Mehmood Khan, Unilever’s global innovation head, goes back to his native village with a plan to turn it around.

Nai Nangla in Haryana’s Mewat district could be just another Indian village, ridden with the usual problems of a people trapped in poverty: Lack of healthcare and clean water, low productivity, high unemployment and illiteracy. But Haji Siddiq Ahmed, a local farmer in his late 60s, sees a different vision. “I want this village to be an adarsh (model) village. Others should look up to this village — that this is what an ideal village should be like,” he says.
The image Ahmed sees is actually taking shape in this quiet village with a majority Muslim population. What’s more surprising is the way the change is taking hold. It may be difficult to imagine the humble folk of Nai Nangla as business executives, but the cool concepts reviving the economy of the village are no less professional.

Take dairy farming, which engages nearly 80 percent of the villagers. Earlier, all they could get was Rs. 12 for a litre of milk; today they can get as much as Rs. 25. Three years ago, female literacy was at 2 percent; today, almost 85 percent of the female population can sign their names and 86 percent of the children in the district are enrolled in schools. Some women are also learning to sew and are setting up their own tailoring units. Companies like insurance provider Aviva, ICICI Bank and Larsen & Toubro are beginning to look at Mewat both as a market and as a field for recruitment. They have hired locals, offering dramatically higher incomes.

The man behind these changes is a Nai Nangla native, someone who left the village nearly 40 years ago in search of an education and a career. His name is Mehmood Khan. Now 54, he is Unilever’s innovation head.

Now, thanks to him an experiment in introducing market economy is taking shape at Nai Nangla and the district of Mewat. An impossible feat for an outsider, but something the people of Nai Nangla have welcomed from one of their own. “Focus on education and use enterprise to bring change by leveraging resources in villages,” he says.

Khan has worked and lived in many countries over the years, making London his home for the last nine. But his link to his roots always remained alive; he would visit his village two or three times a year. He still remembers trudging a couple of kilometres to school everyday and taking cattle out to graze.
“I somehow landed a seat in university and then got into IIM-Ahmedabad. I was ejected by the system,” he says.
For the last five years, Khan has been hard at work to change “the system”.

He is converting a local resource, livestock, into a productive enterprise. He roped in the National Dairy Development Board’s Mother Dairy to spur Nai Nangla’s milk output and break the stranglehold that milk vendors had on local dairy farmers. At one time, these vendors — middlemen really — would lend money to farmers to buy milch animals.
In return, they would demand milk supply at low fixed prices until the loans were repaid. For most farmers, their income was too low to enable them to repay the debt. The result: They remained trapped in debt.
Khan was troubled by this age-old exploitation. He spoke to Mother Dairy and ushered in a new system to break this debt trap. Debt-laden farmers were given loans from institutions so they could repay the vendor and start selling direct to Mother Dairy. “Almost 25 people got loans to buy cattle, without having to pay any bribes,” says Ahmed.

Others who could repay on their own, did so and started selling to Mother Dairy for a better price. This competition forced the milk vendors to match market prices. Overall, incomes improved.
In July 2008, Mother Dairy set up milk collection centres in Nai Nangla and six other villages. In the first week, it got 70 litres of milk. Today, Nai Nangla alone gets 250 litres a day. “Gross income from agriculture has gone up from Rs. 80 lakh to Rs. 1.2 crore,” says Khan. “Milk (has become) a constant income source in a village which has seasonal income due to Kharif and Rabi crops.”

source: http://www.forbesindia.com / Forbes India / Home> Features – Beyond Business / by Neelima Mahajan-Bansal / June 05th, 2009