Like other countries the world over, India is facing a slowdown. One solution offered by economists is to create jobs, boost confidence and fuel consumer spending. The target for such activity is not the cities, however. “In view of contracting global demand, we have to focus on domestic consumption by primarily stimulating growth in the rural areas,” acting finance minister Pranab Mukherjee noted during a recent press interview.
Ajay Gupta, founder and CEO of ruralnaukri.com, has focused on jobs in the rural sector for several years now. (Naukri can be roughly translated from Hindi as “jobs” or “employment.”) Gupta graduated from the G.B. Pant University of Agriculture and Technology, holds a post-graduate degree from the Institute of Rural Management Anand (IRMA), and received a PhD from the Delhi School of Economics. Initially, he entered the corporate sector — 10 years in the corporate social responsibility (CSR) arena and five years in business development. He then tried to move to the rural development sector, but found that there was no organized placement platform for such jobs; people went largely by word-of-mouth. This realization led to Gupta’s creation of ruralnaukri.com. Set up in 2001 under the umbrella of Rural Management Consultants Private Ltd., the organization has grown considerably since then. In an interview with India Knowledge@Wharton, Gupta talks about employment in rural areas and his initiative’s expansion on a grassroots level.
India Knowledge@Wharton: What exactly does ruralnaukri.com do? You have an offline model also. Do they complement each other?
Ajay Gupta: ruralnaukri.com began with the idea of linking rural youth to job opportunities in Indian corporate and development-sector organizations. However, an economically sustainable business model did not emerge through an online portal alone. Hence, we evolved as a self-sustaining, revenue-generating organization with dual objectives — commercial and social. The commercial arm is an offline executive search service exclusively for the agriculture and allied [industries] sectors. The online portal continues to collate and advertise job opportunities in rural areas, both with corporations and NGOs [non-governmental organizations]. On the social front, the organization has joined hands with many NGOs and provides free-of-cost or highly subsidized training programs for graduates and unemployed rural youth. All these programs are motivational in nature. Both the online and offline activities support each other, with one being the provider of the database and the other helping to meet the precise requirements of our clients. In the online model, we have serviced clients like the British High Commission, CARE, CRY [Child Rights and You], Oxfam, Catholic Relief Services, Development Alternatives and Sa-dhan [a microfinance organization]. Similarly, as a consequence of our executive search, employees advised by ruralnaukri work for organizations such as Wal-Mart, Reliance, Pantaloon, the Birla Group, Metro, Spencer’s, Hindustan Unilever, MCX, NCDEX, HDFC, Kotak, Rabo, Godrej, Monsanto, Dow, Rallis, Noble Grains and the Australian Wheat Board.
India Knowledge@Wharton: What made you start this company?
Gupta: I may not be wrong if I say that at least 70% of IRMA graduates who pursue non-development-oriented careers tend to live with a feeling of guilt. As I interact with a large number of them as a part of my current profile, my belief in this statement has grown stronger. Being one among them, I wanted to return to the so-called “sector” after five years of a business development job that completely missed on the larger purpose. This is when I realized that there were no consultants to talk to. It took time to explain to reputed consultants that this hitherto nonexistent stream for them also offers a career choice. Then the idea struck me that I should [make] this space [accessible] in the market place. It appealed [to me], appeared exciting and [was] within my skills sets. It was the feeling of “Eureka.” I discussed this with my elder brother, who is an alumnus of IIMA [Indian Institute of Management Ahmedabad] and has been my mentor since childhood. While usually conservative, this time he encouraged me and offered all financial support. There was complete confidence that this could happen and, fortunately, there were no accompanying regressive thoughts. For the first two years, there was hardly any income and my ex-boss from Reliance Industries invited me to come back. However, I [remained convinced] that it was only a matter of time and gathered the courage to refuse [the offer]. In retrospect, I feel that it was one of the best decisions of my life.
India Knowledge@Wharton: How important are rural jobs in the Indian economy? Can you give us some statistics or numbers on this?
Gupta: The importance of rural jobs does not come second to anything in India. The fact that some one-fourth of us live like sub-humans is attributable to limited earning opportunities. Official figures of unemployed youth cross 50 million…. Land holdings have been getting divided with each generation and there is hardly any alternative non-farm income. Development programs with objectives to generate income do not deliver as the capacity of the potential beneficiaries [to conduct business] is low. For example, there are plenty of cases where microfinance-based groups have tried to initiate new enterprises. But issues related to supply chain management, production of consistent quality, efficient marketing and so on emerge instantaneously. This is the case when their own funds are being put to risk.
Through whatever method, once rural jobs start happening, the supplementary household income will on its own take care of health, cleanliness, education, etc. Providers of these services would automatically emerge once purchasing power develops, increasing further employment prospects. Today, we achieve 7% to 8% year-on-year growth without the active participation of more than 60% of [our population]. From the perspective of the Indian economy, more rural jobs mean a contribution to GDP, more foreign exchange, more raw material for industries, more manufactured goods and more services. Hence, rural jobs have the potential to provide momentum to the giant wheel of the economy.
India Knowledge@Wharton: You have been looking so far at management jobs in rural areas under ruralnaukri.com. Under your latest initiative, villagenaukri.com, are you going deeper to the grassroots? What is the purpose? Also, given your target segment, can this be an online venture in India?
Gupta: Yes, that’s right. We decided not to risk the positioning of ruralnaukri.com and instead created villagenaukri.com as an alternative channel exclusively for jobs within the interior — it could be for a carpenter, plumber, security guard, a lower-level sales job, warehousing assistant, driver, etc. Another initiative by the acronym REAP (Rural Employment Action Program) was also started some three years back. This has provided jobs to over 1,000 unemployed, graduate rural youth with development sector organizations. For this segment, no fee is charged either by employer or employee. We have also signed an agreement with a Bangalore-based organization that will provide online training to this segment in a variety of soft and hard skills.
Online has a limitation in terms of creation of a quick database of interested employees. However, the offline mode is too expensive to think of at this moment. At the same time, our experience with ruralnaukri suggests that word of mouth plays a very crucial role for job sites. We are also networking with 1,500 NGOs to spread this message and have tied up with some of the kiosks being set up by entrepreneurs in different parts of the country. Hence, notwithstanding the challenges, online does provide a cheap alternative to reach the unreached. In the years to come, this can become a powerful tool to organize training and job opportunities, even for illiterates.
India Knowledge@Wharton: You have set up the Ruralnaukri Institute of Agribusiness Management (RIAM) for long-distance teaching. What is the purpose? What has been the progress on this front?
Gupta: RIAM has been established with a very specific purpose. Most of the employees in the food and agribusiness sector today have not had [an outlet] to sharpen their managerial skills. Opportunities from this sector are increasing at a very fast pace and organizations do not have trained managers who can shoulder the new set of responsibilities. They end up hiring management graduates from other industries at a high cost and without domain knowledge. This is a lose-lose situation for employees and employers of this sector. With intent to improve career growth, these employees tend to enroll themselves with any of the hundreds of distance learning courses available in the market. These generalized courses are not really oriented for specialized requirements of the rural and agriculture sectors, and a certificate gets awarded without really adding the desired value to an individual’s skill set.
With this as the background, an institute has been set up that is being run by professionals who understand the sector demands. Most of the faculty members are themselves management graduates from premier institutes like IIMA and IRMA. They have painstakingly developed relevant course material that is contemporary in nature. The students are enrolled on the basis of a written test and interview, and only those who have the potential to gain from this effort are taken on board. Lastly, periodic examinations (two quizzes, one midterm, one project, one assignment, one end-term) during each three-month term ensures that students are under pressure to at least browse through the reading material provided in the form of hard copy. They also have the facility to listen to recorded lectures of faculty members. Non-performers are asked to quit. Hence, a great deal of discipline is imposed on students to ensure that learning eventually gets imparted to them.
I am particularly happy over the progress and am glad we thought about it at the right time. This activity has the potential to truly benefit both the students and their employers. I feel satisfied that within the constraints of distance learning, we have been able to work out a model that delivers acceptable levels. This experience is also like a tutor to us, as online is going to be our mode of teaching in the future years while we have an opportunity to come to the level of non-graduates also.
India Knowledge@Wharton: You have been talking about training rural youth, an initiative that is much bigger than the current activity at RIAM (which is more management than ground-level work). But you don’t want this to be dependent on government grants. What is your plan and vision?
Gupta: I have been consumed by this topic for over 18 months now but without any concrete thought to date. This is one area that has the scope to create job opportunities exponentially. One of the basic problems in organizing a job for a rural youth is that he is not employable today. His existing capacity is the root issue, and that is a function of his lack of exposure. Offline training is too expensive. Considering the country’s size, organizing calls for a parallel government. Imparting skills through online [means] to such an unripe segment remains challenging, although progress is encouraging.
Those who have even partially understood this terrain, either offline or online, would strongly advise you to refrain from burning your fingers and your whole hand. Optimists may guide you to take government grants without realizing that you may end up only negotiating with the complex guidelines within which one must operate. I have met at least 50 people of eminence during the past year to discuss possible routes to untie this knot. My research has brought about some models that may work, but my inner voice is telling me that the route to take for the next few years on this has not yet come.
The most promising model suggests that corporations need to be approached to seek some [funding], the benefit of which will ultimately come to them. Plus, some other corporations may donate in kind — say, the manufacturers of LCDs might give you 1,000 projectors. Or the facilities for offline training may have to be taken as a gift from institutions and corporations. A mix of mostly online and very little offline will have to be worked out. A regular source of income to meet running expenses could be the income derived from the placement of trained staff. This income — say, six months’ salary — should factor in the extra expense that corporations anyway incur on training, because that bit has been done in advance for them. I visualize weaving a project around these thoughts, perhaps after another year or so. A recessionary time is not good to seek [funding] from anyone, as many of them need it themselves.
India Knowledge@Wharton: In India, as has happened in other countries, rural employment will decrease as farms become more mechanized. This can lead to considerable social unrest, as is already evident in some places. Do you plan to offer diversity in training and employment through any of your initiatives?
Gupta: That’s a very pertinent area of concern, although [the answer is] not in the next two decades or so. Indeed, most of the training areas being contemplated are the ones that promote non-farm income. The segment to be trained comprises those with some formal education. They would primarily meet service industry needs. For example, it could be an eight-week course for hospital apprentices to meet the growing demand of the healthcare industry. One could think of creating a roster of trained people to respond efficiently and politely to the needs of patients, doctors, nurses. Similarly, a huge workforce is soon going to be in demand from the retail industry. The FMCG and the insurance industry could be looking for hundreds of low-cost [workers] to provide last-mile channel support. Hence, our target areas need to be ones where modules can be standardized and driven on an online basis, and do not call for too much by way of hard skills [such as auto repairing]. To sum this up, diversity is essential as the total farming area is ultimately limited. The training duration has to be short to retain interest. And only those skills should be developed that have high and regular demand. An equally important aspect is that screening must precede admissions, and this should take into account the assessed potential for final delivery. If we send half-baked products to the market, corporate interest may not last long.