By | Ramesh Ranjan | Editor www.humanengineers.com
In 2013, the Government of India enacted Section 135 of the Indian Companies Act prescribing a mandatory “CSR spend of 2% of average net profits … during the three immediately preceding financial years” for all companies meeting specified financial thresholds. The Government ensured that duty is cast on the company to give back to the society. Through this clever move the government shifts the onus of social welfare to the corporate its responsibility.
Corporates are now expected to not just carry out their business in an environment friendly and sustainable manner, but take initiatives to improve and enhance the lives of various strata of the society.
This was immediately lauded by all sections of the society and Corporate India welcomed it and lapped it.
The necessity of Corporate social responsibility is undisputed, though the mandating of CSR under the Companies Act, 2013 is. The government has prescribed a set of CSR activities which aims at the establishment of an equitable society.
However has it really met the desired social result of uplifting of the needy and the Corporate world truly sharing its resources.
Some companies are using charitable trusts /NGO to fabricate CSR spending, Some others are using fake Trusts, Middlemen and using it for Money Laudering, turning white money into cash using the CSR Funding route
Many a corporates have used this opportunity to build a social brand and leverage it to their advantage rather than to the advantage of the poor.
One of a very reputed MNC uses the CSR Fund to set up Training Schools and train rural youths in becoming an Electrician and then they even fund them to set up their own Electrical Shop and then promote their products and services through them. Is it truly a CSR activity in letter and spirit or is it just marketing by the backdoor route to build goodwill, expand their rural network and promote their products and services.
Another reputed IT Major has set up a very large Educational Institution using the CSR route. However it has mandated that all of them use only their Product & Services in the Educational Institution. In fact the sales generated by selling their products & services to these Institutions far outweigh the CSR Fund provided by the company.
There are instances of Companies funding Social Activists, NGO’s to buy them or to silence them and also to lobby for their interests. There are reports as to how the CSR Funds are being used to further Political gains.
Often, CSR funds are directed at ventures that are directly beneficial to the company, either in terms of increased profits (branding exercises, creating false goodwill among the public, etc.) or an exchange of favours – a quid pro quo exercise.
In contrast to the hypocritical Corporate Social Responsibility programs, look at the unorganised sector.
There is a street vendor in Mumbai Worli Sea Link junction selling Health Juice to the early morning joggers & walkers. His famous drink is Wheat Grass juice and he sells a freshly made wheat –grass glass of juice for Rs.20/- He also offers to them a glass of Neem Juice for free. According to Captain Raghu Raman when asked why he doesn’t charge them for the Neem Juice, the vendor said that Neem is freely available and takes very little effort to make it and hence offers it for free. He could very well have charged another Rs.20/- for Neem juice but he CHOSE not to.
He is a CEO who does 50% CSR, not the 2% mandated by the Government. He is a standing example of a Leader who knows How much is Enough. He had another source of Revenue but he chose not to exercise it. That is the definition of enough
In another example as quoted in his talk India unInc: Management lessons from streets of India, Captain Raghu Raman quotes another example of Social Responsibility exhibited by the unorganised Street Vendors.
An old lady sells Khakra on the Tadoba Forest Reserve road in a roadside Shak. She sells it for Rs.15 per plate and is one of the best Khakra being served in Mumbai. A Social Media specialist was so impressed that he advised her that she should increase the price to Rs.30/- and also put up a Board so that people know about her offer. The next time he visited the place he found that the old lady did implement his suggestion and he found a board and also that she had increased her price to Rs.30. There were long line of cars and people waiting for the Khakra to be served. She had increased her Top Line and also the bottom line. He then suggested to her another idea of why not serve Tea along with Khakra. It would help her to diversify, increase her product offers and her revenue.
She led him outside of the Shack and then pointed him to a neighbouring Tea Stall and said “what will happen to him. What will he do, if I stole his business and offered Tea”. She knew How much is Enough. She was not interested in being predatory trying to steal market share or brand extensions horizontally, vertically.
He was dumbfounded.
The unorganised Street vendors know that to co-exist that we need to fill every body’s plate. You don’t have to pile everyones food on your plate.
At a time when India is facing a Jobless Growth, its about time that the Corporate world, every Business Leader realises that we need to co-exist and ensure that every body’s plate is full rather than trying to maximise shareholders wealth (pile everyone’s food on your plate) . Its about time that We Live and Let others Live too, rather than trying to crush competition. The country is big enough to accommodate every one but not for ones greed.
Can we truly build an inclusive economy by encouraging and taking along the unorganised sector and the marginalised section of the economy in our journey to the Future.
Its about time that all of us in the society give leg up to somebody who can make an orbit shift.
This is true Corporate Social Responsibility and not using Corporate Social Responsibilty as crony capitalism or using it as a Brand Campaign or as a backdoor Marketing campaign.
It’s about time we understand that Rent seeking negates everything that it stands for. We need to work towards making Corporates not just SMART but lives with a HEART.