In response to this need and burgeoning social impact opportunity, here at Calvert Foundation we been have increasing the depth and scope of our Indian investments, with the help of capital from our Indian-American investors. In 2015, we committed $16 million in loans to financial intermediaries, like IntelleGrow and Varthana, that finance SMEs that are serving the needs of Indians with education, financial inclusion, healthcare, renewable energy, and clean water and sanitation.
In July, we welcomed IntelleGrow to our office. They presented an overview of their work helping SMEs with high-growth potential expand through innovative financing.
In the agricultural sector, IntelleGrow has provided financing to Shreedhar Dairy, which works to democratize the Indian dairy economy by empowering small-scale dairy farmers and easing the challenges in the agricultural supply chain.
IntelleGrow has also financed Jiya Eco Products Ltd., which uses agricultural waste as a source of renewable energy in industrial manufacturing. Jiya enlists farmers who collect agricultural waste, and then converts it into biomass pellets and briquettes. In line with IntelleGrow’s mission of supporting clean energy, the production and burning of these briquettes does not emit any sulphur oxide or nitrogen oxide, produces less ash, and costs less.
Nitin Agrawal, Deputy CEO of IntelleGrow, said that demonetization and new tax reforms from the Indian central government have brought some level of uncertainty into the market, but his overall outlook is optimistic. In the next year, he hopes to further diversify IntelleGrow’s impact and mentioned education as one of the sectors he was most looking forward to expanding into.
They’ve made a start in providing financing to EduSports, India’s first and leading sports education company that works with 500 schools around the country to integrate sports and physical education into the school day. With a reach of over 450,000 students, EduSports is working to increase awareness of sports programming in teachers and parents, and improving student health while helping them build soft skills like teamwork, self-confidence, and leadership, in an educational system that focuses heavily on technical skills.
It’s exciting to see thriving social enterprises such as these that are contributing to the growth and well-being of India. On Independence Day today, we celebrate India and the hard-working people and businesses that make the country flourish.