THE RISE OF DALIT ENTERPRISE

Mr Farhad Forbes at the DICCI EXPO in Mumbai on 17/12/11

MUMBAI: An intimidating wall, separating the sprawling Tata Motors plant and the spartan workshop of Abhijeet Surface Coatings, at FII block, Pimpri Industrial Estate, Pune, has stood tall and strong for many years. Gokul Gaikwad, the dalit founder of Abhijeet Surface Coatings, could hear the deep rumblings of industrial activity behind the wall everyday, but never managed to scale it and do business with the auto major. The wall cracked last weekend. Gaikwad didn’t cross it; Tata Motors did.

Several vendor development officers from Tata Motors spent time with Gaikwad at his stall at the Mumbai trade fair organised by the Dalit Indian Chamber of Commerce and Industry (DICCI) the last weekend. The fair, put up to showcase the growing prowess of a new breed of dalit capitalists, helped Gaikwad get the breakthrough he has been wanting for years. As a first-generation dalit entrepreneur, Gaikwad just doesn’t have the peer network and financial or organisational backing that will help him break into vendor lists of large companies. He could never have broken into the big league of mainline companies. But now, they are coming to him.

A small clutch of heavyweight industrial groups – Tata, Godrej, Thermax, Forbes Marshall – and a few MNCs such as Cummins India are beginning to intentionally engage with dalit entrepreneurs, hoping to identify, nurture and integrate them into their supplier fold. The movement has picked up speed since last month when the central government opened up a 7,000-crore opportunity with a dalit enterprise-friendly sourcing plan.

The private sector was seen as alaggard in supporting the concept of ‘supplier diversity’. Not anymore. Displaying a sensitivity rarely seen in Corporate India, Ratan Tata, Adi Godrej and Farhad Forbes not only made it apoint to visit the trade fair and spend time with dalit entrepreneurs from across the country but also spent a few million rupees in helping DICCI organise the event itself. What was glaring was the absence of the rest of industry.

This doesn’t bother Farhad Forbes of the Pune-based Forbes Marshall Group.

Farhad Forbes categorises Indian industry into three kinds: the small set of proactive companies keen on supplier diversity and issues of the underprivileged; the fence sitters, ‘who may want to do things but don’t know how to’ and, of course, the sceptics who view such moves as inimical to the interests of industry. “Fortunately, the fence sitters form the largest group,” says Forbes. “So, there is hope.”

When Ratan Tata arrived at the venue on Saturday, a minor stampede ensued as every dalit entrepreneur wanted to have a word with him or exchange cards. “We are not looking for concessions, what we want is opportunities,” says Milind Kamble, chairman, DICCI, who along with Kalpana Saroj, chairman, Kamani Tubes, flanked the Tata Group chairman on the dais.

Ratan Tata was also seen whispering into Saroj’s ear. He told her how the founder-chairman of Kamani Tubes, Ramjibhai Kamani, had bailed out Tata Steel from a serious labour issue in Jamshedpur many decades ago by influencing Mahatma Gandhi to visit the city and address the workers.

Tata’s presence and his unambiguous support to the cause have infused a lot of energy into a micro ecosystem that has struggled for a long time. The Tata Group chairman told the gathering how important it was to ensure confluences of creative minds and the need for entrepreneurs of all hues to participate in and seek a share in the prosperity of the country.

Expectedly, dalit entrepreneurs used the opportunity to the hilt. A young entrepreneur manufacturing electrical control panels extended his visiting card to Raghu Kowjalgi, GM (materials) at Forbes Marshall. Kowjalgi asked him whether he simply fabricated panels or did value-addition by wiring it up too.

The answer was in the affirmative. “Do you also paint the panel?” The answer was a no. “Examine the possibility of either outsourcing painting, or set up an in-house facility; and we shall talk. Come over anytime,” the youngster was told. Divides, evidently, are dissolving.

Kowjalgi, as materials head of an engineering company, is a much harried man. It’s extremely difficult to identify and develop good vendors. He goes on to explain how he has been struggling to find suppliers of foundry components. Foundries are manual by nature and therefore scaling up is difficult.

Much of the small-scale foundry capacity in the country is monopolised by large companies leaving little for mid-level companies like his. “There is a clear business case in supporting supplier diversity,” he insists. He talks about a new dalit entrepreneur he has identified: “He is technically very sound; all he needs is some help with getting the necessary certifications. Finance and other minor issues can be sorted out.”

While small companies such as Forbes Marshall have latched on to the idea of supplier diversity, the larger groups are just about getting their act together. Tata Motors, for instance, has engaged with dalit entrepreneurs in recent times, initially by farming out requirements for industrial gloves and other peripheral products. Having had a feel of doing business with the lot, the company now wants to graduate to bigger things, slowly.

For this to happen, it would have to not only instil sensitivity on dalit issues across the material procurement hierarchy but also put in place systems and process to enable the induction of dalit entrepreneurs.

The ball is now rolling. Tata Motors, last year, invited DICCI members to its annual vendor meet.

In October, the company’s head of procurement was inducted into the apex affirmative action committee. Last month, the company created what it describes as ‘sourcing circles’ tasked with promoting ‘supplier diversity’ which is now a key performance indicator (KPI) down the line. “We are laying the grounds to graduate from gloves to more meaningful products that can be sourced from dalit entrepreneurs,” a company spokesperson says.

Amar Singh, ED of Food Corporation of India, was among those who flew down from Delhi for the fair. He has a special interest in the issue. As an aide of Digvijaya Singh, then chief minister of Madhya Pradesh, he had played a critical role in designing and rolling out the country’s first supplier diversity programme in public procurement way back in 2002.

While he doesn’t grudge the tax and other concessions (revenue foregone) doled out to industry by the government every year, he insists the private sector has a critical role to play in ensuring the wellbeing of society; upholding supplier diversity is just one way of doing it.

“Last year, revenue foregone was around Rs 5 lakh crore. Dalits are only seeking their share in the system; not charity,” says Singh. The 2002 Madhya Pradesh initiative, though innovative and ground-breaking, soon fizzled out. It was perhaps ahead of its time. But now Singh is sure the time is ripe.

“I had then tried to push supplier diversity top-down,” Singh explains. “Now the demand is from below; a large, growing section of dalit entrepreneurs is pushing for it.”