Investment in rule of law a corporate imperative, not charity: Business, civil society leaders

By Rajiv Shah    

In a compelling town hall discussion hosted at L.J School of Law, prominent voices from industry and civil society underscored that corporate investment in strengthening the rule of law is not an act of charity but a critical business strategy for building a safer, stronger, and developed India by 2047. The dialogue, part of the Unmute podcast series, examined the intrinsic link between ethical business conduct, robust legal frameworks, and sustainable national development, against the sobering backdrop of India ranking 79th out of 142 countries on the global Rule of Law Index.

Dr. Chaitali Jani, Director of L.J School of Law, set the context by highlighting the foundational role of the rule of law, citing a World Bank report indicating countries with stronger legal frameworks attract 70% more Foreign Direct Investment. “When India is moving towards Viksit Bharat 2047, rule of law for corporates to invest in rule of law is not a charity. It's a strategy,” she stated.

Mr. Sameer Khera, Managing Director of See Linkages and President of the Federation of Gujarat Industries (FGI), articulated the business case, tracing his personal journey to family values, education, and the early pressure of global supply chain compliance post the Sarbanes-Oxley Act. “Businesses have multiple stakeholders. Engagement with all on a fair and equitable footing is essential for long-term sustainability,” he stated. 

He emphasized that the drive for ethical Environmental, Social, and Governance (ESG) practices, now encapsulated in India's Business Responsibility and Sustainability Reporting (BRSR) standards, often starts as a business necessity. “Any organization that wants to grow and be sustainable today has to look at these factors. The valuations you get as a compliant company are definitely much better.” He candidly addressed the challenge of inertia within corporate structures, advocating for showcasing tangible benefits to overcome internal resistance.

“The government can lay down laws, but we are also very adept at finding loopholes. It’s important that businesses set the example,” Mr. Khera urged.

Ms. Sonvi Khanna, Director of Social Compact at DASRA, delivered a powerful critique of the systemic neglect facing the majority of India's industrial workforce. She revealed that her initiative was born from a crisis of conscience during the COVID-19 pandemic, when industrialists realized they had no visibility into the plight of migrant contract workers fleeing cities. 

“Today, a large part of industry runs with a blue-collar workforce which is 50 to 80% not on their own rolls, an ‘out of sight, out of mind’ story,” she explained. Her organisation works to bridge this disconnect by directly channeling the lived experiences of contracted workers to principal companies, bypassing opaque contractor systems. She illustrated the hidden exploitation with a stark example from a joint study: despite wages being deposited correctly, contractors retained workers' debit cards, effectively stealing their earnings—a malpractice the principal company was oblivious to until exposed.

“The rule of law is created to ensure a basic level of dignity for every human being. After that, we can talk about maximizing profits,” Ms. Khanna asserted, challenging the notion that ethical labor practices are economically unviable. She countered corporate fear with data, citing an analysis showing that raising wages for 2,500 workers to a living wage would result in a 48% increase in cost as a percentage of revenue—a significant but manageable investment, not a path to bankruptcy. 

She drew a parallel to India's white-collar revolution, arguing that just as HR systems unlocked the potential of clerical staff, similar investment in the blue-collar workforce is needed. Her message to future legal professionals was unequivocal: “We see lawyers really bargaining their degree... not really being custodians of the law.” She urged them to be voices for the voiceless within corporations and to “push back with logic and calculations” against short-sighted practices.

The discussion, moderated by development practitioner Mr. Gagan Sethi and social impact leader Mr. Minar Pimple, delved into practical and ideological challenges. Responding to students’ queries about corporate lobbying, AI's threat to jobs, and the role of law, Mr. Khera emphasized convergence. “It’s a collective responsibility. Unless government, civil society, and businesses find convergence and work together, I don't see improvement happening.” Ms. Khanna framed the mission around two anchors: the “rule of law” and the “collective sense of well-being,” which is eroded by inequity. She advised students to call out contradictions and use their future positions to amplify marginalized voices.

In closing remarks, Mr. Minar Pimple urged the next generation to engage deeply with ideas and contradictions. “Contestation is part of learning. Read, research, and prepare for the profound implications of forces like Artificial Intelligence.” Mr. Gagan Sethi summarized the pathway, stating that moving from mere profit to obeying the law, then to ethical action, and finally to community stewardship requires “conviction, capacity, and capability.”

The town hall concluded with a resonant consensus that for India to achieve its Viksit Bharat ambitions, the corporate sector must evolve from being mere subjects of the rule of law to becoming its proactive ethical stakeholders and champions, recognizing that such investment is fundamental to their own longevity, market resilience, and the nation's holistic prosperity.