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CSR & the Companies Bill: India’s Corporate Struggle

The popular self-branding of India as the next up-and-coming economy poised to take over the global stage is something of a half-truth “in waiting”.  India knows this, America knows this, and corporate India has been put in the spotlight.

Increase in flow of funds to projects which exist for the purpose of alleviating some terrible social and living conditions is not the same as addressing the said problems themselves. The global perception of India’s future prospects and potential (an image mostly engineered by India itself) has been covering up a lack of progressiveness. The Companies Bill is targeted towards investor protection in India via the quotas for Board members, Corporate Social Responsibility (CSR) and auditing in order to improve a very convoluted and corrupt business environment. The main goal of this new bill is to improve the attractiveness of Indian firms and encourage mergers with foreign firms  all the while officially mandating corporate social responsibility in India. In essence, the Indian government wants to create a mutually beneficial relationship between the social and economic sectors but the corporate obstacles to realizing these goals are not explicitly addressed in this bill. The stipulations are as follows according to Acumen.org

  1. All companies with revenue greater than Rs. 1000 Cr ($200M) or profits of 5 Cr ($1M) must spend 2% of the average of the last 3 years profits, towards CSR activity
  2. The Board must designate a 3-member CSR committee (including one Independent Director) to ratify decisions on spending
  3. Employee expenses will not be classifiable as CSR spending
  4. Poverty alleviation, healthcare, education and social business ventures have all been included as potential areas of investment
  5. If the spend is not made in that year, the CSR committee would have to submit an explanation for why that has occurred to not be penalized.

Anirudha Dutta summed up the problem of social welfare initiatives in India in his blog post, ‘Corporate India and CSR’. Corporate corruption, embezzlement, the twisted attitude towards charity all show that without accountability and without mandatory disclosed audits, the CSR initiative of the Companies Bill serves a alternate purpose other than itself and actual social welfare spending. It can be argued that the CSR portion of the bill can be deemed as a way to create a culture of “social responsibility” in India but given the multiple loopholes through which companies can avoid the financial requirements (Point 5), it begs the question of how this CSR initiative might reliably and consistently improve the current and upcoming social initiatives and programs in India in real time.  It seems that the question the Indian government asked itself was how it would fit in with India’s plans to become a “attractive destination for investment”( The Hindu).

What the Companies Bill means for the non-profit sector

“According to Union Minister of State for Corporate Affairs Sachin Pilot, this stipulation makes India the first country in the world to legally mandate corporate spending on social welfare.” India has 3 million NGOs in operation but most lack scale, structure and consistent government funding. This is because the concept of “social welfare” in India is abstract, and  very much a new idea within the Indian culture. Even in a political context, the representation of minority groups and of women is still a matter of concern in the Upper House and Lower House leaving issues important to these two groups less discussed. Given the disparities between deep-rooted social and economic distinctions present within the gender, urban/rural and caste contexts and the all-encompassing concept of “social welfare”, one can see the Mr. Pilot’s statement will need to be matched by some drastic social and cultural changes first. Greed, corruption, social and gender discrimination is propagated to the highest levels of Indian government. The proposed “trickle-down” that this CSR initiative promotes is not enough to address the very real social problems  holding India back from actually having a shot at being the next superpower.  These ondulations of the financial and economic state of the country without  the accompanying upward progression of social habits will result in a self-sabotaging economy and a widening of social rifts.

There is no doubt that many NGOs that secure a corporate relationship will receive much needed financial support and publicity as a result of this mandatory “voluntary initiative”. Despite this, as the bill becomes tested for real life wear and tear, it is an incredibly disheartening thought that out of the 3000 Indian corporations that this bill especially applies to, given the flaws in corporate India, many will not adopt a long-term, substantial sense of welfare responsibility because as M.r Dutta also mentioned, many will look for the tangible “returns” of such an “investment” instead of acquiring a long term sense of national partnership. That being said, foreign multinational companies in India such as Proctor & Gamble have initiated CSR programs of their own in partnership with Indian NGOs and has set an example of the potential for a mutually beneficial relationship between social and economic sectors. A quote from Desmond Tutu expressed this sentiment eloquently:

“You are powerful people. You can make this world a better place where business decisions and methods take account of right and wrong as well as profitability…”

Despite being hailed as one of the fastest growing economies, India is still one of the most difficult countries in which to conduct business and maintain investments.The issue of investment safety and the necessary social changes that needs to occur comes hand in hand and given the recent “economic storm”, India is struggling to maintain it’s mislabeled rapid growth and “progressiveness”. The government is trying to realign corporate mandates towards foreign mergers and investment attraction in an effort to keep perpetuating India’s growth both tangibly and with global confidence. The Rupee might be in bad shape now but if corporate India doesn’t jump on board with the government’s Bill and make the mandatory structural and financial changes, recovery and growth will be stifled in ways that will leave India far behind.

 – Hiba Ganta

 

Featured Photo Attribution MDGovpics, Creative Commons, Flickr

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4 comments

  1. I think it’s a bad idea to force compagnie into investing money in social programme, more so in a country were corruption is common place.

    The goal is good but i think there would have more succes if the governement would just take the money and then invest it in social programme.

    • I think the ultimate problem is that corruption and this lack of a sense of “social welfare” is present in the government as well. Also there needs to be long term support for such welfare programs not just one time donations.

      But you’re right – I don’t think this corporate scheme will have much success unless they see the long term benefit for their own growth of re-investing back into the country.

  2. Jagatheesan Chandrasekharan

    53) MELAYU KLASIK

    Sila
    tulis di dinding gajah simbol menarik yang didiskriminasi ‘ Sarv Samaj (
    Semua Society) yang paling buruk daripada bangsa apartheid untuk
    menyediakan untuk ” Savadhan Vishal Maha Rally ” di Lucknow pada Hari
    Lahir Cik Mayawati pada 15-1-2014

    10. âlavaka Sutta .

    Untuk âlavaka yang Demon .

    21) ENGLISH klasik

    Oleh itu saya dengar.

    Pada satu masa Buddha tinggal di domain syaitan Aalavaka itu. Kemudian setan Aalavaka mendekati Buddha dan berkata:

    ßRecluse , keluar . ”

    Buddha berkata: rakan ßAlright . ” Dan keluar.

    Kemudian dia berkata ßRecluse , masukkan . ”

    Buddha berkata rakan ßAlright “dan dimasukkan.

    Untuk kali kedua , setan berkata ßRecluse , keluar . ”

    Buddha berkata: ßAlright , kawan “dan keluar Sekali lagi,

    setan tersebut, ßRecluse , masukkan . ”

    Buddha berkata: rakan ßAlright “dan dimasukkan.

    Untuk kali ketiga setan berkata: ßRecluse , keluar . ”

    Buddha berkata: “Baiklah, kawan” dan keluar.

    Lagi setan tersebut, ßRecluse , masukkan . ”

    Buddha berkata: ßAlright , kawan “dan dimasukkan.

    Untuk kali keempat setan berkata: ßRecluse , keluar ”

    Buddha berkata: ßFriend , saya tidak akan keluar , melakukan apa sahaja yang anda boleh lakukan. ”

    ßRecluse
    , saya akan tanya satu soalan , jika anda tidak menjelaskan , saya akan
    mengelirukan fikiran anda, atau akan berpecah hati anda, atau akan
    membawa anda dengan kaki dan membuang kepada bank lain sungai. ”

    ßIn
    dunia ini tuhan dan manusia , bersama-sama dengan Maras , Brahmas , dan
    masyarakat suka menyendiri dan Brahmin saya tidak melihat sesiapa yang
    boleh mengelirukan fikiran saya, atau berpecah hati saya, atau diambil
    oleh kaki boleh membuang saya ke bank lain sungai. Namun , jangan bertanya, apa sahaja yang anda ingin .

    Kemudian setan Aalavaka yang ditangani Buddha di dalam ayat .

    181. ” Daripada apa yang wealths utama untuk seorang lelaki, apa yang baik diamalkan membawa kesedapan

    Daripada rasa apa yang utama , dan hidup bagaimana mata pencarian utama . ”

    182. . “Iman , adalah kekayaan utama kepada manusia , Pengajaran yang baik diamalkan membawa kesedapan .

    Daripada rasa kebenaran adalah utama mata pencarian satu hidup dengan bijak dikatakan utama . ”

    183. ßHow adalah banjir terlintas, bagaimana lautan bersilang,

    Bagaimana ekzos perselisihan , dan bagaimana ketulenan berlaku. ”

    184. ßWith iman, banjir itu menyeberang, dengan usaha yang lautan,

    Dengan usaha perselisihan mendapat letih, dan dengan kebijaksanaan kesucian datang kira-kira ”

    185. “Bagaimana kebijaksanaan diperolehi dan bagaimana kekayaan yang berpengalaman,

    Bagaimana seseorang menjadi terkenal, dan bagaimana rakan-rakan terikat.

    Pergi dari ini kepada dunia akan datang, bagaimana ada bersedih. ”

    186. ßPlacing iman di negeri ini sempurna dan Pengajaran untuk mencapai kepupusan,

    Mereka yang mendengar ia dengan tekun dan discriminatingly mendapat kebijaksanaan.

    187. Mereka sesuai yg dikenakan kuk dengan membangkitkan usaha pengalaman Pengajaran

    Melalui kebenaran satu menjadi terkenal dan dengan memberikan rakan-rakan terikat .

    188. Kepada isi rumah dengan iman , jika ada kebenaran, latihan,

    Pandangan kanan dan kemurahan hati, dia tidak akan bersedih hati selepas itu.

    189. Sekarang datang, soalan menyendiri dan Brahmin yang lain, tahu,

    Sama ada terdapat banyak kebenaran, latihan, kemurahan hati dan kesabaran jelas di sini.

    190. ßWhat ​​ada untuk mempersoalkan sekarang, dari suka menyendiri dan Brahmin

    Hari ini saya tahu apa yang penting untuk kelahiran yang seterusnya.

    191 ` Ia adalah untuk kebaikan saya bahawa yang Satu Bersinar datang ke Aalavi ,

    Sekarang saya tahu bahawa , yang diberikan kepada mereka adalah buah-buahan banyak.

    192öow saya akan pergi dari kampung ke kampung dan dari bandar ke bandar,

    Penyembahan semua Bersinar Satu dan kebaikan daripada Pengajaran . ”

    193. Apabila berjalan , berdiri, duduk atau berbaring , ia lentur dan regangan,

    Ini adalah pergerakan badan.

    194. Tulang dan urat diikat bersama dilindungi dengan kulit daging dan,

    Badan dilitupi dengan kulit, dan keadaan sebenar tidak dilihat .

    195. Di dalam ini penuh , perut penuh dengan hati dan organ-organ seksual

    Begitu juga dengan hati , paru-paru , buah pinggang dan limpa.

    196. Ia juga penuh dengan orang yg kurang ajar , air liur , peluh dan minyak badan,

    Dengan darah , minyak sendi, hempedu dan minyak keras.

    197. Kemudian dari sembilan pintu luar merembeskan najis setiap masa.

    Melalui mata dan telinga terdapat rembesan

    198. Ada orang yg kurang ajar yang datang dari hidung dan melalui muntah mulut,

    Begitu juga hempedu atau kahak adalah muntah , dari seluruh trickles peluh badan

    199. Pengayuh berlubang beliau dipenuhi dengan sum-sum

    Yang bodoh telah ditenggelami difikirkan ia adalah sesuatu yang boleh dipersetujui.

    200. Apabila dia terletak di belakangnya mati, kembung dan bertukar biru

    Dan dibuang ke dalam tanah kubur , beliau tidak dimiliki oleh saudara-saudaranya .

    201. Ia dimakan oleh anjing-anjing , serigala , serigala dan cecacing,

    Burung gagak dan burung helang juga makan, dan apa jua makhluk lain ada .

    202 Siddhārtha mendengar kata-kata Bersinar Satu, menjadi bijak,

    Kelihatan di badan kerana ia benar-benar adalah , dan belajar dengan teliti.

    203. . Seperti yang saya sekarang, badan ini juga : sebagai badan ini, jadi saya akan,

    Oleh itu dia menghalau faedah untuk badan secara dalaman dan externally1

    204. Yang Siddhārtha menghapuskan kepentingan dan ketamakan untuk badan menjadi bijak

    Realises bertujuan untuk memujuk abadi dan pengalaman kepupusan

    205. Ini dua perkara berkaki adalah najis memberikan bau yang tidak baik

    Ia penuh dengan pelbagai jenis kotoran dan strews mereka di sana sini.

    206. Dengan satu badan, jika seseorang berfikir conceitedly ,
    Atau jika dia bercakap rendah orang lain, – apa yang ia selain daripada kekurangan kebijaksanaan.

    15-01-2014
    Berhati-hati RAPAT GRAND BESAR
    of
    SEMUA MASYARAKAT PERGERAKAN Emansipasi

  3. Jagatheesan Chandrasekharan

    BSP
    believed in raising money through the donations by party leaders and
    workers and not from business houses or traders.Party leaders and workers also sacrifice their time and talent. SP believes in goonda raj
    which is their real ideology. RSS’s BJP believe in collecting unethical
    money in the name of GURU DAKSHAN which is unaccounted and both SP and
    BJP are funded by business houses or traders which causes sky rocketing price rise, black money and corruption. Neither SP nor BJP can ever dream of gathering more than 20lakhs people in RamaBhai
    Ambedkar stadium. They have to rely on caste and communal
    discriminating CEC that draped the elephant symbol including the ones
    with raised trunks and all SC/ST/OBC leaders’ statues that never draped hands of congress or national flower lotus of BJP when their ruled assemblies
    went for polls. The CEC never ordered for draping the statues of
    Congress and BJP upper caste leaders statues. The CEC has not made
    public the SOURCE CODE of the program of Voting machines which are not
    tamper proof. But for the highly corrupt and caste, communal
    newspapers,magazines and media BJP or the SP would not have won
    elections. Just like Mandela who fought against race
    discrimination Dr Ambedkar, Kanshiram and Ms Mayawati’s party is against
    caste and communal discrimination through Sarv Samaj Sadbhavan i.e.,
    through All Societies unity.

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