E-gaming, cryptos add little in terms of social value: CEA Nageswaran

The CEA said that imposing these costs on micro, small, and medium enterprises (MSMEs) before they can stand on their own feet would be counterproductive

Chief Economic Advisor (CEA) V Anantha Nageswaran on Wednesday said online gaming, ultra-processed foods, and crypto trading businesses could be compliant in the spirit of law but they add little in terms of social value. 

India needs to take steps towards better Environment, Social and Governance (ESG) practices for its own sake but there is a natural resistance when it is imposed by international bodies and forums, the CEA said. 

“When we have global leaders and heads of organisations travel in their private jets a few thousand kilometres to attend a conference on climate change or ESG, that does not pass the credibility test,” the CEA said.

Speaking at a conference by Indian Institute of Corporate Affairs (IICA) on Escalating Environment, Social, Governance (ESG) for Viksit Bharat, he said companies should ask if ESG was a separate activity or embedded in the way they do business.

Nageswaran stressed that responsible business in the Indian context is not the same as how it is interpreted in the West.

He added that India has to focus on climate adaptation rather than emission mitigation because it is not the biggest contributor to emission. 

When asked about the standards being imposed on developing countries such as labour, environment, gender, the CEA said developed countries should remember that these standards came after they reached a certain threshold of income at national and social level. 

The CEA said that imposing these costs on MSMEs before they can stand on their own feet would be counterproductive.

“Imposing these costs on MSMEs may be counterproductive if it crimps their freedom of operation and imposes costs on them before they can stand on their own legs and undermine their competition in the global context...we should draw a line on how much of it is appropriate on national and social context," he explained.

Citing the example of how plastic came into India from outside, the CEA warned that there was a need to be careful in importing some of these things wholesale. 

On corporate social responsibility, Nageswaran said it is not a separate activity but how a business is conducted.

“In the process of earning the current top line and bottom line if businesses end up destroying the productivity and income earning capacity of today’s younger cohort then down the road it rebounds on businesses in terms of much lower aggregate demand and economic growth. It becomes a lose-lose proposition down the road,” the CEA added. 

‘Govt’s intention to provide framework on ESG’

The government’s intention is not to bring regulation but provide guiding principles for companies as far as ESG practices are concerned, Inderdeep Singh Dhariwal, joint secretary, corporate affairs ministry said.

“We provide a framework and then it is left for the companies to evolve it. It is a trust-based relationship,” Dhariwal said, while speaking at the IICA event. 

He said the guidelines may need to be sector specific and may have to vary from a mining company to a services oriented company.

He added that the demand for sector specific guidelines have to come from companies but there has been no such issue raised yet.

“We are listening to the stakeholders. The requirement has to echo from the source,” Dhariwal added.