CSR can be pooled to make corporate partner in progress
4 Jan. 2015 11:41 PM IST
The profiteering corporate culture has shown little responsibility towards society. The corporate during the past many years is only pressurising the government to succumb to its demand for giving more and more. The corporate itself has given little. The CSR – corporate social responsibility has not helped the society but it has increased their profits through setting up so called foundations.
The corporate bodies have not shown the concern to uplift the condition of the people. Their exercise during the so-called slowdown, which apparently, as per their phenomenal profit figures, did not hit them, helped them earn bounties. Not a paisa was transferred to the people but they got government incentives (subsidies) of over Rs 1.5 lakh crore at the least during the past five years.
They cartelised and went on increasing prices of all commodities. Now with the onset of change in political and economic climate also they are neither prepared to help the government nor the people by reducing prices. The car companies despite fall in many input costs do not reduce ex-factory prices, which could automatically reduce taxes. They thrive on excise duty cuts and rue when it is withdrawn.
The proposals of all their organisations are aimed at having further incentives through tax and interest cuts – each of it levies direct burden on the common man. He pays higher taxes both direct and indirect and higher prices and toll.
The corporate now have to change their tack and come out with proposals to come to the aid of the government. They are using CSR funds to set up “foundations” that employ their kith and kin. It gives them tax benefits as also build up reserve. Some piecemeal showpiece activities do not help the society. It gives them mileage in terms of publicity. A big tea firm has boosted its sales through so-called efforts to “strengthen democracy”.
It has to change. They are diverting the government efforts from helping the people and initiating schemes for their welfare. Even the MNREGA was forced by them. They cut on jobs forcing the government to take on the responsibility. This helped them expand to the rural market as average income grew.
Again they did not pay back to the society. The corporate now has to come up with concrete proposals for the untapped CSR funds. They must come up with proposals to be a direct partner in government efforts to reduce prices, create jobs and boost the economy. There is anger in the society as jet fuel cut of 12 per cent that brought prices to a four-year low of Rs 52.4 a litre did not make airfares cheaper. Similarly the crude prices touching a low of $ 57 did not reduce fuel prices as the government had to increase excise duty to fund Rs 10,550 crore road construction a year – that also benefits the corporate raise toll rates.
The corporate are losing opportunities. The higher fares and toll rates boost their profits. People expect them to reduce increase in cost of living by coming out with proposals and steps to reduce prices and inflation.
The industry bodies have to think out of the box. They cannot depend on the government in perpetuity at the cost of the people. The corporate are raking in the largest benefits from the society and giving little back.
The time for pay-back has come. They have to pool out their CSR resources to help the government cut expenses in highway and rural road-building, irrigation, railways, education, health, infrastructure funding, maintain public sector bank profits and consequent elimination of toll and other cesses that increases cost of living.
The car companies have been earning huge profits, much higher than their parents could earn in their countries of origin. Pharmaceutical and health care companies’ profits have soared even higher. The FMCG companies have virtually been riding on over 500 per cent profits. The education shops raked in untold profits through increase of fees and other charges by over 100 to 200 per cent during the past five years. Except small entrepreneurs, who were not paid on time by the large corporate, none suffered.
The consumer at all levels had only to lose. This led to fall in the savings rate that had been lubricating the economy over the last six decades. Now the onslaught on interest rates is a dangerous move to erode the value of their wealth to increase profits of the corporate.
Each time the government has to take blame for their lure of profit. They do not give a farthing back to the government. The companies behave as if they are the only ones who need help in perpetuity. The latest report of global financial services firm UBS says, “India is among the best corporate sector stories. India is the poster child for structural reforms”.
It only means the corporate are buoyant but the society is in tatters – a huge disparity if not corrected could cause a severe social and economic upheaval. The story could turn turtle.
The corrective steps now have to come from the corporate. They should not expect the government to dole out the sops they want. The government has shown its resolve to ensure a low-tax regime. But initiative is possible when they come out to help out in real terms. The least, as suggested, they could is to come out with proposal that could reduce government borrowings, increase funding of railways, health care and all people-oriented services.
The ancient Marwaris had been giving back to the society in the name of “dharmada”. The modern-day high profile corporate has to emulate but modernise the instruments. If they together took responsibility to reorient CSR much of it could be achieved.
The Indian corporate had always belied hopes if not betrayed them. They had not responded to the call of first prime minister Jawaharlal Nehru. The country is looking towards them to usher in a new culture to help the latest one Narendra Modi tide over a severe economic crisis.
This is an opportunity for the corporate. If they do it they would set global example and set India apart for ushering in the real new economy, where corporate would no more be seen as exploiter but a partner in progress. Will they?