Corporate Social Responsibility (CSR) is supposed to be a voluntary activity to be done by those corporations and businesses who want to go beyond their calling of making profits.
One can argue that businesses are not geared up to do this kind of work and the Government should have merely levied a tax and done the work themselves. Viewed in this pragmatic lens, putting the onus of CSR on businesses can be deemed to have a nuisance and a highly negative policy. If they accuse the Kshatriya of asking the vaishya to do his work, they are probably very right.
But if we pause there may be something of very great value in this intrusion into the life of businesses. The Government collects taxes and uses them for law and order, administration, infrastructure and development. In the last 10 years massive amounts have been spent by the Central and state government in the hope the the lot of the bottom 25% of this country. But most of these funds have not been very productive to put it mildly.
So this CSR provides an opportunity for corporates to come up with better plans, ideas and concepts to improve the prospects of the bottom 25% of the country's population and implement them. They could use their mandatory CSR requirements to fund pilots of such initiatives and make a success out of them and then present them to the State and Central governments through their industrial bodies such as FICCI, CII, ASSOCHAM etc for wider adoption.
If they are successful with this kind of CSR effort they will do 2 things - improve the effectiveness of government programs which will in turn either lead to a lower tax rate or it will create a new consumers and market for their goods and products.
One can argue that businesses are not geared up to do this kind of work and the Government should have merely levied a tax and done the work themselves. Viewed in this pragmatic lens, putting the onus of CSR on businesses can be deemed to have a nuisance and a highly negative policy. If they accuse the Kshatriya of asking the vaishya to do his work, they are probably very right.
But if we pause there may be something of very great value in this intrusion into the life of businesses. The Government collects taxes and uses them for law and order, administration, infrastructure and development. In the last 10 years massive amounts have been spent by the Central and state government in the hope the the lot of the bottom 25% of this country. But most of these funds have not been very productive to put it mildly.
So this CSR provides an opportunity for corporates to come up with better plans, ideas and concepts to improve the prospects of the bottom 25% of the country's population and implement them. They could use their mandatory CSR requirements to fund pilots of such initiatives and make a success out of them and then present them to the State and Central governments through their industrial bodies such as FICCI, CII, ASSOCHAM etc for wider adoption.
If they are successful with this kind of CSR effort they will do 2 things - improve the effectiveness of government programs which will in turn either lead to a lower tax rate or it will create a new consumers and market for their goods and products.
