Be partners in India’s progress

The profiteering corporate culture has shown little responsibility towards society. During the past many years, the corporate has only been pressurising the Government to yield to its demand for giving more and more. As for itself, it has given little in return. The CSR – corporate social – responsibility has honestly not helped society, rather has increased their profits through setting up so-called foundations.

Down the years, corporate bodies have not shown genuine concern to uplift the condition of the people. Their exercise during the so-called slowdown, which apparently as per their phenomenal profit figures, did not hit them, helped them earn bounties. Not a paisa was transferred to the people but they got Government incentives (subsidies) of over Rs 1.5 lakh crore at the least during the past five years.

They cartelised and went on increasing prices of all commodities. Now with the onset of change in the political and economic climate they are neither prepared to help the Government nor the people by reducing prices. The car companies despite fall in many input costs do not reduce ex-factory prices, which could automatically reduce taxes. They thrive on excise duty cuts and rue when it is withdrawn.

The CSR proposals of all their organisations are apparently aimed at having further incentives through tax and interest cuts – each of it levies direct burden on the common man. He pays higher taxes both direct and indirect and higher prices and toll.

It is time, the corporate change their tack and come out with proposals to come to the aid of the Government and society. They are using CSR funds to set up “foundations” that largely accommodate their kith and kin. It gives them tax benefits as also help build up reserves. Some piecemeal showpiece activities do not help the society. Rather, it gives them mileage in terms of publicity. A big tea firm has boosted its sales through so-called efforts to “strengthen democracy”. But has it actually, would be a question worth probing.

This has to change. The corporates are diverting Government efforts from helping the people and initiating schemes for their welfare. Even the MNREGA was forced by them. They cut on jobs forcing the Government to take on the responsibility. This helped them expand to the rural market as average income grew.

Have they paid back to the society for the gains earned? Apparently not. But it should and must come up with concrete proposals for the untapped CSR funds. Then only would it be a direct partner in Government efforts to create jobs, reduce prices and boost the economy.

There is anger in the society as jet fuel cut by 12 per cent that brought prices to a four-year low of Rs 52.4 a litre has not made airfares any cheaper. Similarly, the crude prices touching a low of $57 did not reduce fuel prices as the Government had to increase excise duty to fund Rs 10,550 crore road construction a year, which incidentally also benefits the corporates to raise toll rates.

Sadly, the corporates are losing bigger opportunities. The higher fares and toll rates boost their profits, but people expect them to help reduce increase in cost of living by coming out with measures to reduce prices and inflation. Importantly, industry bodies have to think out of the box. They cannot depend on the Government in perpetuity at the cost of the people.

The time for pay-back has come. They have to pool out their CSR resources to help the Government cut expenses in highway and rural road-building, irrigation, railways, education, health, infrastructure funding, maintain public sector bank profits and consequent elimination of toll and other cesses that increase cost of living.

The car companies have been earning huge profits, much higher than their parent companies could earn in their countries of origin. Pharmaceutical and health care companies’ profits have soared even higher.

The FMCG companies have virtually been riding on over 500 per cent profits. Besides, education shops raked in untold profits through increase of fees and other charges by over 100 to 200 per cent during the past five years. Except small entrepreneurs, who were not paid on time by the large corporates, none suffered.

However, the consumer at all levels had only to lose. This led to fall in the savings rate that had been lubricating the economy over the past six decades. Now the onslaught on interest rates is a dangerous move to erode the value of their wealth to increase profits of the corporates.

Every time it is the Government which has to take the blame for their lure of profit. They do not give a farthing back to it. The companies behave as if they are the only ones who need help in perpetuity. The latest report of global financial services firm UBS states: “India is among the best corporate sector stories. India is the poster child for structural reforms”.

It only means the corporates are buoyant but the society is in tatters – a huge disparity if not corrected could cause a severe social and economic upheaval.

The story could turn turtle. Corrective steps are the need of the hour. The corporates cannot expect the Government to continue doling out the sops they want. The latter has shown its resolve to ensure a low-tax regime. But initiative is possible when they come out to help out in real terms. The least, as suggested, is they could come out with proposals that could reduce Government borrowings, increase funding of railways, health care and all people-oriented services.

The ancient Marwaris had been giving back to the society in the name of “dharmada”. The modern-day high profile corporate has to emulate but modernise the instruments. If they together took responsibility to reorient CSR, much of it could be achieved.

The Indian corporate had always belied hopes if not betrayed these. They had not responded to the call of the country’s first Prime Minister Jawaharlal Nehru. The nation is looking towards them to usher in a new culture to help the latest incumbent, Narendra Modi, tide over a severe economic crisis.

This is an opportunity for the corporates. If they do, they would set a global example for ushering in the real new economy, where corporates would no more be seen as exploiter but a partner in progress. Will they?

By: Shivaji Sarkar