OF all pathologies afflicting the United Progressive Alliance (UPA) leaders, the most ludicrous one is their desire to control corporate social responsibility (CSR). Only a rabidly anti-business regime, like the one whose titular is Prime Minister Manmohan Singh, could have come up with the suggestion that part of a company’s profit should be statutorily earmarked for CSR activities.
The idea is bad in principle and will occasion more corrupt practices. In fact, it is not just bad but philosophically egregious. It is a blunt attack on and an obscene attempt to control the noblest human instincts—compassion, altruism, philanthropy. Solicitude for fellow human beings—especially for those who are ailing and poor—is as old as mankind. Almost all men and women—kings, the rich, nobles, even commoners—feel sympathy for those who are less fortunate. They make efforts to improve the lives of teeming millions. And they do that on their volition; they are not goaded by some fiat. Prince Siddhartha became Lord Buddha not because he was following some law or rule but because he was moved by the plight of suffering humanity.
Various scriptures, literature, art, and culture have extolled the virtues of compassion and altruism for centuries. The Congress-led UPA, on the other hand, believes that state power has limitless potency, that it can force businessmen to become compassionate. Its sanguineness is the product and function of the statist ideology that it has embraced under UPA chairperson Sonia Gandhi.
Unsurprisingly, UPA bosses keep toying with one anti-industry idea with other. When they are not talking about earmarking part of corporate profits for CSR, they are favouring more disclosures in annual financial statements and the reports of boards of directors.
The government wants companies to include CSR activities during the year in the annual mandatory disclosure. It wants to know how CSR activities were implemented and what results were achieved. Corporate Affairs Minister Veerappa Moily is on record saying that India Inc should develop a culture of voluntary CSR. “CSR cannot be considered only as a charity, it is more of a social business,” he said.
The Big Brother approach of government, along with its generally interventionist policies, has made corporations wary of CSR. According to a survey by consulting firm KPMG, while most Indian companies give out information on CSR as a part of their annual reports, very few of them take it seriously. Only 16 per cent of top listed companies have well-defined CSR objectives and targets in place, says the survey.
In the US, there is billionaire investor Warrant Buffett, who recently made a case for higher taxation on the superrich. In an article, he wrote, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”
It is not that the superrich in India are without conscience (the Leftist mythology notwithstanding), or that they would not like to help the poor. But four decades of Nehruvian socialism, and its revival under the UPA, have left corporate tycoons suspicious of the intentions and actions of government.
Instead of winning the confidence of India Inc and building a policy mechanism that minimises state interference in the economy, the UPA regime is doing everything to heighten businessmen’s misgivings about it. The misgivings are well-founded because the real ruler, Sonia Gandhi, has surrounded herself with people who are inveterately, almost pathologically, anti-business.
So, few in the UPA have the commonsense to realise what malpractices mandatory CSR would spawn. As the Federation of Indian Chambers of Commerce & Industry, or FICCI, candidly said in December 2009, “If such a compulsion (of CSR) is imposed on companies… it may turn counter-productive as companies may resort to camouflaging activities to meet such regulations, particularly during recessionary periods and economic downturns.”
Evidently, nobody in the government has given due consideration to the country’s oldest apex chamber. By pushing for compulsory CSR, the UPA government wants to control business as well as present itself as the champion of the poor.
America’s third president and author of the Declaration of Independence, Thomas Jefferson (1762-1826), said, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
It is indubitable that the Americans have been able to keep their government under check. The same cannot be said about us. We, the people of India, have to resolve and endeavour to stop the excesses of executive highhandedness.