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Time to do business with dharma in mind
We need to reset our priorities and enhance the nation’s GDP by inclusive power and resource-sharing, not by denial and elimination
It’s a “time’s up” moment of a different kind. On our 69th Republic Day, almost heading into the years of being a benevolent and self-fulfilled elder easing into Vanprastha, we as a nation are progressing with regret and a burdensome conscience of a lost pater familias who couldn’t take everybody along and get all to share the family meal. Two surveys in the past week have raised concerns that we may not even qualify to do so. One said that one per cent of India corners 79 per cent of national income while other observers found India to be lagging behind on the equality index, dropping several notches behind China and our most itchy bugbear, Pakistan.
Meanwhile, at what many experts called “a watershed moment on Wall Street,” BlackRock founder and CEO Larry Fink, the world’s biggest asset manager, laid down some rules of future engagement. Writing to CEOs seeking his angel grants, he said that “society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” In short, he made responsible business practice and socio-economic equity a pre-condition for any company hoping to get the support of BlackRock and its $6 trillion in investments. Fink said loud and clear what the millennial way of doing business should be anywhere in the world. It is not just about generating profits and utilising a part of them as impersonal, conscience-clearing, outsourced and sometimes self-serving CSR but ensuring sustainable generation of profits and redistribution of wealth. Plagued by protests and a slowing global economy, this compassionate business mantra may have stoked the moral fibre and reminded Wall Street institutions that they are investing other people’s money for their good and not for presumptive self-aggrandisement. But Fink’s social activism, given his financial clout and an earned ability to be heard, is beginning to send ripples and force a change in socio-economic discourse. Despite all the criticism about availing the benefits of capitalism and then turning it on its head.
Still, it cannot be denied that the benefits of growth have been posited for the rich and over the last decade the inequality gap has only widened with the poor becoming poorer and the rich even richer. Not only in India but also the world at large. Sensing the portent of this yawning gap, RSS chief Mohan Bhagwat gave a clarion call too while addressing traders at the Bombay Stock Exchange (BSE) on Thursday, advising corporate majors to make dharma an intangible part of their business and treat their enterprises as their family, just as the Japanese do.
India is in a churn itself, having dragged the bulwarks of socialism till it savoured the benefits of a free enterprise in the post-liberalisation years. With the government opening itself up to joint ventures with private enterprise and allowing the latter a generous space for expansion, the rapid acceleration of growth and profits was expected to have a trickle-down effect in terms of better salaries, improved living standards, greater affordability and multiplied job prospects. Unfortunately, beyond the boom years, these areas were the first to get compromised in the aggressive world of survival. In the quest for a lean and cost-effective system and a pressure to shore up bottomlines, any extra legroom was seen as an unnecessary subsidy. This growth plan that focussed on higher graphs and notching up percentages and numbers led to our story being emergent, yes in numerical terms, but simultaneously divergent in terms of diluting the quality of value accrued as societal dharma. It gave us an illusory sense of aspirant mobility and contentment when vast numbers were outside the purview of that dream arc.
Going by the Oxfam survey, 67 crore Indians comprising the population’s poorest half saw their wealth rise by just 1 per cent. Also, it estimated that it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year. Governments may be criticised for dole schemes like the NREGA but these acted as a safety net at a time when crony capitalism aggravated the gap, private majors negotiating their way around on taxes that should have been proportionate or at least considerate instead of blatant waivers. The lopsided tax structure has further imbalanced the development paradigm with the Government sinking deeper with a long list of loss-making companies.
Meanwhile, successful corporates have disproportionately rewarded themselves with fat purses while passing nominal gains to the ranks. The problem with this inverted wealth pyramid is that it does not fuel growth as the creme de la crème can only absorb as much even if they shopped crazy. The economy needs to be propelled with increased demand and without mass incomes going up, the commensurate spends on goods and services won’t go up to sustain the cycle of growth. Or even growth in new sectors. If we look at the prosperity index in successful countries, they all chorus the inevitability of healthy incomes in expanding markets. As major companies embrace ethical business practices and cultivate what is being bandied about as a spiritual quotient in corporate philosophies, the emphasis is on creating a low-cost micro-climate of inputs and sustainability, reducing waste, using resources efficiently, developing cutting-edge products with technology, improving workplace conditions and fostering communities.
At the cusp of changed realities and lessons learnt from the developed world, Indian companies are slowly incorporating this circular model of growth. For example, Cadbury in India tried encouraging boutique cocoa yields among farmers in Kerala in rotation with rubber as an alternative crop and imparted the technological knowhow for culturing superior varietals. Cocoa, which locals had abandoned because of its unpredictability, has now become a desired yield. Meanwhile, CSR expenditure patterns are improving. Even the areas for investment are beginning to address the Indian conundrum: skill development so that our demographic dividend doesn’t become a slag, education, health and micro community development.
The Government, though, needs to make macro shifts in this area, beginning with education. Though six per cent of the GDP is the desired aim, at least four per cent should find its place for shaping the future of children. Public health, which is in shambles in the primary sources of dissemination, needs an increase in allocations to even attempt a bridge over prevalent inequalities and curb vulnerabilities. But this should go hand-in-hand with timely implementation and smart management, something that withers up the fund trellis.
Compassionate business models command a buffet spread of loyalty and sales. Apparently, 92 per cent of millennial consumers are more likely to buy products from ethical companies as they believe that the non-inclusive brands do not stand a chance with the exclusivity of personality, honesty and trust, values that anchor us together as a need-based support between the maker and the receiver of the product. Given its civilisational lessons, Indians have inherited altruism as part of their teaching and value system. The West is now beginning to realise the virtues of sharing as a smart management tool. We just need to reset our priorities and enhance the nation’s GDP by inclusive power and resource-sharing, not by denial and elimination.
(The writer is Associate Editor, The Pioneer)
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