Decoding Mafias, National Heroes, and the role of Government in Education ft. Anil Swarup


"There are three types of people who work in education today: those who know the reality of a classroom, there are those who know the reality of grassroots, but there are very few who know the reality of how government looks at education."

In this very special episode of Decoding Impact, host Rathish Balakrishnan is joined by Anil Swarup, Founder Chairman, Nexus of Good; Former Secretary, School Education (2016-18) & Coal (2014-16), and Author.

Mr. Swarup joins us to help us decode the complex Education sector in India today and understand more about:

• The visible and invisible challenges in Education

• The role of the government between Delhi and the hinterlands

• How to enable young adults thrive in the Indian Education system

• Defining roles for different stakeholders in the Education sector.

Tune in to the latest episode of Decoding Impact today to understand more about the government’s role in Education as well as some unique stories from Mr. Swarup’s incredible Bhārat Yātra across the nation!

Explore some of our SKI products related to Education:

Promising Avenues: Landscape of School to Work Transition in India

Enabling Career Guidance and Mentorship for Smooth School-to-Work Transition

Advancing Gender Equality in Science Technology Engineering Mathematics (STEM) Education in India

Decoding ASER for Foundational Literacy and Numeracy Outcomes with Dr Rukmini Banerji 

Episode Transcript

Episode Transcript

[00:00:11] Rathish: There are actually very few people today who are able to really imagine what a blended finance instrument can actually unlock.

[00:00:18] Ramraj: I found myself increasingly drawn to the idea of how can we leverage financial markets and financial technologies. I used to wonder what does it take to make contributing to the less privileged, a national movement.

[00:00:32] Rathish: Sometimes when we look at social programs, we look at what has to be done.We don’t really break down who does and who pays in a nuanced way.

[00:00:41] Ramraj: What blended finance really tries to do is say that, hey, we know that there are risks. Let us see whether a philanthropy or a charity or somebody else can come in and cover up some of the risks.  

[00:00:51] Rathish: If there is one structure that can hold different pockets and bottles of money and say, listen, I blend it in a different way. The transaction costs become lesser. I think even in the philanthropy landscape, thanks to companies coming in, this rupee for rupee thinking, which is that, “Hey, listen, it is going to be limited capital. How do we make it work?” is growing. 

[00:01:09] Ramraj: There is the investing bucket and there is the philanthropy bucket. In philanthropic bucket, you give away your money. In investing bucket, you make money. What we are talking about here is something in the middle where we are saying, Hey, you know what?

We can make some money, but we can also create a lot of social impact. Now, this is a new paradigm.  

[00:01:27] Rathish: Welcome to Decoding Impact from Sattva Knowledge Institute, where we speak to a wide range of experts on population scale challenges to see what does it truly take to solve these problems at scale.

[00:01:37] Rathish: There is a lot of noise about what we need to do to achieve the sustainable development goals. And one of the chief constraints in achieving them is the capital that we need to make it happen. All the studies by NITI Aayog and other organisations highlight a vast and growing gap in the amount of financing we actually need to solve this challenge.

And it’s very clear that unless we can attract a wide range of sources of capital, including commercial capital and public capital, we will not have a standing chance in achieving the sustainable development goals. One of the critical solutions for achieving that is blended finance. And there have been multiple experiments in how we can blend public philanthropic and commercial capital to solve population scale challenges.

However, there are still a lot of questions on what really is blended finance. What does it take to solve a problem using blended finance? Where is it applicable? Where is it not? And most importantly, what is required to be done for us to be able to scale the application of blended finance today? To answer all of these questions, we have someone who’s been part of the impact investing and the blended finance journey in India over the last four years.

Ramraj Pai joins us today. He has been a president at CRISIL, the CEO of Impact Investors Council, and has had a chance to interact with a wide range of stakeholders on impact investing and blended finance.

[00:03:02] Rathish: Ramraj, thank you so much for joining us today. We’ve been talking about blended finance as part of the focus on today’s episode. But before I get into blended finance, I wanted to speak to you. Tell us about your journey and what got you here to this focus on blended finance in your own career trajectory.

[00:03:19] Ramraj: So thanks, thanks Rathish. I really appreciate you giving me this time to come and share some of my thoughts on some of these topics like Blended Finance. So essentially I’ve been a career financial markets and credit markets person. So I worked with CRISIL, which as most people would know is India’s leading rating agency.

So I used to be part of the credit markets team there. I worked on a variety of businesses at CRISIL for close to 24 years. Also had the opportunity towards the end of my stint there to work on setting up the CSR foundation and you know in fact took what you may want one may want to call a sabbatical for two years to set up the CSR foundation We did a lot of work in the Northeast around building a cadre of self-employed financial literacy workers that kind of peaked my interest in this whole social sector space and I found myself increasingly drawn to the idea of how can we leverage financial markets and financial technologies.

To really create impact at scale. So my work at CRISIL Foundation for the last four years before I left showcased to me that while there are a lot of people who have a great sense of the on-ground business realities, what are the challenges of setting up something and, making it work, there was very little awareness or knowledge around how is it that financial markets can be in some fashion, co-opted, not in every situation, but is there a middle ground where we can actually leverage financing more effectively. 

And so it is with that kind of a broader sort of thought that I left CRISIL sometime in 2019 and I joined as the CEO of the India Impact Investors Council. So the IIC is really a not-for-profit industry body set up by a bunch of impact investors.

Essentially it was set up by a bunch of social impact investors whose whole idea was how can we bring more capital to social impact in the country. 

And I felt that given my past background having worked on the capital market side and with investors, this could be the best way that I could immerse myself in the social sector.

[00:05:42] Ramraj: Rather than get on to the execution side of it, where people have spent careers, understanding education, understanding health, understanding different sectors. I will not be able to really bring very significant value or I’ll also have to spend 20 years.

I am no brilliant person that I can learn all of that in two years. So I decided that I wanted to work in a space where my past experience will help me to add value in the manner that I can create maximum impact with my past background and experience. And that’s how I joined as the CEO of the India Impact Investors Council.

So I was with them for about four years and I’m a bit of a career break now for the last few months thinking through what it is that I need to do next, but clearly the whole space of using financial engineering to maximize impact is something which is very close to my heart. So I continue to remain deeply engaged informally with a variety of market players and stakeholders. To see where is it that I can make my best contribution. 




[00:06:51] Rathish: Before we go into blended finance, more a personal question you’ve seen impact on the outside. Then you saw impact from the CRISIL foundation work. And then as part of IIC, you look back at what you’ve learned and your own assessment of the impact space today. What are a couple of reflections that stay with you?

That probably you saw it differently from the outside and now you see it differently. Now that you’ve had the six odd years of experience working in this space.

[00:07:17] Ramraj: I think my biggest sort of reflection or observation is that for a sector which is so large and so critical for advancing social equity in the country. I think there is a far greater need for institutionalised representation and engagement with stakeholders. And that’s something which I see very little of in this space.

Whether it is the not-for-profit social sector, the for-profit social sector, or otherwise. Look at any other sector you can take in this country. You can take steel, you can take chemicals, you can take any sector. In whatever way and fashion they have organised themselves in a manner, that they are presenting themselves, their problems, their challenges, more importantly, their contributions to the larger stakeholders and figuring out how to create an environment where everyone’s interests are aligned and, we make progress as a society and as a country. I feel in this space, I’ve seen very little of that. And it has always sort of, you know, I’ve always thought about why is it that this sector, which has been around in this country for so long, we don’t have more institutional arrangements. Talking to the government, engaging with the government and working with them and figuring out how is it that we can create much larger social sector organisations. Even if we do a, I had read an article a few years back, which benchmarked India’s largest social sector organisations with the U.S.’s largest social sector organisations. And we are a fraction of that size.

And it always, I used to wonder why, obviously, you have all the purchasing power parity and, all of those issues, but what is it that, it takes for us to create larger organisations which are creating larger impact, just like we have banks and we have NBFCs, we have steel companies, why would we not have very large social sector organisations where the collective interest and motivation of society to make a difference is harnessed in a much more powerful and strategic manner.

It’s happening. I think people are making huge contributions, but what does it take to make this a national movement is really, you know, if I have to leave in my own mind, one thought contributing to the less privileged should be as much a part or a national movement as much as anything else is.

Whether it’s Skill India, some fantastic initiatives from the government. I think making a contribution to the less privileged, yes, we could say that, all of us pay income tax and so on and so forth. But I think there is a deep embedded desire in a lot of people. And I’ve seen that in my own work at CRISIL foundation when we actually created a volunteering program, we had volunteering hit rates of 50%. That means on an employee base of 5,000, we used to have 2500 – 3000 people participate in volunteering, which is self-initiated, not the regular, “let’s clean the beach tomorrow” kind of thing.

These are projects that people set up themselves and run it over the weekend with funding provided by CRISIL foundation. And we saw that there is that deep desire. What you need are the right kind of pipes through which this desire can be harnessed. So I thought that’s one thought which I always feel is, as a country, we should be able to do more of.

[00:10:48] Rathish: One of my favorite anecdotes, building on this, is that there is actually an online Rummy Players Association club, which is just online gaming companies that allow for rummy to have an industry association. We employ more people than the railways. We don’t have an association that can represent our interests.

And I think another point that speaks to it, and I want to bring it up today in our conversation as well, Ramraj is that every other large business and industry today has infrastructure that they have built that will benefit everybody else to do better. Here in the social sector, there is very limited infrastructure.

So it’s everybody working and solving the same problems vertically, rather than sort of solving for it horizontally. 

[00:11:30]  Ramraj: I think we have a lot of value as leaders that we are doing good social service. But I think we have to raise the bar to say that we are doing good only when we have impacted people at scale.

Because I meet a lot of entrepreneurs and I sense sometimes that they feel that they’re doing great work, but I think the difference between, I think our aspiration has to be here in terms of what is it that we believe is doing good; which is not to in any way belittle someone who’s doing work in their own local society or local community, but no, but what are the new tools? What are the new things that we need to move it up here rather than operate it here. 

[00:12:14] Rathish: I think it’s a good point and also why, partly why blended finance is important because one of the reasons I feel we need blended finance in some senses of the capital constraint that we have in solving problems has to be solved. But before we get into that, first blended finance for dummies, how would you explain it to someone so that it is very clear what that is?

[00:12:33] Ramraj: If you really look at society or we look at our country, there’s a base of people who are well off, maybe taxpaying, they have incomes and so on and so forth. And there is another category of people at the other end who are really in dire straits. They need support even in terms of food and other basic things, right? These are the two ends of the market, if I may use that word, but the reality is there is a large base of people in the middle.

Neither are they well off enough that they can completely do things on their own. Neither are they, really living completely hand to mouth. Now, because these people are somewhere in the middle, many times it It becomes difficult for commercial investors to understand how to engage with this market. Can we give them loans? Can we, give them some kind of credit support? Can we do anything for them, which will enable this community to also move upward. So there are some risks because obviously these people are neither here nor there. Now because there are risks, many times the banks or financial institutions or other people do not want to engage or do not want to participate in supporting some of these because obviously they have their own fiduciary duties. What blended finance really tries to do is say that, hey, we know that there are risks. Let us see whether a philanthropy or a charity or somebody else can come in and cover up some of the risks. So let’s say, there is 100 rupees of funding that is going to be made available to these people.

Maybe the risk could be 15%, 20%, whatever it is, 80% will be good, 20% could be bad, we don’t know today, could be bad. That’s a broad range. So what could end up happening is, that a charity or a philanthropy says, Hey, you know what I will put up this 20 rupees. So we give out 100 rupees, 20 rupees comes from the charity or the philanthropy 80 rupees could come from a bank or a financial institution. And that 100 rupees is lent out. When the money comes back, when people repay, they possibly all of them won’t repay. Whatever money comes, you first pay out the 80 rupees to the larger commercial investor. And only after he’s fully paid out the, whatever is the residual.

So let’s say you collect 92 rupees, 80 will go first. The first 80 goes to the larger commercial investor and the 12 rupees then goes to the, goes back to the philanthropy or the charity or whoever else it is. Now, what have you achieved in this? What has the philanthropy or the charity achieved? He has now given 20 rupees, but he has created loans worth 100 rupees, right?

So if you really look at it, the impact is 100, but your rupee investment is 20. impact is 4 rupees or 5 rupees depending on how you define it for every rupee or dollar that you have invested. This is as far as the charity goes. This is the first thing. Second is, this bunch of people who nobody knew what the risk was, now that risk has been manifested.

They have become part of the formal financial system. Banks and financial institutions understand the space better. Therefore, next time they’ll say, oh, now we understand this risk a little bit more. We are more willing to lend to these guys. So now you have created a completely new segment. What have you done?

You have blended some form of credit support from philanthropies and grant providers with commercial financing. And in this process, instead of giving away 20 rupees, which would have gone as grants to these people, you have now brought them into the financial system. You have enabled them to raise money of almost hundred rupees.

And therefore, you have created an ecosystem which is virtuous. And this is very important, Rathish, because let’s understand, we are a capital starved country. You don’t have enough money, particularly for the people who are at the margins of potential income viability. So what this does is it really enables you to use your capital more efficiently.

And it’s always my kind of exhortation to charities and philanthropies is not to look at absolute impact, not to look at I impacted 1 million people, but to ask the question that for every rupee that I put in, how much absolute impact, how much impact did I create? So can we change the conversation from absolute impact to impact per rupee? And that is essentially what blended finance tries to do is really blend some capital, which is taking very high risk with some other capital, which is taking some risk. But at this point is little apprehensive. So how do you mix these two together? How do you bring these two together is really what blended finance is all about.

You can put in a lot of bells and whistles to this, but in essence, this is what blended finance is trying to achieve. I’ve given you an example in financial inclusion. I can think about the same thing for health. We can say primary health centers, we don’t know whether they are viable or not. There could be all kinds of problems, demand issues, supply issue.

Every sector will have some risk. Okay. Can somebody in the initial days handhold the sector, handhold an initiative, take that little bit of risk? And in the process attract financial investors who also want to do good, but possibly today their credit filters or their investment filters don’t allow them an entry into this space.

That is really what blended finance is trying to achieve. We’ve had a long history of blended finance in this country. These are, if you look at priority sector lending by Indian banks, it is in some fashion, if you really think about it is one of the largest scaled up versions of blended finance.

Every bank has to lend a certain amount to farmers. Every bank has to lend certain amount to this thing. These are some ways in which blended finance could typically open. So that’s a kind of a sort of, if I may say a blended finance for dummies. This is something that anybody can use, but let’s keep it in mind, Rathish, that in every situation, blended finance may not work. 

[00:18:47] Rathish: Absolutely. I want to break you know what you said into three parts that I picked up Ramraj, I want to check with you, whether my understanding is correct. In the example you gave, I think three preconditions were necessary, right? One is the commercial investor who put in the money, the commercial entity that put in the money, is gonna get the money back at a predictable period of time. It’s not like a perpetual, you know, not available at 25 years later, there is a period of time they’re willing to let go of capital so that they get it back. So that predictability within a certain time period is important. Second is the fact that there is a certain probability of risk, which should not be a perpetual risk in some form, which is that once you discover the risk, you can measure it, build your model, et cetera. And that is, I think, important because in some sense of philanthropy capital’s role is catalytic, not perpetual. 

And I think that’s an important aspect in some sense that you highlighted which I think is very critical. And in some sense, the third part of it is that the role that the philanthropy plays should be measured in terms of the total capital unlocked. Rather than their contribution, which I think is useful. Are these some necessary parameters to keep in mind?

[00:19:56] Ramraj: I also think there is a fourth point, which is very, it’s a very subtle nuance, but I think it’s very important for a lot of people to understand that access to finance in itself is a huge social good. Even if a small trader can access finance at 21%, Okay. Earlier, he was not able to access it. It is a better social good than him doing a business of say 5, now he can do a business of 50, even if he’s paying a relatively higher price, it is still worth. Most people don’t see access to finance or access to capital in itself as a social good. Okay. Because please understand that when you start a new segment or a new asset class where you’re doing work, obviously, there’s the risks that manifest over a period of time.

Really what happens is a lot of these smaller people, smaller businesses, smaller enterprises, go and raise money at 40%, 50%, 60%, 100%, 200%. You have the vegetable vendors who will take a hundred rupees at the beginning of the day, and at the end of the day, they give back a hundred, 510 rupees.

If you look at it, 10 rupees a day, I don’t know, some 3500% or some such number. So access to capital for a sector is very critical. So when philanthropies and other people look at it, it’s very important to recognize that creating access to capital for a certain segment is important. Immediately an aspiration that they should get money at 8% may not be, it may not be in the right space or, you know, they should get money at 5% because I’m providing catalytic capital.

There are costs of acquiring the client. There are costs of servicing the client. Okay. Many times the client you need to go to his store. Maybe to his thela or to his place and collect the money. There are many other costs which could be involved. So I think access to capital is a huge social good.

In fact, if you ask me one of the most under-recognized social goods that we have in this country is access to capital. A small truck operator, a small person driving a Tata Ace of one ton, if you are giving him access to capital, earlier he was borrowing it from the local money lender, you have created huge social good. And we are somewhere in our systems, I don’t see enough recognition or enough value being accorded. To the fact that a certain kind of transaction or a certain kind of business created that access and brought them into the formal financial system. So I think that’s the only other nuance that I’d like to add.

[00:22:20] Rathish: And I think I want to build on what you just said, which is access to capital in two ways. One is where the access to capital is the intervention, which is that, Hey, listen, I enable access. Two is, I think building on the healthcare point that you were making in sometimes when we look at social programs, we look at what has to be done.

We don’t really break down who does and who pays in a nuanced way like, you know, you want to do provide healthcare training and I always assume that philanthropy is the only way to fund it. You step back and say, who else is willing to pay for this? There is an opportunity to think about an access to finance for that intervention that we default philanthropy almost always.

And there is an opportunity to bring in a commercial interest to that play as well with a certain level of measurable risk.

[00:23:04] Ramraj: And I must tell you that from the commercial investor side today, given the visible pressures on demonstrating sustainability that a lot of banks, financial institutions and other people have; they are actively looking out for such opportunities. In fact, several of the large banks today have their own sustainability team.

They are not very large yet, but I think there is a market. It’s a question about figuring out how to engage and make those transactions work for both the bank as well as for the philanthropy and for the beneficiaries. Blending, you can think, Rathish, at any level, yeah, you can blend on a transaction level, you can blend at an enterprise level also. 

Let’s say you have a you have a vehicle, Let’s say you think of a green climate bank, okay, a green bank, then the green bank’s job is to figure out what is the best value for its money in the marketplace. What all can it do? There is no use of us going and putting more money against another solar power.

There is already State Bank of India and ICICI supporting solar power. What this green bank should be doing is getting into areas where no one wants to put money because it is too risky and that is where you need blending. Where is the battery-swapping technology coming? Where are those kind of infrastructure for battery swapping getting built?

Where are those organisations getting funding? Why is MOEFCC not thinking about setting up a green climate fund, which will support all of these gaps in the infrastructure that is getting built. That’s really where blending can be catalyzed at a very different. Then everyone in this fund is thinking about this problem.

How do I solve for this problem using whatever form of finance that I need is available to me. So I’m not stuck here. I will give only equity. I will give only debt. Why? Whichever problem is there, you solve it with that form of financing.

[00:24:57] Rathish: And as you’re talking, I’m just realising that the transaction cost, when the person holding the different types of capital are different people becomes too high because then you have to align them, et cetera. But here, if there is one structure that can hold different pockets and bottles of money and say, listen, I blend it in a different way.

The transaction costs become lesser because one of my biggest challenges that I see in the space today is that the transaction cost is too high.

I want to go back to something you mentioned earlier, Ramraj, which is not all of it is blended finance. And there are places where blended finance may not work and you like, give one example. Do you want to talk a little bit about that? Like where is blended finance not relevant?

[00:25:33] Ramraj Let’s say you are going into you very poor districts. Maybe there is very little income. There are very little employment opportunities. There is very little potential for the customer to pay anything. Let’s look at adaptation in the climate side. A lot of the adaptation work that will come, some of it can be private sector viability could be there, but a large part of adaptation could be something which you are doing for the larger, you know, you’re, you’re trying to make your society a lot more resilient.

You’re trying to make them adapt to the change that is coming. Some of these spaces may not necessarily be open to just looking at it from the lens of economic viability. There may not be an economic viability in setting up schools or setting up a small primary health center in, in places where there is no economic capacity to pay whatsoever. 

Those situations, blended finance may not work. And I think the whole idea is not that, this shouldn’t be a nail in a search of a hammer. But we have to be strategic in terms of figuring out where are those places where there is a capacity to pay and potentially if they see value of willingness to pay.

Okay. Because let’s face it. A lot of people who are working, maybe lower middle class also have their own pride. They have their own professional this thing, they are earning themselves. We have to give them the opportunity. To avail of a product or a service in a manner that maintains their dignity and it’s just that we have to design a product or service. It may not be possible for everybody.

Okay, for example, I remember still during the peak of the pandemic, there were a lot of schemes which came up to support Zomato and Swiggy and other, these sort of gig economy workers, as you may call it. Some of those schemes are very much viable, because these are all people who are hardworking, regular folks, they just doing their regular delivery, but no one had maybe lent to these guys.

So no one knew. At the peak of the pandemic, will these guys pay back? How will they because anyway, there’s not too much delivery happening. All of those apprehensions were there. But these are segments where there is economic value running through the work that they are doing. So there is a potential for them to pay, but possibly it’s a segment that nobody has you know, worked with or supported them in any fashion.

So in the peak of the pandemic, not really something that the risk department of a bank or an organisation would be very keen to look at. That is where catalytic capital, that is where blended finance can come and say, okay, hey, I’ll provide you a 30% cover or a 30% support or a 20% support or whatever it is, but after two, three cycles, people will realise, hey, this is how this particular bunch of people operate.

These are the red flags. So let’s say somebody’s been a driver for two years, three years, his ratings are good. All of this is good. Maybe he’s a great credit risk, but the market didn’t know about it. But now he’s become a decent guy who could borrow money at a reasonable rate, may not be at 6 percent or 8%, but still he has now become part of the formal financial system. So that’s really the way we need to about think about this whole thing. 

[00:28:42] Rathish: I’m thinking there are three factors we should keep in mind. One is who is the person we are looking to support. Now, there are people who are extremely poor who may not have the economic ability to pay. And if that’s whom you’re targeting maybe there is no opportunity for us to lend in some sense, right?

Because that will go against the grain of what we want to do. So who we work with is one part. Second part of it is the, what we work on. For example, I’m thinking public goods somebody wants to conserve a lake. If there’s nobody who’s going to come in and say, listen, I’m going to pay for the lake, but it has to be done because it’s a public good.

So maybe there are public goods that if you’re building in some sense, there is probably not an economic opportunity there for you to be able to lend. And the third one, which is really where you’re offering something to a person of where the value is not very obvious to the person by start, like if there is no willingness to pay for it today, hopefully when they see the value of it over a period of time, they may be able to play, but in the initial phase, maybe there is an opportunity to only provide it as a grant to sort of switch to a point where they might then say, hey, I see the value of it.

I’m willing to pay, but I’m willing to pay a certain cost. And then you sort of grade them to a point where they at some point are able to pay market price or the market is able to play at the right price but when the value is not acknowledged, maybe again, blended finance may not be the right approach.

Will these three things be a right thing to say? 

[00:30:00] Ramraj: Blended finance is a very, very, very, very large word. All I’m saying is there is a social good that you are doing. I am incentivising you in some fashion and encouraging you to try and do more of that social good and trying to create a market for this whole. So you can do it in health, you can do it, you can do it in a whole host of sectors.

Financial inclusion typically has been a sector where it has been a lot more successful, but now people are trying this out in a variety of other sectors. Like I said, health. We are trying to do this in a lot of the, supporting innovation through technical assistance grants and so on and so forth.

Sometime the theory of change of a particular thing may not be very, very clear. How is this going to manifest? You could actually there provide a TA grant and enable people to run through that entire mechanism, see how it’s going to work. No one knows how it’s going to work. Maybe it’ll go towards London or it’s gonna go through Tokyo, or maybe we are going to end up in Ethiopia or we are going to go somewhere else.

We don’t know that. All of that could get supported through some of these kind of things. So in fact, as I’m saying, Rathish, that you will be, I’m sure seeing examples from your past experience that people have done this. It’s just that we didn’t call it blended finance. Okay. So blended finance is a larger word where you’re trying to in some way blend philanthropy with commercial finance.

[00:31:14] Rathish: I want to summarise that so one roughly as you were talking, I was saying there’s India A, B, C.

India A is people with whom there is no need for philanthropy to even play a role. People like us who can pay for what we want. India C are people who are today living at the same level of income, a sub-Saharan Africa. There is a need for a lot of public capital to come in to deliver value for them.

But there is an India B, which today needs access to a wide range of resources that can help them create value for themselves and for their communities and families. And the scale is large enough for philanthropy to not be able to solve that problem. And we need commercial capital. And these types of needs typically have the following characteristics.

One, it will actually result in an economic transaction, which will give back the money in a certain acceptable timeframe. Two, there is an inherent risk and unknown probability there, which will dissuade a commercial entity to jump on head on. Three is that if provided a catalytic role, philanthropy can support it for a short term so that there doesn’t have to be a perpetual support to make this happen.

In all of these cases, blended finance will be an opportunity for us to solve the problem. And as you rightly highlighted access to finance as a public as an intervention that creates value is important to consider. We also spoke a little bit about what will not be in the ambit of blended finance.

One is what we talked about India C. People who may not be able to have the ability to pay for them to try and do blended finance is not going to be worked. Two, it is going to be areas where there is a public good and the public good is something that is delivering value for a lot of people and hence needs a certain type of capital.

And three is where the the perceived value of it in some sense is shot. And hence it’s not seen by the person who is receiving the value. So may not be willing to pay. And hence Blended Finance may not be helpful. I think a lot of examples that you gave today is actually valuable, but for me, there’s a wealth of information around how we can break it down.

And for me, ties to the second part of what I want to talk about, which is really the point you made, which is there is money available, there is money required, and there is an interim problem of imagination. Of being able to find the right ways to unlock that money that we have to solve for. 

[00:33:32] Ramraj: I think that’s a good summary. I just want to add two quick points on this. One is when you looked at the India ABC and that classification, We just have to ensure that our small and medium enterprises is a very important element. So that has to be added. That is one element because helping them have multiplier effects in a variety of ways, one. Second, supporting innovation. So for example, On the climate side there is one challenge or there is one issue, which is around the climate transition from all your fossil fuels to that, which is the larger institutional mechanism that the government is working on. But there are a lot of problems where there is a need for innovation finance. Now, who is going to make that available? 

Now as the philanthropy, I can use the money in the manner that I imagine is the best value. Okay. Again that’s a space. So for example, now you’re trying to create an entire ecosystem, which is a lot more sustainable than the fossil fuel based ecosystem, right?

The infrastructure for it doesn’t exist. Let’s take the waste management and circularity issue. What infrastructure do you have? You have a huge infrastructure for your fossil fuel based businesses. Everything is available. Think of petrol pump, everything is available for you to access it easily and consume it, right?

But when you think of a circularity or a waste management ecosystem, the infrastructure just doesn’t exist. Collecting the waste or anything else, it just doesn’t exist. Now, these are problems and these are situations from a climate perspective, which also will lend themselves outside of this framework that you provided.

So one would be the innovation part. And the second would be the challenges on climate where creating that infrastructure could have significant combinations of public private partnership. 

[00:35:33] Rathish: Absolutely.

[00:35:34] Ramraj: Both of them will be add ons to the framework that you created in terms of supporting a variety of these organisations and enterprises. We don’t have that infrastructure for some of the other challenges, whether it is waste management, whether it is circularity, whether it is water regeneration, none of the pipes for those have been built and those are again, spaces, where blended finance, where philanthropy, they can reimagine their role, and while they need to continue to do the work on way, you know, education and health and all of the other things, the infrastructure for this is again, a very, very, very important space that has to be seen in the ambit of this whole blended finance. 

[00:36:12] Rathish: So I want to come back to the imagination point Ramraj, and I’m going to try my best out of my memory to capture all of the various examples that you gave. one is the lending example, which is here is a target person.

We want to give a financial loan to a credit product to risk of returns is unclear. So finance can blend it and make it easier. That’s one. I love the example of emissions that you gave, which is where the financial transaction does not benefit or acknowledge the good behavior. As you reduce the money, which is as I put the outcome focus into it, I can actually reduce your interest rates.

So I can finance can come into blend and saying, hey, if you’re doing good behavior, I can find a way to reduce your interest rates or do things that which goes beyond the actual financial transaction to account for the social and ecological benefits that can come in as well. That’s a second example that I can see.

And we talked about a similar example where schools can be provided lower, you know, lower interest rate loans if they show better learning outcomes, for example. The third is the technical grant example. There is a need for patient capital on innovation that will need to be provided for an innovation to become market ready.

And that could be an example where the technical assistance example that you gave, maybe a loan at a very low interest or a grant that can actually enable them to run when they are not market ready. That could be the third example that we can take in some form. The fourth one, which you mentioned, which is interesting for me, I didn’t think of it before, is infrastructure building work.

Which is, what is the infrastructure that we need to build for a wide range of things to actually happen? You gave the example of climate and, recently I’ve been working in the space of water vulnerability. Where if you’re able to create the right infrastructure for water vulnerability, a ton of other people can actually work on it.

So gives us a very interesting way to look at where finance can be blended. So there are lending product related ones. There are outcome based sort of discounts and saying as a word that can be relevant. There are models of making innovation accessible through technical grants. There is infrastructure building work.

And finally for me was the idea of working capital, which is I am providing you working capital for you to be able to validate and work through a certain lean phase. Hopefully because after a certain period of time, the market model will stabilise, right? Broad five categories. One, your feedback on whether these are five valid categories, and is there a sixth or seventh one that is missing?

[00:38:42] Ramraj: Yeah. I think that’s a broadly valid. I just like to focus just one more piece, which is on the innovation side. We need to keep doing better work on building on what exists, but if we have to genuinely over a period of time, believe that we need to create our own sort of IPs and our own sense of intellectual solutions, which are unique to us.

We need to be able to support various kinds of innovation, whether it is biotechnology, whether it is deep tech, whether it is a lot of new areas that are coming on, who is going to support it. Government will be there, but can philanthropies, can other people also come into it? There may not be a role immediately for commercial investors.

Maybe VCs can come in later, but how can we create or how can we make more funding available for innovation? In some fashion for the sake of innovation in itself, because that is an important harbinger for what we want to be as a society.

[00:39:41] Rathish: I want to dig deeper a little bit there, Ramraj. Before you brought up innovation, my own understanding has been that even globally, a lot of the work that innovation covers is funded by federal capital. Government spends money on innovation because there is really to go back to the principles that we laid out.

The economic value is not going to be seen for a very long time, at least as a part of the life cycle where innovation should be ideally be just purely grant funded. Where exactly do you see the value for blended finance and innovation? 

[00:40:11] Ramraj: My worry would be that if you don’t support some of the kind of ideas that people have. If you had a, if 100 people could innovate, okay, maybe only 10, 20 of them will have the mental resilience to go ahead without support. And then out of those 10, 20 of them, maybe five of them will become VC worthy and move ahead from there. If instead of supporting 20 people, we had the wherewithal of supporting a hundred people. Okay, that whole filter and that base would become so much larger that you would have a lot many more unique, specific, innovative ideas or innovative solutions coming together. So my whole idea is how do I increase that sort of, if I may say that pipe for new and innovative ideas.

Right now it is coming despite the lack of funding, not because of the availability of funding. 

[00:41:05] Rathish: Yeah, I agree with the funding question. I’m only wondering whether it is actually blended finance. 

[00:41:10] Ramraj:  You can think of a special purpose vehicle, which will do both innovation, grant support, and then over a period of time, provide venture capital at some level. So it can be a combination within the same vehicle, the vehicle can innovate and also have a VC fund sitting on top of it. 

[00:41:26] Rathish: Correct. 

[00:41:27] Ramraj: So that’s the kind of, that’s the nature of something that I’m thinking about. So let’s think of a, I’m not again, a specialist say, but let’s think of a specialized biotechnology fund, which will do everything and anything. It will do grant support. It will do venture capital funding. It will provide debt financing.

It can provide all kinds of solutions. So if you’re a biotechnology guy, this is where you need to come…is the way I’m looking at it. You can also have third party biotechnology fund and so on and so forth or other people coming through. The amount of funding available to even accelerators incubator from a CSR side, it’s one of, it’s it’s right at the bottom, somewhere at the bottom in that bottom three, again, somewhere my thoughts come from that.

That out of maybe, I don’t know, crores we spend on CSR, the funding that is available to this accelerators incubators is quite low. You can check that data. I am reasonably sure of my numbers.


[00:42:20] Rathish: And I want to step back now largely to a much broader question here, Ramraj, which is really like you said earlier, there is money and there is willingness from institutions to fund this. The need is of course huge. What is today’s stifling the flow from supply to demand in some form. And my own assessment and please correct me if I’m wrong is what I call the lack of imagination.

There are actually very few people today who are able to really imagine where a blended finance instrument can actually unlock because the people who understand the problem, understand the capital and understand that longterm play. You are actually a very few people. Would that be a fair thing to say?

[00:42:59] Ramraj: Yeah. So there are, there is a, it’s a complex hydra headed kind of problem. First of all, we for long years in India have built the entire institutional infrastructure to support regular grant making and execution. And we have done it with a decent degree of support. So whether it is an education, health, the regular projects give grants.

This is something if I’m meeting the CEO in an elevator and he asks you what is happening, what are you doing? I can very simply in half a minute, between the 0th floor and maybe 7th floor or 8th floor, I will be able to in one minute explain exactly what we are doing.

CEO is there. I am also happy. Everyone is happy. Moment you get into blended finance, it’s a complex you know, it’s, it doesn’t lend itself very conveniently for an elevator pitch. Okay. To me, it may sound like a very basic or a very crude thing, but effectively your ability to explain it in a very simple way, it doesn’t, it’s not very easy and very simple and easy to explain.

Okay. It’s far easier for us to say we did x things to 1 million people in x, you know, in, in Bihar or Rajasthan or Tamil Nadu or whatever else it is. It’s a simple model. So blended finance in itself, If I may say, has in itself inherently a certain degree of complexity, because we are trying to change the paradigm in which we are thinking about impact.

We are saying that was for every rupee I put, I created so much of impact rather than saying I helped 1 million people. I had 1 million people. Did you use 100 crores or 500 crores or 10, 000 crores? Where is the relationship between what money you put in and what impact you created? It doesn’t exist. And so changing this paradigm really is where the problem is.

If investors start thinking, if grant providers start thinking like this, and if the not-for-profits and the executing organisations start thinking like this problem can move ahead but really all our institutional mechanisms right from the education that we make available in the social sector, let’s go and look at the syllabus of education.

How much of exposure is there on the financing side? There is an inherent idea, grant will be there, then we will execute and create this kind of solution. But thinking about how that procedure happens, how can we use that? So we do not have the pipes, we do not have that infrastructure through which some of this is made available.

Centrally the issue is at some level, there has to be greater imagination as you have rightly said, and the board has to think about, how is it that we are creating something very radically different. The funding which is available, whether it is philanthropy or CSR, we have to think about it as innovation capital for development. It is not capital for development. The paradigm today that exists is it is capital for development. No, this is money given by the shareholders or by the trustees of the philanthropy or the charity.

This money is given. If you can think about it as innovating for development, then we will solve a lot of these problems because then my idea is not that, okay, what is this money? How can I help people know? How can I create new pathways, new methods, new ways of maximizing the impact because that is the fiduciary duty of the head of CSR.

That is the fiduciary duty of the head of the philanthropy to think, how can I maximize this? How can I create something that 10 years later, somebody will say, yes, this organisation created this new thing. I think that is a paradigm which needs a strategic shift from the chairman or from the board to say, was use this money for innovation.

Because the amount of capital that a philanthropy or a CSR will have is very small. So you will not be able to create absolute change on impact, but if you use it for innovation and we aggregate it across, you can do a lot more, 

[00:46:48] Rathish:  Absolutely. Absolutely. And I think that many times we forget how the philanthropy capital is such a small percentage of the total amount of money we need to solve social problems. And hence being catalytic is going to be very mandatory.

[00:47:03] Rathish:

But you talked about pipes and infrastructure, Ramraj.

And maybe I want to break it down because, you know, usually we follow this system thinking approach where we say mindset is step one. Rules and structures that we have to create is step two. Incentives we are creating is step three. And then there is capacity, capability that we have to establish.

I think the first thing that you talked about is mindset. Do you have a mindset thinking of philanthropy as catalytic and innovation for development rather than development capital, which is very, very important. If I had to break it down, break down the infrastructure point and the piping the plumbing that you talked about, what are some of the critical aspects that you think we have to build?

[00:47:38] Ramraj: so the infrastructure is needed at every level. You asked me one of a very tough question, I must say, because fundamentally the change of mindset itself, it takes a bit, because I knew at CRISIL that we had a very, very enlightened you know, sort of CSR subcommittee of the board. People who’ve been deeply engaged in the social sector for a very long time and also deeply engaged with the financial market.

So it’s a very rare combination. But even there I think there are a variety of pulls and pressures, there is obviously the reporting that you have to do. You have to ensure that the monies are spent, you are not in violation and all of those kinds of things. So I think getting the pipes and the infrastructure in place will happen only if there is that change in mindset because after that, then you have to think of a variety of things you have to think about, from the education that is being made available because today the people who are passing out of our leading social, sector education organisations are the ones who are going to become the heads of these organisations in 20 years time.

So if that imagination is not catalyzed at their college level, they are going to be carrying the same idea. In no way am I trying to say that the regular stuff that we do is not important. It is valuable and important. In a country like ours, where there’s a shortage of capital, we have to think about squeezing development capital for every rupee for what it is worth.

So I think we need a paradigm shift there, one. Second is we also need a far greater celebration of these innovations in the social sector. We don’t see enough of that. In general, in popular media, you know, we don’t see celebration of social enterprises. I think there is a cultural shift that needs to happen.

Today, you have an entire page in every newspaper which says XYZ got ABC funding, so and so got DYF funding. How is it that we can create more oomph, if I may use that word, around social sector support, social sector finance, difference that people are creating, new ideas that people are coming up with?

I think we see some of that happening with, stuff that we see on Shark Tank and, the local, the version and so on and so forth, but I think we need to create a kind of shift in the way society as a whole thinks about creating social impact, which is not that we went and helped two kids on the road.

Important, valuable. Good way to begin. But if you can create something a little more innovative, you will be able to create. Maybe you may be impact 100, 000 or 1 million people. We’ve normalised being an entrepreneur in India, 30, 40 years back, being an entrepreneur is you didn’t get any job.

So you became an entrepreneur today. You have normalised and made that aspirational. How do I make social impact? How do I make innovation in social impact? How do I celebrate that and make that a lot more aspirational that it is today? How do I create a hundred more Jaipur Rugs, a Fab India? How do I celebrate?

Some of those kind of organisations at a level, which is a lot more than what it is today. 

[00:50:44] Rathish: And I fully agree. I think even in the systems thinking thing, we say that if mindset doesn’t shift, nothing else is going to shift, but I also want to make it tangible, Ramraj, because there is today, in my opinion a few tailwinds that are important, right? There are actually professionals from industry who are coming in who understand a certain level of finance to the social sector.

So there is a transition that is happening. I think even in the philanthropy landscape, thanks to companies coming in, This rupee for rupee thinking, which is that, “Hey, listen, it is going to be limited capital. How do we make it work?” is growing. Third, there is actually now that constraint of the fact that this is only catalytic becoming more understandable for people.

They’re like, “Okay, this is the amount of money I have. My ambition is this much.” So there are tailwinds. So even if I have to tell the early adopters that, Hey, listen, this is where you can start and demonstrate value, that zero to one journey. I’m wondering how can we get that started and how can, let’s say today CEOs listening to this podcast or funders listening to this podcast, if they say, listen, I want to do this in my organization, where do they begin?

[00:51:42] Ramraj: one is that increasingly we are seeing a variety of specialized blended finance consulting organisations or organisations trying to become blended finance investment banks. I think starting off working with some of them, for example, a bunch of social impact investors have set up the blended finance company.

There are other organisations like Intellicap and a bunch of other people, Sattva themselves, and a whole host of other organisations who can consult and who can help these people on that particular journey. So that is one part of what I would think. I think re ideating the philanthropy framework is something that I would think that the founders of these philanthropies should be working with a structured approach with institutions and organisations that specialise in blended finance is one part of what they should do. I think the other thing which is needed is somewhere for the government to become a lot more active because there are a variety of frictions and challenges and potential, I may say gray areas

in terms of what is allowed and not allowed as per regulation, what is it that can be done? Because what we are talking about here is the confluence of for profit and not-for-profit. And in general the paradigm in India as from a legal and regulatory perspective has been, we have two buckets.

There is the investing bucket and there is the philanthropy bucket. In philanthropic bucket, you give away your money. In investing bucket, you make money. These are the two buckets in which traditional regulation is operated. What we are talking about here is something in the middle where we are saying, Hey, you know what?

We can make some money, but we can also create a lot of social impact. Now, this is a new paradigm. So most rules and regulation, whether it is the Charities Act, whether it is the Social Venture Fund Act or some of the other regulations that exist don’t necessarily talk to this kind of a new paradigm, not because of a design, it’s a it’s basically something that hasn’t existed.

And that is something that we will, I think somewhere need to work on creating structures, work with the government in figuring out how is it that we can engage them in some of these endeavors. The government themselves coming in, say as an anchor investor in some of these will give a huge boost because the moment it happens like that, from that fashion, that some arm of the government is participating in this, it brings a certain degree of legitimacy.

And, there’s a lot more institutional and regulatory support that comes in once something like that happens. So I would say the two sides of the equation are, as I described, that it will be good for philanthropies and CSRs to reimagine their own role in this space. And second is somewhere, if we can exhort the government whether it is through Niti Aayog or some of the other organisations to create a somewhat more facilitative environment for blended finance, I think a lot, many more people will be interested because I think there is a genuine intention to do this, but time and again, we will, come across issues from a tax side, maybe from a GST side, maybe from a many, some of the other challenges which come up in terms of what charities can do and cannot do.

That people just stay back and say, okay let’s not get into anything which can put a black mark on, our regulatory compliances. I think it’s something that we can work with the government and explain to them, particularly now, because we have these initiatives on the climate side, which are coming up.

The need for climate capital is so huge. So I think there’s a huge value for the government to think about something centrally where they initiate this kind of a blended finance platform loosely put which can actually harness the intentions as well as the capital from a wide variety of players, both from India as well as internationally. 

[00:55:44] Rathish:  I want to summarise some of the points you made, Ramraj. One, as you rightly highlighted, is the mindset, which is what is the definition of success for me as a philanthropist should shift from my capital created impact to my capital created impact per rupee.

And I’m seeing my capital as catalyst for impact or innovation for impact rather than capital for direct development itself. Second part of it is like you said, the supply of talent that is coming in, be it academic institutions that are working on impact. How do we embed this thinking right from there to say, if you’re in a factory today, if you are in a college degree, if you are in academic programs, can you think about this aspect of work, which is impact per rupee rather than impact as part of the way you’re thinking.

Third is how do we create a healthy intermediary ecosystem? And some of them are already emerging. The blended finance company being one. Sattva, the Convergence Foundation. There are a couple of them. So how do we look at all of these players becoming more robust and how do more organisations engage with us?

That’s the third part. I think the fourth part that you talked about is also to make sure that these systems, the government systems, not only talk about the for-profit models and the nonprofit models, but create facilitative structures for the blended finance models as well. Because a lot of times the fear of being on the wrong side is actually higher than the actual risk of being on the wrong side.

And for something that companies do as part of 2% of their net profits, they don’t want to take the hassle of saying, is there a risk that I will be called out by an auditor for doing this, et cetera. So even just creating that facilitative environment, guidelines, notes and support, et cetera, will be very helpful.

I think putting all of these parts of the plumbing and infrastructure that we talked about, I think is critical. 

Anything that we might have missed.

[00:57:25] Ramraj: Yeah. So the challenge Rathish is really that every organisation is living their day to day life. you have your day to day work and your business and everything. You need an organisation. You need an umbrella body for sustainable finance or social finance in this country, which will represent the interests of the community as well as a larger variety of players, which is whose job it is to create these engagements, to work with the NITI Aayog, to work with the government, to figure out how are they thinking about it and figure out how is it that we can, in a more structured way, not on an episodic basis.

A lot of people whose hearts are in the right place are doing this work, but it is episodic. When they go do something and then some other business pressure picks up and then they’re off. How do I make this a structural intervention where I’m partnering with the government? And I’m partnering with the NITI Aayog, where I’m partnering with the line ministries, figuring out what is it that they want to do, figuring out where is it that blended finance can help, figuring out, what structures will be something that could be viable.

You’re setting up the sustainable finance working group of the ministry of finance. How is it that we can partner with them? This has to be part of a larger goal of creating a sustainable finance ecosystem a development finance ecosystem. And I think There needs to be a kind of a broader intervention, which works on this, on a regular basis, not one off. And this has to traverse the continuum of not-for-profit social impact, that whole continuum. It’s a complex mix and but we need to engage with this mix. 

[00:59:04] Rathish: I cannot agree more with you on the bigger tent approach, Ramraj. I think unless we bring that unified view, I think it will always be a niche problem to solve by a niche set of people.

And I don’t think it will go, it’s going to get that pull because we have to merge some of these words. But I think one of the critical challenges there is regulations. People don’t even know what they don’t know. So if you can give us a quick view of what are some of the regulatory hurdles there, that will be useful to understand.

[00:59:28] Ramraj:  you want an organisation which is able to receive various forms of financing, okay? What can be the forms of financing?

It can be grant money, it can be debt or loans, and it can be equity. So that institution should be able to access equity, debt and grants, and it should be able to dispense equity, debt or grants, depending on the mandate. So let’s take an example of what we used about this whole space of say biotechnology. There could be certain spaces where only grants can, will be given because those are very new areas.

In certain other areas, some of those companies have advanced, they have reached a level where possibly they can take equity in a venture capital. So this entity can therefore give potentially equity for these kinds of companies. So that’s on the asset side. In terms of its financing, there may be a bunch of philanthropists who say, yes, this is a specialised philanthropist, a biotechnology accelerator. We think it’s very important or a waste management circularity accelerator. We want to give grants to this particular. Someone else may say, Hey, I have this money. This is the money that I use to support growth level enterprises in biotechnology, I will make equity available.

So there could be a bunch of investors who have a variety of interests, and there can be a bunch of investment options with a variety of opportunities. What this vehicle needs to do is to be able to mix and match these for maximum. The problem that we have is that this is a very, if I may say a radically a different idea because in a traditional vehicle, you take grant, you give grant.

You take equity in a venture capital fund, you give equity in a venture capital. That’s the typical model. But what we are trying to say is we want to mix and match. We want to blend. There can be different models, different. Let’s say I create a healthcare blended finance fund. In some situations, I may want to give grant.

In some situations, I may want to give debt because these organisations can scale. It’s a steady business. I can give debt. In some situations, I may want to give equity. And on the investor side, there can be a bunch of people who want to do different things. So how do I combine this right now, the regulation may not allow, say this vehicle, can it take money from an international foundation?

It may not have today, is this FCRA approved? Does it need an FCRA one? Can it take equity in this fashion and not give equity, but give something else? So effectively the regulation, the regulatory challenge really Rathish is in the fact that we look at, if I lend to an enterprise and I get a return, any kind of a return, it is seen as not being of social impact. You are a social enterprise, you are helping low income kids and maybe, running a school and if you are generating some return somewhere, there is a feeling that there is a, this is not a socially, I mean, it is socially impactful, but making money from this is somewhere seen as being commercial. And I think the paradigm that needs to be shifted from a regulatory perspective is as follows, and which is what you will talk about briefly on the social stock exchange, which is trying to give a very rigorous definition of a social enterprise. A definition in terms of what areas it will operate in, what are the conditionalities under which it will be defined, the audit standards, the regulatory, self regulatory organisation for social enterprises.

And the SEBI has created an entire ecosystem for building up the social enterprises. Now, what we need to do is to use this social enterprise definition as a pivot and provide a lot of support to funding the social enterprises. They could be funded through grants, they could be funded through equity, they could be funded through debt.

Now, if you are able to give some concessions or some benefits in terms of, if I give money to a social enterprise and they give it back to me with say 8% interest, and if I can see that as a social good and not be seen as a commercial transaction, that is something that can help. Right now, those

pipes or those structures are not yet very defined and that is what maybe a social stock exchange can play a huge role because the definition of a social enterprise, the entire bells and whistles around their audit, their control, their management, all of that is being put in place. And I think this is the first if I may say, larger government-supported and mandated framework for social finance in India. And I think it, it needs that we are able to build on it in a lot more of a structural way in terms of ensuring that we’ve got, we’ve got this whole little highway being built.

How do I build the side roads such that we don’t have the last mile issues that, you know, you build this fantastic Metro, but to get to that, you don’t have autos or you don’t have, you know, peripheral kind of. 

The real challenge is this that mixing up these things does not necessarily lend itself to the traditional models of how, not just India, globally, we think about taxation, we think about income, we think about impact. 

[01:04:36] Rathish: As you were speaking about this , I was thinking of what type of capital is required for making an innovation happen. And I see four stages. 

And I want to paint this back to you because this is a topic that’s of huge interest for Sattva. I personally know of four you know, stages. There is a pure research stage. Which is where you’re actually saying, is there a new substance, a new technology, et cetera.

There is a second where a research becomes an early innovation that is lab tested. Third is, it becomes from a lab tested model to a community tested model. Fourth is where it can actually achieve unit economics to actually be viable in the market. In my mind, the public spending can, is really option one and two.

The level one and two, largely is where public funding or maybe huge philanthropic capital can play a role. Level four is where markets should ideally pay for it. A VC picks it up, et cetera. But the level three really where it goes from being lab ready to community ready is really where today a massive funding gap exists because market is not ready to pick it up yet.

Federal funding says, listen my mandate is over. And I feel the blended finance opportunity could really be there at level three to say, can we measure that risk, make a possible instrument that can make it work. I don’t know if that makes sense.

[01:05:48] Ramraj: Yeah. It does. In fact, I would say that even in level one and two, if there is a large scale, say a government initiative. To support one or two funds, there may be a fund of funds which supports one or two or three or four maybe biotechnology funds, which are exclusively focused more on just that, just the core innovation at the R and D level itself.

And, you know, the whole cycle may be between one, two, and three. I think there will be people who will be interested. Right now, you are not getting sort of market intermediaries or other people interested, primarily because there are not one or two heavy hands who are putting bigger money on the table.

And if government, you know, maybe uh, the BIRAC or, you know, the, the ministry behind brings that together in some fashion, you will see the emergence of some of these kinds of organisations and with government and maybe one, two, three large philanthropy sitting on top, and that provides the core kind of a capital for some of these things to be done. Already work is happening.

All I’m saying is there is opportunity there also in one, two, as well as three.

[01:06:54] Rathish: We are at the end of our conversation Ramraj. 

But what I want to talk about in the last section is really way forward. What are some of the things that we absolutely should do? To make this happen. And I want to summarise some things we’ve already talked about so that you can build on it. One aspect of it is this entire mindset change that we require at the funder side, which I think we, and there is an organisation that needs to drive that.

And we have to push that at an ecosystem level. Second part that you talked about is this setting up of a bigger tent where different stakeholders can come together and cut across grants, for profits, blended finance, so that it doesn’t become a niche problem, but a central problem. The third point you highlighted is that there is a remarkable opportunity with the social stock exchange coming in for us to define what a social enterprise is, what is an definition of impact, how do we create models and products for delivering finance, etc.

And the fourth is hopefully find the regulatory environment that can help us. truly build blended institutions in some form institutions that have the ability to blend diverse forms of capital and lend diverse forms of capital. I think all these are really broad agendas and ambitious ones, but I want to still come back and say, are there other things that we need to do, especially now that domestic philanthropy is supposed to grow within India and start a lot more work in solving for impact around much.

[01:08:16] Ramraj: So my thought on this Rathish is that the three, four things that we spoke about are the key building blocks. The major building block to me is and I’ll answer this question. To me, domestic philanthropy is money which is there, which is available. You have to take an investment banking approach to the problem.

 Or maybe let’s talk about a family office. They will do public listed equity. They will do debt. They will do some AIFs. They will do venture capital and they will do some philanthropy. How does this market operate?

There is a whole bunch of investment bank. There’s a whole bunch of other people, mutual fund, all of these guys go to them with a deal. Who is going to them with social sector deal flow, social sector deal flow, which is not just saying that, okay, this is the number of, we want to have this sort of engagement in this district in Tamil Nadu or this district in Bihar. Who is taking social finance, blended finance deal flow?

It’s very sporadic. It’s very anemic. Okay. And there are a variety of reasons why it’s anemic. We spoke about it. Building the pipes in the social stock exchange is one way we can solve for it. Because if using the social stock exchange, we are able to clarify on a lot of the regulatory kind of issues. We can motivate a lot more regular other than obviously the Sattvas and the, blended finance company and others.

We can motivate a lot many more people to get into and get interested in some of these areas. Then what will happen is domestic philanthropy will see more deal flow. If they see more deal flow, there will be more understanding, more learning, more exposure, more knowledge, and over a period of time, more consummation of transactions.

Eventually, without having regular deal flow, domestic philanthropy or any philanthropy for that matter is not going to move. In any sector, you have to, you have to show them more deals. Okay, here it is. If one deal is coming in six months, I am sure, there could be some problem or this issue, that issue.

But if you are able to show them transaction, which have a higher degree of regulatory blessing plus regular frequency of transactions come to the table, you will definitely see domestic philanthropy and other people getting far more interested. You know, they have their own reasons why they are not participating today.

Okay. But I think clarifying on the regulatory side, using the social stock exchange as the platform from where we are building. Okay. The point is, everything is bespoke. The moment everything is bespoke, then every analysis, every evaluation is bespoke. And the moment every evaluation is bespoke, your timelines are long.

Your, the whole chain is much, much more complex. How do I simplify it? I, we need commoditisation of social finance moving from bespoke, uniquely design structures. How can I commoditise it? How can I dumb it down? How can I simplify it? How can I tell a CEO in a lift, in an elevator, in 15 seconds, what is exactly happening?

So what we really need to do is use the social stock exchange platform for commoditisation, for standardisation, for, it just needs to be as simple as someone saying, I went to this district and I did 5,000 cataract operations. It’s a commoditised thing, there is nothing much that has to be in terms of a huge value addition.

Okay. So impact measurement, everything gets then much, much, much more commoditised. The moment it is commoditised, more money will come, easier flows, easier understanding, everything will fall in place. So I think working on helping commoditise transactions on the social stock exchange has to be a very big agenda.

So that will need a lot of work that has to be done with SEBI, with other players, with Ministry of Finance and others to see if there are any problems and how to fix some of those issues that we will have to undertake. 

[01:12:14] Rathish: Absolutely. Domestic philanthropy is still not still new philanthropy money, you know, the behavior, how to give have not ossified to a point where people can’t change it. It is now that we are starting to think, and if you can establish a new behavior now, it’s a lot easier for us to then be able to drive it to scale as that numbers continues to grow.

And like you said, the social stock exchange is an opportunity. The number of intermediaries are few, but can grow and the India giving stories only starting in my opinion. So I think mining this as a de facto approach. And creating the deal flow in some sense, where every week we are evaluating something I think is going to be very important.

[01:12:56] Rathish: I think these are very, very good points. Ramraj, it’s a pleasure to talk to you because you’ve seen this problem hands-on with a wide range of people. We started with a very broad definition of what is blended finance, got into the weeds around what it is not, what are some of the challenges today, what are the building blocks to make this happen and why now was probably a great time to make this happen.

Given some of the things that are going on. Thank you so much for your time. We’ve covered a lot of ground. It was a great conversation.

[01:13:21] Ramraj: Thank you. Thank you, Rathish. Pleasure to be here and all the very best. I think this is a great initiative, the Sattva Knowledge Institute, and I look forward to staying engaged. Thank you so much.

[01:13:32] Rathish: Thank you for listening to Decoding Impact, a Sattva Knowledge Institute production. If you liked my conversation with Ramraj, do head out to Sattva Knowledge Institute’s website, where we have a lot more content on blended finance and capital for impact in general.

If you liked the conversation do check out the season one and season two of Sattva Knowledge Institute on YouTube, Spotify, or wherever else you consume a podcast from.

Thank you for joining us today. I hope to catch you again in a fortnight for another episode of Decoding Impact.

[00:00:10]Rathish Balakrishnan: Despite the progress and the initiative in foundational literacy and numeracy, there is limited dialogue and conversation on the role of the government and the kind of education systems we need for enabling young adults in India today. 

[00:00:23]Anil Swarup: I thought I would be moving out of the dark dungeons of coal mines to the bright lights of school education.

[00:00:28]Anil Swarup: And to my utmost horror, I found that the mafias of school education are much worse than the mafias of education. I had 20 months and probably the only assignment in my entire career where I felt that I should have had more time because of the sheer complexity of issues in education. 

[00:00:42]Rathish Balakrishnan: There are three types of people who work in education today. Those who know the reality of a classroom. There are those who know the reality of grassroots. There are very few who know the reality of how the government looks at education. 

[00:00:53]Anil Swarup: And my understanding is it’s very easy to have ideas in this country. For an idea to fructify and sustain, it has to be politically acceptable.

[00:01:00]Anil Swarup: That’s the top priority. Without that nothing will happen. 

[00:01:02]Rathish Balakrishnan: The lack of consensus within even the country, which is really what happens to our young adults in India today. What is that winning asset? Do we want them to be employable? Do we want them to study in college? Do we want them to be good citizens?

[00:01:13]Rathish Balakrishnan: I don’t know if as a country even articulated it. 

[00:01:15]Anil Swarup: Action can’t happen in Delhi. Action is in the state. You got to go and sit with the states. As school secretary, I didn’t convene a single meeting in Delhi. All meetings in the state.

[00:01:22]Anil Swarup: So you have to go there. Start with the child. Determine what is required. Then develop your infrastructure, human resources on the piece of that. 

[00:01:29]Rathish Balakrishnan: So starting with counseling, which is the information gap. Then the skilling, to address the skill gap and then helping the child move forward, I think is very, very critical. 

[00:01:36]Rathish Balakrishnan: Welcome to Decoding Impact by Sattva Knowledge Institute, hosted by me, Rathish Balakrishnan, where we speak to experts and practitioners to go beyond simplistic solutions to understand what it truly takes to solve social problems at scale.

[00:01:49]Rathish Balakrishnan: 50% of India’s population are made of young people under 25 years of age. To ensure that they can actually thrive and have a prosperous future, we need the right education systems in this country. that guide and provide agency to young people. The role of the government in enabling high quality education still stands paramount.

[00:02:10]Rathish Balakrishnan: However, despite the progress and the initiative in foundational literacy numeracy, there is limited dialogue and conversation on the role of the government and the kind of education systems we need for enabling young adults in India today. To speak about the role of the government, the role of partnerships, and the inherent systems and attitudes we need to make it happen.

[00:02:31]Rathish Balakrishnan: We have with us today, Mr. Anil Swarup. He’s had over 38 years of experience in the government across various ministries and roles. Post his stint within the government, he’s the author of four books around the role of civil servants in the country and his own personal interactions with the government and with politicians.

[00:02:52]Rathish Balakrishnan: He’s had the opportunity to engage with a wide range of stakeholders, which led him to start the Nexus of Good, an initiative that helps replicate best practices and learnings from across the length and breadth of this country. He brings a deep understanding of the issues in education, and I’m so glad that he is joining us today as part of today’s conversation.

[00:02:52]Rathish Balakrishnan: He’s had the opportunity to engage with a wide range of stakeholders, which led him to start the Nexus of Good, an initiative that helps replicate best practices and learnings from across the length and breadth of this country. He brings a deep understanding of the issues in education, and I’m so glad that he is joining us today as part of today’s conversation.

[00:03:12]Rathish Balakrishnan: Sir, thank you so much for joining us in today’s conversation of Decoding Impact. I’ve had the chance to listen to you on audio, podcast, in person. And it’s such a pleasure to have you in this. I look forward to this conversation. Exactly. And today’s conversation, sir, is about education that I, a topic that I know is, you know, as something that’s close to your heart.

[00:03:31]Anil Swarup: Close to my heart, but I am not very sure whether I know so much about education. Actually, I was probably the most illiterate uneducated civil servant we made school education secretary. I had no experience whatsoever, and I still do not know much about education. My exposure has been only for about 20 months but I will try and answer whatever I can. 

[00:03:48]Rathish Balakrishnan: But I do want to explain why I’m saying what I’m saying is that there are three types of people who work in education today. Those who know the reality of a classroom. There are those who know the reality of grassroots. There are very few who know the reality of how government looks at education and government still today.

[00:04:04]Rathish Balakrishnan: It’s a very important stakeholder in the education space in India. You’ve had a chance to look at the government’s view on education, not just in Delhi. I remember the time you went to Bharat Yatra. Where you went to every state and called up stakeholders and said, “Ab batao kya ho raha hai?” Right? And so I would love to know that view of education which is very, very government led, and also why it is not sufficient. Something that you’ve talked about a lot. 

[00:04:28]Anil Swarup: You know, let me give you a bit of a background. When I was posted as school education secretary, this was after my stint at school. So, I thought I would be moving out of the dark dungeons of coal mines to the bright lights of school education. And to my utmost horror, I found that the mafias of school education are much worse than the mafias of coal.

[00:04:47]Anil Swarup: Because in coal, mining was underground and the mafias were overground. In education, all the mafias are underground, eating into the essentials of Indian society. And that damage is so enormous. And the most surprising bit, no one seems to understand it, or if they understand it, they don’t express it. So, it was really a tragedy, what was happening in education, what is happening.

[00:05:07]Anil Swarup: And then, when I looked at it from a particular perspective as Secretary of School of Education, I thought I must go around the country to see what the ground reality is. That has been my habit in whichever assignment. I always felt that I should go down to the ground, understand the ground reality, because much of the problem that I understood in the government was, the inability of those that thought that they had wisdom sitting in Delhi to understand the ground reality.

[00:05:32]Anil Swarup: So I thought I should move around. And as you put it, I traveled to about 24 states in the first three months. I used to travel every Monday, every Friday to one state. And when I say state, it was not merely the state headquarter. The first two districts that I visited were Bastar and Sukma.

[00:05:49]Anil Swarup: And then I drove from Pune to Goa, dropping down on the way to schools, some are structured visits, some are unstructured. I drove from Srinagar to Leh, not taking the national highway, going deep inside terrains, you know, that gave me an understanding of what was right, what was wrong.

[00:06:07]Anil Swarup: And the best discovery during those visits was, such amazing work was being done in the hinterland which we did not realize in Delhi. And all of us were looking at Finland, England, Ireland, Scotland, all the lands of the world without looking at the good work happening here. And what I thought was the advantage was that I don’t have to do a proof of concept.

[00:06:28]Anil Swarup: All I have to do is to pick up a good practice here, roadshow it to others, and they could pick it up. And that’s why, after these visits, we had regional, state level workshops where good models were being displayed, and thankfully number of them were picked up by other states. 

[00:06:44]Rathish Balakrishnan: I want to talk about the good side, but before that, I want to talk about the bad side, the mafia in education.

[00:06:49]Rathish Balakrishnan: It’s actually very different from the view everybody has, that’s because the view on education really is there are a lot of well-intentioned people trying hard and it’s not working. And you are one of the first people who said, well, there is an underground here that we need to realize. Tell me about the Mafia in Education.

[00:07:02]Anil Swarup: So first of all, there are indeed very well intentioned people. So, I endorse that. Yes. And there’s no contradiction between well intentioned people and mafias. In every society, every organization, there are good, bad and ugly people. So, I usually don’t talk about bad people because we learn from good people.

[00:07:18]Anil Swarup: But let me tell you which I have stated in my book also. I looked at a series of mafias. And the worst mafia was the publishing. And even worse, was the B. Ed and D. EI. Ed colleges. Let me explain this to you how it works. You know, I, to my utmost horror, I discovered that the colleges that are supposed to train budding teachers for B. Ed and D. El. Ed, of the 16,000 colleges, 4,000 did not exist. That was my feeling. They did not exist? They existed in a room, two room at the most, and they could give you a degree. So when the chairman, National Council for Teacher Education came and met me and told me this, I couldn’t believe it. How is it possible?

[00:08:00]Anil Swarup: He said, yes, sir. So I asked him, what is your plan? He said, sir, I’m issuing them a notice asking them to submit certain basic information in an affidavit. Why affidavit? Because if they furnish wrong information in an affidavit, there’s a criminal (offence) in it. So I said, please go ahead. These guys were so powerful, they never thought anyone will question what they’re doing.

[00:08:23]Anil Swarup: They were politically linked, this, that, and it. So as a part of strategy, because I’ve always had to make an idea politically acceptable. If it is not politically acceptable, it’s a no go. So, while traveling to those 24 states, I met with a lot of chief ministers from all political parties. And believe me, everyone from every political party supported.

[00:08:44]Anil Swarup: I distinctly remember in UP, when I told the chief minister, sir, this is a serious problem. So, then he heard me out and then he says, “Haan Anil ji, samasya toh duruh hai, lekin main aapke saath hoon.” Similarly, all other chief ministers agreed. So these guys, this mafia of B.Ed and D. El. Ed colleges, who thought they will be able to stymie it through political pressure, didn’t succeed.

[00:09:06]Anil Swarup: So they went to 17 high courts, filed a writ against obtaining of information. Three of those high court granted stay, three. So as you look very perplexed, so was chairman N.C.T.E. He appeared himself in a high court and explained to them, sir, we are only seeking information. The high court judge got so annoyed that issued a contempt notice to him.

[00:09:28]Anil Swarup: And a notice to secretary school education, asking me how he could be checked out. Chairman and said, anything can happen. We live in a wonderful country and anything can happen. At this point in time, the support that he was getting politically in the central government, the chief, the minister said, how long can I, I mean, now that the courts are asking, I was a bit upset.

[00:09:52]Anil Swarup: But the, the chairman NCTE, one of the finest officers, IAS officer, Santhosh Mathew, he got so upset he resigned from the IAS. You know, it’s one of the failures. So that step failed at that point. But good news was that consequent to these steps that we had taken, the National Education Policy framers took note of it, and they have come up with a formulation that hopefully will get rid of these frauds.

[00:10:19]Anil Swarup: This is the biggest mafia. Then the publication mafia. Publication mafia worked in a very interesting manner. They didn’t do anything. They just ensured that the NCERT published its books not online. So session starts. So what do you do? The parents go to private publishers and buy those books. NCERT books come.

[00:10:42]Anil Swarup: This we succeeded because I remember as soon as I joined, I think I joined in November and for the next. education year, I got to know of it. I got the NCERT moving and we got the books delivered on time for that year’s session. This is 2017 session. There again, all hell broke loose because these guys, private publishers, had actually printed those books and they were having a margin of around and if I remember the figure correctly, annually making 3000 copies.

[00:11:12]Anil Swarup: So they were hit because what do you do with these books because NCERT delivered the books, people were not going to them. So they tried all sorts of things. And they took it out in a very different manner, you know, because CBSE was also involved in it. They were very annoyed with this Chairman CBSE. So there was a paper leak.

[00:11:28]Anil Swarup: I don’t know whether you’ve heard about it. In 2018, there was a CBSE paper. These publishers got together and I got to know of it and raised a massive hue and cry against paper leak. They wanted to get rid of the chairman CBSE. Governance is not easy. You have to be aware on all your sides and understand what’s going on.

[00:11:49]Anil Swarup: And play accordingly. I mean, that is another story. I managed to, I had failed in case of Santhosh Matthew. In this case also, the minister said “Anilji, Chairman CBSE ko hatana padega”…told him, “Sir, Uski kya galati hai?””Galati toh nahi hai, situation diffuse hui hai” I said, sir, immediately struck me, I have to come up with something quickly. So I told him, sir, right now the media is after her. She’s a buffer between you and the media. The moment you remove her, the media will be after you. Bingo! He agreed with me. We held a press conference, diffused the situation.

[00:12:24]Anil Swarup: Chairman of CBSE went on to become Secretary of School Education thereafter, a very fine sir. So, that’s how education is very complex. You know, in my entire career, I used to make myself redundant. At Co Secretary, I had made myself redundant. Beginning with sleeping in the office, I had only 45 minutes of work.

[00:12:41]Anil Swarup: We had setup systems, self operated systems. Those systems are working even today. I left it in 2016, but in education, I had 20 months and probably the only assignment in my entire career where I felt that I should have had more time because of the sheer complexity of issues in education. So these are two mafias.

[00:12:59]Anil Swarup: Then the third mafia is Nakal mafia, and you can’t understand it in southern part of India. You can’t even visualize what happens. Let me give you a narration from my early, early part of my career. I was a subdivision magistrate and my driver said,“sir, aaj aapko le chalte hain, ek nazara dikhaayen”. I didn’t understand.

[00:13:16]Anil Swarup: So I said “chalo”. So I went there. I reached, the school examinations were going on. As soon as my Jeep arrived, people started jumping out of windows. So I said, what’s this going on? So he tells me, “sir, nakal karane aaye hain sab log” I said, look, you know, in UP, Bihar they will, the schools are auctioned for, for copying.. You can’t believe I saw it with my own eyes.

[00:13:39]Anil Swarup: So I said, this is nonsense. Listen, “Sir, yahan aise hi hota hai exam” next day he tells me, “sir, aaj thoda jaldi chalenge aur.””Aaj kya hai?” Bole ” sir, aaj doosra nazara dekhle”so I went with him. I reach his examination hall. It’s very quiet. I said, “Yahan toh bada badiya chal raha hai”. bola, “Woh nahi sir, parcha abhi abhi bata hai”

[00:13:58]Anil Swarup:“Woh sir, woh aam ka bhaag dekh rahe hain. Mango.. Waha pe sir, yeh log parcha solve kar rahe hain. Woh solve karke, aage nikal kar aayenge.” So I’m giving this first hand, personal experience about it. Kalyan Singh tried. Because there are nakal Mafias in the sense they take up schools, they allow people to copy, or enable them to copy, ask, what is going on?

[00:14:23]Anil Swarup: This is education. So I can go on and on. So there are codes of mafias. Work on it, towards it. And no one talks about it because I’ll tell you, my reading is, because I used to wonder why isn’t anyone concerned about it? Especially the politician. Now the politician is concerned about today and tomorrow at the most.

[00:14:43]Anil Swarup: And some visionaries will look at day after tomorrow, certainly not five years down the line. Education destroys over a period of time. Or the monuments are built over a period of time. Who’s bothered? You’re bothered about today-tomorrow. That’s the tragedy.

[00:14:57]Rathish Balakrishnan: I want to only pick up and I promise in about next five minutes, I’ll stop talking about bad news and move to good news.

[00:15:02]Rathish Balakrishnan: The last point that you talked about is something that bothered me so much. And I’ve had the pleasure and privilege of working with Dr. Santhosh Mathew multiple times. One of the pet peeves for him is how do you make issues like education, health, politically salient? Has that something, has, given your experience, have you sort of seen, is there a way to make that happen?

[00:15:20]Anil Swarup: You know, it can be made to happen. Anything can be made. In government, it’s difficult, but anything can be made. And my understanding is it’s very easy to have ideas in this country. For an idea to fructify and sustain, it has to be politically acceptable. That’s the top priority. Without that, nothing will happen.

[00:15:36]Anil Swarup: Socially desirable. technologically feasible, financially viable, administratively doable, judicially tenable, emotionally relatable, and environmentally sustainable. Now, these are not easy aspects, but they can be done. But if everything has to be hunted, it requires time. So, for example, in coal, contrary to the general impression, the problem was not as complex as education.

[00:16:01]Anil Swarup: In coal, it was a single dimensional problem. There are mafias there, coal production was a problem. You sort it out, mafia problem, you sort it out. In education, it’s very complex. And there’s so many stakeholders in it, all that were limited, you could count them in a fingertip here. So you require greater time.

[00:16:19]Anil Swarup: You know, that’s why I felt, yeah, I wish I had some more time in education because I’m sure it can be handled. How it can be handled. You have to take issue by issue and try and convince the political master that it would be good for him politically. Once he appreciates that. It’s all a question of conveying a value proposition.

[00:16:36]Anil Swarup: Whoever you are talking to, whichever stakeholder you are interacting with, if you are able to convey a value proposition, because you have to convince him that what I am saying is good for you, not for me. Obviously, it’s good for me, but until he accepts it as his own value, he will not, he will probably like my language.

[00:16:51]Anil Swarup: If I am good at expression, he’ll say yes, do nothing about it. The internalization happens if the person starts finding value in it. So that requires a bit of time. I had struck a chord with Prakash Javadekar. Very fine minister. And so we could stall a few things, which would’ve happened. So we stalled – I mean something which is happening now – changing history and geography, literature, we stalled it and that pointed time I could manage to convince it.

[00:17:17]Anil Swarup: So should we be spending time on this or should we looking ahead? For that matter, another very critical issue, there’s some people who wanted to set up a vedic board and wanted government endorsement on it whatever. We don’t endorse it. You want to set up a board, go and set it up. Why should government endorse any board?

[00:17:35]Anil Swarup: ICSE is not endorsed by government. It’s an independent board. Go and set it up. We stalled that as well. I’m told it’s there now. It’s been set up. The point here is, do I have the skills to convince the political master into believing? So for that, you have to develop confidence. His confidence in you, his trust in you, and then you start believing.

[00:17:55]Anil Swarup: Having worked with a number of politicians before, probably over a period of time, developed this art of conveying it a manner that the politicians accepted it. I had a reasonable amount of experience in convincing politicians of various shades into my side. I mean, people say politicians are the biggest innovating factors.

[00:18:13]Anil Swarup: I used to tell them, 90% of the cases I could convince the politician to my side. Of course, it’s a democracy. 10% they will do what they want to do, which is very fair.

[00:18:22]Rathish Balakrishnan: I want to take you now from a politician’s office in Delhi to the roads between Kashmir and Leh, Sir and, maybe a couple of stories from the time you went to the ground..

[00:18:30]Anil Swarup: Well, it’s, it’s, um, what I saw was absolutely amazing. I must narrate a couple of stories to you. In one instance, this was Maharashtra, and I had been told by somebody not from Maharashtra that there is a school in Maharashtra who doesn’t have electricity. They said, you must visit that school. There’s a two-room government primary school.

[00:18:50]Anil Swarup: Okay. So I, it was conducted to her in the sense that he knew that I was coming. So he came and received me and took me inside the room, a room which was supposed not to have electricity. When I entered the room, I find that every child has a tablet and there’s a smart screen. I’m shocked. I said, where are you getting electricity from?

[00:19:09]Anil Swarup: So he took me around those two rooms and showed me a foldable solar panel. He said, sir, we charge batteries with it. And from batteries, we charge. I said, where did you get the money to buy these tablets and the smart screen? He said, Sir, when I came to this school, and the name of the teacher is, Sandeep Gund, amazing teacher.

[00:19:27]Anil Swarup: So he said, sir, when I came here, there were 40 to 50 children. Many didn’t come to the school. So I didn’t know what to do with them. So where I stay, there’s some internet connectivity there. So I used to download some video films, educational films, and we used to come and play. The children used to congregate.

[00:19:44]Anil Swarup: Two months down the line, about 20, 25 parents came to the school asking very funny questions.“Guruji, pehle toh school jaate nahi the, ab aate hain, aapne kya kiya?” So he says, ” main shayad yeh video dikhaata hun, isliye woh aate hain.” So when he discerned interest in the parents, he requested those parents to contribute 500 rupees each.

[00:20:02]Anil Swarup: Now these were poor people. They managed to give. With these, he brought two tablets and attached them to the lap. Now this passion of the teacher was getting to be known. So a CSR funding agency and an NGO, they visited the school. And they were amazed at the passion of it. So, they decided to fund the tablets and the smart screen.

[00:20:22]Anil Swarup: Around this time, I visited. I was very impressed with Sandeep. So, I took a photograph and tweeted it. So, suddenly, Sandeep Gund becomes a local hero. So, teachers from other schools started visiting his school. And they started replicating in their own way. In between, I met the President of India, Mr. Kovind had just taken over as the president.

[00:20:40]Anil Swarup: So, I had gone for a call and inviting him for an event. So, we had some time, we were sipping a cup of tea. So I narrated this story to Mr. Kovind. He looked impressed. So I said, sir, would you like to meet Sandeep Gund? He said, why not? So I got Sandeep Gund over to Delhi. He met the President of India, photograph taken, tweeted, Sandeep Gund becomes a national hero.

[00:21:01]Anil Swarup: This is not the end of the story. The Pashtepada model was subsequently replicated in more than 50,000 schools of Maharashtra. And not a single penny of more than 300 crores from the government. Everything crowdsourced.

[00:21:17]Anil Swarup: It is an amazing story. I mentioned that in my book. This was one such story, which inspired me into thinking in terms of Nexus of Good.

[00:21:28]Anil Swarup: The other story is totally different. This was an unconducted tour. I just saw a school somewhere. I just walked in. 

[00:21:34]Anil Swarup: My wife was there. We just got down and went. It was lunchtime and I had heard horrid stories about midday. So, I had the meal that was being served and it was very delicious. So, I jokingly told my wife, “Itna achha toh aap bhi nahi banati ho”. Then I asked the teacher, “Yeh bataiye, khana kahan se aata hai“. She says, “Ek sanstha hai, Akshaya Patra, woh deti hai” Because she also didn’t know much about it.

[00:21:56]Anil Swarup: So, I went to the state headquarters while having a meeting. I asked the secretary of the state government. I said, what is Akshaya Patra? He said, sir, it’s a very good organization. Does this, everything he told me… And I said, Can I talk to the state representative? He was immediately called, so I asked him,“Bada achha kaam kar rahe hain” complimented him.

[00:22:16]Anil Swarup: I said, “Kitne zillon me kar rahe hain?” How many districts? He says,

[00:22:19]Anil Swarup:“Sir, do zillon me kar raha hoon”. I mean, UP has nearly 80 districts. I said, “Yeh achha kaam aap kyun kam jagaon mein karte ho? Baaki mein kyun nahi karte?” Bole, “Sir ye hamara nirnay Bangalore mein hamara headquarters hai, wahan se hota hai.” Within a couple of days, I flew to Bangalore.. I met the president of Akshaya Patra, he was shocked. He said, secretary, Gov of India coming and meeting me. I said, I’ve come here for a request. I asked him, you’re doing a wonderful job. I want you to replicate it. He was very happy. I said, you tell me what I have to do.

[00:22:48]Anil Swarup: See, he said, I’ll give you within an hour of two hours, he made out a whole list. This state, this state, this state, we want businesses. Then my job again became that of a facilitator. Talk to those states and get those going. And they have now last year, they doubled the meals from 1 million to 2 million. That’s a major scaling that is happening.

[00:23:08]Anil Swarup: So you know, and then it demonstrates that good can happen. You know, that’s the point that I was trying to establish. Usually, we believe that nothing can happen. I give those eight dimensions to say that nothing can happen. On the contrary, I keep telling that these dimensions are there to, for you to understand the ground reality, work around them and make things happen.

[00:23:32]Anil Swarup: So I came across hundreds of stuff, hundreds. That’s where the Nexus of Good movement started. And it inspired me to believe in whatever the circumstances. The challenge was, how do you create a model that is replicable? And the challenge was how to sustain services. And that’s where, through my career, I thought that if you can create a vested interest around the happenings, then you can withdraw.

[00:23:59]Anil Swarup: That vested interest, if I can use that term, enables good thing to sustain. That’s very important. Otherwise, usually what happens is most of us civil servants, the outstanding ones, they do a good job in the world. Rest of it collapses. You have to create that. And I learned it while doing a scheme Rashtriya Swasthya Bima Yojana which as a system was so good that despite the fact that the current government wanted to dump it for three years, they went back to it, rejigged it, renamed it, and it’s thriving, in that scheme Ayushman Bharat.

[00:24:31]Rathish Balakrishnan: I want to specifically in education talk about one problem that we feel today needs a lot of attention. Just a quick background. There has been a lot of focus on foundational literacy numeracy in India, helping children learn, the ASER work, our work, etc. And today I think the country is on its path.

[00:24:46]Rathish Balakrishnan: It’s a difficult problem. But I think there is a part of education where I think there is the lack of consensus within even the country around what to do, which is really what happens for young adults in India today. This is anyone about 13 years of age when they start to get ready for college and higher education today, I think there is, one, limited conversation on what we want from them. Two, there is also limited alignment on what is that winning aspiration for that young adult. Do we want them to be employable? Do we want them to study in college? Do we want them to be good citizens? I don’t think we’ve, as a country, even articulated it very well.

[00:25:15]Rathish Balakrishnan: And third is that vested interest group around this problem doesn’t seem to be set yet, but I want to get your thoughts on that.

[00:25:20]Anil Swarup: See, you are right. There is a visible indifference towards it, which is shocking because you’re playing with the future of the country, which is supposed to have a demographic dividend.

[00:25:33]Anil Swarup: And if you don’t even have the conversation, as you say, It will be a demographic disaster. So they have very sporadic conversations. I’ve been a part of some of them. As I said, no one seems to be bothered about five days down the line, leave alone five years down. That’s the real problem. Because if I am obsessed with the newspaper headlines, then I would obviously not talk about five years down.

[00:25:58]Anil Swarup: So that is a problem today. And earlier also more so now, because everyone seems to be only bothered about publicity. And education is not publicity. I mean, others could be, education is hard work, brass tacks. And for that, you have to have greater detail of, for example, National Curriculum Framework. I’m digressing it.

[00:26:21]Anil Swarup: No, no one is bothered about it. Look at the time it took for the National Curriculum Framework. Then everyone talks about vocational education, skill development, their conferences held. No one sits down and understand why is it not happening? You know, I learned that in coal. that if you want to find a solution to a problem, you must go deep into the ‘why’ of it. Keep going down till you go to the bottom and then start working.

[00:26:49]Anil Swarup: So, for example, skilling, there is a realization that is skilling is the main appeal. Okay. Now, if that be the case, why is it lack of infrastructure? Is it lack of human resources? Is it lack of funds? Is it lack of political will or a combination? And this is a conversation or discussion that should happen.

[00:27:08]Anil Swarup: But then if I’m busy holding conferences and inaugurating things, You know, we’ve had “Chintan Shivirs”. They call them “Chintan Shivirs”. But uske baat, chinta ka vishay yahi hai ki chintan ke baad kuch hota hi nahi. Phir agla chintan shuru ho jata hai. So it becomes like industry organization who keep holding these conferences. No, they can afford to do it. Government cannot. Government has to go into the depth of it. So, for example, if there is a shortage of infrastructure, okay.

[00:27:34]Anil Swarup: I’m just taking one. If you require certain infrastructure for vocational training or skilling, We must then try and understand what the education policy doesn’t. How do I create that infrastructure? Who all can do that? Government alone can’t do it. See, the problem with the National Education Policy, which I’ve read, is that they look at private sector with, you know, they don’t touch them with a bargepole.

[00:27:58]Anil Swarup: How can you do that? 50% of our children going to private schools. How can you ignore them or treat them as, you know, pariahs, they are having, they’re just there. There has to be a partnership. And I’ve been an advocate of public private, big time. So, for example, if money is required, to what extent can I engage gainfully with the private sector in creating that?

[00:28:23]Anil Swarup: The tragedy is that we are so obsessed with statues that the CSR fund goes for the statue rather than the infrastructure. If the same money goes to infrastructure for IT, things will happen. I’m not saying only infrastructure will solve the problem. What I’m saying is, it’s a very important component of skilling.

[00:28:38]Anil Swarup: You know, in the policy, they say that every school should have skilling. No, for that you have to have infrastructure in the school. Skilling can’t happen in the classroom. You have to have hands-on experience. Where do you do that? So, I’ve just taken one example to illustrate how indifferent or callously we are looking at these aspects, which are so critical.

[00:28:56]Anil Swarup: You know, everyone goes and joins BA. I mean, my personal view is we should dissuade people from doing BA in history. I mean, there should be some people obviously going there, but by studying just history in BA and everyone who doesn’t get admission as well does history and geography, it doesn’t work.

[00:29:13]Anil Swarup: They should be made employable. Then there are other issues. I mean, I can go on and on this employability part, that level of training,  which you give skilling that you get a person skilled in, say, in, Jhajjar will not be able to come to Bombay and work. He has to find employment close by because the salaries that he will get will not sustain him in Mumbai.

[00:29:36]Anil Swarup: So these are aspects that, it’s not that they have not been discussed. They are not taken to logical conclusion. Now, there are some states I am told, I have not studied it at length, who have done this. Like in Tamil Nadu, I had the occasion to travel interior areas. They have managed to create employment locally.

[00:29:54]Anil Swarup: Quite a lot. There’s still a lot of improvement that can be done. But can we understand, say, if somebody elsewhere in this country can study that? And that’s where I feel NITI Aayog should play that role. But this is good that has happened in this part of the country. And it’s not merely one presentation.

[00:30:11]Anil Swarup: It has to be a very intensive dialogue. You know, in Coal, I mean, I’m taking an example because I feel action can’t happen in Delhi. Delhi is a fiction. Action is in the state. You’ve got to go and sit with the states. As Coal Secretary, I didn’t convene a single meeting in Delhi, all meetings in the state, maybe in the, at the mine level.

[00:30:28]Anil Swarup: So you have to go there. That requires indulgence, would not give you publicity. If you sit in a mine, who, which photographer is going to come and take a photograph and publish on the, but if you announce something in Delhi, everyone will notice it. Big things are happening. So more so in education, because these are nitty gritties of education, which will never catch limelight.. But I think will be beneficial. 

[00:30:48]Rathish Balakrishnan: I want to reiterate a couple of things you said. We did an internal research at Sattva where we said that for every hundred students in grade eight today, only three of them are employable at the end of their college, three to hundred. The numbers are stark and I had a chance to speak to some college principals last week.

[00:31:05]Rathish Balakrishnan: You know, the discussion was different and their only question was “Rathish yeh bataiye, bachhon ko kaise hum college leke aayen.”

[00:31:12]Rathish Balakrishnan: They’ve all registered for BAs…Nobody wants to come to college. And so there are these phantom students on whose future we are discussing today. And I think it just reflects the reality that we are sort of dealing with. But the question, sir, and I think I’m asking you this specifically because you engage a lot with young people. And I saw that even yesterday where I had a chance to be part of your book launch. What would your winning aspiration for young people in India today be? For the whole of India, not just for the Bombays and Delhis. 

[00:31:41]Anil Swarup: See, the issue is that we can’t have a generic decision and say this is the strategy. It doesn’t work that, you know, India is a very diverse country within a state there’s… so I have to engage with them. Now, obviously I can’t engage with them. We have to have intermediaries who engage with them. 

[00:31:56]Anil Swarup: I can, I equip the teachers of the school to engage with, I say engagement because each individual requires a different sort of an in different sort of counsel. We can’t say that all should become engineers or should become this.

[00:32:08]Anil Swarup: That’s what we do while making policies. And it has to be much more intensive engagement. Again, it’s a tough job, but doable. It will again not hit headlines and hence people don’t do it. Someone has to sit down and engage with these children and understand them and make them understand. We may not succeed in all cases, but in majority of cases we’ll bring them around to our point of view.

[00:32:31]Anil Swarup: But that conversation is not happening. That conversation has to happen with the child. He has to have faith in you, you have to have faith in him and have a conversation with him what he wants. And then probably, that’s why I lay a lot of importance of counseling. Especially post class eight, child has to be counseled.

[00:32:48]Anil Swarup: And for counseling, you have to understand the child. You just can’t counsel and say, this is the prescription, this applies to everyone. No, you have to understand. It’s like diagnosis. You have to understand the child and then guide him that this is best for you. For example, I guide a lot of aspirants to civil services, okay?

[00:33:02]Anil Swarup: And I spend a lot of time individually with them, especially those that qualify for interviews. I spend one on one with them, at least 10 to 15 minutes with each child. I guided 200 of them last year. So I spend those time to understand what are his strengths and weaknesses and then tell him in the given time how you can work on your strengths.

[00:33:22]Anil Swarup: So that is a very intensive engagement. I think teachers will have to be equipped with that. The policy talks about counselors, but “Jeb mein nahi pata, chal diye Calcutta” don’t really know how to go about doing it. I mean, I told Dr. Kasturi Rangan, you know, a smaller policy and larger action plan. Because when you work out what needs to be done, how it will be done, who will do it, by when it will be done, you will understand the limitations of the recommendations that you’re making.

[00:33:49]Anil Swarup: And there has to be a pathway. States are not equipped. You know, many states approached me, I had retired, on how to go about implementing the policy. That has to be inbuilt with the policy. That institutional mechanism had to be there to handhold some of the states to take the policy to its logical conclusion.

[00:34:05]Anil Swarup: So they are picking up piecemeal here, here, here, here, making a mess of a fantastic policy. Because there’s no action plan.

[00:34:13]Rathish Balakrishnan: Leads me to the second question. I understand when people outside the government throw darts at the government: “Sarkar ko yeh karna hai”. My mom always has an idea on what should government do. And that’s okay because she’s outside.

[00:34:24]Rathish Balakrishnan: What you’re saying seems to be like the 101 for the state’s officials. And I mean, government  civil servants to be able to do. 

[00:34:32]Rathish Balakrishnan: Increasingly that focus on Delhi is growing rather than the focus on the ground. Is that an incentive challenge? Is that a capacity-capability challenge? Why do you think there is.. Because this is a government document on what needs to be done. The actual plans are still missing.

[00:34:47]Anil Swarup: And as I said, hitting the headlines of the objective, that’s the problem here. And that’s an incentive problem. So everyone wants to hold a conference and discuss, you know, I, I became pretty employed after the policy was announced because everyone wanted my statement.

[00:35:03]Anil Swarup: In fact, many people paid me a good amount just to speak on the policy. I said, that’s great. I’ve never got so much money to speak as they did one, one leading national daily. The editor, I may have, sir, if you can write 800 words, it would be great. I said, alright, sir, we’ll pay you this much amount. I said, but what I’ve not got so much amount ever in my life would give me, I’ll write, but then it, the story ends.

[00:35:25]Anil Swarup: You know, someone at the operational level has to sit down and understand, and then the roles have to be defined. You know, central government cannot just sit and issue instructions. You define role. This is what the central government do. This is what CBSE will do. This is what the state governments will do.

[00:35:45]Anil Swarup: And that role definition has to be determined in consultation with the state governments. Otherwise, we are in the habit of the Government of India. You’re showing instructions to the state government on what they have to do. There’s no consultation for even role definition. And it can be done. I mean, I’m a great believer that everything can.

[00:36:03]Anil Swarup: But you have to indulge. You have to sit. You have to examine. Go to the depth of the problem. Sit with experts who had some experience. When I say experts, I mean practitioners as well. You know, one of my grouse with the National Education Policy group was, there’s not even a single principal or teacher on that group.

[00:36:21]Anil Swarup: They were all experts. So they, no one knew where the shoe pinch is now. So, it should have been somebody, a principal or a teacher sitting on the group itself. They did interact with principals and teachers. That’s a different matter. In the final document, as you are sitting there, a, you know, a perceptive principal would have said, these are the likely problems in implementation.

[00:36:39]Anil Swarup: So, okay, have a separate document. This is the way this policy has to be implemented. These are the likely problems. This is the likely solution. We don’t have the solution to this problem. Admit it. Let another group sit down and find a solution. I think it can be done.


[00:36:55]Rathish Balakrishnan: Leads me to the third question. I want to bring it back together. It’s the private sector participation. I’ve actually been in a closed room discussion with Secretary/ Ex-secretary who frankly said, listen, there is always distrust with private sector. That’s the problem. Yeah. 

[00:37:09]Anil Swarup: You know, the assumption and I’ve worked in government for 38 years in the government and offices… We’ve seen that private sector is there only to make money, okay? And unfortunately, private sector thinks that everyone in the government is corrupt. Both are equally wrong. There are outstanding people in the government, there are outstanding people in the private sector.. And I thrived over it as well. I’ll give you a classic example.

[00:37:34]Anil Swarup: You know, one of the mafias or one of the biggest problems in private sector school education is the fee structure. You know, parents are always upset that the schools raise the fees irrationally. It’s a perennial problem. In Gujarat, they went to High Court, Supreme Court. What did we do in UP? When the FICCI delegation, FICCI ARISE delegation came to meet me and I had, I mean, I always believed in public action.

[00:37:56]Anil Swarup: So when they came to me, I said, can you come up with a legislation with a solution to them? You’ve given me a problem. Okay. So I sat with them and my fund, I gave them the bottom line. I said, bottom line is this, that school can charge any fee at the time of admission because then the child has an option not to go to that school.

[00:38:14]Anil Swarup: But once the child gets admitted, there has to be a reason or rationale behind every increase. That was the bottom line. They agreed. So they worked out the legislation. Now, legislation made by FICCI ARISE. And then I put them in conversation with the UP government. They had conversation, minor amendments to the legislation.

[00:38:32]Anil Swarup: The legislation brought out, problem solved. A critical problem for which in Gujarat took everyone to Supreme Court here it was. So what I’m saying here is, sit with the private domain, you, I used to tell everything. See, ultimately, I’m the ultimate decisionmaker. Why should I deprive myself of the wisdom that I may get from anybody, including private actors.

[00:38:49]Anil Swarup: I’m listening. What is wrong in listening? The thing that you said in the beginning, we don’t trust them, is an assumption which I had with the politicians to begin with. I had a lot of problems in the beginning. Why should I trust them? If they do something which is untrustworthy, I’ll do that. I’ll take it accordingly.

[00:39:08]Anil Swarup: But upfront, if I don’t trust people, then I’ll end up doing everything. Why should I do it? I shouldn’t. Now, anyone who has a problem would have a better chance of finding a solution than me giving a solution to them. So, I mean, I got into this habit of asking anybody who came with a problem to give me a solution also.

[00:39:26]Anil Swarup: Because then it made my task easier. I didn’t have to start with ABC. I could jump in LMNOP and take it to its logical conclusion. It solved my problem. So this trust has to be built by demonstrating areas where public private partnership has worked. 

[00:39:41]Anil Swarup: So, Akshaya Patra is a classic example of public private partnership.

[00:39:44]Anil Swarup: Classic example. Money coming from the government, operated by an entity. So as I said, learn from practices that have happened on the ground, and then you can replicate it and see. It can be done. 


[00:39:56]Rathish Balakrishnan: So just bringing it all together… And I know you don’t like to build castles in air. You are, when I heard you multiple times saying, “Yaar, hawa mein baat mat karo, tangible kaam karo” but now that I have you in the room, and if you had to look at the secondary education or the problem, one of the things that you highlighted is role clarity.

[00:40:14]Rathish Balakrishnan:Ki Centre ko kya karna hai, State ko kya karna ha, Private sectors ko kya karna hai aur teachers aur headmasters ko kya karna hai…

[00:40:19]Rathish Balakrishnan: How would you sort of break that down for young adults in India today? And if you just take ninth and twelfth standard, I mean not even go to college at the moment, what are some priorities that you think as a country we should focus?

[00:40:31]Anil Swarup: So first of all, going to the student himself, he, you know, a student opts for a particular, you know, subject or particular stream based on the feedback that you would have received or on the pressures from parents or society. That’s the first step of downstream of the child, understand him and take him to heights.

[00:40:52]Anil Swarup: It may not work in every child, but 80-90% it will work, solves the problem. If it catches the wrong stream, then there’s struggle in the future. So that’s the first step. Second, broadly within a year or two years, you will understand that how many children are going in that stream. Right now, it’s all guesswork.

[00:41:10]Anil Swarup: In fact, we create an infrastructure, we create a stream and push the child in. It’s not demand based. Some experts sit and decide, that’s not correct. You start with the child, determine what is required for him, then develop your infrastructure, human resources on the basis of that. Again, it’s long term, it won’t happen in one year or two years.

[00:41:29]Anil Swarup: Because in two, three years, you’ll get to know where the children are going. Then you will plan your infrastructure, human resource. Another two years, we’ll get that human resource. If people have time, they should do this. And then how do you train that human resource to enable the child to, you know, fulfill his dreams, whatever they are. So it has to be very structured.

[00:41:49]Anil Swarup: And in doing all that, We have to identify all the stakeholders therein and then start defining the rules. And to me, role definition is important because we waste a lot of time doing something which could be done by others. So, if a private sector can do a job better than me, so be it. Why can’t I get private sector on board, do it for me?

[00:42:09]Anil Swarup: You know, in government, I did not have the expertise or wherewithal in a large number of areas. So, what do I do? Claim that I’m an expert and do something or I ask the expert in the private sector. I used to ask private, please do this work for me. They used to do it very happily. They were happy, I was happy.

[00:42:26]Anil Swarup: Obviously, my intentions were clear. There was, they couldn’t browbeat me or they couldn’t mislead me in the sense that with all the experience I knew that this is a vested interest. So that you have to keep in your mind. Apart from that, they are there to help you. After all, it’s their problem. So take all the stakeholders along with you.

[00:42:45]Anil Swarup: And that’s not very easy. You know, sometimes if I have a belief that I am only the wise man around, Then obviously I will not take even help. But if you believe that I can become wiser by talking to other people and get their wisdom on board, then it works. It works brilliantly. I tell you from personal experience, you take everyone on board, as I keep saying at the cost of repetition, ultimately decision is mine.

[00:43:10]Anil Swarup: No one can push me into taking a decision. So why shouldn’t I listen to you? Why shouldn’t I get private sector on board? If there are any financials, give you another example. Now, NGO does a good job in a particular area, right? Now, I used to tell NGOs that you don’t expect money from them, because to give you money, they have to go through a process which will kill you and kill your bank.

00:43:31]Anil Swarup: So don’t do that. You create a model, go to the government and define that these areas shall be directly funded by the government, not to the NGO, for example, teachers training. So the literature printing and everything would be done by the government and literature provided. So money doesn’t go to the NGO.

[00:43:46]Anil Swarup: NGO provides the expertise to train the teacher. They work together. The model is computed beautifully. Similarly, you can find roles of NGOs, roles of private sector in each set of activity. Again, as I said, it requires a very detailed indulgence in every area. I distantly remember we used to come up with these solutions with Kaivalya Foundation.

[00:44:05]Anil Swarup: We used to have sittings in the room through the day. What would the NGO do? What would the government, what is expected of the state government? And then by discussing the state government representative sitting there. So he has to endorse that or he opposes it. We discuss it. Once the model is accepted by everyone, it happens on the ground.


[00:44:23]Rathish Balakrishnan: So I want to reflect on two things as we were talking, which is what I’m taking away. One is, I think what you’re not saying, which I think is so critical is the self assurance of this facilitative leader. I know what I want. I know I cannot be coerced. I have clarity and I have confidence and I’m going to approach you from trust.

[00:44:38]Anil Swarup: No, let us, let us say that even if I don’t have this confidence in myself, I think still that is the way forward. 

[00:44:45]Rathish Balakrishnan: But Sir, hota nahi hai na sir?

[00:44:46]Anil Swarup:Isliye nahi hota.. Because see, conversation has to start from a certain level. If as Secretary of Government of India, I don’t converse, the Joint Secretary will not converse.

[00:44:55]Anil Swarup: So, unlike elsewhere in the world, there’s a top man who makes a difference. If he opens up to conversation, others will also start. That way, bureaucracy is fairly flexible. It looks at what are the signals. I mean, if you’re busy talking to only two, three industrialists, and they determine everything in the country, how dare you talk to anybody else?

[00:45:18]Anil Swarup: So it’s a question of what is the signal coming from the top? And that’s what Mr. Kalyan Singh used to say. Mr. Kalyan Singh, I worked with him when he was chief minister. He said, “Chief Minister toh ghudsawar hota hai… ghode ko jaha jaaye, wahan le jaata hai” you know, a lot depends on the signals in it. I had a great time in the first two years as the Secretary, Government of India, where the signals were such, open conversation.

[00:45:42]Anil Swarup: And that’s why I used to go to the state government, despite the so-called war between the Center and state. And by the way, coal existed in all opposition states. Despite this war going on, center-state, conversations helped. I got them to give land, environment clearances, all that. So it’s a question of, again, conversation.

[00:46:00]Anil Swarup: But obviously, if I am not confident about myself, if I don’t trust people around me, then obviously they go on with it. 

[00:46:07]Rathish Balakrishnan: Then I think we’re going back to something you’ve mentioned before saying attitude. 

[00:46:11]Anil Swarup: Ultimately, ultimately, people talk about expertise in the bureaucracy. I said nonsense. You can outsource expertise. You can’t outsource intent. That has to be developed. 

[00:46:23]Rathish Balakrishnan: And I think the second principle I’m taking as you were talking, because I think you started with counseling, because building the agency of the child to make the right choice, especially at that age is the foundation, then enabling every stakeholder to enable the child.

[00:46:37]Rathish Balakrishnan: Yes. But the child should provide that, the confidence and the clarity and the direction to say“Mujhe yeh karna hai” because then the child doubles up to actually do this better rather than saying “Yaar, marwa diya…kahan phans gaye hai hum?” Because then you’re always making wrong choices. So starting with counseling, which is the information gap, then the skilling to address a skill gap, and then helping the child move forward, I think is very, very critical.

[00:46:58]Rathish Balakrishnan: So that’s helpful. But I want to come back to private partnership again once to ask you another question, which is there are two schools of thought today, in the philanthropy space. One school of thought is that the role of private sector is to innovate and the role of government is to scale.

[00:47:13]Rathish Balakrishnan:“Yeh aap choti scale pe dikha do aur government ko de do, government scale karega”. The second is that there is a symbiotic relationship between private sector and government. Perpetually, private sector will be good at doing a few things and government will be good at doing a few things. Here it is a handover approach. Ki, model karo, scale karne ke liye government ko do. First model it, and then go to the government to scale it up, and you focus on innovation. Here it is a symbiotic perpetual partnership. Which of these two will probably be?

[00:47:37]Anil Swarup: No, no. Both are okay. There is no contradiction. 

[00:47:40]Rathish Balakrishnan: Is it an and? 

[00:47:40]Rathish Balakrishnan: Absolutely. 

[00:47:41]Anil Swarup: It’s not either/or, because in some cases, the incubation will be done by the private sector, and then scaling by the governments. Another case, that partnership has to continue, in the sense that there would be certain role for the private sector, continued role for the private sector, and continued role of the government.

[00:47:58]Anil Swarup: Akshaya Patra is a continued role, so the private sector does something there, continues to do that. Governments does something, continue to do that, right? But there are other models where the private sector has come up with a model that work and handed over to the states. I used to talk of three steps.

[00:48:14]Anil Swarup: One was a private sector incubating, innovating, and coming up with a model and then doing it all entire expenditure being incurred by the private sector. Then they talk to the state government and since state government cannot part with money, they say, okay, in this model, we will continue to do this and you do the rest of it.

[00:48:36]Anil Swarup: Then the third stage would be that NGO or the private sector moves out totally, but continues to be a consultant to the government so as to sustain that idea. Now that partnership continues, but the role changes initially doing everything, then the part thing, then only consultancies, because then, I mean, it happened during my time also, I used to tell them, don’t walk away, be there and continue to guide.

[00:49:01]Anil Swarup: Then your expenditure of the NGO is only one or two people associated with the government, course correction, guiding them, rest of it, they build institutions and they sustain. 


[00:49:12]Rathish Balakrishnan: In your experience, sir, are there certain things, especially in education, where you feel private sector is better place to do than public sector?

[00:49:21]Rathish Balakrishnan: Like how do you make a choice? 

[00:49:22]Anil Swarup: It’s a question of, again, as I keep saying, role definition. Something that the government can’t do, shouldn’t do, is doing. So you identify that. But it’s not complete. There’s certain aspects of that government. Let’s, let’s look at school education. Okay. Thank you. Now in school education, government runs these schools, but there are problems with that.

[00:49:44]Anil Swarup: Now, they can’t get every child there. So how do you enable the private sector schools also flourish along with the government schools? Now I have written a chapter in my book. We haven’t yet experimented in India, but how about giving an entitlement to a child, allow him to go to a private school or a government school.

[00:50:02]Anil Swarup: So you’re creating a competition between public and private. He pays that coupon to government school, something which we did in health. That no one believed in it, but we created that entitlement with the beneficiary who decided to go to a government hospital, to a private hospital. In some states, government hospital improved the performance because they were getting money.

[00:50:21]Anil Swarup: Doctors were getting money, so they get incentivized and they include performance.

I think there is an author called Tooley. He has suggested this. How about a coupon to the child? So if he’s spending say, 8000 rupees per annum on a child, instead of governments giving it to the government school without teachers or with few teachers; enabling a private school to come to creating a potential for private school to come up. So it’s not either or for every action, you have to again have a detailed discussion and then define the role. If you go to every state, then probably I’ll be able to tell you this possibly could be the role of the government. This could possibly be the role of the private sector.

[00:50:58]Rathish Balakrishnan: What you’re saying reminds me of an anecdote that stuck with me. I don’t know if you know the story, so Jesuits used to be only in one part of America and at some point they decided they’ll go all over the world. And apparently one of the priests asked the head of the Jesuits saying, we have a book now. This tells us what to do when we go all over the world. What do we do? And apparently the head said, descend to the particulars, which means that don’t follow the book, wherever you go, descend to the particulars of the context and make the choice. And there’s a principle that is, descent to the particulars. And as you’re talking to me, I’m like, you know, don’t make broad rules. 

[00:51:30]Anil Swarup: Especially in a country like ours, you know, this one nation, one thing business doesn’t work in India. It will be a disaster. There are certain common principles for the country, that’s fine. But the variety is so much. I’ll give you another example.

[00:51:44]Anil Swarup: If a teacher doesn’t go to school in Kerala, probably he’ll be beaten up. In UP, they think it’s a right – 25 % teachers at some point in time were not going to the school. Now they would be going, but there’s a World Bank report, 25%. So, it’s so different. How can you, sitting there, in Delhi, define everything? I used to keep telling my colleagues there, and some of them agreed with me. “Arey sir har cheez kyon handhold kar rahe hain? Aap broad principles kar lijiye, let the state take a call”.

[00:52:10]Rathish Balakrishnan: I want to finish the last part of the discussion with one topic, which is state capacity, which is government, even if it lets go of 55 things and gets by with it, it still does a lot of things in India. And I think there are two crucial challenges specifically with regard to education, which generally applies.

[00:52:25]Rathish Balakrishnan: One is the issue of procurements, which is, I, I’ve now worked with the government at center and state, but my realization is every problem in the government seems like a procurement problem. Because it is so hard because it doesn’t operate from a place of trust. It does not operate from the maximizing quality principle.

[00:52:40]Anil Swarup: This is probably the toughest part because, you know, going by what happened in 2012-2013-2014, with all those scams coming up, no civil servant will risk it. And I don’t blame them because I’ve seen aa school secretary, what trouble they go through without any fault of theirs, right? So they would go like to be straight, but you know, the best way to go in some cases, they managed to do it.

[00:53:05]Anil Swarup: To set those technical qualification parameters. See, so that the bidding happens only after they achieve a particular level of technical competence. That is the way you can avoid a lot of problems because once you define those, and again in defining those technical parameters, engage with the stake. Let the stakeholders themselves define, and then you take a final call, which is the best definition.

[00:53:29]Anil Swarup: Once that gets done, you can mitigate or reduce the problem substantially. You may still not get the best. But still, it won’t be anyone, anybody walking in and getting the right. So, it can be done. There are no perfect solutions. I mean, throughout my career, I used to tell everyone. There’s no perfect.

[00:53:47]Anil Swarup: There’s a Japanese concept, wabi sabi. Don’t go in for perfection. There are no perfect solutions. Go for an improved solution. And to me, this is an improved solution. You must work on technical parameters, technical qualifications. 

[00:53:58]Rathish Balakrishnan: By the way, my WhatsApp status is wabi sabi, sir. Yes, it is. The principle that I live by.

[00:54:06]Rathish Balakrishnan: The second thing that I wanted to ask you, and I think things have shifted significantly from 2014 to now, in my opinion, is that there is increased government and non profit partnership in many parts of India, which is actually thriving and helping. But I think it is leading to a place where today there are three NGOs sitting in the same classroom and telling a teacher what to do.

[00:54:24]Rathish Balakrishnan: And since it is free, the district collector is like“Jo bhi kuch karna hai, kar lo” the accountability framework to ensure both accountable finally for state outcomes to work is starting to get very diffused. 

[00:54:38]Anil Swarup: So I, when I was Secretary GOT, I started this, I wish I could complete it. On a geographical map, I used to define which NGO works where. So that to avoid overlapping, and again, as I keep saying role definition. I’m not going to determine if he goes there. I’ll say first mover, you are there. I won’t let anybody else come in there in that domain. So if it is teacher’s training, you do it. They will do something else, supplementary, complimentary, but not exactly what you’re doing.

[00:55:09]Anil Swarup: We could map teachers. But we haven’t as yet to my knowledge map the NGOs. The moment you map it, you’ll be able to bring in some semblance of, of order in the kiosk of NGOs, same NGOs going to a same location and doing multiple things. Duplication that can be avoided today in this day of technology is very easy.

[00:55:33]Anil Swarup: It is. You’ve been actually map it on another. ‘In this block, in this village, this NGO is working for this purpose, which are the other NGOs’, sit down with them, redefine their geographical location, get them to do either complementary work in the same place or do the same work in some other place. 

[00:55:49]Rathish Balakrishnan: Yeah, because now the supply is increased of NGOs and competent NGOs, the accountability framework, I think.

[00:55:54]Anil Swarup: Then will come accountable. Now, if everyone is there, how do you hold accountable? Exactly. You can’t determine the outcomes also because 10 people are impinging. So, you have separate people in going, different people to different places. Then you can actually determine what are the outcomes. 

[00:56:08]Rathish Balakrishnan: Exactly. And that then helps the government hold the nonprofit accountable and the nonprofit hold the government accountable ki “Hum bhi kaam kar rahe hain”.

[00:56:13]Anil Swarup: But this is an easier thing. No one has thought about it. I started it. I didn’t know what has happened. This can be done very easy. Easily. You have to get a form fit and amp it on it. Someone takes a call on that. 

[00:56:25]Rathish Balakrishnan: And I think it’s about time for a good idea and an easy idea. This is a low hanging fruit as well.


[00:56:30]Rathish Balakrishnan:  Sir, I don’t know where time passed, but I want to summarize what we’ve discussed so far very briefly. I think first is, anyone who’s working in the education space should recognize what is not working in the education space. So I think your introduction about some of the mafias that we spoke about is very very necessary because these are institutional ossified structures that even a civil servant has lost his job on and I think that’s important to know not to be dissuaded by it, but to be aware of that.

[00:56:55]Rathish Balakrishnan: Second is I think magic happens everywhere in India. I think we are a large country, which means there are so many people of potential. I love the story. You know, about how some teacher takes initiative to say, this is what we have to do. And really that problem is not unlocking potential. It is the transferring of good ideas across a large country like ours. And I think that was helpful. 

[00:57:13]Rathish Balakrishnan: I think thirdly, we spoke about the various ways in which state has to look at education. For me, I think the principle that stayed with me is, put the child at the center. Ask ourselves whether we are providing the child agency, the teacher of the agency. And I think to do it another principle that you highlighted.

[00:57:26]Rathish Balakrishnan: Bring the people who matter in the room when the decisions are being taken, not when it’s getting rolled out, because they will tell you where the shoe is pinching to capture your words. And the other point that you mentioned, sir, is that small, with smaller policies, longer work plans, I think is important because the policies can be long and ambitious. But as long as it’s not clear who’s going to do it and what has to be done. 

[00:57:46]Rathish Balakrishnan: Yeah, all of this is paperwork and we can all be happy about it. I think it was also great to hear your acknowledgement that this is a problem that needs attention. What India needs for its young people should be thought through.

[00:57:56]Rathish Balakrishnan: And I think for me, it was great because I had you in the room to talk about state capacity issues where I think once you fix it, the unlock of value, be it procurement or accountability frameworks makes it a lot more easier for us to solve problems. So it’s been a pleasure talking to you. Thank you so much.

[00:58:10]Anil Swarup: Thank you. Thank you. 

[00:58:11]Rathish Balakrishnan: Thank you for joining for this episode of Decoding Impact. I am your host, Rathish Balakrishnan. If you loved our conversation with Mr. Anil Swarup today, do check out more of our education content on the SKI Knowledge website. You can also check out episodes from season one and season two of Decoding Impact on Spotify, YouTube, or wherever you get your podcasts from. Do join me again in a fortnight for another episode of Decoding Impact.

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