gujarat banner
Homebusiness News

Amidst unprecedented externalities, India Inc buckles up and how

Amidst unprecedented externalities, India Inc buckles up and how

Amidst unprecedented externalities, India Inc buckles up and how
Profile image

By CNBC-TV18 May 21, 2020 3:47:44 PM IST (Published)

People, Planet and Profit – all three components central to a company’s existence have been affected by the current COVID-19 pandemic.

People, Planet and Profit – all three components central to a company’s existence have been affected by the current COVID-19 pandemic. While the planet is actually experiencing a temporary respite, people and profits have been adversely hit. COVID-19 has exacerbated already existing tensions in the world economy, triggering, stock market volatility, crude oil slump, plummeting demand, closure of local, and international borders - making India Inc. grip their seats and worry about the resulting impact on their businesses. Internal factors such as reverse migration, weak healthcare system have got them worried about business continuity altogether.

Recommended Articles

View All

Whether to safeguard their workers or help strengthen the country’s COVID-19 response, companies across India are stepping up to strategically utilize their resources to address the here-and-now but also shoring up for future in ways that are beneficial to both business and society.
Action across the Responsible Corporate Citizenship Continuum (RCCC)
Simply put, the RCCC is a framework that helps to navigate the interconnectedness of business, society, and environment. It allows for companies to transition from an entity separate from other stakeholders, towards a role that is integrated with the rest of society. As part of this continuum, companies can adopt three broad approaches to tackling some of the most wicked problems in India.
1. Pure-play philanthropic or Corporate Social Responsibility (CSR) approach.
2. Collaborative approach with stakeholders from across the ecosystem.
3. Shared value approach that seeks to benefit both business and society.
India Inc has used all three lenses to respond to the pandemic.
1. Philanthropic Approach
Engaging in Corporate Social Responsibility activities has been mandated by the ministry of corporate affairs (‘MCA’) since 2014 and the recent notification by MCA dated March 23, 2020 brought expenditure on COVID-19 relief measures under the ambit of CSR expenditure. Since then we have witnessed a lot of traction in terms of companies deploying their CSR resources to provide aid and support to different groups that have been most affected by the current COVID-19 situation. Companies are either implementing programs individually or partaking in collective efforts. An example of the latter is of companies mobilizing their individual resources to collectively support workers across India through the India Workers’ Alliance. Set up by Samhita Social Ventures, the Alliance aims to implement evidence based and expert recommended solutions to provide immediate aid to workers and micro-entrepreneurs and to help build the resilience of workers and their families to subsist through the economic downturn. To provide immediate financial aid, companies have pooled their resources and made Direct Benefit Transfers (DBTs) to a cohort of workers. DBTs is an evidence based solution that has also been propagated by Nobel laureates Esther Duflo and Abhijit Banerjee.
2. Collaborative Approach
India Inc realises that protecting its most important asset, human capital, is critical in these difficult times. A readily accessible and healthy workforce is key for the economy to get back on its legs. Additionally, many companies see this as being integral to their responsibility as employers. However, at a time where companies are stressed with checking the revenue loss, they are crunched for resources that can be deployed towards protecting workers at the bottom-of-the-pyramid. Crunched atmosphere calls for collective action and we have observed several companies head on this path and become stewards of industry-led alliances.
Two examples, prototypes of two types of industry-led alliances, can be shared:
Intra-industry alliance - one of the largest real estate private equity funds in India is looking to lead an industry-wide alliance to extend support to construction workers, who form the backbone of the entire real-estate sector. The alliance seeks to bring together the entire supply-chain in the industry - from infrastructure financing companies to developers to EPC companies and contractors to pool their resources and rally together to support construction workers and their families survive through this pandemic and build their resilience for the long term. Being a collective, the alliance can catalyze impact and generate a higher social return on investment. For example, an investment of INR 500 from the alliance can help unlock benefits worth up to INR 5,00,000 through the Building and Other Construction Workers (BOCW) scheme. These benefits range from education support, mid-day meals, housing, and transit accommodation to maternity benefits and critical illness cover. The crisis has inspired an unprecedented close connect between highest echelons of corporate hierarchy (CEOs) and the bottom-most (construction workers). This can lend the alliance some real teeth and ensure complete buy-in within the company.
Inter – industry alliance – in another unique show of solidarity and concern, a large garment company, concerned about the eventuality of retrenching some of its factory workers due to slumped demand, is looking to spearhead a local industry alliance with companies in industries such as pharma, healthcare and/or logistics that may see an uptick in business and need more skilled manpower. Such an alliance can help structure the transition of workers from one industry to another without the workers or companies being adversely affected and thereby mutually benefit all involved. Pooled resources in this alliance can be utilised to –
  • Map the common skill set across industries and assess the potential of re-skilling.
  • Curate programs that can arm the transitioning workers with the requisite skills and knowledge.
  • Provide financial products such as zero or low interest loans to support workers
  • 3. Shared Value Approach
    Exemplifying the adage, necessity is the mother of invention, the crisis has offered companies an opportunity to converge on the needs of business and society by exploring innovative models. These companies are experimenting with new products / services or curated variants of existing products / services that can meet the demands of government, industries, and society and address gaps wherever required.
    A prominent example is that of a health and fitness company. Otherwise a provider of holistic physical and mental well-being solutions, the company is now providing rural primary care providers (PCPs) with an opportunity to access specialist consultations for their patients. As the coronavirus is novel in nature, rural PCPs may not possess the required capabilities to consult patients that arrive at their doorstep with symptoms. To add to the woe, the ratio of allopathy doctors to population in India stands at a staggering 1:1596 . E-consultations with specialists thereby seeks to address a skill gap in the Indian medical healthcare system and enables rural population to access quality healthcare. The consultations are available on-demand for a subsidized charge, part of which are absorbed by company through its philanthropic endeavor and part can be recovered from the patients themselves. As the company continues to wade through the current pandemic situation, this new business model not only helps them do their bit for the society but also opens up possible revenue streams in future.
    These models illustrate the virtuous cycle of mutual benefit that can be created between business and society, especially in times of such crisis when the chasms between the haves and have-nots are wide. However, this requires a symbiotic relationship, marked by honest intent on both sides, coupled with empathetic understanding of problems and creative solutions. Hopefully, these prototypes of co-operation will continue to grow and scale beyond the immediate crisis to enable planet-people-profits to thrive together.
    Dr Nachiket Mor is visiting scientist at The Banyan Academy of Leadership in Mental Health and Priya Naik is founder and CEO of Samhita Social Ventures.
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!