Tata Power sources ₹115 crore through affirmative action procurement, supporting SC/ST and marginalised entrepreneurs.
Tata Power has reinforced its long-standing commitment to inclusive growth and social equity by channeling ₹115 crore, accounting for 0.3% of its total procurement, towards Affirmative Action Business Associates (AABAs) during the reporting period of 2024-25. These procurements were made from suppliers and contractors belonging to Scheduled Castes (SC), Scheduled Tribes (ST), and other marginalised or vulnerable groups, reflecting the company’s structured and policy-driven approach to inclusive supply chain development.
India’s largest vertically integrated power company directly sourced 20% of its total procurements from Micro, Small, and Medium Enterprise (MSME) Business Associates (BAs)
Tata Power’s Annual Report revealed that this initiative forms a key pillar of Tata Power’s broader Affirmative Action (AA) Policy, which is embedded within the company’s General Terms and Conditions and shared with all prospective Business Associates (BAs).
The Tata Group power company has set an ambitious social impact goal to positively impact 120 lakh (12 million) individuals by 2030 under its Affirmative Action (AA) framework, significantly scaling up its commitment to inclusive and equitable development across India.
The target reflects the company’s long-term vision of creating meaningful change for socially and economically disadvantaged communities, going well beyond procurement-led inclusion and addressing structural gaps in opportunity, livelihoods, and access to resources.
Welcoming Tata Power’s affirmative action-led procurement initiative, Rusen Kumar, Founder and National President, Ambedkar Chamber of Commerce and Industry (Ambedkar Chamber), said, When a company like Tata Power integrates marginalised entrepreneurs into its core procurement system, it sends a powerful message that inclusion is about participation, dignity, and shared economic progress. Directing ₹115 crore to Affirmative Action Business Associates demonstrates that social equity and business strength can advance together through structured and merit-based engagement.”
“Affirmative action in procurement creates a powerful multiplier effect. It nurtures entrepreneurship, builds skills, and generates employment within marginalised communities. When inclusive sourcing is institutionalised by large corporations, it gives first-generation entrepreneurs access to formal markets, strengthens confidence, and gradually corrects long-standing structural imbalances in economic participation. Such models can become a replicable benchmark for corporate India.”, Rusen Kumar added.
Preferential Procurement Policy: A Clear ‘Yes’
Tata Power has confirmed that it does have a preferential procurement policy. The policy explicitly encourages vendor enlistment and ordering from enterprises and contractors drawn from marginalised and vulnerable communities.
The company’s approach goes beyond symbolic inclusion. It actively seeks to:
- Promote entrepreneurship among SC/ST communities
- Encourage contractors to engage workforce from SC/ST backgrounds
- Create growth opportunities for socio-economically disadvantaged groups within its supply chain ecosystem
These principles are not optional add-ons but are integrated into Tata Power’s procurement framework and contractual guidelines.
Who Are Affirmative Action Business Associates (AABAs)?
Affirmative Action Business Associates (AABAs) are suppliers, contractors, and business partners who belong to or primarily represent socially and economically marginalised or vulnerable communities, and who are actively integrated into a company’s procurement and supply chain ecosystem under a structured affirmative action or inclusive procurement policy.
In the context of Tata Power, AABAs are a critical part of the company’s Affirmative Action (AA) framework, aimed at promoting social equity, entrepreneurship, and inclusive economic participation.
Key Groups Covered Under AABAs
Affirmative Action Business Associates typically include enterprises and contractors from the following groups:
- Scheduled Castes (SC)
- Scheduled Tribes (ST)
- Entrepreneurs from marginalised or vulnerable communities
- Companies owned and controlled by SC/ST individuals (with minimum 50% ownership)
- Contractors engaging significant workforce from SC/ST communities
- In a broader AA context:
- Persons with Disabilities (PwDs)
- Women from marginalised communities
Role of AABAs in Tata Power’s Supply Chain
AABAs are not symbolic partners. They are formally enlisted vendors and contractors who:
- Supply goods and services across Tata Power’s operations
- Participate in competitive procurement processes
- Meet quality, safety, and compliance standards
- Receive policy-backed support and incentives to grow sustainably
Tata Power encourages AABAs by offering:
- Preferential consideration in commercial parameters (on merit basis)
- Payment incentives for contractors engaging over 30% SC/ST workforce
- Support for transitioning individuals from employment to entrepreneurship
Purpose of Engaging AABAs
The engagement of AABAs serves multiple objectives:
- Economic inclusion of historically excluded communities
- Entrepreneurship development among SC/ST groups
- Employment generation within marginalised communities
- Creation of inclusive supply chains aligned with ESG principles
Who Are the Beneficiaries?
Under its affirmative procurement practices, Tata Power primarily procures from:
- Scheduled Caste (SC) entrepreneurs
- Scheduled Tribe (ST) entrepreneurs
- Contractors and suppliers engaging SC/ST workforce under contractual arrangements
- Broader vulnerable and marginalised groups, as defined under the company’s AA framework
In addition, the company’s Affirmative Action vision extends to Persons with Disabilities (PwDs), women from marginalised communities, and other underserved social groups, although the reported ₹115 crore procurement figure specifically reflects engagement with SC/ST and vulnerable group business associates.
Incentives to Drive Inclusion in the Supply Chain
Tata Power has introduced measurable commercial incentives to encourage deeper inclusion:
- Payment incentives for contractors deploying more than 30% of their workforce from SC/ST communities
- Preferential treatment in commercial parameters for companies owned by SC/ST entrepreneurs with a minimum 50% ownership stake
- Merit-based consideration to ensure quality, competitiveness, and sustainability are not compromised
These mechanisms aim to motivate marginalised communities to participate actively and confidently in the formal business ecosystem.
Affirmative Action Policy: Beyond Procurement
Tata Power’s Affirmative Action Policy visualises inclusion as a long-term transformation agenda rather than a compliance exercise.
Policy Vision
The policy believes in promoting social equity and equal opportunities for:
- Scheduled Castes
- Scheduled Tribes
- Persons with Disabilities
- Women from marginalised communities
Aligned with Tata Power’s motto ‘Lighting Up Lives’ and its purpose of ‘Powering Transformation’, the policy seeks to drive structural change across underserved regions and communities.
Ambitious 2030 Target: Impacting 120 Lakh Lives
By 2030, Tata Power aims to positively impact 120 lakh (12 million) individuals from the Affirmative Action community through:
- Direct interventions
- Indirect livelihood and enterprise development
- Strategic partnerships
- Employee-led volunteerism
This target underscores the scale at which the company intends to operate, extending its impact far beyond procurement numbers.
Focus Areas and Geographical Reach
The company prioritises:
- Communities located near operational areas
- Aspirational districts
- Underserved and informal sector workers
- Neurodiverse individuals
- Sanitation workers and other neglected occupational groups
The AA policy is governed by the Apex Affirmative Action Council, ensuring regular review and alignment with:
- UN Sustainable Development Goals (UNSDGs)
- ESG requirements
- Evolving community needs and insights
Five Pillars of Affirmative Action Programmes
To ensure sustainable and measurable outcomes, Tata Power has structured its AA initiatives around five key pillars:
- Education
- Employability
- Employment
- Entrepreneurship
- Essential Enablers
Each programme is customised to regional and business contexts and monitored through performance scorecards to ensure accountability and impact.
One such example is the ‘Pay Autention’ flagship programme, designed to address the specific needs of underserved communities with the ambition of achieving nationwide reach.
Diversity and Inclusion Within the Workforce
Alongside inclusive procurement, Tata Power is strengthening internal diversity and inclusion, with focused strategies to:
- Improve gender diversity
- Support Persons with Disabilities (PwDs)
- Enable neurodiverse individuals to participate meaningfully in the workforce
This integrated approach ensures that inclusion is reflected both within the organisation and across its external value chain.
Role of TPCDT and Community Development
The Tata Power Community Development Trust (TPCDT) plays a strategic role in supporting group entities by designing and implementing long-term, sustainable projects, including:
- Farmer Field Schools
- Wildlife conservation initiatives
- Livelihood and environmental programmes
Energy Access as a Tool for Social Equity
In line with its inclusion agenda, Tata Power is also ensuring access to affordable and sustainable energy through:
- Micro-grids
- Renewable energy solutions
- Solar rooftop initiatives
These efforts help underserved communities move towards energy independence, economic resilience, and long-term sustainability.
A Small Percentage, A Significant Statement
While 0.3% of total procurement, amounting to ₹115 crore, may appear modest in percentage terms, it represents a clear institutional commitment to embedding social equity into Tata Power’s procurement practices. More importantly, it reflects a conscious effort to mainstream marginalised entrepreneurs and workers into India’s formal economic ecosystem, reinforcing the belief that inclusive growth and business excellence can—and must—go hand in hand.
About Tata Power
Tata Power is India’s largest vertically integrated power company, with a strong and diversified presence across the entire energy value chain, including renewable, thermal and hydro power generation, transmission, energy trading, distribution, and next-generation energy solutions. As the company continues to expand its generation capacity and modernise grid infrastructure, it remains at the forefront of India’s energy transition, driving the shift towards a cleaner and more resilient power system.
Tata Power’s total generation capacity stands at 25.7 GW, including 9.94 GW under construction, while its transmission network spans 7,047 circuit kilometres, with 2,414 ckm currently under development. The company serves 12.8 million distribution customers, reflecting its extensive reach across urban and rural India.
A leader in clean energy, Tata Power has been India’s No. 1 solar rooftop EPC company for ten consecutive years and operates one of the country’s largest single-location solar cell and module manufacturing facilities, with a capacity of 4.3 GW each, supporting India’s journey towards a smarter and greener future.
(mbedkarchamber.com)
