Economic
Highlights
New Delhi, 2 January 2015
Genuine CSR
BE PARTNERS IN PROGRESS
By Shivaji Sarkar
The profiteering corporate culture
has shown little responsibility towards society. During the past many years,
the corporate has only been pressurising the Government to yield to its demand
for giving more and more. As for itself, it has given little in return. The CSR
– corporate social responsibility has honestly not helped society, rather has
increased their profits through setting up so-called foundations.
Down the years, corporate bodies
have not shown genuine 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 the
political and economic climate 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They thrive on excise duty cuts and rue when it is withdrawn.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 CSR proposals of all their
organisations are apparently 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.
It is time, the corporate their tack
and come out with proposals to come to the aid of the Government and society.
They are using CSR funds to set up “foundations” that largely accommodate their
kith and kin. It gives them tax
benefits as also help build up reserves. Some piecemeal showpiece activities do
not help the society. Rather, it gives them mileage in terms of publicity. A
big tea firm has boosted its sales through so-called efforts to “strengthen
democracy”. But has it actually, would be a question worth probing.
This has to change. The corporate
are diverting 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.
Have they paid back to the society
for the gains earned? Apparently not. But it should and must come up with
concrete proposals for the untapped CSR funds. In turn then only would it be a
direct partner in Government efforts to create jobs, reduce prices 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
has not made airfares any 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, which incidentally also
benefits the corporate to raise toll rates.
Sadly, the corporate are losing
bigger opportunities. The higher fares and toll rates boost their profits, but
people expect them to help reduce increase in cost of living by coming out with
measures to reduce prices and inflation. Importantly, industry bodies have to
think out of the box. They cannot depend on the Government in perpetuity at the
cost of the people.
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 increase cost of living.
The car companies have been earning
huge profits, much higher than their parent companies 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. Besides, 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.
However, 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 past 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.
Every time it is the Government
which has to take the blame for their lure of profit. They do not give a
farthing back to it. The companies behave as if they are the only ones who need
help in perpetuity. The latest report of global financial services firm UBS
states: “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.
Corrective steps are the need of the hour. The corporate cannot expect the
Government to continue doling out the sops they want. The latter 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, is they could come out
with proposals 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 these. They had not responded to the call of the
country’s first Prime Minister Jawaharlal Nehru. The nation is looking towards
them to usher in a new culture to help the latest incumbent, Narendra Modi,
tide over a severe economic crisis.
This is an opportunity for the
corporate. If they do, they would set a global example and an 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? ---INFA
(Copyright, India
News and Feature Alliance)
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