Corporate Social Responsibility in India

Posted: April 1, 2011 in Business, News
Tags: ,

While studying at Jamshedpur, TATA’s contribution towards city’s infrastructure was most visible. I didn’t find anything unusual except that it was in complete contrast with the infrastructure provided by the government administration. Never did I see TATA propagate the notion that they are favouring others by doing this. After that, one day I witnessed TATA Company’s compassionate side towards their employees when my friend’s father expired. He was employed in TISCO. How the company reacted to it was touching. The same compassion was witnessed by the world through TATA’s employees during 26/11 terrorist attack in Mumbai. Harvard University is studying what made these employees go beyond their call of duty and put their life at stake to save lives of their guests at Taj Hotel, Mumbai. It was company’s compassion towards its employees that percolated through them. In earlier times Corporate Social Responsibility (CSR) terminology wasn’t coined but it existed through those who wished to take social initiatives and their were many who did so.

ITC took up farmer and rural community upliftment as their core issue and incorporated it in their business strategy. Many softwares to aid in teaching are developed by software companies. Marketing is done by associating a company with some philanthropic cause. All this is happening but there still is wide scope for much more to be done. These examples also indicate that CSR is not a charity activity but a core business activity. It is about benefiting one’s employees, community and environment as in return it gives them better returns and increased business avenues.

Government is in dilemma on whether to make CSR spend mandatory for corporate sector in India. Presently, the Companies Bill will urge companies to spend up to 2% of their net profits on CSR but it may not make CSR spend mandatory. However the Parliamentary Standing Committee has underlined the need to mandate firms to spend on CSR activities. But since making it mandatory may give rise to malpractice and manipulations of accounts, officials are averse to introduce it as mandatory measure. Moreover there is opposition from industries too as it may give undue advantage to many scrupulous activities in the garb of CSR.

Government and leading corporate firms must come together to promote CSR as beneficial business policy to encourage more and more firms to adopt it with full willingness. Most companies in India spend in charity rather than spending on long term developmental projects. They may be provided with informed options that suit their business interests as well as serve people too. Bottlenecks and dilemmas too are needed to be dealt with so that companies have ease in carrying out such activities. Programs to dispel misconceptions about CSR and promoting its advantages must be organized. So, rather than making it a mandatory exercise, propel it as a mutually advantageous activity for all the stakeholders.

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Comments
  1. Palak Mathur says:

    Agree with you conclusion. If government makes CSR expenditure mandatory by Companies Bill 2009, then again it would be intruding into the affairs that should generally be left on the board of the companies. We are moving towards an era where government’s role in business will be that of a facilitator and government policies are being framed keeping this in mind. But the bill has provisions which are against this frame of mind in the government.

    We need to promote the awareness about advantages of CSR and thereby make the companies to spend in it. We can also promote expenditure by a group of companies or chambers as a whole.

  2. […] Corporate Social Responsibility in India (rijutagupta.wordpress.com) […]

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