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Indian businessmen yet to comprehend social responsibility
By siliconindia
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Monday, 13 September 2010, 16:05 IST |
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30,000 crore in a year on corporate social responsibility (CSR), where the company indulges in sustainable or responsible activities that point to its good intentions as a corporate citizen, practicing CSR among individuals is yet to catch up in India.
In 2007, Business Standard has launched a study to analyze the charity done by the 36 Indians on the Forbes list of billionaires. Their combined worth was over $190 billion, but the money they had set aside for charity was not even a fraction of that. Most of them had nothing to say when asked about their contribution to philanthropic causes. Industry estimates shows, Indians spend about 30,000 crore in a year on charitable causes. This number includes the money spent by companies on corporate social responsibility. If that is taken out, contributions by businessmen would not add up to a lot.
According to a report by Bhupesh Bhandari, in the West, charity is driven by individuals, while in India it is done by companies. Businessmen say there is a historical perspective to it. Punitive taxation in the pre-liberalisation days meant businessmen did not have huge piles of wealth. The stock market boom, which has spawned dozens of billionaires, is a recent phenomenon. So, they couldn't do charity in their personal capacity. But tax breaks were given to companies (and also individuals) if they gave their money for charitable causes. The legacy carries to this day.
Companies are at the forefront of charity, not individuals. For instance, the corpus of the Bharti Foundation, which wants to put as much as 200 crore into education, is contributed by various Bharti companies. The things could be changed in the near future. The Azim Premji Foundation, for instance, is funded totally out of the personal wealth of Wipro Chairman Azim Premji. Nandan Nilekani along with historian Ramchandra Guha has started the New India Foundation which supports research in social sciences. Ex-bureaucrat and Tech Mahindra honcho Vineet Nayyar has donated shares worth Rs 30 crore to the Essel Social Welfare Foundation, which is run by his wife.
Perhaps the best example of charity in India is the Emergency Research Management Institute, which runs emergency ambulance services in various states. It was started by Ramalinga Raju, the scam-tainted ex-promoter of Satyam Computer Services. It is known for its efficiency and reach.
If everything goes fine, the money spent by companies for corporate social responsibility may increase in the days to come. The proposed Direct Taxes Code has laid down that trusts, societies and not-for-profit companies will get tax breaks only if they spend 85 per cent of the money allotted to them. That could mean improved corporate social responsibility in the days to come.