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‘Business Case’ for Corporate Social Responsibility



Over the past several decades, the Tatas have established Trusts, which enabled setting up of institutions like the Indian Institute of Science (IISc) and the Tata Institute for Fundamental Research (TIFR).   Wipro Chairman Azim Premji has pledged to donate nearly Rs 10,000 crores for improving school education in the country.  Infosys commits one per cent of its profits every year to social causes through the Infosys Foundation.  The Birlas, the Mahindras, the Kalyanis and several other large corporations have been spending a fraction of their profits on social causes.

It is clear that in India there are an existent but small number of companies which practice Corporate Social Responsibility (CSR). These companies have been deeply involved with social development initiatives in the communities surrounding their facilities.  Tata’s CSR activities in Jamshedpur include the provision of full health and education facilities for all employees and their family members.

However, CSR in the Indian context is still one of the least understood development initiatives.  Barring the Navaratna and the Mini-Ratna PSUs, the reputed MNCs and a handful of large Indian companies, most others have a confused approach to CSR, interpreting it as philanthropy.  To a great extent, companies see CSR as an add-on function and not core to their business. Hence, the approach has largely remained parental and generally cheque-book oriented.

But the situation is changing.  CSR is coming out of the purview of doing social good and is fast becoming a business necessity.  The Government, on its part has accepted the proposal of Parliamentary Standing Committee headed by former finance minister Yashwant Sinha, which makes it mandatory for companies with a turnover of Rs 1,000 crores or net profit of Rs 5 crores to allocate 2 per cent of their profits towards CSR. 

The guidelines on CSR for Central Public Sector Enterprises state that “corporate social responsibility extends beyond philanthropic activities and reaches out to the integration of social and business goals. These activities need to be seen as those which would, in the long run, help secure a sustainable competitive advantage”.  The CPSEs have also been mandated to create a CSR budget with contribution up to 5% of their net profit every year.

However, several individual companies as well as industry chambers had tried hard against the move to make CSR mandatory.  Those who are opposed to the proposal argue that the very concept of CSR is built on the premise of ‘voluntary’ contribution and hence it should not be imposed on the companies by the Government.  According to them, it is just a new form of tax on company’s profits.

Supporters of CSR say the opposition  stems from a short-sighted  viewpoint.  The environment  in which the companies operate today has changed vastly.  A company can not operate efficiently without the support of the community.  This is particularly true in the face of growing activism of the Civil Society Organizations (NGOs), which support the cause of the under-privileged.   Increasingly, the Governments, both at the Centre as well in several States are making inclusive growth intrinsic to their developmental strategies.  Thecustomers, the public and the investors also expect  companies to act sustainable as well as responsible.  Hence, CSR is becoming an outcome of  a variety of social, environmental and economic pressures.

Genesis of Corporate Social Responsibility

The concept of Corporate Social Responsibility was first mentioned in 1953 in the publication ‘Social Responsibilities of the Businessman’ by William J. Bowen. But, the term CSR became popular only in the 1990s.  The term is still imprecise and its application differs widely.

Worldwide, honouringof a triple bottom line – people, planet, profit has gained universal acceptance.   An approach to CSR that is becoming more widely accepted is community-based development . In this approach, corporations work with local communities to better themselves.   Philanthropy, where corporates give monetary donations and aid to local organizations and impoverished communities, continues to dominate CSR, though it faces serious criticism.  Progressive organizations do not support this form of CSR as it creates a dependence syndrome amongst its recipients rather than developing long-term capabilities.  Another approach that is garnering support is deliberate inclusion of ‘public interest’ and ‘fair trade’ in corporate decision making.

Extent of CSR in India

In India, most leading corporates are involved in CSR programmes in areas like education, health, livelihood creation, skill development, and empowerment of weaker sections of the society.  According to a study undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses, corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36 per cent of the CSR activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent in Delhi and 9 per cent in Tamil Nadu.  The companies had on an aggregate, identified 26 different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, environment, health, as well as rural development.

The survey reveals that, not surprisingly, the corporates targeted most of their activities around the areas they operate.  This trend is likely to continue.  But the flip side is that, it is generally the more developed states that have been the beneficiaries of CSRs, rather than the ones languishing at the bottom, whose developmental needs are more central. 

Another survey, which ranked Indian companies’ CSR activities on a scale of 0-5, showed that none of the Indian companies got placed in the highest level.  Only 16 % of the 500 companies surveyed had well defined CSR activities.  The concept was yet to catch up with the remaining 86% of the companies.   Lack of understanding, inadequately trained personnel, non availability of authentic data and specific information on the kinds of CSR activities, coverage, policy etc. further added to the reach and effectiveness of CSR programmes.

The Government is now working on a framework for quantifying the CSR initiatives of companies to promote them further.  Efforts are also on to develop a system of CSR credits, similar to the system of carbon credits which are given to companies for green initiatives.

The National CSR Hub

The establishment of the National CSR Hub at the Tata Institute of Social Sciences, Mumbai is a major step towards institutionalizing CSR activities in the country. TISS will act as a think-tank, undertake research for the corporate social responsibility projects.  Funded by the Department of Public Enterprises, the National CSR Hub will also undertake nation-wide compilation, documentation and creation of database. The purpose is to dovetail CSR activities with overall national development goals.

The new Guidelines on CSR lay stress on shift from casual approach to the project based accountability approach. There is greater emphasis on identification of projects based on surveys, laying down clear cut path to implement programmes as well as their monitoring.  It is also prescribed that activities under CSR are to be implemented by specialized agencies and not by the staff of the companies. Specialized agencies would include community based organizations (NGOs), panchayat organizations, academic institutes, trusts and missions, Self-Help Groups, Mahila Mandals etc.

Noted CSR expert Prof. Leo Burke of the Notre Dame University, USA says India needs to adopt ‘national-local’ approach.  “National in the sense thatthere will be need for nationwide alliances and databases in order toquickly learn best practices, share innovations, and ‘scale-up’ pilotprogrammes. Local  in the sense that it will require organizations to efficientlyimplement programmes at the grassroots level, as well as mobilize volunteers to serve their local communities.”

The argument that the primary goal of business is to make profits and pay taxes, and it is the responsibility of the governments – local, state and central to create necessary social infrastructure, continues to remain valid.   But, abusiness needs a healthy, educated workforce, sustainable resources to compete effectively. For society to thrive, profitable and competitive businesses must be developed and supported to create income and opportunities.  This is called ‘Creating Shared Values’ and it is here that the interests of the companies and the society converge.   This has led to the ‘business case’ for CSR gaining ground and many corporate houses are realizing that ‘what is good for workers – their community, health, and environment is also good for the business’.

[### PIB Features (RTS/HN  SS-53/SF-53/24.03.2011)]

Disclaimer: The views expressed in this writing are solely of the author and do not necessarily reflect the views or policies of League of India, its Editorial Board or the business and socio-political interests that they might represent.

This article was first published as a part of PIB Features

Manish Desai

The author is Director  (Media & Communications) at Press Information Bureau (PIB) Mumbai.

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Digital Transactions in India to Cross $1 Trillion a Year by 2025



Demonetisation and cashless drive has pushed the growth trajectory of digital payments in India significantly, and by 2025, digital transactions in the country could be worth USD 1 trillion annually, says a report.

According to a white paper by ACI Worldwide along with AGS Transact Technologies (AGSTTL), digital transactions in India could be worth USD 1 trillion annually by 2025, with four out of every five transactions being made digitally.

“The user base for digital transactions in India is currently close to 90 million, but could triple to 300 million by 2020 as new users from rural and semi-urban areas enter the market”.

“Flexible, scalable and reliable technology will be critical to the future of payments in India as the market continues to experience incredible growth,” said Manish Patel, Vice President, ACI Worldwide.

Meanwhile, with the rise in digital payments, cybersecurity costs for companies in India is also rising.

Mahesh Patel, Group Chief Technology Officer, AGS Transact Technologies said, “we understand that rapid rise in internet users nationwide is spurring an increase in digital transactions. However, the Indian market unlike many western nations is still to mature and remains threatened due to lower awareness levels”.

As per the report, Cyber attacks cost India an estimated USD 4 billion annually and could rise to USD 20 billion by 2025, with the digitisation of payments presenting new challenges for cybersecurity.

“It is necessary that the rise in digital transactions remain holistic thereby supporting growth with scalable processing platform. Also, it should be accompanied by allied precautionary measures such as cybersecurity and fraud prevention,” Patel said.

Mass adoption of e-payments and a thriving fintech scene, combined with regulatory policy, are set to propel India into a leading position in the global payments landscape, it said adding unified payments interface (UPI) transactions are a key driver of greater financial inclusion.

The white paper titled “Transactions 2025” noted that India’s smartphone user base is likely to double to 500 million by 2020 as affordable devices and data will spur safe, fraud-resistant digital transactions based on biometrics and multi-factor authorisation.

ACI Worldwide is a global provider of real-time electronic payment and banking solutions, while AGS Transact Technologies (AGSTTL), is an end-to-end payment solutions company.

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World Bank Report Praises the Impact of GST, Projects 7.5% Growth in 2019-20

The World Bank Report points to macroeconomic stability of the Indian economy.



World Bank’s publication ‘India Development Update‘ has noted credible signs of a further uptick in Indian economic growth.The rebound in industrial activity including manufacturing sector is critical for job creation in the years to come.

The report says that the Indian economy is set to revert to its trend growth rate of 7.5% as it bottoms out from the impact of GST and demonetisation. The World Bank Report points to macroeconomic stability of the Indian economy.

The report expects the Indian economy to clock a growth rate of 6.7% in the current fiscal.rise to 7.3% for the next financial year and accelerate further to 7.5% in 2019-20.

Besides pointing to enhanced macroeconomic stability.on sectoral growth, the report says that services will continue to be the main driver of economic growth.agricultural growth has become more stable with slow acceleration.and industrial growth has seen some acceleration.

World Bank report has lauded India’s recent record in controlling inflation.fiscal discipline despite revised budget estimates, declining debt to GDP ratio even after accounting for the recapitalisation of banks, stable balance of payment situation and higher macroeconomic stability as compared to recent years.

The report refers to the impact of reforms on the Indian economy from composition of deficit, energy subsidy reforms, GST, ease of doing business, FDI liberalisation, infrastructure generation, inflation targeting framework, Insolvency and Bankruptcy Code, to access to financial services and digital payments.leading to better governance, and delivery of services and benefits.

The report says that oil prices could impact the Indian India is increasingly integrated with the global economy.

The report appreciated the impact of GST on the formalisation of the economy and for making economic growth sustainable.

As one of the fastest growing emerging and open growth impacts the Indian economy.With global growth picking is expected to infuse further momentum into the Indian growth story.

The World Bank Report is an endorsement of economic reforms undertaken by the Modi govt.and India’s growth is expected to have a salutary impact on the global growth scenario as well.

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Piyush Goyal Meets 110 Professionals from 54 Firms for Station Redevelopment Program



The Union Minister of Railways and Coal Shri Piyush Goyal met with Architects and Planners to discuss issues related to Station Redevelopment Program. A total of 110 professionals from 54 firms participated in the meeting.

The Minister was categorical that in view of the financial condition of Indian Railways and the paying capacity of public, there is a need for finding solutions that meet the aspirations of travelling public at low cost.

“We shall work on providing innovative solutions tailored to uniquely Indian conditions. I am confident that we will eventually be in a position to share the expertise in other countries as well,” Goyal said at the meeting.

This consultation meeting held with Architects was aimed to understand the issues and difficulties in participating in development/redevelopment of railway stations. The discussions were held on a wide range of issues from the difficulties that the architects and planners are facing in participating in station redevelopment program; modifications required in various documents guiding the station design; general direction that station redevelopment program shall take.

Goyal assured the participants that as desired the empanelment will be made in more categories; the name of the Architect will be included in the plaque. The Minster also directed IRSDC to take up capacity building of Consultants as Station Development is as yet a new field.

Goyal also stated that young architects and planners shall also be involved in the station development program and they may be engaged in smaller/simpler stations.

It may be recalled that Indian Railway Stations Development Corporation Limited (IRSDC), as the nodal agency, is taking up redevelopment of around 600 major Railway stations across the country. Towards this objective of stakeholders’ consultation, an idea competition for development of 635 stations of Indian Railways, ‘SRIJAN’ (Station Rejuvenation Initiative through Joint ActioN) has been launched at MyGov portal since 26.01.2018.

This mammoth exercise will kickstart the program worth Rs 1,00,000 crore investments and requires extensive involvement of engineers, planners, architects and other professionals besides the contractors and developers. To prepare the plans for stations, IRSDC has taken up multiple initiatives:

  1. International Design Competition for 3 Railway Stations, namely, Nagpur, Gwalior and Baiyappanhalli
  2. IRSDC has empanelled experienced consultants with multi-disciplinary teams
  3. IRSDC has also invited professionals to take initiatives and share their vision for railway stations for a token fee and in response, eleven architects have registered themselves for development of 74 railway stations.
  4. SRIJAN (Station Rejuvenation Initiative through Joint Action), an Ideas competition has been launched by IRSDC, where users and young minds are invited to put across their ideas for implementing “Low-Cost High Visibility” items at station areas. Around 450 entries have been received so far.

The last date for submission of entries in this competition is 26.03.2018. The winners will get certificates and worthy ideas will be incorporated into the designs.

IRSDC has also launched competition through Mygov portal for IRSDC logo and tagline. The winner for logo competition will get a cash prize of Rs 75,000/-and for tagline also will get Rs 75,000/-. The last date for submission of entries is 26.3.18.

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