History of CSR in India

Part 2 – Culture of CSR in India

India both leads the world in some areas of CSR and trails a long way behind in others. Part 2 (in a 5 part series) explores the culture and history of CSR in India as a background to its Companies Act 2013.

Commerce without EthicsYou can barely go anywhere in India without encountering the juggernaut of Mahandas Karamchand Gandhi (Gandhi to most of us) and his legacy to the nation. He is featured on currency, and seems to pop up in almost any place, including souvenir shops.

Somewhat strangely, his name is invoked by many corporations as a reminder of the history of corporate CSR. I’m not entirely sure this would please Gandhi, after all some of  his silent and peaceful protests were directed against some of the largest companies in India at the time. In his view, their brand of commerce without ethics was a blight not just on corporate executives, but also on humanity as one of the ‘deadly sins’. It’s not clear that he would celebrate the current CSR activity of Indian corporations (with some notable exceptions).

And Gandhi’s own history here is important. He cut his teeth in business as a Commercial lawyer in London before his spiritual transformation (which mostly took place in South Africa). Gandhi knew that corporations had incredible power to transform people’s lives; that they failed in this venture was their ill.

Young Lawyer, GhandiHistory of CSR in India

But to be fair to companies, philanthropy has a long history in India. I’m guessing that will continue – there is certainly a lot of social need.

According to two academics, the concept of CSR has its roots as far back as the teachings in Veda.

 “O man! Procure wealth with one hundred hands and distribute it with one thousand hands. Thus you attain perfection of the work done and to be done.”

Artharva Veda (3-24-5)

Atharva Veda

They also identify CSR concepts in Arthshastra from the 4th century BC(E). That guidance on kings stresses the importance of a lack of self-interest, and that joy lies for rulers in the welfare and satisfaction of subjects. According to this idea, perhaps taken most seriously by Bhutan with it’s Gross National Happiness, stakeholder happiness and satisfaction is key to success, a concept that many CSR professionals still struggle to sell.

The academics identify others (somewhat unconvincingly in my view), but once again, Gandhi is present in the discussion, describing large business as:

                                                         “Trusts of the wealth of the common peoples and thus emphasized                                                                                that the wealth should serve the larger social purpose.”

After Gandhi’s salt marches, many large companies established trusts to do just that and many of them endure to this day. But perhaps that highlights the ongoing intractability of poverty in India. Very few of the problems that Gandhi identified in India have been solved, even when progress has been made and least of all disparity of wealth. Although there have been significant improvements in that area in the last 15 years (at least according to the Gini coefficient), there is still much to be done. A staggering 25% of the Indian population is still illiterate, and more than half (700m+) live on less than $US 1 per day

No doubt corporate philanthropic failure is partly due to the failures of what might be characterised as a command and control semi-socialist economic model (with large tinges of, arguably, government inefficiency and corruption), but it is also a failure of companies to take Gandhi as seriously as they could have since Independence.

India - Land of ContrastsSo although there is a long history of CSR in India, it is difficult to conclude that it is an entirely successful one. (If history of CSR is of interest, here is a more modern reading of the Evolution of corporate social responsibility in India)

Culture of CSR in India

It was probably a little self-selecting and biased, but during my time I heard a lot of people talk about how much companies are doing to try to meet social need. From providing air conditioning to truck drivers (in order to more equally treat employees – bosses in offices have it, so why not drivers, who are much more exposed) to setting up libraries to trying to measure social impact.

Companies in India donate a lot of money to charity.

Leading CSR Spenders in IndiaSource: https://www.academia.edu/7492295/Impact_of_CSR_mandate_on_Indian_companies (from 2011 figures)

But I also observed some fatalism in philanthropy. Organisations that were setting up infrastructure that was sub-standard or using inappropriate resources to try to meet educational needs and claiming that something is better than nothing. I confess to much ignorance on this, but usually doing something well has a better and longer lasting impact. Putting that another way, doing CSR (charity) that needs to later be replaced by better charity at a later time certainly doesn’t seem to me to be what is good for India.

Culture of CSR and NOT charity

I think that India needs to move into full-blown CSR if it is to break the shackles of striving to get rich and then give a little bit back, instead of ensuring that corporate capitalism minimises damage and begins to tractably solve some of India’s most pressing social needs and inequalities. That’s a point I’ll return to in later posts in this Series.

It was slightly disappointing that the words “shared value” were removed from the relevant regulations in 2014. Those words at least hinted at the possible expansion of the 2% rule into a wider understanding of CSR/Sustainability/CR (via Michael Porter and his Creating Shared Value framework – inadequate though I think that is). I understand perhaps why they were removed – so that business didn’t claim business as usual for their CSR spend, but it does look a little like a missed opportunity.

Not Sharing Value

Next Post

In the next post I’ll explore emerging approaches to meeting the 2% requirement.


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