Economics for People and Earth - Part 2

In December 2013, Auroville Today reported on the work done by Manuel and Henk Thomas researching the Auroville economy. Over a period of 15 years, the chartered accountant from Chennai and the professor from The Netherlands had been studying how the economy had developed in the first 40 years of Auroville’s existence. It resulted in an impressive scientific monograph, Economics for People and Earth – the Auroville Case 1968-2008, launched in October 2013. [see AVToday # 293, December 2013]

Harini Sampathkumar of the Auroville Social Research Centre has now updated the work for the years 2008-2014, collecting data of all commercial units and services, the Central Fund (nowadays called City Services), and all grants and donations. She gave a presentation of her findings on June 27th.

The work, said Harini in her introduction, had taken 18 months, many more than anticipated as the financial data over the years 2008-2010 were not available in electronic format. The accounts had to be traced all over Auroville, and then manually entered. “All praise for chartered accountant Mr. Prabakaran, who saw my misery and graciously offered his staff to do the work”, she said.

Asked if there were any surprises, she replied that “the surprising thing was that there has been very little change. Even the closure of Filaure and Auromode, two of Auroville’s main garment units, has only changed a few percentage points. In terms of revenues, the fall of these two units was cushioned by the rise of others. The handicrafts and the garments sectors went down by 4%, but the food and shops sectors went up by 8% which compensated for the downward movement. In terms of contributions to Auroville, the entry of Varuna has created some substantial increases in the last 2 years, ranging from 9% to 13% of the total commercial units’ contributions. Its donations for the payment of electricity bills have clearly made a significant difference.”

The figures show that the number of commercial units increased by 30% from 158 to 206 between 2008-2014. Their total revenue grew by 87% and their contributions to Auroville by 81%. The number of service units increased by 65%, their revenue by 51%. They include grants and donations, which increased by 89%. Auroville’s total revenue during this period went up by 73%. “But these are all actual, not inflation-corrected figures. My guesstimate is that, after inflation-correction, the figures will show a slow growth, like everything else in Auroville. It is a mirror of what we see around us,” says Harini.

“I’m not convinced that inflation-corrected figures necessarily give a true picture”, says Guy, who has been assisting Harini with her data compilations. “An alternative could be to compare growth percentages. These 7 years’ data show an average growth percentage. How does this percentage compare to the growth percentages of the previous 7 years, and the 7 years before? And then one should add the increase of Auroville’s adult population to get a more complete picture.”

What these consolidated figures do not show is the actual health of Auroville’s individual commercial units and services. A commercial unit may show a loss due to depreciation of its assets, while it has a positive cash and bank surplus, or show a profit while it carries the burden of considerable unsecured loans. Likewise, a service unit may not function optimally with too few or too many people. “I’m concerned that such essential information does not show in these data”, says Harini. “The commercial units have mushroomed, but how many of them are small, barely surviving and not contributing to Auroville or only providing a maintenance for the unit executive(s)? How many service units have a record of poor performance? Neither the Funds and Assets Management Committee nor the Budget Coordination Committee have an insight into the functioning of the individual units. They would have to set up a permanent group to evaluate and help units in difficulty.”

Harini’s 7-year updates have meanwhile been sent to the two Thomases for inflation correction and interpretation, and for integration in their monograph.