CIL's sanitation push: India Inc's loo-natic rush for toilets is win-win for all

Narendra Modi’s passion for toilet-building, mentioned before but given a new impetus in his Independence Day speech, has opened the flood gates to focused corporate spending in the area.

In quick succession, many profitable companies and corporate trusts, from Tata Consultancy Services to Bharti Foundation, Hindustan Unilever, Aditya Birla Group, ITC and Adani Group, among others, have announced plans to focus their corporate social responsibility (CSR) spending in toilet building, especially for girls. Most of them have pledged substantial sums (Rs 100 crore or thereabouts) and are talking about building thousands of toilets - not the odd one or two in one village or two.

In part, this flood of offers is the result of the new Companies Act legislated last year, which mandates 2 percent CSR spending for all profitable companies. Clearly, some companies with the money were not sure where they should spend it, and others may have been fishing around for the right opportunities.

Modi’s call on toilets has allowed them to align their need to find outlets for CSR spends with a politically-defined national objective.

According to estimates made by the Indian Institute of Corporate Affairs, an outfit set up by the Union Ministry of Corporate Affairs, over Rs 20,000 crore of CSR funds could be available for social spending annually. While some of this may already be committed to projects like education and health, uncommitted funds could flow towards the toilets programme.

Firstbiz’s own calculations using Capitaline data indicate that 409 companies in the BSE 500, based on average net profits over the last three years, could have around Rs 8,500 crore to invest in CSR annually. Expanding the list to all listed companies does not expand the kitty much.

But whether the amounts available are Rs 8,500 crore or Rs 20,000 crore annually, what matters is the consistency with which the money is invested and how the projects are executed.

Clearly, the coming together of corporate focus and political will make the programme more realistic and result-oriented. While some crooked companies may show investments without actually making them, the blue blooded honchos of India Inc are more likely to get the programme right than governments. A government-funded toilet building programme is most likely to be hijacked by contractors who will build toilets and collect their booty - never mind if the toilets are built properly or can be used easily or not.

If the coming flood of corporate money is to yield optimum results, it is best if there is a commonly agreed programme on how this toilet-building programme is to be implemented. It may not make sense for each company to do its own thing, make its own mistakes, and reinvent the wheel. Some dos and don’ts are thus appropriate here.

First, toilets are not just about building them. They are about maintaining them, too. One reason why the Sulabh Shauchalaya scheme for providing public toilets works is because there is corporate thinking behind it. Many of the toilets are self-funding and ensure a fair amount of hygiene and cleanliness. Clearly, the experience with the Sulabh Shauchalaya needs to be brought into this national toilet building scheme for schools.

Second, it would be good to have a common design for toilets - but modified for local problems. It hardly makes sense to build toilets without water and proper drainage, which means toilets built in places where water is in short supply need different designs and solutions - and regular maintenance. It may also make sense to include toilet-building in the NREGA scheme - work on building and maintaining toilets can be part of job creation under the scheme. Since the initial toilets are focused on girls, it should also be combined with free/subsidised supplies of feminine hygiene products.

Third, a centralised knowledge and monitoring centre can be created nationally and state-wise. Companies, NGOs and researchers should be able to periodically report on how the scheme is progressing and share knowledge and issues with all companies investing in this area.

Fourth, toilet building and the elimination of open defecation has a huge impact on the health of women and children. This means money invested in an effective toilet building programme will save costs on the health front. Many of India’s malnutrition problems relate not to lack of food, but lack of sanitation, which leads to diseases linked to poor hygiene.

Fifth, given the positive response to Modi’s call, the government should, in fact, seek to bring in more private spending into other key social impact areas by creating appropriate tax incentives for charitable trusts and corporate giving. Currently, the rich and the benevolent spend where their personal priorities lie. It is possible for them, and their companies, to act collectively to work on focused programmes that have a national reach and high impact by concentrating resources. Tackling big issues together is better than spreading resources thinly over several sub-optimal projects.

The Michael and Susan Dell Foundation says that companies should stop thinking of CSR as spending and more as long-term investment. A blog on the foundation’s site tells us that spending tends to be short-term in nature while investing seeks to “drive outcomes whose performance can be measured.”

India Inc needs to take note. It is not enough to spend on toilets and say we’ve done our job. They should see CSR spending as investment in the long-term and stay invested till they see the right outcomes emerging from the investment. Smart companies like Hindustan Unilever are building toilets with product branding in mind. According to The Economic Times, the company is building toilets powered by its Domex toilet cleaners.Sometimes, CSR even makes long-term business sense. Way to go.

Ultimately, India Inc will find that investing in society is a win-win for all.