Social Impact Measurement India: A brief history and insight
During our conference a key topic was discussing impact analysis in different countries and contexts. Here Pratik Dattani provides a comprehensive introduction to social impact measurement in India.
In 2009, McKinsey & Co identified over 150 tools for measurement of social impact in 2009. The Foundation Center lists 106 different tools on their website. When I’ve run training or advised clients in the UK, I’ve tended to focus on five or so methods, ranging from the qualitative (“narrative-based”) to the quantitative (“numbers-based”) to make sense for the particular context. The breadth and diversity of impact measurement has come a long way from what is believed to be the world’s first social impact analysis – the Marquis de Condorcet’s canal study in 1775-76 in the Somme valley, north of Paris (Prendergast 1989).
In India, there are more social issues than Britain. For example, 53% of India’s employment is in agriculture, whereas only 19% of its GDP is. 41% of the population lives below the poverty line of $1.25 per day. The adult literacy rate is 63%. Infant mortality is 50 in 1,000 births. This makes not only the accurate measurement of social impact more important, but also more difficult.
Traditionally in India,”social” has been carried out as part of “environmental” impact assessment. But the World Bank, Asian Development Bank, United Nations Development Programme and most other agencies require the social impact also to be measured. The Interorganisational Committee on Principles and Guidelines for Social Impact Assessment (IOCPGSIA 2003) provided some structure, saying that social impacts should consider – at least in principle – culture, community, political, environmental, wellbeing, property rights, fears and aspirational factors.
The National Resettlement and Rehabilitation (R&R) policy, issued in 2007, marked a step-change in social impact considerations in public policy. It recognised the need to carry out assessments as part of all future projects that may displace people. In particular, industrial, mining, irrigation or other large infrastructure projects often stumble at approval stage in India because of the displacement they impose on poor local communities.
The social impact guidance for the R&R policy was released in August 2010, and lays out what should be measured, why, and provides guidance as to how. In particular, it says losses to individuals and to communities should be measured separately. This has often been used by the Ministry for Rural Development in the last few years to delay, or reform, large infrastructure project proposals.
Today, there are plenty of consultancies and internanational organisations that help measure social impact in India including Dasra, Dalberg and Ashoka Foundation, as well as impact investors such as Acumen Fund, who invest based not only on financial, but also social, returns. Meenakshi Nath, the deupty head of a development finance institution in India told the Economic Times “[o]ur objective is not only maximising profit, but also development.”
Our own social impact analyses in India and more widely have been extremely varied, focussed on healthcare innovation at the bottom of the pyramid, incubating social entrepreneurship at business schools, education investments, impact bonds and faith-based organisations.
I’m hoping the current draft of the Companies Bill 2011, scheduled for introduction in the current Winter Session of Parliament will clear many of the cobwebs in the Companies Act 1956. Amongst these may be new norms around company spend on Corporate Social Responsibility. This may well bring social impact considerations for corporates to become part of business as usual, rather than exist as disparate, often not well understand, and even less well implemented measurements.
But according to a recent study by Ernst & Young, there is a definite lack of transparency in impact reporting. Data, it says, is limited and a set of social impact metrics and models appropriate for the Indian context have not yet evolved. Here’s hoping this changes soon.
Pratik Dattani is Managing Director of EPG Economic and Strategy Consulting and also runs a large not-for-profit organisation with strong links to India. He is an economist whose work focusses on helping organisations and investors understand social impact. You can find out more at http://www.economicpolicygroup.com/. You can get in touch with him or the rest of the team via firstname.lastname@example.org.