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Auroville Adventure

November 2003

Economic research and developments

- by Carel

Though many attempts have been made, some of the ideals outlined by The Mother for Auroville's economy are as distant as ever.

How do you create an economy if all you have is a set of high ideals made by none other than The Mother and no economic base to speak of?

This question has been in the mind of many Aurovilians since Auroville's inception in 1968. How can one manifest a city where:
"the land and buildings will belong to the Supreme Lord"(1),
a city "which will be the ideal place for those who want to know the joy and liberation of no longer having any personal possessions"(2) ,
a city which "will have money relations only with the outside world"(3) ,
a city "which will provide for each individual's subsistence and sphere of action"(4)
and which, on top, "will be a self-supporting township"(5)?

These questions have led not only to intense debates but also to the living research that has characterised Auroville for the last decades. However, many major issues are yet to be resolved.


In the beginning

Most of the early settlers came with lots of enthusiasm and little money. Mother had organised 'Prosperity' for them on the lines of the system in use in the Sri Aurobindo Ashram. Within a limited range, goods, services and some cash were made available according to one's request. The Sri Aurobindo Society collected donations and bought land for the Auroville project and built the first settlements. If one wished to build one's own keet hut or a house, it was sufficient to ask permission from Mother. The principle of 'no private ownership of immoveable assets' was started in this way. It has continued ever since. At present all immoveable assets are owned by the Auroville Foundation which 'holds them in trust for humanity as a whole.'6

After the split between the Sri Aurobindo Society and Auroville, 'sharing to survive' became the dictum of the day. Whatever you had, you put in a common pot; whatever you needed you took out. Food was bought centrally and distributed in baskets by the group in charge of 'Pour Tous', (meaning 'For All') a name Mother had given to the central food distribution system. But acute shortages stimulated individuals to start handicraft units in an attempt to make ends meet. Still, the pot soon became empty, and many of these fledgling units lost their money. It led to a lack of trust in centralised common pots.

By the end of the seventies a new system came into existence called 'the envelopes'. Money was allocated to various 'envelopes' for urgent needs such as food, community maintenance, electricity and water. There was no personal maintenance. Around this time 'Nandini' was born which received donations 'in kind', such as clothing, from the young commercial units, for people to collect on a need basis. But the income remained insufficient to cover the needs. People who had personal funds started to share less.

The upswing

The first upswing came in 1984, when Auroville got the first maintenance grant from the Government of India for the Sri Aurobindo International Institute for Educational Research (SAIIER). But even this boost was insufficient to meet the collective needs. The commercial units were asked to not only maintain the Aurovilians who worked there, but also make general contributions for community maintenance. Aurovilians who worked for projects had to ensure that their needs were met by their project. Only Aurovilians who worked directly for community services would be maintained by the community. In this way Auroville's maintenance system was born, along with the concept that Aurovilians who work for commercial units or projects are maintained by those units and projects.

November 1988 marked a second upswing. A well-attended economy seminar led to the beginning of the Central Fund to be managed by a new group, the Economy Group. Yearly budgets for all community services and other collective responsibilities were drawn up and it was agreed that all Aurovilians and Auroville units would contribute monthly to these budgets. The system prospered. It brought nutrition, clothing, health and dental care plus a wide range of goods and services. But the system also highlighted problems and inequalities.

The central financing of the services led to inefficiency within some of them - the more so as the central financing was insufficient. To rectify this, a process evolved in subsequent years that a number of service units should charge for their services, and that these charges should include development costs so that they could finance their own growth. This allowed unit executives the financial freedom to be creative. This system was a success in services such as Pour Tous, but could not be applied to a 'free' service like education.

The other serious concern was that the level of maintenance that could be provided to those working for community services was lower - often considerably - than what was taken by those running commercial units. To counter this, a movement was started in 1999 called 'The Circle Experiment.' The idea behind the experiment is to create 'extended-family' groupings where people with more resources share with those with less. Circle members pool their maintenances in a common pot, and each member draws from the pot whatever s/he requires. Those with sufficient personal resources contribute additionally. Circle deficits are covered from a buffer provided by one of Auroville's commercial units. But the circles have not been the success hoped for. About 80% of the participants depend on inadequate community maintenance. Though the Circle participants receive more income, it remains insufficient. The experiment failed to convince the larger community to participate. At present only five of the original nine circles survive.

The commercial units

Contrary to the 'outside' world, Auroville's commercial units did not develop as privately owned entities - even though they were all privately financed - but as part of various Auroville trusts in an attempt to manifest Mother's principle that "At Auroville nothing belongs to anyone in particular. All is collective property."7 After the Auroville Foundation Act was passed, the Foundation became the owner of all units and delegated the management to individual Aurovilians. At present, there are more than 100 units that can be termed 'commercial'. While all of them provide a maintenance to the executives and employ local labour, the economic base of the majority of them is weak. Only about 40 commercial units make regular donations to the community.

The slow growth of the commercial sector is a cause of concern. In April 2002, Prof. Henk Thomas from The Netherlands and chartered accountant Manuel Thomas from Chennai, presented the White Paper on the Auroville Economy. Based on the key issues of Auroville's economic development from 1968 till 2002, taking into account inflation and population increase, they concluded that the 'carrying capacity', that is the yearly contribution to Auroville of all commercial units per capita Aurovilian, had gone down by more than 20% in the period 1993-1999. An update of this figure is expected soon, but the indications are that the situation has not improved, which will make it difficult to sustain the maintenance levels for those maintained by Auroville. The Paper warned that, with the changed conditions in the outside economic world, Auroville's current economic structure cannot be sustained. It concluded that Auroville's current situation is loaded with risks and uncertainties which threaten the survival of Auroville even in the short run, and made a number of recommendations to improve the commercial sector. Foremost is the need to recognize businesses as providers of employment and economic value to the community. Auroville has to promote commerce; provide access to capital; limit product liability; allow units to enter into joint ventures with external companies; and stimulate outsiders to participate in Auroville's development through injecting venture capital. The Paper stressed that institutions like the Governing Board of the Auroville Foundation, the Funds and Assets Management Committee (FAMC) and the Auroville Board of Commerce should take up an active role, if the goal of expanding to a township of minimally five thousand people is to be achieved rapidly.

Sadly, hardly any of the White Paper recommendations have been followed up. The Governing Board has not yet acted; the FAMC took almost a year before it found the time to discuss the recommendations; and the Auroville Board of Commerce died a few years ago due to serious internal disagreements and has not been revived since. Neither has any other group come into existence for a strategic planning of business development.
There is another way in which the diminishing 'carrying capacity' affects Auroville's growth. Most of Auroville's new buildings are funded from donations. But as a rule, donors do not fund the subsequent maintenance and repair costs, which have to be borne by the community. However, a falling income will make this impossible.

Individuality versus fraternity

The economic context of Auroville is largely determined by two structural features. The first is that individuality is paramount. Each individual is free to determine his or her own line of action and development. Anyone wishing to create a commercial unit, for example, has little more to do than fill in a form and get permission. The flip side is that from that point onwards the individual stands alone. There is no guidance with respect to issues such as accounting, marketing and pricing policies in order to survive; and no financial support is offered. Neither is there any form of control. Small wonder then that unit executives as a rule are closely identified with 'his or her' unit, even though the legal ownership rests with the Auroville Foundation. One immediate consequence is that efforts to collectively market Auroville's products have barely taken off. Another consequence is that unit executives determine for themselves what maintenance to take - regardless of the levels of maintenance taken by those working in the service sector - and freely determine whether or not to allocate part of their profits to Auroville. The commonly heard justification is that those Aurovilians who have private incomes deal with their money in the same way.

The second structural feature of Auroville's economy is that of fraternity, the underlying basis for the manifestation of Auroville's ideals. In economic terms fraternity translates into solidarity. If a diminishing 'carrying capacity' of the commercial units will make it difficult to sustain even the present inadequate maintenance levels of those who depend on Auroville, other means must be found. For if this economic principle of solidarity is not addressed, only those who have sufficient income will be able to stay in Auroville.

No exchange of money

The ideal which Auroville has not been able to manifest is to provide each individual with the basic needs. Mother stated that the city should take care of the needs of each individual, 'not according to notions of right and equality, but on the basis of the most elementary necessities; then, once that is established, everyone must be free to organize his life, not according to his monetary means, but according to his inner capacities.'8 In other conversations She indicated that there should be no exchange of money in Auroville.

If both statements are read together, it appears that, as a first step, the city should make essential goods available to each Aurovilian in kind. But where will the money come from? The city does not levy taxes. It has no income apart from the voluntary donations from commercial units, from projects, from guests and from the Rs 1200 scheme (a scheme under which each unit contributes Rs 1200/month per Aurovilian working in that unit). This income falls short of the budgetary needs and there is no easy way in which it can be increased to provide for the basic needs of each Aurovilian.

It has been argued that if Auroville would copy the business model of the Sri Aurobindo Ashram, which receives and re-allocates all profits of all its commercial units centrally, a no-exchange of money economy providing for the basic needs of each Aurovilian could easily be established. As Auroville is the ultimate owner of all the units, this option is technically feasible. But it does not seem to be a realistic option as it repudiates the principle of the freedom of the individual. If imposed, it may even lead to a dampening of business initiative and motivation.

Is the only option then that Auroville continues to balance its income and expenditure, asking commercial units to increasingly donate more and service units to spend less? This is an unenviable task. It has been the job of the Economy Group ever since its inception 15 years ago. But in March this year the members of the Economy Group decided to call it a day. They felt unmotivated to continue the present system, without a promise that at some time there would be sufficient income to maintain all Aurovilians in accordance with Mother's vision.

Perhaps a joint effort of individuals and unit executives is the only way out. A proposal to that effect, introducing a partial no-exchange of money economy and promising a substantial improvement of the maintenance of those depending on Auroville, is presently circulating in the community. The proposal can only materialise if wealthy Aurovilians and unit executives cooperate to find the necessary income without feeling that they are "being taxed under another name". The principle of fraternity and the ideals of Auroville demand that such a step be made soon.



1. Early 1965. When published on 8 October 1969, Mother changed 2 answers.
2. 18 September 1969, Collected Works of The Mother Vol. 13 p. 208. The text found in Mother's Agenda is slightly different: Auroville is the ideal place for those who want to know the joy and liberation of not having any more personal possession. Mother's Agenda Vol. 10 p. 336.
3. Mother's Answer in 1965: As long as human habits will be such. In 1969, Mother changed this answer into the wording used above. See footnote 1.
4. Bulletin, August 1954, Collected Works of The Mother vol. 12 p. 93-94
5. 30-12-1967, Mother's Agenda vol. 8 p 429.
6. Auroville Housing Policy section 1a..
7. 14 May 1970, Collected Works of The Mother vol. 13, p. 213.
8. 30 December 1967, Mothers' Agenda vol. 8 pp 425 - 428 and 429.

Cartoon: economy 2
Cartoon credit: Emanuele


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