If at least 25 per cent of the CSR spend by corporates is donated to institutions of higher learning and research, we can expect Indian success stories like ISRO, DRDO, Nuclear Power Corporation of India, C-DAC, Center for Cellular and Molecular Biology… to deliver patents and products that will be of even greater global success.
One of the unwelcome schemes of the Government of India, when it was launched five years back, has now been accepted by the industry and very many corporates are willing to spend 2 per cent of their annual average profits on CSR. They are proud of the beneficial impact that this has created in society.
What was seen as a draconian measure and a backdoor tax, has progressively come to be accepted as a reasonable tax? This is because the donor has the option to identify the causes on which to spend the money, unlike the corporate tax, bulk of which seems to go towards meeting the government’s interest burden and the salaries of the bloated government machinery.
There is a great deal of employee involvement in deciding priorities and in many instances, employees volunteer to ensure efficient use of the CSR spend and that it is spent responsibly. Areas such as skill development, improving facilities in schools, grants to hospitals so that they can improve access and affordability of health services for the disadvantaged, scholarships for differently abled students have received, perhaps, the greatest attention from the CSR spend. All very worthy causes that have shown the way for society at large, as to what meaningful philanthropy can achieve.
Think of CSR spending even more effectively
While justifiable benefits have accrued to society in areas of school education, skills development, basic health services, etc., the requirement to meet the needs of an inclusive growth can only be met by the state and Central governments who have access to lakhs of crores of rupees, compared to the thousands of crores that corporates can spend. Also, corporates efforts are in diverse areas of societal needs and limited specific geographic areas of easy reach, to make any impact at scale. CSR spend can show the way, create examples for the government and others to follow and can be a change agent rather than be the change maker for the entire country.
An area that the government is withdrawing from is the area of higher education, research and supporting research and incubation efforts in new areas. Increasingly, institutions of higher learning and analysis such as IITs, IISc., IISERs … have been asked to raise funds for their institutions from alumni, industry and other sources and that the government grants will either stay at the same level or keep declining in the coming years. The recent incident in TIFR, where the salary to the researchers was delayed is one example of the pressures.
This has led to sectors that are expected to proliferate in the future and sectors that apply cutting edge technology are starved of funds. Areas like Biotechnology, genetics, bionics, assistive devices in the healthcare area, space research, aviation, defense, technology and satellite communications, renewable energy, new battery technology and materials, thorium-based proliferation-resistant nuclear power generation, etc. are all growth areas of the future. Cutting edge research is only possible in leading research institutions and universities and they need funding.
If at least 25 per cent of the CSR spend by corporates is donated to institutions of higher learning and research, then we can expect Indian success stories like ISRO, DRDO, Nuclear Power Corporation of India, C-DAC, Center for Cellular and Molecular Biology to deliver patents and products that will be of even greater global success.
That, I would call is responsible for CSR spending.