Jhabua youth learn to create bamboo-based products. / Photo: Shivganga Jhabua

Two Indian-origin academics based in the UK have found how for-profit businesses can play a central role in efforts to alleviate poverty.

Sreevas Sahasranamam, professor, Adam Smith Business School, University of Glasgow and Vivek Soundararajan, professor, School of Management, University of Bath, in their recent study analyzed how organizations have been engaging with poverty over the last 40 years to determine how market-based economies can become fairer for all.

Their findings have been published last week by the World Economic Forum.  Examples from India from among the many cases  cited, point at some innovative outreaches by private businesses and some NGOs which have transformed themselves into small enterprises.

Landmark Dindigul Agreement -- with a global connect

According to the researchers, it is  important to provide less powerful people – whether they are workers or customers – with regulatory support using local or international frameworks or agreements. They point at the  Dindigul agreement signed in 2022 in the southern state of Tamil Nadu, India. 

As per the agreement worker-led unions, textile mills and multinational organizations agree to work to end gender-based harassment in factories.

In April 2022, Indian women- and Dalit-worker led union Tamil Nadu Textile and Common Labour Union signed an agreement with clothing and textile manufacturer Eastman Exports. 
 

Photo: Beggars Corporation / The Beggars Corporation provides new job opportunities in Varanasi.

TTCU and other unions also signed a legally binding agreement with multinational fashion company H&M, which has an ongoing business relationship with Eastman Exports. 

U.S. companies Gap Inc and  PVH also signed similar agreements later in 2022 illustrating the global ramifications of such agreements: multinational companies legally committed to labour and allies to use their supply chain relationships to support a worker- or union-led programme.

Developing forest products in Jhabua

Jhabua is a district town of Madhya Pradesh, 150 km from Indore.  Shivganga Samagra Gramvikas Parishad (SSGP) is a group of social entrepreneurs who are restoring the ecosystem of sustainable living through holistic village development. Their tribal entrepreneurship efforts are based on forest-based produce and wood crafts.

A full-fledged corporation to serve beggars

“Charity breeds poverty: Don’t donate, invest”, says the Beggars Corporation in Varanasi which trains people who would otherwise be begging on the streets to become entrepreneurs and also provides support for them to sell their products and services. 

These entrepreneurs produce bags made of discarded locally-produced Banarasi silk patches, for example, or offer religious services linked to a local Hindu temple.

Though working for the poorest and the helpless, the Beggars Corporation is probably the only organization in the world that is not an NGO. Incorporated on August 12, 2022, as a for-profit company, it engages in Profit with a purpose and commerce with conscience.  

The corporation says: “We refuse to take funding from governments and venture capital firms. Instead, we connect well-off citizens to invest in the ventures of the beggars under the “One Beggar, One Mentor #OBOM scheme.”

Universal Service Obligation Fund 

The government often nudges private enterprise into socially relevant action.  Universal Service Obligation Fund (USOF) is the pool of funds generated by 5 percent Universal Service Levy that is charged upon all the telecom fund operators in India on their adjusted gross revenue. 

Organizations that receive support from USOF, which provides affordable, quality mobile and digital services in remote areas, can access benefits such as cost recovery, subsidies and market exclusivity through government partnerships.

The authors of the study however caution, “It is important to recognise that, even as organizations are trying to alleviate poverty, they could also be aggravating it by preventing people from participating in markets – for example, when they pay unfair wages, hinder self-employment or perpetuate marginalization.”

 “It is only by fully recognising the role businesses play in both alleviating – but also aggravating – poverty that we can spark the important policy discussions and changes that will encourage a shift in how companies and governments think and act when trying to alleviate poverty,” they concluded.