Friday, July 22, 2011

Rise of Dalit Enterprise: Balu

Even a Rs 2 crore business, built over 15 years in cosmopolitan Bangalore , won't shake off the ghosts for Balu. Sometime during the meeting, the 39-year-old owner of a business that makes soldering equipment asks ET not to publish the name of his company or his photograph. He fears losing clients from uppercaste backgrounds. "They will stop placing orders with me if they learn of my background," says Balu. Caste hierarchy in South India, while not spoken about openly, is a factor in most spheres of life.

Dalits have endured socio-economic exclusion for centuries. However, industry people say Balu's outlook is based more on longstanding caste beliefs that have created a fear psychosis, one that has largely been eradicated in urban India. "The only barriers are largely based on competence and delivery, not on socio-economic factors," says S Chandrasekar, chairman , Confederation of Indian Industry-Karnataka State Council.


Balu says his views are shaped by India's deeply divided social hierarchy and his own struggles. Balu hails from a lower middle-class background. "My family was against the idea of me starting a business. They wanted me to do a job that ensured a regular income," he says. "But I was determined." Nothing came easy. A meagre capital of Rs 18,000 in 1995 meant Balu could not buy wire-drawing machines. He improvised. He bought the raw materials, processed it on someone else's machine, and sold the finished product.

Two years later, he assembled his first machine, using parts of a Herald car, which he bought from the grey market. "I stripped the car of its gearbox and differential, and assembled the machine, but I did not have my own place to install it," he says. "Someone was letting out a 10 x 10 space. After six months, I assembled another machine."

When he decided to set up his own unit, old bugbears- money and discrimination - raised their heads again. He needed Rs 5 lakh, for which he had to visit the bank repeatedly. "It (the loan) was rejected at first, possibly because I was a dalit," he says. "I received Rs 2 lakh through a family connection, which I repaid in 2001." In 2004, a State Bank of India initiative for entrepreneurs yielded Balu a loan of .`20 lakh, with which he started production in full earnest. This, too, was repaid in three years. "The turning point was my first bank loan, which was largely on the strength of my balanc esheet and output," he says."Now, I have some institutional backing."


Even when he decided to get married, he went through a cycle of rejection before acceptance. "32 girls rejected me," he says. "That I had a business, instead of a job, went against me. Fortunately, my father-in-law, who is a commercial tax officer, saw beyond that. He believed in what I was trying to set up." Balu is now diversifying into manufacturing organic pesticides and agrochemicals.

The paperwork for his new company is done, and the factory is expected to come up in Ramnagar, on the outskirts of Bangalore, within a year. Balu favours continuing with reservations for dalits. "Our economic conditions have not improved much, especially in rural areas, where we are still largely landless labourers," he says. "Just because a few Dalits have ventured into business, and have done well, it cannot be a reason to cut down on reservations."

He, however, realises the importance of affirmative action, not just from the government, but also from successful businessmen like him to ensure greater community empowerment. "They (future dalit entrepreneurs) are hiding their identity largely because of the dalit tag attached to them. That mentality has to change," he says. "My aim is to create more dalit entrepreneurs."

Source: Economic Times

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