Tuesday, April 14, 2015

Introduce disincentives for "irresponsible" corporates: Pro-Modi babu on CSR

By Rajiv Shah
Top Gujarat government ex-bureaucrat known to be close to Prime Minister Narendra Modi, Maheswar Sahu, wants the state officialdom to tighten the state’s noose over corporate social responsibility (CSR) activities of industrial houses. In a recently released book, “Small but Meaningful: CSR in Practice”, Sahu, who retired as additional chief secretary, industries, in 2014, has said the state must introduce “economic disincentives for irresponsible corporate behaviour”, even as encouraging “socially responsible business practices.”
Wanting the state officialdom to play a vital role in CSR, Sahu says, the government must work out a “robust mechanism for implementation of the CSR projects by corporate.” Sahu – who organized two of Modi’s high-profile Vibrant Gujarat world business summits in 2011 and 2013 as the state babu looking after industry and mining – was appointed independent director in the Board of Directors of the Reliance Industries Ltd (RIL) in February 2015. He is also chairman of the Gujarat State CSR Authority.
Authored jointly with Jeevan Prakash Mohanty, a research fellow with the Energy and Resources Institute (TERI), the book carries a message from Gujarat chief minister Anandiben Patel praising it as a contribution to the academic world, and a foreword by top tycoon Ratan Tata, who believes it will add to the idea of Gujarat being a business model for other states to follow.
Sahu’s idea for having a major role for state in CSR comes against the backdrop of the Gujarat chief minister wanting coprorates to “compulsorily” hand over 1 per cent of company profits to the state government as CSR fund. The chief minister’s idea, however, is known to have not go down well with many state babus, who said, this would deprive corporates of the tax benefits they avail from their CSR activities by involving NGO groups.
Despite wanting the state to play a crucial role in CSR, Sahu is full of praise for corporates’ post-globalization CSR activities india. He says, Indian companies are “seen to be performing” well in non-financial arenas such as “human rights, business ethics, environmental policies, corporate contributions, community development, corporate governance and workplace issues.”
Priced at Rs 1,100 despite poor production and print quality, book jots down 11 CSR activities as case studies, but says that it is “not responsible” for the correctness of the information. It says, information on CSR best practices has been “provided by 11 corporates”, and the “authors and publishers are not liable for the correctness and authenticity of the information”.
Those who have been “selected” are MNCs Cairn and Hazira LNG (Shell); state-controlled public sector undertakings Gujarat State Fertilizer Company (GSFC), Vadodara, and Gujarat Narmada Valley Fertilizer Company Ltd (GNFC), Bharuch; well-known industrial houses Cadila, Reliance, Adanis and Ambujas; and Setco Automotives and UPL Ltd (formerly United Phosphorous Ltd). Several of these industrial houses have in the past faced strong criticism for “destroying” environment, “polluting” atmosphere and depriving local people of livelihood.
Even as going in great detail on the way CSR activities took shape in the West, the book devotes less than two paragraphs on “Gandhi influenced industrialist’s approach towards society and argued that the wealthy should be trustees of wealth”, pointing to how “Industrialists GD Birla, Jamnadas Bajaj, Lala Shri Ram, and Ambalal Sarabhai, were influenced by Gandhi’s theory of trusteeship”, taking up problems of untouchability, women’s empowerment, and rural development.

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