Somnath Dasgupta
Tobacco and cigarettes major ITC, having sort of re-invented the conglomerate under one roof, is now focused on the concept of the triple bottomline, which takes into account its corporate social responsibility of properly deploying its environmental and social capital.
By next year, it will be one of the first Indian companies to qualify for carbon trading, an esoteric concept that is yet to percolate into the corporate sector. With public sector companies becoming cost-conscious or being sold off, their traditional side business of social work (planting trees and helping villagers around plant sites lead better lives) has been turned into a profitable venture by ITC across vast swathes of rural India. ITC gains by way of getting better raw materials for its businesses while protecting the environment. The villagers gain by eliminating middlemen. In fact, ITC's watershed management programmes are being implemented at a fraction of the costs incurred by the government since there is no 'seepage' of investment into the hands of corrupt middlemen and contractors.
So what is ITC exactly? Its mainline business of selling tobacco and making cigarettes is now getting overshadowed by a diverse range of different or new ventures that have one thing in common: they are conceived and run by the best management talent available, and they are designed to be the best of class.
Just check out ITC's presence: From High Street stores (Wills Lifestyle) to one-stop malls for farmers (want some diesel? Or may be a spade?); from pastry shops at luxury hotels (the flour in the pastry to the chlorine-free card-board box) to the hotels themselves; from muddy fields (e-choupals serving farmers) to kirana stores and food marts (Ashirvaad atta); from the tiniest cigarette shop to yuppie dining tables (ready to eat meals).
As India opens up more sectors of its economy, one company that does not have much to worry is ITC. No other company had the foresight years ago to send B-school grads armed with laptops to the heart of India. Their mission: to set up computer kiosks linked with one another via satellite, train a villager to be a sahayak and help others check out crop prices, the micro weather, learn best farming practices or even get inputs, all in a middleman-free environment, all in their local language. As farmers propose, ITC is already waiting for them with choupal sagars, where they can sell their produce to ITC, get soil tests and even blood tests done, pick up farming tips, put money in the bank, buy insurance or even browse at their own superstore.
Urban dwellers have reason to get depressed. Take a typical middle-class family of four in any Indian metro. Can the lady of the house browse the Net for the best bargains in town? Or get her blood tested at a mall? Can the man of the family check out the local job scene efficiently (his skills being his product)? Or, at the weekend, can the family check out the best entertainment options? Some can, at some places. But the urban dweller has no aggregator of such information or services, or no sahayak. Now compare ITC's big bet on rural India with what even the most communist or socialist state governments have done over the decades. No contests there.
The current financial year has been significant for ITC in many ways. Internally, it merged the hotel subsidiaries with itself. Externally, it won a critical case against the excise authorities right in the Supreme Court.
But the bottomline is that ITC has the dream and the management to implement it. In chairman Y C Deveshwar words: "Companies need to create their own balance sheets related to these three dimensions, namely the triple bottomline, alongside the traditional balance sheet that is presented annually to shareholders. It is the spirit of sustainable development that has inspired ITC to adopt this concept in all aspects of the company's functioning."