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Auroville Experience


March 2009

 

Managing the Auroville economy

- In conversation with Carel

 

The challenges are enormous but the outlook is positive.

In November 2008, Auroville's 14-member Budget Coordination Committee (BCC), came into existence. Its main task is to promote strategies to come up with ways of implementing the directions of The Mother concerning the Auroville economy and to stimulate a sustainable economic development. The BCC is responsible for creating an annual Auroville Foundation budget, for monitoring all income and expenditure of the Auroville Unity Fund, and for managing the City Service Budget.

Three of the BCC's members, Divya, Otto and Ulli, talk about the BCC's achievements in its first four months and the challenges of Auroville's economy.

Ulli, Divya, and Otto. Photo by Giorgio
Ulli, Divya, and Otto

The City Services

Ulli: We started with reviewing the budgets of the existing City Services. They had remained unchanged for the past two years. We split into small groups to evaluate and assess the various sub-budgets and review requests for enhancements. Then we analyzed the income and balanced the expenditure against it. We calculated that an average increase by about 12-15% is possible, based on the assumption – which may be a bit doubtful – that our income will rise. This budget was presented to the Funds and Assets Management Committee (FAMC) and was approved by them in February this year.

Otto: The second work was to see to what extent we could tap into our accumulated reserves to finance one-time expenditure of the City Services, so that they can improve their productivity and reduce their costs. We agreed to keep the equivalent of two months running expenditure as a buffer for emergencies (about one crore), and make the rest available for one-time capital expenditures.

Ulli: We are a bit doubtful if our commercial units will be able to contribute the increased amounts, in view of the global recession. Their contributions are calculated on the basis of the profits of the previous financial year, and this may cause problems as some units have not kept reserves.

Divya: But the contribution from profits of the commercial units counts for about one third of our total income. Other sources of income are the contributions from services, projects and guests. These incomes are less affected by the recession. Our overall income has been steadily increasing, despite the global crises and the difficulty for our commercial units.

Ulli: We have also calculated that this year we will only be able to support 50 additional maintenances. Most of these have already been requisitioned by a few services, mainly the education sector.

Divya: We also discussed how we can ensure that each unit operates in the best possible way. We believe it would be useful if there would be a group of professionals who can study and evaluate each service unit on productivity, efficiency, and their contribution to the community. Then we can talk about ‘planned growth' and decide how to help such a unit to improve and what contributions from the community are required to do so. The Farm Group did this three years ago, and that was very helpful.

 

Aurovilian maintenance

Divya: One of the increased budgets is for the maintenance for people working in the Auroville Services. They will get an increase of Rs 1,000. Half of it will be paid into a person's ‘kind' account, half of it will be made available in kind for the lunch and dinner. There will be no additional cash payment. In this way, Auroville will take fully care of a person's maintenance on all levels with a minimum of cash exchange. The in-kind component now includes a free-lunch and a free dinner at the Solar Kitchen or other places, free health and dental care, free education for children, provision of children's maintenance, subsidized electricity and free access to cultural activities. Those working part-time will now also be entitled to either a free lunch or a free dinner. We calculated that the total expenditure per person comes to Rs 9,000 – 10,000 a month.

Ulli: There are issues to be ironed out. In line with Mother's statements on Auroville, we are creating a system with a growing number of ‘in-kind' entitlements for Aurovilians. The biggest problem is how to manage this. Our present computer-based system is reaching its limits and a new system has to be designed to handle all the different entitlements.

Otto: Essentially, the ‘kind' account is there to ensure that a person is maintained by the community. But we have become a bit more flexible than in the past, when the ‘kind' account could only be used to get goods from Pour Tous and pay for meals at the Solar Kitchen. We now allow it, for instance, to be used to pay for expenses such as school fees for children who attend outside schools.

Divya: One of the problems at present is that we have a dual system. There are those who work in the City Services and who are maintained by Auroville through the cash and kind system. And there are the people who are self-supporting or who are working for Auroville's commercial activities. These people are not included in the system. But we believe that the basis for everybody should be the same, that the basic maintenance for every Aurovilian should be covered by Auroville. Those who have personal resources or work in commercial units should also be maintained by Auroville in the same way as those who work for City Services. We are working on that.

 

Joining Auroville

Ulli: A few weeks ago we had a meeting with a group of people about the present entry situation. The members of the present Entry Service threw in the towel some months ago as they felt unable to extend their “welcome mandate” because a growing number of the Newcomers immediately become a financial burden on the community. We agreed to modify the rule that Newcomers should be self-supporting during their one-year Newcomer period. The proposed change in the condition now is that a Newcomer must demonstrate that his economic needs will be taken care of either by him or herself or by an Auroville unit. The condition remains that the Newcomer has to find work that benefits the community.

Otto: The difficulty is that we have been given a certain dimension by Mother to allow people to do the work they really feel like doing. We can't force people to do something in Auroville simply because it corresponds to their education or previous work experience as they may want to do something completely different. We need an active group to guide the Newcomer and show the places where work is available. The Human Resource Team will have to take this up. There is a lot of work to be done here.

 

Challenges: higher education and housing

Divya: While we are confident that we now can take care of all the Aurovilians on the level of subsistence, we are still stuck on two major issues: to pay for the higher education of the Auroville children outside of Auroville, and to provide for housing. An Aurovilian will never be able to make any substantial savings from his or her maintenance to pay for the higher education of his or her children outside Auroville. Education has become very expensive. A high school in India charges between Rs 3 to Rs 5 lakhs a year (US $6,000 – $10,000); colleges and universities charge less, between Rs 50,000 and Rs 100,000 per year (US $1,000 – $2,000). In the USA , depending on the university, it is between US $10,000 – $35,000 a year. There is no way any Aurovilian can make that money in Auroville. The parents either have to go outside Auroville and earn, or the child has to get a study grant – which is not so easy to get – or take a study loan, and then he or she will need to work for many years outside to pay it back.

Ulli: The housing situation is the second major challenge. We do not have a vision, let alone a strategy about how to provide houses to a growing community. We are able to maintain our houses at the present level but we can't finance a healthy growth. The costs of creating housing have rapidly increased, while the matching funds have not. Fifteen years ago it was viable to save and bring the money from the West and build. Today, the costs have gone up so much that a young person will find it almost impossible to come here having saved enough to build a house.

Divya: Our present growth rate is far below that of the population around. When we analyze it, we find that a lot of growth is happening because former employees become Aurovilians or children of Aurovilians turn 18. Today there are about a 120 new housing units being created. The Entry Service says that a 150 people are looking for a place. If you ask the project holders, they will tell you that these people do not have the money to contribute towards a housing unit. Some of these projects may have trouble getting completed due to lack of funds.

Ulli: We have to review the policy of the past where you have to bring in the money you have made and donate it to Auroville for a house. The costs of building a house or apartment are now in the order of 15-28 lakhs (US$ 35,000 – 65,000). We have noted an increasing trend that people who have that kind of money do not all feel comfortable about putting it into Auroville in the present conditions, which is that you make a donation and can't get it back if you leave Auroville. There are many reasons why someone might leave: a problem with the visa; the education of the children; or simply because the Auroville experiment no longer works for that person. Today people come and explore and quite a few leave again because they do not find a way to create a sustainable economic situation for themselves.

Otto: We have often discussed how we could finance housing but we haven't yet found a viable solution. Last year the Government gave a grant to build an apartment complex for temporary residences. That's very promising. But how do you get people to leave such apartments if they don't have a place to go to?

Ulli: We'll have to look into two issues. Can we evolve a policy that allows people who leave Auroville to get the money back they provided for ‘their' house? And how do we raise funds for building more houses?

 

The outlook: positive

Divya: Notwithstanding these great challenges, we have a positive outlook. The balance sheets of the last 10 years show growth. We have many strong areas with growth potential, and we have a very diverse and highly skilled pool of human resources. That is a solid base which holds a lot of promise.

 

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