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Parmal is a small but underdeveloped district. It has rocky terrain that is not suitable for agriculture, though some subsistence agriculture is being done on small plots of land. The area receives adequate rainfall and has an irrigation canal flowing through it. Amria, its administrative centre, is a medium sized town. It houses a large district hospital, an Industrial Training Institute and some privately owned skill training centres. It has all the facilities of a district headquarters. A trunk railway line passes approximately 50 kilometres from Amria. Its poor connectivity is a major reason for the absence of any major industry therein. The state government offers a 10 years tax holiday as an incentive to new industry. In 2010 Anil, an industrialist, decided to take benefits to set up Amria Plastic Works (APW) in Noora village, about 20 km from Amria. While the factory was being built, Anil hired the required key labour and got them trained at the skill training centres at Amria. This act of his made the key personnel very loyal to APW. APW started production in 2011 with the labour drawn fully from Noora village. The villagers were very happy to get employment near their homes and were motivated by the key personnel to meet the production targets with high quality. APW started making large profits, a sizable portion of which was used to improve the quality of life in Noora. By 2016, Noora could boast of a greener village and a renovated village temple. Anil liaised with the local MLA to increase the frequency of the bus services to Amria. The government also opened a primary health care centre and primary school at Noora in buildings constructed by APW. APW used its CSR funds to set up women’s self-help groups, subsidize primary education to the village children and procure an ambulance for use by its employees and the needy. In 2019, there was a minor fire in APW. It was quickly extinguished as fire safety protocols were in place in the factory. Investigations revealed that the factory had been using electricity in excess of its authorized capacity. This was soon rectified. The next year, due to a nationwide lockdown, the requirement of production fell for four months. Anil decided that all employees would be paid regularly. He employed them to plant trees and improve the village habitat. APW had developed a reputation of high-quality production and a motivated workforce. Critically analyse the story of APW and state the ethical issues involved. Do you consider APW as a role model for development of backward areas? Give reasons. (UPSC IAS Mains 2020 General Studies Paper – 4)
Critical analysis of the story of APW
- Business activities, especially like setting up a small-scale manufacturing industry are done with the sole purpose of profit maximization and involve capital risk. Also, we know that proper and right choice of location is instrumental in future success of the industry. In our case, the condition of Parmal district, the Amria administrative centre within the district and the small Noora village is no more hidden after reading the given story. Despite such existing circumstances, the initiative to set up industry in such remote areas and ensure livelihood of villagers, that to with least government support, is a commendable and appreciable job. As far as excess use than granted capacity of electricity is concerned an enquiry can be initiated and prima facie a warning can be issued to administrative staff of the industry. Liaising with the local MLA to increase the frequency of the bus services to Amria can be considered a good initiative as it is the duty of the MLA to work in public interest and liaising is a part of long standing bureaucratic and corporate culture.
Ethical issues involved
- Selflessness vs. Business Ethics: Selflessness is being more concerned about the needs and wishes of others than with one’s own. Business ethics talks about profit maximization and rapid growth instead. In the given case, Anil despite being a businessman, was less concerned about business ethics and instead showed selfless character in decision making.
- Accountability vs. Transparency: The case of accountability is worsened by the perceived lack of transparency in the system. Anil’s industry should have maintained transparency in utilisation of allocated resources as running businesses brings accountability towards stakeholders.
- Spirit of Service and Sacrifice vs. Professionalism: Spirit of Service and Sacrifice is the major quality required in public officials, while professionalism is the major quality required in a businessman or industrialist for boosting business growth. In the given case, Anil despite being a businessman showcased the quality of spirit of service and sacrifice & remained less professional in approach.
My take on APW’s initiative
- Yes, I consider APW as a role model for development of backward areas. Firstly, we all know profit maximization is the sole purpose of any kind of business by private individuals. But the same cannot be found true in case of Amria Plastic Works (APW) and its owner Anil. Despite low expectation of return, he decided to set up industry in the backward Noora village, tried to ensure livelihood for village people and give hope to villagers for prosperity reaching their doorsteps in near future. His works can be more related to multi-dimensional philanthropic agenda rather than pure business motive. Secondly, even during lockdown, when his profit from industry went to zero, in fact might be facing losses because of huge investment done earlier, Anil decided to pay all employees regularly and ensured food, nutrition and livelihood security for them. Thirdly, he employed villagemen to plant trees and improve the village habitat. This work in itself is a highly philanthrophic and altruistic activity as it does common good to mankind without any discrimination and irrational thinking. Finally, as far as works like using electricity in excess by his industry and liaising with the local MLA to increase the frequency of the bus services to Amria are concerned, they cannot be rated unethical, especially at the cost of what good he has done to the society. It is the duty of the government’s executive authority to ensure smooth functioning of the system, if any small fault occurs, it can be dealt accordingly.