MUMBAI: “I’m a Nabardian first and I thought it’ll be fun going back to the institution from where I started,” recalls Harsh Kumar Bhanwala as he settles down in his chair. Seated comfortably in his 1,000-sft corner office at the idyllic Bandra Kurla Complex in Mumbai, he elaborates, “Mujhe laga ki, mein ne jo seekha hai, woh kuch kaam laga sakthe hai kya?” (I thought I could put whatever I had learnt to good use). A farmer himself, it was a logical step for Bhanwala, who was working with State-run IIFC, to grab the opportunity to take a shot at history.
The man from a small town in Haryana didn’t think twice. It was a chance to head Nabard and apply his academic knowledge for a meaningful rural transformation. After all, it was what the 55-year-old had been preoccupied with for most of his life.
He studied dairy technology before taking a management course at the prestigious IIM-Ahmedabad. He didn’t stop there. He did his PhD in Philosophy, driven by his passion for social and moral well-being and search for a meaningful life. His first job was at Nabard, a public-sector re-financier, with agriculture and rural development as its DNA.
Typically, companies with welfare objectives are rarely profitable, but Nabard is an exception. It raises its own funds, lends them to banks and financial institutions implementing development initiatives and nets a tidy profit every year. But profit-making isn’t its core objective. “We don’t talk in terms of NIM (net interest margin), return on assets etc,” Bhanwala explains. “Our goals and objectives are defined around social sustainability and that’s non-negotiable,” he adds after a pause.
Starting as a one-branch office 35 years ago, Nabard’s business grew multi-fold to Rs 3.4 lakh crore today, debunking the myth that social goals and profitability can’t go together. “In the last 35 years, we have grown 70 times!” Bhanwala points out.
What has worked for Nabard is its different approach. It financed self-help groups, even when the RBI exercised extreme caution. “We took the risk doing a pilot in 1992, and soon, were convinced that it works,” he says. Nabard was also one of the few state-run organisations with out-of-the-box ideas for demanding situations. For instance, when banks complained of bleak credit flow owing to slackening infrastructure, Nabard wasted no time getting into the driver’s seat. It floated a Rural Infrastructure Development Fund to build infrastructure (like roads, houses and rural schools) and revived credit absorption. Success was instant with independent studies by IIM and IIT showing an increase in investment flow by 1.6 times.
Though Nabard’s interventions have been in agriculture and rural development, the former became its public identity, but moving forward, the latter will find an equally aggressive push. First in line is a Rs 10,000 crore fund for rural housing in tandem with the PM Awas Yojana to build 2 crore rural houses by 2022. “We are focusing on non-farm based activities like developing clusters and generating rural employment,” explains Bhanwala.
It means areas like food processing, handicrafts and handlooms — the largest employer after agriculture — will get a booster shot. Why? “Look at my village. When I was a child, there were just 2 shops, now there are 150 selling mobiles, doing truck repairs, tent houses etc. These activities create jobs,” reasons the pragmatic philosopher. He believes re-skilling people in alternate skills like electricians and plumbers is important.
This is not to say that agriculture is on the back burner. In fact, it is quite the opposite. Thinking a step ahead, Nabard’s setting up two incubation centres in collaboration with agricultural universities in Haryana and Tamil Nadu. They will provide infrastructure for agri-entrepreneurs, and if need be, venture funding. “We are already funding 7-8 agri venture funds, where if a fund invests Rs 2, we’ll put Rs 1. We want to promote innovation in agri sector,” Bhanwala clarifies.
He has enough reasons for that. Erratic
climatic conditions are already affecting seed sowing, lowering output and pushing up prices. “We need effective production systems to improve output. Precision agriculture with controlled-conditions like right temperature, pesticides is required to grow essentials.
We are working on some of these,” he says.
But this requires skilled manpower in areas like technology, which is hard to find given public sector’s unattractive compensation structure. “Nabard pays better than state-run banks and on par with RBI payscale. More than pay, what counts is team building, work satisfaction, flexibility (like transfers),” Dr Bhanwala, who focused on these soon after taking charge in 2013, points out. The results speak for themselves: employee productivity doubled in three years, indicating that compensation is not THE criteria. On this front, Dr Bhanwala leads by example. Prior to IIFCL, he had a brief corporate stint with IL&FS Water Ltd. “I was getting a much better salary, but I came here (Nabard) for something else.”