Fiinovation -CII AA & Livelihood

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Fiinovation - A CSR based research organization working in areas of education, livelihood, environment and health since last seven years

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PROMOTION OF LIVELIHOOD THROUGH AFFIRMATIVE ACTION & CORPORATE SOCIAL RESPONSIBILITY Presentation by: Soumitro Chakraborty C hief Executive Officer, Fiinovation

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ABOUT THE MENTOR Mentor of the Webinar Soumitro Chakraborty , CEO, Fiinovation About Fiinovation A CSR based research organization working in areas of education, livelihood, environment and health since last seven years Assists businesses to support requirements of communities by designing and implementation of sustainable projects Through practices such as CSR-CSO Partnership, Initiative Design, Initiative Management, Monitoring and Evaluation, Impact Assessment, Sustainability Reporting; Fiinovation facilitates corporations for promotion of social enterprises

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AGENDA OF THE WEBINAR Understanding the alignment between CSR and Affirmative A ction Exploring livelihood opportunities for SC/ST youth Highlighting the role of corporations in CSR and Affirmative A ction Understanding how livelihood initiatives can be linked to CSR and Affirmative A ction Insights on CSR initiatives targeting livelihood generation for the marginalised Update on new policies as per 'Union Budget-2016'

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AFFIRMATIVE ACTION – WHAT DOES IT MEAN? Positive action, reverse discrimination It promotes inclusive development, equality on all aspects Focus on upliftment of the historically marginalised Important policy tool for holistic social development in many countries, including developed ones In India, its implemented through 'Reservation' or the 'Quota' system

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AFFIRMATIVE ACTION & INDIA INC In 2006, then Prime Minister Dr. Manmohan Singh appealed to India Inc to incorporate affirmative action policies to diversify workforce Department of Public Enterprises (DPE) guidelines on CSR and Human Resources for Central Public Sector Enterprises were released in 2010 Non Voluntary Guidelines were established by Ministry of Corporate Affairs in 2011 which was later adopted by SEBI CII have been promoting affirmative action through Skill Trainings, Scholarships, employment opportunities, education etc.

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CORPORATE SOCIAL RESPONSIBILITY A strategic business management concept to obtain a balance of economic, environmental and social imperatives Globally the concept of CSR encompasses all “related” concepts -Triple Bottom Line, Strategic Philanthropy, Shared Value, Corporate Sustainability, Business Responsibility Also known as Corporate Citizenship in North America and Corporate Responsibility in Europe

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CSR IN INDIA Pre-Independence era restricted to charitable and religious philanthropy by businessmen & rich farmers Father of the nation Mahatma Gandhi urged rich to pool resources for India’s upliftment, giving rise to trusteeship movement. Post-Independence, PSUs & govt. led initiatives played prime role in social development sector It became a strategic business concept after the influx of MNCs in India In 2013, The Companies Act, quantified it and made it mandatory for companies which fall under the CSR ambit

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LIVELIHOOD Definition: It is the means of supporting one's existence, especially financially or vocationally; Livelihood is a set of activities, involving securing water, food, fodder, medicine, shelter, clothing and the capacity to acquire above necessities working either individually or as a group by using endowments (both human and material) for meeting the requirements of the self and his/her household on a sustainable basis with dignity. Livelihood helps in tapping new opportunities, vulnerability reduction Livelihood has direct links with the environment, and global warming is having adverse consequences on livelihood of the people

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LIVELIHOOD IN INDIA The Work Participation Rate as per Census 2011 was 39.79% Majority of rural population dependent on agriculture and allied sectors as means of livelihood Majority in urban areas are engaged in service and manufacturing sectors 12 million people enter India's workforce every year India creates 5.5 million jobs every year to accommodate its growing workforce Source: 68th Round, National Sample Survey Office, Employment Exchange Statistics, National Skill Development Corporation Skill Development Reports

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WHY PROMOTE LIVELIHOOD? Create jobs/employment for the youth Reduce vulnerability of the marginalised sections Increase Purchasing Power Parity Optimal use of resources, maximise scale Stable livelihood substantially increases income, asset ownership, self-esteem and social participation among the marginalised It has cross-linkage with health, education, environment etc.

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LIVELIHOOD CHALLENGES IN INDIA Lack of education and skills among the working class Lack of income generation opportunities Lack of infrastructural support Lack of financial support, social safety nets High dependency on climatic conditions/monsoons Large scale migration to bigger cities and towns in search of jobs and employment opportunities Geo-political issues, population pressure

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HOW TO PROMOTE LIVELIHOOD? Infrastructure development Skill development trainings Financial & technological support Creating employment and self-employment opportunities Building forward-backward linkages (value chain management)

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APPROACH – LIVELIHOOD INTERVENTIONS Spatial Approach: Promoting livelihoods in a specified geographical area, such as a region, sub-region, command area or a watershed Sectoral Approach: Promoting livelihoods along a sector of the economy such as agriculture, or a sub-sector such as cotton Segmental Approach: Promoting livelihoods for a vulnerable segment of the population, such as landless households, tribal, women, SC/ST/OBC and the differently- abled

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PROMOTION OF LIVELIHOOD – SKILL DEVELOPMENT Need to develop and empower the human capital to ensure India's global competitiveness 3 crore skilled people will be needed in the construction industry alone in the next five years. Retail will need 1.6 crore skilled people, automobile 40 lakh , logistics 1 crore , and textile and clothing industries, 1.42 crore people It is estimated that only 2.3% of the workforce in India has undergone formal skill training as compared to 68% in the UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea Target is to develop skills of 500 million Indians in less than 10 years with considerable help from the private sector as per National Skill Development Corporation Narrow time-line to harness the demographic advantage which is predicted to last until 2040 Source: National Skill Development Corporation, Union ministry of State for Skill development and Entrepreneurship

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CSR & LIVELIHOOD Tata Group, HUL, HDFC, Axis Bank, Aditya Birla Group, ITC etc are involved in livelihood promotion activities Chambers of commerce such as CII are also engaged in livelihood promotion activities Major focus of CSR has been health, education and sanitation; livelihood is yet to become the top priority There is a need to create employable skilled opportunities in labor intensive industries and sectors In livelihood, major focus is now on skill development for higher growth and sustainability Source: KPMG Survey 2015, NGOBox Survey of BSE Listed Companies 2015

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SKILL DEVELOPMENT – SC/ST COMMUNITIES Need for skill development higher among these backward communities as they are most vulnerable (as discussed in previous webinars) Lack of financial support, education, technology, infrastructure, social capital etc. Majority mostly engaged in unsustainable and low productivity practices High rate of unemployment, seasonal unemployment Lack of self employment opportunities leading to migration, rural distress

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SKILL DEVELOPMENT – GOVT. INTERVENTIONS National Skill Development Corporation India (NSDC) was setup in 2009 as a one of its kind, Public-Private-Partnership company with the primary mandate of catalysing the skills landscape (500 million skilled workforce) in India Some of the major skill development programmes are: Craftmen Training Scheme, Skill Development Initative on Modular Employable skill, National Rural Livelihoods Mission, Rural Self employment Training Institutes, Skill Training for Employment promotion amongst Urban Poor, Support to training and employment Programme (STEP), Parvaz , Entrepreneurial skill development Programme , Hunar Se Rozgar Scheme, Integrated Skill Development Scheme, Udaan , Roshni NRLM is the largest livelihood programme support by World Bank with a credit line of $1 billion Skill India Mission will directly benefit more than 94000 SC, ST candidates Source: National Skill Development Corporation, Union Ministry of Skill development and Entrepreneurship

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DT CONTINUED NSDC Public private partnership entity set up to promote and fund private training providers and set up Skill Development Centres ; Funds to NSDC are received through NSDF Facilitate setup of Sector Skill Councils (SSC) which are autonomous industry-led bodies. SSCs design Qualification Packs ( Qps ) and National Operation Standards Implement STAR (Standard, Training, Assessment and Reward) and UDAAN schemes NSDA Autonomous body registered under Societies Act. Rationalise skill development schemes of govt. of India Anchor and implement the National Skills Qualifications Framework (NSQF) Create integrated Labour Market Information System (LMIS), engage with states to plan their skill development and facilitate skills innovation Training and Apprentice Divisions have been transferred from Labour department from April 2015 Comprises government and private ITIs, PPP skill schools and other institutions 25 new advanced training institutes to be setup

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Boost to SC/ST entrepreneurship through Stand Up India scheme Rs 500 cr has been allocated to promote entrepreneurship At least 2.5 lakh entrepreneurs will benefitting from it All Bank branches to provide support to at least two projects Rs 10 lakh to Rs 1 crore will be provided as loan to them for new ventures BUDGET 2016 PROPOSITION (DIRECT) Category SC/ST Women Example 1 1.5 Lakh (Men & Women) 1 Lakh (General + SC/ST) Example 2 1.5 Lakh (Men) 1 Lakh (SC/ST) Example 3 2.5 Lakh (Women SC/ST) Source: Budget Speech, Union Finance Minister Arun Jaitley

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Year of Economic Empowerment for SC/ST Entrepreneurs 125th Birth Anniversary of Dr. B.R. Ambedkar National Scheduled Caste and Scheduled Tribe Hub in the MSME Ministry Partnerships with industry associations such as DICCI, CII The Hub will provide professional support to Scheduled Caste and Scheduled Tribe entrepreneurs to fulfil the obligations under the Central Government procurement policy 2012, adopt global best practices and leverage the Stand Up India initiative CONTINUED Source: Budget Speech, Union Finance Minister Arun Jaitley

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Overall procurement of minimum of 20 per cent, of total annual purchases of products produced and services from MSEs Out of 20 per cent target of annual procurement from Micro and Small Enterprises, a sub-target of 20 per cent (i.e., 4 per cent out of 20 per cent) shall be earmarked for procurement from Micro and Small Enterprises owned by the Scheduled Caste or the Scheduled Tribe entrepreneurs Enhancing participation of Scheduled Castes or Scheduled Tribes in government procurement, the c entral government ministries, departments and public sector undertakings Special Vendor Development Programmes or Buyer-Seller Meets shall be conducted by the departments/public s ector u ndertakings for SC, ST; Outreach programmes shall be conducted by National Small Industries Corporation to cover more and more Micro and Small Enterprises from SC or ST under its schemes of consortia formation; and National Small Industries Corporation shall open a special window for SCs or STs under its Single Point Registration Scheme (SPRS). PUBLIC PROCUREMENT POLICY FOR MSEs ORDER 2012 Source: Budget Speech, Union Finance Minister Arun Jaitley

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28.5 lakh hectares will be brought under irrigation under Pradhan Mantri Krishi Sinchai Yojana At least 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure Soil Health Card Scheme to cover 14 cr farm holdings by Mar, 2017 The ‘ Parmparagat Krishi Vikas Yojana ’ which will bring 5 lakh acres under organic farming over a three year period The Government has launched a value chain based organic farming scheme called “Organic Value Chain Development in North East Region” BUDGET 2016 PROPOSITION (INDIRECT) Source: Budget Speech, Union Finance Minister Arun Jaitley

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The government is implementing the Unified Agriculture Marketing scheme which envisages a common e-market platform for APMCs will be launched on 14th April- Ambedkar Jayanti To reduce the burden of loan repayment on farmers, a provision of Rs 15,000 crore has been made in the BE 2016-17 towards interest subvention Government has approved the path breaking Prime Minister Fasal Bima Yojana and allocated Rs 5,500 cr Animal Husbandry – Rs 850 cr for the next few years first, the ‘ Pashudhan Sanjivani ’, an animal wellness programme and provision of Animal Health Cards (‘ Nakul Swasthya Patra ’); second, an a dvanced breeding technology; third, Creation of ‘E- Pashudhan Haat ’, an e market portal for connecting breeders and farmers; and fourth, a National Genomic Centre for indigenous breeds CONTINUED Source: Budget Speech, Union Finance Minister Arun Jaitley

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Digital Literacy Mission scheme for rural India to cover around 6 crore households within the next 3 years A sum of Rs 2,000 crore to meet the initial cost of providing these LPG connections for 1.5 cr BPL households in 2016-17 A new health protection scheme which will provide health cover up to Rs. 1 lakh per family Increased share in SSA and 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years Higher Education Financing Agency (HEFA) with an initial capital base of Rs 1,000 cr Under Pradhan Mantri Kaushal Vikas Yojna 1500 Multi Skill Training Institutes will be set up across the country with Rs 1700 cr CONTINUED Source: Budget Speech, Union Finance Minister Arun Jaitley

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Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment (Job Creation and bringing into books informal employees) 100 Model Career Centres to be operational by the end of 2016-17 - National Career Service Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms - Amendments to Motor Vehicles Act 100% FDI will be allowed through Foreign Investment Promotion Board route in marketing of food products produced and manufactured in India CONTINUED Source: Budget Speech, Union Finance Minister Arun Jaitley

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2 crore tax payers in this category who will get a relief of Rs 3,000 in their tax liability many of whom would be from SC/ST communities Increase the limit of deduction in respect of rent paid under section 80GG from Rs 24,000 per annum to Rs 60,000 per annum, which should provide relief to those who live in rented houses A special patent regime with 10% rate of tax on income from worldwide exploitation of patents developed and registered in India Deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs 50 lakh Krishi Kalyan Cess , @ 0.5% on all taxable services to benefit farmers BENEFITS FOR YOUTH (SC/ST) Source: Budget Speech, Union Finance Minister Arun Jaitley

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Corporate Tax from 30% to 25% over a period, accompanied by rationalization and removal of various tax exemptions and incentives The benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020 100% deduction of profits for 3 out of 5 years for startups set up during April 2016 to March 2019 Big relief to a large number of assesses with turnover of maximum 2 cr in the MSME category as it frees them from the burden of maintaining detailed books of account and getting audit done BENEFITS FOR ENTREPRENEURS (SC/ST) Source: Budget Speech, Union Finance Minister Arun Jaitley

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Suitable changes in customs and excise duty rates on certain inputs, raw materials, intermediaries and components and certain other goods and simplify procedures, so as to reduce costs and improve competitiveness of domestic industry 100% deduction for profits to an undertaking from a housing project for flats up to 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019, and is completed within three years of the approval Equilization Levy to tap tax on income accruing to foreign e-commerce companies from India Source: Budget Speech, Union Finance Minister Arun Jaitley CONTINUED

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Prime Minister Narendra Modi launched the Skill India Mission on 15th July 2015 unveiling the new National Policy for Skill Development & Entrepreneurship Aim to become Human Resource Capital of the World by providing 4-5 crore skilled professionals to work abroad Develop ITIs like the IITs Skill India Mission target is to provide skill trainings to 40.02 crore by 2022 Skill loans will be made available for 34 lakh youth Scientific mapping of job market and manpower requirements Linked to Pradhan Mantri Kaushal Vikas Yojana , Startup India, Make in India and other campaigns The country's first skill development university will be set up in Maharashtra Pradhan Mantri Kaushal Vikas Yojana completed 10 lakh enrolments under Skill India till Feb 2016 Source: Union Ministry of Skill development and Entrepreneurship SKILL INDIA CAMPAIGN

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Tata companies are training thousands of youth across India in skill sets that make them employable and productive. TCS was the first company to sign an MoU with National Skills Development Corporation (NSDC) under project Udaan in 2011 To better equip aspirant youths of Nagaland, the state government and TATA Motors Private Limited have started a PPP mode project by upgrading Diesel Mechanic Trade, the automotive section of the Industrial Training Institute (ITI), Kohima IL&FS Skills Development Corporation in partnership with National Skills Development Corporation (NSDC), aims to train 40 lakh people by 2022 through a network of 100 multi skill Institutes and 300 single skill Schools Source: Website – Tata Group, IL&FS Skills, CII SKILL INDIA – INDUSTRY SUPPORT

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CII has been supporting the Ministry of Skill Development & Entrepreneurship, Ministry of Labour & Employment and Ministry of Rural Development and other ministries to create a conducive ecosystem for skill development in India, especially targeting SC/ST Communities NSDC has urged the corporations to promote skill development through CSR targeting 150 million people Source: Website – Tata Group, IL&FS Skills, CII CONTINUED

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Supports Various Ministries to promote Skill Development Targets SC/ST Communities to provide skill development trainings It launched the India Skills Report in 2015 Provided recommendations for the new Skill policy CII members are adopting and upgrading 390 ITIs and strengthening the system through implementation of recommendations CII has set up Skill Hubs in Chindwara , Madhya Pradesh; Bhiwadi , Rajasthan; Kendrapara , Odisha and Skill Gurukuls in association with Pan IIT (PARFI) CII is also working on various on ground initiatives with PSUs like HPCL, IOCL, NSFDC etc and organising Job fairs across India Source: Website – Tata Group, IL&FS Skills, CII CII & SKILL DEVELOPMENT

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Reliance Industries – Project Drishti initiated to bring back eyesight of people from the economically weaker sections Tata Group – Providing books, stationary, school bags etc. to SC/ST students of 46 senior secondary government schools ONGC – Emphasises on higher education, scholarship, grant for youth from the less- priviledged sections of societies Coca Cola – Programme for empowerment of 5 million women entrepreneurs Source: Corporate Citizen Volume 2, Issue 1 ALIGNMENT OF AFFIRMATIVE ACTION & CSR BY INDIA INC

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Amity – Amitasha and Atulasha programmes for SC/ST boys and girls providing free education Bajaj Electricals – Social work in areas such as education, rural development and environment GlaxoSmithKline – Donates funds, medicines and equipments towards improving health and education BHEL & Indian Airlines – Adopted 56 villages having nearly 80,000 inhabitants CONTINUED Source: Corporate Citizen Volume 2, Issue 1

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ALIGNMENT OF AA, CSR & SKILL DEVELOPMENT What Why Where How Providing skill development trainings under CSR to the SC/ST communities SC/ST communities most vulnerable, marginalised and are the poorest sections in India Geographical areas with high percentage of SC/ST communities Community based interventions, skill development centres , EDP, ERC, supporting govt. initiatives

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The way forward can be elaborated by highlighting few CSR models by companies which can be incorporated by other companies: HUL contributed 42 crores in watershed development initiative by partnering with the government under MGNREGA, extending soil and water conservation wages to the people. Axis Bank Foundation work in Dang, Gujarat to enhance livelihood and food security of the tribal communities through conservation of natural resources and providing them with options and techniques for increased income from agriculture. Rashtriya Ispat Nigam Limited through Kaushal - a skill development programme designed exclusively for youth belong to SCs of Vishakapatanam , imparts placement-based training to beneficiaries in garment construction technique and industrial sewing machine operator (basic and advanced). Similar initiatives can be taken up by corporations under their corporate social responsibility targeting SC and ST communities. THE WAY FORWARD

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SUGGESTED TRIPARTITE MODEL Illustration Corporation X’s total CSR expenditure:* Rs 500 cr Product: Handicrafts / Food Processing Registration : The Companies Act, 2013 Organization Structure Operations: Sourcing from community members, processing of finished products, marketing Sharing of Revenues: Yearly dividends, remuneration of community members, salaries to staff, operational expenditure, expansion costs Entity Board Managers SC/ST Communities Managers Managers

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Provide an opportunity to gain financial sustainability & independence for the SC/ST communities CSR grant will allow corporations to spend money on livelihood issues, not otherwise funded Assets of entity will belong to the community and cannot be sold off for private financial gain People, who are local stakeholders in the area of benefit, play a leading role in the entity ensuring inclusive development Local community are the shareholders who ensure accountability of the entity to the community The entity will be able to generate profits or a surplus that can be re-invested or distributed for community benefits BENEFITS OF SUCH INITIATIVES

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THANK YOU Soumitro Chakraborty C hief Executive Officer, Fiinovation Rahul Choudhury Dy. Manager - Content, Fiinovation Rohit Srivastava Graphic Designer, Fiinovation Contribution by:

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