CSR Activity as a Measure of Efficiency in Central Public Sector Enterprises
| Published date | 01 June 2024 |
| DOI | http://doi.org/10.1177/00195561231221817 |
| Author | Roma Mitra Debnath,Abi Antony George |
| Date | 01 June 2024 |
CSR Activity as a
Measure of Efficiency
in Central Public
Sector Enterprises
Roma Mitra Debnath1 and Abi Antony George2
Abstract
A large majority of Central Public Sector Enterprises (CPSE) have been in exist-
ence for more than six decades and might soon complete a century of existence.
They may soon qualify to be called as companies ‘Built to Last’. Notwithstanding
the clamouring for ‘privatisation’ and the frequent interference by the govern-
ment in matters solely concerning the management, the large majority of CPSEs
continue to show profits year after year. This is best exemplified by the long list of
CPSEs contributing towards society’s overall development under the Corporate
Social Responsibility (CSR) Act. This article considers the top seventy-seven
CPSEs, ranging from the smallest to the largest, which have been supporting CSR
activities in the country for the past several years.
Keywords
Corporate Social Responsibility (CSR), Central Public Sector Enterprises (CPSE),
benchmarking, Data Envelopment Analysis (DEA), India
Introduction
The Central Public Sector Enterprises (CPSEs) in India were set up over the years
after independence (1947) to lay the foundation of an industrial economy. They
have created wealth for the society and have been a source of employment. A large
majority of CPSEs have been in existence for more than six decades and are going
to touch the hundred-year mark. It may, therefore, not be far-fetched to call them as
public sector companies ‘built to last’. Public Sector Undertakings or Enterprises
(PSUs/PSEs) are one of the key components of India’s macro economy.
Article
Indian Journal of Public
Administration
70(2) 256–271, 2024
© 2024 IIPA
Article reuse guidelines:
in.sagepub.com/journals-permissions-india
DOI: 10.1177/00195561231221817
journals.sagepub.com/home/ipa
1 Indian Institute of Public Administration, New Delhi, India
2 London School of Economics, London, UK
Corresponding author:
Roma Mitra Debnath, Indian Institute of Public Administration, New Delhi 110002, India.
E-mail: roma.mitra@gmail.com
Debnath and George 257
A key factor for their existence must, however, be ‘efciency’. One of the most
accepted measures of the ‘efciency of a rm’ is the cost per unit of output com-
pared to its peers. An inefcient rm or a company cannot withstand competition
in the market and survive in the absence of ‘efciency’. This is truer in an eco-
nomically more liberalised economy with reduced or no tariffs for protection.
In this context, this article adopts an indirect approach to measure efciency,
employing the Data Envelopment Analysis (DEA). DEA, in turn, is a nonparamet-
ric method for identifying the production frontier of rms or for forecasting growth.
In place of parametric values such as ‘turnover’ or ‘prots’, the DEA makes
use of Corporate Social Responsibility (CSR) funding and CSR activities under-
taken by the CPSEs to evaluate ‘efciency’. The CSR Act, 2013, made it manda-
tory for all prot-making rms in India to contribute towards CSR.
Information on CSR activities undertaken by the prot-making CPSEs is,
therefore, in the public domain. The Public Enterprises Survey published by the
Department of Public Enterprises (2018) (https://dpe.gov.in/en/publication/pe-
survey/pe-survey-report) provides information on the various activities under-
taken by the CPSEs, including the amount spent.
The listed CSR activities for CPSEs are, moreover, a part of the seventeen (17)
United Nations Sustainable Development Goals (UN SDGs), and are similar to
SDGs 1, 2, 4, 5, 6, 10, 11 and 13 (https://sdgs.un.org/goals).
CSR has become an essential parameter in today’s business environment for
understanding the overall efciency of a rm. Mere nancial wellbeing is no
longer the sole idea behind efciency, and the returns or the social cost that a rm
gives back to the society is also crucial. It is for this reason that the CSR contribu-
tion was made mandatory for all rms that have had an annual turnover of greater
than `1,000 crores, or a net worth of greater than `500 crores or their annual
prots for the last three years have been greater than `5 crores.
One critique of PSEs is that they are a huge drain on the economy, and that has
been the justication given behind their privatisation. Therefore, by estimating
the efciency of the PSEs through DEA, we would be able to arrive at the most
optimal point of production for the PSEs, both in terms of cost as well as the
output being generated. Moreover, with the CSR Act becoming mandatory in
2013 for all prot-making rms, PSEs with optimal efciency as well as being
contributors to the overall development of society, these rms would once again
become the most integral cog of the Indian economy.
Corporate Social Responsibility (CSR) and
Data Envelopment Analysis (DEA)
Md. Ghouse et al. (2013) highlighted the role of CPSEs in India. Throughout the
article, the role of CPSEs during the economic restructuring period after colonial
rule has been emphasised, and the importance in the overall growth of various
sectors in India is assessed. The societal role that CPSEs play needs to be quanti-
ed and measured to examine the efciency of CPSEs.
To continue reading
Request your trialUnlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations