Need For More Public-Private Partnerships For Corporate Contributions To Society

At least 43.8 per cent listed Indian companies reported losses in Q1 of FY 2020-21 which is more than twice the number (20.33 per cent) of companies that reported losses for FY 2019-20. In fact, 19.65 per cent of Indian companies who were profitable in Q4 2019-20 reported losses in Q1 2020-21. As the latter corresponds to the period of the meteoric spread of the coronavirus from 2,280 cases on April 1 to 220,546 cases on June 30 in India, we can estimate that much of the loss was a direct economic consequence of the pandemic.

Covid-19 has evidently rubbed off on the economy and the losses suffered by India Inc. are likely to worsen. These losses also push down companies’ financial liability of contributing to Corporate Social Responsibility (CSR), ironically, at a time when private sector contribution to society is needed the most. The amendment notified in the Companies Act, 2013 requires companies with a net worth of Rs 5 billion or more, or an annual turnover of Rs 10 billion or more, or net profit of Rs 50 million or more, to spend 2 per cent of their average net profits of three years on CSR.

On the other hand, in 2021, the government will need the Indian private sector more than ever to contribute to vaccine distribution and post-Covid economic recovery, the dependence for which on CSR is unrealistic. Instead, we need to lean towards structuring more public-private partnerships for corporate contributions to society.

The year 2021 will be the year of the Covid-19 vaccine. It will be the topic of our greatest relief and utmost anxiety. Which vaccine? How to avail it? Will it work? What are the side effects? Procuring the vaccine would indeed be initially difficult but I don’t anticipate it to be our greatest challenge in the long run either. India has a large vaccine production capacity. The Serum Institute of India is the largest vaccine manufacturer in the world and it is producing the AstraZeneca-Oxford vaccine and will also produce the Novavax vaccine. However, funding the programme will likely to be a challenge and a heavily debated one too. Should the vaccine be free for all beneficiaries or only for some? Will the government pay for vaccines for all? If not then who will?

We can also anticipate two other major challenges in vaccinating India for which, I believe, the public-private partnerships can certainly help.

First, how will we distribute the vaccine to the last mile in India? Our existing systems for distributing medicines to the anganwadis and rural medical centres are fraught with pilferage. Already we see a black market for vaccines preparing to suck out the vaccines from the system to offer it to those with greater buying power. Here, the network of the local kirana stores and freelance entrepreneurs in small towns and villages who are already being mobilised by the government for distributing Covid testing kits and masks could be tapped upon. They are the government of India’s best last mile connect. This network has been leveraged by the government already and so it can be leveraged for vaccine distribution as well, to be then picked up by the government healthcare workers in villages, slums, small towns. Large companies could include their supply chain and distributors within that network for vaccine delivery.

Second, how do we overcome India’s biggest malaise — corruption — in this regard? Communication might be key here. An intensive informational and anti-corruption campaign for vaccine distribution can be planned in order to inform the public about the vaccines as well as remind the public of being ethical during the worst global pandemic in history that has ravaged the lives of millions. In fact, since the past three months, the Indian private sector has already stepped in to assist the government in articulating and dispersing the message around general Covid precautions while marketing their product. This trend can be further strengthened towards an anti-corruption campaign for vaccine distribution.

When public-private partnerships are done well, they lead to more long term, stable, and inclusive solutions. But how do we do so? First, it takes collaboration, trust and strong communication channels between different levels of employees at corporates, public officials, nonprofit managers, and community members to work in partnership mode. In India, the private sector often hesitates to work in partnership with the government, as they often find such projects to be unnecessarily bureaucratic, less flexible, and unfavourably structured. Second, there is a dire need to build state capacity to be able to structure viable public-private partnerships, besides a mindset change amongst public officials to work in “partnership mode” with the private sector in a way that is mutually conducive for both parties and societal needs. Finally, public-private partnerships work best when representatives of all entities speak to each other directly, trust and consult each other, without the middleman ship of the large number of CSR advisory firms that have mushroomed in the country.

(Dr Miniya Chatterji works actively on equality and freedom in India and is the founder and CEO of Sustain Labs Paris. Sustain Labs Paris: a sustainability incubator that transforms large organisations into becoming social entrepreneurs and therefore more sustainable. She is an established adviser and public speaker, advocating the cause of holistic as well as sustainable growth of Indian and global businesses)