Sunday, June 7, 2009

Indian ethos and the rise of Corporate Social Responsibility

An Assocham survey on 'Corporate Social Responsibility (CSR) in India' today unveiled some hitherto little known realities--these activities are on the rise, chemical and FMCG industries lead the pack and Maharashtra and Gujarat are the two states where these practices are more pronounced than others.

Interestingly, the area where most of activities are devoted relates to community welfare, followed by education, environment, health care and rural development--in that order.

While the concept of CSR is a well-known practice in the welfare states of Europe, especially Scandinavian countries, it has historical and cultural underpinning even in India.

With the green movement becoming a sensitive issue in politics of the countries of Europe and to an extent in the United States, it is catching up in emerging markets. The bug seems to be catching up in India.

In the Western world, companies which take recourse to CSR are the most fancied and their products have a better chance of selling.

These promoters and CEOs are regularly interviewed on the television channels and stories widely published in leading newspapers and magazines, which tantamount to free publicity of their products as well.

Mahatma Gandhi's concept of trusteeship and the Hindu belief that workers are like family members has been deeply engrained in the minds of a section of the entrepreneurial class. Firms run by 'Marwaris' are well known for sharing this belief.

But in modern India, CSR is more an emulation of the Western concept, buttressed by the fact that in a poor country wealth needs to be shared or else poverty is a threat to prosperity everywhere.

The survey showed that out of 300 Indian companies, as many as 74 firms relating to the chemical industry actively took part in this noble activity, while FMCG and the consumer durables sector accounted for 62 companies. The third in line are textile companies with 53 firms actively engaged in such actions.

'Community services' initiatives entailed activities that focus on the underprivileged that lives around the vicinity of the company or its plants. They facilitate educational and health care activities and support projects that result in employment generation.

The other most sort out CSR initiative followed by industrialists relates to creating enlightenment among the youth.

As the awareness of climate change issues is getting wider and deeper, corporates are increasingly resorting to taking up activities in this regard.

Under the banner of health care, companies offer mobile medical services, organise regular medical camps, launch campaigns to create awareness about preventive health and the like.

Indian conglomerates are increasingly extending support for the development of the rural areas. They provide both financial and infrastructural assistance for the development of agriculture, animal husbandry and cottage industries. They help develop local skills and use local raw materials and help in create marketing outlets.

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