Recently, during a post-Budget discussion with Finance Minister Nirmala Sitharaman, Wipro founder Azim Premji proposed that the private sector be allowed to supplement the efforts of the central government in the Covid-19 vaccination drive. In his words, “If the government were to engage the private industry quickly, we can be sure of achieving coverage of 500 million people within 60 days. That’s a practicality. I think it is very important the government considers this as a major supplementation to the effort.” Similar views have been expressed by other major industrial honchos like Anand Mahindra, Chairman of Mahindra Group, T.V. Narendran, MD of Tata Steel, and Uday Kotak, MD and CEO of Kotak Mahindra Bank.
Typically, it would not be surprising if loudmouths from India’s quintessential Left-liberal brigade (or anarchists) suddenly jump the gun and claim that major corporate houses are trying to make profit from the vaccine drive. In fact, that’s how they are programmed to perceive any innovative idea. However, when something is said by Azim Premji, the valuation of whose donation to Azim Premji Foundation stands at $21 billion, including 67 per cent stake in the IT arm of Wipro, then it has to be deliberated with a lot of intent.
In the first place, Premji’s contribution in the fight against Covid-19 has a revered legacy. In May 2020, as the Covid-19 crisis was peaking, Azim Premji Foundation had collaborated with the National Centre for Biological Sciences and the Institute for Stem Cell Science and Regenerative Medicine for capacity building of the testing infrastructure.
Why Premji’s Suggestion is Valid, Laudable
In fact, the moot point that has been propagated by some of the top minds in the Indian industry is that while the efforts of the Government of India, both in terms of managing the pandemic crisis as well as the vaccination drive, are extremely laudable, there is a pertinent need to involve the private sector for expanding the vaccination drive to address the entire mass of vulnerable population, which, if were to be done by the government alone, may take time a lot of time, and given the propensity that the Covid-19 virus has shown to mutate and emerge in newer avatars as more contagious, the possibility of resurgence of exposure-led susceptibility of the masses at large, in spite of general resilience, remains profound. From an economic perspective, revival of the economy, which is already on the track of recovery after the pandemic-led setbacks, depends a lot on the productive contribution of key stakeholders, including the factory foot-soldiers, service professionals, as well as consumers, all of whom need to be protected, soon enough, from the virus.
The concern that industry is showing for India’s Covid-19 recovery is worth appreciating and is not rooted in ulterior motives. During the peak of the pandemic, Indian industry made genuine efforts in increasing the domestic production of key products necessary to confront a pandemic as contagious as the one triggered by the coronavirus. A case in point is the Indian industry’s effort to make India, earlier a net importer, the second-largest producer of PPE kits in the world. Similar has been India’s journey in the realm of manufacturing hand sanitizers, face masks, Covid testing kits and of course vaccines. Also, the pricing architecture that has been proposed Premji is extremely feasible and would be affordable for most.
Fear-Mongering About Private Sector’s Intent Must Stop
In fact, a typical narrative that has been pushed since the times of the socialist era is that the private industry cannot think beyond self-serving profit-making. Nothing can be further from the truth. In fact, how much harm such a destructive anti-industry mindset can do is evident in Bengal, where the closure of 58,000 factories and the migration of industry, during 34 years of Communist rule, led to severe job crises resulting in a massive ‘Internal Brain Drain’ with a sizeable chunk of educated job seekers exiting Bengal to settle elsewhere in the country.
On the contrary, the contribution of Indian private sector, since 1991, in converting a moribund Indian economy on the verge of a balance of payment crisis-led bankruptcy to one of the major economies of the world can never be undermined. The contribution has been not just in the realm of making India self-sufficient in a multitude of goods and services, but also in launching and nurturing new-age sectors. Success of India’s IT services, pharma sector and automobile sectors are cases in point.
ALSO READ| Private Sector Can Play a Role in Biggest-ever Vaccination Drive, but with Regulations in Place
A recent case that deserves a mention is the National Hydrogen Energy Mission, which was announced in the Budget by Finance Minister Nirmala Sitharaman. The National Hydrogen Energy Mission is aimed at harnessing hydrogen as a viable alternative energy source for mobility. Given the volatility and vulnerability associated with India’s fossil fuel dependence on external sources, as well as headaches associated with dependence on lithium import for lithium-ion based batteries for electric vehicles, developing a viable alternative through hydrogen as a green source of energy is a prudent and futuristic step.
However, given the enormity of the research needed in developing a viable and cost-effective method of extracting hydrogen, either through electrolysis of water or by splitting natural gas or through absorption of methane from air, followed by developing a vehicle engine that can use hydrogen as fuel, building a nationwide fuelling station infrastructure, and finally making it reach a scale where it can become financially viable, a giant futuristic initiative will find it extremely difficult to fructify unless India’s industrial giants join hands on a mission-mode basis to fulfil the government’s vision. One, therefore, should not be surprised if in the times to come a consortium is created with industry majors and the government working together with it. There are, no doubt, uncertainties involved. However, India has no option but to take it forward and it goes without saying that it would bank on the Indian industry to take the lead in making India truly atmanirbhar in energy self-sufficiency.
Industry’s Role in India’s EV Revolution
Interestingly, the manner in which the Indian automobile industry has been working towards making the electric vehicle sector a viable alternative and the eventual first choice of customers in the times to come, moving towards reducing India’s demand for fossil fuel in the coming decades, reflects how the nation can bank on the Indian industry path-breaking structural transformations. It is not an easy journey though, given the investments needed to gradually metamorphose India’s humongous automobile industry based on combustion engine to a battery driven one. However, India’s automobile majors have not thought of their own profit alone but acted as responsible stakeholders taking measures that would help both the nation and the environment in times to come.
Is Making Normal Profit a Sin?
In fact, an often-used cliché by India’s socialist gang is that profit making is akin to a sin, ignoring the basic fact that normal profit is a reflection of efficient utilisation of resources and helps in recuperation of capital for future investments. India’s anti-industry socialist lobby could drag India to the verge of bankruptcy during 40 years of socialist rule, have no problem when for decades India’s large number of PSUs, both at the central as well as the state level, made losses to the tune of thousands of crores every year, yet they have a problem with India’s corporate entities, even when many of them have been relentlessly putting money out for social development from the profits made by their companies.
Self-Proclaimed Socialists vs India’s Industrialists
The case of Azim Premji pledging billions of dollars for charitable work and creating the iconic Azim Premji University is not a case in isolation. There are numerous instances where India’s industry majors have committed enormous sums for sustainable development work. For the $106-billion Tata Group, 66 per cent share of the holding company, namely Tata Sons, is held by trusts which spend most of the earning in developmental work in the spheres of healthcare, nutrition, education, livelihood, digital transformation, environment, skill development, running institutions and offering grants to eligible students. One does not need to go beyond the Indian Institute of Science (IISc) to comprehend the contribution of the Tata Group in furthering the cause of scientific research in India.
Be it the Tata Centre for Technology and Design at IIT Bombay, or the Tata Institute for Genetics and Society, or the Indian Institute of Science, each of them works in the realm of futuristic path-breaking research endeavours. In fact, the Tata Institute of Fundamental Research, one of India’s most respected institution operating under the aegis of the Department of Atomic Energy, would not have been a reality without the active support and passion of JRD Tata.
Over the last half a decade, the cumulative amount spent by corporate entities through Corporate Social Responsibility (CSR) is well above Rs 50,000 crore. Apart from Wipro or the Tata Group companies, relentless efforts towards development pursuits by the likes of Reliance Foundation, Infosys Foundation, or the foundations under Mahindra & Mahindra Group, ITC, Vedanta, Hindalco and L&T, to name a few, deserve special mention. Sadly, more often than not, the enormity of work being done in rural India and on sustainable development by the corporate entities does not get the requisite accolades. One has to remember that CSR contribution of corporate India is over and above the contribution to GDP, job creation, and tax payments.
ITC’s E-Choupal: Empowering Small Farmers
Incidentally, for nearly two decades now, ITC has been working with small and marginal farmers through its renowned e-choupal initiative. Touted as “the largest internet-based intervention in rural India”, as per ITC, “e-Choupal has grown into an ecosystem of services that addresses diverse rural needs, from agri-extension and other farm-related offerings to retail avenues to insurance and healthcare”. The collaborative initiative under ITC has created a viable and effective agri-ecosystem that has touched the lives of nearly 4 million farmers, bypassing intermediaries to procure their produce and giving them access to real-time information on prices, weather conditions and agricultural best practices. Had farm sector reforms been implemented by India when ITC was conceiving the idea of e-choupal, nearly two decades back, Indian agriculture would have been a transformed sector today and India’s rural landscape would have been a cradle of limitless economic opportunities.
Corporate India’s Sachet & Microfinance Revolution
In the same league, credit goes to India’s entrepreneurs in revolutionising consumerism and empowering rural consumers by bringing in the concept of sachet. While FMCG company CavinKare deserves the credit in pioneering the idea, it has been applied by most FMCG companies that redefined affordable consumerism in the rural landscape of India. Likewise, for a long time, when a significant chunk of India’s populace working in the informal sector had no access to credit from the formal banking system, and had little option but to fall into the clutches of unscrupulous rural moneylenders who used to charge back-breaking interest rates, it was the microfinance revolution brought in by a cluster microfinance institutions such as Bandhan, ESAF, Ujjivan, Equitas, Suryoday, Fusion, Svatantra, Annapurna, Arohan, Asirvad and Muthoot Microfinance, to name a few, that transformed rural entrepreneurship and gave a major respite to rural India from the clutches of debt trap. Many of the top microfinance companies have been permitted to become small finance banks but the core target audience for most of them remains more or less the same. One must also mention how the telecom revolution by India’s private sector enabled the country to have more than a billion mobile connections, thereby empowering even a modest Indian with digital connectivity.
Inspiring a Generation towards Entrepreneurship
Likewise, in the realm of inspiring entrepreneurship and handholding many of them to create the next generation of Indian business success stories, the contribution of India’s industrial leaders simply cannot be ignored. One can already witness a major trend over the last decade or so, wherein the aspirations of the educated youth are no more restricted to mere seeking a job but to strive harder for creating something of their own, following in the footsteps of successful entrepreneurs.
ALSO READ| Towards Privatisation: This is a ‘Maruti Moment’ for the Modi Administration, Writes RC Bhargava
Much of this newfound spirit among the youth of India, many of whom no longer aspire to just run away to greener pastures of the US, but to create something enterprising right in India, can be attributed to India’s iconic industrialists starting from JRD Tata, J.N. Tata, Dhirubhai Ambani, Kumar Mangalam Birla, Ratan Tata, Mukesh Ambani, Anand Mahindra, and the first-generation IT czars, be it N. R. Narayana Murthy, Azim Premji, Nandan Nilekeni or Mohandas Pai. However, it does not stop there. Over the last few years, India’s top corporate entities have played a key role in funding several start-ups and nurturing them through their germinating stage.
Take for example Reliance Industries, which has earmarked Rs 5,000 crore for investment in start-ups. From making strategic investments to acquisition in key entities, Reliance JioGenNext and Reliance Strategic Business Ventures have played the key role of mentor investors in many start-ups who now feel bolstered with the presence of a strong shareholder. From investing in edtech start-up Embibe, fashion portal Fynd, logistics start-up Grab, AI firm Haptik, voice suite maker Reverie, digital music company Saavn, OCR software maker Tesseract, online drug retail company Netmeds, robotics company Asteria Aerospace, Saas-based solution provider NewFloats Technologies, telecom solution provider Radisys, and Urban Ladder to name a few, Reliance actually signifies how industry majors can play a pivotal role in rewarding promising start-ups, which can inspire a million more to take the entrepreneurial route.
In the same league, Infosys created the Infosys Innovation Fund in 2015 with a corpus of around Rs 3,000 crore to invest in start-ups. In 2016, it was reported that Infosys would be investing in around 10 start-ups every year. Among several critical investments that it has made in start-ups in India and elsewhere, a notable one is the investment in drone manufacturing company ideaForge, which recently got Rs 140 crore contract for its Switch VTOL drones.
While most major corporate houses have now kept aside funds for investing in start-ups, a notable example of how Indian enterprises are helping a nascent industry grow is the electric vehicle (EV) segment. Much on the lines of the IT revolution in India, a large number of start-ups are making their presence felt in the EV arena and the interesting facet of this is the kind of institutional funding they are getting from established enterprises. Take, for example, Ather Energy which is set to become an aggressive player in the electric bike and scooter segment. After having invested Rs 205 crore in 2016, Hero Motocorp further invested Rs 84 crore in 2020 to take its collective investment in Ather Energy to Rs 289 crore, thereby taking its share in the company to 34.58 per cent. In 2019, there were reports of Ratan Tata investing in electric motorcycle maker Tork Motors. One can also put investment by M&M in the car rental company Zoomcar in a similar league. In fact, Mahindra & Mahindra’s acquisition of Reva in 2010 was the tipping point of India’s tryst with transforming electric vehicle sector.
Private Sector & India’s Next-Generation Quantum Leap
Therefore, from a larger perspective, the role of corporate India in complementing the state in solving issues of the nation deserves more appreciation. If a private vaccine-maker like Serum Institute of India (SII) can become India’s pride and world’s envy by making India the global hub of vaccine production, there is certainly no reason why the same private sector cannot be allowed to give the vaccine shots to people at large. It is highly likely and evident that Azim Premji’s suggestion would eventually see the light of the day given the fact that Modi government has always been extremely candid in acknowledging the role of private sector in nation building.
Over the next decade, as India strives on a mission mode to become a hub of global manufacturing and epicentre of research on cutting-edge technologies, India’s private sector would have to play a stellar role as a partner of the Government of India in creating numerous incubation and research centres and in inspiring the coming generations to take the plunge into the world of innovation. For this, Indian corporate houses not only need to support a large array of start-ups but also set up numerous research institutes at par with the IISc or Indian Institutes of Science Education and Research (IISER). Nation building is a collective enterprise.
The present and the coming generations need to decide whether they want to take the path shown by iconic entrepreneurs who revolutionised India’s industrial landscape or take the path of anarchists and create mayhem, arson and riots. Last but not the least, for India to take the quantum leap of faith into the next league of growth, the culture of Left academia and self-proclaimed liberals to pit industry against the people of the country must be stopped. Those who are unscrupulous must be punished but painting the entire private sector as negative is terribly counterproductive. India can simply not afford to dishonour the bright minds that build nation-building enterprises.
Read all the Latest News, Breaking News and Coronavirus News here
Comments
0 comment