Whose responsibility is it any way?
 

Last year the Ministry of Corporate Affairs introduced the Corporate Social Responsibility Voluntary Guidelines. This was prompted by “the emergence of a strong India Inc. having a significant global footprint1”

At its most basic, CSR can be defined as a concept whereby organisations take responsibility for their impact on society and the environment2. It is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit3.

Indian business has traditionally been socially responsible. The history of Indian corporate philanthropy mainly includes cash or donations in kind to trusts, establishment of schools, libraries, hospitals, etc. particularly ‘family-run businesses’, continue to support such philanthropic initiatives. Traditionally the Tatas and Wadias ruled the roost. Newcomers like the Murthys and Ambanis, have also joined in.

From philanthropy to the incorporation of the stakeholders' interest in the business model, the Indian business sector practices various methods of fulfilling its social responsibility. India's ancient wisdom and spiritual culture, inspires people to work for the larger goal of the well-being of the community and the planet.

The pressure on Indian industrialists to demonstrate their commitment to social development increased during the independence movement, when Mahatma Gandhi developed the notion of ‘trusteeship’, whereby the owners of property would voluntarily manage their wealth on behalf of the people4.

After independence in 1947, India adopted the socialist and mixed economy framework, with large public sector and state-owned companies. The boundaries between the state and society were clearly defined for the state enterprises. Elements of corporate responsibility, especially those relating to community and worker relationships, were enshrined in labour laws and management principles. This state sponsored corporate philosophy still operates in the numerous public sector companies that have survived the wave of privatization of the early 1990s5.

Detractors of the concept challenge the very notion of corporate responsibility for anything other than the economic bottom line. The counter belief is that wealth generated by individuals, through taxation and private charitable choices can be directed to social ends.

The rise of globalisation has brought with it a growing consensus that with increasing economic rights, business also has a growing range of social obligations. There is a need to integrate business processes with social processes. CSR aims at integrating social, environmental and ethical responsibilities into the governance of the firm. CSR in India is looked on as a tool to bridge the gap between India Inc. and the heart of Bharat.

Ashok Khosla, Chairman of Development Alternatives, is of the view that sustainability includes sustainable consumption and sustainable production and is thus the responsibility of both procedures and consumers. The NGOs, citizens and governments must look at sizes, types and locations of companies to explore how CSR can be brought to bear on companies.

The government has already laid down guidelines for large corporate firms. Similar ones are in the making for Central Public Sector Enterprises and small and medium enterprises. Bodies like CII and FICCI are also promoting mainstreaming of CSR activities in business. Consumers too need to demonstrate socially conscious consumption patterns to build pressure on corporate to internalize their externalities.

Karl Marx said that those who ignore their history are bound to repeat it. To make further progress towards more socially responsible and sustainable business practices, we will need a mixture of new ideas about the future and wisdom drawn from lessons of the past.

1 Salman Khurshid, Minister of State (I/C) for Corporate Affairs
2 www.science.org.au/nova/034/034glo.htm
3 www.wikipedia.com
4 Corporate Social Responsibility, Dr Shanker Adawal
5 ‘Altered Images: the 2001 State of Corporate Responsibility in India Poll’ q
 

Kriti Nagrath
knagrath@devalt.org

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