Letters: Profits and social costs

In “LIC stake in ITC: courting trouble” (April 27) Shyamal Majumdar rightly questions the wisdom in seeking court intervention to prevent public sector insurance companies from investing in ITC’s tobacco business. Tobacco business does increase social costs in terms of the ill effect on the health of smokers and a dent on their useful spending. Passive smoking hurts non-smokers also. In order to atone for putting funds in such a corporate activity two alternatives are possible. A good portion of the profits earned by the insurance companies here could be diverted for the creation of social welfare institutions to absorb the social costs (like cancer hospitals). 

Second, in their capacity as the biggest shareholder in ITC (it comes to about 32 per cent) the government could persuade ITC to go beyond the statutory spending on corporate social responsibility activities. Some of its funds could be used for R&D efforts aimed at developing products with reduced harm to the health of the addicts.  

A little discussed issue is the ethical dilemma experienced by the employees who believe that smoking is detrimental to the health of the society and yet have joined the company for economic reasons to produce and sell a product best avoided in public good. Of the 3816 employees of ITC, quite a few may be going through this conflict. The company should think of the ways to help them resolve this cognitive dissonance such as by highlighting how the company is ploughing back a part of its profits for public service activities and encouraging them to be a part of it.  

Y G Chouksey | Pune

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