A Case Study In Sustainability

An Overview of the Problems faced by Indian MSMEs in the Sustainability Sector and solutions suggested by Management Interaction Cell of Jesus and Mary College, India

About ecoHQ

ecoHQ is a sustainable venture aimed at helping Indians make educated choices about sustainable practices through awareness, advocacy, and accountability. It has undertaken numerous initiatives to spread awareness about sustainable development, advocate conscious growth and help brands in being accountable for responsible solutions. 

The team at ecoHQ started as eco-enthusiasts. Any products labeled green, natural, eco-friendly, environment-conscious, organic and the like caught their attention. Most of the brands behind these products didn’t have extensive marketing and selling strategies to back them. Understanding this gap, ecoHQ transformed from a blog website to a one-stop web directory making sustainable brands more accessible to Indians. 

After setting up the platform, they spoke with a few hundred brands and found that marketing mainly revolved around SEO, hard-selling, and guilt-tripping consumers into buying sustainable products. While these strategies may be necessary when competing with big brands, it’s important to sensitise customers, too. Consumers are stakeholders in a business and adopting sustainable practices will not just benefit them, but also the planet. Thus, with a renewed focus, ecoHQ revolutionised its model through in-depth research about the Indian sustainability industry. From a web directory, ecoHQ transformed into an advocacy-first, promotional platform for all sustainable initiatives in India.

Vision and Mission

  • To ingrain conscious consumerism in India through ethical information dispersal and alignment with the United Nations’ Sustainable Development Goals.
  • To work with experts and key stakeholders to provide credible and extensive information about sustainability. Through their content publishing, distribution, and development efforts, this information will help consumers make better choices.
  • To collaborate with communities of all types: Educational, Professional, Corporate, Business Networks, as well as eco-enthusiasts and hobby clubs, encouraging age-agnostic sustainability discussions and organising awareness campaigns.
  • To sensitise society about sustainable development and conscious consumerism through meaningful partnerships with brands and institutions in the sector.

Founder

ecoHQ is run by Deepa Sai, a multi-talented sustainability enthusiast, hailing from a background in Psychology, Social Work, Human Resources, and Communications. She has worked to make a difference in various sectors including disability, child rights, children with special needs, mental health, oncology, neurology, substance dependence, community development, solid waste management, disaster response, and many more. After being active in the Social and Environmental Advocacy sector till 2013, she moved on to Human Resources and Content Marketing. But even during her other stints, she spearheaded environment-based CSR activities at various organisations. In 2021, ecoHQ was born as a collection of her experiences and research in sustainability, to aid eco-businesses and eco-enthusiasts in conscious production and consumption.

Problems Faced by Sustainability Ventures such as ecoHQ

With the high-powered growth of small and medium enterprises lately, there have been innovative constructs around the concepts of ‘zero-waste living’ and ‘green branding’. An increase in the number of small sustainable ventures highlights the massive potential for the sector’s growth for entrepreneurial creation. 

However, the industry may face multiple challenges. The following are the primary challenges, as identified by us, that small sustainable ventures are posed with:

Awareness and Concern

Lack of awareness amongst people, especially the nescient and underprivileged sections, about sustainability is one of the major problems faced by such bodies. The people not living in the metro cities are the ones who suffer the most, and as we go down the line of cities the negligence tends to increase. 

Sustainability is often neglected by people due to the presumption that it is expensive. Neglect from a major section of our society keeps such businesses on the back seat and limits their growth potential. In such cases, awareness is not the only problem. Making them acknowledge the worldwide issue and motivating them to take a step towards it is a greater challenge. 

The products should be priced in such a way that everyone can afford it and not just the affluent ones. It can help to promote sustainability even at the grass root levels. 

Financial Constraints

Inconsistent cash flow can be an issue if vendors carry off the money faster than the customers bring it in. Having a budget is crucial. If the expenses are higher than the income on paper, then a company will never survive in reality. The budget is the plan. 

Unexpected expenses is another big financial challenge faced by entrepreneurs. 

Marketing and Branding 

Small-scale sustainable businesses, in their nascent stages, are faced with the issues of deficient marketing linkages, inadequate access to marketing platforms, and difficulty in building a loyal consumer base. Businesses ought to acknowledge that paid advertising can only fetch customers fit to reach ‘targets’, but it might not ensure customer loyalty in the long run. To serve the latter purpose, they have to utilise various formal and informal channels of marketing. 

However, owing to the resultant unavailing marketing, these businesses can’t leverage expansion and collaboration opportunities such as co-branding. Stiff competition from other established brands coupled with the dynamism of markets also restricts the business’ growth by making the marketing inefficacious. 

The Technology Divide

Due to a lack of monetary support, small-scale sustainable businesses don’t have access to good quality technology, which stops them from excelling. They can’t provide good quality technical products and services because these are usually expensive, leading to a technological divide between them and big corporate giants. Due to this technological divide, a large proportion of small businesses are just restricted to Instagram, Facebook or Instamojo which hinders their growth opportunity. Additionally, they do not have access to branding and marketing tools, further barring their future.

The Regulation Web

Cumbersome regulatory procedures pose a major obstacle to sustainable businesses. Such practices, which include construction permits, collateral guarantees, and taxation, affect the growth of these ventures. The government mostly funds start-ups backed by quality technology and students. Sustainable businesses, often small ones, struggle to get incubation and funding from government and private entities alike. The other contributing factors are inadequate provisions for start-ups and the absence of a common regulatory body.

All of the obstacles can be tackled with effective support from the stakeholders and the government. Addressing the issue of the technological divide is the most important thing and must be considered on priority. 

As far as the restrictions are concerned, governments can plan them in such a way that it does not hamper economic activities while controlling the extent of the overall movement of the population. Businesses should also adapt to effective mechanisms wherein they can shift their strategies and tools as the business climate demands.

Deliverables and Strategies Proposed by Management Interaction Cell, Jesus and Mary College

Product Distribution

Delivery Partners

The following delivery partners can be considered while shipping a product from one place to another.

  • Shiprocket (Application): Minimum recharge of Rs. 200. Delivery charges vary from Rs. 40-60 depending upon the location. Ships all across India.
  • Delhivery: The price range depends upon the location and product weight. For instance, Standard Delivery (Patna to Delhi): Rs. 225 for a small parcel (500 grams to 2 kg); Express Delivery: Rs. 350 for the same. (Slightly on the expensive side)
  • Shyplite (Application & Website): They use carriers such as Delhivery, Blue Dart Express, etc. to deliver the goods. The price range varies from Rs. 40 to Rs. 50. It is cheaper than the carriers it features. Different amounts are charged for different zones and delivery partners. 
  • Nimbus Post: Nimbus Post has various plans and offers to suit the unique needs of every business 
  • Starter – Starts at Rs. 27/500 gm
  • Standard – Starts at Rs. 25/500 gm
  • Enterprise – Starts at Rs. 24/500 gm
  • Enterprise Pro- Customised Shipping Price
Direct Selling through Instagram Stores

For a sustainable venture, Instagram comes across as an ideal platform for growth and development, especially during nascent stages. The brands can use the Instagram Story feature and put their products up there as well as create highlights to specify the sold/available products. This will result in saving of funds as compared to the brand’s starting with a website. 

A website can be launched to expand the business once it’s gaining traction. The business/brand can also utilise Instagram posts and stories to create a live store for users. They can post pictures of the products and tag the prices and materials used in the same.

E-Commerce Shipping Aggregators

An e-commerce aggregator (also known as shipping or logistics or courier aggregator) is a company with pre-existing ties to multiple logistics companies. An aggregator allows selection from an existing list of logistics partners and quick tie-ups with multiple partners at seemingly low prices. Most of the delivery partners come to collect the package/material at the doorstep and deliver it to the customer or receiver.

Suitability: When the business has reached a large volume of sales. 

A few of the aggregators are as follows.

  • ECourierz
    It operates both domestically and internationally. However, they are most appreciated for their international shipping services.

Pin Code Serviceability: 21000+

Number of Courier Partners: 20

Founded In: 2015

Number of Employees: ~30

  • iThink Logistics

They have no minimum volume requirements and provide NDR management services to deal with escalations and delivery exceptions. 

Pin Code Serviceability: 26000+

Number of Courier Partners: ~10

Founded In: 2016

Number of Employees: ~26

  • Pickrr

It provides monthly rates by the number of shipments made per month. They provide access to most of the remote areas in the country.

Pin Code Serviceability: 27000+

Number of Courier Partners: 10

Founded In: 2015

Number of Employees: ~50

  • Rocketbox

It offers a limited selection of courier partners but a greater range of serviceability and a rate calculator to determine the best rate for each shipment.

Pin Code Serviceability: 28000+

Number of Courier Partners: 7

Founded In: 2015

Number of Employees: 40

  • ShipDroid

It is also tied with fewer courier companies and only services across 20,000+ pin codes. However, their account management system remains extremely popular.

Pin Code Serviceability: 20000+

Number of Courier Partners: ~3

Founded In: 2016

Number of Employees: 10-50

  • ShipKaro

It offers low standard rates for individual and bulk shipments in the form of 3 available monthly plans, depending upon the number of orders fulfilled every month.

Pin Code Serviceability: 20000+

Number of Courier Partners: 13

Founded In: 2017

Number of Employees: ~100

  • Ship Rocket

As one of the most popular aggregators currently in the market, Ship Rockets offers a large number of courier partners and greater pin code serviceability

Pin Code Serviceability: 27000+

Number of Courier Partners: 17

Founded In: 2012

Number of Employees: ~240

  • ShipYaari

It offers low monthly rates and a Money-Back-Guarantee (MBG) for certain types of failed orders. They also have a no-initial-cost monthly plan for businesses. 

Pin Code Serviceability: 25000+

Number of Courier Partners: ~7

Founded In: 2013

Number of Employees: ~50

  • Shyplite

It charges based on the dimensions and parameters of each shipment. They also offer COD services, a tech-enabled recommendation engine, and a customised tracking page for order updates.

Pin Code Serviceability: 26000+

Number of Courier Partners: 16+

Founded In: 2016

Number of Employees: ~100

  • Silver Arrow

One of the earliest aggregators founded, Silver Arrow makes use of radio frequencies and associated technology to provide near real-time updates, along with providing risk assessments for shipments.

Pin Code Serviceability: 27000+

Number of Courier Partners: ~10

Founded In: 2012

Number of Employees: ~50

  • Vamaship 

It is possibly most liked for offering QC (quality check) services to shipments demarcated as customer-initiated returns. This almost makes up for their typically slow remittance cycle.

Pin Code Serviceability: 27000+

Number of Courier Partners: ~10

Founded In: 2015

Number of Employees: ~35

  • Swiggy Genie

Swiggy Genie delivers items from any location in a city. The only disadvantage is that it is on the costlier side, and the prices are determined by the distance travelled by the goods.

According to the company as well as the business of the client, the best e-commerce shipping aggregator can be chosen. 

Business Development 

Green Packaging

The creation and usage of green packaging, also known as sustainable packaging, results in enhanced sustainability. This entails greater use of life cycle inventory and life cycle assessment to assist in the selection of packaging that has a lower environmental effect and footprint. While certain materials, such as cardboard boxes, have a low environmental effect, others, such as plastic and Styrofoam packing, will not biodegrade and are not recyclable. Furthermore, consumer packaging, such as the rings that surround soda cans and bottles, adds to the waste stream. 

For both producers and consumers, green packaging materials are healthier. Eco-packaging materials, unlike synthetic, chemical-laden ones, are often free of hazardous byproducts that may create physical health issues. It establishes a company’s environmental and social consciousness. It can be beneficial as innovative green packaging attracts the attention of consumers. Sustainability-conscious customers would like if a sustainable business is environmentally friendly in all aspects.

For instance, cardboard packing can be used for heavy products. Instead of using plastic tapes for packaging, one can use paper tape or jute threads. Seed papers, which are supplied at a lower cost, might be utilised for appealing packaging from the manufacturer’s end. 

Collaboration with ventures having a similar vision as the client

A business can tie up or collaborate with brands on Instagram that share a similar objective and operate on a smaller scale. For instance, two ventures can collaborate on a project such as the creation of a hamper. One can send its finished products, through the aggregators (mentioned earlier), to the other (the second business being closer to the location of the final customer), and the latter can take charge of packing and delivering the final product to the consumer. As a result, it will be a B2B model at first followed by a B2C model. This leads to efficiency, speedy delivery, and cost-cutting for both businesses.

Such collaboration can also be executed by white labelling where one product manufacturer agrees to remove their brand and logo from their product and instead place the  logo of a bigger brand. The final product is marketed under the collaborator’s name instead of the manufacturer’s. This offers benefits to the customers as well because now they can trust the brand name and will not have to study smaller companies.

Collaborating with sustainable Hotels/Restaurants/Resorts

India (and the globe) is home to several sustainable hotels, restaurants, and resorts that embrace a sustainable approach and share a passion for environmental protection. Undoubtedly, these establishments must be utilising sustainable products and sourcing them from some sustainable ventures. Such establishments could connect depending upon the niche of their client and the need requirements to deliver eco-friendly products and services.

Co-Branding

The following sustainable products are complementary to one another and can be utilised in brand collaboration. Two or more businesses must form collaborations to enable the creation of innovative hampers or combos (both for occasions and general demand) consisting of both the parties’ products. These hampers or combos can be packed and delivered using collaboration and aggregators, detailed in the product distribution and business development sections of the document, respectively.

  • Wooden Toothbrush + Copper Tongue Cleaner
  • Cotton Shopping Bags + Jute Bags
  • Coconut Shell Glasses/Cups + Coconut Fibre Dish Scrub
  • Copper Bottle + Wooden Cutlery
  • Coconut Fibre Scrub + Bamboo Soap Tray
  • Bamboo Earbuds + Wooden Comb
  • Wooden Cutlery + Metal Canisters
  • Biodegradable Glass + Paper/Bamboo Straws
  • Coconut Shell Planter 
  • Holi Hamper – Essence Incense Stick + Herbal Holi Colours + Sweets
  • Diwali Hamper – Compostable Murti + Diya + Sweets
  • Stationery Kit – Folder + Notebooks + Plantable Seed Pencils + Plantable Colouring Pens + Paper Pencil (Everything Eco-Friendly)
  • Toilet Tissue Roll Made From Bamboo
  • Reusable Bread Bag + Vegetable/Shopping Bag
  • Reusable Coffee Cups + Reusable Coffee Cup Lids
  • Reusable Lunch Wraps + Recycled And Recyclable Cutlery
  • Compostable Plates + Compostable Bowls
  • Recycled Plastic Toothbrush
  • Recycled Floor Mats
  • Wooden Laptop Table + Wooden Pencil Holder

Collaborating with College Consulting Clubs 

A new sustainable small business that is having trouble marketing its products in a local region or across several states could turn to student organisations and clubs for help. By providing consulting services, the college society may be able to assist the firm. 

In weeks rather than months, college consulting societies can help identify significant challenges and opportunities, prioritise critical activities, and measure progress against sustainability and business goals. Students in the clubs can assist with innovative ideas and online marketing strategies. Young minds have new ideas to analyse, which they combine with their existing knowledge pool, alleviating the difficulties of business development and extending reach for small firms.

Collaborating with sustainable stores 

A sustainable physical store can devise a solution to assist other small brands that are struggling to sell their products to the customer. The cafes or stores such as Goli Soda Store (where great upcycled products are sold) can collaborate with multiple small businesses and receive a commission on sales made by a physical store or an online store such as Brownliving, The Better Home, REFASH, Qtrove, EcoTrendy, Bare Necessities, Ullisu, EcoSattva, Upciclo, Infinitex, House of Crafts, and so on, relieving small businesses of the pains of business development and expanding reach. The business concept proposed here is similar to Etsy, Flipkart and Amazon, where sellers register to sell consumer goods across India or perhaps globally. 

The new small sustainable business would have to invest in collaboration with the physical stores. Customers would be more inclined to buy their products if they could see that they are making a genuine effort to be environmentally friendly and sustainable. Other important elements, such as green packaging, may be taken into account by the companies.

Business Growth Opportunities for Aggregators & Directories in this Space

The issue of distributing products in a local area or across different states, calls for a situation-specific suggestion as detailed under:

Looking at the same problem from a consumer perspective, while shopping for sustainable products, one would have to go through 10 different pages on Instagram or various websites to compare the prices and products, and still, might fail to vet the green-businesses properly. On the other hand, the businesses in the field of promoting green and ethical businesses (like ecoHQ) are already looking forward to vetting the brands through ESG metrics. They also have a vast network of eco-friendly businesses. These efforts and contacts could be leveraged to turn their respective websites into a one-stop destination shop for sustainable products. 

According to this proposition, different businesses could register themselves as sellers on the website. Therefore the products would be provided by the business but the website could help in co-branding, packaging, and distribution. This would also help in generating a revenue stream as the business could collaborate with multiple small vendors, get the commission on sales made through the website, and would save the small vendors from the pains of business development and expanding reach to the target audience nationwide. 

Although, for this proposition to succeed, the quintessential costs of Search Engine Optimisation and modification of the current website into an e-commerce one will have to be incurred.

The business model proposed is similar to Etsy and Amazon, where retailers register themselves to sell consumer products pan-India and all across the globe. Creating a similar channel through the business would help sustainable businesses sell their products and reach the target audience irrespective of the geographic location or their reach over social media.

Additionally, corporate or event gifting markets established for supporting social causes have a good reach and growth potential. Products can also be sold at college stalls or social events organised for bringing in changes for the good.

The Hamper Collaboration Idea

As a part of this, brands or businesses featured on the website can collaborate on special hampers and product combos to be sold around festive seasons. They can come together for such co-branding opportunities in general as well. This idea ensures that several products sold by different ventures, which complement each other, can be sold together to add greater value. It will provide more options to the users to create or customise their hampers, too. 

Website Content

It could be mentioned clearly on the landing page how all the featured brands are 100% sustainable as they utilise green packaging and consider other relevant aspects as demanded by the sustainable domain. It would further encourage customers to buy environment-friendly products by realising that the companies are making a genuine effort towards being green. 

Some ventures, with healthy support from their co-founders and ample funding, have even established standards to appraise and rate brands through their website.

Website Proposal for Small Businesses

Tabs
  1. About Us: This tab will have the description of the company, its operations, and vision. The Founder’s column (with pictures) can be included as a sub-tab or separately accompanied with newsletters. This tab will give a detailed insight into what the business is about and help the visitor in understanding the venture thoroughly to be able to relate to it. The following can be included under the About Us tab:
  • Mission Statement – What and Why (describing what exactly the company provides as its services)
  • Inspiration & motivation behind the venture
  • How the venture syncs with UN sustainable development goals/6Rs and propagates to achieve them.
  • Join us – Career opportunities or Internships. Internships attract students from schools and college societies with similar aims. 
  • Newsletters can be posted periodically covering the recent progress of the company and the latest news relevant to the vision of the venture (E.g. of News – Sustainable Weddings Startups and House of Hope).
  1. Our Clients: Including clients’ names & testimonials. Testimonials will have customer experience in the form of a comparative analysis of how the business helped them in efficient sustainable management along with relevant details and photographs. The ‘Testimonials’ tab bestows the website with a sense of authority and authenticity to build trust amongst those who visit the website for the first time.
  1. Services: This tab will have sub-categories of services. Each sub-category will contain detailed information about what service/product is being offered by the venture and the criteria for prospective consultations/partnerships. The tab is required to give a clear and detailed description of what the company can provide to its clients. The client will use this information to analyse whether the deliverables stated on the website align with its motives and objectives.
  1. Contact Us: The following can be included under this tab:
  • Hyperlinks to Facebook, Instagram, LinkedIn, Quora and Twitter. Contact number and hyperlink to the company’s official Email ID.
  • An enquiry box or a chatbot can be incorporated with some Frequently Asked Questions (FAQs) and keyword-based answers on the website. The box can ask website visitors for their full name, contact information, consumer requirements, and anything else they want to ask the organisation including suggestions.
  • Recommendation Box – A recommendation/feedback form must be positioned at the bottom of the website so that viewers/clients may leave their organisational experiences and suggestions elucidating how the services can be improved. They can also express their dissatisfaction with services and suggest ways to improve them in the future.

A website is required to have a Contact Us page so that people can connect with the business in case of any queries.

Appearance of the Website

  • The use of the same color scheme should be consistent throughout the website e.g.colour themes based on browns and greens. 
  • Additionally, the company’s logo must be positioned on the left side of the page rather than in the center since this helps the website appear more organised. 
  • Pictures and graphics should be used to make the website more engaging.
Main Tabs arrangement
  • Tabs should be positioned at the top middle or top right, and their position should be fixed even if visitors scroll down. The top tab of the website should be re-structured with the name, logo, and menu functions (search icons, etc.).
  • Font should be viewable – Terms of service and privacy policies should be clearly stated under a sub-tab that could be found at the bottom. The shade of the template and the font must be distinguishable.

Some Suggestions for the Blog

Blogs on the following suggested topics can be posted as well as promoted on Quora, Twitter, LinkedIn, Instagram and Facebook.

  1. Experience with sustainable living
  2. Lifestyle changes to be made for sustainable living, e.g., switching over to wooden toothbrushes, reusable sanitary pads, avoiding plastic cups; plastic bags, and straws
  3. More usage of eco-friendly products
  4. Sharing the latest news about development in the sustainability world
  5. Publishing pictures and blog posts detailing how to recycle garbage and produce biodegradable compost step by step

General Suggestions

  1. Optimise website to be compatible to use with both a mobile device and computer in terms of the format.
  2. Incorporate analytics on the website.
  3. Calculate impact. The website could comprise a section called the impact calculator including a  carbon footprint calculator. To have a more positive outlook, a positive impact calculator can also be incorporated.

Social Media Strategies

Social media is vast and has several variable factors to consider for reaching a wider audience. The aim is to stay on top of the minds of people whenever their need arises. 

Here are a few must-haves to engage with your target audience.

  1. Innovative hashtags: Hashtags help in reaching out to the target audience. Using a consistent list of easy, trendy, and unique hashtags in all posts expands the reach of the account.
  1. Instagram Story Features: Features such as Q&A stickers, GIFs, location stickers and countdown stickers help increase engagement and understand what your followers and visitors like and dislike. For example, a poll on Instagram stories related to the posts or announcements which are about to go up can help create buzz and engage the audience. 
  1. Bio: The bio should precisely and clearly state the basic objectives of the business. It should have the name of the founder so that people can recall it. State how you add value in other people’s lives/careers/businesses.
  1. Story Highlights: This is the most interesting part and should be used very carefully. Some things that must have a place on story highlights are
  • About us (vision/mission/what we do)
  • About the founder (or the team, may apply in future)
  • Know more about us (Contact no., Email ID and Twitter, Quora and LinkedIn account hyperlinks)  
  • Selected partnerships of the past that added value to the business.
  • Feedback/Customer review FAQs 
  1. Location: Adding location can help increase reach (by adding locations that people often visit).
  1. Captions: Captions should be able to engage the audience. They must not be too lengthy, or too formal. They must be eye-catching. Adding lines that encourage the audience to interact such as ‘share your views in the comment section’, ‘mention your friends’, etc. will increase the comments as well as the reach.
  1. Story Engagement: Once the social media page is in full swing with all the relevant posts (must-haves and revamping of the feed), we can start with engaging stories to be consistent and to interact with the viewers. 
  1. Record/Capture DIYs: If you’re doing anything creative or taking any step, you can attempt to film each step and upload it to IGTV or a story to promote environment-friendly products. These may include the products of the ventures you collaborate with. It could also help create a strong network and be regular with content without a lot of effort. Moreover, this will provide visitors with a quick overview as well as a lot of information. 
  1. Marketing Campaigns: Holding different campaigns relevant to blog posts keeping in mind the current trends can help to increase the reach. The following campaigns can be conducted:
  • Busting Myths about Sustainability
  • 100 Days of Sustainable Living
  • Quotes on Sustainability
  • Sharing Experiences of People/Brands who Try to Achieve Sustainability. 
  1. Basic Social Media Growth Strategies:
  • Engaging with similar accounts and ventures – Provides us with the benefit of expanded reach with the same kind of audience we want to target. We can also give shoutouts and create a separate highlight for the same. 
  • Posting countdown stories or teasers before posting – Boosts engagement and creates intrigue of what’s coming next.
  • Engaging with our audience 15 mins before posting by liking or replying to their comments – Engaging with the audience sends notifications on their mobiles and gets them active on the time we are about to post to boost the engagement.
  • Analysing the content that is getting us the maximum traction and taking action based on that – By figuring out what works for us we can double down the content so that we have the maximum benefit.
  • Researching content of competitors to see what we can do better and optimising our strategies accordingly – Gives us an idea of what goes around the industry and how we offer a unique solution to it.
  • Being consistent in posting on our feed to keep the audience hooked – Consistency is the key. The more consistently you post, the more are the chances of your content reaching people beyond your followers.

Accounting

IT Returns and Slab Rates 

If the business is registered as a sole proprietorship, the business and the person are considered as a sole entity. Therefore, while calculating the income, the taxable income would include the sum of the income from the businesses and personal income. Personal income comprises wages and salaries received, any transfer receipts (government payments made to the individuals), social security & other government benefits, and Investment income (Dividends, Interest, and Rent). 

There are two tax regimes through which one can calculate Income Tax:

Old Tax Regime

IncomeTax Rate
Upto Rs. 2,50,000#NIL
Rs. 2,50,001 – Rs. 5,00,000*5%
Rs. 5,00,001 – Rs. 10,00,00012,500 + 20% of Amount more than 5,00,000
Above Rs. 10,00,000 12,500 + 1,00,000 + 30% of Amount more than 10,00,000

Note # – If the business has been registered as Sole Proprietorship and the income is below 2.5 lacs, there is no need to file an IT Return.

Note * – If the taxable income does not exceed Rs. 5 lakhs, the person can claim a rebate under section 87A from Income-tax. The amount of rebate is income-tax on total income or Rs. 12,500, whichever is less.

Alternative Tax Regime (115 BAC)

Total IncomeTax Rate
Upto Rs. 2,50,000NIL
Rs. 2,50,001 – Rs. 5,00,000*5%
Rs. 5,00,001 – Rs. 7,50,00010%
Rs. 7,50,001 – Rs. 10,00,00015%
Rs. 10,00,001 – Rs. 12,50,00020%
Rs. 12,50,001 – Rs. 15,00,00025%
Above Rs. 15,00,00030%

Note * – If the taxable income does not exceed Rs. 5 lakhs, the person can claim a rebate under section 87A from Income-tax. The amount of rebate is income-tax on total income or Rs. 12,500, whichever is less.

GST

If the service provided is within India and the gross receipts are below Rs. 20 lacs, then there is no need to register for GST.

Expected Impact of the Deliverables and Strategies

Every organisation faces operational issues, but those are not permanent and can be overcome with the right solutions. We have presented a few solutions and their expected impact on a small-scale sustainable business operating primarily in India. All of the obstacles can be tackled with effective support from the stakeholders and the government. 

As far as the restrictions are concerned, governments can plan them so that they don’t hamper economic activities while controlling the extent of the overall movement of the population. The businesses should also adapt to effective mechanisms wherein they can shift their strategies and tools as the business climate demands.

Credits

Authors

Ms. Paridhi Bisht, Ms. Kanishka Bajoria, Ms. Mansi Goyal, Ms. Mansi Mishra (Team Management Interaction Cell, JMC) 

Editors

Ms. Gaurika Gera and Ms. Simran Paul (Team Management Interaction Cell, JMC) 

Lives in Flames

A Case Study on Sivakasi’s Fireworks Industry

Diwali, the popular festival of lights, signifies the victory of good over evil. The festival is celebrated across India, and the whole nation is lit up with beautiful Diyas, candles and lights for nearly two weeks. Families cook up traditional delicacies, and entire neighbourhoods come together and share in the celebrations. 

Diwali is celebrated not just by Hindus. People of various faiths participate in the festivities because of one major reason – FIREWORKS. Who doesn’t love to watch those lights in the sky and on the ground, lighting up the faces of children playing with them. While fireworks are used for several reasons, Diwali is a prominent festival when their consumption is incomparable.

Fireworks are produced by countries across the world. In India, the town of Sivakasi in Virudhunagar district, Tamil Nadu, is where the magic (or not) happens. The village is referred to as ‘Kutty Japan’ because it’s famous for three industries – matches, fireworks and printing. But there’s one another social phenomenon it’s known for — high prevalence of child labour.

Standard Fireworks Factory at Thiruthangal

In early 2009, my friends and I took a trip to Sivakasi to investigate this social issue. At that time, the fireworks industries in the village were worth between INR 800-1,000 crores.

As per official records, there were 10 major firework companies that owned close to 600 fireworks factories. But we found something else – Sivakasi and it’s neighbouring counties had hundreds of illegal factories.

Fireworks consumed during the 3 significant days of Diwali took 300 days to produce, with labourers working overtime throughout the year. China, the world’s largest fireworks manufacturer and supplier, was India’s largest competitor. But labour cost was cheaper in India, making it a popular choice.  And even though the cost of raw materials in India was about 50% higher, statistics predicted that the fireworks market would grow 10% annually, back in 2009. In 2021, the industry was worth nearly INR 6,000 crore.

Sivakasi’s fireworks production had a long-standing history spanning several decades. The town received low rainfall coupled with dry climate, therefore, rendering the land unproductive for agriculture. This left high dependence on manufacturing fireworks. In the time that the industry flourished, Sivakasi became infamous for various unacceptable practices — child labour being one of the most notable concerns. During 1991, it was reported that about 60,000 children aged 3 — 18 years worked in firework industries.

Low wages, lack of safety precautions, fire accidents, health and life hazards were considered usual, not significant issues. 

Since the 1990s, several NGOs, activist groups and individuals lobbied against these unfair practices but that only worsened the situation. The results of these interventions were continuous checks on child labour and safety measures. But the factory owners found a way around these checks, too. What happened next? 

We got in touch with NEWS

In 2009, through a few contacts, we enlisted the help of Navajeevan Educational Welfare Society (NEWS), located in Thiruthangal and founded by Devaramani Lysabai. Its parent organisation was Paul Foundation. NEWS worked around issues of education and literacy. Some of its major achievements and activities focused on reducing child labour, helping poor pupils to continue education steadily through financial help, taking action against child labour and Dalit discrimination with the Government’s help, and creating institutions for education in backward areas. 

NEWS SCNIC Office

For a few days, we worked with the NEWS staff – Mr. Rajesh, Mr. Pal Pandiyan, Mr. Arul Raj and Mrs. Muthumari. Through them and our own research, we gathered deeper insights on the child labour scenario, taking exposure visits and interacting with residents in Sivakasi and its neighbouring villages.

As per Reports gathered

In 2009, due to increased lobbying and activism, the incidence of child labour reduced drastically – from thousands to hundreds. In large companies, finding a child labourer below 14 years of age was difficult but in the small ones, children were rescued throughout the year. 

Campaign by NEWS SCNIC & the Children of Thiruthangal demanding the Right to Education & Abolishment of Child Labour Practices

However, a quick Google search today will show that not much has changed in the town of Sivakasi. 

Here are the main reasons why child labour continued.

Corruption

Government officials raided these factories but they warned factory owners beforehand. With this tacit agreement in place, the factory bribed the Government workers to avoid prison. 

If the factory owners paid these bribes, children could continue working in the firework factories without the Government’s intrusion. The officials signed fake certificates stating that there were no child labourers in those respective factories. Factory owners also bribed Government doctors to procure false attestations of these children’s ages and showing that they were actually above 14 years of age.

Decentralisation

Since factories were constantly raided, the factories in Sivakasi and surrounding areas supplied raw materials to the workers’ houses. Therefore, families worked from their homes.

Nearly every household undertook production of pipes. Children either worked full time at home (age no bar) or part time after school. When it came to fireworks, they dyed the outer paper, rolled gunpowder, dipped the material into chemicals, and packed the final products. Children engaged in these activities for three to twelve hours every day. 

Fireworks Made at Homes

We also found a few girls who didn’t attend school and were under the threat of being married before 18 years of age. Children lived in dysfunctional families who moved houses due to fights in their neighbourhoods. Their financial situation wasn’t conducive for education either. So, they stayed at home making pipes and firecrackers. Children made close to 10 pipes which yielded INR 45 per day. The money was used by the parents whereas children got only INR 2 per day for their expenses. We interviewed a girl, 12 years old, who stated that her two elder brothers (18 and 15 years old) worked in a rice mill and college mess respectively. Thus, child labour was prevalent in other ways, too.  

Poverty, Lack of Proper Employment and School Drop-outs

Several children dropped out of school at the age of 14 and started working for wages. The reason: no scope for better employment after studies compared to the work already available. 

After studying until the tenth grade, the youth lost interest in studies. They complained that their relatives were either unemployed or working for INR 1,500 per month even after being educated. Eventually, children felt that education was a waste of time. Even if a person got a diploma or degree, they could undertake a desk or accounting job in the factories. So, while children worked as labourers in the factory, educated kids landed up in the same factories with slightly better jobs. 

Opportunities majorly available were production of matches, fireworks or the offset printing press. 

Although 40% of the families sent their kids to Government schools, their education was stopped short in the 7th grade. Several children’s rights were violated, there’s no doubt about that. But their conditions at home were so dire that earning money assumed priority. This was especially worse when a family member or parent died. Often, these households lived hand-to-mouth and children didn’t have any other option but to add to the family income. 

High school annual fees ranged between INR 4,000 and INR 25,000. There were several private schools as compared to Government ones. Generally, private schools were preferred as parents wanted their children to learn English. In Government schools, teachers were incompetent and irregular. Even Government school headmasters sent their kids to private schools because of better standards.

In families with low socioeconomic status, children watched their parents struggle and, therefore, decided to work after school and during summer vacation to fund their studies. Low family income, high cost of living, house rent were some of the key reasons children preferred to work. After all, they get nearly INR 100 per day for making fireworks, which is a significant amount for them.  

Some children used the money to indulge in activities like smoking, drinking or going to the movies. Since they experienced financial independence, they felt investing time in earning money was better than studying at school. As a result, they weren’t dedicated to learning, were unable to stay disciplined and on their own when they’re out of school. 

Another significant issue was dowry. Parents paid about a lakh (or 80 grams of gold) for each daughter’s marriage into good families. Because they’re unable to earn that amount of money, children were sent to work for more income.

Lack of Government Intervention

As already mentioned earlier, Government officials were bribed to cover up child labour and hazardous working conditions. But the Government also failed to provide substantial opportunities for alternative jobs. 

The Mahatma Gandhi National Rural Employment Guarantee Scheme was launched in 2005. But the scheme failed to provide meaningful employment in Tamil Nadu. Unskilled labourers found work for just 3 months (100 days) in a year. Even then, they had to travel far and wide for these jobs. Compared to the ease of working in their hometown and earning comfortably, this scheme didn’t attract labourers. And while the Government put committees and teams in place to monitor the implementation of the scheme, little success came out of it. 

There’s no dearth of regulations against child labour. The problem lay in seeing through their execution and that’s where the Government failed. As per official sources, the number of child workers in India stands at 20 million. But unofficial numbers portray a dark reality. The number is more than double – at least 50 million if not more, are child labourers. Girls are the worst affected. As seen in the film Kutty Japanin Kuzhandaigal, 70% of children working in Sivakasi, and putting their life on the line, are girls. 

Health Hazards

Except for a handful of big companies, none of the factories employed sound safety measures. More than 10 major accidents were reported in 2007, claiming several lives. As of March 2021, over 145 accidents were reported between 2011 and 2021.

The fireworks factory workers were to be given hand gloves and safety shoes but that didn’t happen. The existing safety rules were scarce and even those weren’t followed. Occupational hazards were frequent but no social research was available to establish a cause and effect relationship. Workers were made to work long hours without fair compensation.

Children reportedly suffered from chronic bronchitis, broncho-pneumonia, tuberculosis, malnutrition, gastrointestinal disorders, skin disorders, over-exhaustion, burns and  water-borne diseases. Not just that. They also lived in hazardous conditions at home, chronically exposed to toxic chemicals and working with them.

Children Exposed to Toxic Chemicals at a Decentralised Fireworks Manufacturing Facility at Thiruthangal, Sivakasi

Possibly the worst thing about this whole scenario is children didn’t have a labour union and they were working in an ‘unorganised’ sector. This meant that they could never fight for their rights. Even adults didn’t have protection against occupational hazards and toxic chemicals. Although insurance is a prerequisite as per the law, workers had none. 

Just think about it – 175 pipes made one unit fetching INR 1.7 per unit. One child could make only 20-25 units in a day and this fetched them 43 rupees to make about 4375 pipes approximately. There were no salary perks and the only payment method followed was a ‘piece rate system’. Plus, they didn’t have any insurance or job security.

Impact of Covid-19

The pandemic only added to Sivakasi’s woes. 

Since schools shut down, children resorted to working, to help their parents earn more money. In a recent report, the number of child labourers increased drastically from 28% to nearly 80% in Tamil Nadu during the lockdown. Kids also worked long hours ranging anywhere from 4 to 18 hours a day.

Not just that. 18% of child labourers also faced physical, mental and verbal abuse from their employers. One of the significant reasons for this shift was family and economic pressure. But children also couldn’t afford smartphones to continue learning online or for entertainment. Therefore, boredom and lack of interest in education were contributing factors. In addition to all of the above, if a parent fell sick or died of Covid-19, a child had no choice but to take up financial responsibilities. 

What’s even worse, as much as 81% of these children said they wanted to go back to school. But when will they? – is the bigger question. Even new, sophisticated technologies couldn’t stop the crisis from reversing all the progress made in recent years.

Explicit focus on ‘Environmental’ Sustainability

In our previous article, we discussed the different facets of sustainability: employees, society, profit, and planet. We’re all a part of this ecosystem, and better human lives means a better planet. Yet, when it came to the fireworks industry, the attention swivelled towards environmental sustainability. Amongst this, the importance of lives was lost. 

A worker at Who Had Faced an Injury in 2008 While Working at a Decentralised Factory in ThiruThangal, Sivakasi

Green crackers aren’t the only sustainable solution. The environment plaguing these families is much more toxic. Every day, they are waking up and going to work, putting their lives in danger. They may die today because of an explosion, having their bodies charred to death. Or, they may die years from now, owing to inhalation of chemicals and hazardous substances. In fact, they won’t be the sole victims of this profession. Toxicity would be embedded in their DNA for generations to come. Their children and children’s children could face life-long illnesses and multiple physical or mental deformities.

Then there are other issues like abuse and mental health. Children are also trafficked and put to work in unfair conditions. Particularly, girls face the worst challenges. Lack of education and vocation opportunities has given the people in Sivakasi no option but to bet on their lives by working in firecracker and matchstick factories.

Women Making Matches in a Decentralised Manufacturing Facility Near Their Homes

Cultural identity is also a deep-rooted issue. Sivakasi is known as the fireworks capital of India because that’s the occupation most people have in the region. The label Kutty Japan places pride in their minds for supplying fireworks across India and the world. Even if the industry is abolished, addressing this cultural identity is a challenge. 

The Possible Way Forward

Shunning these fireworks factory labourers wasn’t the right way to go about it. Banning the use of firecrackers or boycotting fireworks factories posed a threat to their livelihoods. 

The Government didn’t initiate any vocational training programs either, meaning these workers couldn’t transition to other occupations. While NEWS was providing a few after-school complementary education programs for children, there weren’t any other such programs by the Government.

After-school Education Programs for hildren of Thiruthangal

Subsequently, what was predicted years ago became reality in 2020 when firecrackers were banned. With several states across India banning the use of fireworks during Diwali 2020, factories couldn’t sell their products leaving labourers high and dry. Several units shut down and workers’ wages fell drastically. Initially in 2018, the Government banned non-green firecrackers. Units in Sivakasi then switched to green crackers manufacturing. However, 2020 came as a big blow with a complete ban.

To see this in numbers — there were 1.5 lakh people directly employed with fireworks factories and several lakhs indirectly. The production was slashed by 35% in 2021 since previous year’s stock wasn’t sold. This was a huge blow to Sivakasi.

Other associated businesses, organisations, and activities also took a hit. Most of the educational institutes in the town belonged to fireworks factory owners. If they suffered losses, the fate of education in this district suffered, too. Plus, if parents didn’t earn wages, children couldn’t attend school either. 

However, local efforts were being made to keep the industry alive through alternatives. The industry had sustained itself by constantly adapting to changing rules. And with India’s new movement – Local goes Global – the firecrackers industry has immense potential.

Change the Narrative

For starters, China is a leading exporter of firecrackers and countries like the US haven’t banned fireworks. India’s firecracker industry could be put on the map, too, if the Government provided adequate support. Currently, the narrative focuses solely on the negative side of firecrackers – pollution, child labour, accidents and more. But instead of making the industry a scapegoat to attain political goodwill and Green branding goals, it’s better to groom Sivakasi into becoming a global fireworks hub while strictly following labour rules (and ethics).

NEWS , in 2009, stated that Government organisations could build factories in bare lands, giving a salary of INR 3,000 per month with 4 days of rest every month for these workers. In that scenario, at least their labour rights violation could be prevented to a certain extent. The Government could also organise vocational training for educated youth, encouraging them to take up jobs as Government staff with reasonable salaries. In this way, the youth will be inspired to continue education, too. 

More importantly, the Government needs to tighten the noose around child labour and workers’ health violations. It’s a long, continuous process but it has the potential to improve the lives of at least three lakh people and children.

At the end of it all, I realised that these men, women and children barely realised they were being exploited. In fact, they were scarcely aware that they had rights to a meaningful life. A chance at livelihood sustained by the fireworks industry and associated activities, along with education and fulfilment of basic necessities will work in their favour. 

Credits

The featured photos were shot at Thiruthangal, Sivakasi and belong to ecoHQ.

The article has been written by Deepa Sai is the founder of ecoHQ and Quill Ink. And, the content has been edited by Ayesha Tari.