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Inclusion With Dignity

Rana Kapoor, Managing Director & CEO, YES Bank

I dream that India will continue on the path of economic progress where headline GDP growth is supported by inclusive development and respect for ecological sustainability.

India has achieved significant stature whether it is for world-class IT companies or cost-efficient telecommunications. Indian entrepreneurs have demonstrated that they are capable of evolving new and innovative business models to work within these challenges.

These cost-effective solutions are well placed to become the foundations of a knowledge-based economy that can be exported as a novel business paradigm to answer some of the pressing issues globally. India has been battling with effective ways to address poverty alleviation for a significant part of its existence as a modern developing economy.

However, there are new threats, which complicate these efforts. With a majority of its population living off the land in agriculture or allied activities, climate change can have a disproportionately adverse impact on those living at the bottom of the pyramid. Here again, business models have emerged to tackle the issues of climate change.

Alternate energy solutions like solar lanterns that replace kerosene lamps save rural households from a monthly recurring expenditure, avoid the health costs associated with indoor pollution and reduce greenhouse emissions. As stakeholders in the mainstream commercial economy, it is our responsibility to see that business models while being profitable also account for positive externalities in terms of people and the planet and are supported to achieve scale and maximise impact.

I dream that the informal economies of rural and urban India will undergo a process of formalisation, inclusion and improved dignity through financial and skills development so that they contribute to the country’s growth.

The informal sector is India’s largest employer and a significant driver of our economy. Should we be able to fully integrate and mainstream the entrepreneurial spirit and creativity that exists in the informal economy, I believe that India will emerge as a global R&D powerhouse of innovative business practices, solutions and consumer products for a wide socio-economic spectrum.

As participants in the organised formal financial system, we can facilitate the intermediation of capital, resources and risk to support path-breaking business models. Basic economic principles suggest that the most critical stage in a company’s lifecycle is in the early genesis, where they can fail miserably or grow exponentially.

Therefore, what is needed are new advisory practices supported by patient capital that can advance socially responsible, sustainable and for-profit enterprises by understanding the particular motivations and incentives that drive entrepreneurs in this space. At the same time, larger corporate houses have begun to see the merits of focusing on the bottom of the pyramid. However, they too have realised that to address this market as consumers or to source from them, what is needed is a completely new hypothesis and not just a tweaking of the existing models.

To translate the possibilities into achievements will require a collaborative approach across scientific disciplines, financial ingenuity and supportive government policies

I dream that in the next two decades, India will have an inclusive energy policy that leverages renewable sources like solar, wind, tidal, wave, hydro and nuclear energy to meet the objectives of energy and development for all. To translate the possibilities into achievements will require a collaborative approach across scientific disciplines, financial ingenuity and supportive government policies. Dispersing scientific progress amongst a wide group of stakeholders while reducing costs and enhancing yields adheres to the principle of comparative advantage.

As intermediaries, the financial sector has a unique vantage point from where it can reallocate resources and support those technologies or models that have the ability to facilitate a structural shift in India’s economic growth trajectory. The financial sector is used to discounting the future, pricing risk and rewarding utility, and I believe it will bring the requisite skills to the sunrise sectors, focusing on inclusive and environmentally sustainable growth.

For instance, by partnering and supporting microfinance institutions with industry-best practices, the banking sector can advance the micro-credit movement. This, in turn, will facilitate income generation amongst low income stakeholders.

The simplest solutions actually lie in imbibing a common set of principles, for example switching off PCs and lights at the end of the day is a practice that can be immediately imbibed into any organisation and this has the potential to dramatically reduce corporate utility bills.

We must follow our dreams and move forward with decisive action. It will take concerted and conscious efforts by leaders in the corporate, political, academic and civil society spheres to convert these dreams into realities.

Working in partnership and utilising each other’s core competencies are critical for the successful implementation of these dreams, where conflicts are diplomatically ironed out and commonalities propel the march towards a common cause – the sustainable development of India.

Rana Kapoor

Rana Kapoor is CEO & Managing Director, YES BANK
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