Corporate social responsibility in India--the emerging discourse & concerns.
| Author | Sharma, Seema |
CSR Discourse: An International Perspective
Definitions of CSR internationally range from simple to exhaustive, from reference to a number of necessary activities to demonstrate responsibility, to a general call for a comprehensive, integrated and committed pursuit of social and environmental sustainability (Aras & Crowther, 2009). CSR is also considered as the commitment of business to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways which are beneficial for both business and development (World Business Council, 2002). It is also seen as a process of managing the cost and benefits of business activity to both internal (workers, shareholders, investors) and external (institutions of public governance, community members, civil society groups, other enterprises) stakeholders (World Bank, 2002). A conscientious business should embrace economic, legal, ethical and philanthropic responsibilities (Carroll, 1994). At the international level, CSR is being aggressively projected as a model of development which provides an alternative to state intervention. It is seen to encompass individuals, groups and communities who are also the stakeholders in the process. It is also considered to have the potential to address issues of governance. Both these roles still some time back were identified with the governments in majority of developing countries including India.
CSR in India
The beginning of Twenty First Century in India has seen the term Corporate Social Responsibility coming to the forefront of development discourse. Interestingly, the Indian state is taking lead in defining the meaning, extent and scope of CSR and creating a context within which the on-going CSR discourse is emerging. In the process, it is also providing legitimacy to the role of CSR in development. This discourse has its roots in the neo liberal philosophy of the West with CSR emerging as panacea for many of the existing problems.
The attempt to delineate a role for CSR in the context of development in India is a challenging task. The problems and social issues that face India are linked to the social structure of the society. Big challenges in the form of caste, inter religious strife, poverty, unemployment, malnutrition, illiteracy, poor health and gender issues affect more than half the population. Distorted development and corrupt bureaucracy add to the woes. In such a scenario, carving out a development role for CSR is a very daunting task.
The Government of India in 1976 had inserted the term socialist in the preamble of country's constitution thereby committing itself to ensuring a development process which would be guided and spearheaded by the state. But the ground situation is now fast changing in India. Post 1991, there is increasingly a receding role of the state in the economic and social sphere. An increasing acceptance of CSR by large number of corporate post liberalisation can thus be seen in the context of the larger role being consciously carved for the private sector in an economy which was earlier largely controlled and managed by the state. The corporate world is keen to exploit the opportunities that are being provided by the new economic outlook of the state. There is a tremendous race amongst the business houses to expand their economic horizons either single handed or in partnerships. This has created a context within which conflicts and contestations with regard to social justice and human rights are taking the centre stage. An analysis of the term CSR or an attempt to build boundaries around this concept in India reveals that both the interpretation of the term and its expected outcomes have an inherent logic of convenience. The state, the corporate and the civil society look at CSR from their respective vantage points. Thus, the definitions of CSR by each of them reflect their respective positions.
Political & Economic Context
Origin of the term corporate social responsibility as understood by the business and the prevailing definitions of CSR that are in use can be traced to the West. The debates on the role of CSR in the West have taken place largely within three specific socio-economic contexts. The first major debate on the role of a socially responsible corporate originated during the Great Depression (Berle, 1931; Dodd, 1932; Donham, 1929) when in 1929, the corporate realised that if they did not serve the communities they would face revolution or feudal system based on business ownership (Donham, 1929). The second debate emerged during the cold war period (Abrams, 1951; Spector, 2006; 2008). The context of this debate was the threat from Soviet Communism. Consequent upon that, corporate social responsibility was seen as part of the ideological war that was fought against communism and so the businesses were exhorted to expand their role in the society and take on public responsibilities (Davis, 1973). By spreading free market values, opening trade with backward regions, businesses proclaimed themselves to be the agents of worldwide benefit and in a way which would also benefit them (Spector, 2008).
The third debate which continues till date started with the onset of globalisation (Palazzo & Scherer, 2008). Globalisation has had its own consequences for theorizing of CSR. In fact, arguments are being built for providing a strong rationale for the larger role of corporate in the social domain and in governance. Business houses are being propagated as solutions to the problem of global regulation and public good where the state agencies may be unwilling or overburdened to administer citizenship rights and contribute to public good. Business firms are also expected to fulfill additional political responsibility of contributing to development and global governance (Scherer et al, 2008). It is in this context that the social responsibility of the firms is gaining ground.
Interestingly, the argument that is being put forth to provide legitimacy to CSR in the post globalised world centres around the fact that in the prevailing globalised scenario, new forms of political regulation are required which are over and above the nation state so that the political order can be re-established and economic rationality circumscribed by new means of democratic institutions and procedures (Scherer & Palazzo, 2008). This global governance and definition and implementation of standards of behaviour with global reach (Habermas, 2001) required national governments, international organisations, NGOs, civil society groups and business firms to play a role in this (Scherer, Palazzo & Baumann, 2006).
Brand West CSR in India
Globalisation has had its own impact on CSR and consequent to globalisation is the receding role of state both as a regulator of business and as a major player in the development process. The repercussions are that in both the areas, vacant space is taken up by business and civil society organisations more specifically NGOs. We find that the state is taking lead in carving out space for the corporate to participate in social development goals of the country in collaboration with NGOs. There is also a conscious attempt by the state and business community to justify the presence of CSR and provide legitimacy to it.
Both the corporate and the state are using different arguments to provide legitimacy and acceptance of the brand West CSR in India. The state has undertaken this challenge by providing appropriate arguments to further the cause of CSR, be it by projecting it as a concept that has been part of Indian culture or by showcasing it as an instrument of wealth redistribution.
Even before the Department of Public Enterprises (DPE) guidelines for CSR were released by the Government of India in 2009, Prime Minister Dr. Manmohan Singh in his address at the general meeting of Confederation of Indian Industries (CII) in 2007 elaborated on a ten point social charter for the corporate of which CSR was a part(http:// pmindia.gov.in/all-speeches.php). He clarified that "corporate social responsibility must not be defined by tax planning strategies alone. Rather, it should be defined within the framework of a corporate philosophy which factors the needs of the community and the regions in which a corporate entity functions." Refuting the notion that CSR is an imported Western management concept, he called it a part of India's cultural heritage which, Mahatma Gandhi called trusteeship. He appealed to industry through CII to come forward in a much more substantial manner and engage extensively in activities which benefit society at large. While many proponents of CSR including the Prime Minister Dr. Manmohan Singh, uphold that CSR is not a Western concept and trace it to the trusteeship model of Mahatma Gandhi, there is a difference between...
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